oversight

Trade Adjustment Assistance: Changes to the Workers Program Benefited Participants but Little Is Known about Outcomes

Published by the Government Accountability Office on 2012-09-28.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States Government Accountability Office

GAO              Report to Congressional Committees




September 2012
                 TRADE
                 ADJUSTMENT
                 ASSISTANCE
                 Changes to the
                 Workers Program
                 Benefited
                 Participants, but Little
                 Is Known about
                 Outcomes




GAO-12-953
                                               September 2012

                                               TRADE ADJUSTMENT ASSISTANCE
                                               Changes to the Workers Program Benefited
                                               Participants, but Little Is Known about Outcomes
Highlights of GAO-12-953, a report to
congressional committees




Why GAO Did This Study                         What GAO Found
While international trade has benefited        The Department of Labor (Labor) was challenged to process the substantial
Americans in a number of ways, it has          increase in petitions filed for the Trade Adjustment Assistance (TAA) for Workers
also contributed to layoffs in a range of      program after related legislation was enacted in 2009. Labor initially had
industries. To assist trade-displaced          insufficient capacity to handle this increased workload, leading to processing
workers, Labor administers the TAA for         delays and data recording errors. For example, in the quarter after the 2009
Workers program, which provides                legislation took effect, Labor took an average of 153 days to process a petition—
income support, job training, and other        nearly four times the statutory limit. Labor responded with corrective action,
benefits. The Trade Globalization and          including hiring new staff and adding additional quality control steps for
Adjustment Assistance Act of 2009,             processing petitions. Partly as a result of these efforts, processing times fell
enacted as part of the American                substantially. Moreover, GAO found that Labor’s petition investigation process,
Recovery and Reinvestment Act, made            as of June 2012, generally conformed to best practices for internal controls.
substantial changes to the TAA
program, such as extending eligibility
to workers in the service sector and
increasing benefits levels. The Act also
required GAO to report on the
operation and effectiveness of those
changes. Specifically, GAO examined
(1) the challenges Labor faced in
implementing the 2009 legislation, (2)
selected state officials’ assessment of
the 2009 legislation’s effect on
participants and state and local
administrators, and (3) the extent to
which participants received program
benefits and services established by
the 2009 legislation and achieved
employment outcomes. GAO
interviewed officials at Labor and in six      According to selected state officials, virtually all of the 2009 changes benefited
states, selected for having a high level       participants, and some also helped administrators serve participants. Officials in
of TAA activity and geographic                 all six states GAO interviewed expressed the view that both participants and
diversity. GAO also reviewed Labor’s           administrators benefited from the simplified and extended training enrollment
internal controls for investigating            deadline. Some officials said the new deadline was easier for eligible workers to
petitions, which are filed on behalf of        understand and provided administrators with more time to advise participants on
                                               their training and employment options. Moreover, officials said participants who
workers and are the starting point for
                                               enrolled in training benefited from other program changes, including increased
determining their TAA eligibility. GAO
                                               training funds, the option to attend training part-time, and a longer period for
analyzed participant data on specific          income support. Some state officials said that the additional weeks of income
benefits and services received and             support allowed participants to consider longer-term training options, such as
employment outcomes, as available.             health care programs.
What GAO Recommends                            Over 107,000 participants received benefits and services as established by the
                                               2009 law, but little is yet known about their employment outcomes. Nationally, all
GAO is not making recommendations              the participants received case management and reemployment services and
in this report. Labor generally agreed         about half enrolled in training, most commonly occupational skills training. Less
with the report’s findings.                    than 8 percent of participants used other benefits. Little is known about
                                               employment outcomes because nearly two-thirds of the participants were still
                                               enrolled as of September 30, 2011, and employment and earnings information
View GAO-12-953. For more information,
                                               was often not available for those who had exited the program. While this
contact Andrew Sherrill at (202) 512-7215 or   information will eventually be available, other factors, including the overall state
sherrilla@gao.gov.                             of the economy, affect these outcomes so isolating the effects of the 2009
                                               legislative changes would be difficult.
                                                                                        United States Government Accountability Office
Contents


Letter                                                                                             1
                       Background                                                                  4
                       Labor Faced Initial Challenges in Implementing the 2009
                         Legislation and Took Steps to Address Them                              12
                       Nearly All of the Changes Benefited Participants and Some Helped
                         Administrators As Well                                                  19
                       Over 107,000 Workers Received Benefits and Services, but Little Is
                         Known About Their Outcomes                                              27
                       Concluding Observations                                                   37
                       Agency Comments and Our Evaluation                                        38

Appendix I             Objectives, Scope, and Methodology                                        40



Appendix II            Comparison of Key 2002, 2009, and 2011 TAA Statutory Provisions           43



Appendix III           TAA Training Fund Expenditures by State, as of March 31, 2012             49



Appendix IV            Comments from the Department of Labor                                     51



Appendix V             GAO Contacts and Staff Acknowledgments                                    53



Related GAO Products                                                                             54



Tables
                       Table 1: Occupational Skills Training Most Frequently Provided to
                                Participants in the 2009 Program                                 30
                       Table 2: Percentage of 2009 Program Participants Accessing
                                Various Benefits as of September 30, 2011                        32
                       Table 3: Selected States                                                  40
                       Table 4: Selected Localities                                              41




                       Page i                                  GAO-12-953 Trade Adjustment Assistance
Figures
          Figure 1: Examples of Expanded Eligibility under the 2009 TAA
                   Program                                                           6
          Figure 2: Increase in the Number of TAA Petitions Labor Received          14
          Figure 3: Average Number of Days to Make a Petition Decision, by
                   Fiscal Quarter Received                                          16
          Figure 4: Quality Control Steps Added to Labor’s Petition
                   Investigation Process Between 2009 and 2011                      18
          Figure 5: Effects of Changes Made by 2009 Legislation on
                   Participants, According to Officials in Six States               20
          Figure 6: Effects of Changes Made by 2009 Legislation on
                   Administrators, According to Officials in Six States             21
          Figure 7: Percentage of Training Funds Expended by Six States, as
                   of March 31, 2012                                                25
          Figure 8: Eligibility for Specific TAA Program Benefits Set by Date
                   of Petition Filing                                               27
          Figure 9: Participant Demographics for Those Enrolled in the 2009
                   Program, as of September 30, 2011                                28
          Figure 10: Participants Who Enrolled in One or More Training
                   Activities, as of September 30, 2011                             29
          Figure 11: Types of Training Provided to Participants in Program,
                   as of September 30, 2011                                         30
          Figure 12: Duration of Training for Participants in the 2009
                   Program Who Completed or Withdrew from Training as of
                   September 30, 2011                                               31
          Figure 13: Total Time Spent in Program for Those Exiting, as of
                   September 30, 2011                                               35
          Figure 14: Few Participants in the 2009 Program Had Information
                   to Calculate TAA Performance Measures through Fiscal
                   Year 2011                                                        36




          Page ii                                 GAO-12-953 Trade Adjustment Assistance
Abbreviations
HCTC       Health Coverage Tax Credit
Labor      Department of Labor
TAA        Trade Adjustment Assistance
TRA        Trade Readjustment Allowances


This is a work of the U.S. government and is not subject to copyright protection in the
United States. The published product may be reproduced and distributed in its entirety
without further permission from GAO. However, because this work may contain
copyrighted images or other material, permission from the copyright holder may be
necessary if you wish to reproduce this material separately.




Page iii                                          GAO-12-953 Trade Adjustment Assistance
United States Government Accountability Office
Washington, DC 20548




                                   September 28, 2012

                                   The Honorable Max Baucus
                                   Chairman
                                   The Honorable Orrin G. Hatch
                                   Ranking Member
                                   Committee on Finance
                                   United States Senate

                                   The Honorable Dave Camp
                                   Chairman
                                   The Honorable Sander M. Levin
                                   Ranking Member
                                   Committee on Ways and Means
                                   House of Representatives

                                   During the recession of 2007 to 2009, the national unemployment rate
                                   peaked at 9.5 percent. The U.S. manufacturing sector was particularly
                                   hard hit by the recession, losing 17 percent of its workforce and reaching
                                   its lowest employment level since 1941. Further, while international trade
                                   has benefited Americans in a number of ways, it has also contributed to
                                   layoffs in a range of industries. Since such trade-displaced workers tend
                                   to be older, less-educated, and have fewer transferable skills than other
                                   displaced workers, they often have difficulty finding jobs in other
                                   industries without additional training. 1

                                   The Trade Adjustment Assistance (TAA) for Workers program, which is
                                   administered by the Department of Labor (Labor), is the nation’s primary
                                   program assisting workers who have been adversely affected by
                                   international trade, providing income support, job training, and other
                                   benefits. 2 Since the TAA program was first established at Labor by the




                                   1
                                     See Sarah Dolfin and Jillian Berk, National Evaluation of the Trade Adjustment
                                   Assistance Program: Characteristics of Workers Eligible Under the 2002 TAA Program
                                   and Their Early Program Experiences, Mathematica Policy Research, Inc., April 2010, a
                                   report prepared under contract with the Department of Labor.
                                   2
                                       The TAA for Workers program is generally referred to in this report as the TAA program.




                                   Page 1                                             GAO-12-953 Trade Adjustment Assistance
Trade Act of 1974, it has been amended a number of times. 3 In August
2002, the Trade Adjustment Assistance Reform Act of 2002 added
several new benefits to the program. 4 In February of 2009, the program
was reauthorized and substantially amended and expanded by the Trade
and Globalization Adjustment Assistance Act of 2009, which was a part of
the American Recovery and Reinvestment Act. 5 The legislation changed
a number of program elements, such as expanding eligibility to additional
types of workers, extending the benefit period of income support,
increasing the level of assistance provided for payment for qualified
health plan premiums, and more than doubling the amount of training
funding available. To accommodate both the cost of these program
enhancements and higher program demand driven by the recession,
Congress increased the overall funding level for the program by about
$859 million, bringing funding to $1.8 billion in fiscal year 2010.

Although these changes were set to expire on December 31, 2010, the
Omnibus Trade Act of 2010 generally extended them through February
12, 2011. 6, 7 After that date, the program reverted to the pre-expansion
provisions until October 21, 2011, when the Trade Adjustment Assistance
Extension Act of 2011 was signed into law. 8 This law reauthorized TAA
and reinstated most of the 2009 program provisions, such as the eligibility
for service sector workers. 9 However, some benefit levels, such as the
level of assistance provided for paying for health plan premiums, were



3
  Pub. L. No. 93-618, 88 Stat.1978. Trade adjustment assistance for workers was
originally established by the Trade Expansion Act of 1962, but determinations of worker
eligibility to apply for adjustment assistance were made by the Tariff Commission rather
than the Department of Labor.
4
    Pub. L. No. 107-210, div. A, 116 Stat. 933, 935-992.
5
    Pub. L. No. 111-5, div. B, tit. I, subtit. I, 123 Stat. 367, 367-423.
6
    Pub. L. No. 111-344, § 101, 124 Stat. 3612.
7
 Labor considered petitions received on or before February 14, 2011, as eligible for the
2009 TAA program because February 12, 2011 was a Saturday.
8
 Pub. L. No. 112-40, tit. II, 125 Stat. 401, 402-427. The TAA for Workers program is
codified as amended at 19 U.S.C. §§ 2271 – 2323.
9
  In this report, the TAA for Workers program as amended by the 2002 legislation is
referred to as the 2002 program, the program as amended by the 2009 legislation is
referred to as the 2009 program, and the program as amended by the 2011 legislation is
referred to as the 2011 program.




Page 2                                                  GAO-12-953 Trade Adjustment Assistance
reduced. The expanded provisions of the 2011 law are set to expire on
December 31, 2013.

