[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
    PUTTING AMERICA BACK TO WORK: REFORMING THE NATION'S WORKFORCE 
                           INVESTMENT SYSTEM

=======================================================================



                                HEARING

                               before the

                    SUBCOMMITTEE ON HIGHER EDUCATION

                         AND WORKFORCE TRAINING

                         COMMITTEE ON EDUCATION

                           AND THE WORKFORCE

                     U.S. House of Representatives

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

           HEARING HELD IN WASHINGTON, DC, FEBRUARY 26, 2013

                               __________

                            Serial No. 113-5

                               __________

  Printed for the use of the Committee on Education and the Workforce


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                COMMITTEE ON EDUCATION AND THE WORKFORCE

                    JOHN KLINE, Minnesota, Chairman

Thomas E. Petri, Wisconsin           George Miller, California,
Howard P. ``Buck'' McKeon,             Senior Democratic Member
    California                       Robert E. Andrews, New Jersey
Joe Wilson, South Carolina           Robert C. ``Bobby'' Scott, 
Virginia Foxx, North Carolina            Virginia
Tom Price, Georgia                   Ruben Hinojosa, Texas
Kenny Marchant, Texas                Carolyn McCarthy, New York
Duncan Hunter, California            John F. Tierney, Massachusetts
David P. Roe, Tennessee              Rush Holt, New Jersey
Glenn Thompson, Pennsylvania         Susan A. Davis, California
Tim Walberg, Michigan                Raul M. Grijalva, Arizona
Matt Salmon, Arizona                 Timothy H. Bishop, New York
Brett Guthrie, Kentucky              David Loebsack, Iowa
Scott DesJarlais, Tennessee          Joe Courtney, Connecticut
Todd Rokita, Indiana                 Marcia L. Fudge, Ohio
Larry Bucshon, Indiana               Jared Polis, Colorado
Trey Gowdy, South Carolina           Gregorio Kilili Camacho Sablan,
Lou Barletta, Pennsylvania             Northern Mariana Islands
Martha Roby, Alabama                 John A. Yarmuth, Kentucky
Joseph J. Heck, Nevada               Frederica S. Wilson, Florida
Susan W. Brooks, Indiana             Suzanne Bonamici, Oregon
Richard Hudson, North Carolina
Luke Messer, Indiana

                      Barrett Karr, Staff Director
                 Jody Calemine, Minority Staff Director
                                 ------                                

        SUBCOMMITTEE ON HIGHER EDUCATION AND WORKFORCE TRAINING

               VIRGINIA FOXX, North Carolina, Chairwoman

Thomas E. Petri, Wisconsin           Ruben Hinojosa, Texas,
Howard P. ``Buck'' McKeon,             Ranking Minority Member
    California                       John F. Tierney, Massachusetts
Glenn Thompson, Pennsylvania         Timothy H. Bishop, New York
Tim Walberg, Michigan                John A. Yarmuth, Kentucky
Matt Salmon, Arizona                 Suzanne Bonamici, Oregon
Brett Guthrie, Kentucky              Carolyn McCarthy, New York
Lou Barletta, Pennsylvania           Rush Holt, New Jersey
Joseph J. Heck, Nevada               Susan A. Davis, California
Susan W. Brooks, Indiana             David Loebsack, Iowa
Richard Hudson, North Carolina
Luke Messer, Indiana
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on February 26, 2013................................     1

Statement of Members:
    Foxx, Hon. Virginia, Chairwoman, Subcommittee on Higher 
      Education and Workforce Training...........................     1
        Prepared statement of....................................     3
    Hinojosa, Hon. Ruben, ranking minority member, Subcommittee 
      on Higher Education and Workforce Training.................     4
        Prepared statement of....................................     6
    Tierney, Hon. John F., a Representative in Congress from the 
      State of Massachusetts, prepared statement of..............     7

Statement of Witnesses:
    Gustafson, Todd, executive director, Michigan Works! Berrien-
      Cass-Van Buren.............................................    22
        Prepared statement of....................................    25
    Hart, Chris, IV, president and CEO, Workforce Florida Inc....     9
        Prepared statement of....................................    11
    Holzer, Harry J., professor of public policy, Georgetown 
      Public Policy Institute....................................    20
        Prepared statement of....................................    21
    Ralls, Dr. R. Scott, president, North Carolina Community 
      College System.............................................    16
        Prepared statement of....................................    18

Additional Submissions:
    Mrs. Foxx, questions submitted for the record to:
        Mr. Gustafson............................................    61
        Mr. Hart.................................................    61
        Dr. Ralls................................................    62
    Mr. Gustafson, response to questions submitted for the record    63
    Mr. Hart, response to questions submitted for the record.....    66
    Mr. Hinojosa, Workforce Stakeholders Group statement on 
      reforming job training programs in America.................    54
    Hudson, Hon. Richard, a Representative in Congress from the 
      State of North Carolina, questions submitted for the record 
      to Dr. Ralls...............................................    62
    Dr. Ralls, response to questions submitted for the record....    66
    Mr. Tierney, letter, dated February 21, 2013, from the 
      Association of Farmworker Opportunity Programs.............     7


                     PUTTING AMERICA BACK TO WORK:

                         REFORMING THE NATION'S


                      WORKFORCE INVESTMENT SYSTEM

                              ----------                              


                       Tuesday, February 26, 2013

                     U.S. House of Representatives

        Subcommittee on Higher Education and Workforce Training

                Committee on Education and the Workforce

                             Washington, DC

                              ----------                              

    The subcommittee met, pursuant to call, at 10:03 a.m., in 
room 2175, Rayburn House Office Building, Hon. Virginia Foxx 
[chairwoman of the subcommittee] presiding.
    Present: Representatives Foxx, Walberg, Salmon, Guthrie, 
Heck, Brooks, Hudson, Messer, Hinojosa, Tierney, Bishop, 
Yarmuth, Bonamici, McCarthy, Holt, Davis, and Loebsack.
    Also present: Representative Kline.
    Staff present: Katherine Bathgate, Deputy Press Secretary; 
James Bergeron, Director of Education and Human Services 
Policy; Casey Buboltz, Coalitions and Member Services 
Coordinator; Lindsay Fryer, Professional Staff Member; Rosemary 
Lahasky, Professional Staff Member; Nancy Locke, Chief Clerk/
Assistant to the General Counsel; Brian Newell, Deputy 
Communications Director; Krisann Pearce, General Counsel; Emily 
Slack, Legislative Assistant; Alissa Strawcutter, Deputy Clerk; 
Brad Thomas, Senior Education Policy Advisor; Aaron Albright, 
Minority Communications Director for Labor; Mary Alfred, 
Minority Fellow, Labor; Tylease Alli, Minority Clerk/Intern and 
Fellow Coordinator; Meg Benner, Minority Education Policy 
Advisor; John D'Elia, Minority Labor Policy Assoociate; Livia 
Lam, Minority Senior Labor Policy Advisor; Brian Levin, 
Minority Deputy Press Secretary/New Media Coordinator; Megan 
O'Reilly, Minority General Counsel; and Michele Varnhagen, 
Minority Chief Policy Advisor/Labor Policy Director.
    Chairwoman Foxx. Good morning. A quorum being present, the 
subcommittee will come to order. Welcome to the first hearing 
of the Higher Education and Workforce Training Subcommittee in 
the 113th Congress. I would like to welcome our members and 
thank our witnesses for being with us today.
    We begin the new Congress addressing a familiar challenge. 
Over the last 2 years, the committee has taken a close look at 
the realities of a broken workforce development system.
    Just yesterday, North Carolina's Greensboro News & Record 
drew attention to the problem of potentially thousands of well-
paying manufacturing, construction, engineering, and nursing 
jobs sitting vacant in North Carolina because there is a 
shortage of qualified applicants.
    Employers from across the country are reporting the same; 
that there are jobs available, but not enough skilled workers 
to fill them. Individuals desperate for work but in need of 
additional learning to compete for these jobs must first 
navigate a maze of rules and programs before they can access 
the skills and education they need.
    Meanwhile, the hands of state and local officials are tied 
by excessive mandates and red tape. In an economy that is 
constantly changing, the federal government has made it more 
difficult for workforce investment leaders to address the 
priorities of their communities.
    Finally, taxpayer dollars are supporting too many 
bureaucrats and not enough workers. The federal government now 
spends $18 billion a year on myriad employment and training 
services, yet it can't tell the hardworking taxpayers who 
provide that $18 billion whether they are earning a good return 
on their investment.
    To illustrate the size of the problem, the poster to my 
left represents our current workforce development system; more 
than fifty programs spread across nine federal agencies. Caught 
in the center of this mess is a worker who has lost his or her 
job. This individual is eager to learn a new skill or trade and 
is even more eager to return to work.
    If this worker manages to navigate the workforce 
development system, data shows it is unlikely he or she will 
complete the program or access the tools actually needed to get 
a job in the community. Nearly two million individuals 
participated in some form of service authorized under the 
Workforce Investment Act, but only 14 percent finished the 
instruction.
    Fewer than half of those who received employment assistance 
such as job searches and resume writing were able to find work. 
With such a hefty price tag, we must demand better results on 
behalf of those seeking jobs and the taxpayers footing the bill 
for this federal maze.
    Today's workforce development system is failing workers, 
employers, and taxpayers. Instead of a dynamic network of 
employment support, we have a massive bureaucracy that stifles 
innovation and wastes resources. As a result, employers cannot 
hire a skilled workforce, workers are stranded in unemployment, 
and our ability to grow and prosper as a nation is diminished.
    The need to fundamentally change the status quo has never 
been greater. President Obama said last year that it was 
quote--``time to turn our unemployment system into a 
reemployment system.'' That is precisely what the Supporting 
Knowledge and Investing in Lifelong Skills Act will do.
    The first step toward an effective workforce development 
system is to reign in the federal bureaucracy. The SKILLS Act 
eliminates and streamlines dozens of ineffective and 
duplicative programs. The bill replaces these programs with a 
new Workforce Investment Fund, providing states a more 
efficient resource to deliver the support their workforce 
needs.
    The President has urged Congress to cut through the maze of 
confusing programs and create one program for individuals to 
find the help they need. Republicans support that effort, and 
in fact, the SKILLS Act is the only proposal that moves us 
toward the President's goal.
    We had a quote up there a second ago, and I hope everyone 
had a chance to see it. While streamlining the federal role is 
important, we must also empower our job creators, state 
leaders, and local officials.
    Doing so means changing the way workforce investment boards 
operate. These boards are responsible for policies and 
oversight of employment and training services, yet the federal 
government dictates who must serve on the boards.
    The SKILLS Act increases the number of employer 
representatives and allows state and local leaders to determine 
the rest. Despite some critics' claims, the legislation does 
not prohibit any stakeholder, including unions, from serving on 
a workforce investment board.
    However, Washington will no longer be in the business of 
picking winners and losers in this regard. It is up to state 
and local officials to decide who best represents their 
communities.
    These are just some of the positive reforms in the SKILLS 
Act. I expect we will discuss others throughout the hearing, 
including how the bill encourages greater collaboration with 
community colleges and promotes accountability over the use of 
taxpayer dollars.
    No doubt we will also have a lively debate. I welcome that 
debate and also welcome the opportunity to advance commonsense 
reforms that will fix a broken workforce development system and 
serve the best interests of our country. It is time to be bold 
with how we prepare today's workers to compete and succeed in 
this new economy.
    Again, I would like to thank our witnesses for joining us, 
and I will now recognize my distinguished colleague, Ruben 
Hinojosa, the senior Democrat member of the subcommittee for 
his opening remarks.
    [The statement of Chairwoman Foxx follows:]

         Prepared Statement of Hon. Virginia Foxx, Chairwoman,
        Subcommittee on Higher Education and Workforce Training

    Good morning and welcome to the first hearing of the Higher 
Education and Workforce Training Subcommittee in the 113th Congress. 
I'd like to welcome our members and thank our witnesses for being with 
us today.
    We begin the new Congress addressing a familiar challenge. Over the 
last two years, the committee has taken a close look at the realities 
of a broken workforce development system.
    Just yesterday, North Carolina's Greensboro News & Record drew 
attention to the problem of potentially thousands of well-paying 
manufacturing, construction, engineering, and nursing jobs sitting 
vacant in my state because there is a shortage of qualified applicants. 
Employers from across the country are reporting the same: that there 
are jobs available, but not enough skilled workers to fill them. 
Individuals desperate for work but in need of additional learning to 
compete for these jobs must first navigate a maze of rules and programs 
before they can access the skills and education they need.
    Meanwhile, the hands of state and local officials are tied by 
excessive mandates and red tape. In an economy that is constantly 
changing, the federal government has made it more difficult for 
workforce investment leaders to address the priorities of their 
communities.
    Finally, taxpayer dollars are supporting too many bureaucrats and 
not enough workers. The federal government now spends $18 billion a 
year on myriad employment and training services, yet it can't tell the 
American people whether they are earning a good return on their 
investment.
    To illustrate the size of the problem, the poster to my left 
represents our current workforce development system--more than fifty 
programs spread across nine federal agencies. Caught in the center of 
this mess is a worker who has lost his or her job. This individual is 
eager to learn a new skill or trade, and is even more eager to return 
to work.
    If this worker manages to navigate the workforce development 
system, data shows it is unlikely they will complete their program or 
access the tools actually needed to get a job in their community. 
Nearly two millions individuals participated in some form of service 
authorized under the Workforce Investment Act, but only 14 percent 
finished the instruction. Less than half of those who received 
employment assistance such as job searches and resume writing were able 
to find work. With such a hefty price tag, we must demand better 
results on behalf of those seeking jobs and the taxpayers footing the 
bill for this federal maze.
    Today's workforce development system is failing workers, employers, 
and taxpayers. Instead of a dynamic network of employment support, we 
have a massive bureaucracy that stifles innovation and wastes 
resources. As a result, employers cannot hire a skilled workforce, 
workers are stranded in unemployment, and our ability to grow and 
prosper as a nation is diminished.
    The need to fundamentally change the status quo has never been 
greater. President Obama said last year that it was ``time to turn our 
unemployment system into a reemployment system.'' That is precisely 
what the Supporting Knowledge and Investing in Lifelong Skills Act will 
do.
    The first step toward an effective workforce development system is 
to rein in the federal bureaucracy. The SKILLS Act eliminates and 
streamlines dozens of ineffective and duplicative programs. The bill 
replaces these programs with a new Workforce Investment Fund, providing 
states a single resource to deliver the support their workforce needs.
    The president has urged Congress to cut through the confusing maze 
of programs and create one program for individuals to find the help 
they need. Republicans support that effort, and in fact, the SKILLS Act 
is the only proposal that moves us toward the president's goal.
    While streamlining the federal role is important, we must also 
empower our job creators, state leaders, and local officials. Doing so 
means changing the way workforce investment boards operate. These 
boards are responsible for policies and oversight of employment and 
training services, yet the federal government dictates who must serve 
on the boards.
    The SKILLS Act increases the number of employer representatives and 
allows state and local leaders to determine the rest. Despite some 
critics' claims, the legislation does not prohibit any stakeholder--
including unions--from serving on a workforce investment board. 
However, Washington will no longer be in the business of picking 
winners and losers. It is up to state and local officials to decide who 
best represents their communities.
    These are just some of the positive reforms in the SKILLS Act. I 
expect we will discuss others throughout the hearing, including how the 
bill encourages greater collaboration with community colleges and 
promotes accountability over the use of taxpayer dollars.
    No doubt we will also have a lively debate. I welcome that debate 
and also welcome the opportunity to advance commonsense reforms that 
will fix a broken workforce development system and serve the best 
interests of our country. It is time to be bold with how we prepare 
today's workers to compete and succeed in this new economy.
    Again, I'd like to thank our witnesses for joining us, and I will 
now recognize my distinguished colleague Ruben Hinojosa, the senior 
Democratic member of the subcommittee, for his opening remarks.
                                 ______
                                 
    Mr. Hinojosa. Thank you, Chairwoman Foxx.
    As ranking member of the subcommittee, I have always 
believed that putting America back to work must be a top 
priority for Congress and the nation.
    I have served 16 years on this committee, and I was on the 
committee when we did the first reauthorization that I 
participated in, in 1998. If you do your math in your head, you 
will see that it was 14 years ago. So this is where I differ 
from our chair. I don't believe that Workforce Investment Act 
is broken.
    I think what needs repair is Congress; that we have tried 
to reauthorize the act 6 years later as we are supposed to, 
2004 we had just moved into a new century, and we are working 
with a WIA, an act that was passed 14 years ago and needs, 
definitely needs to be updated and we have tried that and not 
once, not twice, but three times, and it just seems that both 
parties have been so divided that we have not seen our way 
clear to do the job as we are expected to.
    While the economy has moved in the right direction, adding 
more than 5.3 million private sector jobs during this last 3 
years with investments made in the 2009 recovery act there are 
still millions of Americans who need Congress and their help to 
access good jobs and careers to improve their lives.
    During the 12-month period ending September 30, 2012, WIA 
programs provided services to 32.8 million people as well as 
hundreds of thousands of employers across the country according 
to the U.S. Department of Labor.
    Today, our current public workforce and adult education 
system provides an invaluable range of services including 
education, occupational skills training, career counseling, job 
search assistance, adult education, and English language, 
literacy, and Civics education as well as job placement 
services to populations with unique barriers to employment.
    These populations include migrant and seasonal farm 
workers, Native Americans, people with disabilities, veterans, 
older workers, people who are homeless, low-income youth, low-
skilled workers, English language learners, women seeking 
nontraditional employment opportunities, and others.
    While we know that there are millions of Americans out 
there, who are still having a difficult time accessing good 
jobs in this economy, we also know that there are a substantial 
number of jobs in healthcare, in advanced manufacturing, in 
high-growth industries and sectors that are left unfilled 
because employers require specialized skills for these 
positions in this 21st century.
    In the 113th Congress, my hope is that we can work in a 
bipartisan manner to reauthorize the Workforce Investment Act, 
WIA, and modernize our public workforce and adult education 
system.
    Most recently, I was proud to reintroduce the Workforce 
Investment Act of 2013 with my colleague, Representative John 
Tierney, the lead sponsor of the bill, as well as Ranking 
Member George Miller.
    The Democratic bill which streamlined and improved 
workforce program services while expanding career pathways, 
sector partnerships, regional approaches, and other innovative 
practices will bolster the role of community colleges in job 
training--something that I really believe in--develop a 21st-
century system for adult education literacy and workplace 
services, and engage our nation's youth through multiple 
pathways to success.
    It will create competitive employment services and 
opportunities for individuals with disabilities and improve 
accountability and transparency through performance measures 
and reporting. In addition, this bill would strengthen rather 
than eliminate the priority, low-skilled, and low-income adults 
under WIA.
    Finally, I understand that my Republican colleagues and 
friends propose to eliminate and consolidate 35 WIA programs 
through the introduction of the SKILLS Act.
    While I remain optimistic that we on this committee can 
work through some of our differences to reauthorize the act, I 
do not support the elimination or consolidation of federal 
programs. This approach would only serve to weaken our current 
WIA system.
    With that, Madame Chair, I look forward to hearing from 
today's panel of distinguished witnesses on how to improve our 
nation's public workforce and adult education system. Thank 
you.
    [The statement of Mr. Hinojosa follows:]

       Prepared Statement of Hon. Ruben Hinojosa, Ranking Member,
        Subcommittee on Higher Education and Workforce Training

    Chairwoman Foxx, as Ranking Member of this Subcommittee, I have 
always believed that putting America back to work must be a top 
priority for Congress and the nation. While the economy has moved in 
the right direction, adding more than 5.3 million private-sector jobs 
in the last three years with investments made in the 2009 Recovery Act, 
there are still millions of Americans who need Congress' help to access 
good jobs and careers to improve their lives.
    In the 12 month period ending September 30, 2012, WIA programs 
provided services to 32.8 million people as well as hundreds of 
thousands of employers across the country, according to the U.S. 
Department of Labor.
    Today, our current public workforce and adult education system 
provides an invaluable range of services, including education, 
occupational skills training, career counseling, job search assistance, 
adult education and English Language literacy and civics education, and 
job placement services to populations with unique barriers to 
employment.
    These populations include migrant and seasonal farmworkers, Native 
Americans, people with disabilities, veterans, older workers, people 
who are homeless, low-income youth, low-skilled workers, English 
Learners, women seeking non-traditional employment opportunities, and 
others.
    While we know that there are millions of Americans out there who 
are still having a difficult time accessing good jobs in this economy, 
we also know that there are a substantial number of jobs in health 
care, advanced manufacturing, and in high-growth industries and sectors 
that are left unfilled because employers require specialized skills for 
these positions.
    In the 113th Congress, my hope is that we can work in a bipartisan 
manner to reauthorize the Workforce Investment Act (WIA) and modernize 
our public workforce and adult education system.
    Most recently, I was proud to reintroduce the Workforce Investment 
Act of 2013, with my colleague Representative John Tierney, the lead 
sponsor of the bill, and Ranking Member George Miller.
    The Democratic Bill would streamline and improve workforce program 
services, while expanding career pathways, sector partnerships, 
regional approaches and other innovative practices; bolster the role of 
community colleges in job training; develop a 21st century system for 
adult education literacy and workplace services; engage our nation's 
youth through multiple pathways to success; create competitive 
employment services and opportunities for individuals with 
disabilities; and improve accountability and transparency through 
performance measures and reporting.
    In addition, the Democratic bill would strengthen, rather than 
eliminate, the priority for low-skilled and low-income adults under 
WIA.
    Finally, I understand that my Republican colleagues propose to 
eliminate and consolidate 35 WIA programs through the introduction of 
the SKILLS Act.
    While I remain optimistic that we on this committee can work 
through some of our differences to reauthorize the Act, I do not 
support the elimination and consolidation of federal programs. This 
approach would only serve to weaken our current WIA system.
    With that, I look forward to hearing from today's panel of 
distinguished witnesses on how to improve our nation's public workforce 
and adult education system.
    Thank you.
                                 ______
                                 
    Chairwoman Foxx. Thank you, Mr. Hinojosa.
    Mr. Tierney. Madame Chairwoman.
    Chairwoman Foxx. Yes, Mr. Tierney.
    Mr. Tierney. May I ask for unanimous consent to enter upon 
the record an opening statement just to place on the record.
    [The statement of Mr. Tierney follows:]

    Prepared Statement of Hon. John F. Tierney, a Representative in 
                Congress From the State of Massachusetts

    Thank you, Madame Chairwoman.
    I was disappointed with how the Education and Workforce Committee 
proceeded with WIA reauthorization last Congress. This Committee 
advanced a bitterly partisan bill. Not one Democrat supported it during 
the Committee mark--up. Dozens of outside groups--including the AARP, 
the Adult Literacy Council, the Voc-Rehab Administrators, the National 
Council on Aging, the National Urban League, the United Way, and 
others--voiced concerns about or objections to the Republican bill.
    A real opportunity to work together and come up with a bipartisan 
product was missed.
    During the legislative hearing on the Republican bill, I asked the 
witnesses whether it could be improved by aspects of the Democratic 
bill that I and Reps. Hinojosa and Miller filed. I plan to ask that 
same question again today. Every witness--including the ones invited by 
the Republicans--agreed that our bill could improve their bill. 
Unfortunately, no effort was made to make it a bipartisan process.
    During last year's Committee's mark-up of the Republican bill, Mr. 
McKean said that ``bipartisanship is the responsibility of the 
majority.''
    He's right. That was last June. 7 months, and 1 election have 
passed since then--yet here we are again.
    The latest iteration of the Chairwoman's WIA bill--which was 
announced last week but filed yesterday--continues to prioritize 
repeal, consolidation, and block granting over everything else. Just 
look at their press release on the bill! The first point they mention 
is how many programs their bill eliminates, as if that's the best and 
only measure for strengthening and modernizing the existing system. It 
isn't.
    There is no evidence to support that the kind of arbitrary 
consolidation proposed by Chairwoman Foxx's bill will make the 
workforce system more coordinated or better integrated.
    In fact, what seems more likely is that certain populations--such 
as youth, women, low--income adults, the disabled, and others with 
barriers to employment--will not receive the same level of service as 
they have had under current law. Let's take farmworkers as one example. 
Farmworkers are a hard-to-serve population who are mobile and who often 
have language barriers and unique educational challenges. The 
Farmworker Program is one of the dozens eliminated by Chairwoman Foxx's 
bill. So how can farmworkers across this country expect to be served?
    Again, it is disappointing that Chairwoman Foxx and Republican 
Leadership on this Committee chose not to engage in a constructive 
dialogue on how we can make this a bipartisan process just as it was in 
1998 when WIA became law. It is particularly unfortunate given that our 
areas of agreement on WIA should outnumber our areas of disagreement. 
The millions of workers looking for jobs and the millions of employers 
searching for qualified candidates deserve better.
    I look forward to the witnesses' testimony and thank Chairwoman 
Foxx for giving me an opportunity to make an opening statement.
                                 ______
                                 
