Developing Manpower Legislation: A Personal Chronicle (1978)

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Developing Manpower Legislation A Personal Chronicle WILLIAM H. KOLBERG Committee on Evaluation of Employment and Training Programs Assembly of Behavioral and Social Sciences National Research Council NATIONAL ACADEMY OF SCIENCE Washington, D.C. 1978 OCT5 1978 LIBRARY

c.) NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the Councils of the National Academy of Sciences, the National Academy of En- gineering, and the Institute of Medicine. The members of the Committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This report has been reviewed by a group other than the authors according to procedures approved by a Report Review Committee consisting of members of the National Academy of Sciences, the National Academy of Engineering, and the In- stitute of Medicine. This book was prepare^under grants from the Ford Founda- tion. Library of Congress Catalog Card Number Available from: Committee on Evaluation of Employment and Training Programs National Academy of Sciences 2l0l Constitution Avenue, N.W., Washington, D.C. 204l8 ii

CONTENTS FOREWORD v PREFACE vii I. ACHIEVING MANPOWER REFORM—THE COMPREHENSIVE EMPLOYMENT AND TRAINING ACT l Background—Four Years of Frustration and Conflict l The President Sets the Stage 6 Going Public in the Senate 14 The Regulations and Hard Bargaining 2l The Senate and the Olive Branch 29 Compromise in the House 30 Final Passage and Signature 4l II. EMBARGO, INFLATION, AND RECESSION 45 The l974 Oil Embargo and Unemployment 45 A Counterinflationary Manpower Strategy 50 Developing a Game Plan 57 Recession—Congress Responds in Twenty- Five Days 60 Summary 64 III. SHORING UP OUR FIRST LINE OF DEFENSE 67 Improving Jobless Benefits 67 The Eighteen Billion Dollar Year 70 IV. PUBLIC SERVICE JOBS—THE MANPOWER BATTLEGROUND 72 First Session Frustration 72 The Title II Ploy 75 Flirtation in the Senate 82 Post-Convention Success 86 111

FOREWORD This volume is the personal story of a government official who played a major role in shepherding the Comprehensive Employment and Training Act (CETA) and related programs through the executive and legislative branches of government—at a time when political control over the two branches was divided and the Watergate epi- sode was generating unprecedented turmoil. The Committee on Evaluation of Employment and Training Programs of the National Research Council has, since l974, been monitoring the economic, social, and political consequences of the decentralization of man- power programs under CETA. Several reports were published by the National Academy of Sciences in l976* and the final study is now being completed. To describe the origins of the legislation and capture the flavor of the controversy that accompanied it, the Committee, with Ford Foundation support, commissioned William H. Kolberg, former Assis- tant Secretary of Labor, to recount his experiences in the long battle over manpower reform legislation. Mr. Kolberg's account is not that of a disinterested observer; the Committee is fully cognizant of his role as a principal protagonist. And although the author's views do not necessarily reflect the opinions of the Committee, we believe that this story contributes to an *Mirengoff, William and Lester Rindler, The Comprehensive Employment and Training Act: Impact on People, Places, Programs. An Interim Report; Mirengoff, William, ed., Transition to Decentralized Manpower Programs: Eight Area Studies. An Interim Report; and Lipsman, Claire K., The Comprehensive Employment and Training Act: Abstracts of Selected Studies.

understanding of the genesis of CETA and supplements the work done by the Committee. Political scientists will find this paper an intriguing case study of the clash between the will of a Democratic Congress and the deter- mination of a Republican administration and of the ma- neuvering that led finally to the enactment of CETA; students of manpower programs will also be interested in the author's insights into the ideological and pragmatic considerations that formed the basis for the reform of the nation's employment and training programs. Philip J. Rutledge, Chairman Committee on Evaluation of Employment and Training Programs vi

PREFACE This book is a study of the development and passage of employment legislation between l973 and l977, the centerpiece of which is the story of how the Comprehen- sive Employment and Training Act—CETA—became law. Other parts of this study cover how the recession of l974-l975 caused the alteration of both CETA and unemployment in- surance laws. CETA was landmark legislation. It grew out of the first decade of the nation's experience with manpower programs and created a new intergovernmental delivery system for providing training and employment services. Now, five years later, the acronym, CETA, has entered the lexicon of our everyday language. CETA has become an accepted term standing for the process by which the fed- eral, state, and local governments provide training and employment. "CETA jobs," "CETA people," "CETA operations" —these expressions have become commonplace in communities across our nation. By July l8, l977, President Carter during a press conference described his "CETA training programs" expansion with every expectation that he would be well understood by all. As the Assistant Secretary of Labor and the Adminis- trator of the Employment and Training Administration (formerly the Manpower Administration) from l973 to l977, I was in a key position to participate in and to observe the executive policy making and legislative processes at work. To a participant, these processes are invariably exciting, puzzling, and frustrating, but never do they lose their fascination. As with all "games," events in these processes are shaped by a mixture of planning, hard work, and tenaciousness, as well as power, personality interaction, and luck.

