[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
     THE REAUTHORIZATION OF THE APPALACHIAN REGIONAL COMMISSION AND 
     LEGISLATIVE PROPOSALS TO CREATE ADDITIONAL REGIONAL ECONOMIC 
                        DEVELOPMENT AUTHORITIES

=======================================================================

                                (109-88)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
    ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS AND EMERGENCY MANAGEMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 12, 2006

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                      DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-    JAMES L. OBERSTAR, Minnesota
Chair                                NICK J. RAHALL, II, West Virginia
SHERWOOD L. BOEHLERT, New York       PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
WAYNE T. GILCHREST, Maryland         Columbia
JOHN L. MICA, Florida                JERROLD NADLER, New York
PETER HOEKSTRA, Michigan             CORRINE BROWN, Florida
VERNON J. EHLERS, Michigan           BOB FILNER, California
SPENCER BACHUS, Alabama              EDDIE BERNICE JOHNSON, Texas
STEVEN C. LaTOURETTE, Ohio           GENE TAYLOR, Mississippi
SUE W. KELLY, New York               JUANITA MILLENDER-McDONALD, 
RICHARD H. BAKER, Louisiana          California
ROBERT W. NEY, Ohio                  ELIJAH E. CUMMINGS, Maryland
FRANK A. LoBIONDO, New Jersey        EARL BLUMENAUER, Oregon
JERRY MORAN, Kansas                  ELLEN O. TAUSCHER, California
GARY G. MILLER, California           BILL PASCRELL, Jr., New Jersey
ROBIN HAYES, North Carolina          LEONARD L. BOSWELL, Iowa
ROB SIMMONS, Connecticut             TIM HOLDEN, Pennsylvania
HENRY E. BROWN, Jr., South Carolina  BRIAN BAIRD, Washington
TIMOTHY V. JOHNSON, Illinois         SHELLEY BERKLEY, Nevada
TODD RUSSELL PLATTS, Pennsylvania    JIM MATHESON, Utah
SAM GRAVES, Missouri                 MICHAEL M. HONDA, California
MARK R. KENNEDY, Minnesota           RICK LARSEN, Washington
BILL SHUSTER, Pennsylvania           MICHAEL E. CAPUANO, Massachusetts
JOHN BOOZMAN, Arkansas               ANTHONY D. WEINER, New York
JIM GERLACH, Pennsylvania            JULIA CARSON, Indiana
MARIO DIAZ-BALART, Florida           TIMOTHY H. BISHOP, New York
JON C. PORTER, Nevada                MICHAEL H. MICHAUD, Maine
TOM OSBORNE, Nebraska                LINCOLN DAVIS, Tennessee
KENNY MARCHANT, Texas                BEN CHANDLER, Kentucky
MICHAEL E. SODREL, Indiana           BRIAN HIGGINS, New York
CHARLES W. DENT, Pennsylvania        RUSS CARNAHAN, Missouri
TED POE, Texas                       ALLYSON Y. SCHWARTZ, Pennsylvania
DAVID G. REICHERT, Washington        JOHN T. SALAZAR, Colorado
CONNIE MACK, Florida                 JOHN BARROW, Georgia
JOHN R. `RANDY' KUHL, Jr., New York
LUIS G. FORTUNO, Puerto Rico
LYNN A. WESTMORELAND, Georgia
CHARLES W. BOUSTANY, Jr., Louisiana
JEAN SCHMIDT, Ohio

                                  (ii)

  


 Subcommittee on Economic Development, Public Buildings and Emergency 
                               Management

                  BILL SHUSTER, Pennsylvania, Chairman

JIM GERLACH, Pennsylvania            ELEANOR HOLMES NORTON, District of 
KENNY MARCHANT, Texas, Vice-Chair    Columbia
CHARLES W. DENT, Pennsylvania        MICHAEL H. MICHAUD, Maine
JOHN R. `RANDY' KUHL, Jr., New York  LINCOLN DAVIS, Tennessee
DON YOUNG, Alaska                    JULIA CARSON, Indiana
  (Ex Officio)                       JAMES L. OBERSTAR, Minnesota
                                       (Ex Officio)

                                 (iii)

  
                                CONTENTS

                               TESTIMONY

                                                                   Page
 Bass, Hon. Charles F., a Representative in Congress from the 
  State of New Hampshire.........................................     8
 Brisbin, Jake, Jr., Executive Director, Rio Grande Council of 
  Governments....................................................    32
 Daniels, Jonathan, President and CEO, Eastern Maine Development 
  Corporation....................................................    32
 Delia, Albert A., President and CEO of North Carolina Eastern 
  Region, Director of Federal Relations, East Carolina University    32
 McHugh, Hon. John M., a Representative in Congress from the 
  State of New York..............................................     8
 McIntyre, Hon. Mike, a Representative in Congress from the State 
  of North Carolina..............................................     8
 Pope, Anne B., Federal Co-Chair, Appalachian Regional Commission    17
 Reyes, Hon. Silvestre, a Representative in Congress from the 
  State of Texas.................................................     8
 Robertson, Steve, Commissioner, Governor's Office for Local 
  Development, State of Kentucky, Alternate to the States' Co-
  Chair, Appalachian Regional Commission.........................    17
 Silvetti, Edward, Executive Director, Southern Alleghenies 
  Planning and Development Commission, National Association of 
  Development Organizations......................................    17

