A more radical idea: A Federal copyright-buyout program. Like a gun-buyback program, but for taking books out of copyright and into the public domain. Tell the publishers, hey, you're not making money off those out-of-print titles right now anyway, why not get some lump-sum buyout payments for 'em?
You could couple it with something like what the Internet Archive does now, plus human review/editing for every title, as a jobs program.