Automatic Spending Cuts Threaten Resources that Help People Find Jobs

At a time when unemployment remains high, resources that support workforce development and job training are an important part of the nation’s economic recovery and job creation effort.

Unfortunately, automatic spending cuts, slated to take effect in January 2013, threaten to drastically reduce these resources, which support the efforts of local Goodwill agencies in communities across the United States to help people who face employment challenges to find jobs and advance in careers. Furthermore, efforts to protect funding for defense programs could double the size of these cuts.

Background

Under the Budget Control Act (BCA) passed by Congress last year, automatic across-the-board cuts to defense and non-defense discretionary programs are scheduled to take effect in January 2013. Called “sequestration,” the provision was included in the BCA in order to force proponents of both defense and non-defense discretionary programs to work together to reduce the deficit by $1.2 trillion.

If sequestration takes effect, total non-defense discretionary spending would be cut by nearly $40 billion in FY 2013, while additional non-defense funds – approximately $15 billion – would be cut from some mandatory spending programs. In addition, defense discretionary spending would be cut by roughly $55 billion.

Goodwill: A Public-Private Partnership

Just 2 percent of Goodwill’s total revenue – $4.4 billion in 2011 – comes from local, state and federal grants, while 8 percent comes from government fees for service. These modest government non-defense discretionary investments – such as those authorized by the Workforce Investment Act (WIA) and the Senior Community Service Employment Program (SCSEP) – leverage Goodwill’s nationwide infrastructure, resources and expertise by investing in local Goodwill agencies’ efforts to do more to help people in their communities to find jobs and advance in careers.

Goodwill is aggressively working to increase its ability to generate more revenues to invest in its mission, yet Congress may further reduce its modest, yet critical, investments in programs that leverage Goodwill’s nationwide infrastructure, resources and expertise in helping people find jobs.

Congress should protect critical resources that support community-based organizations – like Goodwill – that are working to help people get back to work during a stubbornly tight job market.