Trade Adjustment Assistance

Congress created the Community Adjustment and Investment Program to assist communities that suffer job losses due to changing trade patterns with Mexico and Canada. GAO reviewed the program and found that the management structure hinders efficient program delivery and the program eligibility procedures are rather complex. Further, the program lacks a system to monitor whether the loan guarantees it issues are resulting in increased private sector employment and growth. Management also needs to improve its efforts to notify counties that are eligible to participate in the program.

GAO noted that: (1) the Community Adjustment and Investment Program's management structure hinders efficient program management; (2) the program is managed in Washington, D.C., by a high-level interagency group chaired by the Department of the Treasury, called the Finance Committee; (3) Committee membership includes the Departments of Agriculture, Commerce, Housing and Urban Development, and Labor, and the Small Business Administration; (4) it took the Finance Committee over 3 years to set up program guidelines and to start disbursing program financing to distressed counties; (5) the Finance Committee's retention of certain day-to-day managerial functions is inefficient and has added more time to the decision-making process, particularly for direct loans and grants; (6) Treasury officials recognize that some delays have resulted from the program's centralized management structure and told GAO that they plan to hire additional full-time staff to expedite future decision-making; (7) however, it is not clear that new staff will improve program management unless the Finance Committee is prepared to delegate decision-making authority; (8) program eligibility procedures are complex and rely on a database that is not designed to be used as a measure of the impact of the North American Free Trade Agreement on communities; (9) GAO found that Treasury's current procedures result in the underestimation of dislocated workers, including approximately 3,700 secondary workers in firms that are suppliers to or assemblers for manufacturing firms adversely impacted by trade with Mexico and Canada; (10) although this undercounting has not had an impact on counties from qualifying for the program; (11) for the 228 counties in 30 states and Puerto Rico designated eligible for the program, notification and outreach have been limited, as Treasury does not directly notify eligible counties about the program, according to program officials; and (12) since 1997, about $257 million in loan guarantees, loans, and grants have been provided to 83 eligible counties.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Team: Phone: