[Congressional Record Volume 154, Number 25 (Thursday, February 14, 2008)]
[Senate]
[Pages S1061-S1067]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SCHUMER:
  S. 2648. A bill to amend the Workforce Investment Act of 1998 to 
improve programs carried out through youth opportunity grants, and for 
other purposes; to the Committee on Finance.
  Mr. SCHUMER. Mr. President, I rise today to introduce the STEP-UP 
Act. The STEP-UP Act is a comprehensive policy solution directed toward 
fighting unemployment, particularly among less educated African 
American men, by implementing innovative and 
successful job training efforts and improving existing tools like the 
Earned Income Tax Credit and the Work Opportunity Tax Credit.
  In America and my home state of New York there is a growing crisis of 
joblessness for African American men. The crisis is profound, 
persistent and perplexing. Across the country and in our own backyard, 
far too many black men lack an adequate education and face difficulty 
finding and keeping work. The numbers are staggering and getting worse.
  Poverty is not new. African American disadvantage is--sadly--not new. 
But now is the time for fresh solutions and urgent action, especially 
now that we are facing an economic recession. We know all too well, 
that when our economy faces a downturn, the most vulnerable members of 
the labor force face the greatest challenges in the job market.
  My goal today is to both shine a firm spotlight on a problem has 
received scant attention, inadequate resources, intermittent focus and 
poor coordination and also to introduce legislation that will offer 
some solid, practical steps forward. To be clear, the provisions in the 
STEP-UP ACT will be open to all Americans, but the legislation contains 
services and incentives that are particularly needed among young 
African American men.
  I am introducing the STEP-UP ACT for several reasons.
  First, the problem of African American male unemployment is severe 
and it is worsening. Consider this: In 2000, 65 percent of black male 
high school dropouts in their 20's were jobless--in other words not 
looking or unable to find work--and by 2004, the share had grown to 72 
percent ``jobless.'' That translates to almost one out of three men. By 
comparison the rate for white male high school dropouts was 34 
percent and Hispanic males 19 percent. Between 1992 and 1999--the 
greatest economic expansion in our nation's history--the labor force 
participation of young black men actually declined from 83.5 percent to 
79.4 percent. Clearly the rising tide did not lift all boats.
  Second, there is an unprecedented need to fill unskilled and semi 
skilled jobs across the countries as baby boomers retire, and there is 
a large supply of jobless black men who could fill them.
  Third, after much trial and error, we now have several successful job 
training programs that work, as well as federal policy options with a 
proven track record of making a real difference in the labor force. Yet 
sadly, while the programs are finally working, the Federal funding has 
gone down by 90 percent.
  There is a complex interplay of forces that led us to this point, and 
many of them are familiar culprits such as: failing schools, 
dysfunctional families, high incarceration rates, overt and subtle 
racism, and the decimation of

[[Page S1062]]

manufacturing jobs that typically afforded opportunities to men.
  All these political, cultural, economic and personal elements combine 
to erect a steeplechase of barriers that is far too difficult to 
traverse for far too many urban black men.
  While this is a sensitive subject, there is also a subculture of the 
street that provides easy money and allows some to eschew personal 
responsibility. But we can't sit passively by and let that subculture 
claim another generation of these men. The public sector--on all 
levels--has an obligation to intercede. The Reverend Johnny Ray 
Youngblood, a pastor and friend of mine from Brooklyn, said it best: 
``Government has a moral responsibility to compete against, and win 
against, subcultures that are immoral, illegal and really inhuman.''
  Let me be clear: there is a host of dedicated, even heroic, leaders 
who have been addressing these issues every day for years. There are 
ideas and leaders out there can turn this problem around. However, on 
the Federal level, there has been no comprehensive public policy 
response to this situation. We have allowed the problems of black men 
to grow worse unabated.
  Last year, as Chairman of the Joint Economic Committee, I held a 
hearing on this very issue. Our witnesses provided testimony that 
vividly illustrated how devastating this crisis truly is. This hearing 
was an eye-opener for me and my colleagues. The hearing also began a 
dialog in Congress on how we can move forward legislatively to expand 
job opportunities and incentives for African American men.
  I believe there is a rare confluence of forces that should be 
exploited--now--to ramp up efforts to aggressively attack the plight of 
jobless black men. The American labor force is in transition and 
therein lies the opportunity. By 2010 as many as 64 million Americans 
from the generations born before and after World War II will approach 
retirement age. Over this period we will be losing 20 percent of our 
entire workforce--a turnover rate the likes of which our country has 
never experienced.
  Many of the new jobs I am speaking about don't require college 
degrees, many are entry level, but many can pay upwards of $40,000 with 
benefits. And the best part is, they can't be outsourced or downsized--
because they're crucial to keeping cities working. A nurse, welder, 
mechanic or long-haul commercial driver doesn't do us any good if he or 
she is working in Bangalore. We have never before had such a clear 
picture of where the jobs will be--or what we have to do to connect our 
struggling young people to them.
  What we need to do now is ensure that black men have access to the 
best, most successful job training programs that can prepare them for 
these jobs. After years of trying, I believe there is a new paradigm 
for job training that will make this possible. For the past year, I 
have been working on the STEP-UP Act to do just that.
  Let me tell you about one innovative job training program that was 
founded in East Harlem but has been replicated successfully throughout 
the United States and Europe: its called STRIVE and it offers some good 
clues on what makes a job program work.
  Here is the most important thing you need to know about STRIVE: 70 
percent of their graduates retain their jobs after 2 years, compared to 
a 40 percent city-wide average. I visited them to see firsthand how 
they do it. It impressed me so much I brought 3 Senators to visit 
STRIVE's offices in Washington, DC, and it blew their hair back as 
well.