The 2009 Act mandated that GAO report on the operation and
effectiveness of the changes made by that Act no later than the end of
fiscal year 2012. 10 Accordingly, we addressed three research questions:

1. What challenges did Labor face implementing the 2009 legislation?
2. What effect do selected state government officials say the 2009
   legislative changes had on participants and on state and local
   administrators?
3. To what extent have participants received TAA benefits and services
   as established by the 2009 legislation and what is known about their
   employment outcomes?
To answer the first question, we interviewed officials at Labor to learn
how the agency was affected by the legislative changes, such as the
expanded eligibility criteria. We analyzed available data on TAA petitions,
which are submitted to Labor on behalf of a group of workers for Labor’s
determination of the workers’ eligibility to potentially receive TAA benefits.
We also compared determination data for a nongeneralizable number of
TAA petitions with determination letters published by Labor. In addition,
we reviewed the internal controls for the petition investigation process.
We also conducted an on-site review of seven case files. For the second
question, we interviewed state government officials from six states:
Massachusetts, Michigan, North Carolina, Oregon, Pennsylvania, and
Texas. These states were selected because they had a high fiscal year
2010 training fund allocation, a high volume of TAA certifications, and
geographic diversity. We also spoke with select local government officials
in three of these states (Michigan, North Carolina, and Oregon). Through
these interviews, we learned how selected state and local officials viewed
key amendments’ effects on participants and on their administration of the
program. For the third question, we analyzed Labor’s data on workers’
participation in specific activities as well as on their outcomes, as
available. 11 For all research questions, we also reviewed relevant federal
laws, regulations, guidance and pertinent Labor reports and procedures.


10
     Pub. L. No. 111-5, § 1894, 123 Stat. 423.
11
  At the time of review, September 30, 2011, was the latest date for which participant
data were available.




Page 3                                           GAO-12-953 Trade Adjustment Assistance
                            We assessed the reliability of both petition data and participant data by
                            (1) performing manual and/or electronic testing of required data elements,
                            (2) reviewing existing information about the data and the system that
                            produced them, and (3) interviewing agency officials knowledgeable
                            about the data. We determined that the data reported were sufficiently
                            reliable for the purposes of our report, with the exception of data on the
                            eligibility categories for certified petitions. At the time of our review, we
                            had some reliability concerns about the data and, as a result, did not
                            include it in our report. See appendix I for additional details on our
                            objectives, scope, and methodology.

                            We conducted this performance audit from May 2011 to September 2012
                            in accordance with generally accepted government auditing standards.
                            Those standards require that we plan and perform the audit to obtain
                            sufficient, appropriate evidence to provide a reasonable basis for our
                            findings and conclusions based on our audit objectives. We believe that
                            the evidence obtained provides a reasonable basis for our findings and
                            conclusions based on our audit objectives.


                            The TAA for Workers program covers workers whose jobs have been
Background                  threatened or lost due to changing trade patterns. While the specific
                            services and benefits available through the program have changed over
                            time, the primary forms of assistance that have been extended include
                            income support and training.


TAA Certification Process   In order for workers to apply for TAA benefits, Labor must certify that their
                            separation was trade-affected. 12 This certification process begins when
                            workers or their representatives file a petition with Labor on behalf of a
                            group of laid-off workers. The agency then conducts fact-finding
                            investigations to determine whether the workers’ jobs were adversely
                            affected by international trade. In nearly all investigations, Labor contacts
                            company officials to gather information on the circumstances of the layoff.
                            This information is the basis for many petition decisions. As needed,



                            12
                              Not all workers covered by an approved TAA petition are individually eligible for TAA
                            benefits. Individual workers must apply for benefits and eligibility depends on factors
                            including the timing and duration of a worker’s layoff. In this report, when referring to
                            workers eligible for the TAA program, we generally mean workers who have been certified
                            as potentially eligible for the program.




                            Page 4                                          GAO-12-953 Trade Adjustment Assistance
                          Labor may also gather information by surveying the company’s customers
                          or examining aggregate industry data.

                          The TAA statute lays out certain basic requirements that all petitions must
                          meet in order to be certified by Labor, including that a significant
                          proportion of workers employed by a company be laid off or threatened
                          with layoff. In addition, a petition must demonstrate that the layoff is
                          related to international trade in one of several ways—for example,
                          because the firm shifted production overseas or because increased
                          imports competed with its products.

                          By law, Labor is required to conclude its investigation and either certify or
                          deny a petition within 40 days of receiving it. Once Labor reaches a
                          decision on the investigation, it notifies the relevant state, which has
                          responsibility for contacting the workers regarding Labor’s decision. If the
                          workers are certified, the state informs the workers of the benefits
                          available to them, and when and where to apply for benefits. If a petition
                          is denied, a worker may challenge the decision through an appeals
                          process. 13


2009 Changes to the TAA   The 2009 legislation made substantial changes to the TAA program,
Program                   including extending eligibility to workers in a greater variety of
                          circumstances. 14 For example, the law extended coverage to workers at
                          firms that provide services—previously, eligibility was restricted to
                          workers in firms producing goods. It also changed eligibility rules for other
                          types of workers, such as those whose firms shifted production overseas,
                          as shown in figure 1. To reflect this broadened eligibility, Labor more than
                          doubled the number of categories by which it could certify a petition. 15




                          13
                            Specifically, workers whose petition has been denied can either request an
                          administrative reconsideration of the decision by Labor or can appeal to the United States
                          Court of International Trade for judicial review of Labor’s denial.
                          14
                               Pub. L. No. 111-5, §§ 1801-1858, 123 Stat. 367-395.
                          15
                             Specifically, the number of categories by which Labor could certify a petition rose from
                          7 to 17 after the 2009 legislation passed.




                          Page 5                                            GAO-12-953 Trade Adjustment Assistance
Figure 1: Examples of Expanded Eligibility under the 2009 TAA Program




                                        The 2009 legislation also generally enhanced TAA benefit levels. The
                                        amount of funding available for training nationally more than doubled—
                                        from $220 million to $575 million for fiscal years 2009 and 2010. 16
                                        Further, the legislation increased either the amount or duration of many
                                        specific benefits and services, which are available to eligible workers
                                        covered by certified petitions filed between May 18, 2009, and February
                                        14, 2011. Specifically, these enhanced benefits and services include: 17

                                        •    Extended deadline for enrollment. The 2009 legislation extended the
                                             deadline by which workers must enroll in or receive a waiver from
                                             training to be eligible to receive income-based support to the later of
                                             26 weeks from the date of TAA certification or the date of separation
                                             from employment. Previously, the deadline for enrolling in training was
                                             the later of 8 weeks after TAA certification or 16 weeks after
                                             separation from employment. The deadline was extended in part to



                                        16
                                          The 2009 law also provided $143,750,000 for the period between October 1, 2010, and
                                        December 31, 2010.
                                        17
                                           Workers covered by certified petitions that were filed between May 18, 2009, and
                                        February 14, 2011 remain eligible for the 2009 program provisions even after the new
                                        legislation passed in October 2011.




                                        Page 6                                          GAO-12-953 Trade Adjustment Assistance
     give laid-off workers more time to search for a job before deciding to
     enroll in training.

•    Extended income support. Participants enrolled in full-time training
     who have exhausted their unemployment insurance may receive a
     continuation of income support equal to their final unemployment
     insurance benefit. The 2009 legislation provided that participants may
     receive up to 130 weeks of income support, up from 104 weeks under
     the prior law. For participants who require remedial or prerequisite
     courses, the maximum level of income support increased from 130 to
     156 weeks. Income support was extended in part to enable workers to
     participate in longer training programs.

•    Training. Under the 2009 program, participants have additional
     training opportunities beyond those that were available under the
     2002 program. The 2009 legislation authorized training for workers
     threatened with a layoff that has not yet occurred in addition to
     workers who have been laid off. The law also authorized participants
     to attend training part-time, but limited eligibility for income support to
     workers in full-time training.

•    Wage supplement. The 2009 legislation increased the income
     eligibility threshold and maximum wage supplement benefit for some
     older workers. 18 TAA participants 50 years or older who secure a new,
     lower paying job than their previous trade-impacted job may be
     eligible to receive wage supplements. 19 The 2009 legislation
     eliminated the requirement that such workers find employment within
     26 weeks of being laid off. It also allowed older workers receiving the
     wage supplement to participate in full-time training if employed at
     least 20 hours per week. Workers employed on a full-time basis who
     were not enrolled in training maintained their eligibility for wage
     supplements.

•    Job search and relocation allowances. The 2009 legislation increased
     the amount of job search and relocation expenses for which state


18
  Specifically, the 2009 legislation increases the maximum annual income eligible for a
wage supplement from $50,000 to $55,000 and increased the maximum supplement from
$10,000 to $12,000 over 2 years.
19
  Under the 2009 legislation, the wage supplement program for older workers is known as
the Reemployment Trade Adjustment Assistance program, which replaced the earlier
Alternative Trade Adjustment Assistance demonstration program.




Page 7                                          GAO-12-953 Trade Adjustment Assistance
     workforce agencies could reimburse eligible participants. 20
     Specifically, the 2009 legislation provided that the lump sum of job
     search and relocation expenses would cover 100 percent (up from 90
     percent) of the costs, to a maximum of $1,500 (up from $1,250).

•    Health coverage benefit. The 2009 legislation increased the amount of
     the tax credit TAA participants could receive through the Health
     Coverage Tax Credit (HCTC) program from 65 percent to 80 percent
     of qualifying monthly health plan premiums. The Internal Revenue
     Service administers this program.

The 2009 legislation also affected Labor’s operations by, for example,
establishing a new Office of Trade Adjustment Assistance and requiring
Labor to collect additional information on workers who receive TAA
benefits and services, as well as data on service sector workers, including
the service workers’ state, industry, and reason for certification.

Although the changes made by the 2009 legislation were set to expire on
December 31, 2010, Congress extended them through February 12,
2011. At that time, the TAA program reverted to provisions as authorized
by the prior law, the Trade Adjustment Assistance Reform Act of 2002.
Eight months later, in October 2011, Congress passed the Trade
Adjustment Assistance Extension Act of 2011, which reinstated many of
the program provisions established by the 2009 legislation, including
eligibility for service sector workers. 21 However, this most recent
legislation also reduced some of the other benefits and services to the
levels set by the 2002 program, such as scaling back the maximum
number of weeks of income support from 130 to 104 for participants
enrolled in basic training and lowering allowances for job search and
relocation from $1,500 to $1,250. See appendix II for a detailed
comparison of the 2002, 2009, and 2011 program provisions.



20
  To be eligible for job search and relocation allowances, it must be determined that the
worker cannot be expected to find suitable employment within the commuting area in
which the worker resides.
21
    The 2011 legislation required Labor, with regard to petitions filed between February 13,
2011, and October 21, 2011, to automatically reconsider denied petitions using the 2011
eligibility provisions. The legislation further provided that workers certified under petitions
filed between those dates who began receiving benefits before December 20, 2011 would
receive 2002 program benefits, but could apply to switch to 2011 program benefits until
March 19, 2012.




Page 8                                              GAO-12-953 Trade Adjustment Assistance
TAA Funding               In addition to changes in participant benefits and services, the 2009
                          legislation added requirements regarding the allocation of TAA training
                          funds to the states. It required Labor to make an initial distribution of no
                          more than 65 percent of available funds, holding 35 percent in reserve for
                          additional distributions throughout the year, but ensuring a distribution of
                          at least 90 percent of funds no later than July 15 of the fiscal year. The
                          law specified a number of factors for Labor to take into account in making
                          distributions to the states, including factors Labor might consider
                          appropriate, and specified that a state’s initial distribution had to be at
                          least 25 percent of the distribution it received in the preceding fiscal
                          year. 22

                          The 2009 legislation required that, to cover states’ administrative costs
                          and employment and case management services, Labor distribute to
                          each state an additional amount equal to 15 percent of its annual training
                          allocation. States were required to use at least one-third of those
                          administrative funds for case management and employment services.
                          The 2009 legislation also required that each state be provided an
                          additional $350,000 for case management and employment services.
                          States have 3 years to expend these federal funds. As such, fiscal year
                          2009 funds had to be used by the end of fiscal year 2011. 23


Role of State and Local   State and local workforce agencies play key roles in the petition
Workforce Agencies        certification process and help workers take advantage of the services and
                          benefits available through the TAA program. The agencies assist workers
                          and employers in filing petitions and can also file petitions on behalf of
                          workers. After a petition is certified, the agencies contact employers to
                          obtain a list of workers affected by the layoff and send each worker a
                          letter notifying him or her of potential eligibility. The agencies may also


                          22
                             In accordance with the specified factors for distribution, Labor allocates the initial
                          distribution of funds to states based on (1) the number of workers covered by
                          certifications, (2) the number of workers participating in training, (3) the number of workers
                          estimated to be participating in approved training during the fiscal year, and (4) the
                          amount of funding estimated to be necessary to provide approved training.
                          23
                             The 2011 legislation eliminated the provision in the 2009 legislation providing an
                          additional $350,000 to each state for case management and employment services and
                          specified that 15 percent of a state’s overall allocation of funds should be used for
                          administration and case management and employment services. In contrast, the 2009
                          legislation provided for an additional amount equal to 15 percent of a state’s training
                          allocation for such activities.