    Chairwoman Foxx. Without objection.
    Mr. Tierney. And may I ask unanimous consent to place on 
the record a letter from the Association of Farmworker 
Opportunity Programs dated February 21, 2013?
    [The information follows:]

                                                 February 21, 2013.
Hon. George Miller, Ranking Member,
Committee on Education and the Workforce, U.S. House of 
        Representatives, Washington, DC 20515.
    Dear Ranking Member Miller: Migrant and seasonal farmworkers are 
among the nation's most vulnerable in the current employment and 
economic climate. The Workforce Investment Act of 2013 you introduced 
with Representatives John Tierney (D-MA) and Ruben Hinojosa (D-TX) 
takes a positive step forward by continuing to invest in the National 
Farmworker Jobs Program, a targeted and fiscally responsible national 
job training program. The Association of Farmworker Opportunity 
Programs (AFOP) applauds this effort to ensure the most vulnerable 
Americans, like our nation's farmworkers, have access to the tailored 
education and training they need to attain good, self- and family-
sustaining jobs.
    AFOP is a national non-profit federation of non-profit and public 
agencies that operate the National Farmworker Jobs Program authorized 
under the Workforce Investment Act at Title I, Section 167. The thread 
that binds the Association is the concept that training and education 
can provide the launching pad to a better and more stable life for the 
workers who plant, tend, and harvest the crops that Americans consume 
at their tables.
     Migrant and seasonal farmworkers are an exceptionally 
hard-to-serve population with unique barriers that the traditional 
universal access model would not be able to effectively serve. 
Typically, farmworkers face language barriers; severe poverty; and very 
low math and literacy rates, with an average education level of just 
seventh to eighth grade.
     Farmworkers are an extremely mobile population. Due to the 
nature of farm work, it is imperative that bills seeking to reauthorize 
or update the Workforce Investment Act preserve the NFJP as a national 
program. It is unrealistic for Congress to expect governors to serve 
people who only work briefly in their state and then move elsewhere.
    The NFJP, is a proven-effective federal job training program 
operated by 52 non-profit and public agencies that specialize in 
providing education and training to migrant and seasonal farmworkers. 
NFJP participants train for high-demand, high-growth work both in and 
outside of agriculture. AFOP's member agencies that are awarded the 
competitive grants provided by the U.S. Department of Labor typically 
place over 80% of job-training farmworker customers into good jobs with 
benefits.
    The services AFOP members provide are integral to the agriculture 
industry's success and, consequently, the country's pursuit of job 
creation and economic stability. Again, we appreciate your commitment 
to making smart federal investments in programs that educate and train 
our nation's farmworkers for skills U.S. businesses need.
            Sincerely,
                                              Jesus Gamboa,
                                                         President.
                                            Daniel Sheehan,
                                                Executive Director.
                                 ______
                                 
    Chairwoman Foxx. Without objection.
    Mr. Tierney. Thank you.
    Chairwoman Foxx. Again, I would like to thank our witnesses 
for joining us.
    Pursuant to Committee Rule 7C, all subcommittee members 
will be permitted to submit written statements to be included 
in the permanent hearing record. And without objection, the 
hearing record will remain open for 14 days to allow 
statements, questions for the record, and other extraneous 
material referenced during the hearing to be submitted in the 
official hearing record.
    It is now my pleasure to introduce our distinguished panel 
of witnesses.
    Mr. Chris Hart is president and CEO of Workforce Florida, 
Inc., the nonprofit, public-private organization charged with 
policy-setting and oversight of Florida's workforce system.
    Dr. Scott Ralls is the seventh president of the North 
Carolina Community College System, which is one of the largest 
systems of higher education in the United States, and is 
internationally recognized for its programs to foster economic 
and workforce development.
    Dr. Harry Holzer serves as a professor of public policy at 
the Georgetown Public Policy Institute and is a faculty 
director--and is faculty director of the Georgetown Center on 
Poverty, Inequality, and Public Policy.
    Dr. Todd Gustafson serves as the executive director of 
Michigan Works!, Berrien-Cass-Van Buren, one of the 25 
workforce development boards in the state of Michigan.
    Before I recognize you to provide your testimony, let me 
briefly explain our lighting system. You will have 5 minutes to 
present your testimony. When you begin, the light in front of 
you will turn green. When 1 minute is left, the light will turn 
yellow. When your time has expired, the light will turn red.
    At that point, I ask you to wrap up your remarks as best as 
you are able. After you have testified, members will each have 
5 minutes to ask questions of the panel.
    I now recognize Mr. Hart for 5 minutes.

          STATEMENT OF CHRIS HART, PRESIDENT AND CEO,
                    WORKFORCE FLORIDA, INC.

    Mr. Hart. Thank you.
    Good morning, Chairwoman Foxx, Ranking Member Hinojosa, and 
other distinguished members of this subcommittee.
    My name is Chris Hart and I have the privilege of serving 
as the president and CEO of Workforce Florida Inc., the 
Statewide Workforce Investment Board of the Nation's fourth 
largest state.
    Simply put, Workforce Florida's mission is to help 
Floridians enter, remain, and advance in the workforce by 
ensuring they have the skills at the right time to meet the 
needs of the marketplace. We believe the SKILLS Act will help 
us achieve this mission.
    I commend this subcommittee and the House leadership for 
making the continued transformation of our nation's workforce 
development system into one that is increasingly flexible, 
responsive, and innovative a leading priority.
    The SKILLS Act proposes a market-driven approach to talent 
development designed to prepare individuals seeking employment 
for the jobs of today and the jobs of tomorrow whether that 
person currently relies on the social safety net, is seeking 
skills upgrade training, or looking to advance within an 
emerging industry.
    The SKILLS Act consolidates the existing job training 
programs that support similar activities, work readiness, 
training, and placement into a single workforce investment 
system.
    The SKILLS Act rightly focuses on creating a talent supply 
system with the funding flexibility to partner with businesses 
to ensure they can design training and education opportunities 
for new and existing employees giving workers the ability to 
sharpen their skills, increase their productivity, and earning 
potential, and advance their careers.
    This consolidation of programs and funding should result in 
a reduction of the administrative burden currently imposed on 
the one-stop career center staff by eliminating cost 
allocations between programs as well as a tracking and 
reporting redundancies.
    The SKILLS Act proposes important changes that facilitate 
regional alignment of markets and resources rather than forcing 
the acceptance of the status quo. It also strengthens the 
authority of governors to designate the boundaries of workforce 
areas. We agree, and support these provisions.
    The flexibility in state and local board appointments is 
another welcomed change proposed in the SKILLS Act and 
increasing the business representation will only improve our 
alignment with market needs.
    In Florida, we have found that volunteer board members who 
come from businesses of all sizes and stages bring with them a 
wealth of experience that helps us shape policies with keen 
focus on reducing red tape, forging strategic partnerships, 
higher return on investment, and pursuit of greater 
efficiencies and effectiveness.
    The SKILLS Act strengthens the link between employment and 
training. We agree that in order to shrink the gap between 
skills demanded and skills supplied, we must have market 
relevant training and education.
    However, Florida asks that the subcommittee strongly 
consider allowing for the greatest amount of flexibility with 
how this training is delivered.
    The SKILLS Act requires regional workforce boards to 
reserve a percentage of funds for training activities. Florida 
imposes a similar requirement on regional workforce boards 
although the amount of the reserve is set by law with the 
ability to reduce the reserve if circumstances warrant.
    From Florida's experience, the reserve requirement 
reinforces the state's commitment to training our workforce to 
meet market needs as long as the type of training is not 
limited.
    Qualified training in Florida ranges from classroom and 
Internet-based training to on-the-job training and customized 
training delivered by businesses.
    The SKILLS Act calls for unified planning and common shared 
goals. It focuses on performance over process and continuous 
evaluation of systems and procedures in an effort to become 
more efficient and effective with each passing year. Florida 
agrees.
    Today, businesses and their jobs go where the talent is. 
Creating a modern and responsive national talent delivery 
system that supports job creation and retention is possible 
only if we continue to remove barriers allowing state and local 
workforce entities greater flexibility to better align 
priorities, services, and programs as well as leverage 
resources with educational systems. In doing so, a strong focus 
must remain on engaging workers at every stage of their career.
    In conclusion, we are proud of our past success resulting 
from our efforts to optimize both the federal and state 
landmark laws. We believe it has contributed to Florida's track 
record of recognition as a national model for innovation.
    However, we are greatly encouraged, Madame Chair, that the 
SKILLS Act will allow our state and others to accelerate 
innovative, market responsive strategies for even higher 
performance and results aimed at improving our nations talent 
competitiveness.
    Chairwoman Foxx, this concludes my remarks. I want to again 
thank you for the opportunity to testify before this 
subcommittee on an issue vitally important to American 
innovation and commerce.
    [The statement of Mr. Hart follows:]

        Prepared Statement of Chris Hart IV, President and CEO,
                         Workforce Florida Inc.

    Chairwoman Foxx, Ranking Member Hinojosa, and other distinguished 
members of this Subcommittee: I am Chris Hart IV and I have the 
privilege of serving as the president and CEO of Workforce Florida 
Inc., the Statewide Workforce Investment Board for the nation's fourth 
most-populous state. Workforce Florida's mission is to develop the 
state's business climate by designing and implementing strategies that 
help Floridians enter, remain and advance in the workforce becoming 
more highly skilled and successful, benefiting Florida business and the 
entire state. While I have served as Workforce Florida's president 
since November 2007, I have been fortunate throughout my career to hold 
other executive, appointed and elected positions in Florida that 
similarly have greatly influenced my testimony today. I have served as 
the interim director of the Governor's Office of Tourism, Trade and 
Economic Development; senior vice president of external affairs and 
investor relations at Enterprise Florida Inc. (the public-private 
partnership that is the principal statewide economic development 
organization); co-founder of a Tampa Bay-based software and classified 
advertising small business; a member of the inaugural Workforce Florida 
Board of Directors; and a member of the Florida House of 
Representatives.
    I am honored to join you today to offer testimony in support of 
reauthorization of the Workforce Investment Act (WIA) and, 
particularly, the Supporting Knowledge and Investing in Lifelong Skills 
(SKILLS) Act. The proposed SKILLS Act, at its very core, is about 
maintaining our nation's global economic leadership and accelerating 
economic progress for Americans by focusing on jobs and a modern talent 
delivery system that produces skilled and knowledgeable workers. The 
Act equips states to better attract, retain and create jobs by serving 
three primary customers: businesses, workers and job seekers. In 1998, 
WIA provided Florida with the opportunity to build a modern workforce 
system, now, 15 years later, new reauthorization legislation is vitally 
needed to better position our state and nation by supporting those who 
create jobs--entrepreneurs and businesses--with a skilled and 
competitive workforce. Given the rapid and profound changes in our 
nation's economy, brought forward by the Great Recession, innovation 
and increased global competition, action is necessary. Our nation must 
better anticipate and respond to the needs of business, educate and 
train workers in market-relevant skills and competencies, help job 
seekers enter and advance in the workforce, and empower state and 
regional leaders to be problem solvers, creative and resource-
efficient.
    I commend this Subcommittee and the House leadership for making the 
continued transformation of our nation's workforce development system 
into one that is increasingly flexible, responsive and innovative a 
leading priority. The talent supply challenges confronting our nation 
at home and the global competition abroad require that we leverage and 
maximize resources ensuring the most efficient and effective use of our 
public workforce investment to address the talent needs of employers 
today and tomorrow, bolstering growth and sustainability of jobs and 
our economy. To assist your efforts, my remarks today focus on three 
primary areas:
     Further streamlining and better integrating federal 
programs as well as eliminating bureaucratic barriers to market-driven 
employment and training services.
     Enhancing opportunities for flexibility for state and 
regional leadership, with an emphasis on performance, to further 
transform workforce investment to address existing and emerging 
economic needs.
     Strengthening talent development by cultivating strategic 
partnerships, especially with education, to improve lifelong learning.
A Roadmap for Innovation
    When I was in the Florida House of Representatives in 2000, I 
sponsored the Workforce Innovation Act. Our goals in Florida--then and 
today--reflect many of the primary objectives of the SKILLS Act.
    First, you want to consolidate the existing job training programs 
that support similar activities (work readiness, training and 
placement) into a single workforce investment system. Connecting job 
seekers with employers and helping Americans get to work remains a 
clear and central focus of the Act.
    You also want to take a market-driven approach to talent 
development designed to prepare individuals seeking employment for the 
jobs of today--and the jobs of tomorrow--whether that person currently 
relies on the social safety net, is seeking skills upgrade training or 
looking to advance within an emerging industry.
    The SKILLS Act also rightly focuses on creating a talent supply 
system with the funding flexibility to partner with businesses to 
ensure they can design training and education opportunities for new and 
existing employees giving workers the ability to sharpen their skills, 
increase their productivity and earning potential, and advance their 
careers.
    With our nation at a crossroad, Florida's experience--forged by 
more than a decade of business-led, public and private collaboration to 
drive market-relevant strategies and workforce investment--offers a 
roadmap for preparing job seekers, workers and businesses to compete 
and advance in an increasingly knowledge-based economy.
Streamlining, Integrating Programs and Services--Florida as a leader
    Florida boldly seized the opportunity created by WIA for a 
customer-focused and business-directed workforce development system 
with its enactment of the Workforce Innovation Act of 2000. An 
overarching priority was restructuring the fractured system we had then 
to create a more integrated and comprehensive system--nimble enough to 
respond to local and statewide demands, economic shifts and strategic 
priorities with clear and consistent business involvement, strong state 
leadership and local decision-making.
    We are proud of the success resulting from our efforts to optimize 
both the federal and state landmark laws, which has contributed to 
Florida's track record of recognition as a national model for 
innovation. Among recent accolades influenced by our state's strong 
workforce system outcomes, Florida ranks:
     No. 1 for its talent pipeline in the third annual 
Enterprising States report by the U.S. Chamber of Commerce and the 
National Chamber Foundation. Enterprising States highlights initiatives 
and strategies that all 50 states are employing to remain competitive, 
restore jobs and drive economic growth.
     No. 2 in an annual Best States for Business survey by 
Chief Executive magazine, which examines feedback from more than 500 
CEOs to assess how each state fares on factors, including workforce 
quality, that are most essential for a business-friendly environment.
     In the Top-3 for five consecutive years in CNBC's annual 
America's Top States for Business, which examines 10 different 
categories to measure each state's ability to attract business 
including workforce quality and availability.
    In Florida, the 24 regional workforce boards direct nearly 100 One-
Stop Career Centers that connect job seekers, workers and businesses 
with employment and training services. Consistent with federal law, 
Florida's One-Stop Career Centers provide access to services offered by 
nearly a dozen state agencies that determine eligibility for and 
provide:
     Adult Job Placement and Training
     Unemployment Insurance
     Vocational Rehabilitation Services
     Transitional Services to Assist Job Seekers with Moving 
from Welfare to Work
     Veterans Employment and Training
    Florida's system successfully uses the One-Stop model effectively 
and encourages regional workforce boards to access other resources or 
partner with other programs to make services available to job seekers, 
workers and businesses. These services or programs are co-located both 
physically and through website linkages.
    Through local decision-making and, in some cases, state policy, 
many of Florida's One-Stop Career Centers already offer access to 
resources or programs the SKILLS Act proposes to consolidate, supported 
by a single Workforce Investment Fund. Under the Act, special 
populations will continue to be served by the One-Stop Career Centers, 
as the state and regional plans must detail the strategies for 
continuing such services.
    This consolidation of programs and funding should result in a 
reduction of the administrative burden currently imposed on One-Stop 
Career Center staff by eliminating cost allocations between programs as 
well as tracking and reporting redundancies. Efficiencies created 
through this universal approach empower those closest to the customers 
to determine the most effective services needed to achieve the best 
outcomes.
    It is our hope this Act also would clarify a federal policy that 
has hindered our state's flexibility to deliver services and further 
reduce administrative costs. While there is no direct federal statutory 
mandate in the Wagner-Peyser Act requiring state merit staff to deliver 
services, the U.S. Department of Labor has denied Florida's waiver 
requests from this regulation since 2007. This requirement has limited 
Florida's ability to cross-train staff across programs, removing from 
our purview management decisions best left to the state and local 
levels.
Flexibility Linked with Performance
    The workforce system envisioned in the SKILLS Act strengthens the 
link between employment and training. We agree that in order to shrink 
the gap between skills demanded and skills supplied, we must have 
market-relevant training and education; however, Florida asks that the 
Subcommittee strongly consider allowing for the greatest amount of 
flexibility with how this training is delivered.
    The SKILLS Act requires regional workforce boards to reserve a 
percentage of funds for training activities. Florida imposes a similar 
requirement on regional workforce boards, although the amount of the 
reserve is set by law, with the ability to reduce the reserve if 
circumstances warrant. From Florida's experience, the reserve 
requirement reinforces the state's commitment to training our workforce 
to meet market needs, as long as the type of training is not limited. 
Qualified training in Florida ranges from classroom and Internet-based 
training to On-the-Job Training and customized training delivered by 
businesses.
    The SKILLS Act calls for unified planning and common shared goals, 
it focuses on performance over process and continuous evaluation of 
systems and procedures in an effort to become more efficient and 
effective with each passing year. Florida agrees.
    Even as we work to link job seekers to employment and businesses to 
a pipeline of work-ready talent, as well as making training available 
to close the skills gap, Florida has and continues to underscore the 
importance of performance and outcomes. In addition to tracking and 
reporting federally required common measures such as entered 
employment, average earnings and youth placement or education and 
skills training gains, Florida continues to place an intense focus on 
the development of other management and performance measurement tools--
with more current data--that allow our state to drive stronger outcomes 
and track progress on shared state and local goals.
    One example is the Daily and Monthly Job Placement Reports, which 
were created by the Florida Department of Economic Opportunity, in 
conjunction with Workforce Florida, to support system measurement, 
management and service improvements aimed at helping Floridians find 
jobs. These reports were launched in November 2011 in response to 
Governor Rick Scott's call for improved performance measurements to 
support economic recovery and growth. Regional workforce boards are 
assigned a ranking based on their job-placement performance, taking 
into account a number of factors. Those factors include the number of 
job seekers who gain employment after being assisted by a One- Stop 
Career Center or via the Employ Florida Marketplace job-matching 
website at EmployFlorida.com, Florida's comprehensive labor exchange 
tool; the number of available job openings in each region; and the 
number of people receiving unemployment compensation, known in Florida 
as reemployment assistance benefits, who find employment after 
receiving workforce services. An individual who receives employment and 
training assistance through a One-Stop Career Center or the Employ 
Florida Marketplace and finds a job within 180 days is deemed a 
placement and may be reported by a regional workforce board.
    Last year, Florida's regional workforce boards assisted more than 
426,000 people who found jobs including more than 111,000 people who 
had received unemployment compensation--or reemployment assistance--
payments. The statewide goal for 2013 is 600,000 placements.
    Our relentless focus on job placements, at both the state and local 
levels, continues to invigorate our efforts to connect job seekers and 
employers and to generate creative solutions. In the Tampa Bay-area, 
the Pasco Hernando Workforce Board, frequently ranked among the Top 10 
boards for job placements, has found success through the board's focus 
on continuous enhancements to customer service and its Monday-Saturday 
Employment Support Center, a call center that links job seekers with 
employers seeking to hire. Polk Works, the regional workforce board 
that serves Polk County in Central Florida, has launched a Race to 
Place initiative, which is gaining momentum, new employer partners and 
communitywide support for its goal of assisting 10,000 Polk County 
residents with finding a job by June 30, 2013.
    Additionally, Florida has worked closely with the public and 
private sectors to identify statewide workforce and economic 
indicators. These indicators are vetted with regional and statewide 
collaborative partners. This work has led to better integrated 
strategies in workforce, education and economic development. Today, 
independent strategic plans across state and local entities are built 
using common measures. In Florida's State Strategic Workforce Plan, 
strategic goals are aligned with federal programmatic requirements, 
common measures and priorities of the Governor and Florida Legislature. 
Performance reporting systems and dashboards serve as tools to measure 
progress and align partnerships among regional workforce boards, 
educational entities and the Florida Chamber of Commerce.
    The regional workforce boards, and the communities they serve, 
represent a significant competitive advantage as we strive to grow 
Florida's economy.
    The SKILLS Act proposes important changes that facilitate regional 
alignment of markets and resources rather than forcing the acceptance 
of the status quo. It also strengthens the authority of governors to 
designate the boundaries of workforce areas.
    With Florida's shared vision, mission, strategic planning and 
common goals, Workforce Florida is now collaborating with the Florida 
College System, the State University System, the Florida Department of 
Transportation, Regional Planning Councils, Enterprise Florida and the 
Florida Chamber of Commerce at a level necessitating the review of 
relationships, policies, procedures, project management protocols and, 
yes, geographical boundaries in order to build the nation's most 
efficient and effective state system.
    The flexibility in state and local board appointments is another 
welcome change proposed in the SKILLS Act--and increasing the business 
representation will only improve our alignment with market needs. In 
Florida, we have found that volunteer board members who come from 
businesses of all sizes and stages bring with them a wealth of 
experience that help us shape policies with a keen focus on reducing 
red tape, forging strategic partnerships, measuring return on 
investment and pursuing greater efficiencies.
    The proposed funding level of 15 percent for the Governor's Reserve 
would enable Florida to continue to invest in innovative initiatives 
that respond to statewide economic development priorities and address 
the workforce needs of special populations such as at-risk youth, 
individuals with disabilities, veterans and other workers with 
challenges to employment.
Strengthening Talent Development and Lifelong Learning through 
        Partnerships
    Today, businesses--and their jobs--go where the talent is. Creating 
a modern and responsive national talent development system that 
supports job creation and retention is possible only if we continue to 
remove barriers allowing state and local workforce entities and 
educational systems to leverage resources and better align priorities, 
services and programs. In doing so, a strong focus must remain on 
engaging workers at every stage of their career.
    In Florida and across the nation, traditional silos that impede the 
development and implementation of seamless talent solutions aimed at 
maximizing the assets of workforce and education partners as a true, 
talent supply and delivery system are stifling our competitiveness. The 
SKILLS Act addresses critical areas for improving talent development 
and service delivery by providing enhanced opportunities to more 
effectively confront skills gap challenges by, among other things, 
facilitating greater collaboration with community colleges, building 
basic literacy and math skills into employment activities and 
encouraging stronger alignment of regional resources among workforce, 
education, economic development and industry.
    All three areas remain major priorities for Florida where we have a 
strategic focus on addressing the challenges of getting Floridians back 
to work, while also advancing opportunities to diversify our state's 
economy through a more highly skilled and competitive workforce for 
sectors targeted for economic development such as homeland security and 
defense, logistics and distribution, and aviation and aerospace, along 
with infrastructure industries like transportation, water resources, 
energy, broadband and healthcare.
    Florida's 28 state and community colleges have been and continue to 
be important allies in modernizing and creating a responsive talent 
supply and delivery system in our state. These institutions are 
recognized for being able to respond quickly to marketplace needs and 
just-in-time training required to keep businesses and their workers 
competitive. A specific provision in the SKILLS Act that we strongly 
support allows regional workforce boards to contract with community 
colleges to provide training to large groups of participants instead of 
on an individual basis. This approach, which generates efficiencies, is 
exemplified through a strong partnership between Workforce Connection--
the Florida regional workforce board that serves Citrus, Levy and 
Marion counties--and Central Florida Community College. Faced with a 
high unemployment rate of 10 percent on average in 2012 in two of the 
three counties it serves and 9.5 percent in the other, and a loss of 
jobs in the manufacturing and financial sectors, Workforce Connection 
has developed a partnership with its community college to provide 
training to large groups of participants in common but critical skill 
areas rather than a more limited, less efficient one-on-one approach to 
training.
    Another noteworthy example of seamless collaboration to meet 
industry demands is a unique, aligned approach among multiple state 
colleges to serve businesses creating jobs in manufacturing--a high- 
value industry essential to innovation. St. Petersburg College is the 
lead recipient of a $15 million, multi- year Trade Adjustment 
Assistance Program grant awarded last fall that will enable 12 state 
colleges to focus on training resulting in the attainment of industry-
recognized credentials and opportunities for On-the-Job Training, 
internships and job placements facilitated through regional workforce 
boards. The entire seamless workforce, education and economic 
development project is under the direct guidance of the Manufacturers 
Association of Florida and colleges are linked with regional 
manufacturing associations in their respective communities.
    Also in Florida where business is leading the way to improved 
talent solutions, Workforce Florida has developed Target Industry 
Cluster Task Forces to provide market perspective on developing a 
world- class talent delivery system in key sectors. The chief 
executives, who participate in these task forces, have emphasized that 
building basic literacy and math skills is a critical need and 
essential to workplace success. This linkage cannot be overlooked as an 
underpinning to lifelong employment success. As a key component of the 
SKILLS Act, the focus on these vital skills signals to business leaders 
and owners across the nation that these building blocks of basic 
literacy and math skills are universally viewed as a foundation for 
improving the skills of our nation's workforce.
    The global marketplace is as dynamic as it is diverse and regional 
economies must continue to develop strategies and talent development 
solutions that are based on more than the geographic designations of 
training providers. There must be strong alignment to regional 
economies and labor markets. The full spectrum of collaborative 
partners that impact talent solutions must now include industry 
clusters and employers and their specific talent needs, including 
groups of occupations that meet multiple industry sector needs; talent 
commuting patterns; existence of state colleges and universities, 
especially research centers; economic development regions and 
indigenous economic assets (e.g. ports, logistical centers and 
infrastructure). In Northwest Florida with Workforce Florida's support, 
a special skilled technician task force is just getting underway. Led 
by industry executives in construction and energy, the Northwest 
Florida Skilled Technician Project is facilitating an evaluation of 
existing regional assets and building on those attributes to create a 
new regional approach for world-class talent supply for skilled 
technicians. With economic competitiveness as its primary driver, the 
task force will gain a deeper understanding of skilled technician 
workforce needs for Northwest Florida companies in the defense, 
advanced manufacturing and energy sectors; create an education and 
training assets inventory informed by a review of supply and demand 
workforce analytics; and develop short-term and long-term 
recommendations that transform the region by identifying opportunities 
for skills improvement. By focusing increased attention on seamless 
alignment within regional economies and labor markets, the SKILLS Act 
will foster greater collaboration among workforce, education and 
economic partners, like those participating in the Northwest Florida 
Skilled Technician Project, to advance opportunities for businesses, 
workers and job seekers to be globally competitive.
    At the state level, Florida also is aligning talent needs within 
public and private K-12 and higher education organizational structures 
supported by increased integrated reporting systems. Mapping core 
educational standards to higher education curricula and job demands by 
occupational clusters has gained increased support. Greater attention 
is placed on accountability of funding allocations to educational 
providers with the resulting outcomes on job placements. Collaboration 
among workforce and educational entities continues to grow. Innovative 
programs based on proven performance to meet Florida's workforce and 
economic needs have increased. Recognition of industry-recognized 
licensure and credentials has gained importance in meeting job demands 
and identifying opportunities to assist employees with job retention 
and advancement.
    In closing, Florida's vision, innovation and action provides a 
roadmap for what our nation can accomplish through a better integrated 
talent supply and delivery system. The SKILLS Act will allow our state 
and others to accelerate innovative, market-responsive strategies for 
even higher performance and results aimed at improving our nation's 
talent competitiveness.
    Chairwoman Foxx this concludes my remarks. I want to again thank 
you for the opportunity to testify before this Subcommittee on an issue 
vitally important to American innovation and commerce. I welcome any 
questions you may have.
                                 ______
                                 
