The COVID-19 crisis precipitated the worst economic downturn since the Great Depression, and is exacerbating existing inequities, including place-based opportunity gaps. We need a bold, innovative agenda to spur widely-shared economic growth and create more opportunities for more people in places that have been left behind.
The Rebuilding Economies and Creating Opportunities for More People to Excel (RECOMPETE) Act would establish a new federal block grant program at the Economic Development Agency (EDA) to empower persistently distressed communities with flexible 10-year RECOMPETE Grants to meet local economic development needs, create good jobs, invest in their workers and businesses, connect local residents to opportunities and resources for long-term success, and rebuild stronger with lasting opportunity and economic growth.
- Why local control? The needs of communities differ. For some, the barrier to growth may be inadequate broadband access or poor freight mobility, in which case, they could use RECOMPETE Grants for infrastructure development. Others may need more workers with skills in growing industries, so they could use these grants to invest in training and educational opportunities. Or, they may need support for brownfield redevelopment and infrastructure investments to support greenfield development, job retention resources like childcare services, or support for small business and entrepreneurs. Communities know best what their challenges are, and solutions should be locally-driven.
- Why flexible use? As much as the needs from one community to another can vary, they also are likely facing multiple challenges that require a diverse set of solutions. Direct spending on services such as workforce outreach and training, infrastructure and housing development, job retention programs like childcare, and resources for small businesses and entrepreneurs are among the most cost-effective ways to boost lasting employment and wage growth for local workers. Developing and investing in a truly comprehensive economic development approach that addresses each economic challenge through a wide range of programs and activities will maximize communities’ efforts and investments.
- Why direct long-term help via formula funding? Persistently distressed communities are far more likely to have needs not addressed by short-term, ad-hoc grants, and often are not eligible to receive direct federal assistance through existing block grant programs. These communities are also the least likely to have the capacity to navigate the maze of competitive federal grant programs. RECOMPETE Grants are based on each communities’ level of economic distress and are developed and implemented with robust technical assistance from the EDA, in order to provide the consistent, longer-term assistance needed to execute a comprehensive, long-term economic development strategy.
- Why distressed communities? These places were hurting prior to the COVID-19 pandemic and have seen their challenges exacerbated by the subsequent recession. Many were left behind following the Great Recession or by the changing economy as certain sectors declined, like the timber industry in Washington state. These communities have largely been left out of the investment, wealth, innovation, and opportunity concentrated in a handful of major metro areas and have been unable to transform their economies and rebuild. They are most in need of jobs, and by investing in these areas, America has the greatest opportunity to expand overall employment, diversify geographic opportunity, and boost the national economy.
- Administration: The RECOMPETE Grant program would be administered by the EDA, leveraging the expertise and resources of the EDA to provide thorough technical assistance and funds to help eligible communities develop, implement, and carry out 10-year comprehensive economic development strategies and activities, administer the grants, and conduct oversight of the programs.
- Eligible Areas:  Persistently distressed local labor markets, local communities, and Tribal Governments would be eligible to receive assistance under this Act.
- Local labor markets are discrete Core Based Statistical Areas (CBSAs), or metropolitan and micropolitan statistical areas, and commuting zones (CZs). Local labor markets with a five-year average prime-age employment rate that is two and a half percent or more below the national five-year average prime-age employment rate are eligible to receive the grant.
- Local communities are individualunits of local government and territories within a discrete local labor market that is not distressed. Local communities with a five-year average prime-age employment rate that is five percent or more below the applicable local labor market five-year average prime-age employment rate and national five-year average prime-age employment rate, and which meet other certain criteria, are eligible to receive the grant.
- Tribal Governments are the recognized governing body of any Indian or Alaska Native tribe, band, nation, pueblo, village, community, component band, or component reservation, with a five-year average prime-age employment rate that is two and a half percent or more below the national five-year average prime-age employment rate are eligible to receive the grant.
- Eligible Uses: Eligiblecommunities would develop a 10-year comprehensive economic development strategy for addressing the unique local economic challenges, closing their prime-age employment gaps, increasing per capita income, and creating sustained economic opportunity. RECOMPETE Grantscould be used for a wide variety of purposes, including:
- Business advice for small and medium-sized local businesses and entrepreneurs, such as manufacturing extension services and small business development centers.
- Land and site development, such as brownfield redevelopment, research and technology parks, business incubators, business corridor development, and Main Street redevelopment.
- Infrastructure and housing, such as improvements in transit, roads, broadband access, and affordable and workforce housing development.
- Job training oriented to regional or local labor market needs, such as customized job training programs run by local community colleges in partnership with local businesses.
- Workforce outreach programs that reach out to lower-income neighborhoods and embed job placement and training services in neighborhood institutions.
- Job retention programs for support services such as job success coaches, childcare services, or transportation support.
- Other uses deemed appropriate by the EDA.
- Allocation: Eligible communities could receive a maximum RECOMPETE Grant equal to the cost of closing half of the prime-age employment rate gap for that area, subject to cost-sharing. The formula is determined by the eligible community’s population, level of distress, and other factors. The Federal share of the project cost would be a minimum of 50 percent and a maximum of 100 percent, depending on the level of distress and the needs of the communities served.
- Labor Standards: RECOMPETE Grants require robust labor standards and local prevailing wages for laborers and mechanics employed by contractors and subcontractors on projects and activities outlined in the plan, consistent with the Davis-Bacon Act.
The legislation introduced by Rep. Kilmer is co-sponsored by 50 members of the U.S. House of Representatives, including: Jaime Herrera Beutler, Suzan K. DelBene, Doug LaMalfa, Pete Aguilar, Steve Palazzo, Ami Bera, Donald S. Beyer Jr., Earl Blumenauer, Lisa Blunt Rochester, Cheri Bustos, Salud Carbajal, David N. Cicilline, Jim Cooper, Angie Craig, Jason Crow, Sharice Davids, Val Demings, Ted Deutch, Debbie Dingell, Bill Foster, Josh Harder, Jim Himes, Steven Horsford, Chrissy Houlahan, Hakeem Jeffries, Ro Khanna, Dan Kildee, Ron Kind, John B. Larson, Elaine G. Luria, Kathy Manning, Lucy McBath, Joe Morelle, Stephanie Murphy, Donald Norcross, Jimmy Panetta, Ed Perlmutter, Scott Peters, Dean Phillips, Kathleen Rice, Tim Ryan, Adam Schiff, Kim Schrier, M.D., Terri A. Sewell, Mikie Sherrill, Darren Soto, Marilyn Strickland, David Trone, Filemon Vela, and John Yarmuth.
The companion legislation introduced by Senator Coons is co-sponsored U.S. Senators Michael Bennet, Amy Klobuchar, and Jacky Rosen.
Bartik, Tim, et al, “Stimulus steps the US should take to reduce regional economic damages from the COVID-19 recession,“ Brookings Institute & W.E. Upjohn Institute for Employment Research (Mar 2020)
Fikri, Kenan et al, “Uplifting America’s Left Behind Places: A Roadmap for a More Equitable Economy,” Economic Innovation Group (Feb 2021)
Bartik, Tim, “Helping American’s distressed communities recover from the COVID-19 recession and achieve long-term prosperity,” Brookings (Sep 2020) & Bartik, Tim, “Broad Place-Based Jobs Policies: How to Both Target Job Creation and Broaden its Reach,“ W.E. Upjohn Institute for Employment Research (Nov 2020)
Bartik, Timothy J. and Austin, John C., “The program that could revitalize both red and blue America,” Brookings Institute (Feb 2021)