Every year, like the cherry blossoms in DC marking the arrival of spring, the President’s Budget arrives to kick off the annual appropriations cycle. Well, it is officially Fiscal Year 2025 Appropriations season, even as Congress is still working to finalize appropriations for the current fiscal year. And it’s off to a great start with the President’s Budget Request.
NSC has a vision for a workforce system that’s dynamic, inclusive, and equipped to address long-standing structural inequities in our labor market. We need a workforce system resourced to give workers and businesses with access to the skills training they need so workers, businesses, and our economy are resilient in the face of current and future economic shifts. And we need a workforce system that creates pathways to quality jobs so that every worker and industry can thrive.
This is a budget that – taken as a whole – would modernize our public workforce system in this way – and realize many of NSC’s other campaign goals: implementing a people powered infrastructure, support digital equity at work, make college work for working people and business.
Achieving this vision for our workforce system requires bold ideas and ambitious federal investments especially important in light of the 2.9 million new jobs being created each year by the bipartisan infrastructure law, the CHIPS and Science Act, and the Inflation Reduction Act.
This budget has those big ideas! Congress just needs to make the investments to realize them.
The President’s budget highlights skills training, supportive services, and prioritization of underserved populations as a priority for the administration. President Biden has proposed exciting mandatory programs that fall outside of the appropriations process including paid family and medical leave, affordable childcare and an $8 billion Career Training Fund. It is really encouraging to see a pioneering new proposal around training, especially as historic underfunding of the workforce system has served as a major barrier to workers accessing the skills they need, and businesses finding skilled workers.
In 2023, Congress agreed to limits on funding for FY 2025 for discretionary programs. For skills advocates, that includes investments in Workforce Innovation and Opportunity Act (WIOA), Career and Technical Education (CTE), and Adult Basic Education (ABE) programs. And this year’s Presidential Budget Request adheres to those limits.
The President’s budget request doesn’t automatically become law – but it plays a crucial role in the budget process as a starting point in the negotiations between the legislative and executive branch. It signals the President’s priorities, and Congressional committees will analyze proposals and evaluate the budget’s alignment with their own priorities as part of the annual appropriations process. NSC will keep skills advocates in our coalition up to date on major developments and on opportunities to encourage Congress to make the ambitious investments this budget calls for: sign up for our newsletter, keep an eye on our skills blog, and come to our Skills Summit in May to advocate on Capitol Hill for investments in workforce programs. For now, let’s dive into a detailed analysis of the proposed budget.
One of the most exciting proposals for the President’s FY25 budget is $8 billion for a new Career Training Fund administered by the Department of Labor that would provide as much as $10,000 per worker to partnerships including employers, community colleges, labor unions, the workforce system and other organizations to train workers for jobs in high-demand sectors and provide supportive services. Under the proposal, training outcomes would be tied to employment rates, wages, and credential attainment and the program is intended to prioritize individuals from underrepresented communities. The Career Training Fund shares some similarities with the Skills Training Accounts that NSC proposed in recommendations for WIOA reauthorization. If implemented, this program could serve 750,000 workers over ten years. This proposal is a strong sign that workforce is still high among the administration’s priorities even if political realities make increases to discretionary programs more difficult.
Like last year, the President’s budget recognizes the value of industry and sector partnerships by proposing funding for the Sectoral Employment through Career Training for Occupational Readiness (SECTOR) program. Unfortunately, the proposed funding for the program takes a $150 million haircut with the FY25 request at $50 million. Even in the diminished form, NSC is glad that the administration is acknowledging the value of sector partnerships.
Similarly, the Strengthening Community College Training Grant Program which supports community college partnerships with employers and the workforce system receives a $5 million bump over FY23 enacted appropriations but still falls $30 million short of the proposed amounts in the President’s FY24 budget.
With a few exceptions, most Department of Labor programs are kept at or below funding for 2023. For instance, funding for WIOA title I formula grants, Adult, Dislocated Worker, and Youth are level funded. So, too, is funding for Wagner-Peyser, Workforce Data Quality Grants, YouthBuild, senior community service employment.
JobCorps budget takes a significant 10% cut amounting to almost $155 million and the Dislocated National Reserve dips 15% losing nearly $50 million from its proposed budget over enacted 2023 levels. The Reentry Employment Opportunities program which provides workforce development opportunities to justice-impacted individuals is one of the only programs to receive a modest $5 million increase over 2023 levels. However, that funding level still falls $50 million short of the 2024 budget proposal.
If both the $8 billion Career Training Fund and the flat discretionary funding were enacted together, the Training Fund could create additional capacity for the workforce system by making more funding available for underfunded programs including industry partnerships and wrap-around support services. On the other hand, if Congress moves the flat funding proposal moves forward alone, then when factoring in inflation, many programs will experience funding decreases.