  First, STRIVE's core program does not begin with teaching 
participants how to read an account ledger or hammer in a nail. It 
begins with what they call ``soft skills'' like how to dress for work, 
interact with your boss and superiors, and accept criticism. Seems 
obvious enough, but for many it is harder than it should be to tell the 
difference between constructive criticism and a provocative ``dis'' 
that, in the code of the street, demands an aggressive reaction.
  In addition to focusing on those elemental ``soft skills,'' STRIVE 
provides intensive follow-up, long-term involvement with additional 
training opportunities, and wrap-around services to address the whole 
host of obstacles that black men face when trying to enter and remain 
in the workforce.
  Our current Federal job-training program--the Workforce Investment 
Act--WIA--has been steadily underfunded in recent years. To give a 
sense of how much we have walked away from such initiatives, in 1978 we 
spent $9.5 billion on jobs programs--$30 billion in today's dollars. In 
2007 we spent only $5.1 billion. On top of that, WIA does not mandate 
or even encourage the STRIVE model. The WIA program hasn't been 
reauthorized since it expired in 2003 and it needs to be updated to 
incorporate the lessons of STRIVE.
  My bill, the STEP-UP Act, moves our job training agenda closer to the 
STRIVE model. If we can duplicate some semblage of STRIVE's 70 percent 
success rates--which they have duplicated in 22 locations around the 
country--we can begin to really move the employment needle in the right 
direction.
  The STEP-UP Act reauthorizes funding for the Youth Opportunity 
Program, YO, which was originally established in 1998 to provide grants 
to programs that offer intensive job training and placement services 
for hard-to-serve youth between the ages of 16 to 24. When it was 
created, the YO program was meant to be the ``model'' job training 
program, the shining star in a system replete with false starts and 
failed efforts. It drew on the best practices from a generation of 
previous job training efforts, understanding that attacking the scourge 
of unemployment meant offering comprehensive services to at risk youth. 
Preparing young men and women for the workforce has to be more than 
just teaching someone to touch-type or hammer a nail. A job training 
program can put anyone into a job, but their efforts will only be 
successful if we give them a comprehensive skill set and support 
services.
  This legislation draws on the strengths of the YO program but makes 
some important modifications based on the experience of grantees. 
First, programs that receive YO grants will be required to provide 
``wrap-around'' services. This means not only workforce training, but 
also those ``soft skills'' that are so essential to keeping a job.
  Secondly, the STEP-UP Act encourages grantees to engage with local 
resources, such as labor organizations, educational institutions, as 
well as the private sector. By bringing in private businesses, we can 
truly bridge the gap between training and employment.
  Finally, to make sure we don't travel willy-nilly down the same path, 
we must invest in proven models, we must track progress and we must 
make adjustments to improve programs as the facts flow in. That is why 
the STEP-UP Act mandates strict oversight of job training programs that 
will participate in the Youth Opportunity Grant programs. My bill 
requires the Secretary of Labor to perform evaluations of participants 
after the 24 months and report to Congress on the best practices 
implemented by participants. Too frequently, we have funded job 
training efforts but we have not demanded results. The Department of 
Labor needs to dedicate themselves to understanding what programs work 
best and why.
  To summarize for a moment: we know the jobs are out there for young 
black men, we know there are training programs that work, so what's the 
missing link? The missing link is ensuring that work pays well enough 
to help lure young men into the workforce.
  Given the limited earning potential for many young African American 
males, there can be a lot of bottom line reasons not to work in the 
formal economy. Working a tough job in a warehouse for $7 an hour would 
put less than $300 a week and around $13,000 a year in your pocket. In 
2008, those wages don't go too far.
  We need to make work pay for African American men.
  The STEP-UP Act offers an economic incentive to join the workforce 
through a targeted expansion of the Earned Income Tax Credit, EITC. My 
bill doubles the current credit from $438 up to $875. Effectively, this 
broadens the scope of the credit and you will be able to receive some 
credit up until your income reaches $22,880. For someone without kids 
or a family to support, the extra money you would get from this program 
would make a real difference.

[[Page S1063]]

  The second thing my bill does is extend the EITC to those low-wage 
earners who have kids and are current on their child support payments. 
There are lots of men out there who really want to work and do right by 
their families. It can be an uphill battle for them, but many find a 
way to make it happen.
  Considering that about a third of low-income noncustodial fathers 
nationwide are black, a federal EITC expansion could have a big impact 
for them. Here is how my bill does it: If you are a dad paying your 
child support, the existing childless tax credit is quadrupled from 
$438 to $1,719 a year. This is still much smaller than the credit a 
family with one child will receive, which is $2,917 in 2008.
  Let me be clear: enhancing the EITC is not just about getting men 
working but about strengthening families, and encouraging low-income 
fathers to fulfill their parenting responsibilities and stay current on 
their child support payments. Studies have documented a direct 
correlation between fathers who pay child support and their involvement 
in their children's lives. If we can get men working and they become a 
positive force in the lives of their sons and daughters, we will have 
achieved two very worthy objectives.
  The Earned Income Tax Credit is just one example of a tax incentive 
that translates to real dollars for working families. Another issue 
that I want to address is the problem of keeping people in the 
workforce. Too many men are cycling in and out of employment. We need 
to make steady employment pay.
  The Work Opportunity Tax Credit, or WOTC, is one incentive that I 
think needs to be strengthened and modified. Currently, WOTC is only a 
credit for employers, and at its maximum it is worth $2,400 if the 
worker is employed for 400 hours or more. So if a worker making $7 an 
hour stays on the job for about 5 months, then his employer gets the 
maximum credit, but he does not receive anything for hitting this 
benchmark.
  The STEP-UP Act expands WOTC to include employees so that it is not 
only an employer credit, and to maximize its potential over time. 
Specifically, once a worker has reached 1,500 hours on the job, or 52 
weeks, both the employer and employee should get a $500 credit. We need 
to encourage employers to really invest in their workers and to ensure 
that workers are staying on the job.
  Today I am asking my colleagues on both sides of the aisle to 
carefully consider this legislation. Given the severity of the African 
American jobless problem and the unprecedented opportunity that will 
result from the mass retirement of workers from the post war 
generation, shame on us if we do not figure out how to take action to 
put people who want to work into jobs that pay. It is up to us to align 
these tools and make them work. We must. Not only must it be a moral 
imperative that we give more opportunity to African American men, it 
must be a national imperative to keep our country competitive in the 
21st century. I ask my colleagues to join me in this effort and take 
this initial step towards success.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2648

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Supporting Training and 
     Employment Potential for Underemployed Populations Act'' or 
     the ``STEP UP Act''.

