CABINET COUNCIL ON ECONOMIC AFFAIRS PLANNING MEETING - JANUARY 8, 1985 8:45 A.M. - ROOSEVELT ROOM TOPIC: EMPLOYMENT POLICY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87M00539R002303820021-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 26
• Document Creation Date: December 22, 2016
• Document Release Date: April 27, 2010
• Sequence Number: 21
• Publication Date: January 4, 1985
• Content Type: MEMO

Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
EXECUTIVE SECRETARIAT
ROUTING SLI P
ACTION
INFO
DATE
INITIAL
1
DCI
2
DDCI
3
EXDIR .
4'
D/ICS
5
DDI
6
DDA
X
7
DDO
8
DDSBT
9
Chm/NIC
10
GC
11
IG
12
Compt
X
13
D/Pers
14
D/OLL
15
D/PAO
66
SA/IA
17
AO/DCI
18
C/IPD/OIS
19
NIO/ECON
X
20
21
L
22
an
3637 (1041)
Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
E afire Secretary
85
J
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
THE WHITE HOUSE
WASHINGTON F",.. '.`.
8S 037
CABINET AFFAIRS STAFFING MEMORANDUM
Date: 1/4/85 Number: 169111CA Due By:
'Subject: Cabinet Council on Economic Affairs Planning Meeting - January 8, 1985
ALL CABINET MEMBERS
Vice President
State
Treasury
Defense
Attorney General
interior
I Agriculture
Commerce
Labor
HHS
HUD
Transportation
Energy
Education
Counsellor
A ~
CI
UN
U STR
GSA
EPA
NASA
OPM
VA
SBA
REMARKS:
TOPIC: Employment Policy
Action
FYI
Action,
CEA L9'
CEQ ^
^
OSTP ^
0
^
0
^
(ld'
r
~
^
2
^ ,
0
Baker
?H
^ .
0
Deaver
Darman (For WH Staffing)
Mc Farlane ^ ,
0
Svahn
rh man
Q
'-
0
^ .
.
0
f]
11
^
~1u1__ '
Executive Secretary for:
CCCT ^
^
^
CCEA 0r
^
^
CCFA ^
^
^
CCH R ^
^
^
CCLP ^
^
^
CCMA ^
^
^
CCNRE ^
There will be a Cabinet Council on Economic Affairs Planning
Meeting on Tuesday, January 8, 1985, at 8:45 A.M. in the
Roosevelt Room.
The agenda and background papers are attached.
RETURN TO:
^ Craig L. Fuller ^ Don Clarey [H" Tom Gibson .0 Larry Herbolsheimer
Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
Tar LdDIDPT {ArTalrc n .....t 1-1 --- . u
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
MEMORANDUM FOR THE CABINET COUNCIL ON ECONOMIC AFFAIRS
FROM: ROGER B. PORTERQIA
SUBJECT: Agenda and Papers for the January 8 Meeting
The agenda and papers for the January 8 meeting of the
Cabinet Council on Economic Affairs are attached. The
meeting is scheduled for 8:45 a.m. in the Roosevelt Room.
The Council is scheduled to continue its consideration
of the report of the Working Group on Employment Policy, which
last reported to the Council on December 13. The January 8
meeting will focus on three'issues:
2. Summer Youth Employment and Training Program Fund
Distribution
Papers on the first two topics were distributed on
December 11. Copies of them are attached for your
convenience.
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
January 8, 1985
8:45 a.m.
Roosevelt Room
1. Report of the Working Group on Employment Policy (CM# 510)
Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
(MEMORANDUM FOR THE CABINET COUNCIL ON ECONOMIC AFFAIRS
FROM: THE WORKING GROUP ON EMPLOYMENT POLICY
SUBJECT: Targeted Jobs Tax Credit Extension
Issue: Should the Administration support extension of the
Targeted Jobs Tax Credit program and, if so, should the
Administration propose any program changes and how long
of an extension should it support?
The Targeted Jobs Tax Credit (TJTC) program is designed to
encourage employers to hire disadvantaged individuals from
certain target groups and recipients of certain welfare payments.
