stimulus

From an editorial in today's New York Times:

Federal help also could keep states from rushing into short-term fixes that could have bad long-term consequences. Pre-kindergarten programs save enormous amounts of money later on because as the students age they are less likely to repeat a grade, need special education or get involved with the justice system.

We agree. The state fiscal stabilization fund in both House and Senate stimulus bills should come in handy here, and the new CCDBG funds should help preserve childcare funding in these tight fiscal times.

Earlier this month we wrote about the early education funding provisions in the House version of stimulus legislation currently making its way through Congress. Today, Early Ed Watch obtained more information about the early education funding provisions in the Senate’s version of the stimulus bill.

The House and Senate stimulus bills are similar in many ways:

Earlier today, House Appropriations Committee Chairman David Obey (D-Wisc.) released an outline of spending priorities for an economic stimulus package. Obey's plan would provide $550 billion in new spending to stimulate the economy, including over $52 billion in funding for Pk-12 education programs, including early education. (The entire bill can be found here.)

Specifically, the proposal calls for:

The recommendations for early education in the stimulus package just keep on coming. Before Christmas we wrote about proposals from Pre-k Now, CLASP, the Early Care and Education Consortium, National Women’s Law Center, NACCRRA, and others. Last week the National Institute for Early Education Research (NIEER) added to the fray with a “Federal Early Childhood Policy Guide for the First 100 Days.”

NIEER’s offering four recommendations for federal policy action on early education in the first 100 days of the Obama administration:

• Pass a stimulus package that includes $19 billion (spread over two years) to create new places in quality early care and education for 1 million children.
• Increase Child Care and Development Block Grant (CCDBG) funding by $500 million
• Increase Head Start appropriations by $1 billion
• Create a presidential Early Learning Council to coordinate federal early care and education programs and facilitate federal-state cooperation. (This last proposal reflects a proposal President-elect Obama made during the campaign).

In a coincidence of timing, we published our roundup of various organizations' proposals for early childhood care and education in the stimulus package at about the same time as Pre-K Now released a letter to House Speaker Pelosi and Senate Majority Leader Harry Reid outlining their stimulus agenda for early education--so Pre-k Now's agenda didn't make it into our roundup.

Pre-k Now's first recommendation calls for state fiscal relief--an idea we've previously noted might be the best way to support early education in the stimulus, by staving of likely state cuts to early childhood and elementary school funding. Like some of the organizations we mentioned yesterday, they're also calling for $3 billion in increased funding for Head Start and Early Head Start, and another $3 billion increase for the Child Care and Development Block Grant.

As we've said previously, one thing for early education advocates to keep an eye on in the stimulus package is ensuring that community-based early education providers have access to any new school construction funding that the legislation provides: And Pre-k Now has kept their eye on that ball, encouraging Congress to allocate $1 billion of any school modernization package specifically for school facilities.

As we've previously noted, the economic crisis is hitting early childhood care and education programs, too. Parents who've lost their jobs are pulling their children out of preschool and child care programs. Child care centers in hard-hit areas are struggling to stay afloat amid growing vacancies, threatening the care other families need to stay in the workforce. Even worse, some financially strapped families, faced with choosing between child care and other essential bills, are choosing to leave their young children home alone while they work--a situtation that puts little ones in considerable danger. And states face budget shortfalls that could lead to cuts in child care funds.

During the design of the fiscal stimulus plan in early 2008, the mantra was that it must be "timely, targeted, and temporary." Larry Summers, in his recent piece in the Financial Times, acknowledged that these principles may have been flawed and that a longer term stimulus plan that includes infrastructure investment will be necessary.

At the time, people feared that the economy would recover quickly and any stimulus that went beyond the summer would add to inflationary pressure. Many now fear that the economy will be stagnant for much longer and that the stimulus checks will only provide a temporary boost to consumption, after which, the economy will enter a longer period of stagnation or even recession.

During the formulation of the stimulus plan, the New America Foundation Economic Growth Program and Bernard Schwartz advocated investing in infrastructure to give Americans jobs with high incomes and make businesses more competitive. Now, Summers agrees that infrastructure investment should be a component of further fiscal stimulus.

Larry Summers - What we can do in this dangerous moment (June 30, 2008)

I found Sunday's front page New York Times story on the fate of rebate checks a bit odd. With the remarkbale increases of gas prices, mortgage delinquencies, and household debt, the paper of record sounded surprised that families were not exchanging their windfall directly for more consumer goods.

Perhaps I shouldn't be shocked given how Washington sold this $158 billion package. As I said before, people would be forgiven if they felt it was their patriotic duty to spend their rebates. We knew at the time that many people were inclined to use these resoures to pay down their debts or even contribute to their savings. We know that other people in pretty good financial shape would hardly be inclined to change their behavior in any significant way.

That is not to say that there was never a macroeconomic justification for the policy but it was hard to hear it articulated by our elected leaders. Perhaps this should be an excuse for the Times. On second thought, perhaps they should have been required to read their own in-house economist (Paul Krugman) who has a spot on their op-ed page. This may have made for a more illuminating piece.