                          Page 9                                             GAO-12-953 Trade Adjustment Assistance
                         hold orientation sessions to provide workers with detailed information on
                         the TAA program and other services and benefits available. In addition,
                         case managers provide vocational assessments and counseling to help
                         workers enroll in the program and decide which services or benefits are
                         most appropriate. Local case managers also refer workers to other
                         programs, such as the Adult and Dislocated Worker Programs under the
                         Workforce Investment Act, 24 for additional services.


TAA Performance and      Labor is responsible for monitoring the performance of the TAA program.
Reporting Requirements   Its primary reporting system, the Trade Activity Participant Report, is
                         intended to track information on TAA activity for individuals from the point
                         of TAA eligibility determination through post-participation outcomes. 25
                         Prior to 2010, the TAA information was reported only on those who had
                         exited the program, as required by Labor. Each quarter, states are
                         required to submit data on participants who received TAA program
                         services. These data include participant demographics; information on
                         services and benefits received, such as case management and
                         reemployment services; income support; and participant outcomes such
                         as employment status and earnings after program exit. States primarily
                         track these outcomes using the Unemployment Insurance wage records.
                         Labor uses data submitted by states to report national outcomes on the
                         TAA performance measures for each fiscal year.

                         The 2009 legislation added a new requirement for states to report on all
                         participants who are enrolled in the TAA program and not just those who
                         exited the program, as required by Labor. As a result of this change,
                         Labor revised its reporting system and required states to submit
                         additional information to track individual benefits and services provided to
                         participants under the new law. In addition, the 2009 legislation required
                         states to report on program outcomes for a longer period after




                         24
                            The Workforce Investment Act of 1998, Pub. L. No. 105-220, established the Adult and
                         Dislocated Worker programs, which authorize grants to states for a broad range of
                         employment and training activities including job search assistance, assessment, and
                         training for eligible individuals.
                         25
                            Under the 2002 TAA program, data reported on participants was less comprehensive
                         as states only reported information on participants who had exited the program and not on
                         those who were still enrolled.




                         Page 10                                         GAO-12-953 Trade Adjustment Assistance
                       participants exit the program. 26 Labor reports on the TAA program’s three
                       core measures of program performance: entered employment rate,
                       average earnings, and employment retention rate. For fiscal year 2012,
                       Labor’s performance goals for the TAA program were 59 percent for
                       entered employment, $13,248 for average earnings over a 6-month
                       period, and 83.2 percent for employment retention.


Related TAA Programs   The TAA for Workers program is one of four trade adjustment assistance
                       programs; the other three provide assistance to firms, farms, and
                       communities. The Department of Commerce administers a TAA program
                       that provides funds for manufacturing and other types of firms to develop
                       and implement a business recovery plan. The Department of Agriculture
                       administers the TAA for Farmers program, which provided help to
                       individual producers of raw agricultural commodities, such as farmers and
                       fishermen, to become more competitive in producing their current
                       commodity or transitioning to a different commodity. Under a TAA
                       program to assist trade-affected communities, Labor awards grants to
                       institutions of higher education for expanding or improving education and
                       career training programs for persons eligible for training under the TAA
                       for Workers program, and the Department of Commerce provides
                       technical assistance to trade-affected communities and awards and
                       oversees strategic planning and implementation grants. In addition to
                       mandating that GAO report on the TAA for Workers program, the 2009
                       Act mandated that GAO report on the other TAA programs as well. Our
                       report on the Farmers program was issued in July 2012 and our reports




                       26
                         The difference relates to the quarters in which performance is tracked. Previously, the
                       performance measures were based on the first, second, and third quarters after exit.
                       Under the new law, performance is based on the second, third, and fourth quarters after
                       exit.




                       Page 11                                           GAO-12-953 Trade Adjustment Assistance
                             related to the TAA programs that assist firms and communities were
                             issued in September 2012. 27



Labor Faced Initial
Challenges in
Implementing the
2009 Legislation and
Took Steps to Address
Them
2009 Legislation Increased   Labor took multiple steps to implement the 2009 legislation after it was
Volume and Processing        enacted. For example, it set up the Office of Trade Adjustment Assistance
Complexity of TAA            established by the legislation, which took over administration of the TAA
                             program from the Office of National Response. Also, as required by the
Petitions                    legislation, Labor issued a regulation implementing the new requirements
                             for the distribution of training funds to states. 28 Agency officials told us
                             that they also drafted a regulation on investigation standards, as required,
                             but did not publish the regulation because by the time it was ready for
                             publication, the 2009 provisions were set to expire. 29 Also, in accordance
                             with the legislation, the agency updated its information technology system
                             to collect data on service sector workers and implemented a new
                             reporting system for states to collect data on participant activities and
                             outcomes. Labor also took implementation steps beyond those
                             specifically required by law, such as providing training and technical


                             27
                                GAO, Trade Adjustment Assistance: USDA Has Enhanced Technical Assistance for
                             Farmers and Fishermen, but Steps Are Needed to Better Evaluate Program Effectiveness,
                             GAO-12-731 (Washington D.C.: July 12, 2012). GAO, Trade Adjustment Assistance:
                             Commerce Program Has Helped Manufacturing and Services Firms, but Measures, Data,
                             and Funding Formula Could Improve, GAO-12-930 (Washington D.C.: September 13,
                             2012). GAO, Trade Adjustment Assistance: One-Time Grants Awarded to Trade-Impacted
                             Communities; Program Results Will Not Be Known until after 2013, GAO-12-993
                             (Washington D.C.: September 26, 2012). GAO, Trade Adjustment Assistance: Labor
                             Awarded Community College Grants in Accordance with Requirements, but Needs to
                             Improve Its Process, GAO-12-954 (Washington D.C.: September 28, 2012).
                             28
                                  75 Fed. Reg. 16,988 (Apr. 2, 2010) (codified at 20 C.F.R. §§ 618.900 – 618.940).
                             29
                               Labor officials told us that at this time, the agency does not anticipate publishing
                             regulations on eligibility standards for the 2011 legislation before it expires.




                             Page 12                                            GAO-12-953 Trade Adjustment Assistance
assistance to state workforce agencies and issuing revised guidance on
program operations. 30 According to the state officials we interviewed, this
assistance was generally both helpful and timely.

Labor’s primary implementation challenge after the 2009 legislation was
addressing a substantial increase in its workload to process petitions. As
depicted in figure 2, the number of petitions the agency received in the
third quarter of fiscal year 2009, when the law took effect in May 2009,
was more than triple the number received the previous quarter. Multiple
factors contributed to this increase. According to agency officials, the
increase in petitions was caused by the 2009 legislation’s expansion of
eligibility to new categories of workers as well as the economic recession,
which may have increased trade-related layoffs. Another cause for the
spike in petitions is that in the months before the law took effect, Labor
allowed petitioners to withdraw and then resubmit petitions after the 2009
legislation took effect, so they could take advantage of the new,
enhanced benefit levels. As a result, an agency official estimated that
roughly 500 petitions were withdrawn before May 18, 2009, and then
resubmitted after the law took effect.




30
  See Department of Labor, Training and Employment Guidance Letter No. 22-08
(Washington, D.C.: May 15, 2009).




Page 13                                      GAO-12-953 Trade Adjustment Assistance
Figure 2: Increase in the Number of TAA Petitions Labor Received




                                        According to Labor officials, the 2009 legislation generally made it more
                                        challenging to determine TAA eligibility. As described earlier, the law
                                        expanded the number of categories for which petitions could be certified.
                                        Agency officials told us that this expansion complicated investigators’
                                        efforts because petitions needed to be evaluated against a greater
                                        number of eligibility criteria than before. Further, some of the new
                                        categories presented additional challenges. According to Labor officials,
                                        the firms identified in service-related petitions tended to be more
                                        dispersed geographically than manufacturing firms, making it more
                                        difficult to evaluate certain service-related petitions. For example, in
                                        cases where the work that was shifted abroad was performed by workers
                                        in multiple locations, it may be difficult to determine exactly which workers
                                        had been affected. In addition, some officials said that investigating
                                        petitions in which workers produce finished articles that contain foreign
                                        components, such as tubes used in televisions, proved challenging. Labor
                                        said these petitions often require contact with foreign firms, which can
                                        present communication challenges—for example, due to differences in
                                        currencies and time zones. Further, they noted the absence of any legal


                                        Page 14                                   GAO-12-953 Trade Adjustment Assistance
                              requirement for foreign companies to comply with Labor’s data requests.
                              In contrast to these challenges, Labor officials told us that the 2009
                              legislation made some investigations easier. Previously, TAA eligibility
                              standards were different for nations that did and did not have a free trade
                              agreement or preferential trade relationship with the United States. The
                              2009 legislation eliminated this difference, making it more straightforward
                              to investigate shifts in production.


Labor’s Processing            Labor initially had insufficient capacity to handle its increased workload,
Timeliness Adversely          and thus, lagged in processing petitions. As described previously, Labor
Affected by Increased         is required to process a petition—that is, determine whether to certify or
                              deny it—within 40 days. The quarter after the 2009 legislation took effect,
Petition Volume and Initial   on average, Labor took 153 days to process a petition—nearly four times
Staff Shortage                as long as the statutory limit (see fig. 3). Multiple factors contributed to the
                              lag, including an increased volume of petitions, initial staff shortages and
                              turnover, and the need for staff to become familiar with the new
                              provisions of the 2009 legislation. An official noted that initially, hiring
                              proved challenging because the 2009 legislation did not authorize funds
                              for implementation. As a result, Labor paid for new hires through the
                              agency’s general management funds. Most new staff members were
                              hired in July 2009, approximately 2 months after the law took effect.




                              Page 15                                    GAO-12-953 Trade Adjustment Assistance
Figure 3: Average Number of Days to Make a Petition Decision, by Fiscal Quarter Received




                                        During our review of TAA data and petition case files, we discovered that
                                        Labor mislabeled the basis for several certifications in its records,
                                        suggesting that data reported to Congress may contain inaccuracies.
                                        These errors were likely caused by the high volume of petitions that
                                        required processing, staff shortages and turnover, and gaps in internal
                                        controls. Moreover, as described earlier, the number of categories by
                                        which petitions could be certified more than doubled after the 2009
                                        legislation. Labor told us that investigators’ unfamiliarity with these new
                                        categories may have also contributed to errors. In one instance, Labor
                                        certified a petition based on imports of goods, but the staff member who
                                        entered this information into the information technology system
                                        inaccurately recorded the eligibility category as imports of services. In
                                        another case, Labor officials acknowledged that a certification based on
                                        imports of goods was improperly documented as imports of services in
                                        the petition case file itself. Among other gaps in internal controls, we
                                        found that a single staff member was responsible for recording the reason
                                        for each certification in Labor’s information technology system. The errors
                                        we found do not necessarily indicate that petitions were wrongly
                                        determined, and we did not examine whether any individual
                                        determinations were correct. However, the errors indicate that some
                                        petitions were mislabeled after they were certified. Agency officials


                                        Page 16                                      GAO-12-953 Trade Adjustment Assistance
                           acknowledged that both types of errors occurred and told us that they
                           were most likely to occur in petitions filed during the first year of the 2009
                           program, a period in which approximately 4,000 petitions were processed.