The credit is scheduled to expire December 31, 1985. There will
almost certainly be legislative proposals in the 99th Congress to
extend it.
Background
The Revenue Act of 1978 created the TJTC for a three-year
period expiring on December 31, 1981. The Economic Recovery Tax
Act of 1981 extended TJTC for one year and the Tax Equity and
Fiscal Responsibility Act of 1982 extended the program for two
additional years to December 31, 1984. The Deficit Reduction Act
of 1984 extended TJTC through December 31, 1985.
percent of the first $6,000 of an eligible employee's1wagesLin
the first year of employment and 25 percent in the second year
for seven designated groups:
0 Economically disadvantaged youth aged 16-24;
0 Economically disadvantaged Vietnam veterans under a'-"
35;
o Economically disadvantaged ex-convicts;
o Recipients of Supplemental Security Income;
I,I
0 'Recipients of general assistance;
it
o Students in qualified cooperative education progra-s?
ii
0
o Handicapped persons referred by vocational
rehabilitation programs.
ii
Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
In extending the credit, Congress has made several
structural changes:
o Limited eligibility of cooperative education students
to those who are economically disadvantaged.
Limited the retroactive certification of persons
already hired.
0 Added disadvantaged youth for summer jobs as an ? .
eligible target group. (This credit is 85 percent'of
wages up to $3,000 for the 90-day period beginning May
1 of each year.)
o Removed the age limitation for Vietnam veterans.
o Added Work Incentive (WIN) program participants and Aid
to Families with Dependent Children (AFDC) recipients
as eligible target groups, which had been subjects of a
separate credit.
o Removed Comprehensive Employment and Training Act
(CETA) public service employees who were laid off as an
eligible target group.
State employment service agencies administer the TJTC and
certify individual workers for qualification in specific target
groups. The Internal Revenue Service is responsible for the
applicable regulations.
The scope of the program has expanded substantially since it
was enacted in 1978. The number of TJTC certificates issued i3
as"follows:
Fiscal year Certifications
Percent char:e
1979
?
37,020
NA
1980
305,743
NA
1981
411,581
34.6
1982
?
202,261
-50.8
1983
397,644?
96.6
1984
(estimated)
508,500*
29.8
? Excludes summer youth certifications: 33,538 in 1983; 27,r^n
1984.
The substantial decline in certifications in FY 1982 wa-
largely due to the elimination of non-disadvantaged cooperative
education students as an eligible group. The limitations cn
retroactive certifications also contributed to the decline .n
certifications.
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
-3-
Economically disadvantaged youth, the largest target
group, accounted for 62 percent of TJTC jobs obtained in the
first three quarters of FY 1984. In addition, a substantial
number of youth obtained jobs through the summer youth TJTC
program.
AFDC recipients accounted for 16 percent of TJTC jobs.
Attachment 1 outlines the number of certifications for each
target group.
About 42 percent (30 percent black and 12 percent other) of
those individuals obtaining jobs under the TJTC were from
minority groups. In addition, 56 percent of those certified were
male and 76 percent were under 24 years old. Attachment 2
outlines the demographic composition of TJTC participants.
Over 40 percent of the jobs for which individuals were hired
under the credit were in service occupations. The next highest
proportion of jobs was in clerical and sales occupations (19
percent). Attachment 3 outlines the distribution of occupations
among TJTC participants.
There is no definitive measure of the net employment impact
of TJTC on participants. The relevant criteria for judging the
program include:
o To what extent does the TJTC act as a tax loophole by
permitting employers to claim the tax credit from hiring
persons they would have hired without the credit.
o To what extent does obtaining ,a job under the TJTC enhance
the likelihood of obtaining permanent, unsubsidized
employment?
o To what extent do persons hired from the target groups ur.rer
the TJTC displace non-target group members. For example, in
employers tend to hire disadvantaged youth instead of
disadvantaged adults in order to earn the credit?
o Could the objective of enhancing employment
opportunities oe youth be met more effectively and at les-
cost-by simply lowering the-minimum wage and removing ct`.?tr
unnecessary employment. barriers?
