Obama's Metro Presidency

Introduction

When President Obama assumed office in January 2009, he was called the nation's first “Metro President.” ¹ Obama's professional coming of age as a community organizer in the south side of Chicago marked him as a rare national politician acutely aware of the challenges facing cities and their metropolitan areas and, as importantly, their central role in American economic and social life.

The “Metro President” moniker underscores the need for an overhaul of federal policies that affect metropolitan communities. After decades of demographic, market, and development shifts, federal “urban” policies are seriously outmoded and outdated. Their exclusive focus on central cities has ignored the extensive decentralization of population and employment, and the suburbanization of poverty and immigration. Their intense attention to the “deficits” of places has obscured the ample assets that are concentrated in cities and suburbs. Their embrace of affordable housing as the policy tool of choice has been a simplistic approach to multidimensional challenges.

The Great Recession and other global and national pressures have only intensified the need for a new Metro Policy in the United States. the economic crisis has shown the need to build an American economy that is more export–oriented and less consumption–focused than the bubble economy preceding it. at the same time, urgent energy and environmental imperatives have accelerated the transition to a lower–carbon, innovation–fueled economy. With metropolitan areas at the heart of the evolving next economy, a whole set of federal policies on trade, energy, infrastructure, and innovation are essentially metro policies. An increase in exports, for example, necessitates increased freight capacity in our metropolitan hubs and ports. and lowering carbon emissions will require realizing the environmental benefits of dense development (Glaeser and Kahn, 2008).

Obama's performance as a Metro President, therefore, needs to be measured against a higher standard than prior, narrowly drawn urban policies. the argument can be summarized as follows: the federal stance toward cities and metropolitan areas must take account of their central, driving role in the US economy and society. Our metros encompass cities and downtowns, old and new suburbs, and exurban and rural areas that, by virtue of their integrated labor and housing markets, share common economic destinies. These areas are the unequivocal engines of the American economy (and the prosperity that follows) because they hyperconcentrate the assets that matter, like innovation, human capital, and infrastructure, and the dense and sustainable places where these assets flourish (Glaeser et al., 1992). the role of national policy, therefore, must be to help cities and metropolitan areas leverage these critical assets in the service of productive, sustainable, and inclusive growth. A full–fledged Metro Nation, in essence, demands a Metro Policy.

There are early signs that the Obama Administration embraces this new vision of Metro Policy. the President's rhetoric recognizes the critical role cities and metropolitan areas play in the national economy and the need for a new generation of federal policies that leverage this economic primacy. the American Recovery and Reinvestment Act of 2008 (the Recovery Act or ARRA) and other Administration initiatives contained in the FY 2010 budget invest directly in the assets that drive prosperity. the creation of a new White House Office of Urban Affairs and the promotion of interagency collaboration illustrate the move toward multidimensional thinking and action.

Moreover, the Administration must overcome significant obstacles if it is to realize the true potential of a Metro Policy. Most macro policies are decided without any regard to the metro concentration of economic assets. in addition, Obama inherits a federal government replete with legacy programs, diminished in capacity, and without any coherent federalist philosophy. Many metropolitan areas do not govern as metropolitan areas and the federal government lacks any consistent mechanism for encouraging such behavior. And, most significantly, the balkanized organization of Congress, based on anachronistic iterations of the American economy and polity, dictates the compartmentalized, often anti–metro nature of federal policy.

What is Metro Policy?

An evaluation of Obama Administration policies toward cities and metropolitan areas must logically start with an assessment of the role and function of these places. This requires a fundamental rethinking of the mental and cultural map of the United States, which traditionally defines the country either as a union of States or a network of small towns. the economic reality is quite different. the world may be “flat,” as Thomas Friedman has famously concluded, but the spatial reality of modern economies is their intense concentration in a relatively small number of places (Florida, 2008). the United States is a full–fledged Metro Nation. Strictly speaking, there is no single American economy, but rather a network of highly connected, hyperlinked, and economically integrated metros (Porter, 2008). All metropolitan areas, 366 in total, constitute 83 percent of the nation's population and generate over 88 percent of our gross domestic product (U.S. Census Bureau, 2008; U.S. Bureau of Economic Analysis, 2009). the 100 largest metropolitan areas make an outsized contribution to the economy; they take up just 12 percent of the country's land area, but are home to two–thirds of the population and account for three–quarters of our national GDP.