The object of the policy and legislative game is not only to "win," but, as often, to recognize what consti- tutes winning. Since players in this game usually ascribe all their motives and actions to "the public interest," any scorecard is highly loaded and subjective. This study has been written both for practitioners in the employment and training field and for general students of government. I have long felt that there is a paucity of specific case study material to describe how public policy evolves and is implemented. Such material is necessary both for teaching students of public administra- tion and for informing practitioners so that governmental processes can be improved. The period covered by this study is unique. "Water- gate" was already a significant political factor when the story of CETA began. During the ensuing l8 months, con- ducting the most routine executive-legislative relation- ships reached a dangerous low point. And after the resignation of President Nixon, the new administration of President Ford was faced with the most severe economic recession since the depression of the l930s. The Depart- ment of Labor's Employment and Training Administration, for which I was responsible, was in the very eye of this economic storm. At the height of this period, it was our job to pay unemployment compensation to l4 million Ameri- cans and to provide job-finding assistance and training or public jobs for millions more. During this period, six major substantive pieces of employment and training legislation were passed. This book chronicles the events surrounding the development and passage of five of the six acts. (The basic unemployment insurance amendments of l976 are not covered because they were not directly linked to CETA or the recession.) During this same period I worked for and with three Secretaries of Labor: Peter J. Brennan, John T. Dunlop, and W. J. (Bill) Usery. As this book will show, they gave me an unusual measure of freedom to carry out my responsibilities and yet were unfailing in providing guidance and support at crucial times. Students of manpower history should not look to the book for detailed background about the development of man- power programs prior to l973. Numerous volumes have been written on this subject (particularly the excellent "Policy Studies in Employment and Welfare," edited by Dr. Sar A. Levitan and Dr. Garth L. Mangum and published by the Johns Hopkins University Press). A specific prec- edent to this study is "The Politics of Comprehensive

Manpower Legislation," written by Roger H. Davidson. Mr. Davidson's excellent study covers the legislative attempts of the 9lst and 92nd Congresses, from l969 to l972, to reform the manpower system. Most political officials in the executive branch come into the government from private life, serve for a few years, and return to their chosen occupation. I became a political executive after serving 22 years in the career service of the federal government. Thus, this story is both handicapped and benefitted by having as its author a Washington "insider." When I became Assistant Secretary, I was no stranger to the manpower field. As a career official in the Bureau of the Budget, I had been in charge of the labor and man- power area from l963 to l967. I had then spent six months as the executive director of a task force set up by Presi- dent Johnson to study and recommend to him measures to deal with urban unemployment problems. In l968 I joined the staff of the Manpower Administration of the Department of Labor under Assistant Secretary Stanley Ruttenberg and served him and Secretary Wirtz in various capacities, end- ing up in l969 as the associate manpower administrator for policy, planning, research, and evaluation. When the Nixon administration took office, I continued in that capacity under Secretary George Shultz and Assistant Secretary Arnold Weber until Secretary Shultz was named to be the director of the new Office of Management and Budget (OMB, replacing the Bureau of the Budget), and I was named by Director Shultz to a new position as the assistant direc- tor of the Office of Management and Budget in charge of field operations and special projects. During my two years at OMB, I became fully convinced of the need for and efficacy of an intergovernmental system in which the basic planning and operation of domestic programs are placed in the hands of state and local governments with the federal government retaining an overall role of policy, oversight, and evaluation. At OMB, however, I was only generally involved with manpower programs and had prac- tically no connection with the major policy deadlock that had developed between the administration and the Congress. Two caveats require statement here. First, this is primarily my story, limited by Kolberg-brand objectivity. Second, one year does not a Gibbon make. In time, some of my views shall most certainly alter. For the present, I have attempted to correct some of the myopia and to broaden some of the view. Dozens of those involved in the events recorded here were interviewed by me; their

insights, their additional experiences, and their memories were extensively sought. However, those with whom I spoke bear no responsibility for what is written here, and, if they were to record the same events from their own per- spective, I am sure some of those events would look dif- ferent. I am particularly appreciative of the time, assistance, and insights given me by former President Gerald R. Ford; former Secretaries of Labor Peter Brennan, John Dunlop, and Bill Usery; former Under Secretaries of Labor Richard Schubert and Michael Moscow; Congressman Albert Quie and former Congressmen Dominick Daniels and Marvin Esch; former Deputy Director of the Office of Management and Budget Paul O'Neill; former Assistant Secretary of Labor for Manpower Malcolm Lovell; former counsel to the Senate Subcommittee on Employment Richard Johnson; and Associate Director of Legislation for the AFL-CIO Kenneth Young and his associate Robert McGlotten. Special thanks go to William Hewitt, Administrator, Office of Policy, Evaluation, and Research, and Bill Langbehn, Chief, Division of Legislation and Program De- velopment, both of the Labor Department's Employment and Training Administration. Each was intimately involved in most of the events covered in this book, and they have given freely of their time and their records to make this story as accurate as possible. Finally, I am indebted to the Ford Foundation for the grant that made this study possible and to the National Research Council, under whose auspices the study was undertaken. Mr. William Mirengoff, study director. Com- mittee on Evaluation of Employment and Training Programs, was directly responsible for monitoring this effort and I am deeply appreciative of his assistance and support.