President Obama’s State of the Union address focused on “winning the future”. This strategy included winning the future through public investments, including educational investments.

For advocates of early childhood programs, it is noteworthy that the educational investments that were mentioned in the SOTU speech were in K-12 and higher education. Early childhood investments were not mentioned in the speech. Perhaps some initiatives will appear when the federal budget is announced in a few weeks. However, based on recent reports from Lisa Guernsey, of Early Ed Watch at the New America Foundation, this appears doubtful. If there are any early education initiatives in the budget, they appear likely to be modest, given the announced freeze on federal discretionary spending.

The SOTU address also extensively discussed competitiveness of American business. But other noteworthy omissions from the SOTU speech were proposals to increase the competitiveness of U.S. manufacturers through an expansion of the federal Manufacturing Extension Partnership, or to increase the competitiveness of U.S. manufacturers and other businesses through an expansion of customized job training. I have advocated for expanding these programs in a recent paper for the Hamilton Project.  Chapter 5 of Investing in Kids includes a discussion of improving the efficiency of business incentive design. Chapter 5 discusses the evidence for why manufacturing extension and customized job training are far more efficient business incentives than typical tax incentives, such as property tax abatements. I know that proposals to expand such services have been discussed in the Administration. But they did not make the cutoff for the SOTU speech, which does not bode well for such proposals being included in the budget.

We can debate why early childhood programs and effective services to manufacturers were omitted from the speech.  Why were they less politically attractive in the current circumstances than what was mentioned in the speech? I suspect it has something to do with political resistance to expanded federal intervention in both early childhood programs and assisting individual manufacturers.

But the bottom-line in this: if investment in early childhood programs is to be maintained and expanded over the next several years, this is largely going to be up to state and local government decisions.  If business incentives are going to de-emphasize tax incentives, and put more emphasis on efficient business services, this is largely going to be up to state and local government decisions.

This is one reason why, as events would it, Investing in Kids is turning out to be a timely book. The book focuses on the state and local returns, in economic development benefits, from early childhood programs and reformed business incentives. It is state and local policymakers who over the next several years will determine the future investment in such programs.