    Chairwoman Foxx. Thank you, Mr. Hart.
    Mr. Hart. Thanks.
    Chairwoman Foxx. You set a good standard here for the rest 
of our folks.
    Mr. Hart. Thank you.
    Chairwoman Foxx. I would now recognize Dr. Ralls for 5 
minutes.

            STATEMENT OF DR. SCOTT RALLS, PRESIDENT,
            NORTH CAROLINA COMMUNITY COLLEGES SYSTEM

    Mr. Ralls. Thank you, Chairwoman Foxx, Ranking Member 
Hinojosa, and members of the subcommittee. Thank you for the 
opportunity to testify before you today.
    Less than 2 weeks ago, the President was in Asheville, 
North Carolina, the day after the State of the Union Address, 
touring one of our state's newest advanced manufacturing 
facilities, Linamar.
    He was particularly taken with the story of his tour guide, 
Jeff Brower, later nicknamed by the media as ``Jeff the 
Machinist,'' who the President noted found opportunity at 
Linamar after a decade in the trucking industry.
    One year earlier, a North Carolinian named Jackie Bray sat 
by the First Lady during the State of the Union address as the 
President made note of her transition from the ranks of the 
unemployed to a new job making gas turbines at Charlotte's 
Siemens Energy Hub.
    And a year earlier than that, Kathy Proctor of Winston-
Salem was referenced in one press account as the star of the 
2011 State of the Union, for her ``that's me'' response when, 
while sitting in the gallery, the President commented on her 
journey from dislocated furniture worker into the new world of 
biotechnology.
    Each of these hard working North Carolinians experienced 
very unique moments of recognition, but they also shared a 
common experience available to thousands of North Carolinians 
each year; the opportunity to gain new skills and a new career 
through education and job training at one of our 58 community 
colleges.
    From the trucking industry to advanced manufacturing, 
packaging to energy, furniture to biotechnology, the 
opportunity to move from one sector of the economy to better 
opportunities in another hinges on the access and opportunity 
presented by education and advanced job training.
    Unfortunately, as important as education and advanced job 
training are to rebuilding our economy, the Workforce 
Investment Act, our nation's primary federal program intended 
to provide such education training, is simply not keeping up 
with the needs of our employers or the men and women this 
system was designed to serve.
    This Act, which has not been reauthorized since 1998, 
provides too few education and training opportunities, is 
overly prescriptive and bureaucratic, and creates barriers to 
aligning with other federal programs.
    Making training a priority will mean dedicating additional 
resources to it, no doubt a very difficult challenge in an 
environment marked by the scarcity of resources. And that is 
why it is also important that reauthorization of the Workforce 
Investment Act streamline programs and limit administrative 
overhead and enable state and local flexibility to design 
systems that meet the legislative goals in the most effective 
and efficient manner.
    Simplifying the system and moving past the myriad of 
multiple program titles and funding streams is a fundamental 
step. At the state and local levels, these program streams 
often lead to the same delivery sources, but require additional 
administrative oversight, diverting dollars from valuable 
direct services such as education and training.
    That is why I believe it is past time to reauthorize and 
reexamine the Workforce Investment Act in a way that addresses 
each of these issues.
    To that end, I am encouraged by legislation introduced by 
you, Chairwoman Foxx and others on this committee, which 
proposes many critical changes toward meeting these objectives.
    In particular, I support provisions that place a renewed 
emphasis on job training by requiring minimum amounts of 
funding targeted toward education and training, that 
restructures the cumbersome current sequence of services that 
too often puts training at the end of the list and instead 
ensure individuals will have the opportunity to receive 
training immediately, allow local boards to contract directly 
with community colleges for the provision of training designed 
to serve large groups of individuals, and allow states to 
streamline the eligibility of training providers, particularly 
community colleges.
    At the state level in North Carolina, simplifying and 
streamlining has been the recent goal in creating a more 
effective workforce delivery system. Previously separate 
management structures for Wagner-Peyser and Workforce 
Investment Act funds have been consolidated, new performance 
measures across workforce programs are being created, alignment 
between community college and public school Career Technical 
Education pathways are being tightened, as well as pathways 
between adult education and job training, and the State 
Workforce Investment Board was reduced from 38 to 25 members 
with particular emphasis placed on maintaining strong business-
based leadership.
    Our new governor, Pat McCrory, is placing great emphasis on 
closing the skills gap to better meet the needs of our citizens 
who need employment and our businesses that need skilled 
employees. The changes you have proposed will further this 
goal.
    In North Carolina, we have seen the benefits of 
collaboration across workforce system providers and joint 
efforts to increase opportunities for accelerated training in 
demand occupations. When the recession hit North Carolina hard 
in 2008, we began thinking hard about where the jobs would be 
when recovery began and the skills training that could be 
accelerated to trampoline folks back into the workplace.
    We developed a training model that utilized in-demand 
industry certifications, the ACT WorkKeys tools, and 
employability skills training in areas like interviewing, 
resume writing, time management, and communications.
    Our accelerated training model continues at community 
colleges across our state with support from the Workforce 
Investment Act, and 3 weeks ago, I saw its practical benefits 
in a very real and personal way.
    I visited the Workforce Certification Academy operated by 
Piedmont Community College at a small community center in the 
rural town of Roxboro, North Carolina. There I met a woman 
named Linda Weaver, a woman in her mid-50s, who shared a story 
similar to Jeff, Jackie, and Kathy.
    Linda had lost her job in the construction industry and was 
facing homelessness. In her local newspaper, she read about the 
accelerated manufacturing training program. Within months she 
had gained her Certified Production Technology Certificate, 
Gold-level Career Readiness Certificate, certifications 
endorsed by the National Association of Manufactures, and 
applied for a job.
    Within this past year, she has received a $2/hour raise. 
And that day, when she hugged my neck, she said to me, ``This 
program saved my life.''
    Madame Chair, Ranking Member Hinojosa, and members of the 
subcommittee, I am hopeful that this Congress will have the 
will and determination to finally achieve a reauthorization of 
the Workforce Investment Act this year and in doing so, I 
strongly urge that it be streamlined and improved so that job 
training and community colleges are a more integral part of our 
Nation's vitally important efforts to ensure that each and 
every Linda, Jeff, Jackie, and Kathy out there have the 
opportunity to receive the education and skills necessary to 
get and keep a good job.
    Thank you.
    [The statement of Mr. Ralls follows:]

          Prepared Statement of Dr. R. Scott Ralls, President,
                North Carolina Community College System

    Chairwoman Foxx, Ranking Member Hinojosa, and members of the 
subcommittee, thank you for the opportunity to testify before you 
today. My name is Scott Ralls, and I am President of the North Carolina 
Community College System. This year, I also serve as Chair of the 
National Council of State Directors of Community Colleges, and have 
previously served as a president of a local North Carolina community 
college and as the state administrator of federal workforce funds under 
the then Job Training Partnership Act. I am also on the Board of 
Directors of Rebuilding America's Middle Class (RAMC), a coalition 
promoting the vital role community colleges play in serving Americans.
    Less than two weeks ago, the President was in Asheville, North 
Carolina, the day after the State of the Union Address, touring one of 
our state's newest advanced manufacturing facilities, Linamar. He was 
particularly taken with the story of his tour guide, Jeff Brower, later 
nicknamed by the media as ``Jeff the Machinist,'' who the President 
noted found opportunity at Linamar after a decade in the trucking 
industry. One year earlier, a North Carolinian named Jackie Bray sat by 
the First Lady during the State of the Union address as the President 
made note of her transition from the ranks of the unemployed to a new 
job making gas turbines at Charlotte's Siemens Energy Hub. And a year 
earlier than that, Kathy Proctor of Winston-Salem was referenced in one 
press account as the star of the 2011 State of the Union, for her 
``that's me'' response when, while sitting in the gallery, the 
President commented on her journey from dislocated furniture worker 
into the new world of biotechnology.
    Each of these hard working North Carolinians experienced very 
unique moments of recognition, but they also shared a common experience 
available to thousands of North Carolinians each year: the opportunity 
to gain new skills and a new career through education and job training 
at one of our 58 community colleges. From the trucking industry to 
advanced manufacturing, packaging to energy, furniture to 
biotechnology, the opportunity to move from one sector of the economy 
to better opportunities in another hinges on the access and opportunity 
presented by education and advanced job training.
    Unfortunately, as important as education and advanced job training 
are to rebuilding our economy, the Workforce Investment Act--our 
nation's primary program intended to provide such training--is simply 
not keeping up to the needs of our employers or the men and women this 
system was designed to serve.
    This Act, which has not been reauthorized since 1998, provides too 
few training opportunities, is overly prescriptive and bureaucratic, 
and creates barriers to aligning with other federal programs.
    Making training a priority will mean dedicating additional 
resources to it, no doubt a difficult challenge in an environment 
marked by the scarcity of resources. That is why it is also important 
that reauthorization of the Workforce Investment Act streamlines 
programs, limits administrative overhead, and enables state and local 
flexibility to design systems that meet the legislative goals in the 
most effective and efficient manner. Simplifying the system and moving 
past the myriad of multiple program titles and funding streams is a 
fundamental step. At the state and local levels, these different 
program streams often lead to the same delivery sources, but require 
additional administrative oversight, diverting dollars from valuable 
direct services such as training.
    That is why I believe it is past time to reauthorize and reexamine 
the Workforce Investment Act in a way that addresses each of these 
issues. To that end, I am encouraged by legislation introduced by you, 
Chairwoman Foxx and others on this Committee, which proposes many 
critical changes toward meeting these objectives.
    In particular, we support provisions that:
     Place a renewed emphasis on job training by requiring 
minimum amounts of funding targeted toward training;
     Restructure the cumbersome current sequence of services 
that puts training at the end of the list and instead ensure 
individuals will have the opportunity to receive training immediately;
     Allow local boards to contract directly with community 
colleges for the provision of training designed to serve large groups 
of individuals;
     Allow states to streamline the eligibility of training 
providers, including community colleges; and,
     Promote the development of educational pathways from high 
school through postsecondary education with more ``on and off'' ramps 
so students and transitioning workers can gain interim credentials with 
real value in the labor market.
    I'm also pleased your bill takes important steps toward 
streamlining programs and eliminating overly prescriptive provisions 
which have hampered the ability for states and local communities to 
create the high performing workforce systems so desperately needed.
    At the state level in North Carolina, simplifying and streamlining 
has been the recent goal in creating a more effective workforce 
delivery system. Previously separate management structures for Wagner-
Peyser and Workforce Investment Act funds have been consolidated, new 
performance measures across workforce programs are being created, 
alignment between community college and public school Career Technical 
Education pathways are being tightened, and the State Workforce 
Investment Board was reduced from 38 to 25 members with particular 
emphasis placed on maintaining strong business-based leadership. Our 
new governor, Pat McCrory, is placing great emphasis on closing the 
skills gap to better meet the needs of our citizens who need employment 
and our businesses that need skilled employees. The changes you have 
proposed will further this goal and create more opportunity to 
strengthen our state workforce system.
    In North Carolina, we have seen the benefits of collaboration 
across workforce system providers and joint efforts to increase 
opportunities for accelerated training in demand occupations. When the 
recession hit North Carolina hard in 2008, we began thinking hard about 
where the jobs would be when recovery began and the skills training 
that could be accelerated to trampoline folks back into the workforce 
in less than six months. We developed a training model that combined 
training for in-demand industry certifications, Career Readiness 
Certifications using the ACT WorkKeys tools, and employability skills 
training such as interviewing, resume writing, time management and 
communications.
    Our accelerated job training model continues at community colleges 
across our state, and three weeks ago, I saw its practical benefits in 
a very real and personal way. I visited the Workforce Certification 
Academy operated by Piedmont Community College at a small community 
center in the rural town of Roxboro, North Carolina. There I met Linda 
Weaver, a woman in her mid-50s, who shared a story similar to Jeff, 
Jackie and Kathy. Linda had lost her job in the construction industry 
and was facing homelessness. In her local newspaper, she read about the 
accelerated manufacturing training program and signed up. Within a 
couple of months she had earned her Manufacturing Skills Standards 
Council Certified Production Technician certificate endorsed by the 
National Association of Manufacturers, a Gold-level Career Readiness 
Certificate, and applied for a job. At first, she was kicked out of 
initial employment consideration because of her credit history, and 
that's when the program director jumped in to convince the local 
manufacturer that with the skills Linda had demonstrated through her 
competency-based certificates, they would be crazy not to hire her. So 
they did, and one year later, she's doing great. She has even received 
a $2 an hour raise. ``This program saved my life,'' she whispered to me 
that day, as she hugged my neck.
    Madam Chair, Ranking Member Hinojosa, and members of the 
subcommittee, I am hopeful that this Congress will have the will and 
determination to finally achieve a reauthorization of the Workforce 
Investment Act this year.
    In doing so, I strongly urge that it be streamlined and improved so 
that job training and community colleges are a more integral part of 
our nation's vitally important efforts to ensure that each and every 
Linda, Jeff, Jackie, and Kathy out there have opportunity to receive 
the education and skills necessary to get and keep a good job.
    Thank you.
                                 ______
                                 
    Chairwoman Foxx. Thank you.
    Dr. Holzer, you are recognized for 5 minutes.

          STATEMENT OF DR. HARRY HOLZER, PROFESSOR OF
       PUBLIC POLICY, GEORGETOWN PUBLIC POLICY INSTITUTE

    Mr. Holzer. Thank you, Chairwoman Foxx, Ranking Member 
Hinojosa, and subcommittee members.
    I would like to make four main points today. Point number 
one; the need for effective education and workforce services 
that would improve the skills of American workers and serve the 
interests of workers, employers, and the economy has never been 
greater than it is today. And I think none of us would disagree 
with that claim.
    But point number two, ironically, we continually invest 
fewer resources in our workforce system over time to meet this 
need, and we invest much less than do most other industrial 
nations. Program consolidation and budget sequestration both 
threaten to aggravate this disturbing trend.
    By almost any measure total funding of the workforce 
programs in the United States have fallen very dramatically 
over time, much of it in the last decade. We have a $16 
trillion economy and 150 million workers. Total workforce 
expenditures now constitute only about 0.1 percent of GDP which 
is less than what virtually any other industrialized country 
spends on such services.
    The capacity of our one-stop offices to meet and to provide 
services to millions of workers under current budgets is 
already strained, and longer-term training funded within the 
system is virtually nonexistent.
    And ongoing budget sequestration could severely exacerbate 
this trend and consolidation will likely exacerbate it as well, 
because consolidation is often used as a justification for 
further budget-cutting in this area.
    Point number three; consolidation of many small programs 
into one clearly has some potential benefits in terms of 
savings on administrative costs. It also has some potential 
costs in terms of particular populations being less well-served 
than they are today.
    The recent report by the U.S. Government accountability 
office does indicate that there are potential savings from 
consolidating administrative structures on many small programs, 
but the report also points out, and I think this is very 
important, we currently have virtually no evidence on how large 
these benefits of consolidation really are, and the report is 
very clear about that.
    Furthermore, the report also warns that merging programs 
may make services less accessible to groups considered hard to 
serve such as ex-offenders, disconnected youth, or many rural 
residents. The adage, ``one size does not fit all,'' clearly 
applies in this case. It is not clear that one program and one 
funding stream fit all in this case.
    Point number four. It is very important that we institute 
reforms in our workforce system to better integrate and better 
coordinate our nation's higher education programs with our 
workforce systems and to make both of them more responsive to 
the needs of the U.S. labor market and the economy, but a 
simple consolidation of many programs into one with fewer 
dollars attached does not necessarily help us achieve this 
goal.
    Our nation's career and technical education, higher 
education, and workforce programs should operate together more 
effectively to better enable workers to gain the credentials 
valued by employers. Industry specific partnerships between 
employers, service providers, and workforce agencies are a 
proven way of achieving this goal and career pathways seem 
critical as well.
    Using data to inform students and educators of which 
sectors and jobs are in high demand and enabling our education 
and workforce systems to better meet this demand is very 
important. In my view, the proposed Workforce Investment Act of 
2013 contains several key provisions that would move us towards 
achieving this goal.
    It is much less clear to me that the SKILLS Act as 
currently written would do so as well, especially with less 
funding. Either way, these reforms should be the primary goal 
of any workforce legislation, not simply consolidating and 
cutting funding. Thank you.
    [The statement of Mr. Holzer follows:]

  Prepared Statement of Harry J. Holzer, Professor of Public Policy, 
                   Georgetown Public Policy Institute

    Chairwoman Foxx, Ranking Member Hinojosa and Subcommittee Members: 
I am very pleased to be here today and to have the opportunity to 
address important questions about the future of our nation's workforce 
system. I'd like to make the following points:
    1. The need for effective education and workforce services that 
would improve the skills of American employees and thus serve the 
interests of workers, employers, and the overall economy has never been 
greater than it is today.
    Having the educational levels and occupational training valued by 
employers is clearly a precondition for any worker who wants to achieve 
family-sustaining earnings in our current economy. But large 
percentages of American workers lack such education and skills.\i\ The 
fact that many millions of workers today suffer long-term unemployment 
that further erodes their skills and labor market information (because 
of the Great Recession) only exacerbates this problem. And, even with 
today's high levels of unemployment, many employers seem to have 
difficulty finding sufficiently skilled workers to fill vacant 
jobs.\ii\ Employers who face or anticipate these difficulties have 
incentives to create fewer jobs in America, and fewer good- paying ones 
at that.
---------------------------------------------------------------------------
    \i\ Claudia Goldin and Lawrence Katz, The Race Between Education 
and Technology, Harvard University Press, 2008; Harry Holzer and Robert 
Lerman, America's Forgotten Middle-Skill Jobs, The Workforce Alliance, 
2007.
    \ii\ Michael Elsby et al., ``The Labor Market in the Great 
Recession,'' National Bureau of Economic Research Working Paper, 2010; 
Harry Holzer, Testimony before the Joint Economic Committee of 
Congress, July 2011.
---------------------------------------------------------------------------
    2. Ironically, we continually invest fewer resources in workforce 
services over time to meet this need, and we invest much less than do 
most other industrial nations. Program consolidation and budget 
sequestration both threaten to aggravate this disturbing trend.
    By almost any measure, funding for workforce programs in the U.S. 
has fallen dramatically over time, and especially in the past few 
years. Such expenditures now constitute less than .1% of GDP, which is 
less than what virtually any other industrialized country spends on 
such services.\iii\ The capacity of our One-Stop offices to provide 
needed services to millions of workers under current budgets is often 
limited, and longer-term training funded within this system has become 
almost nonexistent. An ongoing budget sequestration, which threatens to 
further reduce discretionary spending of many kinds, could severely 
exacerbate this trend; and consolidation might exacerbate it as well, 
since it is often used as justification for cutting budget 
appropriations in the workforce area.\iv\
---------------------------------------------------------------------------
    \iii\ Chris O'Leary et al. eds., Job Training Policy in the United 
States, W.E. Upjohn Institute for Employment Research, 2004.
    \iv\ For example, Budget Committee chair Rep. Paul Ryan frequently 
uses consolidation as justification for cutting funding for WIA and 
other workforce programs in his proposed federal budgets.
---------------------------------------------------------------------------
    3. Consolidation of many small employment and training programs 
into one clearly has potential benefits, in terms of savings on 
administrative costs, as well as potential costs, in terms of 
particular populations being less well-served than they are today. Both 
the benefits and costs of any approach to program consolidation should 
be carefully considered before it is implemented.
    As the recent report by the U.S. Government Accountability Office 
(2011) indicated, there are potential savings that could be achieved by 
consolidating administrative structures and colocating some workforce 
services between the many small employment and training programs now in 
existence.\v\ But the report also points out that we currently have 
virtually no evidence on how large these potential benefits of 
consolidation really are. Furthermore, merging such programs might make 
services less accessible to many groups considered hard-to-serve, such 
as ex-offenders or disconnected youth, than they are today. The adage 
``one size does not fit all'' applies very strongly to different 
demographic groups with different levels of skill deficiency and 
different kinds of barriers to participation in the workforce, and it 
is important that our programs recognize these differences and account 
for them.
---------------------------------------------------------------------------
    \v\ Multiple Employment and Training Programs: Providing 
Information on Colocating Services and Consolidating Administrative 
Structures Could Promote Efficiencies. United States Government 
Accountability Office, 2011.
---------------------------------------------------------------------------
    4. It is very important that we institute reforms to better 
integrate and coordinate our nation's education programs with our 
workforce systems, and make both more responsive to the needs of the 
U.S. labor market and economy. But a simple consolidation of many 
programs into one does not necessarily help us achieve this goal.\vi\
---------------------------------------------------------------------------
    \vi\ For a new proposal to promote more such integration and 
coordination see Harry Holzer, Raising Job Quality and Skills for 
American Workers: Creating More-Effective Education and Workforce 
Development Systems in the States, the Hamilton Project, Brookings 
Institution, 2011.
---------------------------------------------------------------------------
    Our nation's career and technical education, higher education and 
workforce programs should operate together to better enable workers to 
gain the credentials valued by employers. Industry- specific 
partnerships between employers, education providers and workforce 
agencies are a proven way of achieving this goal, while the existence 
of clear ``career pathways'' for students and workers to gain these 
credentials seems critical as well. Using available data to inform 
students and educators of which sectors and jobs are in high-demand, 
and incenting our education and workforce agencies to better meet this 
demand, is important as well. In my view, the proposed Workforce 
Investment Act of 2013 contains several key provisions that would move 
us towards achieving these goals, though it is less clear that the 
recent consolidation proposals would do so as well. This should be the 
primary goal of any new workforce legislation in the coming years.
                                 ______
                                 
    Chairwoman Foxx. Thank you, Dr. Holzer.
    I now recognize Mr. Gustafson for 5 minutes.