Labor Took Corrective      Labor took steps to address its implementation challenges, including
Action to Address          roughly doubling its staff. In the months after the 2009 legislation took
Challenges in Processing   effect in May 2009, Labor hired approximately 30 new staff, some on a
                           permanent basis and others as temporary hires. Although most new staff
Petitions                  members were hired in July 2009, agency officials estimate that it takes
                           approximately 6 months to fully train a new investigator. As a result,
                           officials said the Office of Trade Adjustment Assistance reached its peak
                           operating capacity in January 2010, approximately 8 months after the
                           2009 legislation took effect. 31 Labor’s efforts to increase staff were
                           hampered by frequent employee turnover. According to Labor officials,
                           many staff hired on a temporary basis left the agency when they found
                           permanent positions elsewhere, diminishing Labor’s overall capacity to
                           process petitions.

                           In tandem with its efforts to increase capacity, Labor took steps to
                           enhance its internal controls by adding quality controls to its petition
                           investigation process. As shown in figure 4, Labor incorporated these
                           controls over approximately 2 years. In December 2009, for example,
                           Labor began requiring a senior investigator to review each petition case
                           file before and after the determination was reached to ensure the file
                           included appropriate documentation. Previously, petitions were subject to
                           a single review by the certifying officer. Second, in May 2010, the agency
                           created a checklist that specified standard operating procedures and
                           accuracy checks for investigations. The final version of this checklist,
                           established in the spring of 2011, has specific targets for data entry
                           accuracy, timeliness of investigations, customer outreach, and more.
                           Finally, in the fall of 2011, Labor began quarterly tests to gauge how often
                           these targets were reached. In the first quarter that tests were conducted,
                           Labor told us that investigators met the quality control targets 87 percent
                           of the time on average, slightly below the agency’s internal goal of 90
                           percent.




                           31
                              At that time, the office included 61 staff, including 32 full-time staff, 20 temporary staff, 3
                           staff detailed from other offices, and 6 contractors.




                           Page 17                                              GAO-12-953 Trade Adjustment Assistance
Figure 4: Quality Control Steps Added to Labor’s Petition Investigation Process Between 2009 and 2011




                                        It took some time for the benefits of increased staffing and improved
                                        quality controls to take effect. By the end of fiscal year 2010, petition
                                        processing times had fallen substantially, although by this time the
                                        number of petitions Labor received had declined. Moreover, in June 2012,
                                        we reviewed Labor’s petition investigation process and found that it
                                        generally conformed to best practices for internal controls.


                                        Page 18                                      GAO-12-953 Trade Adjustment Assistance
                    Further, in September 2012, Labor conducted an internal audit to
                    determine how often the basis for a certification was improperly recorded
                    in either the petition case file or the agency’s information technology
                    system. This review covered the period from May 18, 2009, until May 31,
                    2010, when Labor introduced additional quality control steps. Through an
                    audit of 351 randomly selected petitions, Labor estimated the error rate to
                    be 1.4 percent, with a margin of error of plus or minus 5 percent.
                    According to Labor, this audit suggests that errors were more likely to be
                    present in the information technology system than in the petition case file
                    itself. Labor concluded that this low percentage of error had a minimal
                    impact on the petition data reported in its 2010 annual report to Congress.
                    Labor said it has corrected all errors found in its audit findings, and as
                    part of new quality control procedures, has established a more frequent
                    internal audit system that will identify and correct such errors throughout
                    each quarterly reporting cycle.


                    Participants benefited from nearly all of the 2009 legislative changes,
Nearly All of the   some of which also helped administrators better serve the participants,
Changes Benefited   according to the state officials we interviewed. For example, the
                    expanded eligibility for workers, such as for those in the service sector,
Participants and    benefited participants by providing access to program benefits for trade-
Some Helped         affected workers under a wider array of circumstances, such as call
Administrators As   center employees whose jobs were moved overseas. Figures 5 and 6
                    summarize the views of officials in the six states we examined.
Well




                    Page 19                                  GAO-12-953 Trade Adjustment Assistance
Figure 5: Effects of Changes Made by 2009 Legislation on Participants, According to Officials in Six States




                                          Note: None of the state officials viewed any change as having a negative effect on participants. The
                                          changes appear in order of impact on participants from positive to neutral.




                                          Page 20                                                 GAO-12-953 Trade Adjustment Assistance
Figure 6: Effects of Changes Made by 2009 Legislation on Administrators, According to Officials in Six States




                                         Note: The changes appear in order of impact on administrators from positive to negative.



Extended Training                        Both participants and administrators benefited from a simplified and
Enrollment Deadline                      extended training enrollment deadline—which must be met to qualify for
                                         TAA-based income support—according to officials from all six states.
                                         Previously, eligible workers had to enroll in training within 8 weeks of their
                                         petition’s certification or 16 weeks of their separation, whichever was
                                         later. The 2009 legislation extended the training enrollment deadline to 26
                                         weeks after the later of certification or separation. An official from one
                                         state told us that the new extended deadline was easier for eligible
                                         workers to understand since the period of time within which individuals
                                         had to enroll in training was the same, regardless of whether that period
                                         began at the date of separation or certification. According to several



                                         Page 21                                                GAO-12-953 Trade Adjustment Assistance
                         officials we interviewed, the extended deadline allowed participants to
                         more fully consider their employment and training options, and therefore
                         facilitated better decision making. The longer enrollment period also
                         positively affected administrators. Some state officials noted that the
                         extension provided case managers with more time to assess participants’
                         skills and abilities and advise them on employment and training options.


Dedicated Funding for    In addition to extending time frames for participants, the 2009 legislation
Case Management and      provided dedicated funding to states for case management and
Employment Services      employment services, which indirectly benefited participants, according to
                         several state officials. Previously, states did not receive funds for case
                         management and employment services, and so resources from other
                         programs were often used to support TAA participants. Several state
                         officials said that dedication of these funds allowed case managers to
                         better serve participants. Generally, these funds were used to pay the
                         salaries of TAA case managers. 32, 33 In some cases, this built capacity,
                         such as when the funds were used to hire new TAA staff who provided
                         these services. In other cases, the TAA funds replaced funding from other
                         sources, for example, when services were provided through the
                         Workforce Investment Act, according to several state officials. Officials
                         from several states said that the dedication of these funds reduced the
                         financial burden the TAA program had previously placed on other
                         workforce programs.


New Authority to Waive   Other 2009 program provisions that benefited both participants and
Deadlines                administrators were related to new authorities allowing state officials to
                         waive certain deadlines for eligible workers. The law allowed for the
                         application of states’ good cause provisions, which permit state officials to


                         32According to several state officials, meeting the requirement to spend one-third of their

                         administrative funding on case management was not difficult.
                         33
                            Under a rule Labor published on April 12, 2010, states were required, no later than
                         February 12, 2011, to use state government employees covered by a merit system of
                         personnel administration to perform TAA funded functions undertaken to carry out TAA
                         provisions. 75 Fed. Reg. 16, 988 (April l 2, 2010) (codified at 20 C.F.R. §618.890). (The
                         Omnibus Trade Act of 2010 extended the initial regulatory deadline of December 15,
                         2010, to February 12, 2011. Pub. L. No. 111-344, §102, 124 Stat. 3614.) As a result,
                         officials from one state told us that they calculated exactly how many TAA staff they could
                         support with the TAA funding and then used funds from other sources to pay non-merit
                         staff providing case management.




                         Page 22                                            GAO-12-953 Trade Adjustment Assistance
                        waive deadlines for TAA-based income support and enrollment in
                        training. Similarly, it also provided an exception to the training enrollment
                        deadline in cases where an eligible worker missed the deadline because
                        he or she was not given timely notification of the deadlines. Both
                        participants and administrators benefited from these changes, according
                        to the officials from five of the six states we interviewed. Officials from one
                        of these states told us that the waivers reduced the administrative burden
                        of processing appeals from eligible workers who missed the enrollment
                        deadline.


Enhanced and Expanded   Further, several of the changes made by the 2009 legislation benefited
Training Benefits       participants who enrolled in training, according to most of the officials we
                        interviewed, including:

                        •      the possibility of receiving income support for longer than previously
                               available;
                        •      the option to start training while threatened with job loss (prior to
                               actually losing their jobs);
                        •      the flexibility to attend training on a part-time basis; and
                        •      an increase in the amount of training funds available.

                        According to several officials, the additional 26 weeks of potential income
                        support while in training allowed program participants to consider longer-
                        term training options, such as health care, a high-demand profession. In
                        addition, officials said that since participants often drop out of training
                        after income support expires, this change bolstered training program
                        completion. Some officials also said that in some cases, the flexibility to
                        attend training part-time may have contributed to higher training
                        completion rates. For example, some full-time training participants who
                        gained employment before their training program ended opted to finish
                        their training part-time. Officials said that without the part-time option,
                        such participants would have likely dropped out of training altogether.
                        Officials from five states said the shift allowing part-time training had a
                        neutral effect on administration. However, officials from one state
                        attributed their state’s relatively low part-time enrollment rates to the
                        requirement that TAA-based income is contingent upon full-time
                        enrollment in training. 34



                        34   Only workers enrolled in full-time training are eligible for TAA-based income support.




                        Page 23                                              GAO-12-953 Trade Adjustment Assistance
Increase in Available   Moreover, according to state officials, the increase in available training
Training Funds          funds from $220 million to $575 million per fiscal year benefited
                        participants. In one state, officials said that having access to additional
                        funds increased its statewide caps on training program costs, which
                        allowed them to keep pace with higher education institutions’ rising
                        tuitions. 35 Officials in another state said that receiving these additional
                        funds allowed them to train all eligible participants rather than putting
                        some on waiting lists for training. Further, a few state officials noted that
                        the increased funds for training enabled them to serve an increased
                        volume of participants. As shown in figure 7, five of the selected six states
                        expended all of their fiscal year 2009 training funds—the only 3-year
                        spending period that has expired. Thus far, these states have drawn
                        down, on average, 76 percent of the training funds allocated to them for
                        fiscal year 2010. 36 See appendix III for additional information on state
                        expenditures.




                        35 It is unclear what relationship exists, if any, between tuition levels and state-specified
                        training amounts. Officials from one state we interviewed reported that higher education
                        institutions may have raised their tuition levels to match increases in state-specified
                        training amounts.
                        36Data is current as of March 31, 2012, and fiscal year 2010 funds can be drawn down
                        through September 30, 2012.




                        Page 24                                             GAO-12-953 Trade Adjustment Assistance
Figure 7: Percentage of Training Funds Expended by Six States, as of March 31, 2012




                                        Note: As of March 31, 2012, neither Massachusetts nor North Carolina had expended any of their
                                        fiscal year 2011 allocation.


Enhancements to Wage                    Other changes made by the 2009 legislation, specifically those made to
Supplement and Health                   the older worker wage supplement and the HCTC programs, also
Coverage Tax Credit                     benefited participants, according to officials from all six states. First,
                                        although the 2009 legislation modified the wage supplement for older
Programs                                workers in several ways, several state officials said that eliminating the
                                        employment deadline was most important. A few noted that, prior to the
                                        changes, laid-off older workers often struggled to obtain employment by
                                        the deadline of 26 weeks after their layoff. Second, regarding changes to
                                        the HCTC program, some officials noted that increasing the amount of the
                                        health care premiums from 65 percent to 80 percent improved
                                        participants’ ability to afford health care. However, other officials said that
                                        even with the premium assistance, many TAA program participants could
                                        not afford to pay for their share of health plan premiums. According to
                                        some state officials, it is unclear as to whether participation in this
                                        program increased as a result of the change.




                                        Page 25                                              GAO-12-953 Trade Adjustment Assistance
Increased Allowances for    State officials we spoke to differed on the extent to which they thought
Job Search and Relocation   another change made by the 2009 legislation—the increased maximum
Expenses                    allowance for job search and relocation expenses—affected participants.
                            While some state officials viewed the increase as having a positive effect
                            on participants, others noted that the higher benefit amount probably had
                            not induced more participants to apply for such allowances. Officials told
                            us that few participants have chosen to relocate despite higher
                            reimbursement for associated expenses. According to a few officials,
                            many participants do not want to relocate for various reasons, including
                            being settled in a particular community, not being able to sell their house,
                            or not wanting to disrupt their children’s schooling.


