Biden: Recovery Act Laying the ‘Seed Money’ for Next Internet

Vice President Joe Biden on Tuesday gave a vigorous defense of the administration’s economic recovery act for its role in promoting innovation, likening the government to a venture capitalist that provides the “seed money” for nourishing emerging new sectors that will create well-paying jobs and ensure U.S. competitiveness.

Biden, speaking at the White House to mark the release of a major report on the economic impact of last year’s $787 billion stimulus bill, compared the administration’s current work to the role the government played in developing the Internet through a research arm of the Defense Department.

In a politically charged address, which Biden began with a lengthy rebuttal of the Republican economic agenda House Minority Leader John Boehner (R-Ohio) laid out this morning, he pointed out that the Advanced Research Projects Agency (ARPA) was created under the Republican Eisenhower administration at a time of similar concerns over flagging U.S. competitiveness. Then in the 1970s, ARPA was renamed DARPA with addition of “Defense,” and its researchers developed the computer network protocols that became the foundation of the modern Internet.

Fast forward to today, and Biden was happy to draw a parallel between the role of the current government in incubating what can grow into “game-changing” industries and DARPA’s work in developing the rudiments of the Internet in the 1970s.

“[Today] it’s the engine of hundreds of billions of dollars of commerce. That was a relatively modest federal investment that allowed private industry to completely transform not only our economy, but the world’s economy,” Biden said. “That’s exactly what we have to do again. That’s what we are doing now. Our federal investment is bringing money off the sidelines.”

Biden claimed that the roughly $100 billion of stimulus spending in innovation projects has brought $286 billion in private investment.

The report the White House released today (available in PDF format here) focuses on stimulus programs that have funneled federal investments toward innovation sectors such as clean and renewable energy, advanced vehicle technology and medical research such as human-genome sequencing.

It also details the stimulus programs that have allocated money toward next-generation infrastructure projects, including nearly $7 billion for broadband programs and more than $4 billion for smart-grid technologies that would provide for the dynamic allocation of electricity.

“In all of these areas, the president and I recognize that the federal government’s role is limited,” Biden said. “It’s to provide the seeds, but it’s the private sector that’s going to make them grow. That’s why we’re investing so much in broadband.”

He described broadband as the great enabler for economic growth, particularly in rural areas, where much of the stimulus money is heading. Citing a favorite example of broadband proponents, Biden noted the boon that high-speed Internet access can offer for farmers, providing speedy delivery of weather updates, crop prices and other market conditions that can help them optimize their profits.

Biden has been acting as the point person for the stimulus act, crisscrossing the country in recent months for what the administration has dubbed the “summer of recovery.”

The push comes as the Obama administration remains dogged by high unemployment numbers as the midterm election approach and the economy promises to be a central political fault line.

Many Republicans have panned the stimulus bill, weaving it into a narrative of reckless deficit spending on the part of the Democrats and contradicting the administration’s claims about the number of jobs it has created.

Boehner picked up that message again this morning.

“All this ‘stimulus’ spending has gotten us nowhere, but it comes from somewhere,” he said in prepared remarks in a speech in Cleveland. “We are now borrowing 41 cents of every dollar we spend from our kids and grandkids.”

The White House quickly responded with a “fact check” sheet accusing the Bush administration of running up soaring deficits and citing analyses from both Obama’s Council of Economic Advisors and two independent economists touting the impact of interventionist policies in staving off further calamity. The CEA report looked only at the stimulus bill, while the independent study also evaluated policies dating back to the Bush administration, including the bailout of major Wall Street firms.

While Biden devoted a fair share of time to lashing out at Boehner’s comments and criticizing the economic policies of the previous administration in his address this morning, he sought to position the innovation elements of the recovery act, particularly broadband and the smart grid, as a down payment on the U.S. competitive position in the still-emerging industries of the future.

“The smart utility grid, the universal broadband, these are the foundations upon which innovative businesses can built what they go out and discover and innovate. They’re able to open the doors everywhere,” he said. “That’s what really this is all about — giving American entrepreneurs and American businesses the tools to do what you all do best.”

Kenneth Corbin is an associate editor at, the news service of, the network for technology professionals.

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