        STATEMENT OF TODD GUSTAFSON, EXECUTIVE DIRECTOR,
             MICHIGAN WORKS! BERRIEN-CASS-VAN BUREN

    Mr. Gustafson. Chairman Fox, Ranking Member Hinojosa, and 
members of the subcommittee, thank you for the opportunity to 
testify before the subcommittee today.
    I am Todd Gustafson, and I am the executive director of 
Michigan Works! Berrien-Cass-Van Buren, the Workforce 
Investment Board serving the southwest corner of Michigan.
    Our service region includes 278,000 people and covers both 
rural and urban areas including Benton Harbor, one of the 
poorest cities in the state of Michigan.
    We are a market-driven organization where we strengthen 
business. Our customer is the employer, which in turn has 
enabled us to serve more people and to better assist job 
seekers.
    Our annual budget, which is diversified among the 41 
different funding sources, ranges between $13 million and $16 
million. Last year alone, we matched 3,100 jobseekers to jobs, 
trained nearly 650 people, and raised over $3.5 million to 
integrate with our federal funds.
    Perhaps, most importantly, we pride ourselves on being 
social entrepreneurs. Federally funded programs are the 
foundation on which we build self-sustaining initiatives that 
address our community's problems through an integrated approach 
to business, workforce, and community development.
    I applaud the members of the community for introducing 
Workforce Investment Act, WIA, reauthorization legislation this 
year. The time for action is now. The most recently introduced 
SKILLS Act is a step in the right direction towards achieving 
those objectives.
    I have been asked to provide comments on some of those 
proposed reform concepts. Number one; streamlining federal job 
training programs. Eliminating and streamlining the existing 35 
federally-funded workforce programs is vital to upgrading the 
Nation's workforce system.
    The system has to change and the system has to adapt as 
other thriving industries and organizations have done. It is 
equally important Congress has recognized streamlining begins 
with them.
    The practice of appropriating many new and siloed programs 
fosters redundancies, increased costs, inhibits innovation, and 
undermines outcomes.
    Streamlining or consolidation, however, is not a new 
concept. Take Michigan for example. Since the inception of WIA 
in 1998, Michigan created a workforce system that combined or 
integrated many federal funding sources such as Trade, WIA, 
Employment Services, and even TANF.
    Michigan's model has worked and has regularly outperformed 
other states and including in the 17 performance measures of 
WIA. We serve more businesses and often more individuals.
    Taking this a step further to the local level, we have used 
this model as an opportunity to further diversify our local 
funding in order to make more significant strategic economic 
impact.
    Over the past 5 years we have, on average, raised nearly an 
additional $3.5 million to integrate with our federal funding. 
In fact, at one point, our local share of WIA money equated to 
nearly 70 percent of our total budget.
    After more integration and diversification it now accounts 
for only about 35 percent. The difference though is our nearly 
41 different funding sources are integrated to strategically 
impact our region.
    We have also seen important ancillary operational benefits 
from this consolidation. We are able to more efficiently absorb 
financial cuts or uncertainty, spread infrastructure costs 
across multiple sources, and have increased fiscal 
accountability and transparency.
    Number two; strengthening the business engagement in 
workforce investment boards. For boards to have the greatest 
strategic impact and productivity they have to be business led 
and be a manageable size. Locally run and accountable boards 
governed by the end-user of the system, business, make the 
system more responsive, innovative, and less bureaucratic.
    Eliminating the 19 federal mandates on representation will 
further strengthen business engagement. Requiring two-thirds of 
board members to be employers will enhance the shift from a 
supply-side design system to a demand-or market-driven system.
    Three; creating a seamless workforce development system. 
Redesignation, I understand, is potentially the most 
controversial concept in the reform legislation. While it is 
reasonable for states to have the ability to develop their own 
workforce systems, it should not be at the expense of local 
input. After all, the right to self-determination and being 
locally responsive are two important aspects of the system's 
strengths.
    When a workforce investment board's service area prohibits 
a regionalized economic growth strategy or is no longer optimal 
because of contemporary labor market trends, then there 
continue to be--there should be an equitable process between 
the state and local boards to negotiate a service region.
    Take, for example, our local community. When we explored 
merging with our neighboring workforce board at one point, the 
local business community and local elected officials determined 
after further review that it made no sense, that the 
communities were different, the focuses were different, and 
ultimately, the missions of the organizations were different.
    Some service regions many to be or should be altered or 
redesignated. However, without collaborative process between 
the state and locals, the potential to divide communities and 
waste precious time, energy, and resources increases. It is 
imperative there is an equitable redesignation process between 
the locals and the states to minimize politics and service 
disruption.
    Finally, number four; requiring strategies that serve 
various populations. Requiring strategies to serve various 
populations is an important concept in the reform legislation. 
Addressing it though starts with the workforce investment 
boards being business-led and demanded-driven with the business 
as the customer. These are the two first critical steps in 
developing a strategy that best serves disadvantaged 
populations.
    Although we sometimes get pushback from our peers for being 
demand-driven, we have actually done more to serve jobseekers, 
matched them to jobs, trained them, and provided opportunities 
to these disadvantaged populations.
    Demand-driven is generally misunderstood as creaming only 
the best and leaving behind the disadvantaged populations. That 
is false. Being demand-driven starts with knowing what the 
customer needs and finding people today and in the future who 
match those evolving requirements.
    But first, you have to know who the customer is. We don't 
cream for our services or programming. We have actually 
improved or added services and programming for jobseekers 
especially disadvantaged people based on the gaps created by 
the disconnect between our labor market demand and supply.
    Again, thank you Madame Chairman for the opportunity to 
speak before the committee.
    [The statement of Mr. Gustafson follows:]

       Prepared Statement of Todd Gustafson, Executive Director,
                 Michigan Works! Berrien-Cass-Van Buren

    Chairman Foxx, Ranking Member Hinojosa, and Members of the 
Subcommittee. Thank you for the opportunity to testify before the 
subcommittee. I am Todd Gustafson, and I am the Executive Director of 
Michigan Works! Berrien-Cass-Van Buren, the workforce investment board 
serving the southwest corner of Michigan.
Michigan Works! Berrien-Cass-Van Buren
    Our mission is to serve as change agents to create solutions for 
business, workforce and community challenges to promote the economic 
vitality in the Southwestern Michigan region. Our service region 
includes 278,000 people and covers both rural and urban areas, 
including Benton Harbor, one of the poorest cities in the state of 
Michigan. We are a market-driven organization where we strengthen 
business. Our customer is the employer, which in turn has enabled us to 
serve more people and better assist job seekers. Each year we serve 
nearly 5,000 employers and over 20,000 job seekers. Our annual budget, 
which is diversified amongst 41 different funding sources, ranges 
between $13 and $16 million. Last year alone, we matched 3,100 job 
seekers to jobs, trained nearly 650 people and raised $3.5 million to 
integrate with our federal funds.
    Perhaps most importantly, we pride ourselves on being social 
entrepreneurs. Federally funded programs are the foundation on which 
we've built self sustaining initiatives that address our communities' 
problems through an integrated approach to business, workforce and 
community development.
The Need for Reauthorization
    I applaud the Members of the Committee for introducing Workforce 
Investment Act (WIA) reauthorization legislation this year. As you are 
aware, reauthorization is long overdue and while we politically 
struggle to retool our workforce system global competitors, like China, 
India and Brazil, who are heavily investing in their workforce, are 
gaining a competitive advantage. The time for action is now.
    If reauthorization is accomplished it will help provide U.S. 
companies a competitive advantage in the global economy; enhance the 
skills of the nation's workforce; reduce the budget deficit; and allow 
for a more strategic, flexible and impactful use of limited resources.
    The most recently introduced SKILLS Act is a step in the right 
direction toward achieving those objectives. I've been asked to provide 
comments on some of the proposed reform concepts in the SKILLS Act.
Streamlining Federal Job Training Programs
    Eliminating and streamlining the existing 35 federally funded 
workforce programs is vital to upgrading the nation's workforce system. 
The system has to change. And the system has to adapt as other thriving 
industries and organizations have done.
    It's equally important Congress has recognized streamlining and 
consolidation begins with them. The practice of appropriating many new 
and siloed programs fosters redundancy, increases costs, inhibits 
innovation and undermines outcomes.
    Streamlining or consolidation, however, is not a new concept. Take 
Michigan for example. At the inception of WIA in 1998, Michigan created 
a workforce system where the multiple federally funded employment and 
training related programs were consolidated at the local level. In 
fact, Michigan's workforce system was one of the first systems in the 
nation to integrate multiple programs, such as the Workforce Investment 
Act, Employment Services (Wagner-Peyser), Trade Assistance Act, Food 
Training and Employment (Food Stamps) and even Temporary Assistance for 
Needy Families (welfare) at the local level.
    This delivery model has enhanced the workforce boards' operational 
efficiency, increased fiscal transparency, and most importantly, 
improved our impact with employers, job seekers and our local 
economies. The states with disparate delivery systems often create 
employer and job seeker confusion, dissatisfaction and little strategic 
impact. Michigan's model has worked and has regularly outperformed 
other states, including the WIA's 17 performance measures and in number 
of businesses and individuals served.
    Taking this a step further to the local level, we have used this 
model as an opportunity to further diversify our local funding in order 
to make a more significant strategic economic impact. Over the past 
five years we have, on average, raised nearly an additional $3.5 
million to integrate with our federal funding. In fact, at one point 
our local share of WIA money equated to nearly 70% of our total budget. 
After more integration and diversification it now accounts for only 
about 35%. The difference though, is our nearly 41 different funding 
sources, are integrated to strategically impact our region. We've also 
seen important ancillary operational benefits from the consolidation. 
We're able to more efficiently absorb financial cuts or uncertainty, 
spread infrastructure costs across multiple sources and have increased 
fiscal accountability and transparency.
    Again, streamlining employment and training programs into a single 
fund has already been done in places like Michigan. The model works. I 
support the concept of creating an overarching Workforce Investment 
Fund at the federal level. If done equitably with the interests and 
needs of the states and the locals included in the design it can work. 
And although the Michigan model works, continuous improvement via the 
elimination and streamlining of funding streams at the federal level 
will further benefit Michigan's workforce system.
Strengthening Business Engagement in Workforce Investment Boards
    For boards to have the greatest strategic impact and productivity 
they have to be business led and be a manageable size. Locally run and 
accountable boards governed by the end-user of the system--business--
make the system more responsive, innovative and less bureaucratic.
    Eliminating the 19 federal mandates on representation will further 
strengthen business engagement. Requiring two-thirds of board members 
to be employers will enhance the shift from a supply side designed 
system to a demand or market driven system.
    Mandating board representation stifles board member recruitment and 
often forces the creation of large unmanageable and unengaged boards. 
Eliminating mandates will also help attract higher caliber local 
business and community leaders who otherwise feel disempowered and 
ultimately uninterested among a large unfocused group. Smaller boards 
are a best practice in both the private-for--profit and non-profit 
sectors and should be applied to the government's workforce system.
    The most highly functioning organizations are governed by boards 
with quality, engaged leaders and are manageable in size and have 
regular input from a diverse cross section of community leaders.
Create a Seamless Workforce Development System
    Redesignation is potentially the most controversial concept in the 
reform legislation. While it is reasonable for states to have the 
ability to develop their own workforce systems, it should not be at the 
expense of local input. Afterall, the right to ``self determination'' 
and being locally responsive are two important aspects of the system's 
strengths.
    When a workforce investment board's service area prohibits a 
regionalized economic growth strategy or is no longer optimal because 
of contemporary labor market trends, there should continue to be an 
equitable process between the state and local board to negotiate a 
service region.
    Moreover, increasing governors' authority to dictate the boundaries 
of workforce development service areas would undermine the intent of 
the legislation to strengthen the system through business engagement. 
It's the local business-led boards who best understand the dynamics of 
their economy and generally, like the market, ignore politics. Cutting 
these local leaders out of the process or reducing their influence 
would potentially inject divisive politics, exactly at the time, when 
local leaders should be focused on doing what's best for the local 
economy.
    Take for example, the region we serve. It's a three country area 
with a population of 278,000 people. Our neighboring workforce board 
serves an area with 314,000 people. Under current WIA legislation, the 
governor has the ability, working with the locals, to redesignate our 
service areas into one. Both politically and practically this may 
appear to make sense and, in WIA, a process exists to make it happen. 
Even though, we explored a potential merger, it was ultimately 
determined, by our business-lead boards and local elected officials, it 
wasn't a good idea. Although the regions are somewhat similar, the 
needs of the communities within the greater region are different. Only 
the locals could recognize that the two organizations had different 
focuses, philosophies and missions. A merger would have detracted from 
the work both organizations were doing.
    Some service regions may need to be, or should be, altered or 
redesignated.
    However, without a collaborative process between the state and 
locals the potential to divide communities and waste precious time, 
energy and resources increases. Its imperative there is an equitable 
redesignation process between locals and the states to minimize 
politics and service disruption.
Require Strategies that Serve Various Populations
    Requiring strategies to serve various populations is an important 
concept in the reform legislation. Addressing it though, starts with 
the workforce investment boards being business-led and demand driven 
with business as the customer. These are the first two critical steps 
in developing a strategy that best serves disadvantaged populations. 
Although we sometimes get push back from our peers for being demand 
driven, we've actually done more to serve, match to jobs, train and 
provide opportunities to disadvantaged populations.
    Demand driven is generally to be misunderstood as `creaming' only 
the best or leaving behind disadvantaged populations. That's false. 
Being demand driven starts with knowing what the customer needs and 
finding people today and in the future to match those evolving 
requirements. But first, you have to know who the customer is. We don't 
`cream' for our services or programming. We've actually improved or 
added services and programming for job seekers, especially 
disadvantaged people, based on the gaps created by the disconnect 
between our labor market demand and supply.
    One of our highly encouraging examples is our Bridge Academy. This 
is an alternative school we created cobbling together and streamlining 
13 different public and private sector funding sources, including WIA. 
We built it based on the recognition the at-risk youth we were serving 
weren't prepared educationally or vocationally for the needs of 
regional employers. We equip them with either a GED or High School 
Diploma, vocational experience, work experience and ultimately a job. 
As a result of this complex but important effort, we now have the 
opportunity to really make significant transformation with the most in-
need populations and in the most challenging areas in our region.
Thank You
    Thank you for the opportunity to testify before the Subcommittee. 
On behalf of Michigan Works! Berrien-Cass-Van Buren, including my board 
chair and business owner, Jim Kadis, who is here, we thank you for the 
opportunity to tell our story. We strongly believe in improving a 
business-led, demand or market driven workforce system that encourages 
and rewards innovation, efficiency, accountability and makes a 
strategic regional impact. The concepts I commented on will undoubtedly 
make our nation more globally competitive; enhance the skills of our 
workforce; reduce the budget deficit; and make better use of our 
limited resources.
                                 ______
                                 
