Federal Funding for State Innovation

When big bank speculation crashed the economy, millions were driven into unemployment.  But, according to a new study by two leading economists, the combination of the Troubled Asset Relief Program (TARP) loans to banks, loosening of the money supply, and federal stimulus funds for states and individuals, helped stop a far worse potential full-out Depression that would have left an additional 8.5 million Americans without jobs on top of the 8 million who have lost their jobs since the recession started-- what would have been a nearly doubling of the job loss due to the economic crisis.

State governments may seek additional funding for up to three additional years on broadband projects. The announcement comes from the National Telecommunications and Information Administration (NTIA) who recognized that "better data and strategic planning are needed on the state level.

The Council of Economic Advisers (CEA) recently released its third quarterly report on the impact of the American Recovery and Reinvestment Act (ARRA).  The report generally confirms what economists across the board have concluded: the Recovery Act has prevented a full economic collapse; generated millions of jobs; boosted national economic performance; and provided sorely needed state fiscal relief.

This week marks the one-year anniversary of the passage of the American Recovery and Reinvestment Act (ARRA).  The annual report by the White House task force monitoring the impact of ARRA funds, led by Vice-President Joe Biden, finds that up to 2.4 million jobs have been created or saved in both the public and private sector as a result of federal recovery efforts. 

How do we know the Recovery Act is working?

Over 70 members of the House of Representatives vociferously opposed ARRA, but returned to their home districts to take credit for job creation, investments in infrastructure and the green economy, and spending on critical community needs.  Many of these same lawmakers requested further federal funds for projects in their states.

In the State of the Union speech, President Barack Obama stated, "...jobs must be our number-one focus in 2010, and that's why I'm calling for a new jobs bill." With the fiscal crisis forcing states to layoff hundreds of thousands of teachers, nurses and police officers, the need for more federal job creation and state fiscal relief support is clear.  And there is substantial momentum building around this issue in the states.

Gridlock.  Slow fulfillment of promises of change in D.C.  A health care bill so compromised that even supporters are unhappy with many details. Frustration with D.C. seemed to be the clearest message from Massachusetts voters on Tuesday. But what can we expect other than gridlock and resistance when a 59-seat super-majority in the U.S. Senate is insufficient to pass serious legislation?  Or when monied interests in D.C. buy off support to block serious reforms on financial regulations, health care and climate change legislation? This is why bold, progressive leadership in the states matters. 

As this Dispatch will highlight, the first step is to fund jobs that support long-term economic competitiveness, notably by investing in people and physical infrastructure.  While the economic climate for profit-making business opportunities is more limited, investments in education, health care, transit and energy efficiency can create immediate jobs while strengthening building blocks for long-term growth.

With the new year, Progressive States Network is working with allies to launch a campaign to demand a new, federal job creation plan that includes fiscal relief to state and local governments in order to foster economic growth and create and maintain jobs. We are asking state legislators to sign onto a letter to promote this job creation plan, the full text of which can be seen at www.progressivestates.org/jobcreation. Legislators can sign the letter at www.progressivestates.org/jobcreation or by emailing jobcreation@progressivestates.org. 

On Tuesday, December 8th, President Barack Obama delivered an address to the Brookings Institution on the need for increased focus on the job crisis that is affecting so many working families across the country.