                TITLE I--YOUTH OPPORTUNITY GRANT PROGRAM

     SEC. 101. FINDINGS.

       Congress finds the following:
       (1) Finding employment that provides steady income and a 
     career track is a problem for young, undereducated men and 
     women who lack educational credentials and are disconnected 
     from the labor market.
       (2) That problem is particularly acute for young African-
     American men. In 2006, over \1/5\, or 21.8 percent, of black 
     men ages 16 through 24 were unemployed. This is roughly 
     double the unemployment rate for all young men (11.2 
     percent).
       (3) Even over a period of relative economic growth, 
     employment for disconnected African-American men has 
     declined. In 1999, 65 percent of African-American male high 
     school dropouts were jobless and not looking for work. In 
     2004, that rate had risen to 72 percent.
       (4) The Youth Opportunity Grant Program was established in 
     the Workforce Investment Act of 1998 to provide intensive job 
     training and placement activities as well as other 
     educational, social, and recreational services to at-risk, 
     hard-to-serve youth.
       (5) The Youth Opportunity Grant Program built upon the most 
     promising strategies of previous demonstration programs that 
     strongly suggest the effectiveness of intensive case 
     management and follow-up services in assisting disconnected 
     young men and women in finding long-term employment.
       (6) By reauthorizing and refining the Youth Opportunity 
     Grant Program, Congress could help make strides against those 
     serious problems faced by both young African-American men and 
     other disconnected youth.
       (7) Over the course of the Youth Opportunity Grant Program, 
     36 localities with high poverty rates received funding 
     through grants. The Youth Opportunity Grant Program was 
     effective in assisting hard-to-reach populations. The 
     Department of Labor estimates that 42 percent of the eligible 
     youth and 62 percent of the eligible out-of-school youth in 
     the target areas enrolled in the Youth Opportunity Grant 
     Program.
       (8) Further understanding of the successes of, challenges 
     faced by, and shortcomings of, the Youth Opportunity Grant 
     Program in the past, and in the future, will require 
     extensive evaluation and study by the Department of Labor.

     SEC. 102. YOUTH OPPORTUNITY GRANTS.

       Section 169 of the Workforce Investment Act of 1998 (29 
     U.S.C. 2914) is amended to read as follows:

     ``SEC. 169. YOUTH OPPORTUNITY GRANTS.

       ``(a) Grants.--
       ``(1) In general.--Using funds made available under 
     subsection (j), the Secretary shall make grants to eligible 
     local boards described in subsection (c) and eligible 
     entities described in subsection (d) to carry out programs 
     that provide activities described in subsection (b) for youth 
     and young adults. The boards and entities shall carry out the 
     programs to increase the long-term employment of youth and 
     young adults who seek assistance and who live in empowerment 
     zones, enterprise communities, or high poverty areas.
       ``(2) Definition.--In this section:
       ``(A) Hard-to-serve young adult.--The term `hard-to-serve 
     young adult' means an individual who is--
       ``(i) not less than age 25 and not more than age 30; and
       ``(ii)(I) an unemployed individual;
       ``(II) a school dropout;
       ``(III) an individual who has not received a secondary 
     school diploma or its recognized equivalent;
       ``(IV) an ex-offender; or
       ``(V) a noncustodial parent with a child support 
     obligation.
       ``(B) Youth or young adult.--The term `youth or young 
     adult' means an individual who is not less than age 14 and 
     not more than age 30.
       ``(3) Grant period.--The Secretary may make a grant under 
     this section for a 2-year period, and may renew the grant for 
     each of the 3 succeeding years.
       ``(4) Grant awards.--In making grants under this section, 
     the Secretary shall ensure that grants are distributed 
     equitably among local boards and entities serving urban areas 
     and local boards and entities serving rural areas, taking 
     into consideration the poverty rate in such urban and rural 
     areas, as described in subsection (c)(3)(B).
       ``(b) Use of Funds.--
       ``(1) In general.--A local board or entity that receives a 
     grant under this section shall use the funds made available 
     through the grant to provide job training and employment 
     activities and related services, including--
       ``(A) activities that meet the requirements of section 129;
       ``(B) youth development activities such as activities 
     relating to leadership development, citizenship, and re-entry 
     from the justice and juvenile justice systems, community 
     service, and recreation activities; and
       ``(C)(i) workforce preparation and attitudinal training;
       ``(ii) sector-specific skills training as described in 
     subsection (f)(1)(D);
       ``(iii) educational completion services, including classes 
     that lead to a secondary school diploma or its recognized 
     equivalent (and programs to prepare for such a class), 
     remedial reading and mathematics classes (including classes 
     to prepare an individual to read and do mathematics at a 
     college level), and skills certification and credentialing 
     programs;
       ``(iv) access to internships, transitional jobs, work 
     experience, and nontraditional employment opportunities;
       ``(v) access to other services either directly or through 
     an organization that enters into a strategic partnership 
     described in subsection (e) with the local board or entity, 
     including parenting classes for fathers and mothers, 
     financial literacy services, services to improve health care 
     (and mental health care) treatment and access, and services 
     to improve access to affordable housing and shelter; and
       ``(vi) assistance in obtaining the earned income credit 
     under section 32 of the Internal