    Chairwoman Foxx. It is now time for members to ask 
questions and normally the chair will start, but because I am 
going to be here for the entire hearing and some members may 
want to go other places, I am going to recognize other members 
first.
    I do want to make one point that I never miss the 
opportunity to make, and the staff will be shaking their 
heads--when I did my doctoral program at UNC Greensboro, I had 
a wonderful professor who pointed out to people who used the 
word training to apply to human beings that you train dogs and 
you educate people.
    I would like to say to all of you who use the word training 
a great deal that you think about substituting education for 
that word when possible because I feel pretty strongly about 
that. I think we are working to educate people and not train 
them because what we want them to be is lifelong learners and 
if we do more educating rather than training I think that is 
the direction in which we go.
    So as I said, I never miss the opportunity to say that and 
so, please think about that as you talk about this issue.
    I would now like to recognize my distinguished colleague 
from Michigan, Mr. Walberg.
    Mr. Walberg. Thank you, Madame Chairman. And I wish my dad 
had heard that dissertation on training. He wanted me to be 
trained, but he also wanted me to be educated. I remember often 
times him saying that education is a lifelong process. You will 
never learn everything so learn how to learn.
    But in the meantime, get a trade or a skill that for your 
lifetime you can always fall back on if the education fails, 
the training opportunity is there as well.
    So I guess it is in perspective and I am glad, Madame 
Chairman, that you have held this hearing today and have 
forwarded the SKILLS Act idea because frankly in this day and 
age and coming from Michigan as well, wrestling with the 
challenges of a workforce that is shifting to a new and 
different competition, global competition to have entities that 
are concerned with meeting the needs of the real world today 
and educating people for those real needs is huge.
    Mr. Gustafson, it is good to see another Michigander who 
fled the state for the recent snowstorm. Glad you are here. I 
have had the pleasure in the last several weeks of meeting with 
a number of your colleagues in Michigan Works! across my 
district, Julie Montri of the Monroe chapter as well as Mike 
Jones of the South-Central Michigan Works! program.
    I have appreciated their emphasis on efficiency; updating 
themselves to meet the needs that are in the field right now as 
opposed to just moving forward with the same old same old.
    As you know, Michigan's needs of the workforce employers' 
vary greatly based upon the proximity, based upon geography, 
based upon placement in our state. So I guess I would ask you 
to review to some degree how would the SKILLS Act provide more 
flexibility to Michigan Works! to serve the demands of both 
employers and the jobseekers from Monroe to Marquette.
    Mr. Gustafson. Thank you, Congressman. It is good to see 
another Michigander. I think the SKILLS Act does provide the 
flexibility that to some certain degree has been going on 
already in Michigan especially with the streamlining of the 
funds, which is so important at the operational level locally.
    And many of us, but not all of us, have taken that a step 
further to run our Michigan Works! like a business to where we 
are integrating funds so we can better impact the employers, 
our customer that we are serving, but the jobseekers as well. 
So flexibility is very important. Does that answer your 
question?
    Mr. Walberg. Well, maybe a little bit more specifics. 
Again, thinking of our state, which is I am sure were not 
unlike a lot of other states. It is a changing, changing floor 
plan that is there for our workforce.
    Mr. Gustafson. As I mentioned to my testimony and in my 
written testimony, we have recognized that the federal funding 
that is provided to the locals is just a foundation and so what 
we have done is gone out to attract additional resources as I 
mentioned, 41 different funding streams, which is really 
important and that has provided us the flexibility.
    Now many of them have different rules and regulations and 
it is very complex for the staff to manage, but at the end of 
the day, we know that we are there for the community. So 
anything that Congress can do to help us reduce the maze that 
we talked about earlier will be extremely helpful at the local 
level.
    Creating a workforce investment fund like the SKILLS Act 
does essentially helps create that one fund with less mandates 
and restrictions and it actually will foster creativity which 
we need to do, which we need at the local level in order to 
make that labor exchange between the customer and job seekers.
    Mr. Walberg. Okay. If you could expand on--in your 
testimony you talked about the need for business involvement 
with the workforce investment boards. Expand a bit on how the 
SKILLS Act, as you have read it, would modify our current 
system to give employers more of that contact and involvement.
    Mr. Gustafson. Enhancing the business involvement in the 
boards from 51 percent to two-thirds is really important 
because the businesses are the key here. Also removing the 19 
federal mandates on every partner to come to the table also 
makes it more a manageable board.
    Although those partners should still have input, I am not 
sure the oversight and engagement of the board is necessary for 
all of those different partners. If it is business led, they 
know what their needs are. They can manage the board more 
effectively, and so I think that is a really important point in 
the legislation of the SKILLS Act; removing those 19 mandates, 
making it more business led.
    Mr. Walberg. Thank you.
    Dr. Ralls, a number of great community colleges in my 
district that provide services including to three of my kids.
    I see my time has ended. Well, someone else will have to 
ask that question. Thank you.
    Chairwoman Foxx. Thank you.
    Mr. Hinojosa, you are recognized.
    Mr. Hinojosa. Thank you.
    My first question is going to be to Dr. Ralls, but before I 
ask the question, I couldn't help but listening to our chair 
tell us about the difference between education and training.
    I went to school at the University of Texas in Austin where 
I got a BBA and an MBA and they taught me differently. They 
taught me that we are in business to make a profit and you can 
do that by raising revenues and reducing costs.
    And I truly believe that football teams like those that we 
produce at UT that have become national champions are trained 
to do their job and be able to beat the opponents.
    In business, I heard one of you say that local input is 
very important and I believe in that, but I say that WIA is 
responsible for helping train people for the jobs that are 
available and that they do it well so that they can prosper.
    As you, Dr. Ralls, may know, my bill, Workforce Investment 
Act of 2013, would authorize a community college to career 
fund, which is a new program proposed by President Obama last 
year in 2012.
    He said to us many times, ``We must do more with less,'' 
and that is what this program does. The fund would provide 
competitive grants to community colleges working with 
businesses and other workforce partners to build or expand 
education and training programs for workers, including 
disadvantaged individuals, to earn credentials and find 
employment in high-growth industries such as healthcare and 
advanced manufacturing.
    Would the community colleges in North Carolina benefit from 
a fund like this?
    Mr. Ralls. Mr. Ranking Member, let me first begin by saying 
I am a former community college president and I remember well 
one year spending 23 percent of my equipment budget at a 
community college to buy one CNC machine. I also work now with 
58 community colleges and we have had to do more with less 
serving 25 percent more students.
    I am not against anything that would bring more resources 
to America's community colleges, which I do personally believe 
that the road to recovery in the United States is running right 
through the middle of the community colleges in the United 
States.
    Mr. Hinojosa. I agree with you fully.
    Mr. Ralls. That being said, I think that what I would hope 
is that moving forward in terms of reauthorization and reforms 
to the Workforce Investment Act would not be slowed by any 
other efforts because I think what is integral to move forward 
is that the community colleges in the United States, which I 
think are at the front lines of workforce education, that they 
would be an integrated and integral part of the workforce 
system moving forward and not just a source of competitive 
grants in the future.
    Mr. Hinojosa. I agree with you, and I want to say that 
President Obama gave us $2 billion for community colleges about 
2 or 3 years ago and they did so well with it that he put in an 
additional $8 billion for community colleges in his proposed 
budget.
    So I agree with you fully. I am going to have to ask 
questions to try to get to all four of you. I thank you for 
your response.
    Dr. Holzer, finding--or rather, funding for federal job 
training programs has been cut by more than 30 percent in the 
past 10 years from $4.8 billion in 2002, to a smaller number of 
$2.6 billion in 2013.
    Of that amount, more than $1 billion in cuts just since 
2010. So they have been drastic. To make matters worse, 
critical employment and training programs stand to lose 
billions more under the current threat of sequestration which 
you mentioned.
    Such cuts would result in dramatic reductions in training 
for the unemployed and other disadvantaged workers and cutbacks 
on services for employers seeking skilled workers. Can you 
elaborate on your testimony and explain how consolidation and 
budget sequestration could further reduce those financial 
resources for individuals with employment barriers?
    Mr. Holzer. I am happy to do so, and thank you for your 
question. Very simply, sequestration will impose large cuts--if 
it is ongoing--will impose large cuts on non-defense 
discretionary spending. That will cut into many programs of 
which this is just one prominent example, and it does seem to 
me that consolidation is frequently used as justification for 
cutting budgets.
    Budget Committee Chair Ryan and many others have often 
quoted the benefits of consolidation in arguing for further 
reductions in these budgets. So it seems to me that that is 
often the intent of these consolidations.
    We hear a lot about the 40 plus programs and all the waste 
in those programs. I regard that figure as a very misleading 
because again, if one looks carefully at the GAO report, three 
programs account for about 80 percent of all of those dollars; 
WIA, TANF, and Voc/Rehab, and all of the other 40-plus are 
really very, very small and involve very few dollars.
    And with so few dollars spent, the amount of waste that is 
alleged simply can't be that large. It also seems to me that 
there is quite rigorous evaluation evidence that the current 
WIA program is cost effective and I cite the research of 
Professor Carolyn Heinrich at the University of Texas and 
several of her colleagues who have done some very good research 
indicating that core and intensive services at the current one-
stops as well as what is referred to as training in the 
legislation appears to be cost-effective as well.
    So the argument that the current system is completely 
broken and that there is this massive waste of resources I 
think doesn't hold up when one looks carefully at the numbers.
    Interestingly, my colleagues here who spoke very 
impressively about very fine activities going on in Florida and 
Michigan and North Carolina, those things all do sound 
impressive. I simply point out that that there was enough 
flexibility within the current WIA system for all of those 
things to occur.
    I would also point out that a few years ago in Michigan, 
there was a program called, ``No Worker Left Behind'' where 
funds from many different pots were combined into one program, 
and I was told that 150,000 workers were effectively trained, 
and so there was sufficient flexibility in the system to 
accomplish that. So to me, the issue is much less consolidation 
but funding available.
    Mr. Hinojosa. Our time has run out, Dr. Holzer, but I thank 
you so much. Possibly you could give me something in more 
detail because I think that you are hitting the nail on the 
head, and I want to continue your thinking.
    With that, Madame Chair, I yield back.
    Mr. Holzer. Thank you.
    Chairwoman Foxx. Thank you.
    I recognize Mr. Guthrie.
    Mr. Guthrie. Thank you, Madame Chairwoman. I appreciate 
that very much. I am pleased to be back on the committee and 
one reason I was on before, left, and then came back is for 
this issue.
    My family has a manufacturing business. My dad worked for 
Ford Motor Company in the town I grew up in when you were--my 
senior year of high school. So at the end of my senior year, 
one guy said this and it was absolutely true.
    He said, ``You guys are all going to college. I know 
somebody that has pull that can get me on at Ford and I will 
make more money than you will.'' And that was absolutely a true 
statement and a legitimate--for the most part--and a legitimate 
economic decision for someone to make in my high school our 
senior year. By May of our graduation, Ford announced they were 
closing the plant.
    The people who had skills were able to go somewhere else 
and work and people who didn't--our town was devastated. So 
this is something real important to me because I saw people 
that I grew up with fathers--my father actually had worked his 
way through the plant up into--worked his way through college 
and he did it on his own. He did it at night and weekends so he 
had some other decisions that he was able to make and started 
his own manufacturing business.
    So I just say that to say this. We needed tool and die 
makers when we started. We needed industrial maintenance 
people. We needed all of these others, and we found a whole 
floor full of unskilled people who were very smart in high 
school but nobody told them or they didn't figure it out until 
they got into the workforce and so we partnered with the 
community colleges to get them educated.
    That is where our tool and die makers are today. They 
started out working out working in the factory for the most 
part; it is hard to hire one. You have to create them and there 
are a lot of smart people that just didn't get the opportunity.
    And so my question I guess to practitioners in the field, 
the three of you that have--when somebody shows up you talk 
about flexibility because all of us want to get more training 
dollars to the worker to train them for jobs that people are 
wanting to hire.
    And so when we talk about more flexibility, do you have 
examples of when somebody shows up or a group of employers show 
up and say we need industrial maintenance people, which I am 
sure you have heard that, do you have any manufacturing 
anywhere near your facility you do?
    Or where somebody shows up and you say, I am--you know, the 
perfect course for action but the bureaucracy, the red tape, 
what you have to do career counseling, you have got to do 
resume training, you have got to do all of this before we can 
even put you in a program.
    So you are asking for flexibility. Could you give us 
examples of where the lack of it has really delayed your 
ability to implement or even cost money in terms of putting it 
into the program to train--actually taking money away from 
training because you had to follow red tape?
    Since you are asking for the relief, it be--your--some 
examples? All the three--I start with Mr. Hart--I guess--the 
three of you who practice this----
    Mr. Hart. Okay. Thank you, and I think specifics are always 
helpful. So as we are looking at the flexibility of the fund, 
let us put it this way. You are describing a marketplace and 
marketplaces are dynamic. Global marketplaces are even more 
dynamic. You all use budgets. We all use budgets and they all 
have specific line items. This is no different.
    So if you are using WIA and you have got your adult, your 
dislocated worker, your youth, or if you are bringing in some 
Wagner-Peyser dollars, or if you have TANF dollars or FSET, now 
known as SNAP, all those fall under specific budget categories 
and so if you maintain the silos rather than putting them into 
one fund, you have to follow the prescriptions that you are 
given.
    Now there is some current funding flexibility, move some of 
the funds around, but I don't think to the greatest degree 
possible in terms of what we need to meet the market's needs.
    So here is a specific. AO Precision is a company in Volusia 
County. They need CNC machinists. They are working with our 
community college it there in the area, Daytona State College, 
as well as other training providers. We are agnostic as to 
whether they would be public or private. We simply want to 
ensure that the marketplace has what it needs.
    They need immediately 40 or so CNC machinists. That is a 
lot. They tell us that they can expand up to 141. We do not, in 
that local area, have the funds necessary to meet that 
business' needs given the funding restraints that we have.
    Mr. Guthrie. The yellow light just came on. So we are only 
going to get to your example it looks like.
    Mr. Hart. Sorry.
    Mr. Guthrie. So is it a lack--no--I want you to answer. Is 
it the lack of--I know everybody can use more funds--or is it 
the lack of being able to move your funds to accommodate that 
need? Because I know exactly where--we are looking for CNC 
people too those are well-paying up----
    Mr. Hart. Right.
    Mr. Guthrie. You can be in the middle class if you are a 
CNC operator.
    Mr. Hart. There is a lot of money out there. I believe that 
we need a talent supply system.
    Mr. Guthrie. So what prevented you from creating a program? 
I mean why--in what we are doing here--what in the current law 
prevented you from being able to fully do the program the way 
you wanted to do it?
    Mr. Hart. It is the prescription that comes down from the 
feds for the use of certain funds for certain populations, for 
certain uses of certain funds, for certain purposes. There is 
some flexibility. I believe that there needs to be more in 
order to meet the market's needs which we all agree----
    Mr. Guthrie. I've got one point before the red light. So if 
somebody worked for that company in an unskilled--say they were 
a dock loader and they says, well I want to be a CNC operator 
because they are probably pay twice as much as the dock loader, 
can they go through your program or do they have to be 
unemployed to go through your program?
    Mr. Hart. Madame Chair, if I may?
    We can get to them a couple of different ways. We can 
either do employed worker training if they are existing or 
incumbent worker training at the state level or they can come 
through some of the other----
    Mr. Guthrie. But it is easier if they got laid off from the 
company and then came back to work for your program--is it 
easier to----
    Mr. Hart. No, no sir.
    Mr. Guthrie. They can't----
    Mr. Hart. Not necessarily, but if we have the funding 
flexibility, then we can more readily meet the needs of that 
person whether they be a dislocated worker, a recently 
unemployed worker, or a current or existing worker.
    Mr. Guthrie. Okay, thank you.
    Chairwoman Foxx. Thank you.
    Ms. Bonomici?
    Ms. Bonamici. Thank you very much, Chairwoman Foxx and 
Ranking Member Hinojosa for holding this hearing today, and to 
the witnesses for informing us so much about the workforce 
investment system in the country.
    The 1st District in Oregon, which I am honored to represent 
is the home to the Silicon Forest, it is like the Silicon 
Valley only with trees. It is a cluster of high-tech firms and 
businesses like Intel, Nike, and Genentech that employ, 
thousands of workers in Oregon, but there are also a lot of 
small businesses in the district that share the concern about 
finding adequately skilled workers to fill their open jobs.
    So there is a skills gap in Oregon like there is across the 
country that is presenting a serious challenge for employers 
and workforce investment systems alike.
    Because of this skills gap, I am going to be reintroducing 
the WISE Investment Act which addresses this skills gap on a 
local level through a designated liaison who will strengthen 
the relationship and work with workforce investment boards, the 
business community, and community colleges to evaluate how the 
services can be improved with the goal of eliminating that 
skills gap.
    So, Dr. Holzer, you spoke about the goals of the WISE 
Investment Act in your testimony when you discussed the need 
for education institutions and workforce systems to work 
together so they are more responsive to the needs of the U.S. 
labor market and the economy.
    So our workforce investment system needs to be dynamic and 
responsive to the needs of local employers and I think everyone 
has testified to that and the WISE Investment Act would allow 
them to do just that; innovation to improve, coordinate, and 
streamline programs should be our first priority, not the 
unproven strategy of simply consolidation.
    So will you please expand on how consolidation of WIA 
programs might negatively impact our ability to innovate and 
improve workforce programs?
    Mr. Holzer. Thank you for that question. Consolidation may 
or may not work. As the GAO report points out, we have no 
evidence one way or the other. It is likely that reducing some 
administrative costs would free up a small amount of 
resources--I indicate small because as I said, the vast 
majority of funds spent are simply in these three programs 
already that are combinable under the current system.
    Consolidation threatens the performance of the system if it 
is accompanied by significant budget cutting and that is what I 
hear over and over again. Members of Congress arguing we don't 
need as much money because we are now combining and 
consolidating these 40-plus programs as if there were so many 
dollars spent in the vast majority of those 40-plus programs 
that we would be freeing up a lot of resources.
    The facts, I think, contradict that point of view. I am a 
strong supporter of community colleges working more closely 
with the workforce system and being responsive to the labor 
market and the demand side of the labor market.
    I think there are many ways in which that responsiveness 
doesn't exist right now. We send many millions of people 
through community colleges who don't finish anything, don't 
emerge with any credential recognized by industry and by 
employers.
    There are many reasons for that. I think part of it is that 
our community colleges are so cut off from our workforce 
agencies. A lot of those people attending would in fact benefit 
greatly and would finish their degree programs if they had some 
core services, some intensive counseling, some career 
counseling, some testing, some access to labor market 
information that could be much better analyzed at the state and 
local level than it is today.
    As I said, combining the different programs into one and 
then cutting their budgets moves us no closer to that goal. In 
fact, it makes it more difficult because of even fewer dollars.
    Ms. Bonamici. Thank you so much.
    And I want to ask Dr. Ralls a question too. Before I went 
to the University of Oregon and the University of Oregon Law 
School, I spent 2 years at a community college, Lane Community 
College in Eugene, and got a great education there as well.
    So as a community college graduate, I am particularly 
concerned about the SKILLS Act proposal to eliminate the 
requirement that representatives from community colleges sit on 
workforce investment boards. And I know, Dr. Ralls, in your 
testimony you urge improving WIA so the job training and 
community colleges are a more integral part of our Nation's 
efforts in this regard.
    So will you please elaborate a little bit on that statement 
a talk about the positive contributions of community colleges 
to local workforce investment programs, but particularly to 
boards? Thank you.
    Mr. Ralls. Well, I think our community colleges in North 
Carolina serve on many of the boards throughout the state and 
play very important role and our community colleges are an 
integral part of our system in North Carolina.
    I think across the United States, community colleges can 
play a much more integrated role with the workforce system and 
particularly the issue of skills training and workforce 
education. As we talk about the need for new skills and up 
skilling, one of the things we have to keep in mind is when we 
look at our Workforce Investment Act system it is not just 
about how many categories of program streams we have, it is 
about how many people do we serve and what services do they 
receive.
    So for instance, one study in 2010 indicated I think that 
you know in the two programs where you indicated there were 80 
percent, the adult programs and the dislocated worker programs 
approximately 13 percent of the WIA participants received some 
form of skills training. So that is why I believe that it is 
important for this system to move workforce education from the 
bottom of the sequence of servicing list to the front.
    That is why I believe it is important for workforce boards 
to be able to directly contract with community colleges because 
as we talk about a Workforce Investment Act that invests in 
skills training, the truth is, the majority of participants who 
are going through the Workforce Investment Act programs are not 
receiving that very important service, particularly in the time 
of a skills gap.
    Ms. Bonamici. Thank you so much and I see my time has 
expired.
    Thank you, Madame Chairwoman.
    Chairwoman Foxx. Thank you.
    Mr. Heck, Dr. Heck, you are recognized.
    Mr. Heck. Thank you, Madame Chairwoman for holding the 
hearing today and for including within the SKILLS Act language 
which is from my bill from last Congress regarding the 
workforce investment board structure and governance.
    I want to thank the panel members for being here today and 
I will say--I will start off--I am a little disappointed to 
hear that my colleagues on the other side of the aisle are 
reluctant to embrace the President's call to quote ``Cut 
through the maze of confusing training programs so that from 
now on people have one program, one Web site, and one place to 
go for all the information and help that they need,'' end 
quote.
    Now in the 112th Congress, we held a field hearing on this 
issue out in my district, Nevada's 3rd District. Nevada has the 
highest unemployment rate in the nation. I think we are tied 
with Rhode Island now so I thank Rhode Island for helping us 
out there.
    And in part, that's due to the loss of about 70,000 
construction jobs in our area because construction represented 
about 12.5 percent of our workforce where the national average 
is only about 5 percent.
    So the question is how can we ensure state and local boards 
focus on developing and strengthening the strategic 
partnerships necessary to get the in-demand industries, with 
in-demand industries, to make sure that we are preparing people 
for the jobs that are and will be as opposed to the jobs that 
were.
    And I will start with you, Mr. Gustafson, if you would like 
to take a crack at that.
    Mr. Gustafson. Thanks, Congressman, for the question. Could 
you repeat the last part again?
    Mr. Heck. Yes. How do we strengthen the strategic 
partnerships with in-demand industries to make sure that we are 
preparing workers for the jobs that are and will be as opposed 
to the jobs that were?
    Mr. Gustafson. Well, I think that really could be led off 
with the requirement for the boards to be demand-driven. It is 
not just have a business representative on there but like we do 
locally, businesses from the sectors in our region that are in 
in-demand high-growth sectors. So it is not randomly taking a 
business person out there.
    Second, allowing for the flexibility for the local elected 
officials to determine who else they want to put on the board 
is really important because we have very strong relationships 
with our community colleges and in fact, both community 
colleges sit on our board.
    However, some areas do not have that and it should be up to 
the locals to determine whether they are on or not. By having 
the board folks from in-demand high-growth sectors, we get 
better intelligence on what is going on in that regional 
economy and what their needs are, not only as specific business 
owners but as a region and as a sector within that region.
    Mr. Heck. Thank you.
    Mr. Hart, anything to add on that?
    Mr. Hart. Okay. Thank you very much. Great question. So I 
think there's three ways that the boards can help at state and 
regional levels and that is through Scan Focus Act.
    They can help scan the marketplace. They can do that 
through supply/demand gap analysis. They can look at customer 
satisfaction survey index results from both what we call 
infrastructure industries like our global trade logistics, our 
energy, our water areas, or for us, our target industries 
clusters like life sciences, financial services, IT, advanced 
manufacturing.
    And then working with target industry cluster task force 
teams. We do that in Florida where we actually pull together C-
suite individuals to help us understand what is happening in 
the marketplace today but even more importantly where they are 
going in the future.
    Then bringing all of that information combined back in to 
work with all of our talent supply chain partners so that we 
can work with our colleges, our universities, as well as the K-
12 system. That is what we are doing in Florida and it seems to 
be working very well for us.
    Mr. Heck. Dr. Ralls?
    Mr. Ralls. I hate to sound like a broken record, but when 
we are talking about new and emerging jobs that require new 
skills, then you have to have some form of workforce education 
and skills training, and in that regard I think that needs to 
be a much more central part of the Workforce Investment Act 
system than the data indicates that it is right now.
    That means that education and training services cannot be 
at the bottom of the list of a sequence of services. It must be 
moved to the top and I think that is something that this bill 
attempts to correct.
    Mr. Heck. Thanks.
    And Dr. Holzer, anything to add on how you think we can 
strengthen those strategic partnerships?
    Mr. Holzer. I agree, by the way, that I would like to see 
more education and training provided within the system. Both 
bills--The Workforce Act of 2013 also eliminates the sequence 
of services. There really isn't any disagreement on that and I 
agree with many of the comments that my colleagues here at the 
table have made.
    Again, I point out that they have been able to do a great 
deal of that within the current framework of WIA and that 
consolidating and cutting the funding will not improve their 
ability to do so.
    I think within the Workforce Act of 2013, there is a lot of 
attention played to building sector partnerships using data 
more effectively than that data is used now about where the 
demand is, what are the growth sectors over the next several 
years, and then building the career pathways and the industry 
partnerships to meet that demand. So I think we all share that 
goal.
    Mr. Heck. Excellent. Well thank you, thank you all very 
much for your answers.
    And thank you, Madame Chair, I yield back.
    Chairwoman Foxx. Thank you, Dr. Heck.
    Mrs. McCarthy?
    Mrs. McCarthy. Thank you, Madame Chair, and thank you for 
having this hearing. I find it very interesting and to my 
ranking member.
    You know, listening to all of you on both sides of the 
aisle, I don't see where we can't work together and come out 
with a good bill. We are not that far apart. Many of us on this 
committee were here in 1998. We did work together. We put 
everything together, and yes, now we are here in the year 2013, 
and it needs to be updated.
    So I am having a hard time because I think everybody keeps 
talking over each other and saying, you know, I am listening 
to--certainly our community college is the most important thing 
because they are on the local level and they see what is going 
on.
    They certainly work with all of our business people and 
they meet all of the time so I particularly think that yes, we 
have to go forward and hopefully we can work together through 
this committee before we go to the full committee and come to 
an agreement on what is going to work. Each state is different.
    Each state is representing different manufacturing jobs, 
which, by the way, are coming back. You know, and if you look 
at China, which certainly for many, many years was a very 
uneducated country, they spend--I can't remember the exact 
amount but it is a heck of a lot more money than what we spend 
for those workers.
    And Dr. Holzer, you know, when you talk about all of the 
different parts and the thing up there, there is a reason for 
that, because there was a population out there that we are not 
getting into the better jobs so we wanted to make sure that 
that population could come into the workforce and improve their 
lives. There are reasons for all of that being done.
    So I will go to Mr. Gustafson, you know, when you talk 
about making the board smaller and you know I can understand in 
some smaller communities you might want to have that but 
representation of whatever is in the community or in that part 
of the state for the education, you have to hear those voices 
and a lot of those voices do come from the community college 
but they also come from the little small business and they also 
come from the larger manufacturing.
    I know on Long Island, right now, we are going in more into 
a high-tech healthcare. Healthcare will probably take over Long 
Island where we used to be the top manufacturer of military.
    One of the problems that I found--and I am sure that you 
are seeing that in the community college--we don't have enough 
professors to teach everybody to go into the healthcare field. 
That is a big issue.
    So probably on that, I disagree. I think all you know 
having--I have--you know, I have gone to meetings. We have 20 
or 30 people. Yes they are probably an hour longer than what 
they usually are, but the ideas are coming out from them and 
that is where everybody comes together and says okay. These are 
the things that work. So, please.
    Mr. Gustafson. So thanks, Congresswoman. I don't disagree 
with you in that there--but it should be a local decision on 
who should be included in the board in addition to the business 
folks because in some areas of the community, colleges, for 
example, might have a different focus or partner in a different 
way.
    So it should be the local leaders who say yes, this is a 
partner we want at the table rather than having someone in 
Lansing--in Michigan or Washington, D.C. dictate to us locally 
who should be at the table.
    And I do agree that it is necessary, as do my board members 
and my board chair is here who owns a manufacturing company, 
they will be the first to say we need more input from the 
community and we do need other partners at the table and we 
don't want to do this or go at it alone.
    Mrs. McCarthy. But I also think that is where the 
flexibility comes in and I think that certainly from a number 
of things that President Obama has done he is looking at that 
flexibility. He talked about that. He has also talked very 
strongly about consolidating a lot of the programs that aren't 
working and I think we all can agree on that.
    Dr. Holzer, when I talk about the investment that we make 
for our workers versus India, China, some of the other 
industrial nations, it is embarrassing, to be very honest with 
you, what we invest.
    Mr. Holzer. I agree with you. That again, the right way to 
think about this is as a percent of GDP. We have a $16 trillion 
GDP with 150 million workers. The total dollars, $18 billion in 
the system, constitutes \1/10\th of one percent of that amount 
relative to all other industrial countries--not even talking 
about the--the brick nations, the newly emerging countries.
    We should be more comparable with many industrialized 
countries and they are spending more than we are spending and 
even if you include the amount of money we spend on community 
colleges, if you include Pell grants, A--that fact still holds, 
and B--there is enormous waste within those systems too and we 
do need to better align those systems, the community colleges, 
the workforce agencies to break down those silos. It doesn't 
seem to me that this consolidation that is described here today 
helps accomplish that.
    And I think many features and you know your opening 
statement about there is a lot of overlap, there really is. And 
as you read both bills, you see a lot of attention to measuring 
in-demand industries and occupations in trying to make all of 
the system more responsive to that.
    I simply don't think we accomplish that by one more round 
of cutting funds, which we have been doing continually now for 
about 30 years.
    Mrs. McCarthy. Thank you very much.
    And thank you.
    Chairwoman Foxx. Thank you.
    Mrs. Brooks?
    Mrs. Brooks. I represent Indiana's 5th District. Before 
doing that I actually was a senior leader in our state's 
community college system in Indiana, Ivy Tech Community 
College. I also served on the state's workforce board and most 
recently have visited with EmployIndy, the Indianapolis 
workforce board.
    I had not been involved in the workforce investment system 
until I joined Ivy Tech in 2007, and I must share that it is 
probably the most bureaucratic, most complicated system I have 
ever seen in federal government, and I have been in federal 
government in the past as a U.S. attorney.
    My question is about how many of these billions of dollars 
is actually getting to training. When you have state workforce 
boards, local workforce boards, regional operators, one-stop 
shops--at the very bottom on that chart or in the middle of 
that chart was the worker, was the unemployed or, the you know, 
undereducated and underemployed worker.
    And with all of the programs that the various boards have 
to administer, all of the reporting requirements, all of the 
different funding streams, how can this SKILLS Act in your 
opinion help to get the most bang for our buck to the worker 
for training.
    I think if the American people knew how little of each 
dollar--and I am curious what you all think in your states; how 
much of each dollar is actually going to train that worker, and 
to educate, to Chairman Foxx's point, to educate that worker--
there are state employees, federal employees all administering 
all of this, and of the number of back-office workers that have 
to fill out all of the reports for the 47 programs is taking 
away from the actual money going to that worker.
    And so I am curious what your thoughts on this SKILLS Act--
how can we maximize the training dollars, the education dollars 
going to that worker? And does this SKILLS Act get to that? 
Does the new governance structure in this SKILLS Act get to 
that? And you know, maybe we will start with Mr. Gustafson, who 
deals with as a local--a local administrator, I have never seen 
such a maze and a bureaucracy.
    Mr. Gustafson. Thank you, Congresswoman. Can I just go 
last? [Laughter.]
    Yes, that is a concern of our local board and of me. The 
amount of money that actually goes to the job seeker. And with 
the maze of programs that we have mentioned here, we have done, 
we have strived at the local level as much as we possibly can 
to consolidate and get as much money possibly to the job seeker 
service.
    In fact, my board, which again I am advocating for local 
control, my board has put a cap on us locally to say we are 
going to spend 30, at least 35 percent, at least 35 percent of 
our monies on training and that number seems small, but that is 
expensive especially in working with our community partners.
    Although a small number, that is only 35 percent of WIA's 
