billion for the Employment and Training Assistance appropriation, to fund the new legislative program.

In the Federal Unemployment Benefits and Allowances appropriations, the Administration request is $35 million. This request reflects savings anticipated from passage of three legislative proposals, which the Administration has recently sent or will shortly forward to Congress. These proposals include legislation to eliminate the additional Trade Readjustment Allowance benefit, provided beyond regular unemployment benefits, to those persons whose unemployment has been determined to be related to the adverse affects of imports. Training and employment services for these persons will be continued. This proposal is in line with the President's goals of removing the inequities in cash payments to individuals in similar situations, and eliminating the lengthy benefit receipt. The Administration will also be proposing to limit Redwood benefits to only those persons who lost their jobs as a direct result of the expansion of the Redwood National Park on or before December 31, 1978. Again, this is an effort to limit excess benefits and to eliminate disincentives to the seeking of new employment. Finally, the Administration has proposed changes to the unemployment compensation program for ex-servicemembers, that will limit eligibility for unemployment benefits only to those servicemembers involuntarily discharged due to demobilization, reduction-in-force or disability incurred while in service.

We are requesting $4.6 billion in the Advances appropriation to provide for general fund advances to the Unemployment Trust Fund ($4.5 billion) and to the Black Lung Disability Trust Fund ($62 million). The $674 million request for

Black Lung reflects the legislation enacted last December amending the Black Lung Act.

In the Special Benefits Account, we are requesting

$336 million for Federal Employees' Compensation Act (FECA) benefits which are paid to disabled employees. This amount

assumes $58 million in savings related to the passage of certain amendments to the FECA legislation, which the Adminis tration has recently transmitted to Congress. The Administra tion's new bill closely follows those proposals for FECA reform considered in the last session of Congress, which seek to eliminate current disincentives to return to gainful work and also to reduce the potential for abuse of the federal disability compensation system.

In the Grants to States appropriation, we are requesting $2.345 billion in funding for State administration of unemplo ment insurance and employment services in 1983. This request includes the Fiscal Year 1983 budget amendment for the Employment Service of $283 million, which the President forwarded to be consistent with the 1982 supplemental action he requested and signed into law on February 22.

Of the $2.4 billion expected to be requested for the Employment and Training Assistance appropriation for new employment and training programs, $1.8 billion will be for a new program of grants to states for operation of employment training programs under new legislative authority. Of the request, $387 million will be for the Job Corps program, which will be continued under the new legislation as a separate program. The remaining $200 million in the request will be for operation of a nationally-administered program to serve groups who have particular disadvantages in the labor market.

Finally, in the area of federal staffing for the Department, we are proposing salaries and expenses budgets which, in total, reduce Fiscal 1983 end-of-year employment levels in the Department by 107 persons. However, in certain

key areas, we are seeking staffing increases. In the LaborManagement Services Administration, we are seeking additional funds for 150 new positions in the Labor-Management Standards Enforcement area. These additional personnel will increase our capacity to perform proper enforcement of our LandrumGriffin Act responsibilities. We are also seeking funds

for an additional 52 positions in the Office of Inspector General in order to have resources to complete all scheduled CETA audits and to perform needed investigations activity. In the Mine Safety and Health Administration, the President has announced he will submit a budget amendment for 1983 for $15 million to restore the coal enforcement activities to 1979 levels. In the Occupational Safety and Health Administration, we are seeking an increase of funds for operation of state on-site consultation programs. This increase is in line with our policy of helping business comply with basic safety and health standards.

In summary, I believe that we have a responsible budget request that allows us to carry out our basic mandates,

but which also complies with the President's goals of general reduction in the rate of growth of federal spending and reduction in the size of the federal workforce. I will be happy to answer any questions you have.

GAO REPORT ON CETA DISCRETIONARY CONTRACTS

Senator SCHMITT. Did you wish to make a summary, or shall we proceed?

Secretary DONOVAN. I think we could proceed, Mr. Chairman.

Senator SCHMITT. Mr. Secretary, at the request of this subcommittee the General Accounting Office completed a special report last June reviewing a sample of CETA contracts awarded during the last 5 months of the Carter administration. This report found few formal records of award negotiations, a lack of comprehensive evaluations of awardees' past performance before award renewal, and little evidence of site monitoring.