[[Page S1064]]

     Revenue Code of 1986 and obtaining benefits through 
     government entitlement programs, such as the Medicaid program 
     under title XIX of the Social Security Act (42 U.S.C. 1396 et 
     seq.) and unemployment compensation programs, as well as 
     other State and local entitlement programs that may be 
     applicable.
       ``(2) Intensive placement and follow-up services.--In 
     providing activities under this section, a local board or 
     entity shall provide--
       ``(A) intensive placement services; and
       ``(B) follow-up services, including case management, every 
     2 months for not less than 24 months after the completion of 
     participation in the other activities described in this 
     subsection, as appropriate.
       ``(3) Limitation on use for hard-to-serve young adults.--
     The local board or entity shall not use more than 25 percent 
     of the funds made available through the grant to provide 
     activities for hard-to-serve young adults.
       ``(c) Eligible Local Boards.--To be eligible to receive a 
     grant under this section, a local board shall serve a 
     community that--
       ``(1) has been designated as an empowerment zone or 
     enterprise community under section 1391 of the Internal 
     Revenue Code of 1986;
       ``(2)(A) is a State without a zone or community described 
     in paragraph (1); and
       ``(B) has been designated as a high poverty area by the 
     Governor of the State; or
       ``(3) is 1 of 2 areas in a State that--
       ``(A) have been designated by the Governor as areas for 
     which a local board may apply for a grant under this section; 
     and
       ``(B) meet the poverty rate criteria set forth in 
     subsections (a)(4), (b), and (d) of section 1392 of the 
     Internal Revenue Code of 1986.
       ``(d) Eligible Entities.--To be eligible to receive a grant 
     under this section, an entity (other than a local board) 
     shall--
       ``(1) be a recipient of financial assistance under section 
     166; and
       ``(2) serve a community that--
       ``(A) meets the poverty rate criteria set forth in 
     subsections (a)(4), (b), and (d) of section 1392 of the 
     Internal Revenue Code of 1986; and
       ``(B) is located on an Indian reservation or serves 
     Oklahoma Indians, or Native villages or Native groups (as 
     such terms are defined in section 3 of the Alaska Native 
     Claims Settlement Act (43 U.S.C. 1602)).
       ``(e) Strategic Partnerships.--
       ``(1) Local boards.--An eligible local board may--
       ``(A) work independently to provide activities under this 
     section; or
       ``(B) enter into a strategic partnership to provide 
     activities under this section with 1 or more entities 
     consisting of--
       ``(i) a community-based job training provider who is an 
     eligible provider identified in accordance with section 
     122(e)(3), or another provider selected by the local board;
       ``(ii) State or local government entities;
       ``(iii) labor organizations;
       ``(iv) other entities described in the statement of need 
     required by subsection (f)(1)(C);
       ``(v) private sector employers;
       ``(vi) educational institutions, including secondary 
     schools (which may be public schools, parochial schools, or 
     other private schools) or community colleges; or
       ``(vii) entities in the judicial system, entities in the 
     juvenile justice system, or organizations representing 
     probation and parole officers.
       ``(2) Entities.--An eligible entity may--
       ``(A) work independently to provide activities under this 
     section; or
       ``(B) enter into a strategic partnership to provide 
     activities under this section with--
       ``(i) the local board; and
       ``(ii) 1 or more entities described in paragraph (1)(B).
       ``(f) Application.--To be eligible to receive a grant under 
     this section, a local board or entity shall submit an 
     application (individually or as part of a strategic 
     partnership described in subsection (e)) to the Secretary at 
     such time, in such manner, and containing such information as 
     the Secretary may require, including--
       ``(1)(A) a description of the activities that the local 
     board or entity will provide under this section to youth and 
     young adults in the community described in subsection (c) or 
     (d);
       ``(B) a description of the strategic partnership referred 
     to in subsection (e), if any, that the applicant intends to 
     enter into to provide activities under this section;
       ``(C)(i) information describing how the applicant will 
     coordinate the planning and implementation of the activities 
     to be carried out under the grant with entities serving youth 
     in the community involved, including the one-stop operator 
     and one-stop partners in the local workforce investment 
     system, educational institutions including institutions of 
     higher education, child welfare agencies, entities in the 
     juvenile justice system, foster care agencies, and such other 
     community-based organizations as may be appropriate; and
       ``(ii) a statement of need for the community;
       ``(D) information identifying employment sectors in the 
     local and regional economy that could employ youth and young 
     adults served under the grant and a plan to provide sector-
     specific skills training for jobs in those sectors and 
     employment opportunities in those sectors; and
       ``(E) information identifying the specific role, if any, 
     that private sector employers in growing employment sectors 
     in the local and regional economy will play in that plan, 
     including information describing their skills training 
     curricula and job placement programs;
       ``(2) a description of the performance measures negotiated 
     under subsection (h), and the manner in which the local 
     boards or entities will carry out the activities to meet the 
     performance measures;
       ``(3) a description of the manner in which the activities 
     will be linked to activities described in section 129; and
       ``(4) a description of the community support, including 
     financial support through leveraging additional public and 
     private resources, for the activities.
       ``(g) Consideration.--In making grants under this section, 
     the Secretary shall give special consideration to a local 
     board or entity that submits an application under subsection 
     (f) as part of a strategic partnership described in 
     subsection (e) that includes a private sector employer if the 
     employer agrees to--
       ``(1) commit to hire youth and young adults who complete 
     the program carried out under the grant involved;
       ``(2) provide personnel, facilities, equipment, and a 
     skills training curriculum for the program;
       ``(3) provide internships, mentoring, and apprenticeship 
     opportunities for participants in the program; or
       ``(4) provide funding, scholarships, and access to 
     specified employer-based resources for the program.
       ``(h) Performance Measures.--
       ``(1) In general.--The Secretary shall negotiate and reach 
     agreement with the local board or entity on performance 
     measures, for the indicators of performance referred to in 
     subparagraphs (A) and (B) of section 136(b)(2), that will be 
     used under paragraph (3) to evaluate the performance of the 
     local board or entity in carrying out the activities 
     described in subsection (b). Each local performance measure 
     shall consist of such an indicator of performance, and a 
     performance level referred to in paragraph (2).
       ``(2) Performance levels.--The Secretary shall negotiate 
     and reach agreement with the local board or entity regarding 
     the--
       ``(A) overall performance levels expected to be achieved by 
     the local board or entity on the indicators of performance; 
     and
       ``(B) separate performance levels for those indicators for 
     the performance of the board or entity--
       ``(i) regarding participants in the activities who are not 
     less than age 14 and not more than age 24; and
       ``(ii) regarding participants in the activities who are not 
     less than age 25 and not more than age 30.
       ``(3) Evaluations and reports.--
       ``(A) Evaluations.--
       ``(i) Evaluations of prior activities.--Not later than 2 
     years after the date of enactment of the Supporting Training 
     and Employment Potential for Underemployed Populations Act, 
     the Secretary shall complete the evaluations described in 
     paragraph (1) of local boards and entities, using performance 
     measures with overall performance levels described in 
     paragraph (2)(A), concerning activities carried out under 
     subsection (b) prior to that date of enactment.
       ``(ii) Evaluations of new activities.--Not later than 2 
     years after a local board or entity receives a grant under 
     this section after that date of enactment, the Secretary 
     shall conduct the evaluations described in paragraph (1) of 
     that local board or entity, using performance measures with 
     overall performance levels described in paragraph (2)(A) and 
     performance measures with separate performance levels 
     described in paragraph (2)(B).
       ``(iii) Comparison groups.--The evaluations conducted under 
     this paragraph shall include evaluations of carefully matched 
     comparison groups.
       ``(B) Reports.--The Secretary shall prepare a report, based 
     on the evaluations described in subparagraph (A)(i), that 
     contains the baseline data obtained and that begins to detail 
     the best practices of recipients of grants under this section 
     throughout the Nation. The Secretary shall prepare an annual 
     report, based on the evaluations described in subparagraph 
     (A)(ii), that contains the data obtained and that details the 
     best practices of recipients of grants under this section 
     throughout the Nation, with attention to how different 
     activities impact both different demographic sectors of the 
     population and different age groups in the population.
       ``(4) Use.--If the Secretary, in conducting evaluations 
     under paragraph (3), determines that a local board or entity 
     fails to meet the performance measures for 2 fiscal years, 
     the local board or entity shall not be eligible to receive a 
     grant under this section for a subsequent fiscal year.
       ``(i) Incentives for Business Partners.--The Secretary 
     shall establish a plan to increase the availability of bonds 
     through the Federal Bonding Program carried out through the 
     Employment and Training Administration to employers that are 
     partners in the programs carried out under this section.
       ``(j) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $250,000,000 for 
     fiscal year 2008 and each subsequent fiscal year.''.

