Will Feds Get Behind A National 'CEO' Approach?

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Mayor Michael Bloomberg last month proposed a new poverty-fighting program – not just for New York City, but in cities across the country. Called the Federal Urban Innovation Fund, it would invest $5 billion in major urban centers, with the aim of creating new workforce development initiatives to build a stronger, greener economy.

Bloomberg introduced the idea for the innovation fund at the winter meeting of the U.S. Conference of Mayors, held annually in Washington for leaders from the 1,200 largest cities. He described it as modeled on the Center for Economic Opportunity (CEO), the public-private partnership his administration created in 2006 to address local poverty in specific ways. The Innovation Fund would spread the CEO’s strategy of incubating smaller pilot programs whose progress is measured, inviting other urban centers to develop their own poverty-fighting pilots and expand those that meet with success.

The Fund has been part of ongoing stimulus package discussions, according to officials both at the city and federal level. CEO spokeswoman Kathleen Carlson said the proposal had been issued in formal communication stating NYC’s priorities to Congress and the White House and that reactions had been “positive thus far.” Deputy Mayor for Health and Human Services Linda Gibbs also visited the offices of several representatives and senators to advocate for the innovation fund along with other NYC priorities.

While many of the programs in the CEO are still undergoing further evaluation, Bich Ha Pham, the director of policy, advocacy, and research at the Federation of Protestant Welfare Agencies, said that the waitlists for several programs demonstrated that the CEO was meeting a “clear need.” She said that the sign of an effective program is when attendees are recommending it to others, and talked about how participants were urging friends and family to join because of their own experiences with the CEO.

The fund would also manage a plan to revise the national poverty measure, a decades-old formula that many experts have argued is out of date and underrepresents the actual number of impoverished people. New York City implemented its own updated assessment formula last summer, using a wider variety of criteria to demarcate poverty as opposed to the current federal standard, which is determined only by a formula based on the price of food. Under the new measure, NYC saw a 4 percent increase in those qualified as “living in poverty.”

Jeremy Reiss, director of workforce mobility at the Community Service Society, lauded the revised poverty measure and noted that revising the poverty line at the federal level would increase eligibility for current entitlement programs like Medicaid and food stamps. “It’s historic,” Reiss said, “that a major urban leader is looking at systemic poverty issues.”

He also thought that expanding New York City’s approaches into a national fund was potentially a good step, noting that while each of the individual programs may be small, they are meeting the “discrete needs” of their target populations.

CEO spokeswoman Carlson pointed to several programs as likely candidates for expansion if the fund materializes, but would not estimate how much money the city might stand to gain. In their first year of existence, the Young Adult Internship Program connected more than 1,300 youth to short-term paid internships, job placements, education and training and follow-up services, she said, and the Community Based Organization Outreach initiative – which extends the reach of the city's Workforce 1 Career Centers – placed more than 2,000 people into jobs. CUNY's Accelerated Study in Associate Programs (ASAP), which is funded by CEO and provides academic and economic support to help students complete associate's degrees more quickly, also is showing early promising results with students demonstrating better academic achievement and college retention than a comparison group. In fact, some tenets of the ASAP approach, such as a summer orientation session and required full-time enrollment, have been incorporated into CUNY's proposal for a new 5,000-student campus in Manhattan.

Although Reiss from CSS was largely positive about the CEO's ideas, he was more skeptical about the innovation fund’s eventual inclusion in the stimulus package. He admitted he was unsure if “a $5 billion urban innovation fund is realistic, even given the current stimulus.” That’s because, given the urgency of the financial crisis, money is being channeled through existing programs to allow for faster absorption into the economy. Creating new programs is at cross purposes with the intent of the stimulus package, due to the extra time required for implementing such funding.

So, some CEO programs – like Opportunity NYC, which has been slow to produce evaluations – may appear too unproven to be replicated elsewhere. A set of conditional cash transfer programs, Opportunity NYC is funded by private philanthropists to reward poor families with cash for “good behaviors” like high test scores, going to the doctor and holding down a full-time job. But critics argue that the method for measuring the success isn't rigorous enough. (See City Limits Investigates, Spring 2008, Target of Opportunities.)

At this point, both the House and the Senate versions of the stimulus bill have significant increases for Workforce Investment Act (WIA) funding. And according to Allegra Baider, senior policy analyst at the Center for Law and Social Policy in Washington, programs like the WIA and others would match some of the priorities outlined in the innovation fund. But, Baider was quick to note, there were also ideas that didn’t have specific authorizations from the stimulus.

Adult education, for instance, is not currently included, something she said would be crucial in providing effective job training and career pathways for lower-income and low-skilled adults. She added that there was also no funding “explicitly included” for transitional jobs and that there were “barriers within the existing legislation” to creating paid public works projects.

These omissions and obstacles reflect a design by Democrats that relies more on existing legislative vehicles – leaving limited political will for a brand new fund for urban centers to try out new ideas. Furthermore, basing a countrywide program on pilot initiatives that are just beginning to show their results could be seen as an overly ambitious risk by lawmakers in Washington. That's not been the case in New York, where the results of the CEO's programs arguably should be a mixed bag. They are intended to test out whether the strategies are or aren't effective in fighting poverty and then make changes accordingly.

Carlson acknowledged there’s no Urban Innovation Fund currently in the stimulus packages, but the administration views it as “a moving target,” and continues to advocate for the fund. For the time being, however, the recovery bill that passed the House includes a similar proposal by U.S. Rep. Charles Rangel, in that it provides federal resources directly at the local level for economic development in distressed areas, or recovery zones, according to Rangel press secretary Elbert Garcia.

Rangel “certainly believes that we have to look at new and innovative ways to combat poverty and that Mayor Bloomberg's proposal (and his anti-poverty initiatives in NYC) deepens that discussion by providing ideas that could lay the foundation for models nationwide,” Garcia said.

Baider says it’s not as though the administration is asking for the wrong things, however.

Alongside the innovation fund, Bloomberg’s proposal to the White House also calls for transitional job creation, the expansion of the earned income tax credit, and green jobs investment—all priorities President Obama underlined during his campaign for office. Baider says not to expect the whole agenda to be implemented in the context of the federal economic recovery package. “They’re really aiming at economic stimulus and they want to pass it quickly,” she said.

– Casey Samulski

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