Last week, President-elect Barack Obama announced his intention to invest stimulus dollars in repairing and modernizing America’s schools. As The Wonk Room noted, this would be a good investment in immediate stimulus and longer-term human capital.

Today, the Politico reported further that “federal aid for education could grow as much as $140 billion under a two-year economic stimulus bill now taking shape in Congress,” in the form of a block grant for states and a $15 billion expansion of annual Pell grants to low-income college students:

[L]ike Medicaid, education has clearly emerged as a favorite channel through which Washington will pump massive amounts of aid to states struggling with huge budget deficits aggravated by the economic downturn.

Sen. Charles Schumer (D-NY) and Gov. David A. Paterson (D-NY) explained that the block grants for state education would go towards preventing “teacher layoffs, suspension of academic programs and substantial increases in school property taxes.” Furthermore, as the Center for American Progress’ Will Straw and Michael Ettlinger wrote, providing college funding to low-income students “would provide a boost to the economy and improve the workforce skills needed when businesses begin to hire again as the economy improves.”

Indeed, investments such as these would be a wise use of stimulus dollars. They would not only prevent states from making potentially debilitating budget cuts, but will also aid America in restoring its competitive academic edge. America’s lead in educational attainment has slipped in recent years, which increased federal aid could help address.

But these investments do more than simply bolster America’s human capital. The purely fiscal benefits of education investment “aren’t abstract or aspirational“: better educated people are more productive, healthier, less likely to require public assistance, commit fewer crimes, make more money, and therefore pay more taxes.

It’s an absolute necessity that the stimulus package finance economic recovery and growth simultaneously. These investments in education would be an excellent step toward achieving that goal.

During an event at the Center for American Progress last week, CAP Senior Fellow Matt Miller warned President-elect Barack Obama against passing the Employee Free Choice Act, because it could “poison the well” between business and labor:

I think the flashpoint might be the card check thing…Going for things like the Employee Free Choice Act could poison the well for universal health coverage because it will just lead to a decimating fight on both sides.

Miller forgot that the well has already been poisoned by the Bush administration, which for the last eight years has catered to big business, at the expense of American workers. It’s time to construct a new well.

A good place to start would be the Employee Free Choice Act, which Bush threatened to veto after it passed the House last year. The bill is opposed by big businesses and the Chamber of Commerce, but solidly supported by the public. In fact, an AFL-CIO poll released last week showed that 73 percent of adults support the provisions laid out in the legislation.

While Miller seems stuck in Bush’s era, progressives are looking for change by creating an atmosphere in which businesses don’t get to dictate the terms and conditions of every debate all the time. According to Roll Call, Obama’s transition team has introduced business lobbyists to a “shocking new reality“:

Top business officials accustomed to red-carpet treatment in the Bush White House say they must stand in line in the cold outside [Obama] transition headquarters along with people they don’t recognize, waiting to be cleared to meet with Obama staffers they don’t know.

This is a symbolic move, but represents a wider shift toward restoring the balance for workers by the President-elect. Consider:

- Today, Obama announced that he dropped a business tax credit that was “ripe for abuse” from his economic stimulus proposal.

- Obama plans to retain the estate tax, arguing that a large tax break “shouldn’t go into force halfway through Mr. Obama’s proposed economic-recovery package.”

- Obama’s transition team announced wide restrictions on corporate lobbyists that the Washington Independent called a “180-degree reversal of the policies of President George W. Bush.”

- Obama supported striking workers at the Chicago-based factory Republic Windows and Doors, saying, “The workers who are asking for the benefits and payments that they have earned, I think they’re absolutely right.”

On the campaign trail, Obama criticized his opponent for “putting corporations ahead of workers.” The Employee Free Choice Act is a strong step toward putting corporations and workers on more equal footing.

Last week, the Heritage Foundation released its proposed economic stimulus plan. It contained two parts: extend the Bush tax cuts as far into the future as possible and cut taxes across the board for individuals, businesses and corporations through 2013.

These measures — like those proposed by other conservative organizations like the Club for Growth — are woefully ineffective at offering immediate and substantial stimulus when compared with other, progressive alternatives. A new analysis by the Center for American Progress Action Fund finds that the Heritage Foundation’s conservative proposals have far less job creating potential than progressive proposals of the same magnitude.

As Matt Yglesias wrote of the Heritage proposal, “this plan would deliver nothing to those in the greatest need and would stimulate demand in the least-efficient way possible. All in pursuit of the right-wing’s never-ending goal of further enriching the richest.”

Every $10 billion in taxpayer money that goes towards extending the Bush tax cuts would create or save just 10,000 jobs versus nearly 60,000 jobs which could be created or saved by extending unemployment benefits and food stamps (stimulating demand for goods and services) or investing directly in energy, transportation and education infrastructure.

As has been extensively documented, the most effective way to close the GDP gap and lay a foundation for long run growth is by getting money into the hands of people who are most likely to spend it (struggling families), helping to shore up state budgets to prevent service cuts and property tax hikes, and through direct investment by the federal government. What we don’t need is simply more tax cuts for corporations and the wealthy.

Methodology notes after the jump. Read more