Many Changes Had No         Although some of the changes made by the 2009 legislation helped
Effect on Administrators    administrators better serve participants, as previous discussed, many had
                            no clear effect, according to selected state officials. For example,
                            administrators said they had not been affected by the change to the
                            HCTC program—primarily because it is managed by the Internal
                            Revenue Service. In addition, officials from all six states said that the
                            increased allowances for job search and relocation had no impact on
                            administrators. Officials from one state noted that the change only
                            required a minor modification to their processing forms. In contrast,
                            officials in two states separately viewed two changes as having a
                            somewhat negative effect on administrators. Officials from one state said
                            that allowing participants to attend training part-time potentially increases
                            the associated administrative burden because some participants switch
                            their training attendance status between full-time and part-time, which
                            affects not only their training plan, but also their eligibility for TAA based
                            income support. According to officials from another state, allowing
                            participants in the wage supplement program for older workers to receive
                            training in addition to income support made the program more
                            complicated to administer.


Challenge to Administer     While the specific changes made by the 2009 legislation generally
TAA under Multiple          affected administrators in a positive or neutral manner, a few state
Program Provisions          officials noted the more general challenge of concurrently administering
                            TAA under various sets of program provisions. Eligible workers generally
                            qualify for the benefits and services specified by the TAA legislation that
                            is effective at the time their petitions are filed. Thus, after the 2009 TAA
                            legislation passed, administrators were not only serving these newly
                            eligible workers, but also participants already in the program who
                            qualified under the 2002 legislation. When the most recent TAA


                            Page 26                                   GAO-12-953 Trade Adjustment Assistance
                                           legislation passed in October 2011, administrators began to operate
                                           under a third set of program provisions. Further, because there was a gap
                                           of several months between when the 2009 legislation expired and the
                                           2011 legislation passed, workers covered by petitions certified during this
                                           time may receive benefits and services under either the 2002 provisions
                                           or the 2011 provisions (see fig. 8).

Figure 8: Eligibility for Specific TAA Program Benefits Set by Date of Petition Filing




Over 107,000 Workers
Received Benefits and
Services, but Little Is
Known About Their
Outcomes
About Half of the                          TAA provides participants with a variety of benefits and services—some
Participants in the 2009                   were used more than others. As of September 30, 2011, 107,896
Program Enrolled in                        participants received services under the 2009 TAA program. 37 As shown
                                           in figure 9, the majority of these participants were male and most were
Training, but Other
                                           white. Nearly half the participants were age 50 or older and nearly two-
Benefits Were Less Utilized                thirds had a high school education or less.


                                           37
                                             At the time of our review, September 30, 2011, was the latest date for which participant
                                           data was available.




                                           Page 27                                          GAO-12-953 Trade Adjustment Assistance
Figure 9: Participant Demographics for Those Enrolled in the 2009 Program, as of September 30, 2011




                                        Note: In determining the percentages for ethnicity, we excluded participants who did not indicate an
                                        ethnic group or who identified multiple ethnic groups.

                                        All 107,896 participants who received services under the 2009 TAA
                                        program received case management and employment services and
                                        nearly half enrolled in training. Most of the participants who enrolled in
                                        training had only one training activity, but some enrolled in two or three
                                        training activities (see fig.10).




                                        Page 28                                                 GAO-12-953 Trade Adjustment Assistance
Figure 10: Participants Who Enrolled in One or More Training Activities, as of
September 30, 2011




Participants can receive different types of training, but occupational skills
training—training in specific occupations typically provided in a classroom
setting—was the most common type of training provided (see fig. 11). In
addition to occupational training, participants received other types of
training, such as remedial training, which includes adult basic education
and English as a Second Language. These types of training were
provided less frequently than occupational training.




Page 29                                       GAO-12-953 Trade Adjustment Assistance
Figure 11: Types of Training Provided to Participants in Program, as of September
30, 2011




Note: Other includes on-the-job training, customized training, prerequisite training, and apprenticeship
training.


Participants in the 2009 TAA program received training in a variety of
occupational fields, most commonly related to computers, health, and
production occupations (see table 1).

Table 1: Occupational Skills Training Most Frequently Provided to Participants in
the 2009 Program

                                                                                          Number of
 Occupational field                                                                      participants
 Computer occupations (such as computer support specialist)                                     3,795
 Health technologists and technicians (such as medical records and                              3,767
 health information technician and licensed practical and licensed
 vocational nurses)
 Other production occupations (such as production worker helper)                                3,193
 Other installation, maintenance, and repair occupations (such as                               2,557
 heating, air conditioning, and refrigeration mechanic and installer)
 Other health care support occupations (such as medical assistant)                              2,159
Source: GAO analysis of Department of Labor participant data.



As of the end of fiscal year 2011, approximately half of the 2009 program
participants who had enrolled in training were still in a training activity. For



Page 30                                                         GAO-12-953 Trade Adjustment Assistance
those 24,568 participants who completed or withdrew from training, the
average amount of time spent in training was approximately 43 weeks. As
shown in figure 12, nearly one-third of these participants spent between a
half year and a full year in training.

Figure 12: Duration of Training for Participants in the 2009 Program Who
Completed or Withdrew from Training as of September 30, 2011




While approximately 50,000 participants enrolled in training under the
2009 program, fewer participants took advantage of several benefits and
services that were added to, or expanded under, the 2009 program. For
example, the 2009 legislation added part-time training and pre-layoff
training for adversely affected incumbent workers. 38 The legislation also
increased the job search and relocation allowances and modified the
program providing wage supplements for older workers. As shown in
table 2, fewer than 8 percent of the participants who received benefits
under the 2009 program used each of these benefits.



38
   Adversely affected incumbent workers are those who have been threatened with a
layoff, but have not yet been separated from the company.




Page 31                                        GAO-12-953 Trade Adjustment Assistance
Table 2: Percentage of 2009 Program Participants Accessing Various Benefits as of
September 30, 2011

                                                                Number of participants    Percentage of all
 2009 program benefit                                              accessing benefits         participants
 Training for adversely affected                                                8,540                   7.9
 incumbent workers
 Wage supplement for older workers                                              5,521                   5.1
 Relocation allowance                                                             534                   0.5
 Part-time training                                                               462                   0.4
 Job search allowance                                                             178                   0.2
Source: GAO analysis of Department of Labor participant data.

Note: Not all participants would be eligible to access training for adversely affected incumbent
workers or receive the wage supplement for older workers.


The wage supplement for older workers and the job search and relocation
allowances are benefits that have not been widely utilized in the past. For
example, we previously reported that fewer than 3,500 workers had
utilized this benefit each year between 2004 and 2006. 39 Similarly, not
many participants have typically received job search and relocation
allowances. For example, the Congressional Research Service reported
that fewer than 500 workers received job search allowances each year
between fiscal years 2006 and 2008, while fewer than 800 received
relocation allowances during those years. 40

While not used extensively, about 13 percent of the 5,521 older workers
who participated in the wage supplement program also enrolled in
training—a benefit available to eligible older workers participating in the
2009 program. Under the 2002 program, workers who participated in the
wage supplement program for older workers were not eligible to receive
training.

Based on our prior work on HCTC, we found that participation in the
program initially increased after the 2009 legislation. HCTC was another


39
  GAO, Trade Adjustment Assistance: Changes to Funding Allocation and Eligibility
Requirements Could Enhance States’ Ability to Provide Benefits and Services,
GAO-07-701 (Washington D.C.: May 31, 2007).
40
   Congressional Research Service, Trade Adjustment Assistance for Workers (TAA) and
Alternative Trade Adjustment Assistance (ATAA), RS22718 (Washington, D.C.: May 5,
2011).




Page 32                                                               GAO-12-953 Trade Adjustment Assistance
benefit that was enhanced under the 2009 legislation, increasing the tax
credit covering monthly health insurance premiums from 65 percent to 80
percent. Because HCTC is administered by the IRS, Labor does not
collect information on how many TAA participants used this benefit.
However, we reported in 2010 that during the 6 months after key changes
in the 2009 legislation took effect, the average monthly participation rate
for TAA individuals was about 10,000. 41 This represented an increase in
participation compared to the 6 months prior to the passage of the
legislation. 42

Few participants received income support under the TAA program, likely
as a result of the availability of extended unemployment benefits. As
previously discussed, the 2009 legislative changes lengthened the
number of weeks participants could receive income support while enrolled
in full-time training and provided additional weeks of support for those
participants simultaneously enrolled in remedial or prerequisite
education. 43 However, as of September 30, 2011, only about 8 percent of
the participants in the 2009 program received income support under TAA.
On average, participants received this income support for about 21
weeks. According to Labor officials, the availability of extended
unemployment benefits may have made many TAA participants ineligible
for income support payments under TAA. Specifically, because
participants must completely exhaust unemployment insurance benefits
before receiving TAA income support, extended unemployment benefits
provided through the Emergency Unemployment Compensation program
likely reduced or replaced TAA income support payments in many




41
  GAO, Health Coverage Tax Credit: Participation and Administrative Costs,
GAO-10-521R (Washington, D.C.: April 30, 2010).
42
   Our analysis found that in the 6 months after key changes in the 2009 legislation took
effect, the average number of TAA eligible individuals increased by 40 percent, and the
average number of TAA eligible individuals per month participating in the HCTC increased
by 67 percent.
43
  Under the 2009 TAA program, participants could receive up to 130 weeks of income
support, plus an additional 26 weeks if they are also enrolled in remedial or prerequisite
education. In total, the number of weeks for which participants could receive income
support increased by 26 weeks.




Page 33                                            GAO-12-953 Trade Adjustment Assistance
                           cases. 44 These officials also said that, once these extended benefits
                           expire, the number of participants receiving TAA income support and the
                           average duration of TAA income support may increase substantially.


Limited Outcome Data are   Little is yet known about the outcomes achieved by participants in the
Available                  2009 program largely because nearly two-thirds of the participants were
                           still enrolled in the program as of September 30, 2011. States are not
                           required to begin tracking employment outcomes for participants until
                           they exit the program. Of the 107,896 participants enrolled in the 2009
                           program, approximately 66 percent had not exited the program as of
                           September 30, 2011. The one-third of participants who exited the
                           program spent an average of about 37 weeks in the program.
                           Approximately 76 percent of those exiting were in the program for 1 year
                           or less (see fig.13).




                           44 Emergency Unemployment Compensation is a federally funded program that provides

                           benefits to individuals who have exhausted regular state benefits. The program was
                           created on June 30, 2008, and has been modified several times. Most recently, the Middle
                           Class Tax Relief and Job Creation Act of 2012 extended the expiration date of the
                           program to January 2, 2013. Pub. L. No. 112-96 § 2122(a)(1), 126 Stat. 163.




                           Page 34                                         GAO-12-953 Trade Adjustment Assistance
Figure 13: Total Time Spent in Program for Those Exiting, as of September 30, 2011




In addition, little is known about participants’ outcomes because the
information needed to assess these outcomes was not yet available. For
the approximately 36,000 participants who had exited the program as of
September 30, 2011, information to calculate entered employment rates,
employment retention rates, and average earnings was not yet available
for many participants. For example, the entered employment rate is
based on the number of participants who were employed 6 months after
exiting the program. 45 Yet, as of September 30, 2011, states had reported
the 6-month employment status on only about 60 percent of the
participants who had exited the program. Similarly, states reported the
earnings information needed to calculate the average earnings
performance measure for only about a third of the approximately 13,000



45
   The entered employment rate is based on the number of participants who were
employed in the second quarter after program exit. The employment retention rate only
includes those who were employed in the second quarter after program exit and is based
on the percentage who were employed in the third and fourth quarter after program exit.




Page 35                                         GAO-12-953 Trade Adjustment Assistance
participants who would have been included in the calculation. 46 As a
result, few of the participants in the 2009 program would have been
included in calculating TAA performance outcomes through fiscal year
2011 (see fig. 14).

