by Mike Gallagher for the CMF NewsWire
Posted: 8/6/2009
At no time in history save the Great Depression have Americans been in such an incredibly vulnerable, frightening, yet exciting position to fundamentally change the economic direction and future of the U.S., according to one of the nation’s top metro/regional policy reform experts.
Bruce Katz, vice president and founding director of the Brookings Institution’s Metropolitan Policy Program, is fresh off a stint working with the Obama administration and the U.S. Department of Housing & Urban Development (HUD) helping officials formulate new ways to look at and change the federal government’s existing policies around such issues as housing, transportation and metropolitan stimulus.
Sharing his expertise, ideas and insights recently with Michigan grantmakers into how and why the federal government is making available unprecedented resources – $787 billion – through the American Recovery and Reinvestment Act of 2009 (ARRA), Katz says the time is now for foundations and others to lead the charge.
“Michigan foundations have a remarkable opportunity to help move forward the conversation about economic recovery ideas and goals among local, state and federal policymakers and determine the best use of these unprecedented resources,” says Katz.
The nationally acclaimed Brookings advisor met last week in Lansing with more than 20 Michigan foundation executives, staff and consultants at a meeting hosted by the Council of Michigan Foundations (CMF), the Office of Foundation Liaison (OFL) to the Governor and the Charles Stewart Mott Foundation.
Katz’ talk is a follow-up to his keynote at last fall’s CMF 36th annual conference on the need for metropolitan stimulus and empowerment along with fundamental changes in the way federal and state governments deal with an economic crisis, legacy procedures and rules and reshaping its agenda and goals to revitalize 21st century America.
Noting a fundamental fallacy with ARRA, Katz says because the federal stimulus package was assembled in haste to deal with quickly deteriorating economic conditions, it reflects many of the standard operating procedures and rigid delivery systems of five decades worth of “legacy” federal government.
“Because of the need to intervene quickly, the package relies heavily on existing federal-state-local spending mechanisms, subject to existing laws, formulas and guidelines,” warns Katz. “We need to look at new roles for the state and federal governments to play to ensure the best use and most dramatic impact of these stimulus dollars.”
Five New Roles To Ensure Success
President Obama’s administration is setting a new course in the way the U.S. government works and is exploring the feasibility of new models to carry out a radically different kind of interaction between the states and the federal bureaucracy, notes Katz.
“What is happening with the Obama administration is there is more of a networked, governance type of model where the think tanks on the outside are working with the White House, OMB (Office of Management and Budget), the vice president’s office and the agencies to really be a conduit between innovators and practitioners around the country to help in real, rapid time,” he says.
“There is this ‘tyranny of the clock’ when budget deadlines are due, appropriations occur and when authorized bills are introduced to really feed in concrete and specific ideas…but we need to find ways to streamline this process and find ways to make faster, more effective and coordinated change.”
To help accomplish that, Katz says he sees five, nonpartisan roles that local/state/federal officials, citizens and foundations need to play to make the bureaucracy more responsive in time of great economic and social upheaval:
- There is a role for metros and states to implement well the policies and programs that have already been put in place by this administration, the Recovery Act being the major piece of that.
- There is a role for states to prepare for the next wave of programs and initiatives that are about to cascade down from Washington and they will look much different from those created in the 1970s and 1990s. There will be more focus on integrated problem solving and inter-jurisdictional collaboration along with a focus on catalyzing markets.
- There is a role to play for states like Michigan in identifying areas where the Obama administration is not focused with precision on issues that have regional applications. There needs to be both policy development and advocacy by Michigan and other state’s congressional delegation that focus on and utilize that which is unique due to their shared industrial heritage.
- There is a role for state and federal government officials, foundations and community leaders to think through how the national government can leverage and align with needed state reform efforts.
- There is a role for everyone to focus on the 2010 election cycle and its upcoming state and federal campaigns and how candidates will work to implement metro-focused solutions to 21st century problems.
“There is no question this is a cataclysmic moment we are all living through,” notes Katz. “The country hasn’t seen anything like this since the Great Depression. We’ve looked at a lot of numbers – unemployment, housing starts, home completions, etc. – and some of the indicators are the worst numbers in 50, 60 years since we began data collection nationwide.
“We think we’ll see a U.S. poverty rate hit 16% by the end of this year with another 10 1/2 million people pushed into poverty.”
From small town residents to Washington politicians, “We need to recognize that we are – and must act like – a metro nation,” warns Katz. “We must adopt market-changing strategies in the areas of healthcare reform and learn to share prosperity over time.
“We are not small town connected; we are metro area connected and our future depends on interaction and innovation,” he adds.
Systemic Change Is Coming
Near-term developments to focus on, suggests Katz, include how ARRA will not only create more jobs, but generate new governmental structures and relationships.
“If you look at the 2010 federal budget…there will be significant signature initiatives that will impact every state, including Michigan…and systemic change is coming,” he says.
For example, notes Katz, HUD will be looking to implement integrated transportation around metro neighborhoods; the U.S. Department of Energy has many outdated Cold War laboratories and will seek to build new, more highly efficient networks; and healthcare reform could fundamentally change the way doctors, hospitals and insurance companies do business.
Katz also notes that while the federal government during the last six months has been the “primary investor” in this coming change, state officials will set the rules for new governance through anticipated reforms and needs in the areas of human capital, infrastructure and social policy change.
“The question for foundation leaders and others is ‘How can federal investments be used to galvanize action around state governance?’” says Katz. “Artificial political borders don’t matter any more. There needs to be – and has to be – linear connections between federal investments and social/state government reforms.
“Success is fundamentally related to having a clear vision and having a clear way of realizing that vision,” he adds. “If we can cement a network of folks across multiple disciplines…that’s a different, political, organizing moment we need to be involved in.”
Responding to Katz’ presentation, Tom Woiwode, Greenways Initiative director of the Community Foundation for Southeast Michigan, says that because of the breadth of economic problems throughout Michigan, some federal stimulus dollars are being diverted by state officials to other programs and projects.
“Can we force their hand to use this money properly?” Woiwode asks Katz.
“States can do a lot to thwart the federal economic reforms,” replies Katz. “That is why there needs to be a focus on where these dollars are going in Michigan and other states. Foundations can initiate and press the conversation on these actions and spur action by citizens to let state officials know what is acceptable and what is not.”
Neal Hegarty, program officer for the Charles Stewart Mott Foundation, adds, “Philanthropy can play a role in getting behind an effort to gather information” on brownfields and land reclamation efforts, for example and who needs to pay for these types of infrastructure projects.
Katz responds, “No one does land reclamation better than the Europeans. No one does it worse than America. There is definitely a role here for foundations in these strategic and important areas.”
David O. Egner, president and CEO of the Hudson-Webber Foundation, says, “There is an interesting quandary in Michigan. The old economy is still in existence in our state. There is a void in reality. We also have not figured out the leadership issue.
“How do we (foundations) get the right things on the table to discuss and influence outcomes?” asks Egner.
Katz says, “In the end this is about (initiating) an issues campaign. You have to force the issues to the forefront that are important to you. In most parts of the country, it’s a waste of time to wait for that transformative leader. Foundations can and should be a catalyst for change.”