Can you tell us what has been done in the last 2 years to resolve these problems in discretionary programs, including overcommitment of funds and improper contracting procedures?

Secretary DONOVAN. Well, when we took office I agreed with the GAO report. The office was frankly a managerial nightmare, and Assistant Secretary Angrisani has done yeoman's work in bringing some managerial controls to that office. We have made some major strides to improve the integrity of the national office grant funding process. Several other improvements will be effective within the next month.

The past record of every grantee is scrutinized before refunding occurs. We can supply for the record several case studies where refunding did not occur because of poor past performance.

We have separated grant funding from program management. The contracting function in ETA now reports to the finance administrator rather than the program office, and site monitoring plans have been developed. Forty-five key sites have been identified which directly provide service to enrollees or provide essential management support

services.

We intend to visit each site at least once and more often if first visits indicate the need for follow-up.

Senator SCHMITT. That's one per year, Mr. Secretary.

Secretary DONOVAN. That's right.

In addition I should say that these grants or contracts have been and will continue to go on a competitive bid basis rather than a sole-source basis. I think that has been missing in the past.

SPECIAL TARGETED PROGRAM

Senator SCHMITT. Mr. Secretary, you are proposing $200 million for a new form of the Secretary's discretionary fund to take the place of existing programs for older workers, migrants, Indians, and special target groups such as veterans and trade-impacted workers.

Since these separate programs are currently funded at nearly $500 million, what activities do you expect will be squeezed out at the reduced level?

Secretary DONOVAN. We are studying that now, Mr. Chairman. You are correct that it was $500 million, and it is now $200 million. It is very difficult to make these choices. A study is underway for the allocation of those funds.

I should point out, though, in addition to the Secretary's discretionary funds, the bill that we have before the Senate now recognizes the need for service to other groups by allowing each State to use up to 10 percent of its allocated funds for the special labor market disadvantaged, such as older workers, in-school youth, displaced workers, and veterans. It is a difficult task, and we are trying to make it as fair and equitable as possible under these budgetary constraints.

Senator SCHMITT. Mr. Secretary, Senator Levin is here, and if my distinguished colleague from North Dakota will allow me, Senator Levin has requested to present a statement on the work incentive program.

Does the Senator from North Dakota have time?

Senator BURDICK. I would be glad to yield a few minutes.

Senator SCHMITT. OK. We will go ahead.

STATEMENT OF HON. CARL LEVIN, U.S. SENATOR FROM MICHIGAN

Senator LEVIN. I will be happy to reschedule this for later in the afternoon, if that is better for you.

Senator SCHMITT. I just wanted to be sure that members of the committee were not inconvenienced with your appearance at this time, Senator Levin.

Senator LEVIN. Thank you, Mr. Chairman. I appreciate the opportunity to appear and testify on this comprehensive study which I requested GAO to conduct on the work incentive program, the WIN program, which is jointly administered by the Labor Department and the Department of Health and Human Services. This study has been underway for almost 2 years now, and the GAO recently completed a draft of its initial assessment of the program. As a draft, their findings and recommendations do not yet have the benefit of comment from the two administering agencies.

Nonetheless, I wanted to share with this committee the preliminary findings of the GAO and alert you to the continuing work of GAO in this area.

We asked the GAO to answer several specific questions about the WIN program:

First, what portion of AFDC recipients actually receive help from WIN?

Second, what portion of WIN participants achieved self-sufficiency and no longer need AFDC?

Third, are WIN performance goals being achieved? Is the program working?

In response to these questions the GAO has conducted extensive onsite interviews in 40 States with State and local WIN and AFDC officials in about 150 offices and with WIN participants and AFDC recipients, totaling about 2,200 people.

These are the principal findings to date:

First, of the 1.6 million recipients legally required to register to participate in the program, only one-half were chosen to actually participate in the program and receive services and assistance. According to State and local WIN officials, limited Federal funds and limited job markets are the two major factors for such a low participation rate. As a result, about 800,000 of the eligible WIN registrants will not be enrolled in any component of the WIN program and will receive no assurances that they will ever be selected.

Second, because the WIN program cannot serve all who are eligible and register, local WIN staffs carefully screen those who do participate. Generally, WIN program legislation and the WIN funding formula encourage WIN to consider a registrant's employability potential in selecting participants. As a result, WIN staff seem to direct their efforts toward those most likely to succeed and those who need the least

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