Figure 14: Few Participants in the 2009 Program Had Information to Calculate TAA
Performance Measures through Fiscal Year 2011




Incomplete outcome data for TAA participants is a longstanding issue.
The primary data source for outcome information is Unemployment
Insurance wage records. As we have previously reported, these wage
records provide a common yardstick for assessing performance across
states but suffer from time delays. 47 We reported on these delays in 2006,
noting that most of the outcome data reported in a given program year
actually reflect participants who left the program up to 2 years earlier. 48


46
  The average earnings performance measure is based on those participants earning
wages in the second quarter after exit and the total amount earned by those participants in
both the third and fourth quarter after exit.
47
  GAO, Workforce Investment Act: States and Local Areas Have Developed Strategies to
Assess Performance, but Labor Could Do More to Help, GAO-04-657 (Washington, D.C.:
June 1, 2004).
48
   GAO, Trade Adjustment Assistance: Labor Should Take Action to Ensure Performance
Data Are Complete, Accurate, and Accessible, GAO-06-496 (Washington, D.C.: April 25,
2006).




Page 36                                          GAO-12-953 Trade Adjustment Assistance
               Another factor contributing to the unavailability of outcome data for the
               2009 program participants at the time we analyzed the data is that the
               2009 legislation required states to report on job retention and earnings for
               a year after the participant exits the program—an additional 3 months
               beyond what states had previously reported. Labor officials stated that
               they were aware of the lack of outcome information being reported and
               are requiring states to submit updated outcome information by September
               2012. 49

               Even when employment and earnings information becomes available,
               more information will be needed to assess the effectiveness of the
               changes made by the 2009 legislation. First, Labor uses information on
               employment rates and earnings to compare the TAA program to national
               program goals, but the information is reported on a fiscal year basis and
               combines data for participants under the 2002 and 2009 programs.
               Therefore, these reports will not provide a complete or separate picture of
               outcomes for 2009 program participants. However, Labor officials stated
               that their annual report for fiscal year 2012 would primarily consist of
               2009 participants. Second, a program’s effectiveness cannot be
               determined solely by outcomes because they cannot show whether an
               outcome is a direct result of program participation or whether it is a result
               of other influences, such as the state of the local economy. Labor officials
               told us they have no plans to conduct an impact evaluation of the 2009
               program since the program is no longer in effect. However, Labor is
               conducting a 5-year evaluation study of the 2002 TAA program, which is
               expected to be completed by November 2012. The study will address the
               operation and impacts of the program after the passage of the Trade
               Adjustment Assistance Reform Act of 2002 and will include an impact
               study on participants’ employment-related outcomes, overall and for key
               worker subgroups, and a benefit-cost analysis.


               The 2009 TAA legislation made extensive changes to the TAA for
Concluding     Workers program benefitting program participants—training funds were
Observations   more than doubled, new benefits were added, eligibility was broadened,
               and existing benefits were enhanced. This contributed to a substantial
               increase in the number of petitions immediately following implementation
               of the changes in May 2009. Yet, when confronted with the initial surge in



               49
                    This requirement is part of a larger data integrity initiative underway at Labor.




               Page 37                                               GAO-12-953 Trade Adjustment Assistance
                     petition volume and faced with pressure to process these petitions
                     quickly, Labor made some errors in recording the reasons why petitions
                     were certified. Since that time, Labor has enhanced its quality controls for
                     investigating petitions and determined that the data errors we found were
                     not widespread.

                     In addition, because most participants were still enrolled in the program at
                     the time of our review, sufficient information was not available to
                     determine whether the program changes contributed to better
                     performance outcomes. However, even when outcome data become
                     available, it will be very difficult to isolate the effect of the 2009 legislative
                     changes because the results cannot differentiate program participation
                     from other outside factors, including the overall state of the economy.
                     While Labor plans to release the results of its 5-year evaluation study of
                     the 2002 program later this year, it will not include a definitive
                     determination of the effectiveness of the substantial changes made by the
                     2009 legislation. Further, the TAA program was modified again in October
                     2011, further complicating any future evaluation of the 2009 program.


                     We provided officials from the Department of Labor a draft of this report
Agency Comments      for review and comment. Labor provided written comments, which are
and Our Evaluation   reproduced in appendix IV, as well as technical comments, which we
                     incorporated as appropriate. In its written comments, Labor generally
                     agreed with our findings. Labor noted that the report validated its efforts
                     to improve employment and retention outcomes for trade-affected
                     workers, made possible by the expansion of benefits and services under
                     the 2009 TAA program.


                     We will send copies of this report to the Secretary of Labor, relevant
                     congressional committees, and other interested parties and will make
                     copies available to others upon request. In addition, the report will be
                     available at no charge on GAO’s Web site at http://www.gao.gov.

                     A list of related GAO products is included at the end of this report. If you
                     or your staff have any questions about this report, please contact me at
                     (202) 512-7215 or at sherrilla@gao.gov. Contact points for our Offices of




                     Page 38                                      GAO-12-953 Trade Adjustment Assistance
Congressional Relations and Public Affairs may be found on the last page
of this report. Other contacts and staff acknowledgments are listed in
appendix V.




Andrew Sherrill
Director, Education, Workforce, and
  Income Security Issues




Page 39                                GAO-12-953 Trade Adjustment Assistance
Appendix I: Objectives, Scope, and
Methodology

                                    Our objectives were to determine: (1) what challenges Labor faced in
                                    implementing the 2009 legislation, (2) the effect selected state
                                    government officials say the 2009 legislative changes had on participants
                                    and on state and local administrators, and (3) the extent participants
                                    received TAA benefits and services as established by the 2009 legislation
                                    and what is known about employment outcomes. To address these
                                    objectives, we reviewed relevant federal legislation, regulations, and
                                    departmental guidance and procedures. We also interviewed Labor
                                    officials and state government officials in six states—Massachusetts,
                                    Michigan, North Carolina, Oregon, Pennsylvania, and Texas. We also
                                    interviewed selected local government officials in three of these states
                                    (Michigan, North Carolina, and Oregon). We obtained and reviewed
                                    Labor data on petitions, training fund expenditures, and participant
                                    activities. We conducted this performance audit from May 2011 through
                                    September 2012 in accordance with generally accepted government
                                    auditing standards. Those standards require that we plan and perform the
                                    audit to obtain sufficient, appropriate evidence to provide a reasonable
                                    basis for our findings and conclusions based on our audit objectives. We
                                    believe that the evidence obtained provides a reasonable basis for our
                                    findings and conclusions based on our audit objectives.


Selected States                     We selected the six specific states because they had a high fiscal year
                                    2010 training fund allocation, a high volume of TAA certifications, and
                                    geographic diversity (see table 3).

Table 3: Selected States

                               Fiscal year 2010                            Number of
                           training fund allocation                     TAA certifications                        Labor
                                                              State                            State       geographical
State                           Amount                      ranking     Number               ranking             region
Massachusetts               $12,056,206                            25         71                 11                    1
Michigan                    $83,070,480                            1         193                  4                    5
North Carolina              $28,269,836                            6         172                  5                    3
Oregon                      $28,665,642                            4          66                 14                    6
Pennsylvania                $31,056,520                            2         212                  3                    2
Texas                       $18,759,147                            9         131                  6                    4
                                    Source: Department of Labor.



                                    We also spoke with select local officials in three states (see table 4).
                                    Through these interviews, we obtained state and local officials’ opinions



                                    Page 40                                        GAO-12-953 Trade Adjustment Assistance
                               on what effects key changes made by the 2009 legislation had on their
                               administration of the program and on participants.

                               Table 4: Selected Localities

                                State                         Local entity
                                Michigan                      Oakland County Michigan Works! Workforce Development Division
                                                              Southeast Michigan Community Alliance Michigan Works!
                                North Carolina                Forsyth County Job Link Career Center
                                                              Wake County Job Link Career Center
                                Oregon                        Oregon utilizes a virtual model in which all TAA participants receive
                                                              case management via telephone from Salem-based staff
                               Source: Department of Labor.



Analysis of Labor’s Petition   We analyzed Labor’s data on petitions filed from fiscal years 2007 to
Data                           2011. We assessed the reliability of key data by interviewing Labor
                               officials knowledgeable about the data, reviewing related documentation,
                               manually and electronically testing the data, and assessing internal
                               controls at Labor. During our manual testing of this petition data, we
                               discovered Labor made errors in recording the reasons why several
                               petitions were certified, although the results of our review are not
                               generalizable. We brought this issue to the attention of Labor officials.
                               Because we did not know the extent of these errors during the period of
                               our review, we did not include information on certification categories in
                               this report. In late September 2012, Labor provided us with the results of
                               its internal audit, which indicated that this data was reliable. Moreover, we
                               determined that information regarding the number of petitions filed, the
                               dates petitions were received by Labor, and the dates Labor issued
                               determinations were sufficiently reliable for the purposes of this report.

                               We also assessed what internal controls were present in Labor’s petition
                               investigation process as of June 2012. We compared Labor’s written
                               procedures with GAO-published standards for internal controls and
                               conducted an onsite review of seven petitions to assess whether Labor
                               followed its written procedures when conducting investigations. We
                               selected petitions filed from May 2009 to February 2011. They are
                               nongeneralizeable and used only for illustrative purposes. The selected
                               petitions were diverse with respect to the month/year petitions were
                               received; whether petitions were certified or denied; whether petitions
                               represented manufacturing or service sector workers; and other factors,
                               such as the reason for the layoff (i.e., a shift in production overseas
                               versus an increase in imports).



                               Page 41                                                     GAO-12-953 Trade Adjustment Assistance
Analysis of Labor’s   We analyzed Labor’s data on TAA training fund expenditures for fiscal
Training Funds        years 2009 through 2011, with data current through the second quarter of
Expenditure Data      fiscal year 2011 (March 31, 2011). This data included expenditures by
                      state for training, administration (inclusive of employment/case
                      management), job search and relocation, income support, and the wage
                      supplement program for older workers. We assessed the reliability of
                      these data by electronically testing for errors and by interviewing
                      knowledgeable agency officials. Further, we compared these expenditure
                      data with fund allocation data published in Labor’s annual reports to
                      Congress. Overall, we found that the data were sufficiently reliable for the
                      purposes of this report.


Analysis of Labor’s   We analyzed Labor’s participant data file containing data elements on
Participant Data      characteristics, activities, and outcomes for TAA participants. We
                      conducted our analyses on those participants who were covered by
                      petitions filed between May 18, 2009 and February 14, 2011—the dates
                      covered by the 2009 legislative changes. We assessed the reliability of
                      these data by interviewing Labor officials about the internal controls in
                      place to assure the quality of data reported by states and reviewed the
                      edit checks Labor established to identify inconsistencies and data errors.
                      We also performed electronic testing of individual data elements to
                      remove duplicate entries and ensure that the data being entered were
                      consistent with instructions provided by Labor to the states. We
                      determined that information related to participant characteristics and
                      activities was sufficiently reliable to be used in the report. However, our
                      testing of the outcome data surfaced issues with information being
                      reported on employment status and earnings for participants who had
                      exited the program. Specifically, we found that the employment status
                      and earnings information for many participants who had exited the
                      program was not identified. We believe that reporting outcomes would be
                      misleading when two-thirds of the participants in the 2009 program were
                      still enrolled as of September 30, 2011, and outcome information for
                      many participants who had exited the program was not yet available. As a
                      result, we did not include entered employment rates, employment
                      retention rates, and average earnings in this report.




