Economic Opportunity and Anti-Poverty Programs

In an effort to stimulate local economic growth and free up credit markets, New Mexico Sen. Tim Keller and Rep. Brian Egolf introduced HB66, which would require the state to give preference to community banks and credit unions to manage the state's general fund operating cash depository account.  Currently, Bank of America holds the $1.4 billion account. 

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.

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. 

In this Dispatch, we emphasize that any stimulus spending has to be tied to increased accountability and transparency in spending decisions, especially by government contractors who often operate like a shadow government with little oversight.  One key reality is that those most in need often don't receive help from government spending without transparency and accountability measures built into the rules.  While the recent federal recovery plan made real strides in expanding such accountability, additional measures are still needed if the recovery plan is going to deliver real equity in our economic recovery.

By one estimate, the federal government spent over $367 billion in 2005 aloneon subsidizing Americans' retirement savings and tax breaks to build upother assets like buying a home.  Unfortunately, those subsidies gooverwhelmingly to those Americans who already have high-incomes; almostnone of it goes to the poorest Americans who need the most helpbuilding the financial assets that can lead to long-term economicopportunities and security.

States don't really know how many of their residents are poor.  The current federal poverty measure uses a forty-year old, widely criticized methodology.  It neither accounts for many of the resources poor families receive from the government, such as Food Stamps and the EITC, nor does it, conversely, factor in many additional expenses the poor face that are not accounted for in the federal measure, such as transportation costs, child care and local costs of living. 

It's now ten years since the 1996 welfare law promised to end "welfare as we know it." That goal may have been accomplished, but the results have been decidedly mixed, both for poor families and for state lawmakers coping with changing federal mandates.