Economic Adjustment Assistance: Federal Programs Intended to Help Beneficiaries Adjust to Economic Disruption

What GAO Found

GAO identified 15 programs and 1 tax expenditure that met its definition of economic adjustment assistance (EAA), which was developed in consultation with relevant federal agencies and regional commissions. These programs and tax expenditure are administered by one of the following six agencies or commissions: The Appalachian Regional Commission (ARC) and the Departments of Agriculture (USDA), Commerce (Commerce), Defense (DOD), Labor (DOL), and the Treasury (Treasury). Programs differed in size. For example, according to agency officials, in fiscal year 2017 a DOL program provided about $974 million in grants to states to assist workers who had lost their jobs become reemployed; whereas a DOD program dispersed about $354,000 for grants designed to conduct research and provide technical assistance to communities affected by defense-related activities.

The EAA programs and tax expenditure GAO identified are:

• USDA's Economic Adjustment Assistance Program, which provides funds to help certain cotton users make capital investments in land and equipment to help the U.S. textile industry remain competitive by limiting market losses, plant closures, and declines in employment. 

• ARC's Partnerships for Opportunity and Workforce and Economic Revitalization Initiative, which is intended to help communities affected by job losses in coal mining, coal power plant operations, and coal-related supply chain industries due to the changing economics of energy production. 

• Commerce's programs are designed to assist communities experiencing adverse economic changes and businesses affected by trade through its Assistance to Coal Communities, Economic Adjustment Assistance, and Trade Adjustment Assistance for Firms programs. 

• DOD has five programs that work with communities facing potential economic impact due to changes within DOD or the defense industry. These changes can include base closures or realignments as well as budget cuts and layoffs that may accompany changes in defense programs, such as the cancellation of a DOD contract or weapon system program. 

• DOL's programs are intended to help dislocated workers, including those affected by trade or layoffs. The Workforce Innovation and Opportunity Act (WIOA) Dislocated Worker Formula Program is designed to help dislocated workers become reemployed by providing job search assistance, career services, and/or training. The National Dislocated Worker Grant Program temporarily expands service capacity at the state and local levels in response to significant dislocation events that cannot be accommodated within the operations of the formula-funded dislocated worker program. It also funds demonstration projects and provides state and local staff with training and technical assistance. The Trade Adjustment Assistance (TAA) for Workers program is intended to help workers adversely affected by trade with opportunities to obtain the skills and support necessary to return to the workforce in an in-demand industry. The TAA Community College and Career Training program is aimed at helping community colleges increase their capacity to provide education and training programs for in-demand jobs. Finally, Health Coverage Tax Credit Infrastructure National Dislocated Worker Grants provides funding to state workforce agencies to provide health insurance coverage assistance and support related services to eligible trade-affected workers. 

• Treasury is responsible for administering the Tax Credit for Health Insurance Purchased by Certain Displaced and Retired Individuals (also known as the Health Coverage Tax Credit), a tax expenditure that reduces the after-tax cost of health insurance for individuals who lose their jobs due to trade.

Why GAO Did This Study

Individuals, businesses, and communities in the United States have had to change how they work or operate because their jobs or economies have been affected by external forces, such as trade agreements or defense or energy policies. GAO was asked to assess the federal programs specifically targeted toward helping individuals, businesses, and communities adjust to economic disruptions that reduce the demand for certain workers, commonly referred to as programs that provide EAA. The federal government provides EAA through programs and tax expenditures. Developing an inventory of EAA programs is the first step in assessing the scope of the federal government's involvement in this area, as well as determining whether these programs are effective, efficient, and able to meet current and future needs.

This report describes the GAO-identified federal programs and tax expenditure that support economic adjustment, including their objectives, eligibility requirements, beneficiaries, obligations, and expenditures. For the purposes of this report, GAO (1) developed criteria, in consultation with relevant agencies and commissions, for including programs and tax expenditures by identifying the characteristics closely associated with EAA, (2) identified programs and tax expenditures that met the criteria by interviewing agency officials and searching the Catalog of Federal Domestic Assistance and relevant tax expenditure documents, and (3) surveyed relevant agencies asking them to confirm or provide program or tax expenditure information.

GAO is not making recommendations in this report.

For more information, contact Cindy S. Barnes at (202) 512-7215 or brownbarnesc@gao.gov.