                      Page 42                                  GAO-12-953 Trade Adjustment Assistance
Appendix II: Comparison of Key 2002, 2009,
and 2011 TAA Statutory Provisions

2002 TAA Program                                 2009 TAA Program                                   2011 TAA Program
Period Covered
Petitions filed on or after November 4, 2002, Petitions filed on or after May 18, 2009, and on or   Petitions filed on or after October
                                                                          b
and on or before May 17, 2009                  before February 14, 2011                             21, 2011, or before December 31,
Petitions filed on or after February 15, 2011,                                                      2013
                                     a
and on or before October 20, 2011                                                                   Petitions filed on or after February
                                                                                                    15, 2011, and on or before October
                                                                                                             a
                                                                                                    20, 2011
GROUP ELIGIBILITY REQUIREMENTS
One of the following circumstances must          One of the following circumstances must have          No change, except workers from
have contributed importantly to the reason       contributed importantly to the reason for             public agencies are no longer
for separation or threat of separation for a     separation or threat of separation for a significant eligible
significant number or proportion of the          number or proportion of the workers in a firm or
workers in a firm or subdivision of a firm:      subdivision of a firm:
•    the firm’s sales and/or production have     •   The firm’s sales and/or production have
     decreased and imports of articles               decreased; and
     similar to the articles produced by the              imports of articles or services like or
     firm have increased; or                              directly competitive with the articles or
•    the firm shifted to another country the              services produced by the firm have
     production of articles similar to the                increased; or
     articles produced by the firm and that               imports of articles similar to the article
     country has a free-trade or beneficial               into which component parts produced by
     agreement with the United States; or                 firm are directly incorporated or which
•    the firm has been secondarily affected               are produced using services supplied by
     by trade as either a supplier or                     such firm have increased; or
     downstream producer for a firm that has              imports of articles incorporating
     already been TAA certified based on an               component parts produced outside the
     increase in imports from, or a shift in              U.S. that are similar to imports of articles
     production to, Canada or Mexico and                  incorporating component parts produced
     the article which was the basis for the              by such firm have increased
     primary certification was related to the
     parts or processes supplied by the          •   The firm shifted to any other country the
     secondary firm
                     c                               supply of services or the production of articles
                                                     similar to the services supplied or articles
                                                     produced by the firm or the firm has acquired
                                                     articles or services from a foreign county that
                                                     are similar to articles produced or services
                                                     supplied by such firm; or




                                                Page 43                                          GAO-12-953 Trade Adjustment Assistance
2002 TAA Program                                 2009 TAA Program                                       2011 TAA Program
                                                 •   a public agency has acquired from a foreign
                                                     country services like or directly competitive
                                                     with services which are supplied by such
                                                              d
                                                     agency; or
                                                 •   the firm has been secondarily affected by
                                                     trade as either a supplier or downstream
                                                     producer of articles or services for a firm
                                                     affected by trade with any other country, and
                                                     that firm has already been TAA certified; and
                                                     the basis for the primary certification was
                                                     related to the articles or services produced by
                                                                          e
                                                     the secondary firm
                                                 •   If a U.S. firm has been determined by the
                                                     International Trade Commission as having
                                                     been adversely affected by international trade
                                                     and the TAA petition is filed within 1 year of
                                                     this determination being published in the
                                                     Federal Register
PARTICIPANT BENEFITS AND SERVICES
Trade Readjustment Allowances (TRA)
Up to 104 weeks for workers enrolled in full-    Up to 130 weeks for workers in full-time training      Up to 130 weeks for workers in full-
time training                                    OR                                                     time training, the last 13 of which
OR                                                                                                      are only available if needed for
                                                 Up to 156 weeks for workers also enrolled in           completion of a training program
Up to 130 weeks for workers also enrolled in     remedial training                                      and training benchmarks are met
remedial training
                                                                                                        No additional weeks for remedial or
                                                                                                        pre-requisite training
Enrollment Deadlines to Receive TRA
In order to receive TRA, must be enrolled 8      In order to receive TRA, must be enrolled 26           No change
weeks after certification or 16 weeks after      weeks after certification or total separation,
total separation, whichever is later             whichever is later
Training Waivers
Waivers may be issued because the worker:        Waivers may be issued because the worker:              Waivers may be issued because
1. Will be recalled to work                      1. Will be recalled to work                            the worker:
2. Has marketable skills for suitable            2. Has marketable skills for suitable employment       1. Cannot participate in training
    employment and has reasonable                    and has reasonable expectation of                      due to a health condition
    expectation of employment in                     employment in foreseeable future                   2. Enrollment date is not
    foreseeable future                           3. Is within 2 years of eligibility for a pension or       available
3. Is within 2 years of eligibility for a            Social Security                                    3. Training program not available
    pension or Social Security                   4. Cannot participate in training due to a health
4. Cannot participate in training due to a           condition                                          All waivers must be reviewed at the
    health condition                             5. Enrollment date is not available                    3 month mark and on a monthly
5. Enrollment date is not available              6. Training program not available                      basis thereafter
6. Training program not available
                                                 All waivers except those issued under the
                                                 “retirement” reason must be reviewed 3 months
                                                 after issued and on a monthly basis thereafter




                                                Page 44                                              GAO-12-953 Trade Adjustment Assistance
2002 TAA Program                                 2009 TAA Program                                       2011 TAA Program
Job Search and Relocation Allowances
To qualify, workers must be totally separated from their employer and cannot reasonably be expected to find suitable employment in
commuting area.
Job Search                                       Job Search                                             Job Search
•   90 percent of allowable costs, up to         •   100 percent of allowable costs, up to $1,500       •   Not more than 90 percent of
    $1,250                                       Relocation                                                 allowable costs, up to $1,250
Relocation                                       •   100 percent of costs, plus a lump sum              •   At state’s discretion
•   90 percent of costs, plus a lump sum             payment of up to $1,500                            Relocation
    payment of up to $1,250                                                                             •   Not more than 90 percent of
                                                                                                            allowable costs, plus a lump
                                                                                                            sum up to $1,250
                                                                                                        •   At state’s discretion
Training Services
•   Under Labor’s regulation, training may       •   Training may be approved on a full-time basis      •   No change
    only be approved on a full-time basis            or part-time basis, although full-time training
•   Certified workers may not begin                  is required for TRA eligibility
    approved training until they have been       •   Training may be approved for adversely
    totally or partially separated from              affected incumbent workers before separation
    adversely affected employment                •   In addition to other training, registered
•   On-the-job, customized training, training        apprenticeship training, prerequisite
    authorized under Workforce Investment            education and training programs and
    Act of 1998, remedial education, and             coursework at accredited institutions of higher
    training paid for under other federal or         education may also be approved for worker
    state programs                                   training
•   Workers may not be determined                •   Workers may not be determined ineligible for
    ineligible for unemployment insurance            unemployment insurance or TAA benefits
    or TAA benefits because they are                 because they are enrolled in training, left
    enrolled in training or left unsuitable          unsuitable work to enroll in training, left work
    work to enroll in training                       that the worker engaged in on a temporary
                                                     basis during a break in training or delay in
                                                     commencement of training or left on-the-job
                                                     training after less than 30 days because it did
                                                     not satisfy TAA requirements
Re-employment Trade Adjustment Assistance (known as Alternative TAA in 2002)
A wage supplement for workers over 50 providing a portion of the difference between their old and new wages
Established as a demonstration project:          •   Does not require a separate certification of       No change, except:
                                                     group eligibility                                  •   Available only for workers
Alternative Trade Adjustment Assistance:
     Requires a separate certification of        •   Workers may participate in TAA-approved                earning less than $50,000 per
     group eligibility                               training and receive employment and case               year in reemployment
                                                     management services                                •   Maximum benefit of $10,000
•    Workers may not participate in TAA-
     approved training                           •   Allows for part-time employment if enrolled in         over a period of up to 2 years
                                                     training                                               (104 weeks)
•    Requires full-time employment within 26
     weeks of separation                         •   Eliminates deadline for reemployment
•    Available only for workers earning less     •   Available only for workers earning less than
     than $50,000 per year in reemployment           $55,000 per year in reemployment
•    Maximum benefit of $10,000 over a           •   Maximum benefit of $12,000 over a period of
     period of up to 2 years (104 weeks)             up to 2 years (104 weeks)




                                                Page 45                                           GAO-12-953 Trade Adjustment Assistance
2002 TAA Program                                 2009 TAA Program                                         2011 TAA Program


Health Coverage Tax Credit
•   Tax credit allowed equal to 65 percent       •   Tax credit equal allowed equal to 80 percent         •   Tax credit allowed equal to
    of an eligible participant’s monthly             of an eligible participant’s monthly qualifying          72.5 percent of an eligible
    qualifying health insurance premium              health insurance premium                                 participants qualifying health
                                                                                                              insurance premium. Provision
                                                                                                              is retroactive to February 13,
                                                                                                              2011, and applies to workers
                                                                                                              served under 2002, 2009 or
                                                                                                              2011 programs
ADMINISTRATIVE CHANGES
Training Fund Amount
•   $220 million per fiscal year for workers’    •   $575 million for fiscal years 2009 and 2010          •   $575 million for fiscal years
                                                                          f
    training                                         for workers’ training                                    2012 and 2013 for workers’
                                                                                                              training, job search and
                                                                                                              relocation allowances, case
                                                                                                              management and employment
                                                                                                              services, and associated
                                                                                                                             g
                                                                                                              administration
Training Fund Formula
•   No statutory provision                       •   Requires Labor to make an initial distribution       •   No change except that these
•   In practice, Labor initially disbursed 75        to states of at least 65 percent of available            requirements now apply to
    percent of training funds based on a             training funds as soon as practicable after the          distribution of funds for
    state’s accrued training expenditures            beginning of each fiscal year taking into                training, job search and
    and the number of training participants          account: (1) the trend in numbers of certified           relocation allowances, case
    and disbursed to a state no less than 85         workers, (2) the trend in numbers of workers             management and employment
    percent of the prior year’s initial              participating in training, (3) the number of             services and administration
    distribution                                     workers enrolled in training, (4) the estimated
                                                     amount of funding needed to provide
                                                     approved training and other factors Labor
                                                     determines are appropriate. Requires that
                                                     each state receive initial distribution of not
                                                     less than 25 percent of an initial distribution in
                                                     previous fiscal year. Requires Labor to
                                                     establish procedures for distribution of
                                                     remaining fund but provides that not less than
                                                     90 percent of available funds must be
                                                     distributed by July 15 of each fiscal year




                                                Page 46                                             GAO-12-953 Trade Adjustment Assistance
2002 TAA Program                                   2009 TAA Program                                                       2011 TAA Program
Employment and Case Management Services
•   SERVICES: Labor is required to make            •   SERVICES: Labor is required to make                                •      SERVICES: No change
    “every reasonable effort” to provide               available to eligible workers, either directly or                  •      FUNDING: No more than 10
    eligible workers counseling, testing,              through agreements with the States: (1)                                   percent of the amount provided
    placement and supportive and other                 comprehensive and specialized assessment                                  for training, job search and
    services provided for under any other              of skill levels and service needs, (2)                                    relocation allowances, case
    law, including services provided through           development of individual employment plans,                               management and employment
    Workforce Investment Act one-stop                  (3) information on training, (4) information on                           services and administration
    delivery systems through agreements                financial aid, (5) short-term prevocational                               may be spent for
    with the States, where appropriate                 services, (6) individual career counseling, (7)                           administration; and
•   FUNDING: No statutory provision                    employment statistics, and (8) information on
                                                       supportive services                                                •      not less than 5 percent of the
                                                                                                                                 amount provided may be spent
                                                   •   FUNDING: States receive an additional                                     for case management and
                                                       amount of funds equal to 15 percent of the                                employment services
                                                       amount they receive for training and must use
                                                       at least 1/3 of these funds for case                               •      Labor may recapture from the
                                                       management and employment services; and                                   states funds remaining
                                                       spend no more than 2/3 of these funds on                                  unobligated after 2 or 3 years
                                                       administration                                                            and distribute such funds to
                                                                                                                                 states in need of funds
                                                   •   States also receive an additional $350,000
                                                       yearly for case management and employment
                                                       services
Office Responsible for Administering TAA
•   No statutory provision. TAA was                •   Established an Office of Trade Adjustment                          •      No change
    administered under Labor’s                         Assistance at Labor, headed by administrator
    Employment and Training                            reporting directly to the Deputy Assistant
    Administration                                     Secretary for Employment and Training
                                                       Administration
Data Collection and Reporting
•   No statutory provision. In practice,           •   Requires Labor to implement a data system                          •      Requires Labor to update its
    states submitted quarterly data reports            by mid-August 2009 to collect information as                              data system by October 2012
    on the characteristics, activities and             prescribed in the statute, on (1) petitions filed,                        to collect additional information
    outcomes information for all individuals           certified and denied, (2) benefits received, (3)                          as prescribed in the statute,
    who received TAA services and benefits             training, (4) outcomes, and (5) rapid response                            on: (1) benefits received, (2)
                                                       activities as well as any other information                               training, (3) outcomes, (4)
                                                       Labor considers appropriate                                               spending as well as any other
                                                   •   Requires Labor to submit a report to Senate                               information Labor considers
                                                       Finance and House Ways and Means                                          appropriate
                                                       Committees no later than December 15 of
                                                       each year summarizing information collected,                       •      The deadline to submit a report
                                                       and including information on distribution of                              to Senate Finance and House
                                                       funds to each state and any                                               Ways and Means Committees
                                                       recommendations with respect to changes in                                was extended to February 15
                                                       eligibility requirements, benefits or training
                                                       funding
                                               Source: GAO analysis of Trade Act of 1974 as amended by 2002, 2009 and 2011 legislation.