money. We have then recognized, we need to get other monies 
because the federal monies we have don't, there isn't enough 
money to serve all of the population, so we have gone out and 
attracted other monies.
    What another concern of mine is, especially in the way the 
system is structured, where you have the money that goes to the 
states, the state takes their share of it then it gets down, 
pass down to the locals, and the locals take their share of it, 
then the locals pass it out to multiple contractors, and they 
take their share it.
    So by the end of the day, the job seeker or the customer in 
this case aren't getting served as well as they can. So if we 
can do anything and the one thing that the workforce investment 
fund of this SKILLS Act does is it starts to reduce and provide 
provisions to reduce that structure so it does get to the job 
seeker.
    Mrs. Brooks. Thank you.
    Any other states like to comment about percentage of 
dollars actually getting to training? You mentioned 35 percent. 
I commend you for that because some states I believe are as low 
as 15, 20 percent of each dollar is actually going to training 
and education.
    Mr. Ralls. Data I have seen going to 2010 showed wide 
variance actually as low as 2 percent of the participants and 
up to 80 percent in terms of participating in training, which 
is great variance in that regard.
    I do believe skills, workforce education should be at the 
forefront of this system and I think simplification of the 
system will make a difference because for instance, in our 
system, we serve one out of every eight adults in our state.
    We take particular pride in that we are the road to 
opportunity for low income and working folks. And I suspect 
that from all of the different categories and funding streams, 
we have folks throughout our system in our different education 
and training programs, but ultimately, we are going to have to 
get more individuals into those opportunities to truly meet the 
skills gap and I think provide individuals the opportunity that 
the federal--the national workforce system can truly provide.
    Mr. Hart. Thank you, Madame Chair.
    Very, very quickly, yes ma'am. So I think through the state 
plans, the unified plans we can ensure that whether it be the 
state level, the local level, or our training providers that 
when everybody takes a cut as Mr. Gustafson said, it is always 
value add. So that will be value add, so that will be a value 
add based on performance.
    In our state, we have a something we call the 50 percent 
ITA reserved requirement. That is for training dollars, but in 
Florida, what we have done is we have ensured that that is not 
simply classroom training. It can be online training, it can be 
customized training, so that when we are talking about training 
dollars to the system, those training dollars go to the 
individuals and to the businesses that need it most.
    Mrs. Brooks. Thank you.
    Chairwoman Foxx. Thank you.
    Dr. Holt?
    Mr. Holt. I thank the chair.
    I wanted to go through several questions. So I would ask 
the response--I would ask the responders to be as quick as 
possible. First of all, Mr. Holzer, in 10 or 15 seconds, do you 
have at your fingertips some comparisons with other countries 
in what is spent on public, publicly on training? What 
percentage of GDP?
    Mr. Holzer. I don't have them at my fingertips right now, 
but I can cite them in the literature.
    Mr. Holt. Please, please if you can provide those. Thanks.
    You know, a lot of the debate here is about flexibility. I 
think Mr. Holzer, you have, Dr. Holzer, you have made the point 
that there already is a lot of flexibility. And I would add is 
that the role of the federal government is not to just provide 
money.
    The reason we are in this is also to ensure fairness and to 
correct inequalities so it is not just a matter of leaving a 
bushel basket of money at the states.
    You know, the local industries could do that. And we don't 
want to provide so much flexibility that we only end up serving 
powerful local interests or ignoring the difficult cases and 
serving only the easy cases.
    Let me ask all four of you quickly, looking at the four 
laws, the existing one, the SKILLS Act, and the Tierney/
Hinojosa Bill, do any of them and do a good job looking at best 
practice? And we have got 600 WIBs we have got lots of states 
are doing this in different ways.
    There already is some flexibility and we can argue whether 
it is sufficient. How about identifying best practice and 
communicating and replicating that.
    Mr. Holzer. I will take a stab at it, I think.
    Mr. Holt. Okay.
    Mr. Holzer. If you look at the evaluation evidence, the 
rigorous evaluation evidence, what is clear is that there is a 
set of programs called sectorial programs where you target 
funds towards sectors that are clearly growing in local and 
state economies. You build partnerships between industry, the 
workforce agencies, service providers to meet that demand, and 
they work together.
    That does seem to be the best practice. I would argue that 
the Workforce Investment Act of 2013 probably pays more 
attention and does more to encourage, even require, those 
partnerships and paying attention to those data on sector than 
any of the other efforts you have mentioned, and I think it is 
much closely aligned with the evaluation----
    Mr. Holt. Briefly, Mr. Hart or Dr. Ralls. Do any of these 
bills do a better or worse job in identifying best practice?
    Mr. Hart. Great question, Congressman Holt. I think the 
SKILLS Act follows much of what Florida put together back in 
2000 through the Workforce Innovation Act of 2000 and that is 
where we have been able to consolidate many of those funds, all 
around the mission of helping all Floridians enter, remain, and 
advance.
    Mr. Holt. That is not answering the question I am asking, I 
don't think. Is it?
    Mr. Hart. I think it is, Mr. Holt, because you asked for 
best practice and we have had that act in place for----
    Mr. Holt. A mechanism for identifying----
    Mr. Hart [continuing]. For 13 years.
    Mr. Holt [continuing]. Best practice.
    Mr. Hart. I am sorry?
    Mr. Holt. A mechanism for identifying and communicating 
best practice and replicating it.
    Mr. Hart. Oh, okay. Yes, absolutely. I think by having a 
business-led board, that helps out a lot because the focus of 
that business-led board will bring to both the state and of the 
local----
    Mr. Holt. The market will provide that.
    Mr. Hart. The market definitely will provide for all 
parties whether disadvantaged or otherwise.
    Mr. Holt. Dr. Ralls.
    Mr. Ralls. I truly can't speak to all the bills because I 
have not read them, but what I can say is from our experience 
in North Carolina, we do believe simplification is better. 
And----
    Mr. Holt. Okay.
    Mr. Gustafson, have you read the bills?
    Mr. Gustafson. I have not had a chance to read them.
    Mr. Holt. Another question. We have talked about the role 
of community colleges. What about local libraries? It 
certainly--I have observed in New Jersey they are already 
playing a big role. Should they be incorporated in, 
legislatively, into the training employment program?
    Let me take it in reverse order. Mr. Gustafson.
    Mr. Gustafson. Thank you, Congressman.
    Mr. Holt. Do you have any comments on that?
    Mr. Gustafson. I would say the more mandates, the less 
flexibility at the local level and we have a very good strong 
partnership with our libraries. We do a lot of--provide a lot 
of services through them, but if it was mandated and the 
economy changed, we wouldn't have the flexibility to meet the--
be responsive to our local economy.
    Mr. Holt. Dr. Holzer?
    Mr. Hart. I would agree with that as well and----
    Mr. Holt. Dr. Holzer, I am sorry.
    Mr. Hart. Oh, sorry.
    Mr. Holzer. I have no particular knowledge of that issue.
    Mr. Holt. Okay.
    Yes, Mr. Hart.
    Mr. Hart. I would agree with Mr. Gustafson, and we do 
incorporate the libraries at the local level.
    Mr. Holt. Dr. Ralls.
    Mr. Ralls. I believe libraries can play a very important 
role particularly in the rural areas, but I think the local 
boards are best to make that determination about how they play 
given their area distinctions.
    Mr. Holt. Just what I expected in the answers.
    Thank you.
    Chairwoman Foxx. Mr. Yarmouth?
    Mr. Yarmouth. Thank you, Madame Chair.
    Thank you all for your testimony, and I would agree with 
many of the comments made before that it seems like in general, 
we all want the same thing. We want programs that are 
effective, that reach the most people, that help match skills 
and education with the jobs that are available and will be 
available, and also create innovation, which ultimately we all 
want.
    I have a couple of concerns about SKILLS Act and one has 
been mentioned and that is the issue of basically I think the 
balance of power on the workforce investment boards.
    And while I understand, certainly, the need for business 
community input, I would disagree with the characterization, 
Mr. Gustafson, that this is, you want a demand-driven rather 
than supply-driven because I would take the position that that 
we are here to serve the citizens of the country not 
necessarily the businesses.
    And understanding that we rely to a certain extent or to a 
great extent on employers to employ our citizens I think I 
would kind of reflect on the Chair's comments about education 
versus training and that subtle distinction and the idea that a 
first grader today the odds are that 60 percent of the jobs 
that the first grader entering school today will encounter 
don't exist yet.
    It indicates to me that we want that flexibility to educate 
and prepare as much as to match people up, but that I think has 
been explored enough.
    My primary concern just with SKILLS Act is the idea of 
block granting these funds to the state and I come from the 
district that when you include the entire economic region in 
the marketplace, employs about 30 percent of all of the people 
who are employed in the Commonwealth of Kentucky.
    There is no way that we ever get 30 percent of any dollar 
that comes to the Commonwealth of Kentucky, and this is 
replicated of course across the country.
    In our Northern Kentucky area the situation is reversed 
where people in the Northern Kentucky area are part of the 
Cincinnati economy as well. But I wonder and I will just throw 
it out there, we are facing a political competition 
essentially--we would be if we block granted all of these 
programs to the states, and is that a concern that any of you 
share that certain areas such as mine would be at a 
disadvantage in terms of benefiting from that kind of the 
structure?
    Dr. Holzer?
    Mr. Holzer. Well, in fact the GAO report, which again is 
the report always cited in support of consolidation--says very 
clearly that one of the great risks of the consolidation of the 
block granting is that rural areas will be shortchanged in this 
process and that rural areas often require more one-stops in 
greater attention to services and many of the citizens in both 
the rural and urban areas are often left out.
    With all due respect to my colleague, and I think paying 
attention to demand is very important and employers have to be 
at the table, but when I took economics, I am taught that 
supply as well as demand both matter. And when you look at the 
supply side, when you look at groups that are often targeted by 
some of these current efforts, dislocated workers, veterans, 
disconnected youth, these are all groups that could easily be 
lost in the shuffle in a program that simply block grants and 
puts it purely at the discretion of local administrators of how 
to spend the money.
    These are not the groups, by the way, that often have a 
great deal of power and political pull in any of these 
locations and they are not the favorites of most employers.
    So I think a balanced system that pays attention to 
employers, but of the difficulties of these target populations, 
that kind of balance, I think has to be preserved and block 
granting doesn't necessarily do that.
    Mr. Yarmouth. Thank you for that. I probably attend one or 
two events a month involving our Workforce Investment Act 
entity, Kentucky Works, and many of them are involving 
disadvantaged youth employment for summer for young people and 
many community organizations, and I am concerned about those 
groups being deemphasized and getting lost in the shuffle here.
    Mr. Hart.
    Mr. Hart. Yes, sir. Great--I think it is a great question. 
In the state of Florida, we are the fourth, soon to be third 
largest state, 19th largest economy in the world, but a little-
known fact is of our 67 counties, 31 of them are rural.
    And so that is a concern for us always and forever; how we 
take care of those rural counties. And so in some cases, what 
we have done with some of our state discretion is being able to 
take up to say a 30 percent of the fund, block that out for a 
6-month period of time and say that that will go to those rural 
communities should they have a need over and above perhaps, you 
know, what would have come through formula.
    At the end of the 6 months though, we then have the ability 
to pull that back in for general use throughout. There are 
mechanisms where we can still maintain our flexibility at the 
state and local levels but also respond very clearly to our own 
particular and unique needs.
    Mr. Yarmouth. I appreciate all those comments.
    Thank you, Madame Chair.
    Chairwoman Foxx. Thank you.
    Mrs. Davis?
    Mrs. Davis. Thank you.
    Thank you, Madame Chair.
    Thank you all for being here. I wonder if we could shift 
for just a second to talk about veterans programs and the 
extent to which you see integration. We keep talking 
consolidation. I think integration obviously is critically 
important.
    I think, Dr. Holzer, you particularly mentioned that in 
your fourth point. What do you see from what we are looking at 
and talking about right now addresses the issue of licensing, 
of certification, where people are moving from one skill set to 
another not necessarily understanding or acknowledging or 
appreciating the skills that they have and how we can do that 
better?
    I know that we are focusing on that as we are trying to 
transition many of our service members today, but what do you 
see in the proposals before us now that address that? Do they 
address it in the way that you think provides the most 
efficacious way of talking about this and really applying it?
    Anyone want to respond? Dr. Holzer?
    Mr. Holzer. I will take a crack at that. I think what you 
have hit on a very important problem and all of us have talked 
about the dynamic nature of the economy, the dynamic nature of 
the labor market, the credentials that are valued in the market 
today may not be the ones exactly that are driving the market 
tomorrow.
    We heard stunning stories at the depths of the great 
recession in 2009 and 2010. There were welder shortages around 
the country. Welding isn't necessarily rocket science. There 
were thousands of unemployed welders, but they didn't have 
exactly the skill set often sought by particular employers at 
that time.
    So you need a system that I think recognizes credentials, 
measures credentials, rewards places that generate more of 
those credentials that the market is rewarding, analyzing the 
data on exactly what is in demand and what is not, and then 
helps the locals and incense them to respond and provide those 
credentials.
    I think it is also important that the training we provide 
has a strong general core, that it not be completely sector 
specific so that when the demand shifts, that people can adjust 
to that and that is hard to accomplish in any--but again, 
consolidation doesn't address that at all.
    Mrs. Davis. All right, yes. Anybody else? Because I think 
we need to incentivize that and I guess, what I am looking for 
in the system, if we are doing that.
    And the other question that that really relates to it is 
that the private sector is stepping up to the plate essentially 
and providing the kind of apprenticeship programs that really 
could take the workers that they have and necessarily upgrading 
that skill set.
    Mr. Gustafson. I think Congresswoman Davis, that is an 
important issue and I am a veteran myself. And again, running a 
local workforce board, we have vet reps co-stationed with the 
one-stop.
    Unfortunately because the structure is siloed from the 
federal government to the state government to the locals--I, as 
a veteran, and have a family of veterans, I am really 
embarrassed by the way the system takes care of our veterans.
    And frankly, I have little to no authority over that 
ability and though they are co-located and we have a 
partnership, often the right hand doesn't know what the left 
hand is doing. Often the right hand, which is the veteran reps, 
are doing their own thing and not in conjunction with the rest 
of the workforce board and therefore, if you are a veteran and 
you come through the wrong door, you get lost and that is a 
shame.
    Mrs. Davis. How does what we are talking about right now--I 
mean, how does that address that problem?
    Mr. Gustafson. I think in the workforce investment fund of 
the SKILLS Act by consolidating, by streamlining some of these 
funds and with all due respect to my colleague here, I disagree 
with some of the notions because by streamlining it, and 
structurally streamlining it, not just the funding stream, but 
structurally streamlining it, then you have the better 
opportunity operationally at the local level to serve the 
population whether it is a veteran, at-risk youth, or whatever 
the disbanded population may be.
    Mrs. Davis. Anybody else want to focus on that because I 
think, you know, it sounds good to say that we are either co-
locating or we are integrating that, but as you say, I don't 
see it working either.
    Mr. Gustafson. I see it happen every day that we are--that 
veterans are getting lost in the system because of the way it 
is structured.
    Mr. Ralls. And I would carry that, if I may, to also 
structuring of how we structure skills training with education 
and a focus in our system on industry certification, third-
party credentials that are recognized by businesses and 
licensor--one of the areas we have to pay attention to in 
workforce development is our veterans that are coming back have 
great skills and we can accelerate them into getting the 
competency--or to getting the certifications without having to 
go through the whole program.
    And that is something that we are very focused on in North 
Carolina, but it is something I think our entire workforce 
system in how we structure and emphasize accelerated 
opportunities will pay benefits to our veterans who already 
bring great skills back when they are returning into the 
private sector.
    Mrs. Davis. Thank you all--go ahead.
    Mr. Hart. Right--and if I may--so in Florida, we track how 
many people have been placed in the year; 426,000 last year, 
111,000 of those had been on unemployment, but we also track 
the vets and that number is 32,561 and that is a good number. 
It is a solid number, but I don't think it is as good as it 
could be.
    So I agree with what these gentlemen have said. If we have 
the ability to cross train and integrate more fully through the 
system, I think it will help us meet the needs of our vets 
because you are right, they are unique, and in Florida, defense 
and defense-related industries, that is our third largest 
industry in our economy. It is huge.
    Mrs. Davis. I would suggest too that we have a great deal 
to learn about what is happening now in that arena and that the 
Veteran Skills to Jobs Act can perhaps inform us about some of 
these other programs. But we need to have a vehicle as well for 
looking at some of the consolidation here to incentivize those, 
whether it is hospitals, you know, or other industries that are 
working in this area and have found some new ways to apply 
their knowledge.
    Thank you.
    Chairwoman Foxx. I am going to recognize Mr. Tierney in 
just a second, but Mrs. Davis, the staff has pointed out to me, 
which might be helpful to you to know, that last year we 
accepted an amendment to the bill that we had from the 
Democrats to make sure that we could gather the data on 
veterans and the consolidated programs.
    So Mr. Tierney, if you are ready, I would like to recognize 
you for 5 minutes.
    Mr. Tierney. Thank you.
    Good morning, gentlemen. Thank you very much. I am sorry 
that I had to leave temporarily on that. I am sure that most of 
the ground--at least I hear that most of the ground has already 
been covered and everybody has made their case pretty well, but 
I wanted to talk to Mr. Holzer just for a second and ask you to 
expand a little bit on your testimony.
    You said that one of the points that you had was that while 
there might be savings on administrative cost of all of this 
consolidation, there might be cost on the other hand to 
particular populations that are being served today that might 
not be under this consolidation. Would you expand on that 
please?
    Mr. Holzer. Well, one can simply go to the GAO report. The 
GAO report says that very clearly. The GAO report is not a 
ringing endorsement of consolidation. It says that there are 
potential benefits and potential costs, and it emphasizes we 
have virtually no evidence on any of these claims that very 
substantial savings will result. We simply don't know.
    And it is possible they would be substantial. It is 
possible they wouldn't, and again they quote agency officials 
as saying that the needs of different populations, different 
clients, often do require different attention. It is not clear 
that one program will meet all of those needs as carefully.
    Again, even that claim is also both the benefits and the 
costs, the information is very small, and therefore the 
dramatic claims made about the benefits of consolidation 
relative to the cost simply aren't supported by any evidence 
that I have ever seen.
    Mr. Tierney. Thank you. Well I do know the history of 
consolidation and block granting has been cut, cut, cut and 
some programs just get put aside depending on who is going to 
put the emphasis where.
    Dr. Ralls, let me ask you a second. On the community 
college aspect of that, would you think that having a community 
college representative on the workforce investment boards 
locally would be a positive or a negative thing?
    Mr. Ralls. I believe it is a positive thing. I believe what 
is really positive is for us to be directly connected with the 
employer community because with hitting targets, that is who we 
are trying to hit in terms of moving folks into the private 
sector.
    I think we spend a lot of time worrying about who sits on 
boards and how many funding streams we have and we need to 
spend more time on how many overall people we serve and what 
services they receive. And I think we may find we actually 
serve more low income and all of the other folks we are trying 
to help through that process.
    Mr. Tierney. And I think you would have a better idea of 
how all of those different types of people you are trying to 
help than would some businesses, correct?
    Mr. Ralls. Excuse me?
    Mr. Tierney. I think that you, being the college president 
or being somebody in community college, would have a better 
idea of what populations you are serving or could be served 
sometimes better than an employer might.
    Mr. Ralls. I value our employer input greatly and what I 
will tell you in each of our community colleges, we have 
advisory boards for each of our programs. So what I would hate 
to see is that employer input not be recognized because I think 
it is a very important part of our work----
    Mr. Tierney. Well, I think both bills recognize employer 
input. I think the question is whether or not we recognize any 
other input. Whether we think there is value for other 
perspectives of stakeholders on that and if you had an entire 
business representation on there I think you wouldn't have a 
community college representative, you might not have anybody 
that really reflects the interests of people that have a lot of 
barriers; the disabled community or veterans or whether it is 
just somebody has an English learning language barrier or 
anything. Do you think those perspectives are important trying 
to determine what a workforce investment board addresses?
    Mr. Ralls. I think they are all important and I think 
different people bring those perspectives from a variety of 
different areas. I think what we have to try to get to is that 
we don't become overly complicated.
    As I mentioned in North Carolina, we had a 38-member 
workforce investment board, which I sit on. It is now 25 
members. Simplification is often a way we can serve more----
    Mr. Tierney. Do you think that there is an issue with 
oversimplification? If you don't have enough representation? 
Enough perspectives?
    Mr. Ralls. Could be, but I think we have yet to try that.
    Mr. Tierney. I am not sure you want to try a bad thing, 
right? We can always try somebody. Just put one point of view 
on there and see how that goes.
    Mr. Ralls. I am not someone who makes the assumption that 
that is automatically a bad thing.
    Mr. Tierney. Really? Okay, so if you had 100 percent of 
disabled interest on the board, you think that would be a good 
thing. If that is what we decided to do, one interest, one 
perspective only.
    Mr. Ralls. No.
    Mr. Tierney. Okay. All right, thank you.
    I yield back.
    Chairwoman Foxx. Thank you, Mr. Tierney.
    I would like to make a couple of comments, and then I do 
have some questions I want to ask. I really appreciate Mrs. 
McCarthy's comments about the fact that we ought to be able to 
come up with a bill that all of us could support or most of us 
could support. I am sorry she is not here, but she is my 
neighbor down the hall. I am going to stop in and tell her 
that.
    I am going to ask that we get from Mr. Hart, Dr. Ralls, Mr. 
Gustafson, and Dr. Holzer, if you have access to those, an 
estimate of how much you would save in state and private 
dollars from consolidations.
    And I think, Dr. Holzer, you said that there have been 
dramatic claims of savings made. I would like to see what you 
are talking about because I haven't seen those. We certainly 
haven't made those, and so if you have evidence of dramatic 
claims of savings that have been made, I would like to see 
those in writing.
    I think that what we have here is a--it boils down to a 
philosophy that either Washington knows best or locals know 
best when it comes to these kinds of programs and that is 
something I think we need to pursue a little bit more in terms 
of getting the data that we need.
    Also, Dr. Holzer, you mentioned that we have a $16 trillion 
GDP, but we are spending very little on these programs. Well, 
we also have a $16 trillion debt, and I think that it is very 
important that we recognize that our debt now equals our GDP 
and that we do everything that we possibly can to be good 
stewards of hard-working taxpayers who are providing the money 
for these programs.
    It is people who are currently working who are paying a lot 
in taxes to provide for these programs, which people who may 
never have worked in the real world are making decisions on how 
to spend.
    Mr. Holzer. May I respond to that?
    Chairwoman Foxx. Mr. Gustafson, we hear a lot of the 
criticism that if a certain population does not have a 
dedicated funding stream they will be forgotten. Do you agree 
with that?
    Mr. Gustafson. No, absolutely not. And in fact, Madame 
Chairwoman, I have an example in my written testimony where we 
understand who the customer is and we have actually added more 
programs and services and have a great example for that, which 
is what we call the Bridge Academy.
    We wouldn't have created the Bridge Academy if we hadn't 
known what the businesses' needs were and knowing that the 
populations we were serving didn't have those skills.
    So we put together the Bridge Academy in conjunction with 
our local school districts, with private funders, with some of 
the federal funding. We have 13 different funding sources for 
this and as a result, we are serving a very disadvantaged 
population of at-risk youth that have been kicked out or 
dropped out of school.
    And what we do is we get them either their GED, adult 
literacy, high school diploma in some cases, and vocational 
training, work experience, and then connect them to a job at 
the end.
    This was in our response to the demand, the demand, we 
better, actually better serve the supply.
    Chairwoman Foxx. Thank you.
    Mr. Hart, in your written testimony, you discussed the need 
to enhance opportunities for flexibility with an emphasis on 
performance and certainly that is something we are very 
concerned about.
    What happens currently if a local area is not meeting its 
performance metrics? What happens if a state does not meet its 
performance metrics? And how can we ensure continuous 
improvement in the system?
    Mr. Hart. Okay, great question. At the state level, the 
Governor holds me accountable and so you know, I talk to the 
governor twice a week and it always starts with, ``Hey Chris, 
Rick Scott here. How we doing?''
    And specifically, he is talking about our daily job 
placement, our monthly job placement, and our common measures. 
And so he really looks to me and our board and our boards--he 
knows how every single one of them are doing, as do I, as do 
they, every single day and that is very important.
    So what he is looking to all of us to do is ensure that we 
can meet that performance whether we have to work with a 
college, university, or a private training provider.
    What happens at the local level if they do not meet that, 
there could be a corrective action plan that is in place but 
also we work very diligently with them to ensure that they are 
meeting their performance objectives, which they have been 
doing when you take a look at the state of Florida.
    Chairwoman Foxx. Thank you very much. I am going to submit 
to you in writing a question related to the employment service 
merit staff and the consolidation of the functions of Wagner-
Peyzer Act into a single workforce investment fund and how this 
is being responding--would be responded to in Florida. So I am 
not going to over my time by asking that now and asking you to 
give a response.
    I want to thank again our distinguished panel of witnesses 
for taking the time to testify before the subcommittee today. I 
do think this has been a very enlightening hearing, and I again 
appreciate all of my colleagues for being here and the 
questions that they have asked.
    Mr. Hinojosa, do you have closing remarks?
    Mr. Hinojosa. Yes, Madame Chair, I do.
    I also want to echo the chair's first statement in closing. 
I want to thank our panelists for sharing their views on how to 
improve our nation's WIA system. I too found your presentations 
to be very interesting, and I want to build on some of the 
things I heard you say.
    But I especially want to highlight a statement made by one 
of our members of Congress on the other side of the aisle, 
Congresswoman Susan Brooks from Indiana, who questioned the 
amount of expenses that are being undertaken I guess, once the 
money gets to the WIA board and I can say that from 2007 to 
2010, I served as chairman of this committee, subcommittee.
    We had hearings from west coast to east coast and often 
times we found that 15 to 35 percent was all that was available 
for training because the other was being spent by somebody 
else.
    So my recommendation is going to be that--and I will 
personally do this. I will write a letter to the Office of 
Management and Budget and ask them how much money would we save 
over the next 10 years if we were to eliminate the middlemen.
    As Congressional money that is put out, we will decide if 
it is going to be $3 billion or $4 billion for training and 
that we change that, eliminate the middleman. I did that in 
higher education and they told us that we could save $96 
billion over 10 years in higher ed by eliminating the middlemen 
that used to be banks and a foundation. I won't name them but 
just know that it was questioned and fought by lobbyists 
representing those middlemen, but we did it. It became law.
    Congress can give money directly to the colleges and 
universities and they pay them for the cost of college 
education and we have increased the numbers that are going to 
community colleges and universities by over 28 percent since it 
kicked in.
    I believe, Madame Chair, that we should eliminate the 
middlemen again. In this case it is going to be the state 
government and the federal money would go to the community 
colleges, and we will figure out the details on how that money 
would be spent.
    However, we want to make sure, as Susan said, that most of 
the money, 60 to 65 percent be used for training and that we 
cut back on these fixed expenses; in many cases they are 
leasing buildings or buying buildings. Cut that out.
    Find buildings that were paid for by taxpayers and let them 
use that for a board meeting room for the workforce board. And 
then for the training, instead of having so many places for the 
trainees to go to, reduce those numbers. We did that in my 
district in South Texas. We had 13 places. We cut it down to 
six. It can be done.
    And, possibly some of the training that is being done in 
those particular buildings may have to be reduced so that more 
money goes to training them for the jobs that they are going to 
get, not just using computers and counseling and things like 
that.
    There have to be changes, but I like what Congresswoman 
Maloney said and that is that both sides of our group here and 
the education committee and the WIA, find a way to compromise 
so that we can get a good piece of legislation out this year.
    But I say eliminate the middlemen and that goes--and I will 
be very blunt--eliminate the state government because we did 
that. The banks just--for higher education--and the banks just 
went bizarre. They didn't want to cut out because they were 
making so much money.
    But I can tell you, there are training groups out there 
that are making so much money according to the hearings that we 
had from west coast to east coast and it is happening today.
    So, Madame Chair, with that close----
    Mr. Tierney. With the gentleman yield, please?
    Mr. Hinojosa. Yes, I will. I will yield to Congressman 
Tierney.
    Mr. Tierney. Thank you. I just want to make a point that 
everybody seems to be enamored with the idea that we work 
together yet nobody seems to be reaching out so that can 
happen.
    Madame Chairwoman, my understanding is that this hearing is 
being held today and that your intention is to markup this bill 
next week. If you liked what Mrs. McCarthy had to say, I am 
wondering where is that period of time going to be in which 
your folks and our folks sit down and try to actually discuss 
what differences we might have and work out a compromise.
    We went through this last year where the majority 
essentially jammed their bill through the committee, jammed it 
through the Floor, and off it went to limbo in the Senate. If 
we are really serious about this, I would hope that you would 
at least take a serious attempt at a period of time when the 
two committees might sit down and try to work out some 
differences and go forward otherwise I think I can be fairly 
good prognosticator that you will jam it through next week, it 
will be jammed through on the Floor, it will go sit in some 
basket over in the Senate again.
    Mr. Hinojosa. Reclaiming my time, Mr. Tierney.
    I agree with you. I think we need time. We need time to get 
this done in a bipartisan manner that is best for our country, 
and I don't think that we need to jam it through and mark it up 
next week because we are letting go of all of the information 
that we collected from the years 2007 to 2010, which spoke 
about limiting the amount of expenses and having a lot more 
money like two-thirds of it, 60 to 65 percent for training. And 
so I agree strongly and let the record show that we are asking 
for additional time.
    And with that, Madame chair, I yield back.
    Chairwoman Foxx. Thank you, Mr. Hinojosa.
    Thank you, Mr. Tierney.
    I, for the record, let me state that we--our staffs have 
worked--have reached out to your staff very, very often. We 
had----
    Mr. Tierney. They must have done it by stealth, Madame 
Chairwoman----
    Chairwoman Foxx. We had our bill last year. We had a markup 
on it. We allowed amendments to be offered. We will do the same 
thing again this year. We are more than happy for you to make 
amendments in the markup that we will have next week. I think I 
have been very fair in the way we have handled this hearing and 
the way we handled hearings last year.
    And so, we welcome your amendments. I do find it 
interesting that the bill that you all have introduced doesn't 
include the points that Mr. Hinojosa has brought up here today, 
and it doesn't agree with what the President has said that he 
would like to see, which is a consolidation of the maze of 
programs.
    So I find that very interesting. I do want to say that 
having served almost 7 years as the president of a community 
college, I am a big fan of community colleges. I always have 
been. I like the quote from Dr. Ralls, ``The road to recovery 
runs through community colleges.''
    Now, they are not perfect institutions. They don't offer 
perfect programs, but I do think a lot can be done with 
community colleges. Again, I want to point out that what the 
President has said is exactly what we do in the SKILLS bill and 
that is not done in the bill that our colleagues have 
introduced.
    Their bill does nothing to streamline or consolidate and I 
do hope we will be able to get the data to show that this will 
save money. I know that it will save money. I know it will save 
money in North Carolina. I tried when I was in the North 
Carolina State Senate to consolidate the programs and we knew 
it was a big savings for the state.
    I would like to say, Dr. Holzer, that you asserted many 
times that consolidation is an excuse for cutting funding. We 
have never said that. We cut no funding in this bill. What our 
interest is, is in showing--is getting more money directly to 
the skill seeker and the job seeker.
    I love that title, job seeker, because that is what we want 
to do and take the money out of the bureaucracy. And again, 
having been there Dr. Holzer, I am quite aware of how this 
money is being wasted.
    I have called it high-priced welfare because we hire a lot 
of government bureaucrats to administer programs and very 
little gets done to actually serve the job seeker, the client, 
the skill seeker, that person that we all say we want to help. 
And I think on both sides of the aisle that should be the 
focus.
    I was a person who worked very hard with tech prep 
programs, with making sure that people who came who were in the 
high schools and the college that I served were getting college 
credit. I agree with you. We need to do a lot more to get 
higher education and workforce programs working together, and I 
also agree very much that we need data to inform the public.
    And I have no doubt in my mind that as we get the data 
together to inform the public, that the public is going to be 
on our side on this issue, that consolidation works. I think 
the fact that those of you who are providing services to people 
have worked the system the best that you can to provide those 
services, have already shown us a way to do this, and I think 
we simply need to do more and I believe that the wisdom of the 
world is out there in the states, in the local communities, and 
does not reside in Washington, D.C.
    Our job is to do the best that we can to bolster what is 
going on locally and in the states rather than to hinder that. 
With that----
    Mr. Hinojosa. Madame Chair, before you close, I ask 
unanimous consent that this document that I was supposed to 
have asked permission to get into the record, it is entitled 
``Workforce Stakeholders Group Statement on Reforming Job-
Training Programs in America'' be entered into the permanent 
record for today.
    [The information follows:]

