Remarks by the President on Job Creation and Job Training, 5/8/0. A. M. EDTTHE PRESIDENT: Good morning, everybody. Jill Biden, a community college professor who's devoted her entire life to education - - and who happens to be married to the Vice President - - to lead a national effort to raise awareness about what we're doing to open the doors to our community colleges. So I think this is one more piece of the puzzle. On the Job Training: Can Obama's Huge Infrastructure Program Really Work? Anyone looking for an indication of how dramatically the American political landscape has changed since September 2. The proposal floated recently by President- elect Barack Obama to spend at least $6. To win even broader support for the proposal, Obama advisors announced a plan this week to include about $3. To be sure, Obama’s infrastructure plan has drawn considerable debate, but mostly over the details — the size of the stimulus program, how to structure the plan to create the most jobs in the shortest time, and how to administer such a large program to limit corruption and pork- barrel projects. Indeed, two Wharton professors have prepared congressional testimony or launched new academic research on how to best provide meaningful oversight for government spending on an economic stimulus plan — an issue that has assumed greater importance amid news accounts that there has been virtually no transparency in the recent doling out of $3. It’s not at all obvious how this thing is going to work — they’re talking about projects that are shovel- ready. The following is the text of President Obama’s prepared remarks on Friday on government plans to provide educational opportunities for the unemployed, as released by the White House. This morning, we learned that. Obama’s job-training program model in Georgia “nearly bankrupt. One central program in Obama’s proposal will be built on the model. Why would you go into a job training program when you get years of. Obama put forth policies that he said would 'restore an economy where everyone gets a fair shot,' calling for more job training for. Obama's speech Tuesday could help make. He has just begun a research project with the Federal Reserve Bank of Philadelphia that seeks to better quantify the true job- creation value of an economic stimulus package like the one Obama is proposing. Spending Productively. In interviews with a half- dozen Wharton faculty about the Obama stimulus plan — which has been outlined only in broad strokes, with more details to come as the January 2. Wharton professor of insurance and risk management Kent Smetters, who voiced concern during and after the election that an Obama administration would impose new tax burdens on corporations, agrees that a massive infrastructure program could help bring a speedier end to the recession here in America, assuming the money is spent productively.“I think the most persuasive evidence is that very basic infrastructure projects like roads and bridges actually do have a big impact on productivity, so it’s good,” says Smetters, citing economic research conducted in the 1. His biggest concern about the Obama proposal is that too much money will be devoted to less productive types of job creation — as Smetters argues happened with some of the public works projects championed during Franklin Roosevelt’s New Deal in the 1. If so, that could actually slow the recovery. The new, more heavily Democratic Congress is expected to quickly approve some version of the economic stimulus package that Obama outlined in a radio address to the nation on December 6, when he pledged to “create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1. He said that basic infrastructure work is at the core of his drive to create some three million new jobs (revised upward from the original figure of 2. Great Depression. He warned state officials that his program’s motto will be “use it, or lose it” — that to receive the money, projects will need to be ready to begin hiring workers right away. The initial cost of the plan — based upon discussions between the Obama transition team and congressional leaders — is reportedly in the range of $6. Obama Administration Awards Nearly $500 Million in First Round of Grants to Community Colleges for Job Training and Workforce Development. Obama proposing more spending on job training programs. Another grant program would subsidize community. WITH THE GOP & THEY’RE ALL WILLING TO. Not all of the proposed dollars are for basic infrastructure such as roads and bridges. Several economists have been urging a plan as large as $1 trillion — an idea that has been seconded by cash- strapped state governors as well as the struggling American steel industry. Some of the additional spending, according to news accounts, would include a major push for improved energy efficiency — such as funding to spur the creation of a national power grid that could better harness wind and solar power, money for the weatherization of government buildings and critical facilities, and other so- called “green jobs” in renewable energy. In this year's State of the Union address, President Obama announced that Vice President Biden would lead a reform of America's job training programs, making sure that these programs 'train. Congress passes job training program to complete Obama’s trade package. We’re doing some maintenance right now. On President Obama’s Proposed Unemployment Insurance Program. Other spending proposals would target education — including construction of new schools as well as teacher training and lowering college tuition costs — or healthcare, where the incoming Obama administration has proposed a kind of technology infrastructure program that would help healthcare facilities better computerize their records. Drunken Sailors. Then there are aspects of the Obama plan, as it takes shape, that would steer very little toward long- term bricks- and- mortar- type projects — such as helping recession- battered state and local governments close the growing gaps on their accounting sheets (which must be balanced, unlike the federal budget), extending unemployment benefits and providing as much as $1. With so many bold programs likely to be pushed through in such a short timeframe — especially by government standards — it is easy to see why some are so worried about oversight.