Executive Decisions

With all eyes on the Super Committee as it finishes determining the fate of the federal budget, Congress has been more quiet than normal. The same cannot be said about the White House, however, as President Barack Obama has taken a series of executive actions to promote his own economic policy agenda. In the past week, the White House has announced plans intended to help veterans, homeowners, teachers and student loan borrowers. But will any of these initiatives move the needle on a stalled economy or provide relief to cash-starved state budgets?

The wave of executive actions kicked off with a decision by the administration to offer waivers to states from certain provisions of the No Child Left Behind Act. Dozens of states are now wading through the 17-page guidance document issued by Education Secretary Arne Duncan in September to see if they can qualify. While the jury is still out on the process, it offers the prospect for states to safeguard their access to vital federal education dollars, avoid the taint of having thousands of schools that have made good progress to date being labeled as “failed,” and catalyze locally driven interventions for addressing the most needy schools and student populations. 

In keeping with the education theme, the president also announced a plan to cap federal student loan payments at 10 percent of discretionary income for some borrowers in 2012. Congress passed legislation in 2010 to allow for a 15 percent cap, with a 10 percent cap taking effect in 2014, so the president’s recent announcement is not as much a new program as it is an earlier date on an existing program. Still, this should come as good news to moderate- and low-income borrowers.

The White House also has announced that it will increase grant funding for colleges and universities that train veterans for careers as physician assistants. With a veteran unemployment rate more than two percentage points higher than the national average in September, the program streamlines the certification process for military veterans who already have substantial training as physician assistants during their service. The administration is trying to advance similar relief measures to homeowners with underwater mortgages by broadening and streamlining the Home Affordable Refinance Program to allow nearly anyone with a Fannie Mae- or Freddie Mac-backed mortgage to refinance.

All these announcements have something in common.

They are all loosely related to sections of President Obama’s proposed American Jobs Act that has effectively died in Congress. In fact, in announcing each of the proposals, the White House has admitted it is doing what it can, but if Congress passed the American Jobs Act, it would do more. These programs probably will not have a major impact on the economy, even less for state governments, but the “us versus them” narrative beginning to take shape does paint a picture of what the political landscape is going to look like for the next year.

While it may prove to be good politics, this same narrative makes it doubly difficult to tackle the long-term policy challenges, such as education and transportation reauthorization, that would have the most lasting impact on state governments and the constituents they serve.