| Sandy Baruah Chief of Staff, EDA - Panel on “The Future of Economic Development Programs Through the Federal Initiative on Strengthening America’s Communities: A View from Washington”
Meeting of the Council on Extension, Continuing Education and Public Service of the
National Association of State Universities and Land Grant Colleges (NASULC)
Hilton Washington Embassy Row Hotel Thursday, June 9, 2005 | | Panelists (in order of speaking): Baruah; Matt Chase, Executive Director, NADO; Sam Leiken, Senior Policy Analyst, NGAIntroduction by Ted Settle, Director of Economic Development, Virginia Tech• Good morning, and thank you, Ted, for that kind introduction. • On behalf of Commerce Secretary Gutierrez and Assistant Secretary David Sampson, I would like to thank NASULGC (nuh-SULL-jick) for the invitation to be on this panel this morning to discuss the President’s Strengthening America’s Communities initiative.• As proposed, the initiative would fundamentally update and improve the federal role in regional economic and community development activities, which, if successful, include the participation of colleges and universities. • I would like to begin by providing the underlying principles behind the proposal, followed by some key components of the program. Finally, I will give you an update on implementation, and then open it up for discussion. • When the President submitted his proposed 2006 Budget to Congress in February, he outlined an ambitious agenda to ensure America’s economy remains the most prosperous in the world. • His agenda is the foundation for economic success in all of America’s communities.• Although the national economy is strong and getting stronger, there are many communities throughout America that are struggling—communities where traditional industries do not employ as many workers as they did a generation ago. • There are areas experiencing high levels of unemployment and poverty that deserve – that need – development assistance, and the President is committed to providing that assistance.• The President and the Administration—as well as leading economic and community development experts—believe that there is no reason why the federal delivery system of these important resources should be disjointed, duplicative, and overly complex. • There has got to be a better way – and that’s why we believe that the Strengthening America’s Communities initiative is critical to the economic health and well-being of those communities that need assistance the most. • As the 21st Century economy emerges, we can’t expect to meet its challenges with yesterday’s tools for economic growth. Over the last 40 years, the federal government has spent over $100 billion on anti-poverty programs. • Certainly, these programs have played an important role in providing individuals in need necessary services, not to mention a sense of dignity.• But the federal government’s record regarding community-based anti-poverty programs is mixed. The Progressive Policy Institute, the Government Accountability Office (GAO), the Organization for Economic Cooperation and Development (OECD), Federal Reserve Chairman Alan Greenspan, and the Council on Competitiveness in its December 2004 “Innovate America” report, have all called for some form of consolidation of duplicative development programs. • Clearly, the Administration is not the only group who thinks we can and should do better. • As you can see at the top of page 5 in the Initiative’s overview document, there are currently 35 economic and community development programs housed in 7 different cabinet agencies, forcing communities to navigate a maze of federal departments, agencies and programs to access federal assistance.• There is widespread duplication and overlap across these many programs, inconsistent criteria for eligibility, and little accountability for how funds are spent. • The programs lack clear goals or performance measures, and many of them are unable to sufficiently demonstrate any measurable impact.• Too many communities that no longer truly need assistance continue to receive funding—funding that could be going to needier communities. • For example, 38% of the grants from the CDBG program at HUD are going communities that have lower poverty rates than the national average. • And, the CDBG formula produces some very interesting and mysterious situations—Fresno, California, for instance, receives $16 million per year while Cleveland, OH, with the same population and poverty levels, receives $53 million.• This is not to say that Fresno receives too little or Cleveland too much, but how can the same types of cities with almost identical criteria receive hugely different amounts of assistance? • The new program under the Strengthening America’s Communities Initiative will target communities that need assistance the most by setting new eligibility requirements based on key economic indicators such as job loss, unemployment rates and poverty rates.• The program will track progress toward certain goals, such as increasing job creation, new business formation, and private sector investment from an economic development standpoint; and, from a community development perspective; increasing homeownership, including first-time and minority ownership, and commercial development.• The President’s Strengthening America’s Communities Initiative would take 18 of the 35 federal economic and community development programs – principally the direct grant programs – and consolidate their funding into a single, new grant program called Strengthening America’s Communities Grant Program.• As you can see at the bottom of page 5 in the overview document, this consolidation greatly eases access to the federal system. For distressed communities with limited resources and expertise, the President’s plan reduces the number of federal bureaucracies they need to deal with from 18 to 1. • I think that’s important. The federal government should not require communities already short on resources to devote a large proportion of those resources to negotiate a maze of federal bureaucracies. • Furthermore, the challenge in building growing, vibrant economies is that reliance on government and philanthropic resources to get the job done is an inadequate approach. • The real opportunity is to engage the much larger resources of the private sector to change economic opportunities for our most distressed communities and citizens. • We want more resources to flow to the most distressed communities so that they can go beyond “treading water,” and target additional federal government resources to attracting and leveraging the power of private markets to renew themselves.• The communities that have made the most progress over the past decade have had leaders who have made it their priority to remove barriers to economic growth and attract new private sector investment which creates jobs and produces new tax revenue. • They have promoted a culture of enterprise to foster innovation, new business formations and attract new investment, bringing once abandoned property back into productive use as employment centers and revenue generators.• The next generation of community and economic development and revitalization must embrace the lessons learned from communities and regions that are succeeding. That is what the Strengthening America’s Communities Initiative does.• I am pleased to report that the Strengthening America’s Communities Advisory Committee—a group of national, regional and local economic and community development leaders—has completed its three meetings on April 15 in Fresno, California; May 13 in Kansas City Missouri; and June 2 in Clearwater, Florida to work towards a report that will provide advice and recommendations to Secretary Gutierrez on the implementation of the Strengthening America’s Communities Initiative. • The Advisory Committee’s recommendations will play an important role in developing the enabling legislation for the initiative, which will be submitted to Congress later this summer.• We will keep you posted on the activities of the Committee through the initiative’s website at www.doc.gov, where you can find agendas and transcripts from meetings of the Advisory Committee, Federal Register notices for upcoming meetings, and other information on the Initiative.• With that, I would like to again thank you all for the opportunity to discuss this proposal with you, and look forward to your questions and comments.
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