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January 5, 1997 MEMORANDUM FOR JOHN D. PODESTA FROM: KAREN A. TRAMONTANO CC: BRUCE REED ELENA KAGEN MICKEY IBARRA GREG FRAZIER WILLIAM CORR LEE SATTERFIELD SUBJECT: PRIVATIZATION On Tuesday, January 6 at 2:00 p.m. there will be a meeting to discuss the Administration's response to state requests to privatize various programs. This meeting is an effort to understand those requests and to the extent appropriate, share information regarding the status of those requests and agency responses. Department of Labor: Several months ago, the Department of Labor through means other than state notification, learned of Michigan's desire to privatize its employment services program. Since I was not able to be involved in this matter, you are aware that the Department of Labor within the last week communicated a number of concerns to the state. As a result, the state informed the Department of Labor that it has withdrawn its request to privatize its employment services program. Secretary Herman has attempted to contact the Governor to determine whether the state will resubmit its request or whether the state has decided to halt its actions regarding this matter. At this time, the Governor has not returned the Secretary's calls. Department of Agriculture: The state of Arizona has a request pending with the Department of Agriculture to privatize segments of their food stamp program. Just prior to the time expiring during which the Department would have had to issue a decision, the Department requested additional information. The matter remains pending. The state of Wisconsin has made a similar request with the Department of Agriculture. I understand that this request is pending also.