This Budget comes as Congress is working to advance WIOA reauthorization proposals in both chambers. The bipartisan House bill, A Stronger Workforce for America, included some proposals like what we see in the proposed budget – including efforts to support industry and sector partnerships and a limited mandatory spending proposal to support more training and supportive services with Individual Training Accounts. The Senate has not yet released legislation; however, Health, Education, Labor, and Pension Committee leadership has indicated a desire to develop a WIOA reauthorization bill and legislation to amend the National Apprenticeship Act. Both the budget and these efforts indicate a high level of support for skills and the opportunity for Skills advocates to influence funding and policy.
The Department of Commerce’s budget connects to NSC’s longtime advocacy for sector partnerships and lays out $4 billion in mandatory funding to support the Regional Technology and Innovation Hubs which aim to support technology in regions across the U.S. and includes workforce development as a key component of the program. It should be noted that while the proposed funding is ambitious, it is not a new component of the budget and was included in the FY24 request as well.
The Commerce Department budget proposal also proposes $41 million for the Good Jobs Challenge to fund high-quality, locally led workforce systems that expand career opportunities. Many members of NSC’s network have been awarded these grants, and we appreciate the administration’s commitment to continuing the program. Unfortunately, the budget cap agreement has resulted in a nearly $60 million drop in proposed funding for Good Jobs Challenge grants this year compared to last year’s budget request, meaning fewer partners will see substantial grants. As always, NSC continues to advocate for sustained funding to support industry and sector partnerships. In the same vein, the President requested level funding for FY2025 for the Manufacturing Extension Partnerships, which is down $100 million from what was requested in FY2024.
The care economy workforce continues to be a growing national issue both in terms of ensuring that aging individuals and those with disabilities have access to care and ensuring that the jobs in this sector are good jobs. The President’s budget includes $10 million for the Direct Care Workforce Strategies Center to support the direct care workforce by providing technical assistance, training and resources to states, providers, and stakeholders.
Partners should be encouraged by the consideration provided by the President’s budget to programs that support inclusive access to training and education, industry and sector partnerships that center worker and business needs, and supportive services that allow more workers to enter and complete training programs.
The budget request aligns with several areas of NSC’s Making College Work (MCW) Campaign. The MCW Campaign is about driving policy change that widens the path to postsecondary education, begins to redress structural racism in our education and training systems, and makes college work for everyone – for new majority learners, for business, and for our economy at large.
The Administration once again has included the Free Community College proposal in its budget as well as a new Reducing the Costs of College Fund. Overall, for these proposals to be realized they would have to receive mandatory funding outside of the regular appropriations process.
The Administration continues with its efforts to double the Pell Grant maximum by 2029. It does so by setting a maximum award of $8,145 for award year 2025-26, an increase of $750 over the 2024-2025 award year.
Over the past several years Congress has utilized the Pell Grant surplus to support increases in the maximum award. However, according to the Office of Management and Budget (OMB) that surplus is now gone, and the program is slated to head toward a shortfall. OMB’s projection charts were created prior to a continuing resolution (CR) on funding. That CR – which passed a couple of weeks ago – included an infusion of mandatory funding for the Pell Grant program, as well as a technical clarification on how dependent student Pell Grant awards should be calculated. However, even with those changes in the CR the program could be facing a multi-billion-dollar shortfall in the years ahead. We will know more once the Congressional Budget Office releases its estimate in the weeks ahead.
An impending Pell Grant shortfall could have an impact on the ability to pass legislation to expand Pell Grant eligibility to shorter-term education and training programs. While we don’t yet know the extent of a potential shortfall, legislation around short-term Pell Grants has typically relied on use of surplus dollars to pay for the eligibility change. If those funds are no longer available, then it may cause some roadblocks in seeing the legislation move forward.
For Perkins CTE state grants and ABE state grants, the budget proposes level funding. It is the same for Federal Supplemental Educational Opportunity Grants and Federal Works Study. There is a modest increase for the Childcare Access Means Parents in School (CCAMPIS) program at $5 million. There is an increase for CTE National Programs – an additional $32 million to support Career-Connected High Schools. This program is designed to support activities such as: dual enrollment; work-based learning opportunities connected to programs of study; attainment of in-demand, career-related credentials; high-quality counseling and career navigation supports; and educator professional development. The budget also proposes an additional $5 million for Adult Education National Programs aimed at supporting programs at correctional institutions that use Pell Grant funds to provide access to postsecondary offerings.
There are several smaller funding proposals under the Fund for the Improvement of Postsecondary Education. Below are highlights for a few of those new and existing proposals.