The Department of Labor has contracted with Macro Systerz,
Inc. to evaluate the impact of the TJTC. The study will seek
estimate the net employment and earnings effects of the credit ?n
the target groups over a period of 15 months after they are hi: 1
and to measure the extent to which the hiring of TJTC-eligible
Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
individuals displaces workers from the non-eligible population.
Macro Systems started the study in August 1984 and expects to
complete it by the end of 1985.
Budget Implications
TJTC affects the budget in two ways. The more important
one, by far, is tax expenditures.
Tax Expenditures. The following table displays estimates of tax
expenditures for TJTC: -
Revenue loss
Fiscal year (in $millions)
1982 235
1983 290
1984 465
1985 1000
Budget Outlays. The TJTC increases budget outlays through costs
incurred by the Department of Labor in administering it. For
fiscal years 1982 through 1985, these administrative costs were
about $20 million annually. The Department is requesting approp-
riations in FY 1986 of $35 million. The $15 million increase is
aimed at meeting the high level of employer interest that has
developed in the program as economic conditions have continued to
improve.
Recent Legislative Proposals
The Deficit Reduction Act of 1984 extended the TJTC thrc?_:r.
December 31, 1985. The Senate-passed version would have ext-r?.d
the TJTC three years, while the House-passed version did not
contain an extension. The Conference Committee agreed on a
one-year extension, which was supported by the Administratic'r.
A number of other TJTC-related legislative proposals
were introduced in the 98th Congress. Some would have exter.rc!
the program for five years. Others would have added new tar:.:'
groups. A list of these proposals is found at Attachnent 4.
Policy Objectives
There are at least two major generic objectives which
should attempt to meet:
 1. Increase employment and earnings of target groups by a
greater amount than otherwise would have occurred. A tax
credit program should increase employment of those groups
targeted above that would have taken place in the absence of
the the credit. Moreover, a program should increase the
likelihood of participants obtaining permanent, unsubsidized
employment.
2. Achieve greater employment and earnings while minimizing
program costs. A lobs program should achieve its employment
objectives while minimizing costs. If there are a variety
of programs that can achieve the same increase in employment
and earnings, the government should choose the program which
expends the fewest resources.
Policy Options
There are two basic policy issues that need to be addressed.
Issue 1: Should the Administration support extension-of the
LJTC?
Option A: Allow the TJTC to expire after December 31, 1985.
Advantages
o While the net employment benefits of the TJTC are
uncertain, its costs are certain. Allowing the TJTC to
expire would reduce FY 1986 tax expenditures by about
$1.0 billion and reduce budget outlays of about S35
million in administrative costs. Moreover, expiration
would reduce future fiscal year tax expenditures, which
would probably increase if the credit were extended.
0 TJTC may provide sizable windfalls to employers who ^3v
have hired many individuals even in the absence of the
credit.
o The Federal Government already provides much employment
and training assistance to youth, especially those ?-ho
are economically disadvantaged, largely through the
JTPA. Moreover, the Administration is proposing the
establishment of a Youth Employment Opportunity Wage,
which would further help youth.,. particularly those who
are economically disadvantaged.
Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
 o Unless the Administration proposes allowing TJTC to
expire now, growing support for the program would make
the credit permanent.
Disadvantages
0 Allowing expiration could be interpreted as a retreat
from the Administration policy of encouraging the
movement of the economically disadvantaged into private
sector jobs. ?
o Segments of the business community and target groups
benefiting from the credit will strongly oppose
expiration.
o Allowing expiration may reduce support for the Admin-
istration's youth employment opportunity wage (YEOW)
proposal since some groups supporting YEOW may perceive
TJTC as a necessary complement to YEOW.
Option B: Propose extending the TJTC for at least two years.
Advantages
o Proposing extension would affirm the Administration's
commitment to the placement of the economically
disadvantaged in private sector jobs.
o The program could be modified to restrict eligibility
and limit costs.
Disadvantages
o Extending the program would result in a revenue loss
of about $1.0 billion in FY 1986 and perhaps more it
future fiscal years.
o Given the large projected out-year deficits, it is
difficult justifying expending resources on a proar.i-
with uncertain and unproven benefits, especially when
there exists alternative youth employment prograric
have demonstrated effectiveness.
