Two Crises, One
Bill, and a Handful of Problems
President Donald Trump signed the FY2026 federal budget
reconciliation bill into law in early 2026, enacting $79 billion in
discretionary Department of Education funding — and, notably,
flat-funding key education programs including Perkins V, the primary
federal law governing Career and Technical Education. That should have
been a non-event: level funding for CTE is, in a constrained budget
environment, a reasonable outcome. But the celebration was
short-lived.
Simultaneously with the reconciliation bill’s signing, the Trump
administration moved to withhold approximately $7 billion in
congressionally approved education funding that had been
cleared under the continuing resolution that maintained level Perkins V
funding through the 2025–26 school year. That $7 billion is not being
deleted from the federal ledger — Congress appropriated it. The
administration is simply refusing to spend it. Six hundred education
stakeholders, coordinated by Advance CTE and joined by a bipartisan
group of senators led by Senator Shelley Moore Capito (R-WV), sent a
joint letter to OMB Director Russell Vought and Secretary of Education
Linda McMahon demanding immediate release of the withheld funds. Capito
chairs the Senate Appropriations Subcommittee on Labor, Health and Human
Services, Education, and Related Agencies — the committee with direct
jurisdiction over Perkins V funding.
That bipartisan coalition is not nothing. When Advance CTE, a
national CTE advocacy organization, can find common ground with a
Republican Senate appropriations chair on the question of whether
federal law means what it says, that reflects a level of institutional
alarm that goes beyond typical advocacy positioning.
The funding withholding story, however, is compounded by a second and
arguably more structurally significant development: the Departments of
Education and Labor are moving forward with an Interagency
Agreement (IAA) to transfer day-to-day administrative oversight
of Perkins V CTE programs — and Adult Basic Education (AEFLA) — from the
Department of Education to the Department of Labor. Advance CTE has
reported significant operational challenges with that transition,
including technical problems, increased bureaucracy, communication
lapses, and delayed grant payment processes. ED is reportedly paying DOL
approximately $1 million to cover the cost of
administering these programs during FY25 and FY26 — a financial
arrangement that critics say creates perverse incentives for DOL to
manage programs in ways that may not align with ED’s statutory
obligations.
The $7
Billion Question: Where Does the Money Actually Go?
Before going further into the policy mechanics, it’s worth being
precise about what the $7 billion in withheld funding actually supports
— because the answer shapes who gets hurt first.
The congressionally approved funding at stake isn’t primarily Perkins
V formula grants to states, which operate on a different appropriations
track and have thus far been less immediately affected. The $7 billion
in question flows through workforce development and adult education
channels — job training programs, employment services, adult basic
education, and related functions administered by DOL. These are the
programs that CTE students and graduates typically encounter when they
exit high school and try to enter the labor market or postsecondary
training.
In practical terms: a CTE student who graduates from a Pennsylvania
high school in 2026 and wants to pursue industry certification,
apprenticeship entry, or additional occupational training may find that
the federally funded employment service or training program they were
counting on has been scaled back, delayed, or made administratively
inaccessible due to funding uncertainty. The withholding doesn’t close
programs overnight, but it creates cash-flow problems for state
workforce agencies that have contracted services against anticipated
federal reimbursement — and when that reimbursement is delayed or
reduced, the services stop.
For Pennsylvania, this lands at a particularly awkward moment. The
state is currently preparing Perkins V state plan updates for program
years 2026 and 2027 — a process that requires PDE and the State Board of
Education to make binding commitments about how federal CTE funds will
be used. Those state plans are built on assumptions about the broader
federal program environment: that Perkins V administration will remain
at ED, that grant reporting requirements will be stable, that fund flows
will be predictable. If the ED-DOL IAA transfer proceeds on its current
timeline, Pennsylvania may be developing a state plan for a federal
program that no longer exists in its current form.
The
ED-DOL Transfer: What It Sounds Like vs. What It Is
The administration has framed the ED-to-DOL transfer as an efficiency
move — consolidating workforce programs under a single agency, reducing
duplication, aligning CTE with the broader public workforce system.
Senate leadership at ED has argued that subsuming Perkins V into DOL’s
infrastructure is necessary for the adoption of Learning and Employment
Records (LERs) and wider skills-based hiring efforts. On paper, there is
a defensible policy argument for this: DOL already administers the
federal workforce development system (WIOA), and linking CTE more
tightly to that system could improve transitions from school to
work.
In practice, the early evidence is alarming. A letter from Senators
Warren, Sanders, Murray, and Baldwin to the Government Accountability
Office (GAO), reviewed as part of Advance CTE’s reporting, documents
significant implementation failures in the Perkins V-to-DOL
transition:
- Technical problems in moving from ED’s unified grants management
system to DOL’s dual-system setup - Communication lapses between ED and DOL program offices
- Delayed launch of money-transfer processes for CTE programs, by
weeks in some cases - Confusion at the state and local level about which agency’s rules
and deadlines now apply
The $1 million annual payment from ED to DOL for administering
Perkins V during the transition is a structural curiosity that advocates
have seized on as revealing. Critics argue it creates a situation in
which DOL has a financial incentive to manage these programs in ways
that justify its administrative role — potentially prioritizing grant
management compliance over program quality or student outcomes. Whether
that criticism is entirely fair or not, it reflects a genuine concern
about what happens when administrative jurisdiction over a $1
billion-plus federal program shifts to an agency whose core mission is
not education.
