An idea whose time has come (again)

Senator Jim DeMint (R-S.C.) recently asked "Why are taxpayers paying for wine tasting?" taking aim at the Economic Development Administration (EDA), a Department of Commerce agency that stands to gain funding from pending legislation that even the White House calls too expensive. We agree with Senator DeMint's criticisms of the panoply of federal economic development programs, but we find his call to shut down EDA akin to treating a severed arm with gauze pads - a small step when more significant action is needed to stop the bleeding. A far more meaningful solution would be for the federal government to fundamentally restructure and consolidate the various economic and community development programs, which is exactly what President George W. Bush tried to do six years ago before being blocked by both Democrats and Republicans in Congress.

In truth, EDA is merely one of many redundant federal agencies that could actually accomplish something meaningful if lawmakers had the courage to merge them under a single authority, cut overhead, and put accountability measures in place.

The current system is fragmented and confusing. 

There is a maze of more than two dozen federal economic and community development programs, housed in various cabinet agencies, each with their own set of rules, narrowly focused priorities, and application processes. The communities most in need of creating jobs are those with the fewest resources available to navigate this maze worthy of a Byzantine administrator. Yet, some of the wealthiest communities in America receive substantial federal funds that are supposed to reduce economic blight. The Community Development Block Grant (CDBG) program at HUD is a glaring example. Worst of all, unless individual program stewards expend the time and expense to implement strong performance measures, as we did at EDA, there are very few metrics to measure a program's impact.

With this in mind, the Bush administration in 2005 proposed the Strengthening America's Communities Initiative (SACI), which would have consolidated 18 existing federal community and economic development programs, including EDA. These 18 programs across the government largely work in isolation of each other - they are more likely to be sparring over funding than synchronizing efforts or cooperating - encouraged by a labyrinth of Congressional committees responsible for program funding. SACI proposed to put all of these programs under the authority of a single department that would have administered a program to allocate federal assistance to communities based on objective criteria with sound performance metrics for results, and a smaller competitive program to fund innovative job creating initiatives developed at the local level.

Effective program execution is possible in government, but efforts must be maintained from administration to administration. During the Bush administration, we improved EDA from one of the lowest performing programs to one with the second highest federal performance rating. We did this through the implementation of one of the federal government's first strategic balanced scorecards to monitor program performance and a tightly focused strategy designed to attract private sector capital and jobs into a region. The emphasis was on building a long-term, market-based competitive position.

Under SACI, overall funding for the 18 programs would have fallen from $5.6 billion to $3.7 billion, yet we believe better results would have been achieved thanks to better coordination and program design. Yet on a bipartisan basis Congress sadly chose to reject this new approach and continued to fund the 18 programs separately.

Now, we are paying the price for Washington's shortsightedness, and because of the dire state of our economy, having to consider more draconian measures than most of us ever thought plausible back in 2005. As with Social Security and immigration reform, our country would be in better shape today had Congress acted on President Bush's proposal instead of kicking the can down the road.

Senator DeMint and other critics of EDA are right to highlight examples of wasteful spending, unfair earmarks, and overall government disorganization. Yet by condemning government inadequacy one program at a time, we risk overlooking the greater need to achieve real, comprehensive reform, and efficiency throughout the federal government's various economic development offices.

Had Congress embraced SACI back before the recession, we might not be facing today's choice of spending more money on a program found to be inefficient, or killing it because it's ineffective. At the very least we should be learning from lost opportunities, and once again consider a plan like the SACI that would save the taxpayer money and help get people working again.

David A. Sampson served as Assistant Secretary of Commerce for Economic Development from 2001-2005 and as Deputy Secretary of Commerce from 2005-2007. Sandy K. Baruah served as Assistant Secretary of Commerce for Economic Development from 2005-2008 and as head of the U.S. Small Business Administration from 2008-2009 under President George W. Bush. 

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