Statement of Administration Policy: H.R. 1617 - Consolidated and Reformed Education, Employment, and Rehabilitation Systems Act ("CAREERS")

(House)
(Rep. McKeon (R) CA and 36 others)

The Administration supports a number of the key features of H.R. 1617, including skill grants for adult training, substantial program consolidation and simplification, and organizing adult training services into a one-stop career delivery system. Although the Administration has many significant concerns with the bill, the Administration supports the bill for purposes of House passage and will work to address these concerns as the workforce legislation moves through Congress. Among the most significant concerns are:

• Inadequate authority to continue the current School-to-Work Opportunities Act initiative to enable States and localities to complete their system implementation. . Without transition language, the authority for this State-led initiative would be eliminated in FY 1997. This would stop in midstream the progress made by the 27 States already developing new ways to help youth prepare for success in further education and the workforce, and it would deny 23 additional states the opportunity to build Statewide school-to-work systems.
  
  
• The amendments to the Rehabilitation Act of 1973 that would prevent a governor from using the State's existing vocational rehabilitation delivery system to provide vocational rehabilitation services without the concurrence of all of the local workforce development boards.
  
  
• Insufficient funding when compared to the needs of the workforce and the economy. H.R. 1617 would authorize funding levels that are 20 percent below the levels enacted in FY 1995 for the programs the bill consolidates. As competition in the global economy increases, it is more important than ever to maintain our Nation's commitment to provide opportunities for youth, adults, and dislocated workers to gain skills for successful long-term participation in the workforce. Reducing authorization levels retreats from that commitment.
  
  
• Failure to provide sub-State allocation formulas. It is important to direct Federal resources to schools and individuals most in need at the local level. Sub-State targeting ensures that this happens. It is also important that State and local education agencies receive and direct the funds in accordance with State constitutional provisions.
  
  
• Provisions to privatize the Student Loan Marketing Association (Sallie Mae) fail to provide a date certain to accomplish the privatization. Whether or not Sallie Mae's shareholders decide to reorganize into a private firm, the company should be dissolved after an eight-year transition. Provisions to privatize the College Construction Loan Insurance Association (Connie Lee) fail to allow enough time for the Secretary of the Treasury to sell the Secretary of Education's holdings of Connie Lee stock in a manner that would ensure adequate value for taxpayers. They also fail to provide for reimbursement of costs associated with such a sale. The Secretary of the Treasury will forward separately more detailed comments addressing the Administration's concerns about provisions that would privatize Sallie Mae and Connie Lee.

Pay-As-You-Go Scoring

H.R. 1617 would affect direct spending and receipts; therefore, it is subject to the pay-as-you-go requirement of the Omnibus Budget Reconciliation Act of 1990. The Office of Management and Budget's scoring estimate is currently under development.