Created with the enactment of the Public Works and Economic Development Act of 1965 (PWEDA; P.L. 89-136), the Economic Development Administration has a 46-year history of supporting job creation and long-term economic recovery efforts in the nation's economically distressed areas. As the 112 th Congress considers these and other legislative proposals that may reauthorize, amend, and fund the agency and its programs, a review of the evolution of the agency's statutory authority may inform Congress in its deliberations. Among the themes and issues that framed the debates authorizing EDA and its predecessor agencies and programs were the following:
the centralization of federal aid in contrast to decentralization and devolution of responsibilities to state and local governments, the allocation of funds to infrastructure development versus direct aid to the unemployed and underemployed, the targeting of federal funds to the most economically depressed areas versus allocation of resources geographically throughout the country, the use of public works as an anti-recession job creation tool, the use of unemployment as the dominant factor to identify counties eligible for assistance in contrast to a matrix of elements, and the level of aid necessary to affect job growth and economic development. The agency evolved from a cluster of programs targeted primarily to depressed rural communities to an agency that was also called upon to direct assistance to urban areas and to address issues confronting communities experiencing sudden and abrupt economic dislocation caused by factory shutdowns, foreign competition, base closures, and disasters. By the end of the decade, Congress had approved legislation that increasingly relied on unemployment rates as the primary factor used to determine EDA eligibility and authorized EDA to provide economic adjustment and trade adjustment assistance to communities experiencing or with the potential for experiencing sudden and abrupt economic dislocation. The amendments tightened eligibility criteria, standardized matching fund requirements, simplified the application process, encouraged regional cooperation, and introduced performance measures. The act limited EDA funds to 50% of a project's cost, but included provisions that allowed EDA to cover an additional 30% of a project's cost based on a community's economic condition. In addition, the act standardized the federal minimum cost share at 50% among the types of EDA assistance provided (i.e., public works grants versus economic adjustment assistance). To receive assistance, states were required to devise comprehensive economic development strategies consistent with local and district plans. The act made no substantive changes to the federal-local cost share requirements for EDA, but it did simplify the language, allowing EDA to consolidate the provisions requiring a minimum federal cost share of 50% of project cost with the provision allowing EDA to award supplemental grants covering an additional 30% of the cost of a project based on the relative need or financial capacity of the assisted area. Concluding Observations

During its 46-year history, EDA has remained relatively unchanged in its mission and the means of achieving it. Congress has acted to refine the programs' components and focus.
As the 112th Congress considers legislation reauthorizing the Public Works and Economic Development Act of 1965 (PWEDA; P.L. 89-136), which created the Economic Development Administration (EDA) and its programs, the PWEDA's statutory evolution may inform Congress in its deliberation. In reviewing the evolution of the PWEDA's statutory authority, several observations are worth making:
Congress has consistently used unemployment as the primary criterion to determine eligibility for EDA assistance, but it has authorized the inclusion of other criteria, resulting in up to 80% of counties being deemed eligible for assistance. Although Congress has cast a wide net in terms of the criteria for EDA eligibility, it has remained focused on a singular mission: supporting private sector job creation in economically depressed areas primarily through the financing of infrastructure projects, including technology enhancements. Congress has continued to promote multi-jurisdictional regional planning as a core activity in support of EDA's job creation mission. The use of EDA public works-based assistance as an anti-recession tool has generally been opposed by some in Congress and viewed as slow and costly in generating jobs for the unemployed during a recession.
During its 46-year history, EDA has evolved from a cluster of programs targeted primarily to rural communities experiencing long-term economic depression to an agency that has also been called upon to target assistance to urban areas and to address issues confronting communities experiencing sudden economic dislocation caused by factory shutdowns, foreign competition, base closures, and disasters. Although Congress initially approved legislation that used unemployment rates as the primary determinant of eligibility, it has also used per capita income and other criteria to qualify areas for assistance. Supporters contend that this allows EDA to be responsive to areas experiencing population outmigration, natural disasters, natural resource depletion, military base closures, the sudden loss of manufacturing jobs, and other special needs, while detractors contend that this broad targeting has diffused the agency's resources.
As the programs of EDA evolved, Congress enacted legislation that standardized matching fund requirements among programs, simplified the application process, encouraged regional cooperation, established performance measures, and provided additional performance-based funding to grant recipients. The 1998 amendments standardized the federal cost share at 50% of a project's cost, but allowed EDA to provide supplemental assistance to increase the EDA contribution to no more than 80% of a project's cost. The 2004 amendments allowed EDA to waive completely the cost share requirements based on an EDA finding of insufficient taxing or borrowing capacity.
In an effort to encourage regional cooperation, Congress conditioned the receipt of public works and economic adjustment assistance on the development and implementation of a Comprehensive Economic Development Strategy (CEDS) and required each grantee's CEDS to be consistent with local and district plans. Congress also directed EDA to award additional funds for outstanding performance in the execution of grant activities. Most recently, with the passage of American Recovery and Reinvestment Act (ARRA; P.L. 111-5), Congress returned to the practice of using EDA assistance as a countercyclical tool. This report will be updated as events warrant.