Issue 2: If the Administration supports extension, should it
propose any program changes?
Option A: Propose TJTC extension while: a) limiting the to
groups to economically disadvantaged youth and we??
recipients; and/or b) changing the nature of the
credit, for example, reducing the credit for disad-
vantaged summer youth from 85 percent of wages to
percent, the same credit available to other groups.
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
There are already seven target groups under the TJTC and a
number of legislative proposals would, if enacted, add seven more
target groups. The expansion of the scope of the credit
diminishes its effectiveness as an incentive for hiring the basic
group for which it was created: the economically disadvantaged.
In addition, the proliferation of target groups makes the TJTC
more difficult to administer.
An alternative to the proliferation of target groups would
be to reduce the current number of target groups eligible to
economically disadvantaged youth and welfare recipients.
o A reduction in the number of target groups would assure
targeting of resources to those most in need.
o A reduction in the number of target groups and/or a
change in the nature of the credit would result in a
lower loss of revenue. A direct extrapolation of
reducing the number of target groups to economically
disadvantaged youth and welfare recipients suggests
that the FY 1986 revenue loss would be $800 million,
instead of $1.0 billion. However, the revenue loss
could be greater or less.,
o It would streamline the administration of the program.
Disadvantages'
o Given the congressional pressure for expanding the
scope of the program, proposing a reduction in the
scope could alienate support in the Congress for the
TJTC itself.
o A reduction would encounter opposition from
disqualified target groups.
o Changing the nature of the credit could reduce the
incentive for employers to hire individuals from the
targeted groups.
 Option B: Propose TJTC extension without amending the
credit.
o Maintaining the current scope of the program enables
the government to target specific groups.
Disadvantages
o Maintaining the current scope makes it less likely that
employers will hire economically disadvantaged youth.
o It would keep the costs of the program high since the
credit would be available to a large number of target
groups.
 Attachment 1
Targeted Jobs Tax Credit Certifications
Issued by Target Group: First Three Quarters FY 1984
(October 1, 1983 - June 30, 1984)
Youth, Economically
Disadvantaged 235,766 61.5
Vietnam Veterans,
Economically
Disadvantaged
Ex-convicts, Economically
Disadvantaged 19,924 5.2
Vocational
Rehabilitation 27,644 7.2
General Assistance
Recipients
16,789 4.4
Supplemental Security
Income Recipients 1,094 0.2
TOTAL 383,541 1/ 100.0
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
Attachment 2
Demographic Characteristics of Certified Individuals
First Three Quarters FY 1983.
TJTC
Percent of Total
Demographic Characteristics 1983
Male
55.8
Female
44.2
16-18
Years
Old
14.3
19-24
Years
Old
61.4
25-34
Years
Old
17.0
35 Years Old
or Over
7.3
White, Not Hispanic
57.9
Black, Not Hispanic
30.1
Hispanic
8.8
American Indian/Alaskan Native
0.6
Asian or Pacific Islander
2.6
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
II
Attachment 3
Occupations of Certified Individuals
First Three Quarters FY 1983
? ? TJTC
Percent of Total
Occupational Groups
1983
Professional, Managerial, Technical
2.1
Clerical and Sales
18.6
Service
40.8
Farming, Forestry, Fishery
2.4
Processing
4.9
Machine Trades
5.0
Benchwork 1/
7.6
Structural
5.4
Miscellaneous
13.2
Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
Attachment 4
Proposed Legislation in the 98th Congress
to add additional target groups to TJTC
H.R. 2127
Kennelly
Ferraro
H.R.
2180
Rinaldo
H.R.
3211
Hammerschmidt
H. R.
3414
Seiberlinq
H.R.
4208
Bilirakis
t azzoli
Sasser, Nunn
Levin, Johnston,
Pressler
Helms, Domenici,
Thurmond
Economically disadvantaged,
aged 55 or older
Handicapped individuals
(added to WIN tax credit)
Economically disadvantaged,
delinquent youth (16-18)
Individuals unemployed one
year or who have exhausted
unemployment benefits
Low income older workers
(65 or older).
