In a major victory for AFSCME, the House of Representatives has blocked the Department of Labor attempt to privatize the Wagner Peyser and Trade Adjustment Assistance (TAA) programs using the agency's regulation making authority.

The action came as the House approved a bill continuing funding for most federal agencies until the end of September that also prohibits DOL from issuing any new final regulations for the Workforce Investment Act, the Wagner-Peyser Act and the TAA until Congress passes legislation renewing these programs.

In late December, DOL had published for comment proposed rules that repealed the longstanding federal regulatory requirement for state employment service personnel to be state merit staff employees, thereby opening the way for states to contract with private placement agencies or turn Wagner-Peyser funds over to local workforce boards, in effect block granting the two programs.

DOL made a similar proposal for the TAA program last August. The proposed rules also would have required all employment service operations to be located at local one-stop offices and transferred substantial policymaking authority from local one-stops to the state level.

All of these provisions touched on controversial areas that Congress has been addressing over the last four years and, in effect, bypassed the Congress' prerogatives to legislate in these areas. The Senate will next take up the same legislation. While there always is a chance that an effort will be made to remove the prohibition on the Senate floor, the fact that it received bipartisan support will be helpful in rebuffing such an attempt.