On Feb. 19, 1982, Office of Management and Budget Director David A. Stockman sent a letter to the Labor Department making plain his distaste for the cost of the Job Corps program and his desire for a fresh study of whether the program was worth the expense.
A long-range study by Mathematica Policy Research Inc. had shown that the program, aimed at helping disadvantaged youths with little hope for gainful employment, was a resounding success in putting people to work and keeping them out of jail and off the welfare rolls. Its economic benefits for society, Mathematica had concluded repeatedly, "are greater than its costs."
That, evidently, was not what Stockman wanted to hear.
Although the Job Corps was continued in the 1983 budget, Stockman, in a "personal and private" letter to then-Labor Secretary Raymond J. Donovan said, "its high cost per enrollee year warrants a searching analysis of its costs and benefits." The OMB director said he wanted another report on the program, including "an identification of the specific aspects of the Job Corps that produce apparently favorable results" and "a critical assessment of recent studies of the Job Corps, including the Mathematica study."
The study held up under three separate reviews by outside experts. The Job Corps program survived, thanks to support within the administration and on Capitol Hill.
It has now reemerged as an OMB target, however. This year, the federal budget's bottom line has become more important than its ingredients.
The Job Corps, an offspring of President Lyndon B. Johnson's "Great Society" that even conservatives came to favor, is a case in point. At a 20th anniversary celebration of the program in September, the keynote speaker was then-Labor Secretary Donovan, a staunch Job Corps supporter. Reagan sent a warm telegram calling it a "vital program . . . in keeping with the American spirit of helping others to reach their full potential, a spirit that has sustained our nation from its very founding."
"Nancy and I," the president concluded, with the election just six weeks away, "send everyone present our best wishes for future success."
All that seemed to have been forgotten in February, when Reagan sent to Congress his proposed fiscal 1986 budget, recommending cuts of more than $1.1 billion in education, labor training and social services. Summer youth employment and dislocated worker programs would lose more than $100 million each. The $267 million Work Incentive Program would be wiped out -- and so would the Job Corps.
The program, which received $617 million this year, would get no funding next year. The administration has indicated that it wants to start shutting down the 107 Job Corps centers across the country this summer. Although the Labor Department had recommended continuing the Job Corps at its present level, the cost-cutters at OMB prevailed.
Too expensive and ineffective, OMB charged in a background summary describing the Job Corps as the most costly federal training program. Each of the 40,500 program "slots," the budget agency said, will cost $15,200, an expense that "nearly equals the annual cost of sending a student to Harvard or Stanford universities, which is far beyond the reach of most American families."
The OMB also asserted that "65 percent of all Job Corps terminees do not complete a course of study before leaving" and that "only one-third of Job Corps terminees are reported as being employed within the year after they leave Job Corps."
The agency dismissed reports of much higher success rates as "greatly overstated" and charged that " 'statistical' studies purporting to demonstrate cost effectiveness of Job Corps border on false and misleading advertisement."
Job Corps defenders on Capitol Hill are still fuming. If there is any false and misleading advertising, they contend, it is coming from OMB. Senate Appropriations subcommittee Chairman Lowell P. Weicker Jr. (R-Conn.) took up the cudgels at one recent hearing, assailing Labor Undersecretary Ford B. Ford's dutiful repetition of the $15,000-a-slot expense figure even though more than one youngster occupies the same slot during a year. The Labor Department's testimony last year, Weicker contended, put the program in much better perspective.
"The chart you submitted for last year's hearing shows an estimated cost of $5,252 for each Job Corps participant, that being adjusted for 1984 dollars," Weicker said. "Why do you keep emphasizing that Job Corps costs $15,000 per slot when, obviously, more than one youth occupied the same slot during the course of the year? . . . . I have to tell you I think it is very misleading."
The OMB's other statistics have been similarly challenged. Its claim that 65 percent "do not complete a course of study before leaving," Job Corps supporters say ignores the fact that there are several levels of training. For instance, they say, 35 percent of those given clerical training achieve the highest skill level of secretary-stenographer -- but another 35 percent qualify as clerk typists and leave the program to seek work at that level.
