President Franklin Roosevelt’s New Deal programs were the first to focus on the depressed regions of the U.S. Economic development was also a focus of the government after the end of WWII because of concerns that regional economies would suffer from the breaking down of the war industry.
In 1943, the National Resource Planning Board (NRPB), proposed that the federal government should develop a national policy that assists people moving from depressed regions to ones with greater opportunity. However, Congress had the NRPB come to an end that same year and created special House and Senate committees to control post war economic policy and planning. Around this time, Henry A. Wallace, who was secretary of Commerce, proposed developing a comprehensive federal strategy for depressed areas. In 1945 two legislative proposals on depressed areas reached Congress, both which were largely driven by Henry S. Wallace and other administration officials. The first bill became the Full Employment Act in 1946 and the second was the Hays-Bailey Bill.
The Eisenhower administration had favored providing technical assistance and loans to depressed areas, which led to a new Area Assistance Program that was created to better assist communities that had experienced continual and substantial unemployment.
Under President Kennedy, in the early1960’s, the Area Redevelopment Act (ARA) was established within the Department of Commerce with the purpose of providing direct loans to rural and urban depressed areas, as well as technical and retraining assistance grants. However, the ARA failed greatly at reducing unemployment in depressed areas. This led to the replacement of the ARA with the Economic Development Administration (EDA) and the passing of the Public Works and Economic Development Act (PWEDA) of 1965.
The EDA was similar to the ARA. They were both part of the Department of Commerce, both focused on rural areas and both were supply-side oriented and led to the increase in the government’s role in supplying infrastructure to high-unemployment areas.
The original goals of the EDA since it was established in 1965 have remained the same, although they have been redefined.
In 1971, under President Nixon, the EDA Extension Act gave additional authority to the EDA through the Publics Works Impact Program (PWIP), with the goal of helping short -erm countercyclical employment. The 1971 amendments also extended eligibility to areas whose median family incomes were 50% of the national average. Revisions to PWEDA in 1972 included extensions, funding and relieving areas from economic disaster in addition to emergency assistance. The Amendments to EDA stressed its need to provide assistance and increased funding to communities experiencing both long- and short-term unemployment.
EDA has evolved from focusing predominantly on rural concerns during the 1960s to both rural and urban problems. Funding for EDA programs has been greatly impacted by the ideological changes of the current political parties in office and their constituents.
EDA Legislative History