The President signals his commitment to digital equity – in line with one of the main tenets of NSC’s Digital Equity @ Work campaign by requesting $6 billion to sustain the Affordable Connectivity Program in 2024 and expressing his commitment to collaborate with Congress for future funding. ACP (Affordable Connectivity Program), which provides affordable internet access to over 23 million homes in America, is set to expire in April, and despite 191 co-sponsors in the House, Speaker Johnson has not brought it up for a vote. As states work to expand the program, and implement components of the Digital Equity Act, interruptions in funding for ACP threaten effective provision of services across both these programs. Furthermore, the administration’s allocation of $112 million for the ReConnect program, focusing on deploying broadband in underserved regions, particularly tribal areas, reinforces its prioritization of expanding internet access.
The administration also references the installation of high-speed internet creates good, high-paying jobs (that are often unionized) and strengthens local economies, which leads to increased job and population growth, lower unemployment rates, and new business formation. But the administration does not call for a renewal of the Broadband Employment Access and Deployment program, which supports the broadband installation workforce.
The budget proposal also outlines an approach for the federal government to lead by example in integrating digital skills into the workforce. It emphasizes the provision of digital services and AI (Artificial Intelligence) training focused on cybersecurity and privacy for federal workers. We see this as an opportunity for the administration to expand further, integrating digital skills training into the broader workforce system. This expansion should include dedicated funding for upskilling and reskilling initiatives, particularly given the active discussions on reauthorization of WIOA.
Recent analysis from the Political Economy Research Institute (PERI) at the University of Massachusetts-Amherst commissioned by National Skills Coalition and the BlueGreen Alliance estimates that investments from infrastructure laws will generate 2.9 million jobs per year and that there will be a labor shortage of 1.1 million workers who—without training and other workforce investments— will lack the skills to fill these infrastructure-related jobs. As historic investments from the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS and Science Act continue to roll out and drive demand for workers in transportation infrastructure, clean energy, and manufacturing, it is important that the Administration continue to embed these components into the annual budget request. The President’s FY25 budget builds on previous requests to support the infrastructure workforce but is disappointing when compared to the bold and ambitious proposals of previous years.
There are very few investments in the Department of Transportation’s budget that go directly towards workforce development, although it should be noted that formula grants and other sources of funding can be used to support workforce development. Both the On-the-Job Training Supportive Services (OJT/SS) which funds state investments in training and education and the Disadvantaged Business Enterprise Supportive Services (DBE/SS) which helps businesses owned by women and people of color compete for transportation projects, once again, receive $10 million each.
The Climate Corps program administered by AmeriCorps, which trains individuals for jobs in clean energy, is a big winner in the President’s budget with $8 billion in mandatory funding over the next 10 years to support the growth of the program.
The Department of Energy budget includes $32 million for activities under Community Energy Programs (CEP). Both the Local Government Energy Program and the Energy Communities Interagency Working Group fall under the CEP program. The Local Government Energy Program focuses on providing grants to local governments to support clean energy deployment focused on disadvantaged communities. The Energy Communities Interagency Working Group (IWG) encompasses the work of the Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization to support communities impacted by transition to clean energy where coal, oil, and gas facilities have closed. The IWG receives a bump of $3 million over last year’s budget request to $8 million while the Local Government Energy Program Budget falls by more than half from $53 to $24 million. It should be noted that $24 million proposed for the Local Government Energy Program is still twice the enacted levels in 2023.
The Administration’s support for registered apprenticeship programs is closely tied to many infrastructure and energy programs. Most notably, apprenticeship is a key component of accessing the full inflation reduction act tax credits. The Administration recently promulgated proposed regulations related to apprenticeship to which NSC submitted comments. Given this longstanding support for strengthening the apprenticeship model, it should come as no surprise that the apprenticeship grants program is one of the only programs under the Department of Labor to retain levels proposed in the last budget. The proposed funding is set at $335 million which is $50 million higher than the enacted appropriations for the program in 2023.
The President’s budget request kicks off the annual appropriations process where Department Secretaries will justify their budgets before Congress, each chamber’s appropriations committee will draft a series of 12 funding bills and separately will work to pass those bills. This process is beginning even as appropriations for the current fiscal year are still only half complete. Election year dynamics will likely further complicate passing full year appropriations and it is likely that FY25 funding will not be completed until after the November election.
This budget highlights just how important our coalition’s advocacy will be over the next year to ensure that workforce programs receive adequate funding to meet workers’ and employers’ needs.
Over the next few months, the department Secretaries and agency officials will go before Congress to justify their budget proposals and each chamber will develop twelve appropriations bills to fund the government. NSC will follow this process and keep advocates up to date on major developments and provide opportunities to advocate for skills.
NSC will share more information about appropriations updates and give our partners an opportunity to advocate for workforce funding among other priorities at the Skills Summit in May. We hope you will join us!
