Congress

Interesting Look at How Federal Investments Drove Job Growth in Charlotte

/ The Old Crank

(Updated Below)

For anyone interested in job creation and job training—and the debate over the federal role in both—this story on a new Siemens turbine plant in Charlotte in yesterday’s Washington Post is probably going to be more interesting than anything you’ll read coming out of either of the political conventions:

Ask Siemens executives why they placed their bet on Charlotte and they talk about public investments such as the state-funded rail spur that runs through their facility and the city’s international airport, which recently added a fourth runway using $132 million in federal funds.

They talk about the Export-Import Bank, an independent federal agency that in January approved a $638 million loan to finance the sale of turbines to Saudi Arabia, helping Siemens beat bids from companies in Germany, South Korea and Japan.And they talk about the quality of the workforce in Charlotte, where local leaders are retooling the public education system to churn out the engineers and skilled technicians needed to operate one of the most efficient gas-turbine plants in the world.

My only quibble with this piece: I don’t understand why the austerity budgets “favored by the GOP” are set aside as if they are somehow separate from Romney’s position.

Romney’s plan for growth centers on slashing government spending while cutting tax rates sharply for everyone. Romney claims his approach would create 12 million jobs over the next four years, a conclusion that relies heavily on research by Alan Auerbach, an economist at the University of California at Berkeley.

Auerbach, who has studied the economic effects of tax cuts, said lower taxes on savings and investment do cause people to plow more money into new investments, which “should lead to faster economic growth.” But “how much, how fast” is harder to say, Auerbach said. And that approach is, in any case, less likely to be effective in a sluggish economy, he said, when businesses are holding back on new investments not because they do not have the cash but because they are “looking first at whether they can sell stuff.”

“If the question is what would [Obama and Romney] do right now to spur economic activity,” Auerbach said, “I’m not sure either platform is particularly well designed for that.”

Meanwhile, the austerity budgets favored by the GOP would cut government spending in the very areas that do seem to matter. (my emphasis) In his most recent budget, Romney’s vice-presidential running mate, House Budget Committee Chairman Paul Ryan (R-Wis.), proposed spending 25 percent less on transportation over the next decade than Obama and 31 percent less on education and training.

As part of their campaign to shrink the size of government, House Republicans also tried to kill the Export-Import Bank, which encourages exports by financing the foreign purchase of U.S. goods and services, turning a profit for taxpayers. Spiegel said the bank was a critical factor in Siemens’s decision to build turbines for export in the United States. 

Romney has endorsed the Ryan budget cited here. It’s not as if Romney has one approach and House Republicans have another one that is on some kind of separate track (“meanwhile”). Whatever the merits are of Romney’s proposal to cut tax rates in order to spur growth, by endorsing that budget, he has completely embraced the federal infrastructure and education spending cuts proposed by Ryan and his party. Those spending cuts are just as much a part of his approach as his tax rate cut proposal. And if those cuts “do seem to matter,” then the differences between the two candidate’s approaches are perhaps more significant than this article suggests.

UPDATE 9/5/12 7:22pm: Added the last sentence and edited the whole piece slightly for clarity and emphasis.

Republican Platform Essentially Endorses House Republicans’ WIA Reform Plan

/ The Old Crank

(Updated Below)

The 2012 Republican platform was released today. For what it’s worth, it implicitly endorses the approach that Republicans in the House took with their Workforce Investment Act (WIA) reauthorization bill, H.R. 4297. This bill, which was passed by the House Education and the Workforce Committee in June, would consolidate all of the different WIA funding streams and convert them into a block grant program for states. H.R. 4297 isn’t mentioned specifically in the Republican platform, but consolidation of federal workforce programs is explicitly endorsed (see page page 7):

It is critical that the United States has a highly trained and skilled workforce. Nine federal agencies currently run 47 retraining programs at a total cost of $18 billion annually with dismal results. Both the trainees in those programs and the taxpayers who fund them deserve better. We propose consolidation of those programs into State block grants so that training can be coordinated with local schools and employers.

UPDATE 8/29/12: It’s also worth pointing out that, unsurprisingly, the GOP platform says nothing about adult education or adult literacy—with one exception: it offers explicit support for family literacy programs (See page 36):

Because parents are a child’s first teachers, we support family literacy programs, which improve the reading, language, and life skills of both parents and children from low-income families.

What Would Sequestration Mean for the District of Columbia’s Most Vulnerable Residents?

/ The Old Crank / 3 Comments

Yesterday one of our local public radio stations here in the District (WAMU) broadcast a story on the potential local impact of sequestration, the across-the-board federal spending cuts that are set to go into effect in January—unless Congress passes some kind of legislation to avoid it. Right now these cuts are required by a law that this same Congress passed last summer, the Budget Control Act (BCA).

Stephen Fuller, director of George Mason University’s Center for Regional Analysis, told WAMU that federal spending accounts for roughly 40% of the D.C. metro area’s economy. Federal employees and contractors spend their paychecks here, and so businesses that rely on those dollars (and the housing market) are likely to suffer if that spending is cut back significantly:

“Federal payroll supports a lot of jobs at Giant and Safeway and CVS and other retail establishments,” he says, citing some examples. “There will be fewer high-income households that can afford big houses.  So we could see a rollback on housing values.”

