Some Certainty in an Uncertain Time

Fiscal cliff signLast week, Speaker of the House John Boehner’s so-called “Plan B” failed to attract sufficient Republican support. Members of Congress soon headed home for the Christmas holiday with the nation’s economic future still in question. Will congressional leaders and President Obama find a way to agree to a deficit reduction deal that averts a plunge over the fiscal cliff? Or will we take that plunge?

In the latter event, Bush-era tax cuts will expire, while automatic spending cuts, otherwise called “sequestration,” will reduce defense spending by approximately 10 percent and non-defense spending by nearly 8 percent.  This includes federal spending on job training programs and supports that help local Goodwill agencies help people find jobs and career advancement.  For example, federal funding that supports employment services and job training for youth, adults and dislocated workers would decline by more than $200 million.

Sequestration would mean some painful realities going forward as the workforce system’s resources would be reduced and many charitable organizations would be expected to pick up the slack. Just as worrisome is how sequestration would continue to steadily reduce our national investment in programs that aim to put people back to work. As a result, our national investment in its primary job training system will be nearly 30 percent less than it was a decade ago at a time when unemployment was just 5.8 percent compared to the current rate of nearly 8 percent.

And if Congress and the administration agree to a framework that shuts off the automatic spending cuts, such a deal would likely include provisions that would instruct key committees, including congressional committees that have jurisdiction over job training, to find ways to cut spending. Since job training has been a frequent target in the past, the workforce system expects Congress to consider proposals that would reduce funding for job training and/or to consolidate a number of job training programs into a single block grant to states.

If the federal government continues to reduce its resources for people who need help, community-based organizations, like Goodwill and its partners, will be asked to do more with less. It’s the proverbial analogy of the balloon – squeeze it here and it bulges elsewhere.

While the question about the fiscal cliff remains uncertain, Goodwill has been on the front lines since 1902, working to build stronger communities, and it will continue to urge Congress to protect investments that leverage Goodwill’s efforts to help people find jobs and advance in careers.