               Workforce Stakeholders Group Statement on
               Reforming Job Training Programs in America

Preamble
    In the first decade of this millennium, our nation has faced 
enormous tragedies, challenges, and changes that have diverted 
policymakers from giving workforce development and skills attainment 
the level of priority needed. As a result, a number of key Acts are due 
or soon due to be reauthorized. These Acts include:
     The Workforce Investment Act (WIA);
     The Carl D. Perkins Career and Technical Education Act;
     The Higher Education Act (HEA);
     The Older Americans Act (OAA)
     The Trade Adjustment Assistance Act (TAA); and
     The Temporary Assistance for Needy Families Program 
(TANF).
    Many of these laws authorize unique and important programs and 
services to common populations; therefore, the Workforce Stakeholders 
Group believes that the 113th Congress has a strong opportunity to:
     Create a cohesive and broad workforce system that 
leverages the unique strengths and resources that numerous systemic 
components (see list below) bring to the table;
     Remove the systemic barriers that allow people to fall 
through the cracks and that prevent them from reaching their full 
potential; and
     Improve the productivity of business through the provision 
of skilled, competitive, and motivated workers.
    Components of the broad workforce system include:
     The workforce system/WIA;
     higher education;
     career and technical education;
     adult education;
     veterans' programs;
     law enforcement and corrections;
     The Temporary Assistance to Needy Families program; and
     supportive services such as housing and food assistance.
    As our nation slowly recovers from the worst recession since the 
Great Depression and unemployment stubbornly hovers at close to 8 
percent, millions of people are seeking supports that will help them 
meet basic needs. Many have turned to safety net programs for 
assistance with housing, food, transportation, child care, and cash.
    In addition to programs that provide support with such basic needs, 
millions of people are also seeking skill-building and advancement 
opportunities that will put them on a career path that leads to 
financial stability and economic security. These include job training, 
employment services, transitional jobs, vocational rehabilitation, and 
education (alternative education, adult education, and postsecondary 
education). Many unemployed, low-wage workers, or people in 
transitional jobs need access to additional education and training 
through a postsecondary institution. Some turn to Adult Education 
programs to gain academic skills that high schools did not provide. 
Many veterans turn to the Department of Veterans Affairs for benefits 
and assistance in overcoming their employment challenges. People with 
disabilities utilize vocational rehabilitation programming for help in 
addressing their employment challenges. And millions more also turn to 
the workforce system for help finding a job.
    The Workforce Stakeholders Group agrees that systemic improvements 
could be made to better promote cross-functional program collaboration 
and systemic integration in order to increase investments in quality 
services, resources, and training. The group believes that these goals 
should be achieved by preserving important programs and systems with a 
track record of success in providing a range of services to specific 
populations with unique barriers to employment, including veterans; 
people with disabilities; youth; older workers; people with a criminal 
background; migrant and seasonal farmworkers; Native Americans; people 
who are homeless; and women seeking non-traditional employment 
opportunities, so that they can successfully gain the skills needed to 
participate in one of the cornerstones of American society--the 
workforce. Furthermore, the broader workforce system must ensure that 
these special populations receive high quality career guidance, 
education, skill training, supportive services and placement.
    More specifically, individuals and organizations that are concerned 
about workforce development and skills attainment, have been working 
for a decade to enact many needed improvements through Workforce 
Investment Act (WIA) reauthorization. Unfortunately, Congress has not 
passed a bi-partisan WIA reauthorization bill, which has prevented 
enactment and implementation of important improvements, while leaving 
the system vulnerable to criticism and budget cuts.
    Rather than rehashing old debates that have proven to be 
unproductive and divisive, the Workforce Stakeholders Group believes we 
should refocus our attention on the following question:
    ``What outcomes do we want from our workforce system, and what 
elements are needed in order to put the system in a position to achieve 
them in a constantly changing environment?''
    The Workforce Stakeholders Group answers that question with the 
following:
Desired Goals
    The Workforce Stakeholders Group believes that Congress should 
develop a blueprint that would create a comprehensive workforce system 
that leverages the unique strengths and expertise of its systemic 
components. Together, this broad workforce system should achieve the 
following equally-important goals.
    Serve Employers and Businesses: Businesses are most competitive 
when they have access to a strong, agile, and skilled workforce. Such a 
workforce includes workers who are prepared for the jobs that employers 
seek to fill today, and have the ability to learn and build on those 
foundational skills in order to perform the jobs of the future. The 
comprehensive workforce system should connect businesses to workers who 
have the job skills employers seek, or the ability to learn needed job-
specific skills on the job. In addition, the workforce system should 
work with businesses to increase employment equity, improve job quality 
and retention, and provide training and educational opportunities to 
workers to ensure that workers remain current with industry 
advancements.
    Serve People: America's 143 million working people and its 12 
million job seekers represent diverse groups with a variety of needs. 
The comprehensive workforce system must use a holistic approach to 
advance people along a continuum that leads to work opportunities, 
career advancement, and economic and family stability. Depending upon 
the person, the intensity and length of this journey will vary greatly. 
The comprehensive workforce system should be prepared to assist people 
whenever they seek its support.
    Contribute to Building Stronger Families and Communities: America's 
communities have the potential to be the engines of full national 
economic recovery and growth. Realizing this potential requires 
investments not only in places, but also in people. The federal 
government makes a number of investments in the physical capital of 
urban communities, including public housing and transportation 
development. These initiatives have the potential to pay off not just 
in terms of improved community resources, but also in terms of job 
opportunities for local residents. But these opportunities are lost for 
a large portion of urban residents--low-literacy, low-skilled adults in 
particular--unless there are high-quality employment and training 
services that prepare them for the jobs created by federal investments. 
A comprehensive workforce system should better coordinate investments 
we make in local communities with investments we make in the people who 
live in those communities. The workforce system can help build stronger 
and more stable communities by connecting workers to and qualifying 
them for the best possible jobs, and helping businesses find the 
skilled workers they need.
Needed Elements
    The Workforce Stakeholders Group believes that the following mix of 
elements and attributes is needed in order to achieve the goals 
outlined above.
    Integrated and collaborative: The Workforce Stakeholders Group 
believes that the comprehensive workforce system should treat people 
holistically and be collectively held accountable for ensuring that 
people do not slip through the cracks between each unique component 
that makes up the broad workforce system. Regardless of a service 
seekers entry point into the broad workforce system, its individual 
systemic components should have the capacity and motivation to ensure 
that service seekers are connected to additional programs and services 
that are outside the functional scope of any systemic component. 
Furthermore, individual components of the broad workforce system should 
have access to information and data needed to view service seekers 
holistically rather than narrowly focusing attention only on the 
specific symptoms that the component has the functional capacity to 
address.
    With this context, the group believes that the current dialogue 
must shift from consolidation to promoting integration and 
collaboration among existing resources and programs. The group is 
concerned that a consolidated block grant would lack the sophistication 
needed to appropriately direct resources to address unique target 
populations' needs and challenges. Integrated programs, on the other 
hand, would preserve population-specific resources where they are most 
needed, and would likely result in cost-savings that could be 
reinvested in proven workforce development and job training programs to 
continue to build and sustain the strong and adaptable workforce needed 
to keep America economically sound and competitive.
    The reauthorization of programs such as WIA, CTE, HEA, TANF, and 
TAA also presents an opportunity to encourage and strengthen 
collaborative partnerships that leverage the infrastructures, 
expertise, and resources of service providers, businesses and 
employers, and stakeholders that serve common populations. Such 
innovative approaches can serve to bridge the very supports and 
programs administered by multiple federal agencies.
    The current workforce system (WIA) is designed to provide services 
and training that will quickly prepare consumers to obtain jobs that 
employers are seeking to fill. Often serving people who are out of work 
and needing immediate employment, it is frequently engaged in crisis 
intervention. It is not designed or resourced to help consumers, 
particularly individuals who are hardest to serve or people who have 
been placed in jobs, yet need to obtain additional skills and 
credentials that will help them to advance in their careers. Currently, 
there are many workforce organizations engaged in successful 
collaborative partnerships, particularly with educational institutions 
like community colleges that can often provide training and industry-
recognized credentials in career and technical education programs. The 
workforce system plays a key role in these partnerships because it 
provides workers with information to navigate their local labor market 
as well as with tools to be better prepared for jobs.
    The Workforce Stakeholders Group believes that consumers could be 
better served by promoting collaborative partnerships that provide 
clear bridges between all the systems that serve common populations 
such as those supported by the U.S. Departments Labor, Health and Human 
Services, Education, Veterans Affairs, Justice, Housing and Urban 
Development, and Agriculture. Furthermore, partnerships that engage 
local community-based organizations and sector-based partnership in 
this capacity leverage the additional resources, experience, and 
infrastructures; allowing these additional resources to supplement 
federal resources aimed at common populations.
    By rewarding collaborative partnerships that are part of a holistic 
approach that bridges systems, consumers would be better served than 
through a program-specific approach that focuses only on the issues 
that that fall within the scope of individual programs.
    Accountability: While the comprehensive workforce system should be 
collaborating and better leveraging one another's scarce resources to 
achieve the goals outlined above, the Workforce Stakeholders Group 
recognizes that each systemic component within the comprehensive 
workforce system has its own specific performance outcomes that must be 
achieved. To the greatest extent feasible, the group believes that 
system-specific outcomes should align with and support the ultimate 
goals of the comprehensive workforce system.
    The accountability system for the broad workforce system should:
     Provide data that is essential for efforts to overcome 
disparities in employment and programmatic outcomes by reporting by 
sub-population, including at least gender, race, ethnicity, disability 
and age;
     Ensure that people, regardless of the system they first 
turn to for help, are successfully engaged and welcomed by the 
system(s) that is/are best positioned to address individuals' 
employment challenges.
     Take into account individuals' unique employment 
challenges in order to ensure that hard-to-serve populations are indeed 
served, and that services are appropriate and meaningful.
     Account for economic conditions in local labor markets and 
individuals' characteristics when they enter programs.
     Provide the comprehensive workforce system with the 
capacity to collectively track individuals' interim successes along 
their career and educational paths.
    Employers indicate that it is difficult to find workers who are 
qualified to perform the jobs they need to fill in order to maintain 
productivity. Especially at a time when unemployment is high, it is 
perplexing that millions of jobs are going unfilled. The comprehensive 
broad workforce system should be held accountable for helping to close 
the skills gap by working with businesses, industry, and employers to 
ensure that incumbent and future workers are connected to resources 
that will help them acquire the hard and soft skills employers seek. 
Policymakers should also recognize the need to invest in and maintain a 
data management capacity that allows the different systems within the 
broader workforce system to improve alignment and foster 
accountability.
    Resources: Without sufficient resources, even the best-designed 
system will fail to produce the desired outcomes that the system is 
designed to achieve. The Workforce Stakeholders Group believes that 
Congress should authorize resources based upon what is needed to train 
and educate the workforce of the 21st century.
    Despite federal disinvestments of more than 30 percent since 2002--
with more than $1 billion in cuts just since 2010--critical employment 
and training programs stand to lose billions more under current 
proposals to reduce the federal deficit. Such cuts are already having 
an impact: a recent survey of workforce providers found that more than 
three quarters expected to reduce training as a result of already 
reduced funding levels, and nearly half believed they would have to cut 
back on services for employers seeking skilled workers.


------------------------------------------------------------------------
              Program                    2002\1\            2013\2\
------------------------------------------------------------------------
WIA\3\............................     $4,801,217,456     $2,603,315,124
ABE...............................       $738,907,137       $594,993,000
CTE...............................     $1,643,307,607     $1,123,030,275
ES................................     $1,234,405,967       $700,841,901
TANF..............................         16 billion  28% loss of value
                                                                  due to
                                                            inflation\4\
------------------------------------------------------------------------
\1\ All 2002 figures adjusted for inflation.
\2\ As enacted under the current continuing resolution (P.L. 112-175)
  through March 27, 2013
\3\ Represents funding for WIA Title I Adult, Youth, and Dislocated
  Worker programs
\4\ As calculated by the Center on Budget and Policy Priorities, http://
  www.cbpp.org/cms/?fa=view&id=3534

