We’ve been arguing that the Obama administration should seriously consider investments in human capital, not only to reverse America’s falling educational attainment, but also because it makes sense economically.

While most of the administration’s focus in this area has been on college accessibility and retention, that shouldn’t be the only avenue for investment. According to a study from the Center on Children and Families, an investment in preschool education would provide a desperately needed boost to our human capital supply while also causing the economy to grow. As the study’s authors noted, “well-educated individuals are more likely to be employed at all points in their lives and live longer than those who are less educated which in turn increases labor supply and thus GDP“:

As GDP increases, federal, state and local tax revenues are assumed to increase in proportion to their ratio to GDP if tax rates were held constant. This is the primary source of net revenue gains, but there are also several costs that are avoided due to having had more children in pre-kindergarten programs. With more graduates, fewer children will need special education or be retained in grade. If fewer students are held back, fewer resources are used to produce the same number of students with any ultimate level of achievement.

Here are the long-term GDP and human capital effects of preschool investments:

The study’s authors also found that, if lawmakers are patient enough, the program will eventually pay for itself — though we are talking decades before that effect is seen. “This may sound like a long time,” the authors note, “but the vast majority of government expenditures are undertaken with no hope of ever recovering their costs. That preschool education holds out hope of doing so, while promising large social returns in the short and medium run, makes it an outstanding investment.” And in any case, America can hardly afford to prolong its tumble from the summit of educational attainment any longer.

Our guest bloggers are Center for American Progress Action Fund interns Kalen Pruss and Carlin Rosengarten.

To protect the profitability of pollution, conservative politicians are becoming the false heroes of the poor. After careers spent voting against measures aimed at helping low-income families, Republican legislators have rushed to attack clean energy proposals that would fight global warming, citing the false premise that cutting pollution will disproportionately hurt low-income households by affecting energy prices:

– Senate Minority Leader Mitch McConnell (R-KY): “An increase in electricity and gas prices would disproportionately affect people at the lower end of the economic ladder, and American families cannot afford a tax increase at a time when many are struggling to make ends meet.”

– Senator James Inhofe (R-OK): “When you increase the cost of energy in America . . . it is also regressive because those who have the least income are going to be spending a greater amount of their income on the purchase of energy.”

– Representative Rob Bishop (R-UT): “If you’re poor, that’s when you hurt. That’s when you have to decide whether you’re going to pay for gas or for heating or simply for food. That’s who gets hurt the most.”

– Representative Michele Bachmann (R-MN): “In one of my counties, Mr. Speaker, I was told that one of my counties has unemployment now reaching 10 percent. Where are these people going to go, Mr. Speaker, when this body decides to pass a budget that will tax them $4 trillion, that will impose out a doubling on their energy bills?”

These politicians were joined by Steve Austria (R-OH), Ginny Brown-Waite (R-FL), David Dreier (R-CA), Louie Gohmert (R-TX), Glenn Thompson (R-PA), and Duncan Hunter (R-CA) and Senators Kit Bond (R-MO), John Ensign (R-NV), John Enzi (R-WY), Lindsay Graham (R-SC), Judd Gregg (R-NH), Orrin Hatch (R-UT), Johanns (R-NE), John Thune (R-SD), and David Vitter (R-LA), all claiming President Obama’s cap-and-trade plan would hurt low-income families during the House and Senate budget debate.

In reality, President Obama’s plan for energy reform gives working families a tax cut while spurring job creation, innovation, and efficiency — while reducing the global warming pollution that hurts the poor the most. This is why genuine advocates of the poor — economic justice, labor, and religious organizations like the NAACP, Service Employees International Union, and the United States Conference of Catholic Bishops have joined the Climate Equity Alliance to call for an end to dirty energy.

Yet McConnell and his fellow Republicans have consistently voted against the very people they claim to defend in opposing green economy legislation. These legislators voted no on increasing the minimum wage, voted no on helping struggling families stay in their homes, voted no on tax cuts for poor and middle-class families, and repeatedly voted no on extending health insurance for low-income children. Bachmann even voted against extending unemployment benefits, before falsely protesting skyrocketing unemployment in her own district.

McConnell and his colleagues’ sudden support for poor Americans is a transparent excuse to oppose clean energy legislation, including the global warming pollution standards outlined in the Waxman-Markey American Clean Energy and Security Act. While claiming to defend low-income families, these legislators have lied about the cost of pollution cuts, ignoring proposals to protect struggling families from higher energy costs. In actuality, conservative congressmen and senators are defending a status quo that allows big corporations to destroy our climate and degrade our economy free of cost.

Read more at the Center for American Progress Action Fund.

According to an analysis by the Wall Street Journal, “lending at the biggest U.S. banks has fallen more sharply than realized, despite government efforts to pump billions of dollars into the financial sector.” The Journal found that “the biggest recipients of taxpayer aid made or refinanced 23% less in new loans in February, the latest available data, than in October, the month the Treasury kicked off the Troubled Asset Relief Program.”

Leading the cutback in lending are three banks that last week eagerly declared themselves profitable. Two of them — Goldman Sachs and JP Morgan Chase — have also announced their intention to pay back their TARP money soon. The Journal provided this chart to illustrate the situation:

Coinciding with this report, a senior administration official told the Financial Times that “strong banks will be allowed to repay bail-out funds they received from the US government but only if such a move passes a test to determine whether it is in the national economic interest”:

He said the government had three basic tests. It needed first to “make sure the system is stable”. Second, to not create “incentives for more deleveraging which would deepen the recession”. Third, to make sure the system had enough capital to “provide credit to support the recovery”.

This last point is important, and ties back to the Journal’s analysis. If a bank is truly healthy and can pay back TARP money while maintaining lending, more power to it. If, however, a bank is paying back TARP because it wants to get out from under the program’s restrictions — while not lending and clinging to other government funded rescue programs — that’s problematic.

For instance, Wells Fargo (which received TARP money) has posted a profit and maintained lending. If it announces a desire to exit TARP, the administration should seriously consider the offer. However, this is going to make it transparently obvious which banks are in the best shape. The administration will then have to decide whether the others will ever be anything more than zombies — limping along thanks to government support without actually doing any good — and be honest about the need to take them over and wind them down.