Shutdown’s impact on workforce development.

October 01, 2013

Because the House and Senate were unable to reach an agreement on fiscal year (FY) 2014 funding, the federal government is partially shut down as of October 1. However, Congress will continue to meet during the shutdown and it is NSC’s hope that they will be able to resolve the shutdown relatively quickly, although it’s unclear right now how they might break the current stalemate. 

Depending on how negotiations go between the House and the Senate, the shutdown could last a couple of days or several weeks. If the shutdown is very short—a few days or less—our hope is that it will have relatively limited impact on federal workforce development programs. However, the longer the shutdown lasts, the greater the likelihood that there could be serious consequences. The situation is further complicated by the fact that the federal government will breach the debt ceiling on October 17; it is difficult to imagine how Congress will resolve a simultaneous shutdown and possible default on our nation’s debt. 

There is limited information about the impact of the shutdown available right now. Agency websites are down and almost all staff has been furloughed so there’s no one to call and ask. NSC is trying to understand what the shutdown might mean for key workforce development programs. Each agency was required to develop a shutdown plan, and many agencies have attempted to provide some additional guidance to help stakeholders and service providers. 

For the most part, it seems that funds that have already been obligated will continue to be available for states, local communities, and service providers, although there may be some difficulty drawing down the funds depending on the actual payment mechanism. Funds that have not yet been obligated, new grants, and funds for certain contracts may not be available, or may be available only until existing funding runs out. This availability of funds and the ability to make payments appears to vary widely across programs and agencies. 

Most agencies will not have staff available to provide technical assistance, answer questions, or provide other guidance. Any program using federal funds will need to continue to meet the rules and regulations governing these funds; however, many federal reporting systems will be turned off and inaccessible during the shutdown (but programs will still be responsible for maintaining performance and financial reporting records). 

In general, there is a great deal of confusion and uncertainty in DC right now and there are not a lot of people available to answer questions or provide guidance. NSC will continue to do its best to understand how the shutdown will impact federal workforce development programs, and will provide additional information as it becomes available. 

You can help! Tell us how the shutdown is impacting your organization. By letting us know the impact to your programs, we will be able to track how the shutdown is impacting workforce development programs and share this information with members of Congress, the press and the public. 

How the Shutdown is Impacting Specific Federal Workforce Programs.

Based the information that is currently available, here is our best understanding so far of the impact of the shutdown on certain employment and training programs (this is not an exhaustive list):

Department of Labor (DOL)

Shutdown Plan  
Questions & Answers

Workforce Investment Act (WIA)

While circumstances clearly vary from state to state, it seems clear that the shutdown will potentially have an impact on the WIA Adult and Dislocated Worker programs. These programs normally receive an allocation on October 1, and it appears that DOL will be unable to obligate these funds as a result of the shutdown. States may use carry-over funds or other funding currently available to continue operating these programs. Unfortunately, though, many states already face funding shortfalls because the full FY 2013 sequester cut was taken out of the July 1, 2013 WIA Adult and Dislocated Worker allocations, and some states may be unable to continue to provide services without additional funding. 

The WIA Youth program received its full allocation in April 2013 and should not be directly impacted by the government shutdown. 

Trade Adjustment Assistance (TAA)

Trade-impacted individuals may file paper applications for TAA by mail or fax (on-line services will not be available). However, no new petitioners will be certified, since there will not be staff available to receive petitions. States will not be able to receive Reserve Funds for TAA training during the shutdown, since staff will not be available to review requests for funds. 

Department of Education (DOEd)

Shutdown Plan

It appears most DOEd programs that include workforce components will be only indirectly impacted by the shutdown, at least in the short-term. The Pell grant program will continue to make obligations and payments. Funding for career and technical education (CTE) and adult-basic education (ABE) programs does not appear to be immediately impacted by the shutdown. 

Department of Health and Human Services (HHS)

Shutdown Plan  
Letter on TANF

Temporary Assistance to Needy Families (TANF)

The TANF block grant expired on September 30 (it would normally have been extended as part of a continuing resolution). As a result, states will not receive any additional TANF (or Child Care Development Block Grant) funding until the shutdown is resolved and the program is reauthorized. HHS notes that many jurisdictions have unspent TANF funds, which they may continue to spend during the shutdown. Additionally, jurisdictions are statutorily mandated to meet TANF Maintenance of Effort (MOE) funding requirements during each year, and HHS urges states to consider spending state MOE funds to provide services to TANF recipients during the shutdown even if they have no carry-over funds available. 

Department of Agriculture (USDA) Food and Nutrition Service (FNS)

Shutdown Plan

Supplemental Nutrition Assistance Program Employment and Training (SNAP E&T)

SNAP will continue to operate and eligible households will receive monthly benefits in October. As a result, individuals should continue to be eligible to participate in SNAP E&T programs. However, it is currently unclear what funding will be available for SNAP E&T. Because “100 percent” funds are annually appropriated, no additional 100 percent funds will be made available under the shutdown. Additionally, it is currently unclear if staff will be available to receive, review, or process reimbursement requests for “50-50” funds.