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
SUBJECT: Summer Youth Employment and Training Program
Fund Distribution
Issue: How can the Administration better target Summer
Youth Employment and Training Program funds to
areas with the greatest need?
The Summer Youth Employment and Training Program (SYETP) is
designed to subsidize minimum wage public sector summer jobs for
economically disadvantaged youth between the ages of 14 and 21.
Because of certain provisions in the distribution
formula, large cities faced significant funding reductions in
1984. As a result, Congress appropriated an additional $100
million in both the 1984 and 1985 program years to make up for
the potential shortfall.
Large cities typically have more youth who would be eligible
for the program and relatively fewer unsubsidized jobs available
than suburban and rural areas. Unless the distribution formula
is changed, areas with the greatest need will receive inadequate
funding, while areas with less need will receive more funding.
Summer youth employment programs began with the Neighborhood
Youth Corps, authorized by the Economic Opportunity Act of 1964.
Initially, the summer program operated in a small number of
cities and its purpose was to provide short-term, part-time jobs
to in-school youth living in areas with few private sector jobs.
The implicit objectives of the program were to: a) give
unemployed youth something to do during the summer monttis; and
b) provide these youth with an opportunity to earn a paycheck.
There was little emphasis on providing youth with marketable
skills for later entry into the job market.
In 1973, the Comprehensive Employment and Training Act
(CETA) consolidated a variety of categorical programs into one
system of Federal, State, and local programs targeted primarily
at economically disadvantaged individuals. While previous suer-.(,.r
youth programs concentrated their efforts in urban labor markets,
CETA spread these efforts nationwide. Summer youth programs were
initiated in many smaller cities, suburban jurisdictions, and
 rural areas. Appropriations for summer youth programs began to
increase rapidly from $305 million in 1974 to $839 million in.
1981.
In 1982, the Job Training Partnership Act (JTPA)
reauthorized the summer youth programs, calling them the Summer
Youth Employment and Training Program. The targeting and service
provisions in the program are essentially the same as those in
the programs that existed under CETA.
The program restricts eligibility to economically
disadvantaged youth and the services include: work experience,
basic and remedial, education, skill training, employment
counseling, and supportive services. The predominant activity
remains work experience, i.e., part-time jobs in public or
non-profit agencies. The type of work includes general
maintenance and clean-up, simple clerical, and other low-skill
activities. Appropriations for FY 1985 total about $825 million.
Prior funding and participation levels are found at Attachment 1.
Definitive impact evaluations have not been conducted on the
summer youth programs. Analysts generally agree that, absent any
emphasis on the development of the youth's basic skills and
competencies, the programs have done little, if anything, to
improve the long-term earnings and employment of participants.
Furthermore, it is unclear whether the summer youth programs
provided more job opportunities in.some areas than those that
would have been present in the absence of the programs. However,
job opportunities in inner city areas have been declining over
time and it is probable that summer youth programs have created
new jobs in those areas.
Distribution Formula
Under JTPA, the Federal Government distributes funds to the
States, which in turn distribute funds among approximately 600
Service Delivery Areas. These are local units of general
government, or consortia of such units, that are' responsible for
program delivery.
The distribution of funds to the States is subject to a 9C
percent hold-harmless provision, i.e., each State receives at
least 90 percent of its previous year's allocation. There is no
comparable hold-harmless provision in JTPA for the distribution
of funds from the states to the Service Delivery Areas.
Since JTPA uses a different distribution formula from that
used in CETA and does not use a hold-harmless provision at the
Service Delivery Area level, many areas could have experienced in
1984 significant funding reductions from the levels they recei?.:ed
under CETA.
 These reductions would have been especially severe in larger
cities where large numbers of eligible youth reside and
relatively fewer unsubsidized jobs are available.
To avoid these potential shortfalls, Congress appropriated
an additional $100 million for both the 1984 and 1985, summer
programs. These supplemental funds are to be used, to the extent
possible, to keep local summer youth funding at the same levels
as those under CETA. In 1984, about one-half of. the $100 million
supplemental was provided to the 50 largest cities.