Agglomeration happens because the assets that matter most to national prosperity—innovation, human capital, and infrastructure—gather and strengthen disproportionately in urban and metropolitan communities, particularly those that are developed in sustainable ways. Metros concentrate the innovative new ideas, inventions, and institutions that boost productivity. the top 100 metros produce 78 percent of all patents and receive 82 percent of NIH and NSF research funding and 94 percent of venture capital funding.

Metros concentrate the nation's human capital—the education, skills, and talent—that drive innovation. the top 100 metros gather 74 percent of adults with a college degree, 75 percent of workers with a graduate degree, and 76 percent of all knowledge economy jobs. Metros are the nation's hubs of global trade and commerce and contain the infrastructure that moves people, goods, ideas, and energy quickly and efficiently. the top 100 metros concentrate 72 percent of seaport tonnage, 79 percent of all US air cargo weight, and 92 percent of air passenger boardings. the drivers of American prosperity come together most forcefully in dense, diverse, and distinctive metropolitan communities that foster greater innovation, attract and grow human capital, and promote infrastructure efficiency. the top 100 metros contain 79 percent of performing arts establishments, 90 percent of city populations, and 95 percent of public transit passenger miles (Berube, 2007).

The cumulative impact of these assets is stunning. Metro areas generate the majority of gross domestic product in 47 of the 50 states, including such “rural” states as Iowa, Kansas, Nebraska, and Arkansas. the Seattle region houses only 51 percent of residents in the state of Washington, but generates 69 percent of its economic output. Chicagoland is home to 67 percent of the population of Illinois, but contributes 78 percent of that state's GDP (Metropolitan Policy Program, 2007). If anything, the current Great Recession validates the intense focus on fundamental, economy–driving assets and reinforces the need for federal and state policy reforms in the service of metropolitan prosperity. America's economic recovery will depend on a return to “real” innovation—in bio–medicine, in clean, renewable energy, in technology, and the delivery of health care and other services. This innovation will fuel the next generation of infrastructure—smart grids, high–speed rail, wind and solar energy, clean coal, safe nuclear, and new auto technology. All this innovation will be maximized and accelerated if the sharing of ideas takes place in communities with modern transit, transit–oriented development, and balanced, sustainable growth. Lastly, this reliance on innovation will require us to get smart. the US continues to fall behind internationally, particularly in math and science. We cannot import our way out of this talent gap (U.S. Department of Education, 2009).

Yet, no matter how much metros innovate, they do not have the resources or powers to “go it alone.” A metro can focus on building its economic strengths and finding new ways to further innovation, but its economy is profoundly influenced by federal government action. Macroeconomic, trade, and investment policies, energy regulations, and housing policies influence metropolitan development. A metro can focus on reducing income disparities and elevating the education and skills of its workforce, but only the federal government can effectively close the gap between wages and the cost of living across the country. ² A metro can focus on reducing congestion and implementing market–shaping infrastructure investments, but the federal and state governments are the major financiers of such investments. Finally, a metro can do what it can to address climate change by promoting green building, transit–oriented development, urban regeneration, and renewable sources of energy, but only the federal government can set standards and regulate industries on a national scale. in sum, the forces affecting metros originate at the global scale and have impacts and implications that transcend the parochial borders of localities and even states.

A rapidly changing world demands that the federal and state governments serve as strategic, flexible, and accountable partners to help metros act with cohesive vision, address their central problems, realize their full potential, and, in so doing, resolve our most pressing national challenges. at the core of Metro Policy is a call for a new federalist compact. This compact should have three essential components: First, the federal government should lead where it must. Global challenges, broad in scale and geographic reach, require national solutions. Only the national government can set a strategic vision for the entire country, address issues that naturally transcend state borders, and establish a unified framework for smart metro–wide and regional solutions driven by private and public sector action. Next, the federal government must empower metros where it should. A nation of our size and diversity displays immense variation: Minneapolis is not Miami; Charlotte is not Cleveland; and Phoenix is not Pittsburgh. Federal policy must enable metropolitan areas to bend national policies to their own distinctive market realities and strengths. the final piece to our federalist puzzle is that the federal government must maximize performance and fundamentally alter the way it does business in a changing world. It is time for Washington to “get smart” and become a fact–filled, rather than fact–free, zone.