    Our nation's economy cannot function without a skilled workforce. 
According to the Center on Education and the Workforce at the 
Georgetown Public Policy Institute, by 2020 nearly two out of every 
three U.S. jobs will require some postsecondary education and 
training.\5\ Research suggests that the demand for workers with 
postsecondary education is growing much faster than the supply, and by 
2025 the U.S. will need 20 million more people with a postsecondary 
degree or credential than our nation is currently on-track to 
produce.\6\
---------------------------------------------------------------------------
    \5\ http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/
CTE.FiveWays.FullReport.pdf, pg. 2
    \6\ http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/
undereducatedamerican.pdf, pg. 10
---------------------------------------------------------------------------
    America's workers depend on these education and training programs. 
Last year, more than 9 million individuals received training and 
related services through the federally-supported workforce investment 
system--an increase of nearly 250 percent in just two years. Millions 
more received training and employment services through youth, career 
and technical education, adult education, vocational rehabilitation, 
and veterans' programs that will help them pursue good jobs or further 
postsecondary education.
    Additional funding cuts would shut the door on these hard-working 
individuals seeking employment, significantly limiting their access to 
the skills and credentials needed to succeed in today's labor market. 
It would stifle the ability of U.S. businesses to find the skilled 
workforce they need to take advantage of new markets and emerging 
economic opportunities, putting our nation at a competitive 
disadvantage at a time when other countries are ramping up their own 
investments in human capital.
    The Workforce Stakeholders Group believes that the steady erosion 
of funding for the workforce system must be reversed. While concerns 
about the deficit may create a temptation to cut programs, in the long 
term, we need to investment in the skills of America's workforce so 
that more people can develop the market-ready skills to meet the needs 
of U.S. industries and the larger U.S. economy now and in the future.
    Special populations: The group strongly believes that programs that 
aim to meet the special needs of certain populations must be a high 
priority, properly resourced, and measured to ensure that special 
populations have access to quality services that holistically address 
their unique challenges. Therefore, the needs of special populations 
must continue to be a priority. A consolidated block grant would lack 
the sophistication needed to appropriately direct resources to address 
unique target populations' needs and challenges.
    Several programs were created with the intention of ensuring the 
provision of services to specific populations that are unlikely to be 
feasible in a general-population service setting. For example, 
experience informs us that youth are typically better served in the 
context of a youth-specific program rather than in a general program.
    Other programs were created because a national program better 
serves the target population. For example, migrant and seasonal 
farmworkers are an extremely mobile population and it is unrealistic 
for Congress to expect governors to serve people who only work briefly 
in their states and then move elsewhere.
    As Congress works to create a comprehensive workforce system, the 
Workforce Stakeholders Group urges Congress to ensure that the system 
is equipped and able to provide the right services and supports to help 
people to overcome their unique and personal employment challenges.
    Employers and Industry: The U.S. workforce system is often 
criticized as a sum of disconnected parts, with worker training poorly 
matched to industry demand, a lack of focus on industries that are the 
most important to local economies, and duplicative business outreach 
and workforce training services. A comprehensive workforce system will 
better engage employers and industry at the local and regional level, 
and ensure that workers are obtaining the skills and credentials 
employers are seeking for job opening in local and regional economies.
    Sector strategies respond to such criticisms. At the regional labor 
market level, they are partnerships of employers in one industry that 
bring together government, education, training, economic development, 
labor, and community organizations to focus on the workforce needs of 
their industry. At the state level, they are policies and investments 
that support the development of local sector partnerships. A growing 
body of evidence demonstrates their effectiveness for employers and 
workers.
    When employers find effective ways to work together with the public 
education and training systems--particularly the small and midsized 
firms that are increasingly responsible for U.S. job creation--they can 
improve their profitability. In a survey of employers participating in 
sector partnerships in Massachusetts, 41 percent reported reduced 
turnover; 19 percent reported less rework on the job; 23 percent 
reported fewer customer complaints; and 100 percent of the companies 
said that participation in a sector partnership was valuable.\7\
---------------------------------------------------------------------------
    \7\ Cathryn, ``BEST Benefits''; Industry Partnerships in 
Pennsylvania.
---------------------------------------------------------------------------
    Workers also benefit from involvement in a sector partnership. 
Navigating the education market to secure the knowledge-based skills 
required in today's economy is as daunting as navigating the labor 
market. Thousands of credentials exist, including full degrees, short-
term certificates, and professional licenses. Which ones do employers 
accept? Which education and training programs are flexible enough to 
allow working adults to complete them and obtain their credential? 
Public sector programs serving industry and job seekers through a 
sector partnership are better able to align the needs of employers with 
the career paths of workers, and the results for employees are higher 
wages and better jobs. A 2009 random-assignment evaluation of three 
sector partnerships showed that worker participants earned 
significantly more (18 percent more, or $4,500 over 24 months) than the 
control group. The reason was that they were more likely to work, 
worked more consistently, and worked in jobs with higher wages. They 
also had higher-quality jobs, as measured by benefits such as health 
insurance, paid vacation, and paid sick leave.\8\
---------------------------------------------------------------------------
    \8\ http://www.ppv.org/ppv/publications/assets/325--publication.pdf
---------------------------------------------------------------------------
    Such outcomes help explain why an estimated 1,000 regional sector 
partnerships are operating across the country, and more than 25 states 
are exploring or implementing sector strategies as a way to address 
industry needs through education and training programs.\9\ The 
Workforce Stakeholders Group urges Congress to ensure a comprehensive 
workforce system supports such best-practices to more effectively 
engage employers and industry.
---------------------------------------------------------------------------
    \9\ http://www.sectorstrategies.org/library/2010/snapshot-state-
sector-activity
---------------------------------------------------------------------------
    Industry-Recognized Credentials and Certificates: The Workforce 
Stakeholders Group believes that stackable, nationally portable, 
industry-recognized competency-based skills credentials will help 
connect employers to the workers they seek. In addition, the group 
believes that the broad workforce system should be positioned to and 
held accountable for addressing the needs of:
     regional economies and key regional industries;
     employers in key regional industries who need to hire for 
middle-class jobs or for jobs in pathways to them; and
     employers who want to improve the quality of their jobs.
    This will use public resources most effectively and do the most to 
make businesses competitive while bringing about the most financial 
stability and economic security.
    Labor Market Information: In order to achieve the goals outlined in 
this statement, the broad workforce system will require quality real-
time labor market information that will allow stakeholders to identify 
growing and/or high-demand occupations in regional labor markets, and 
key industries that are connected to such growing and high-demand 
occupations. Furthermore, in order to close the skills gap, information 
is needed to identify under-served populations and prepare them for 
regional employment opportunities.
    Supportive Services: It is well known that people who lack stable 
housing, reliable transportation, access to health care, and child care 
are less likely to succeed in employment. Yet many people who turn to 
the workforce system for help face these and other barriers to 
employment.
    Under current law, WIA funds may be used to provide supportive 
services to people who are participating in core, intensive, training 
or post-exit services; and are unable to obtain supportive services 
through other programs that provide such services. Unfortunately, the 
law creates barriers and disincentives to the provision of supportive 
services. The Workforce Stakeholders Group believes that Congress 
should acknowledge that the provision of supportive services is often 
an important key for many people who seek to find jobs and succeed in 
the workforce. Congress should ensure that the broad workforce system 
has the capacity to directly enroll job seekers in supportive services 
if they would benefit from them.
    Governance and Infrastructure: The Workforce Stakeholders Group 
understands that it has been difficult to resolve a number of state and 
local governance and infrastructure issues. The group believes there is 
an appropriate role for both state and local decision makers, and 
therefore believes that authority should be shared between states and 
local areas. In addition, the group believes that steps should be made 
to ensure that decisions made take into account a number of key 
economic and social attributes, including areas' industries, workers, 
population demographics, and public and private resources. It is 
important to recognize, however, that workers live at a local level, 
businesses employ local workers, and the impact of long-term 
unemployment are realized in the local community. Therefore, local 
flexibility, including clear and significant roles for local elected 
officials and local workforce boards, must be retained to allow the 
system to adapt to the real needs of real employers and job seekers.
Conclusion
    The reauthorization of WIA is an obvious immediate opportunity to 
make needed improvements that will ensure that our workforce is 
prepared for the jobs employers need them to perform today and 
tomorrow. The group believes that wholesale consolidation of key 
programs, as proposed in House legislation, H.R. 4297 (introduced 
during the 112th Congress), would move workforce programming in the 
wrong direction. Such a one-size-fits-all system risks becoming an 
underfunded system that lacks the resources and sophistication needed 
to meet the unique needs of certain individuals who must overcome 
population-specific employment challenges.
    As our nation is only beginning to emerge from the worst recession 
since the Great Depression and ongoing global competition is a long-
term certainty, the Workforce Stakeholders Group has grave concerns 
about proposals to dismantle the current workforce system. Such action 
would only serve to divert attention from providing quality employment 
services and job training to people who need job placement and 
supports. Instead, time, attention and resources would be spent on the 
implementation and rebuilding of a new workforce system. In other 
words, it is not necessary or cost effective to tear down the whole 
barn when it is just the roof that leaks.
    As Congress begins again to look at the reauthorization of the 
Workforce Investment Act, policymakers should keep in mind that WIA 
programs have played a pivotal role in helping jobseekers and employers 
rebound from the ``Great Recession.'' The latest quarterly reporting 
data provided by the Department of Labor indicates that more than 8 
million jobseekers have utilized WIA formula programs over the past 
year (DOL, WIA system quarterly reports ending March 31, 2012), a 
dramatic 291 percent increase over just four years ago (DOL, WIA system 
quarterly report ending March 31, 2008). These most recent reporting 
data does not include an additional 786,000 job seekers using targeted 
WIA programming to help special populations with additional barriers to 
employment.
    The Workforce Stakeholders Group continues to stand ready to work 
with policymakers to enact policies that will ensure that America's 
workforce is again the most skilled, the most competitive, the most 
productive, and the most adaptive workforce in the world.
                 about the workforce stakeholders group
    The Workforce Stakeholders group includes a range of organizations 
that are engaged in efforts to ensure that people served by the 
workforce system and programs that support the workforce system:
     Create a pipeline of qualified employees for business and 
employers;
     Find easy access to the services they need to help them 
find jobs;
     Have access to supports needed to advance in careers;
     Receive quality services that help them overcome unique 
challenges they face;
    These organizations represent state and local policymakers and 
program administrators, advocacy groups, service providers, and 
technical assistance providers.
     Asian Pacific American Labor Alliance, AFL-CIO & APALA 
Education Fund
     Association of Farmworker Opportunity Programs
     Coalition of Labor Union Women
     Corporate Voices for Working Families
     Corporation for a Skilled Workforce
     Council for Adult and Experiential Learning (CAEL)
     Easter Seals
     Goodwill Industries International
     Insight Center for Community Economic Development
     International Economic Development Council
     Jobs for the Future
     Legal Momentum
     National Alliance for Partnerships in Equity
     National College Transition Network at World Education
     National Council of La Raza
     National Council for Workforce Education
     National Disability Rights Network
     National League of Cities
     National Skills Coalition
     National Transitional Jobs Network
     National Youth Employment Coalition
     National Workforce Association
     PHI--Quality Care through Quality Jobs
     Proliteracy
     Sargent Shriver National Center on Poverty Law
     Senior Service America
     The Corps Network
     United Way Worldwide
     Wider Opportunities for Women
     Workforce Learning Strategies
     Young Invincibles
     YouthBuild USA
                                 ______
                                 
    Chairwoman Foxx. Without objection. There being no further 
business----
    Mr. Tierney. Chairwoman, there is a point you just 
mentioned of how well and cordial you have run this meeting, I 
would like just make a couple minutes of last remarks, if I 
could.
    Chairwoman Foxx. It is highly unusual for any member to do 
that. It is up to the chair to make the closing remarks. We 
would love to have your remarks in the record. Thank you, Mr. 
Tierney.
    Mr. Tierney. Well, you know Madame Chairwoman, I guess you 
are just proving what I was saying earlier. There is no 
apparent desire here to have a discussion about this bill and 
what it talks about.
    You have shut out the meeting. Apparently you must have 
some place of very important to go; you can't spend 2 minutes, 
but you haven't had a conversation. Your staffs haven't had a 
conversation.
    The things that Mr. Hinojosa talked about were in fact, and 
are in fact in our bill, so apparently you haven't read that to 
any great degree on that.
    One hearing, no matter how cordial you run it, doesn't give 
us a chance to look at your bill and our bill and see where 
there might be room for compromise. One markup where you let us 
present amendments, but then vote them down by party line 
doesn't present itself as a way to talk through and compromise.
    I think the most disturbing thing I heard you say was at 
the end, your side would prevail. I don't think this is about 
sides. I think the American public is sick of it being about 
sides. And what the public would probably like to say is that 
we get a final bill where all sides feel that they were dealt 
with fairly and that the end product is something they can all 
move forward on.
    Getting 51 percent of the public to think that they were 
listened to as opposed to getting a much larger percent of the 
people feeling that they may not have gotten all they wanted 
but they were heard and that a bill reflects a good compromise 
that the whole country can get behind, that would I hope be the 
decent goal on this.
    The way that you have set it up for just this hearing and 
just the markup next week, that clearly isn't an opportunity 
for both parties to show the public that we are trying to make 
a real serious effort of working out a bill that everybody can 
get behind.
    Mr. Hinojosa. Madame Chair----
    Chairwoman Foxx. Let the record shows that Mr. Tierney----
    Mr. Hinojosa [continuing]. I would strongly support your 
idea of consolidation----
    Chairwoman Foxx. Let the record show that Mr. Tierney got 
his 2 minutes of time. There being no further business, the 
subcommittee stands adjourned.
    [Questions for the record and their responses follow:]

                                             U.S. Congress,
                                    Washington, DC, March 21, 2013.
Mr. Todd Gustafson, Executive Director,
Michigan Works! Berrien-Cass-Van Buren, 499 West Main Street, Benton 
        Harbor, MI 49022.
    Dear Mr. Gustafson: Thank you for testifying before the 
Subcommittee on Higher Education and Workforce Training at the hearing 
entitled, ``Putting America Back to Work: Reforming the Nation's 
Workforce Investment System,'' on Tuesday, February 26, 2013. I 
appreciate your participation.
    I have enclosed additional questions for inclusion in the final 
hearing record. Please provide written responses no later than April 5, 
2013. Responses should be sent to Rosemary Lahasky or Emily Slack of 
the committee staff who can be contacted at (202) 225-6558.
    Thank you again for your important contribution to the work of the 
committee.
            Sincerely,
                                 Virginia Foxx, Chairwoman,
           Subcommittee on Higher Education and Workforce Training.
    1. Please provide an estimate of how much savings in state and 
private dollars could be attained from the consolidation of federal 
workforce development programs and their administrative functions in 
the state of Michigan.
    2. Please provide some specific examples of where the lack of 
flexibility in the current workforce investment system has impacted 
local and state efforts to provide training services directly to job 
seekers and workers.
                                 ______
                                 
                                             U.S. Congress,
                                    Washington, DC, March 21, 2013.
Mr. Chris Hart, President and CEO,
Workforce Florida Inc., 1580 Waldo Palmer Lane, Suite 1, Tallahassee, 
        FL 32308.
    Dear Mr. Hart: Thank you for testifying before the Subcommittee on 
Higher Education and Workforce Training at the hearing entitled, 
``Putting America Back to Work: Reforming the Nation's Workforce 
Investment System,'' on Tuesday, February 26, 2013. I appreciate your 
participation.
    I have enclosed additional questions for inclusion in the final 
hearing record. Please provide written responses no later than April 5, 
2013. Responses should be sent to Rosemary Lahasky or Emily Slack of 
the committee staff who can be contacted at (202) 225-6558.
    Thank you again for your important contribution to the work of the 
committee.
            Sincerely,
                                 Virginia Foxx, Chairwoman,
           Subcommittee on Higher Education and Workforce Training.
    1. Please provide an estimate of how much savings in state and 
private dollars could be attained from the consolidation of federal 
workforce development programs and their administrative functions in 
the state of Florida.
    2. In your testimony you discussed the fact that Employment Service 
merit staff is hindering your state's flexibility to deliver services 
and further reduce administrative costs. Why is this a hindrance to the 
state of Florida, and what impact is it having on improving outcomes 
for job seekers?
                                 ______
                                 
                                             U.S. Congress,
                                    Washington, DC, March 21, 2013.
Dr. R. Scott Ralls, President,
North Carolina Community College System, 200 West Jones Street, 
        Raleigh, NC 27603.
    Dear Dr. Ralls: Thank you for testifying before the Subcommittee on 
Higher Education and Workforce Training at the hearing entitled, 
``Putting America Back to Work: Reforming the Nation's Workforce 
Investment System,'' on Tuesday, February 26, 2013. I appreciate your 
participation.
    Enclosed are additional questions submitted by members of the 
subcommittee after the hearing. Please provide written responses no 
later than April 5, 2013 for inclusion in the final hearing record. 
Responses should be sent to Rosemary Lahasky or Emily Slack of the 
committee staff who can be contacted at (202) 225-6558.
    Thank you again for your important contribution to the work of the 
committee.
            Sincerely,
                                 Virginia Foxx, Chairwoman,
           Subcommittee on Higher Education and Workforce Training.
                    chairwoman virginia foxx (r-nc)
    1. Please provide some specific examples of where the lack of 
flexibility in the current workforce investment system has impacted 
local and state efforts to provide training services directly to job 
seekers and workers?
                  representative richard hudson (r-nc)
    1. The Community College system in North Carolina is integral to 
the success of many people who are out of work. What areas can you 
identify that would allow for better communication between the job 
creators' needs and the community?
    2. What is the federal government doing right now that stands in 
the way of the North Carolina Community College System doing what it is 
exactly supposed to do?
    3. How can the committee foster greater coordination and 
collaboration among federal, and North Carolina state and local 
workforce development programs, so that people like myself and our 
newly elected Governor, Pat McCrory, can work more effectively 
together?
                                 ______
                                 
    [Response to questions submitted for the record follow:]
    
    
    
    
    
    
                                ------                                


       Mr. Hart's Response to Questions Submitted for the Record

    Below are answers regarding Chris Hart's testimony on February 26 
before the Higher Education and Workforce Training Subcommittee 
entitled, ``Putting America Back to Work: Reforming the Nation's 
Workforce Investment System.''

    1. Please provide an estimate of how much savings in state and 
private dollars could be attained from the consolidation of federal 
workforce development programs and their administrative functions in 
the state of Florida.

    The savings are indeterminate, but positive, as it will allow the 
most efficient use of available resources to address client needs. 
Consolidated programs will allow both unused funding and underused 
personnel (due to program restrictions) to be shifted to higher demand 
services. In addition, consolidation will result in a reduction of the 
administrative burden currently imposed on One-Stop Career Center staff 
by eliminating the need for duplicative personnel systems and 
eliminating other program management and reporting redundancies.

    2. In your testimony you discussed the fact that Employment Service 
merit staff is hindering your state's flexibility to deliver services 
and further reduce administrative costs. Why is this a hindrance to the 
state of Florida, and what impact is it having on improving outcomes 
for job seekers?

    The current restricted use of state merit staff employees is one of 
the major barriers to integrated services and administration associated 
with the multiple programs provided through the One-Stop Career 
Centers. Federal regulations restrict the use of state merit based 
staff to delivery of traditional labor exchange activities funded under 
the Wagner-Peyser Act. Florida has made great strides in restructuring 
its workforce service delivery system to move away from the 
programmatic and financial ``silos'' inherent in a fragmented delivery 
system and to achieve a truly integrated network of One-Stop Career 
Centers and services. The removal of this restriction will allow the 
state to more concretely integrate the delivery of services at its one-
stop centers. The goal of such integration is better coordinated 
service delivery, which will result in better outcomes for job seekers. 
This is consistent with the USDOL's recent charge to integrate 
workforce system services. In addition, both WIA and Wagner-Peyser 
funded One-Stop Career Center staff provide core services, which are 
virtually indistinguishable as it relates to customer service. The 
special status of merit staff creates challenges to all One-Stop Career 
Center partners, to include morale and disciplinary problems due to 
disparate wages, hours, benefits and other working conditions for One-
Stop staff who are essentially doing the same customer service work. 
Finally, elimination of dual payroll, human resources and related costs 
for maintaining two sets of overhead mechanisms will reduce overall 
administrative expenditures, thereby freeing up funds for additional 
services for employers and job seekers.
                                 ______
                                 
                                        Raleigh, NC, April 5, 2013.
Hon. Virginia Foxx, Chairwoman,
Subcommittee on Higher Education and Workforce Training, U.S. House of 
        Representatives, 2181 Rayburn House Office Building, 
        Washington, DC 20515.
    Dear Representative Foxx: Thank you for the opportunity to testify 
before the Subcommittee on Higher Education and Workforce Training in 
February and for your introduction of the SKILLS Act. I am also very 
appreciative that you and members of your committee are allowing for 
more input regarding the needs of community colleges, as we have a 
great opportunity to do much good for many of our citizens.
    I have attached to this letter the responses to the questions I 
received from you and Representative Hudson. If you need further 
clarification to my comments or have more questions, please do not 
hesitate to ask.
    Again, thank you for this opportunity.
            Sincerely,
                                 R. Scott Ralls, President,
                           North Carolina Community College System.
                    chairwoman virginia foxx (r-nc)
    1. Please provide some specific examples of where the lack of 
flexibility in the current workforce investment system has impacted 
local and state efforts to provide training services directly to job 
seekers and workers?
Response
    The areas where many community colleges have difficulty with the 
Workforce Investment Act have been the limitations for contracting with 
Workforce Boards for class-size or cohort training, and the sequencing 
of services which can deemphasize job training as a workforce service 
under WIA.
    Compared to the previous Job Training Partnership Act, a major WIA 
limitation is that it treats community colleges as just another 
education and training vendor, and does not provide the flexibility for 
direct contracting for the delivery of courses or full programs for 
multiple WIA participants. There are several disadvantages to this 
limitation. First, community colleges are typically closely engaged 
with employers and work with employers to develop specific training 
programs to meet their new hiring requirements. Consequently, if a 
large employer needed welders, previous JTPA workforce legislation 
would have allowed contracting whereby the college could develop a 
welding program for a group of participants through a contractual 
relationship with the Workforce Board. Under WIA, colleges may offer 
programs with their own resources and WIA participants may enroll in 
those programs and use their training vouchers to pay for their tuition 
or fees, but there is not the same flexibility for course-based 
contracting. This limits the occurrence of this valuable opportunity 
for connecting system participants with specific training that may 
provide coordinated, direct pathways to potential employment. The 
SKILLS Act would correct this limitation of the current Workforce 
Investment Act.
    A second disadvantage of not having direct contracting is it limits 
the opportunities of providing services for a cohort of WIA 
participants. Our work on student success suggests the advantages of 
working with cohorts or groups of students because they identify with 
each other, develop relationships and in turn create their own mutual 
support networks. With a cohort of students, different programs and 
services can be organized collectively, such as our efforts in North 
Carolina to provide coordinated workforce development opportunities for 
students to gain an industry recognized credential, a career readiness 
certification, and employability skills training.
    Finally, the Workforce Investment Act places education and training 
as the last potential intervention in a prescribed sequence of 
prescribed services. This has the effect of deemphasizing education and 
training as a workforce development service when the national skills 
gap issues suggest it should be prioritized. We have run into issues 
where Workforce Boards indicate that they do not have available 
resources for education and training services for individual training 
accounts when we believe it those services which would be most valuable 
and should be prioritized. The SKILLS Act would also correct this 
limitation of the current Workforce Investment Act.
                  representative richard hudson (r-nc)
    1. The Community College System in North Carolina is integral to 
the success of many people who are out of work. What areas can you 
identify that would allow for better communication between the job 
creators' needs and the community?
Response
    In North Carolina as in other areas of the nation, community 
colleges are uniquely positioned at the front lines of workforce 
development and have direct contact with employers to meet their 
workforce needs. For example, each of our educational programs at our 
local colleges have employer advisory committees that meet regularly to 
ensure that our course and program objectives are consistent with 
employer demands. On a state basis, we also ensure employment 
engagement on statewide program changes, such as our recent statewide 
redesign of technical education programs or our current redesign of 
math programs, where we include business representatives of key 
industry sectors on the leadership teams for these statewide 
initiatives. In North Carolina, our colleges are supported to provide 
customized training for new and expanding employers, as well as 
employers making new investments in technology, which means that they 
not only know through data what job trends are occurring, but also have 
an intimate understanding of what potential employment expansions are 
being contemplated in their communities. Bottom line, community 
colleges in North Carolina and throughout the nation are the front line 
troops in addressing the skills gaps that limit economic recovery. 
Current WIA legislation does not recognize this unique role played by 
our nation's community colleges, in essence treating us like just 
another training vendor.
    Stronger more integrated data systems at the Federal level would 
help in providing the type of information community colleges need, and 
policymakers desire, in determining both areas where services need to 
be targeted and the effectiveness of workforce interventions. For 
instance, one of the areas Governor McCrory has expressed great 
interest is measuring and incentivizing programs that lead to jobs. 
However, it is problematic to do that because we do not have data 
sources that allow us to determine employment in fields trained. Most 
community college students work while in college, and our employment 
numbers following program completion are in turn very, very high, 
typically exceeding 95 percent. However, we are not able to delineate 
whether employment is in the field for which they were trained which 
limits accurate evaluation. We can discern what industry they may be 
working in, but that cannot substitute for the field, because for 
example, maintenance workers are employed in hospitals and hotels, and 
information technology specialists are employed in manufacturing 
companies. Bottom line, data limitations and access do create barriers 
to analysis.

    2. What is the federal government doing right now that stands in 
the way of the North Carolina Community College System doing what it is 
exactly supposed to do?
Response
    Data indicates that community colleges have been the most effective 
sector in keeping costs of college down and preventing the higher 
education ``bubble.'' (For example, see data from the Delta Cost 
Project). However, this also means that per student expenditures at 
community colleges are vastly lower than those found at four-year 
colleges and often even at public schools. This has impact, 
particularly in providing programs needed in ``job driver'' areas such 
as health care (i.e., nursing, radiography and dental assistants, etc.) 
and technician programs (i.e., machining, maintenance, advanced 
manufacturing, HVAC, etc.) that have high costs, require smaller class 
sizes and where you have a middle-skills gap. The current WIA system 
does not provide for support of resources to community colleges for 
providing these needed programs. Tuition and fees, paid for through the 
Individual Training Account vouchers that WIA participants receive, 
support participation in community college programs, but frequently do 
not cover the costs. This is particularly the case in low tuition 
states like North Carolina, where tuition amounts to less than 25 
percent of the cost of delivering the training. States that maintain 
low tuition should be encouraged to maintain those low tuition rates, 
with flexibility granted that allows them to use Federal funding to 
support community college costs for equipment and instructors in high 
cost areas where significant skill gaps exist. Otherwise, it creates a 
perverse incentive for community colleges to increase their tuition 
costs so that they can capture more of the actual costs of providing 
education and training programs. It also means that under current WIA 
funds can be used to support administrative overhead costs, when 
perhaps they could be more effectively used by states to support the 
costs of providing an effective training delivery network through their 
community colleges, absent an increase in tuition and fees.
    There seems to be increasing recognition at the Federal level of 
the importance of investing in community college job training and 
education as evidenced by the competitive grants made available through 
the Department of Labor's Trade Adjustment Assistance Community College 
Training Grant Program. However, this investment should be incorporated 
into the nation's overall system for workforce development, not just 
provided as a temporary, add-on competitive grant program that does not 
reach the vast majority of community colleges.

    3. How can the committee foster greater coordination and 
collaboration among federal, and North Carolina state and local 
workforce development programs, so that people like myself and our 
newly elected Governor, Pat McCrory, can work more effectively 
together?
Response
    The committee should give greater credence to the role community 
colleges play as part of state and local workforce systems, and 
recognize them as such at the national level by deeming them as a 
central part of the nation's workforce development system, not just as 
another training vendor which essentially is what the Workforce 
Investment Act currently does. The previous Job Training Partnership 
Act was much better in recognizing the role of community colleges than 
the Workforce Investment Act,. Under the current Workforce Investment 
Act, there is too often a disconnect in too many places between 
community colleges and workforce boards because the federal legislation 
does not acknowledge nor really speak to the unique role played by 
community colleges, other than in regards to board inclusion. 
Consequently, when individuals at the Federal level refer to the 
workforce system, they may or may not incorporate community colleges, 
when at the state or local level, community colleges are almost always 
central players in the workforce system. Resolving this disconnect at 
the federal level with greater recognition of the national role of 
community colleges in the nation's workforce development 
infrastructure, I believe, would be an important first step in gaining 
greater coordination and collaboration among federal, state and local 
officials and workforce development programs.
                                 ______
                                 
    [Whereupon, at 12:05 p.m., the subcommittee was adjourned.]

                                 
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