At the same time the JTPA distribution formula reduced
resources. to the urban areas, the formula expanded resources for
suburban and rural areas which tend to have proportionately
smaller numbers of eligible youth and more unsubsidized jobs.
Initial estimates indicate that a substantial amount of.the 1984
summer program funds were unused. These estimates indicate that
18 percent, or $150 million of the $825 million available, was
unused in 1984. An estimated 150,000 job opportunities may have
been lost this past summer.
While these unused funds can be used in future years, they
cannot be reallocated among jurisdictions. Unless the JPTA
distribution formula is changed, areas most in need will continue
to receive relatively less funding than those areas with less
need.
Policy Considerations
There are a number of policy objectives the Summer Youth
Program should attempt to meet:
o Provide job training. Although most of the jobs provide
youth earnings and activities in which to engage during the
summer, analysts generally agree that the program does
little to improve the long-term earnings and employment of
participants. To provide youth more than a temporary job,
the program should include actual training to develop job
skills and work habits.
o Target resources to those areas with greatest need. The
current distribution formula is based on aggregate
unemployment and poverty data for both adults and youth.
The formula does not necessarily distribute funds
effectively toward those areas with youth who are most
likely to benefit from it. In fact, these youth are
concentrated in urban areas with high rates of joblessness
and high concentrations of economically disadvantaged.
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
Any attempt to develop a formula that distributes
funds more effectively toward needy youth will be limited by
currently available labor market data. Statistics on total
youth unemployment are available by State but not by
specific age category, or by minority or disadvantaged
status. Moreover, data at both the State and local levels
do not reflect timely or accurate changes in the youth labor
force and youth unemployment. Therefore, it will be
difficult to identify those areas which have the
proportionately largest numbers of youth who are unemployed
or disadvantaged.
o Assure that the program size is commensurate with the size
of the youth population. Bureau of Labor Statistics data
show that the youth population has declined since 1978. For
example, the number of youth aged 16-19 in the labor force
declined from 9.7 million in 1978 to 8.2 million in 1983.
Likewise, the minority youth population has declined in
size as shown in Attachments 2 and 3. Youth unemployment
has leveled off and begun to decline in many areas.
The Federal Government should review whether the size of
the Summer Youth Program should be adjusted to accommodate
this demographic shift.
o Allow jurisdictions to adjust gradually to funding changes.
Because of-the absence of a hold-harmless provision in JTPA
at the Service Delivery Area level, local areas can
experience substantial year-to-year shifts in funding. Not
only can substantial annual changes make it difficult for
local areas to adjust their programs; substantial reductions
in funding can significantly increase the political
pressures for increased appropriations.
Policy Options
The Working Group has developed three options for addressing
the deficiencies in the current Summer Youth Program distributior
formula.
Option 1: Maintain the status quo by continuing to use the
current distribution formula without adjustment.
Advantage
o Maintaining the status quo would eliminate the need
Congressional action and opening up JTPA, which risks
unnecessary funding increases.
ii
Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
 Disadvantage
o There will continue to be strong pressure on the
Congress to appropriate additional funds to compensate
for the relatively low funding to urban areas with
greater need.
Option.2: Retarget funds to large urban areas through:
A. Using the current distribution formula, but raising
the threshold levels for "areas of substantial
unemployment" (to an unemployment rate of 10
percent) and "excess unemployment" (to the level of
the annual average national unemployment rate).
B. Targeting funds in a manner similar to A., but
using data specific to youth, instead of aggregate
data which includes both adult and youth, to
determine the areas with the greatest proportion of
unemployed and economically disadvantaged
individuals.
C. Using the current distribution formula, but
permitting Governors to apply the 90 percent
hold-harmless provision to allocations of funds to
Service Delivery Areas.
Advantages
o Raising the threshold levels in the distribution
formula would increase the proportion of funds directed
to those areas with the most unemployment.
o Since urban areas would tend to receive more funding
under these criteria, there would be less pressure on
the Congress to provide supplemental funding to
compensate for the shortfall to urban areas.
o This option would provide an opportunity to reduce
program appropriations since raising the threshold
levels would direct resources more accurately, enabling
the program to meet employment needs in more areas with
fewer dollars.
o Targeting funds to large urban areas by using data
specific to Youth would more effectively target
resources toward those areas with high youth
unemployment, rather than areas with high unemployment,
in general..
Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
o Applying the hold-harmless provision at the area level
would avoid program disruption in both the losing and
gaining areas, permitting them to adjust gradually.
Disadvantages
o Raising the threshold levels without using data-
specific to youth would still not necessarily target
most resources toward those areas with the highest
youth unemployment rates.
o Because of limitations in currently available labor
market data, it will be difficult to identify those
areas which have the proportionately largest numbers of.
youth who are unemployed and/or disadvantaged.
o Proposing these changes in the program would require
legislation, which would open up consideration of JTPA
and risk unnecessary funding increases.
Option 3: Merge the Summer Youth Program with the basic JTPA
block grant, which authorizes the full spectrum of
training and employment services for adults and youth.
Advantages
0 This would permit Governors and Service Delivery Areas
to address summer youth employment in the way they deem
most appropriate.
o Preliminary data suggests that the basic block grant
program is effective in placing participants in private
sector jobs. Given the lack of skill training in the
current Summer Youth Program, it is unlikely that it
will significantly improve the long-term employment and
earnings prospects of participants. By contrast, at
least 70 percent of the block grant's funding must be
used for training.
o Merging the Summer Youth Program with the basic block
grant would likely reduce administrative costs.
Disadvantages
0 Proposing a merger may result in Congress both
continuing funding of the Summer Youth Program and
increasing funding of the block grant program.
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
o Unless the formula for the basic block grant program is
modified, funds would not necessarily be targeted.
toward areas with the greatest youth unemployment
needs.
0 Merging the two programs could result in less funding
for summer employment when youth unemployment is
greatest, if Governors and Service Delivery Areas do
not allocate sufficient funds for summer employment..
Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
 CALENDAR YEAR SUMMER PROGRAM
FUNDI'.1G AND PARTICIPANT LEVELS
Calendar Year Funding Levels Participants
(millions)
1985a
824.5
817,200
1984a
824.5
817,200
1983
824.5
813,200
1982
674.6
683,198
1981
839.0
776,717
1980
608.6
855,700
1979
785.2
882,700
1973
756.0
898,566
1977
595.0
907,193
1976
525.4
1,1311600b
1975
473.4
941,598
1974
305.6
862,502
1973
222.0
913,900
1972
332.2
759,361
1971
257.9
602,200
1970
185.5
461,700
1969
148.0
423,300
1968
126.8
360,000
1967
133.3
261,700
1966
121.1
182,800
1965
N/A
114,500
aThese represent approved budget levels for 1984 and 1985;
participant levels are projections based on estimated
participant unit costs.
bincludes FY 1976 transition quarter.
 Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
EMPLGY1E::T STATUS )F THE C2:ILI:.:i ::v:: I::ST: :!1T17JAL PCPULATI0:7
3Y AGZ A2;D SFX. 1970-1383
:,,and 15 Year Olds
Civilian
1oninst.
Pcoulation
Civilian
Labor
F.:r:e
v 1000)
1. ..')l
1970
7933
153
1971
9123
lc co
1972
8299
1973
8342
162
1974
8447
17:3
1975
849L
1631
1976
8422
!6 6
1977
8359
1973
9227
1979
8009
:633
1080
76:
351
!I 1982
'!'i
19?1
7151 '
1370
14519
:?-!
15''?22
1972
5510
1273
15547
1974
16 190
19'5
16413
587)
1976
16614
o.
1271
16668
335II
1974
16c95
197?
1665-
190_?0
16543
1951
:621_4
1942
!5763
:9'?3
15274
1970
5322
__ '
:971
16345
..3:_
'.972
.. 1.,_
:;...
1073
176 :?:
1974
17994
!33'.
1975
18595
!3'-1
:o7
19109
14:
1977
L9582
19 9
-01_07
!373 .
29353
990
_o_.
1961 20221 .. ..