Infrastructure policy provides a particularly clear example of the way that Metro Policy ought to work. First, the federal government should lead again, as in the 1950s with the construction of the interstate highway system, and set forth a national transportation vision that fits the challenges of our time, namely, to facilitate the movement of people and goods within and among the metropolitan gateways of international trade and the major corridors of intermetropolitan travel. the federal government must identify, map, prioritize, finance, and then implement those investments that will have the largest return for the nation, economically and environmentally: real time pricing for congested beltways, intermodal facilities at congested ports and freight hubs, and high–speed passenger rail in critical corridors.

Second, beyond leadership, the federal government could empower metropolitan areas to tailor national policies to their own realities. to this end, the federal government should allocate more resources and devolve more decision making power directly to metropolitan areas. Finally, the federal government can maximize performance by replicating the intricate web of data, metrics, analytic tools, and spatial planning techniques now routinely deployed by Germany, Britain, Denmark, and other European nations. Only in this way can the United States make decisions based on evidence, rather than political horse–trading, and measure progress toward clear national priorities.

Ultimately, we need to build a network of metros that are competent and capable, representative and accountable. Metros must align decision making proportionally with the populations of cities, developed suburbs, and developing suburbs. They must set performance measures for reducing sprawl, ensuring fair share housing, reducing segregation, and reducing fiscal inequality between jurisdictions.

How is the Obama Administration Doing?

There are early signs that Barack Obama's Administration understands and embraces this new vision of Metro Policy, but there is still a long way to go. Most broadly, at the paradigmatic level, the Administration talks about city and metropolitan areas in a sophisticated way, a sharp departure from traditional rhetoric that exclusively discussed cities while ignoring their suburbs, and deficits like poverty and crime while ignoring their assets. the President's “Urban Policy Statement,” is illustrative:

To maximize economic productivity and opportunity in a 21^st century economy, federal policy must reflect the new metropolitan reality—that strong cities are the building blocks of strong regions, which in turn, are essential for a strong America. (The White House, 2009b)

The Administration's embrace of the new metropolitan framework is critical, because policy choices ultimately derive from broader paradigms.

Beyond rhetoric and framing, the federal government is beginning to make the kinds of investments and policy reforms needed to leverage metropolitan prosperity. in February, Congress enacted the President's American Recovery and Reinvestment Act of 2009. the Recovery Act, while imperfect, begins to make the kinds of game–changing, market–shaping investments in the next economy that have been long deferred. Most significantly, the Recovery Act invests in the assets that drive prosperity (innovation, human capital, and infrastructure) and in the building of sustainable places. on innovation, ARRA invests tens of billions of dollars in federal research and development, both through existing agencies and channels (e.g., NIH, NOAA, NASA) and a new one in the Department of Energy: the Advanced Research Projects Agency–Energy (ARPA–E). This new agency supports cutting–edge energy technology, bridging the gap between basic research and the commercialization of products. on human capital, the Recovery Act provides tens of billions of dollars in direct funding for education, including billions of dollars for incentives to states and innovations in urban school districts. on infrastructure, the Recovery Act invests tens of billions of dollars to repair declining “old” infrastructure as well as catalyze the building of next generation systems like high–speed rail, smart energy grids, and health care information technology. and to raise the quality of life in places, Congress has enacted tens of billions in spending and tax incentives for energy retrofits, inner–city business development, community development, transit extension, and brownfield remediation.