In D.C. itself, the District’s chief financial officer, Natwar Gandhi, told WAMU that federal spending accounts for 60% (!) of the city’s annual economic output. He said that cuts to federal spending would likely result in reduced local tax revenue, which could lead to reductions in services for the city’s most vulnerable residents.

(Fun fact: the legislation that created sequestration was enacted by a Congress in which we do not have a vote, yet it sound like the pain associated with these cuts will likely be more painful here in this city than it will be in other parts of the country.)

Alternatives to sequestration may still include federal workforce reductions and pay freezes, so even if sequestration is scrapped, it’s replacement might not be so great for the local economy either. I recently attended a meeting with some Republican staffers who were still enthusiastically pitching S. 2065, a Senate bill that was introduced in February that would delay the first installment of the sequestration cuts by extending the current federal employee pay freeze though June 2014, and restricting federal hiring to only two employees for every three who leave. While I don’t think this specific bill is going anywhere at the moment, elements of this proposal could make their way into a sequestration-scrapping plan somewhere down the road.

Fuller told WAMU that federal contracting “has been a welfare program for the Washington metropolitan area. Taxpayers around the country send us their money, and we’ve been living well off of this, and now we have to face the music.” Sequestration alternatives that protect this long-standing corporate welfare program via reductions in federal hiring and pay freezes will likely have the same kind of depressive effects on the local economy as the across-the-board cuts required by sequestration.

House and Senate Adult Literacy Resolution Roundup

/ The Old Crank

Congressman Jared Polis (D-CO) is introducing a resolution in the U.S. House of Representatives to recognize the second full week in September as National Adult Education and Family Literacy Week. (As a D.C. resident, I was pleased to see that Congresswoman Eleanor Holmes Norton is a co-sponsor of the resolution.)

If you would like to ask your member of Congress to sign on as a co-sponsor as well, the National Coalition for Literacy (NCL) has all the information you need in order to make that ask. The deadline is tomorrow, July 31st.

In addition, Senators Patty Murray (D-WA) and Lamar Alexander (R-TN) have introduced a similar resolution in the Senate, and are also looking for co-sponsors among their Senate colleagues. For this one, the deadline is Wednesday, August 1st. For some reason, I can’t find this information on the NCL web site, but here is an e-mail NCL sent out last week with some helpful instructions on how to contact your Senator about it:

Senate Alert: Invite Senators to Cosponsor Resolution Dedicating National AEFL Week 2012!

Recently, Senators Patty Murray (D-WA) and Lamar Alexander (R-TN) introduced a senate resolution dedicating the week of September 10, 2012 as National Adult Education & Family Literacy Week! Already Jim Webb (D-VA) and Bernie Sanders (I-VT) have signed on as cosponsors to this measure. Would you like your U.S. Senator to support adult education and family literacy by cosponsoring this resolution?

If so, then please call his or her office today, requesting your U.S. Senator sign on as a co-sponsor.  Deadline to co-sponsor: Wednesday, August 1st

Instructions:

  1. Call your U.S. Senator’s office. Ask to speak to the legislative staff who covers adult education. Find the phone number here: http://bit.ly/Senate-AEFLWeek12
  2. Ask, “Will you please ask Senator __________________ to cosponsor a Senate Resolution recognizing the week of September 10 as National Adult Education & Family Literacy Week? The deadline to officially sign on as a cosponsor is August 1.”
  3. To cosponsor, legislative staff should call Jordan Smith on Senator Murray’s staff or Peter Oppenheimer on Senator Alexander’s staff. Offer to send the staffer acopy of the draft resolution.
  4. Talk about why it is important for the Senator to show his/her support as well as the success of local programs and impact of adult education in local communities. While NCL shares the “national picture” with Congress, only you have the local and personal story.
  5. Follow up as appropriate.

Also worth noting: Congressman Hansen Clarke (R) and Tim Scott (D), both of Michigan, introduced a House resolution at the very end of last month “[e]xpressing the sense of the House of Representatives that bolstering literacy among African-American and Hispanic men is an urgent national priority.”

The resolution, if approved, would, among other things, “affirm the goal of reducing adult illiteracy by 50 percent in these target populations and by 25 percent throughout the United States” over the next ten years; encourage local, State, and Federal agencies—as well as the private sector—to engage in “literacy promotion initiatives;” and encourage Federal agencies and private firms to support community-based organization programs and the use of trained volunteers to work with the target populations. (my emphasis).

Congressman Clarke also wrote a piece for the Huffington Post on Friday advocating for increasing resources for adult literacy programs—but without mentioning any specific support for legislation that would actually increase federal funding for adult literacy. Here are his recommendations:

First, rather than reducing school hours and facilities due to budget cuts, we must keep our schools open later and reopen libraries to serve students who are struggling to read. Second, we should boost funding for community-based organizations like Reading Works and ProLiteracy Detroit that provide adult literacy training. Such programs are understaffed and oversubscribed, with 74 percent of organizations nationally maintaining waiting lists. Third, we should reform our prisons to give inmates the tools they need to become successful members of the workforce. We can start to do this by providing more resources to teach literacy in prisons and by rewarding inmates who read more.