	Background

The TAA program was designed to assist workers who have lost their jobs  as a result of international trade. The program provides two primary  benefits to these workers—training and extended income support. Health coverage benefit. Labor Could Improve Its TAA Program Administration

Labor could improve the way it administers the program in two key  areas—the process it uses to allocate training funds and its tracking of  program outcomes. Labor’s process for allocating training funds presents  two significant challenges to states. First, the amount states receive at the  beginning of the fiscal year does not adequately reflect states’ spending the  year before or the current demand for training services in the state. Second, Labor distributes a significant amount of funds to most states on  the last day of the fiscal year, even to states that have spent virtually none  of their current year’s allocation. 1). 2). In our recent report, we recommended that the Secretary of Labor develop  procedures to better allocate training funds and ensure that any reserve  funds are given to only those states that have spent or obligated a  substantial portion of the current fiscal year allocation. In its comments,  Labor agreed with our findings and recommendations and noted that it  would examine the process for allocating training funds to states. TAA Data Do Not Provide a Complete and Credible Picture of the Program’s Performance

TAA performance data are incomplete and may be inaccurate. States Face Challenges in Providing Services to Workers

States report being challenged by the lack of flexibility to use training  funds to provide trade-affected workers with case management services,  such as counseling to help them decide whether they need training and  what type of training would be most appropriate. In addition, efforts to  enroll workers in training are sometimes hampered by the confusing TAA  training enrollment deadline that requires workers be enrolled in training  within 8 weeks of certification or 16 weeks of layoff to qualify for  extended income support. States do not receive TAA program funds  for case management and, by law, cannot use training funds for this  service. States also reported limitations to using administrative funds to provide  case management. As of April 2007, Labor had not yet begun gathering  information on the impact of the deadline. Several Factors Limit Participation in the Wage Insurance and Health Coverage Benefits

Several factors, including a short deadline for getting a job and the cost of  buying health coverage, may limit participation in two new benefits  resulting from the TAA Reform Act of 2002. In our site visits, states  reported that the requirement that workers must find a job within 26  weeks to receive the wage insurance benefit was the major factor  preventing more workers from taking advantage of the benefit. Furthermore, in our most  recent report, we suggested that in order to enable more workers to take  advantage of the wage insurance benefit, Congress may wish to consider  increasing the length of time workers have to become reemployed and  eliminating the requirement that to be certified as eligible for wage  insurance, the petitioning workers must have been laid off from a firm  where the affected workers lacked easily transferable skills and a  significant portion of those workers were aged 50 or over. While cost is one of the most significant factors limiting participation in  the health coverage benefit, some states also reported that the health  coverage tax credit program can be complicated and difficult to  understand for both workers and local case managers. An industry certification approach  based on three petitions certified within 180 days would likely increase the  number of workers eligible for TAA, but the extent of the increase  depends upon the specific criteria that are used. As we  identify in our forthcoming report, either approach presents some design  and implementation challenges. Concluding Observations

Through our work on the Trade Adjustment Assistance Program since  passage of the Reform Act in 2002 we have identified a number of areas  where Labor and the Congress should take action.
Why GAO Did This Study

The Trade Adjustment Assistance (TAA) program, administered by the Department of Labor (Labor), is the nation's primary program providing income support, job training, and other benefits to manufacturing workers who lose their jobs as a result of international trade. In fiscal year 2006, Congress appropriated about $900 million for TAA, including about $220 million for training. GAO has conducted a number of studies on the TAA program since the program was last reauthorized in 2002. This testimony draws upon the results of two of those reports, issued in 2006 and 2007, as well as ongoing work, and addresses issues raised and recommendations made regarding (1) Labor's administration of the TAA program, (2) the challenges states face in providing services to trade affected workers, (3) the factors that affect workers' use of the wage insurance and health coverage benefits, and (4) the impact of using industrywide certification approaches on the number of workers potentially eligible for TAA.

What GAO Found

Labor could improve the way it administers the program in two key areas--the process it uses to allocate training funds and its tracking of program outcomes. Labor's process for allocating training funds presents two significant challenges to states. First, the amount states receive at the beginning of the fiscal year does not adequately reflect the current demand for training services in the state. Second, Labor distributes a significant amount of funds to most states on the last day of the fiscal year, even to states that have spent less than 1 percent of the current fiscal year training allocation. Regarding program outcomes, TAA nationwide performance data are incomplete and may be inaccurate. We recommended that Labor develop procedures to better allocate the training funds and improve data. Labor recently noted that it would examine its processes. States face challenges in providing services to workers, including the lack of flexibility to use training funds to provide trade-affected workers with case management services, such as counseling to help them decide whether they need training and which training would be most appropriate. States receive no TAA program funds for case management and must either use their limited administrative funds or seek resources from other programs, such as those funded by the Workforce Investment Act. States also reported that their efforts to enroll workers in training are sometimes hampered by the training enrollment deadline and that workers find the deadline confusing. We have suggested that Congress consider providing states the flexibility to use training funds for case management and simplifying the training enrollment deadline. Few TAA participants take advantage of the wage insurance and health coverage benefits, and several factors limit participation. For example, several states reported that the requirement that workers must find a job within 26 weeks to receive the wage insurance benefit was the major factor preventing more workers from taking advantage of the benefit. Regarding the health coverage benefit, several states told us that high out-of-pocket costs may discourage workers from using the benefit. Furthermore, states also reported that the health coverage benefit can be complicated and difficult to understand. We have suggested that the Congress may wish to consider increasing the length of time workers have to become eligible for wage insurance. In addition, we also recommended that a centralized resource be developed to assist workers with their questions about health coverage. In response, the agency has developed new simplified materials. Finally, an industry certification approach based on three petitions certified within any 180-day period would likely increase the number of workers eligible for TAA, potentially doubling those eligible. The approach also presents some design and implementation challenges.