                                               a
                                                The 2011 legislation required Labor, with regard to petitions filed between February 13, 2011, and
                                               October 21, 2011, to consider petitions and automatically reconsider denied petitions using the 2011
                                               eligibility provisions.




                                               Page 47                                                               GAO-12-953 Trade Adjustment Assistance
b
 Although the Omnibus Trade Act of 2010 extended the effective date of the expiration of the 2009
amendments to February 12, 2011, Labor interpreted this to mean petitions filed on or before 11:59
PM EST on Monday, February 14, 2011, the next business day after February 12, which was a
Saturday.
c
 Suppliers produce and supply component parts directly to other firms, which produced articles that
were the basis for a TAA certification. Downstream producers perform additional, value-added
production processes for firms producing articles that were the basis for a TAA certification. If a
worker’s firm is a supplier, and component parts it supplies to the primary firm accounted for at least
20 percent of production or sales of the worker’s firm, then the loss of business from the primary firm
by the worker’s firm is not required to have contributed importantly to the separation or threatened
separation.
d
 Public agency was defined as a department of agency of a state, local or the federal government or
a subdivision thereof.
e
    See third statement in table note c.
f
    The training fund amount was $143,750,000 for October 1, 2010 to December 31, 2010.
g
    The training fund amount will be $143,750,000 for October 1, 2013 to December 31, 2013.




Page 48                                                  GAO-12-953 Trade Adjustment Assistance
Appendix III: TAA Training Fund
Expenditures by State, as of March 31, 2012

                   Fiscal year 2009                                   Fiscal year 2010
                                           Percentage                                           Percentage
     Authorized            Expended         expended    Authorized             Expended          expended
AK     $881,072              $417,387             47      $294,208              $118,839                 40
AL   $11,057,729          $10,775,197             97     $9,627,476            $5,371,553                56
AR   $20,458,583          $13,523,121             66    $15,682,487            $5,827,743                37
AZ    $4,097,414           $4,097,414            100     $3,260,329            $1,400,548                43
CA   $29,149,155          $29,149,155            100    $17,405,603           $11,293,865                65
CO    $4,408,022           $4,408,022            100     $3,610,808            $3,382,426                94
CT    $7,874,131           $7,874,131            100    $10,939,232           $10,934,173              100
DC           $0                       $0            -           $0                       $0               -
DE           $0                       $0            -     $823,135              $551,333                 67
FL    $3,974,236           $3,273,833             82     $2,381,291            $1,018,302                43
GA   $18,592,632           $8,578,606             46    $13,549,578            $1,030,398                 8
HI     $465,447              $162,104             35            $0                       $0               -
IA   $11,784,901          $11,784,901            100     $5,461,537            $5,461,537              100
ID    $4,229,928           $4,229,928            100    $12,719,629           $12,081,816                95
IL   $22,260,179          $22,260,179            100    $20,358,555           $14,789,904                73
IN   $26,014,364          $26,014,364            100    $26,665,015           $25,861,499                97
KS    $2,951,445           $1,911,432             65     $1,178,510            $1,018,660                86
KY   $15,908,719          $15,908,719            100    $18,337,054           $16,447,886                90
LA    $2,769,101           $2,769,101            100     $2,782,637            $1,203,610                43
MA   $17,006,838          $17,006,838            100    $12,820,766            $9,454,442                74
MD    $2,454,015           $2,454,015           100%     $1,137,875             $518,068                 46
ME    $5,945,139           $5,323,793             90     $4,043,222            $1,425,309                35
MI   $55,570,709          $55,570,709            100    $81,984,160           $81,984,160              100
MN    $8,566,539           $8,566,539            100     $8,826,628            $8,826,628              100
MO   $13,941,423          $13,941,423            100    $17,940,408           $17,940,408              100
MS    $6,447,326             $933,023             14     $5,008,604             $336,465                  7
MT    $3,147,405           $3,147,405            100     $8,729,454            $8,729,454              100
NC   $58,199,987          $34,704,788             60    $48,399,437            $9,924,227                21
ND     $722,177              $722,177            100      $413,606              $413,606               100
NE    $1,420,917           $1,379,737             97     $1,244,390             $422,037                 34
NH    $2,210,051           $2,210,051            100     $3,903,295            $3,787,220                97
NJ    $7,332,226           $7,332,226            100     $5,513,879            $1,761,671                32
NM    $3,297,619           $3,297,619            100     $3,048,975            $3,048,975              100
NV     $732,583              $471,912             64      $263,888              $148,313                 56
NY   $12,521,835          $12,521,835            100    $15,370,985           $12,541,946                82




                              Page 49                                 GAO-12-953 Trade Adjustment Assistance
OH      $23,742,822   $23,742,822                        100           $25,221,843              $25,221,843              100
OK       $5,890,639    $3,710,782                          63            $4,349,196               $234,303                  5
OR      $14,294,376   $14,294,376                        100           $24,965,367              $24,965,367              100
PA      $31,762,854   $31,762,854                        100           $29,083,124              $24,913,905                86
PR        $850,934      $796,103                           94                $307,296             $229,157                 75
RI       $4,477,145    $4,477,145                        100             $5,814,205              $2,806,366                48
SC      $24,184,159   $21,418,512                          89          $17,005,487               $2,745,417                16
SD       $1,517,234    $1,517,234                        100             $4,534,640              $2,928,811                65
TN      $14,409,894   $12,238,626                          85          $12,315,372               $1,225,861                10
TX      $24,841,852   $24,841,852                        100           $18,241,477              $11,687,059                64
UT       $5,222,047    $5,222,047                        100             $3,337,142              $2,563,467                77
VA      $16,301,162   $12,984,989                          80            $9,860,769              $3,265,235                33
VT        $816,876      $816,876                         100                 $582,242             $582,242               100
WA      $14,945,560   $14,945,560                        100           $12,661,696               $8,134,309                64
WI      $21,160,654   $21,160,654                        100           $23,848,795              $23,848,795              100
WV       $7,237,945    $7,237,945                        100             $4,944,690              $4,220,557                85
WY              $0              $0                           -               $200,000               $62,918                31
Total   598,050,000   537,890,061                          90          580,999,997              418,692,634                72
                         Source: GAO Analysis of Department of Labor Data.

                         Note: Expenditure data are current as of March 31, 2011. Fiscal year 2010 funds can be drawn down
                         until September 30, 2012. Funds include both training funds and job search and relocation
                         allowances.




                         Page 50                                                        GAO-12-953 Trade Adjustment Assistance
Appendix IV: Comments from the
             Appendix IV: Comments from the Department
             of Labor



Department of Labor




             Page 51                                     GAO-12-953 Trade Adjustment Assistance
Appendix IV: Comments from the Department
of Labor




Page 52                                     GAO-12-953 Trade Adjustment Assistance
Appendix V: GAO Contacts and Staff
                  Appendix V: GAO Contacts and Staff
                  Acknowledgments



Acknowledgments

                  Andrew Sherrill, 202-512-7215 or sherrilla@gao.gov
GAO Contacts

                  In addition to the contacts named above, Laura Heald, Assistant Director;
Staff             Kathryn O’Dea, Ellen Ramachandran, and Wayne Sylvia made key
Acknowledgments   contributions to this report. Also contributing to this report were James
                  Bennett, Jessica Botsford, Susannah Compton, Daniel Concepcion,
                  Kathy Leslie, Jean McSween, and Vanessa Taylor.




                  Page 53                                 GAO-12-953 Trade Adjustment Assistance
Related GAO Products
             Related GAO Products




             Trade Adjustment Assistance: States Have Fewer Training Funds
             Available than Labor Estimates When Both Expenditures and Obligations
             Are Considered. GAO-08-165. Washington, D.C.: November 2, 2007.

             Trade Adjustment Assistance: Industry Certification Would Likely Make
             More Workers Eligible, but Design and Implementation Challenges Exist.
             GAO-07-919. Washington, D.C.: June 29, 2007.

             Trade Adjustment Assistance: Changes Needed to Improve States’ Ability
             to Provide Benefits and Services to Trade-Affected Workers.
             GAO-07-995T. Washington, D.C.: June 14, 2007.

             Trade Adjustment Assistance: Program Provides an Array of Benefits and
             Services to Trade-Affected Workers. GAO-07-994T. Washington, D.C.:
             June 14, 2007.

             Trade Adjustment Assistance: Changes to Funding Allocation and
             Eligibility Requirements Could Enhance States’ Ability to Provide Benefits
             and Services. GAO-07-701, GAO-07-702. Washington, D.C.: May 31,
             2007.

             Trade Adjustment Assistance: Labor Should Take Action to Ensure
             Performance Data Are Complete, Accurate, and Accessible.
             GAO-06-496. Washington, D.C.: April, 25, 2006.

             Trade Adjustment Assistance: Most Workers in Five Layoffs Received
             Services, but Better Outreach Needed on New Benefits. GAO-06-43.
             Washington, D.C.: January 31, 2006.

             Trade Adjustment Assistance: Reforms Have Accelerated Training
             Enrollment, but Implementation Challenges Remain. GAO-04-1012.
             Washington, D.C.: September 22, 2004.




(131087)
             Page 54                                 GAO-12-953 Trade Adjustment Assistance
GAO’s Mission         The Government Accountability Office, the audit, evaluation, and
                      investigative arm of Congress, exists to support Congress in meeting its
                      constitutional responsibilities and to help improve the performance and
                      accountability of the federal government for the American people. GAO
                      examines the use of public funds; evaluates federal programs and
                      policies; and provides analyses, recommendations, and other assistance
                      to help Congress make informed oversight, policy, and funding decisions.
                      GAO’s commitment to good government is reflected in its core values of
                      accountability, integrity, and reliability.

                      The fastest and easiest way to obtain copies of GAO documents at no
Obtaining Copies of   cost is through GAO’s website (http://www.gao.gov). Each weekday
GAO Reports and       afternoon, GAO posts on its website newly released reports, testimony,
                      and correspondence. To have GAO e-mail you a list of newly posted
Testimony             products, go to http://www.gao.gov and select “E-mail Updates.”

Order by Phone        The price of each GAO publication reflects GAO’s actual cost of
                      production and distribution and depends on the number of pages in the
                      publication and whether the publication is printed in color or black and
                      white. Pricing and ordering information is posted on GAO’s website,
                      http://www.gao.gov/ordering.htm.
                      Place orders by calling (202) 512-6000, toll free (866) 801-7077, or
                      TDD (202) 512-2537.
                      Orders may be paid for using American Express, Discover Card,
                      MasterCard, Visa, check, or money order. Call for additional information.
                      Connect with GAO on Facebook, Flickr, Twitter, and YouTube.
Connect with GAO      Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts.
                      Visit GAO on the web at www.gao.gov.
                      Contact:
To Report Fraud,
Waste, and Abuse in   Website: http://www.gao.gov/fraudnet/fraudnet.htm
                      E-mail: fraudnet@gao.gov
Federal Programs      Automated answering system: (800) 424-5454 or (202) 512-7470

                      Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-
Congressional         4400, U.S. Government Accountability Office, 441 G Street NW, Room
Relations             7125, Washington, DC 20548

                      Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800
Public Affairs        U.S. Government Accountability Office, 441 G Street NW, Room 7149
                      Washington, DC 20548




                        Please Print on Recycled Paper.