But the Recovery Act is seemingly just the beginning. Since February 2009, the Administration has put forward a series of proposals to catalyze multidimensional and multijurisdictional solutions to complex metro challenges. to help lead a step change in clean energy, the Administration has proposed a network of Energy Innovation Hubs to turn advanced research and development into commercially deployable materials, devices, and systems (U.S. Department of Energy, 2009, p. 1). to align federal policy with the spatial clustering of economic sectors, the Administration has proposed a Regional Innovation Clusters initiative to leverage the disparate competitive strengths of distinct metros to boost job creation and economic growth (U.S. Office of Management and Budget, 2009, p. 52). to upgrade the education and skills of the American workforce, the Administration has proposed the American Graduation Initiative, a 10–year $12 billion investment in America's community colleges that could produce 5 million more graduates by the year 2020 (The White House, 2009a).

The Administration is also building communities and the next generation of American infrastructure. It has proposed a National Infrastructure Bank to make market–shaping investments based on evidence and merit, rather than political calculation (U.S. Office of Management and Budget, 2009, p.19). to help remake the sprawling American landscape, the Administration has proposed a $150 million Sustainable Communities Initiative to develop integrated regional plans that link housing, transport, jobs, and land use and create more compact and transit rich communities (U.S. Office of Management and Budget, 2009, p. 74). to help metros grow more inclusively, the Administration has proposed a $250 million Choice Neighborhoods Initiative to couple the transformation of distressed public housing with early childhood investments and school reform (U.S. Office of Management and Budget, 2009, p. 75).

Overarching these efforts, the Administration's organization of the White House and the Cabinet recognizes that complex challenges facing US metros require integrated solutions that cross traditional policy and bureaucratic silos. the Administration has created a White House Office of Urban Affairs to communicate its vision of a new federal partnership with cities and metropolitan areas and promote coordinated activity across the specialized agencies of the federal government. the level of interagency collaboration envisioned and undertaken to date is truly remarkable by historic standards. the principal focus of action has been on the built environment. Prompted by the Recovery Act, for example, HUD, DOE, and EPA have forged a close partnership to catalyze a green, energy–efficient residential sector (U.S. Department of Housing and Urban Affairs, 2009, p. 23). on the broader metropolitan scale, HUD, DOT, and EPA are collaborating on new initiatives around livable and sustainable communities (U.S. Environmental Protection Agency, 2009).

What Challenges Lie Ahead?

The Obama Administration's actions taken to date reflect a shift both in the federal government's views of cities and metropolitan areas and the role of federal policies in leveraging metropolitan prosperity. Yet these early steps do not reflect the systemic, structural reforms and investments that are necessary if the promise of a new Metro Policy is to be fully realized. Going forward, the Obama Administration will need to overcome five major barriers to change.

First, the Administration should extend Metro Policy beyond the realm of place–based initiatives. the federal policies that have the greatest impact on cities and metropolitan areas are rarely those that are explicitly labeled as “urban” or “metropolitan.” Research has shown, for example, the distorting, distending effects that the federal homeownership tax expenditures have on metropolitan growth patterns (Gyourko and Sinai, 2001). the economic downturn has highlighted the impact that trade, tax, and other policies have on the competitiveness of particular globally oriented sectors like manufacturing. We can expect that the health care and climate reforms will have broad impacts, both positive and negative, on places. As the Obama Administration evolves, there is a need to connect the “macro to the metro” and engage metropolitan–wide business, political, and civic leaders in the design and implementation of broad, market–shaping policies.

Second, the Administration must couple investment with structural reform, including a restructured and more effective federal workforce. the Administration inherits a “legacy” government in both function and organization. Current programs, policies, and implementation strategies are more suited to the last century than this one. the Recovery Act reflects this deficiency since the bulk of investments flow through existing systems that largely ignore the economic primacy of metropolitan areas.

On infrastructure, for example, states have rarely allocated highway funds under the Recovery Act based on any sophisticated cost/benefit analysis. State departments of transportation routinely distribute resources to satisfy the political logic of state legislatures rather than the market logic of investing in major metropolitan areas, the centers of population and economic activity. Many state transportation plans submitted prior to the enactment of the Recovery Act did not identify a single investment within certain major cities. ³ the Administration must learn from these mistakes as it moves ahead with transportation reform and broader infrastructure policy. States and smaller units of government must not be given a blank check with federal resources, but be held to a higher level of accountability for meeting national goals and priorities.