For state CTE offices, which depend on predictable federal fund flows
to maintain payroll and program operations, the delays in payment
processing that have already been reported are the most immediate pain
point. A delayed grant reimbursement to a state CTE office is not an
accounting problem — it is an operational emergency if the office has
already committed those funds to staff salaries and program costs.
The Bipartisan Pushback
and Its Limits
The coalition behind the Capito-organized letter — 600 stakeholders,
bipartisan Senate backing — is significant in the current Washington
environment. It suggests that the institutional norms around federal
education funding have not completely collapsed: appropriators, even in
a reconciliation-driven budget process, still expect authorized funding
to be spent as appropriated.
But the pushback has limits. The reconciliation process, which allows
budget legislation to pass the Senate with a simple majority and without
the Senate’s ordinary 60-vote threshold for appropriations bills, has
effectively removed the procedural leverage that minority-party
Democrats would normally have to force the release of withheld funds.
The $7 billion withholding is happening within a Republican-controlled
process, and the pushback is coming from Republican appropriators as
well as Democrats — which is meaningful, but not sufficient to reverse
executive branch decisions without significant political cost.
Advance CTE’s decision to mobilize sustained advocacy rather than
simply monitor the situation is notable. Organizations typically reserve
sustained mobilization for issues they view as existentially threatening
to their core mission. That threshold appears to have been crossed
here.
Pennsylvania’s Particular
Exposure
For Pennsylvania CTE leaders, the combination of funding uncertainty
and administrative restructuring creates a specific set of challenges.
The Shapiro Administration has championed CTE expansion and secured
increases in state CTE funding, but state-level investment can only go
so far when the federal funding architecture is in flux.
Pennsylvania’s 2026-2027 Perkins V state plan is currently being
developed under conditions of unusual federal ambiguity. State plan
submissions require assumptions about federal program structures,
timelines, and reporting requirements. If those structures change
mid-plan — which appears likely if the ED-DOL IAA transfer proceeds —
plans submitted today may require revision tomorrow. That is not just a
logistical burden; it is a potential integrity problem for state plan
implementation, since revisions require a public comment process and SEA
board approval.
The Pennsylvania Association of Career and Technical Education
(PACTE) and the state’s CTE center network have not issued public
statements on the federal developments as of late March 2026, but given
the significance of the issues, that silence is likely to end.
The good, the bad, what’s
best?
The good: The bipartisan pushback against the
funding withholding — organized across partisan lines with Republican
Senate appropriators leading — demonstrates that institutional norms
around authorized funding have not fully collapsed. Advance CTE’s
sustained mobilization signals that national CTE leadership views these
developments as serious enough to warrant active resistance, not passive
monitoring. The Senate’s FY26 appropriations bill rejecting most of the
administration’s proposed cuts to Perkins V and workforce development
programs provides a legislative floor that, if it holds, prevents the
worst-case funding scenario. The flat-funding of Perkins V itself, while
not an increase, is better than the elimination proposed in earlier
budget requests.
The bad: The ED-DOL IAA transfer is proceeding
despite documented operational failures in its early implementation.
Those failures — delayed grant payments, communication lapses, technical
problems — are not implementation details; they are early warning signs
that the transfer is not working as designed. For state CTE offices that
depend on predictable federal fund flows, the payment delays already
reported are an immediate operational threat. The $1 million annual
payment from ED to DOL for administering Perkins V creates structural
incentives that critics — with some justification — argue will
prioritize bureaucratic convenience over student outcomes. The $7
billion in withheld workforce development funding, even if it doesn’t
directly affect Perkins V formula grants, will ripple through the
programs that CTE graduates rely on after graduation.
What’s best? The immediate priority for CTE
advocates and state leaders is securing the release of the withheld
funds — which requires sustaining political pressure on the
administration through congressional appropriators. The longer-term
structural fight is the ED-DOL transfer, which threatens to remake the
federal CTE landscape in ways that will be difficult to reverse even if
the current administration leaves office. Pennsylvania CTE leaders
should build contingency plans for state plan revisions, communicate
explicitly with local CTE providers about the federal funding situation,
and resist any temptation to treat current federal program structures as
stable for planning purposes.
❌ This Is Not the Time to Wait and See — but Action Requires
Knowing What You’re Actually Fighting
The federal CTE funding situation is genuinely serious, but advocates
need to fight the right battles. The $7 billion withholding is a
political fight with a plausible legislative remedy: continued pressure
on appropriators in both parties, framed around the principle that
congressionally authorized funding should be spent as appropriated. That
fight is winnable if the bipartisan coalition holds.
The ED-DOL IAA transfer is a harder fight because it has a policy
argument on its side — consolidating workforce programs under a single
agency is not obviously irrational, and the administration has seeded
that argument with language about LERs and skills-based hiring. The
response to that argument needs to be empirical and specific: the
implementation is failing, states are already experiencing payment
delays, and the $1 million administrative fee to DOL is a structure that
rewards dysfunction.
Pennsylvania CTE leaders should be planning state plan contingencies
now, not waiting for the federal picture to clarify. Waiting may mean
filing a plan based on assumptions that change before the ink is
dry.
The crisis is real. The fight is winnable. The time to engage is
now.
Source: Advance CTE
