The Honorable C.W. Bill Young
The Honorable David Obey
July 7, 2004
Dear Chairman Young and Ranking Member Obey:
The House Appropriations Committee will soon begin consideration of the FY 2005 Budget proposal by the Bush Administration for the Departments of Labor and Health and Human Services. In this regard and with respect to the DOL budget, our organization of 25 national unions representing over 4 million professional and technical workers urges you to oppose the President’s recommendation to eliminate a key job training program designed by the Congress to reduce this nation’s reliance on foreign guest workers.
Specifically, the President’s budget requests that Department of Labor funds earmarked for the H-1B Technical Skills Grant Training Program–which have been expended through grants to upgrade the skills of displaced American workers in H-1B impacted occupations—be rescinded. This is the second time that the administration has attempted to eradicate this important training initiative. The 2002 the Bush budget proposed re-allocation of these funds to underwrite the expedited processing of permanent “green card” labor certifications for foreign workers but Congress rejected that notion.
The training initiative targeted by the Administration was conceived as a direct result of Congressional action taken in both 1998 and 2000 to expand the H-1B program. When it did so, Congress imposed on employers a “user” fee for each guest worker visa issued to them. Of the funds generated, 55% are allocated to the Department of Labor (DOL) for job training grants for technical skills training programs. The fee, which was $1,000 per visa, had through 2003 generated over $100 million each year depending upon how much of the yearly allotments of guest worker visas allowed under the current H-1B law were used or renewed.
As such, the H-1B skills grant training program is paid for entirely through employer “user” fees.No taxpayer dollars are used for this training. Moreover, since one of the requirements of receiving an H-1B training grant is an additional match of employer funds and/or other tangible assets, the value of available training monies are actually increased by 50% over and above the initial H-1B award using private sector resources. Thus a $2 million grant actually generates $3 million in total training resources. And in some cases the local match has actually exceeded the 50% requirement. Wiping out the H-1B training program means that millions of dollars in matching private sector resources for future grants and worker training will be forfeited.
From 2000 through December 2003, the H-1B Technical Skills Grant Training Program invested over $300 million in over 124 training grants affecting thousands of workers in 35 states and the District of Columbia. (Attached to this letter is a listing of recipient states, the number of grants received and the number of training dollars invested.) This program has blended some of the best in private and public sector training expertise from small businesses, education–including community colleges and four year institutions, unions with a long and successful track record in job training, major corporations, various business alliances and consortiums as well as over 100 state and local workforce development agencies. Corporate partners include 15 of the top 100, Fortune 500 companies as well as “whose who” of major U.S. companies in high tech, finance, manufacturing, health care, telecom, insurance, bio-med and pharmaceuticals.
The administration rationalized its earlier efforts to repeal the H-1B training program and its refusal now to seek its renewal with claims that the program is ineffective and has “not been proven successful in raising the skills of U.S. workers in specialty occupations.” A review by the General Accounting Office (GAO-02-881), however, refutes these assertions. According to the GAO:
- H-1B grantees “use[d] the flexibility allowed by Labor to administer training through a variety of service delivery options to individuals whose skills need to be upgraded” and “have used the program to create innovative programs and build ties with new partners.”
- Through the H-1B training program, “new partnerships were formed with employers thereby increasing workforce investment boards’ knowledge of local workforce needs.”
- The program worked to train individuals for high skill jobs: “almost all of the 43 grantees funded in 2000 provided IT-related training…health care, telecommunications, engineering and manufacturing.”
- The program benefited America’s workers: 1,800 H-1B training program participants got new or upgraded jobs, 1,600 increased their wages or salaries, 2,600 attained skill certifications and 1,900 attained industry-recognized skill standards.
While Congressional authority mandating the fee has expired, there are ongoing discussions in both the House and Senate regarding its reinstatement. Regardless of that outcome, at a time when off-shore outsourcing of professional and technical jobs is surging and industry is clamoring for more–not less–investment in worker re-training, the DOL should be directed to expend the remaining funds in the H-1B training account for that purpose.
With record high jobless rates in the high tech/IT sector, we view the proposal by the Administration to rescind the H-1B training monies as ill advised. In effect, it abandons a vital, bi-partisan job training program that equips our workers for higher-skilled jobs in tech, bio-med, advanced manufacturing and other sectors as well as career ladder job opportunities in the health care industry where the availability of trained nurses, technicians and other skilled workers are in severe short supply. Finally, given the fiscal situation in most states, these federal funds are even now more critical as some states are being forced to reduce their own commitments to job training.
On behalf of our association, we urge you to reject this rescission and restore these funds so that the H-1B grant money will be spent for its intended purpose—job training for American workers.
Paul E. Almeida
c: Members of the House Committee on Appropriations