The Jobs Programs Trump's Budget Would Cut

For a president fixated on employment, his proposal for federal spending leaves out a surprising number of young, elderly, and disabled workers.

A retired volunteer directs traffic in San Diego. (Mike Blake / Reuters)

While the details of President Donald Trump’s proposed 2018 budget remain scant, one thing is clear: The Department of Labor will likely be one of the biggest losers. Trump’s budget proposal would cut the department’s funding by $2.5 billion, or 21 percent, which will mean drastic changes for the work the department does.

The dramatic scale-back is meant to offset the proposed budget’s additional funding to national-security efforts. The proposal says, “With the need to rebuild the Nation’s military without increasing the deficit, this Budget focuses the Department of Labor on its highest priority functions and disinvests in activities that are duplicative, unnecessary, unproven, or ineffective.”

Those are strong adjectives for programs that have helped put Americans back to work, a consistent and bipartisan economic goal. The 2018 budget details around $500 million in cuts for the department, which likely means that programs for disadvantaged workers, including seniors, youths, and those with disabilities, would be reduced or completely eliminated. The Senior Community Service Employment Program, training grants at the Occupational Safety and Health Administration, and technical-assistance grants at the Office of Disability Employment Policy would all disappear. Job-training centers for disadvantaged children would be shuttered and funding for more general job-training and employment services would move from the federal budget to states.

While Obama’s budget did make some cuts similar to the ones proposed by Trump for the Labor Department, these reductions signal a definitive break from Obama’s strategy, which focused on the inclusion of workers who might otherwise be left out of the workforce without government intervention.

The National Employment Law Project (NELP), a left-leaning nonprofit, has spoken out against the cuts, calling Trump’s budget for the Labor Department “draconian.”  “The Trump budget would gut the very job-training programs workers need to develop the skills required to compete in emerging fields and fill many of the high-paying jobs available now and projected for the future,” said Christine Owens, the executive director of the NELP, in a statement.

For instance, the Senior Community Service Employment Program (SCSEP)—a federal initiative that has provided employment training to low-income Americans over 55 years old for more than 40 years—now faces an uncertain future. In 2015, Obama slashed the SCSEP’s funding in his budget and has proposed moving the program from the Labor Department to the Department of Health and Human Services, where other programs for senior Americans are housed. Jim Seith, a director at the nonprofit National Council on Aging, one of the grantees of the SCSEP, says that the program is the only labor programs targeted at seniors in poverty.

The Trump administration argues that SCSEP is ineffective on the grounds that only half of the program’s participants successfully transition to unsubsidized employment. But given the participants’ demographic—they’re low-income senior citizens, some of whom were unemployed for long stretches before the program—Seith says those numbers are good. He also highlights the fact that participants in the program provide some 40 million hours of volunteer time at public and nonprofit organizations.

Another program that’s likely facing cuts is Job Corps, which provides free education and job training for disadvantaged minors. This program also faced cuts in past Obama budgets. An economic cost-benefit study of the Job Corps program from 2008 found that it was the “only federal training program that has been shown to increase earnings for this population,” leading participants to go further in school, reducing their criminal activity, and increasing their average earnings for several years after the program, although the earnings gains were only sustained by older participants. The budget includes closing centers where some 37,000 unemployed and underemployed youths receive job training.

“Basing important decisions on Job Corps performance measures could be more complicated than it appears,” said Peter Schochet, a senior fellow at Mathematica Policy Research who led the study on the Job Corps program, via email. “Our data show that some Job Corps centers improved student earnings relative to what they would have been, even among centers with lower overall performance measures.”

In addition to these cuts, the budget beefs up some Labor Department initiatives that are aimed at getting people back to work. The proposal would expand the Reemployment and Eligibility Assessment program, which is designed to make people less likely to claim unemployment insurance by referring recipients to programs and services that would help them find jobs. The program was found to be successful in Nevada, with participants in the program receiving unemployment funds for fewer weeks. Another expansionary effort in the proposed budget calls for apprenticeship programs, to be administered by states.

Regarding these changes, the NELP’s Owens said that her organization “is encouraged to see the intent to devote more resources to reemployment services and apprenticeship programs, but the devil is in the details.” At least for now, she says, while the budget is still subject to change substantially, there aren’t enough details to judge. That means that precisely where $2 billion worth of budget cuts will come from, and what impact they might have on the labor force’s most vulnerable populations, is still uncertain.