600 Income Security:Let Trade Adjustment Assistance Expire
-
2016823
-
2017867
-
2018897
-
2019922
-
2020947
-
2021973
-
20221000
-
20231028
-
20241055
-
20251084
-
2016-20204456
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2016-20259596
Sources
Savings based on CBO projections of program cost as found in “CBO’s April 2014 Baseline for Farm Programs,” April 14, 2014. The CBO projections include program costs through 2024. We assume costs of $1,084 in 2025, using the same percentage increase in costs from 2024 to 2025 as occurred between 2020-2024.
×Technical Notes on Scoring
CBO Baseline
Unless otherwise noted, calculations for savings for each recommendation relies on the most recent Congressional Budget Office baseline, as found in “An Update to the Budget and Economic Outlook: 2014 to 2024,” published August 27, 2014, has been used.
Savings “Totals”
While totals for the five and 10 year savings are provided by section and for the complete set of recommendations, there are two reasons they should not be viewed as representing total savings for The Budget Book.
First, as noted in the introduction, The Heritage Foundation would recommend that the savings realized in the Function 050 Defense section would stay within the Department of Defense to strengthen the nation’s defense capabilities.
Second, the numbers cannot be deemed to represent the realized savings if every single recommendation were adopted because policy changes made in one program can impact spending levels in other programs. Thus, the numbers in the table do not reflect any potential interactions between the various policy changes affecting spending or savings.
×Heritage Recommendation:
The entire Trade Adjustment Assistance (TAA) program was set to expire on December 31, 2014. However, Congress extended the life of the program through FY 2015 with passage of the Consolidated and Further Continuing Appropriations Act of 2015. Congress should not reauthorize TAA again, and should let the program expire at the end of FY 2015. This proposal saves $823 million in 2016, and $9.6 billion over 10 years.
Rationale:
If congress let the TAA program expire at the end of 2015, we would save $9.6 billion.
TAA provides overly generous government benefits to American workers who lose their jobs because of foreign trade, even though these workers are a small fraction of laid-off workers.
However, is there any evidence that this assistance and training improves earnings based on newly acquired job skills? Program evaluations of TAA say no. This finding should not be surprising, because scientifically rigorous evaluations of federal job-training programs have consistently found these programs to be highly ineffective.
A 2012 quasi-experimental impact evaluation of TAA by Mathematica Policy Research and Social Policy Research Associates builds upon the consensus of three previous quasi-experimental impact evaluations that have found TAA ineffective at improving the employment outcomes of participants. Thus, Congress should let this costly and ineffective program expire by not reauthorizing the program.
Overall, there is little empirical support for the notion that TAA improves the employment outcomes of displaced workers. In fact, TAA participants are more likely to earn less after participating in the program. This trend was also confirmed by a Government Accountability Office report that concluded that TAA participants are more likely to earn less in their new employment. Last, TAA failed a commonsense test of determining whether the program produces more benefits than its costs.
If congress let the TAA program expire at the end of 2015, we would save $9.6 billion.
Contributing Expert
David B. Muhlhausen, Ph.D. is a leading expert on criminal justice programs in The Heritage Foundation's Center for Data Analysis. A Research Fellow in Empirical Policy Analysis at the think tank, Muhlhausen has testified frequently before Congress on the efficiency and effectiveness of law enforcement grants administered by the U.S. Justice Department.
David B. Muhlhausen, Ph.D.Research Fellow in Empirical Policy Analysis
Heritage Expert
Bryan Riley is a full-time advocate for free trade through his research and writing for The Heritage Foundation. He brings years of experience in trade and economic issues to his role as Jay Van Andel senior analyst in trade policy.
Bryan RileyJay Van Andel Senior Policy Analyst in Trade Policy
Additional Reading
- David B. Muhlhausen, “Trade Adjustment Assistance: Let the Ineffective and Wasteful Job-Training Program Expire,” Heritage Foundation Issue Brief No. 4121, January 8, 2014.
- James Sherk, “Congress Should Allow Trade Adjustment Assistance to Expire,” Heritage Foundation WebMemo No. 3134, February 4, 2011.
- U.S. Government Accountability Office, “Trade Adjustment Assistance: Most Workers in Five Layoffs Received Services, But Better Outreach Needed on New Benefits,” January 2006.