     SEC. 103. CONFORMING AMENDMENTS.

       Section 127 of the Workforce Investment Act of 1998 (29 
     U.S.C. 2852) is amended--
       (1) in subsection (a)(1)--
       (A) by striking ``sections'' and inserting ``section''; and

[[Page S1065]]

       (B) by striking ``and 169'' and all that follows and 
     inserting ``; and''; and
       (2) in subsection (b)(1)(A)--
       (A) in clause (i), by striking ``provide youth 
     opportunity'' and all that follows through ``grants) and''; 
     and
       (B) by striking clause (iv).

             TITLE II--EARNED INCOME TAX CREDIT ENHANCEMENT

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Earned Income Tax Credit 
     Enhancement Act of 2007''.

     SEC. 202. FINDINGS.

       Congress finds the following:
       (1) The earned income tax credit is considered one of the 
     most successful antipoverty programs in the United States. 
     Previous expansions of the earned income tax credit in the 
     1990s were instrumental in lifting families, especially 
     single parents, out of poverty by increasing income and 
     building assets.
       (2) However, the earned income tax credit provides little 
     assistance for childless workers and noncustodial parents. 
     The credit for childless workers is only 15 percent of the 
     credit for a worker with 1 child.
       (3) Increasing the maximum earned income tax credit amount 
     for childless workers would help to lift more individuals out 
     of poverty and mirror the successful credit expansion of the 
     1990s. Additionally, lowering the age of eligibility will 
     extend this important credit to the growing population of 
     young adults living in poverty.
       (4) Although the effectiveness of the work opportunity tax 
     credit has come under scrutiny, the credit is limited in 
     scope. The credit is only available to employers and offers 
     no benefits to employees to encourage job retention. 
     Additionally, the credit only addresses short-term job 
     retention, not long-term employment.
       (5) Expanding the work opportunity credit to employees and 
     increasing the time period of the credit's availability could 
     provide greater incentives for employees to stay in their 
     jobs and for employers to retain these workers over long-term 
     periods.

     SEC. 203. ENHANCEMENTS TO EARNED INCOME TAX CREDIT.