As the federal government reforms policy, it must also rebuild a federal workforce that is diminished in capacity, ill–focused, and ill–informed. the next decade could see an unprecedented turnover in the federal civil service, with new talent recruited for new challenges (U.S. Office of Personnel Management, 2006). This creates an opportunity to design a federal government that is smaller, smarter, and more effective. An accompanying sea change in technology could finally enable the government to enter the 21st century and deliver its services in ways that meet the high standards of American consumers.

A third and related point is that the Administration should define and deploy a coherent, consistent vision of federalism and the relationship between different levels of government. the Great Recession has dramatically exalted the federal role and diminished the roles and responsibilities of states, metropolitan areas, and localities. Resolving America's most pressing challenges requires a new federalist partnership (and collective problem solving) that pushes each level of government to do what they do best within a more coordinated metropolitan–driven vision. the Administration is already starting to use federal policies in housing and transportation to catalyze the formation of governance systems that match the geography of metropolitan economies. It is also beginning to use federal power and resources to leverage structural state and local reform in the educational sphere. the same logic can easily be applied to other areas of domestic activity, like infrastructure, workforce development, and economic development. for broader structural change, the Administration may need to turn to a blue–ribbon commission (like the Hoover commissions of the 1940s and 1950s) or an advisory task force (like President Reagan's Advisory Committee on Federalism) to provide a blueprint for the next stage of American federalism. in the interim, the Administration can purposefully follow the lead/empower/maximize performance framework described above.

Fourth, the Administration can assist metros to align their governance more closely with the geography of the economy. Despite their economic primacy, many American metros do not govern as metros, but rather as uneasy collections of fragmented municipal governments. Yet the scope and sophistication of metro–level institutions and mechanisms appear to be on the rise. Minneapolis/St. Paul and Portland, Oregon, have had effective governing entities at the metro scale for decades. Many Southern metros have developed de facto metropolitan governments, either through expansion of municipal boundaries via annexation powers or the consolidation of city and county governments (most recently in Louisville, Kentucky). Encouragingly, metros like Chicago and Denver are experimenting with informal approaches to collaboration, with the creation of metropolitan mayors caucuses.

The federal government can play a substantial role in promoting metro governance around issues as diverse as transportation, climate, housing, economic development, and homeland security. the Administration has already started down this path by encouraging multijurisdictional collaboration in the Recovery Act through Department of Transportation TIGER (Transportation Investment Generating Economic Recovery) grants and Department of Housing and Urban Development Neighborhood Stabilization grants. Yet more can be done to consolidate local administrative entities that oversee federal programs (such as public housing authorities) as well as catalyze new broader forms of metro governance, as seen in countries like Germany, France, and South Africa (Katz and Turner, 2000).

Finally, perhaps the most difficult of these challenges, the Administration will need to reeducate a Congress that is intensely Balkanized across committee and subcommittee lines. the organization of Congress along narrow disciplinary lines deifies specialization and technical knowledge within committee and agency silos rather than encouraging multidimensional and integrated solutions to modern challenges. As a result, the federal government does not “connect of the dots” between policies and programs that naturally relate (as with transportation and housing, housing and education, and economic and workforce development) and cannot capitalize on the synergies of many of these policies where they come to ground in places.

Conclusion

The United States enters a new century with a new geography and a new face. We are no longer Jefferson's nation of rural hamlets and small towns, with economies that are internally focused and self–reliant. Rather we have emerged as the world's preeminent economic power precisely because we are now a network of metropolitan areas that are integrated and connected with sister economies across the globe.

Our challenge is to get comfortable in our new metropolitan skin and alter the way we govern so that metro communities can achieve their full potential as engines of national prosperity. the federal government, at a time of economic crisis, social challenge, and unprecedented environmental pressure, can catalyze the move toward metropolitan policies and metropolitan governance and, in so doing, pave the way for decades of smart and sustainable growth and development.