19-2
Participation
Unemploy-
Unemoloy-
Not in
Labor
Rate
E-1clon^ent
vent
ment Rate
Force
(QUO)
1000
OJU1
19.2
1262
168
11...
6454
!?.3
1393
183
'1!.7
6563
19.4
1417
192
11.3
6659
23.J
148L
190
11.4
o673
20.2
1479
230
12.4
0740
1?._
1396
235
14.4
6,361
10.3
1363
238 -
14.J
6876
30.?
1485
263
6612
21.-
1.492
274
646!
20.3
1393
253
6369
!193
226
_c.)
d254
.-.5
1073
214
17
:5
203
5937
lo.c
992
199
14.o
5990
o144
1106
41 7
6209
1262
:E.!
7552
6746
1308
456
%271
1235
=333
>?:'.
7443
1422
-5.33
-:.3
71C4
1767
-549
7236
1719
7553
56.3
76:3
1663
57.d
9070
1533
'243
57.)
9CE3
1555
-01?
,710
1669
7
7:65
7225
1763
'?.
6543
'977
6342
1E23
3
%31
?366
1'333
1005
2101
1212
_153:
1865
:3194
lb33
141.1
.4 Z-
Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8
 Sanitized Copy Approved for Release 2010/04/27 : CIA-RDP87M00539R002303820021-8
alack Workers
t4 and 15 Year OLds
CNP
CLF
P/it -
Fill'
I111EMP
11/R
1970
[129
147
13.0
104
44
29.9
I
1150
136
11.7
10
44
32.6
2
1204
,146
12.1
95
50
34.5
3
1232
121-
10.4
li)
46
35.4
4
1294
155
12.0
90
-50
37.2
S
1116
14(1
10.6
04
56 .
40.1)
6
1336
131
10.3
79
59
42.3
7
13313
145
1'0.:1
35
60
41.6
0
1342
164
12.2
16
60
41.7
9
1330
146
10.)
03
63
43.1)
1930
1310
120
9.7
74
55
42.7
1
1294
115
1.n
65
41)
42.6
2
1':21')
:lu
o.-1
4 5
4 1
4 7 . 7
3 1
1261
101
0.u
513
43
42.6
16 to 19 Year Olds
L970
'
11)5
`109
40.4
574
_ IS
29. 1
t?
2'104
737
37.0
5313
211
3L.6
2
211;1
7:111
39.,)
51'1
21.1
35.1
3
2'3)5
.33)
3-3.3
.'.'
2'
11.i
4
2137
051
30:3
5,4
2')7
35.-1
5
2111
0113
3.1.2
5;,
31.3
1.3
13
2264
.111
17.1
5)1
J 111
39..?
7
2273
1,1
37.)
Sn%I
354
11.1
13
2270
130
41.0
571
3nI
30.7
9
2,76
112
1:%..)
57)
331
36.5
1100
2209
011
39.-'
-547
143
30.5
t
221317
.i:2
1. ?
3;'
41 . )
22+2
`('1
i....
,.')
3.1,E
3.3.1
1
..... ,
1 1
1...
I : ,
I 'J
1 1 . S
20 to 24
Venr (1135
1970?
I'S
I 157
(.I
I I7'
13. 1
I?,.7
2
.727
II')
L I 7
IL..-.
3
2)32
II-I'
?-1.I
I]'..1
I i . S
4
7137
I.7
..1.i
I.`)7
I?..
5
_...:-1
'1477
.1
1115
.,
_,' l
I II
in I
.1
5.4 I
i 7 1'
I!.
.'
...
, / )J
1
I5'',
I''H0
i., b,
I o12
..
I I'.1
I
21 ...1.!
l i!-i
..'?
114?,
2
1
2' 11
I '?I .
, 1. 1
1 ...
' Fnr
th.:sn years -I.,, 1
r+llr.?.;.,.; ,
nl'.
111 .
.r 11n
ri 11....
rnr
other tars the dar..1 r-: 1
y CIi?cty .11 .,t4i .,nly.
11 ELF
9112
1'123
1059
1103
1139
1177
1119
11'13
II 74
1192
Sanitized Copy Approved for Release 2010/04/27: CIA-RDP87M00539R002303820021-8