       (a) Credit Allowed for Certain Childless Individuals Over 
     Age 18.--
       (1) In general.--Subclause (II) of section 32(c)(1)(A)(ii) 
     of the Internal Revenue Code of 1986 (relating to eligible 
     individual) is amended by striking ``age 25'' and inserting 
     ``age 21''.
       (2) Exception for full-time students.--Paragraph (1) of 
     section 32(c) of such Code is amended by adding at the end 
     the following new subparagraph:
       ``(G) Exception for full time students.--The term `eligible 
     individual' shall not include any individual described in 
     subparagraph (A)(ii) if such individual has not attained the 
     age of 25 before the close of the taxable year and is a full 
     time student for more than one half of such taxable year.''.
       (b) Modification of Credit Amount for Individuals Without 
     Qualifying Children.--
       (1) Modification of credit percentage.--The last row in the 
     table in section 32(b)(1)(A) of the Internal Revenue Code of 
     1986 is amended by striking ``7.65'' in the middle column and 
     inserting ``15.30''.
       (2) Modification of phaseout amount.--Subparagraph (A) of 
     section 32(b)(2) of such Code is amended to read as follows:
       ``(A) In general.--Subject to subparagraph (B)--
       ``(i) in the case of an eligible individual with 1 
     qualifying child--

       ``(I) the earned income amount is $6,330, and
       ``(II) the phaseout amount is $11,610,

       ``(ii) in the case of an eligible individual with 2 or more 
     qualifying children--

       ``(I) the earned income amount is $8,890, and
       ``(II) the phaseout amount is $11,610, and

       ``(iii) in the case of an eligible individual with no 
     qualifying children--

       ``(I) the earned income amount is $4,220, and
       ``(II) the phaseout amount is 200 percent of the dollar 
     amount applicable under subclause (I).''.

       (c) Increased Credit for Certain Individuals Without 
     Qualifying Children.--
       (1) In general.--Paragraph (1) of section 32(b) of the 
     Internal Revenue Code of 1986 is amended by striking 
     subparagraphs (B) and (C) and inserting the following:
       ``(B) Increased credit for certain individuals without 
     qualifying children.--In the case of an eligible individual 
     described in subparagraph (C), the credit percentage under 
     subparagraph (A) shall be 30.6 percent.
       ``(C) Eligible individual described.--An eligible 
     individual is described in this subparagraph with respect to 
     a taxable year if--
       ``(i) with respect to such eligible individual for the 
     taxable year, another individual--

       ``(I) bears a relationship to the eligible individual 
     described in section 152(c)(2),
       ``(II) meets the requirements of section 152(c)(3), and
       ``(III) has the same principal place of abode as the 
     eligible individual for less than one-half of such taxable 
     year,

       ``(ii) such eligible individual is required to make child 
     support payments with respect to the individual described in 
     clause (i), and
       ``(iii) such eligible individual has made all such required 
     child support payments during the taxable year.

     For purposes of clause (iii), an eligible individual shall be 
     treated as having made all required child support payments 
     during a taxable year if such eligible individual has made 
     child support payments in an amount not less than the total 
     amount of child support payments required for such eligible 
     individual for such taxable year.''.
       (2) Notification of failure to pay child support.--Section 
     464(b) of the Social Security Act (42 U.S.C. 664(b)) is 
     amended by adding at the end the following new paragraph:
       ``(3) The Secretary shall use notices of past-due support 
     under this section in administering the earned income tax 
     credit under section 32 of the Internal Revenue Code of 1986 
     for eligible individuals described in subsection (b)(1)(C) of 
     such section. The regulations promulgated pursuant to this 
     subsection shall require States to submit such notices at a 
     time adequate to allow the Secretary to properly administer 
     such credit for such individuals.''.
       (d) Repeal of EGTRRA Sunset.--Section 901 of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001 (relating to 
     sunset provisions) shall not apply to the amendments made by 
     section 303 of such Act (relating to marriage penalty relief 
     for earned income credit; earned income to include only 
     amounts includible in gross income; simplification of earned 
     income credit).
       (e) Election to Average Earned Income.--Paragraph (2) of 
     section 32(c) of the Internal Revenue Code of 1986 is amended 
     by adding at the end the following new subsection:
       ``(n) Election to Average Earned Income.--
       ``(1) In general.--Under rules established by the 
     Secretary, in the case of an eligible individual who has made 
     an election under this subsection, subsection (a) shall be 
     applied--
       ``(A) by substituting `the taxpayer's 2-year averaged 
     earned income' for `the taxpayer's earned income for the 
     taxable year' in paragraph (1) thereof, and
       ``(B) by substituting `2-year averaged earned income' for 
     `earned income' in paragraph (2)(B) thereof.
       ``(2) 2-year averaged earned income.--For purposes of this 
     subsection, the term `2-year averaged earned income' means, 
     with respect to any taxable year, the average of--
       ``(A) the taxpayer's earned income for such taxable year, 
     and
       ``(B) the taxpayer's earned income for the preceding 
     taxable year.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 204. CARRYBACK AND CARRYFORWARD OF STANDARD DEDUCTION 
                   AND PERSONAL EXEMPTION DEDUCTIONS.

       (a) Standard Deduction.--Section 63 of the Internal Revenue 
     Code of 1986 (relating to taxable income defined) is amended 
     by adding at the end the following new subsection:
       ``(g) Carryback and Carryforward of Deductions for 
     Individuals Who Do Not Itemize.--
       ``(1) In general.--In the case of an eligible taxpayer, if 
     the sum of the deductions described in subsection (b) exceeds 
     the amount of the adjusted gross income of such taxpayer for 
     such taxable year (hereinafter in this subsection referred to 
     as the `unused deduction year'), such excess may be--
       ``(A) carried back to the preceding taxable year, and
       ``(B) carried forward to each of the 2 taxable years 
     following the unused deduction year
       ``(2) Amount carried to each year.--
       ``(A) Entire amount carried to first year.--The entire 
     amount of the unused deduction for an unused deduction year 
     shall be carried to the earliest of the 3 taxable years to 
     which (by reason of paragraph (1)) such deduction may be 
     carried.
       ``(B) Amount carried to other 2 years.--The amount of the 
     unused deduction for the unused deduction year shall be 
     carried to each of the other 2 taxable years to the extent 
     that such unused deduction may not be used for a prior 
     taxable year because of the amount of adjusted gross income 
     of the taxpayer for such taxable year.
       ``(3) Eligible taxpayer.--For purposes of this subsection, 
     the term `eligible taxpayer' means, with respect to any 
     taxable year, a taxpayer with respect to whom a credit under 
     section 32 is allowable for such taxable year.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 205. ADVANCED REFUNDABLE CREDIT FOR MEMBERS OF TARGETED 
                   GROUPS.

       (a) Allowance of Credit.--
       (1) In general.--Subpart C of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     refundable credits) is amended by redesignating section 36 as 
     section 37 and by inserting after section 35 the following 
     new section:

     ``SEC. 36. EMPLOYMENT CREDIT FOR MEMBERS OF TARGETED GROUPS.

       ``(a) Allowance of Credit.--In the case of an eligible 
     individual, there shall be allowed as credit against the tax 
     imposed by this title for the taxable year an amount equal to 
     $500.
       ``(b) Eligible Individual.--For purposes of this section--
       ``(1) In general.--The term `eligible individual' means an 
     individual who is a member of a targeted group and--
       ``(A) who--
       ``(i) has worked exactly 1,500 hours for an employer during 
     any period beginning on the date such individual was hired 
     and ending with or within the taxable year, and

[[Page S1066]]

       ``(ii) was continuously employed by such employer during 
     such period, or
       ``(B) who--
       ``(i) began work with an employer during any 52-week period 
     ending with or within such taxable year, and
       ``(ii) was continuously employed by such employer during 
     such 52-week period.
       ``(2) Member of a targeted group.--The term `member of a 
     targeted group' has the meaning given such term under section 
     51(d).
       ``(c) Special Rules.--For purposes of subsection (a)--
       ``(1) only 1 employer may be taken into account with 
     respect to any eligible individual for any taxable year, and
       ``(2) an individual may not be treated as an eligible 
     individual more than once with respect to any employer.

     For purposes of this subsection, rules similar to the rules 
     of subsections (a) and (b) of section 52 shall apply.
       ``(d) Coordination With Advance Payments.--
       ``(1) Recapture of excess advance payments.--If any payment 
     is made to the individual by an employer under section 3511 
     during any calendar year, then the tax imposed by this 
     chapter for the individual's last taxable year beginning in 
     such calendar year shall be increased by the aggregate amount 
     of such payments.
       ``(2) Reconciliation of payments advanced and credit 
     allowed.--Any increase in tax under paragraph (1) shall not 
     be treated as tax imposed by this chapter for purposes of 
     determining the amount of any credit (other than the credit 
     allowed by subsection (a)) allowed under this part.
       ``(e) Coordination With Certain Means Tested Programs.--For 
     purposes of--
       ``(1) the United States Housing Act of 1937,
       ``(2) title V of the Housing Act of 1949,
       ``(3) section 101 of the Housing and Urban Development Act 
     of 1965,
       ``(4) sections 221(d)(3), 235, and 236 of the National 
     Housing Act, and
       ``(5) the Food Stamp Act of 1977,

     sany refund made to an individual (or the spouse of an 
     individual) by reason of this section, and any payment made 
     to such individual (or such spouse) by an employer under 
     section 3511, shall not be treated as income (and shall not 
     be taken into account in determining resources for the month 
     of its receipt and the following month).''.
       (2) Conforming amendments.--
       (A) Section 1324(b)(2) of title 31, United States Code, is 
     amended by inserting before the period at the end ``, or 
     enacted by section 204 of the Earned Income Tax Credit 
     Enhancement Act of 2007''.
       (B) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 is amended by redesignating the item relating to section 
     36 as relating to section 37 and by inserting after the item 
     relating to section 35 the following new item:

``Sec. 36. Employment credit for members of targeted groups.''.
       (b) Advanced Payments.--
       (1) In general.--Chapter 25 of the Internal Revenue Code of 
     1986 (relating to general provisions relating to employment 
     taxes) is amended by adding at the end the following new 
     section:

     ``SEC. 3511. ADVANCED PAYMENT OF EMPLOYMENT CREDIT FOR 
                   MEMBERS OF TARGETED GROUPS.

       ``(a) In General.--Except as otherwise provided in this 
     section, every employer making a payment of wages for a 
     payroll period to an individual who is an eligible employee 
     with respect to such payroll period shall, at the time of 
     paying such wages, make an additional payment to such 
     employee of $500.
       ``(b) Eligible Employee.--For purposes of this section, the 
     term `eligible employee' means, with respect to any payroll 
     period, an individual--
       ``(1) who is an eligible individual (as defined by section 
     36(b)), and
       ``(2) with respect to whom an eligibility certificate under 
     this section is in effect.
       ``(c) Eligibility Certificate.--For purposes of this title, 
     an eligibility certificate under this section is a statement 
     furnished by an employee to the employer which--
       ``(1) certifies that the employee is a member of a targeted 
     group (as defined in section 51(d)),
       ``(2) certifies that the employee does not have an 
     eligibility certificate under this section in effect for the 
     calendar year with respect to the payment of wages by another 
     employer, and
       ``(3) contains such other information as the Secretary may 
     require.
       ``(d) Payments to Be Treated as Payments of Withholding and 
     FICA Taxes.--
       ``(1) In general.--For purposes of this title, payments 
     made by an employer under subsection (a) to his employees for 
     any payroll period--
       ``(A) shall not be treated as the payment of compensation, 
     and
       ``(B) shall be treated as made out of--
       ``(i) amounts required to be deducted and withheld for the 
     payroll period under section 3401 (relating to wage 
     withholding), and
       ``(ii) amounts required to be deducted for the payroll 
     period under section 3102 (relating to FICA employee taxes), 
     and
       ``(iii) amounts of the taxes imposed for the payroll period 
     under section 3111 (relating to FICA employer taxes),