According to a point-by-point rebuttal by the Homebuilders Institute, the educational arm of the National Association of Homebuilders, OMB's claim that only a third of Job Corps members "are reported as being employed" is another dubious statistic.
State employment services, officials say, are "supposed to try to track down these kids" and help them find jobs, but traditionally have assigned the chore a low priority. The Job Corps, meanwhile, encourages its students to find jobs on their own. The OMB, critics say, considered only the number of youths for whom state employment services found jobs, as though none of the others became employed.
The Job Corps, by contrast, figured its success rate for fiscal 1984 at 75.6 percent. According to Director Peter E. Rell, that means that 60.6 percent of those who could be contacted found jobs or entered the military and an additional 15 percent went on to further education. "There are a number of different ways to measure success," Rell said. "The traditional way is based on the number of those contacted."
The OMB, in turn, has contended that the Job Corps' "successes" include thousands of youngsters who left the program within 90 days and "can hardly be expected to have benefited from the program."
On one point, there is no dispute: The Job Corps is expensive. According to Rell, it cost $6,124 for each of the 98,809 youngsters who took part in the program last fiscal year. Defenders such as Sen. Orrin G. Hatch (R-Utah), the chairman of the Senate Labor and Human Resources Committee, emphasize that it is the only program tailored for youngsters facing a lifetime of poverty and despair. The typical Job Corps member is a black 18-year-old high school dropout who has never had a full-time job, reads at the sixth-grade level and comes from a poor family and a disruptive environment.
Hatch is a former skeptic who became converted by firsthand observation. Before he was elected to the Senate in 1976, he said in a recent interview, "most of what I heard about the Job Corps depicted it as just another 'Great Society' program born during the Johnson administration along with a host of other Santa Claus programs." But before long, he said, it became clear to him that the predominantly residential Job Corps "was not a handout program at all, but a handup program designed to give youth the chance to learn lifetime skills" in fields as varied as welding, auto repair, carpentry, nursing, cooking and landscaping.
Hatch also said he was impressed by the Mathematica studies, which ended in September 1982 with a follow-up report based on interviews with hundreds of 1977 Job Corps members and with a comparison group who got no such training. It showed that for every $1 spent, there was a $1.46 return to society in terms of increased employment, less criminal activity and reduced welfare payments. The OMB, Hatch said, has given the Corps "a very bad set of raps."
"This is a sound program," Weicker said, "not just in human terms, but in fiscal terms . . . . " The proposed elimination of the program "is typical of the kind of cuts I will refuse to make -- cuts that give us black ink today and red ink tomorrow."
Hatch said some Job Corps centers "are very poorly run" and should be shut down, but others "are doing a fantastic job . . . , placing up to 90 percent of their people in the work force." He added that, although he is committed to cutting the deficit, he has "been fighting with everything I've got behind the scenes to try to save the Job Corps."
A couple of days later, the White House and Senate Republican leaders, including Hatch, agreed on a compromise deficit-reduction plan that, among other things, would eliminate the Job Corps. The package, which Reagan has dubbed "The Taxpayers Protection Plan," is scheduled for Senate floor debate this week.
The Labor Department said last fall that "for some, the Job Corps is the last, best hope to join the societal mainstream." Now the administration contends that youths can be "more effectively and more efficiently" trained under much less expensive provisions of the three-year-old Job Training Partnership Act. But Hatch, a coauthor of that bill, and others familiar with it say it is aimed primarily at high school graduates, not dropouts. It is not scheduled for any funding increase next year.
"If it was a straight vote on whether or not to have the Job Corps, it would win hands down," one administration official said. "But tied up with deficit reduction makes it a different story. It's just another chip to trade with."
The president, meanwhile, appears to have put his September telegram behind him. Last year he recommended an increase in Job Corps funds. Last week, defending his proposed domestic spending cuts, he singled out the Job Corps as one of those "programs whose costs outweigh the benefits."
"It's estimated that each job created through the program costs the taxpayers $15,200," Reagan said as he built up to a punch line. "That's almost equal to sending a student to Harvard for one year. Maybe the result's the same, too . . . . "