“We’re spending money like drunken sailors,” warns Wharton management professor Lawrence G. Hrebiniak, author of The Mismanagement of America, Inc. Traditionally, infrastructure programs are even more prone to political abuse, he notes, and he expresses concern that the new Democratic White House will promise pork projects for Republican districts in return for supporting liberal goals such as higher taxes on the top income bracket.“We need sound management,” Hrebiniak says. There needs to be transparency.”Wharton management professor Witold J. Henisz agrees that as the Obama administration and congressional leaders draw up the program, too much attention may be focused on where the money will be spent and not enough on how the program will be governed. He suggests that Congress could remove the potential taint of political- horse trading from the economic stimulus package by establishing a panel modeled after the Congressional Base Closing Commission, which helped to reduce the size of the nation’s military, devoid of pressure from the affected districts.“We should focus more on governance, which could give rise to people saying that we need to be timely and not offer excuses for inaction,” says Henisz, who recently prepared testimony for a Congressional committee looking into the oversight for a new stimulus plan. He cites a number of large projects that have been approved on a state or local level that can move forward with some extra federal assistance — such as a $1. California voters for a high- speed rail system from San Diego to San Francisco. However, there has already been some controversy over another more comprehensive list of projects prepared by the U. S. Conference of Mayors, which listed 1. Critics seized on the fact that the list included a new ride at a water park as well as a polar bear exhibit and even an anti- prostitution program — projects they claimed had little to do with job creation. When $1. 00 Is Really $5. Indeed, concern over whether the federal government can target the money to the right programs without substantial waste is motivating Wharton’s Inman to work with the Philadelphia Fed on research into how money from past stimulus packages has been spent, especially direct federal aid to states. When states have infrastructure projects that are “shovel- ready” for work to commence immediately, it means the funds for the project have already been allocated, he says. The new federal dollars really end up going for other state and local purposes, such as balancing the budget, that do not lead to direct job creation.“Everybody has in the back of their head this idea that you have a bunch of unemployed guys standing on the side of the road with shovels and that if you give the state of Pennsylvania $1. Inman notes. But the evidence shows that economic stimulus doesn’t operate that way, he says, adding that Pennsylvania Gov. Ed Rendell has indicated the state would use up to $4. So we’re trying to do the math” to show what percentage of federal stimulus money allocated to states is actually used to stimulate the economy. The key issue, he says, is that “much of that money goes into things that wouldn’t have happened otherwise. It might be $1. 00, but it might be only $5. There’s a big difference in the marginal effect on jobs between a dollar that goes into a company that hires guys who are unemployed and a dollar that goes into an unemployed guy’s back pocket.” The money that goes into the state government coffers may prevent a tax hike, “but the economic impact of that is more difficult to measure,” Inman says. Another critical debate regarding the stimulus plan is whether it includes too many programs — especially in the area of so- called “green jobs” that involve public alternative energy projects or conservation — that may be experimental and which lack the job- creation power of more basic public works projects such as new highways. According to Smetters, the evidence is that a large government role in translational research — work that takes critical discoveries in basic science and converts the findings into projects such as, in the case of energy, new fuel cells for cars or wind turbines — is a highly inefficient use of taxpayer money. He notes that while it is important for the government to help pay for basic research through its agencies such as the National Science Foundation, commercialization of new discoveries works better when financed by private enterprise. Orts, a Wharton professor of legal studies and business ethics who helped provide energy and environmental policy advice to the Obama campaign, takes a different view. He sees several types of programs that could create a number of new jobs while aiding the environment at the same time. In particular, he cites federal block grants to states that would help them pay for energy efficiency programs such as retrofitting and insulating existing buildings, as well as work on mass transit programs such as high- speed rail, which could reduce carbon pollution from automobiles.“It’s very encouraging that they’re going to subsidize new technologies,” Orts says. That was the course elected in early 2. President Bush and Congress; $1.
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