     as if the employer had paid to the Secretary, on the day on 
     which the wages are paid to the employees, an amount equal to 
     such payments.
       ``(2) Advance payments exceed taxes due.--In the case of 
     any employer, if for any payroll period the sum of the 
     aggregate amount of payments under subsection (a) plus any 
     amount paid under section 3507 exceeds the sum of the amounts 
     referred to in paragraph (1)(B), each such advance payment 
     shall be reduced by an amount which bears the same ratio to 
     such excess as such advance payment bears to the aggregate 
     amount of all such advance payments.
       ``(3) Employer may make full advance payments.--The 
     Secretary shall prescribe regulations under which an employer 
     may elect (in lieu of any application of paragraph (2))--
       ``(A) to pay in full all amounts under subsection (a), and
       ``(B) to have additional amounts paid by reason of this 
     paragraph treated as the advance payment of taxes imposed by 
     this title.
       ``(4) Failure to make advance payments.--For purposes of 
     this title (including penalties), failure to make any advance 
     payment under this section at the time provided therefor 
     shall be treated as the failure at such time to deduct and 
     withhold under chapter 24 an amount equal to the amount of 
     such advance payment.''.
       (2) Clerical amendment.--The table of sections for chapter 
     25 of such Code is amended by adding at the end the following 
     new item:

``Sec. 3511. Advanced payment of employment credit for members of 
              targeted groups.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 206. MODIFICATIONS TO WORK OPPORTUNITY CREDIT.

       (a) Expansion to Youth Opportunity Program Participants, 
     WIA Youth Activity Participants, and Young Offenders.--
       (1) In general.--Paragraph (1) of section 51(d) of the 
     Internal Revenue Code of 1986 (relating to members of 
     targeted groups) is amended by striking ``or'' at the end of 
     subparagraph (H), and by adding at the end the following new 
     subparagraph:
       ``(J) a youth opportunity program participant,
       ``(K) a qualified WIA youth activity participant, or
       ``(L) a qualified young offender.''.
       (2) Definitions.--Subsection (d) of section 51 of the 
     Internal Revenue Code of 1986 is amended by redesignating 
     paragraphs (11), (12), and (13) as paragraphs (14), (15), and 
     (16), respectively, and by inserting after paragraph (10) the 
     following new paragraph:
       ``(11) Youth opportunity program participant.--The term 
     `youth opportunity program participant' means an individual 
     who is certified by an eligible local board or eligible 
     entity (as such board and entity are described in section 169 
     of the Workforce Investment Act of 1998)--
       ``(A) as having completed a program carried out under that 
     section, and
       ``(B) as having a hiring date which is not more than 1 year 
     after the last date on which such individual completed such a 
     program.
       ``(12) Qualified wia youth activity participant.--The term 
     `qualified WIA youth activity participant' means any 
     individual who is certified by a designated local agency--
       ``(A) as an eligible youth (as defined in section 101 of 
     the Workforce Investment Act of 1998) who--
       ``(i) is not less than age 18 and not more than age 21, and
       ``(ii) has been enrolled in or has received a youth 
     activity (as so defined) under chapter 4 of subtitle B of 
     title I of such Act, and
       ``(B) as having a hiring date which is not more than 1 year 
     after the last date on which such individual was so enrolled 
     or so received such activity.
       ``(13) Qualified young offender.--The term `qualified young 
     offender' means any individual who is certified by a 
     designated local agency--
       ``(A) as being not less than age 18 and not more than age 
     21,
       ``(B) as having been convicted of a misdemeanor, and
       ``(C) as having a hiring date which is not more than 1 year 
     after the last date on which such individual was so convicted 
     or was released from prison.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to individuals who begin work for the employer 
     after the date of the enactment of this Act.
       (b) Additional Work Opportunity Credit for Retained 
     Employees.--
       (1) In general.--Subsection (a) of section 51 of the 
     Internal Revenue Code of 1986 (relating to amount of credit) 
     is amended by striking ``equal to 40 percent of the qualified 
     first-year wages for such year.'' and inserting ``equal to 
     the sum of--
       ``(1) 40 percent of the qualified first year wages for such 
     year, plus
       ``(2) $500 for each retained employee.''.
       (2) Retained employee.--Section 51 of the Internal Revenue 
     Code of 1986 is amended by adding at the end the following 
     new subsection:
       ``(l) Retained Employee.--For purposes of this section, the 
     term `retained employee' means an employee who is a member of 
     a targeted group and--
       ``(1) who--

[[Page S1067]]

       ``(A) has worked exactly 1,500 hours for the taxpayer 
     during any period beginning on the date such employee was 
     hired and ending with or within the taxable year, and
       ``(B) was continuously employed by such taxpayer during 
     such period, or
       ``(2) who--
       ``(A) began work with the taxpayer during any 52-week 
     period ending with or within such taxable year, and
       ``(B) was continuously employed by such taxpayer during 
     such 52-week period.
     For purposes of the preceding sentence, no employee may be 
     treated as a retained employee more than once with respect to 
     any taxpayer.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 207. PUBLICATION OF CHANGES AND ASSISTANCE WITH 
                   PREPARATION.

       The Secretary of the Treasury shall--
       (1) publicly disseminate information with respect to the 
     amendments made by this title (including the dissemination of 
     such information to State and local government one-stop job 
     centers), and
       (2) provide appropriate assistance to taxpayers (through 
     low-income taxpayer clinics and other sources) for the 
     purpose of allowing taxpayers to benefit from the amendments 
     made by this title. 
                                 ______