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

 Bass, Hon. Charles F., of New Hampshire.........................    47
Norton, Hon. Eleanor Holmes, of the District of Columbia.........   153
Oberstar, Hon. James L., of Minnesota............................   155
 Reyes, Hon. Silvestre, of Texas.................................   190

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

 Brisbin, Jake, Jr...............................................    81
 Daniels, Jonathan...............................................    94
 Delia, Albert A.................................................   138
 Pope, Anne B....................................................   157
 Robertson, Steve................................................   192
 Silvetti, Edward................................................   207

                       SUBMISSIONS FOR THE RECORD

 Bass, Hon. Charles F., of New Hampshire, articles, statements 
  and charts.....................................................    47
 Brisbin, Jake, Jr., Executive Director, Rio Grande Council of 
  Governments, responses to questions............................    88
 Daniels, Jonathan, President and CEO, Eastern Maine Development 
  Corporation, responses to questions and attachments............   103
 Pope, Anne B., Federal Co-Chair, Appalachian Regional 
  Commission, responses to questions.............................   170
 Robertson, Steve, Commissioner, Governor's Office for Local 
  Development, State of Kentucky, Alternate to the States' Co-
  Chair, Appalachian Regional Commission, responses to questions.   199
 Silvetti, Edward, Executive Director, Southern Alleghenies 
  Planning and Development Commission, National Association of 
  Development Organizations, responses to questions..............   217


     THE REAUTHORIZATION OF THE APPALACHIAN REGIONAL COMMISSION AND 
     LEGISLATIVE PROPOSALS TO CREATE ADDITIONAL REGIONAL ECONOMIC 
                        DEVELOPMENT AUTHORITIES

                              ----------                              


                       Wednesday, July 12, 2006,

        House of Representatives, Committee on 
            Transportation and Infrastructure, Subcommittee 
            on Economic Development, Public Buildings and 
            Emergency Management, Washington, D.C.
    The subcommittee met, pursuant to call, at 1:00 p.m., in 
room 2253, Rayburn House Office Building, Hon. Bill Shuster 
[chairman of the subcommittee] presiding.
    Mr. Shuster. The Committee will come to order.
    We are here today to discuss the reauthorization of the 
Appalachian Regional Commission and other proposed regional 
economic development authorities.
    The Appalachian Regional Commission was established by 
Congress in 1965 to address the profound economic and social 
problems in the Appalachian region that made it a region apart 
from the rest of the Nation. Since its inception, the ARC has 
helped cut the region's poverty rate in half, more than doubled 
the percentage of adults over the age of 25 with a high school 
diploma, and provided water and sewer services to over 800,000 
households. The region's infant mortality rate has been reduced 
by two-thirds.
    Currently, there are 77 counties in the region recognized 
as economically distressed. This is quite an improvement over 
the 223 distressed counties recognized in 1960.
    As with other members of this Subcommittee, I am grateful 
for the assistance ARC has brought to our communities. The ARC 
has done a great job encouraging local economic development by 
making use of local resources for the benefit of the community. 
While ARC funds are rarely the largest source of project funds, 
they have proven integral to the success of the projects. These 
projects and new initiatives go a long way in attracting new 
industry, new companies and, of course, the jobs that accompany 
the investment to the area.
    As with all parts of the region, the ARC has been a 
significant resource to the distressed counties in Southwest 
Pennsylvania. I have had the personal opportunity to see its 
success through numerous ARC investments in Pennsylvania. To 
give you an example of the benefits of ARC, a project in 
Huntington County received an ARC grant of $250,000 in 2005 to 
extend water and sewer piping to commercial development. The 
project is expected to help retain and attract industry to the 
area, private investment of roughly $25 million, and over 400 
jobs. This is a significant investment for Huntington County 
and a boom to the community and region.
    ARC has previously authorized, in 2002 through 2006 fiscal 
year, new initiatives, including an increased focus on 
telecommunications and technology were instituted and have 
shown early success.
    While ARC is considered by most to be a strong, effective, 
and efficient model of intergovernmental economic development 
commission, there is still room for improvement. One of the 
proposed changes to ARC is the creation of an additional 
designation to assist counties that are at risk, yet don't 
fully qualify as distressed. By law, these counties may only be 
funded up to 50 percent of project costs. The new proposed at-
risk designation will permit ARC to fund projects in these 
counties up to 70 percent of the project costs.
    Over the past few years, ARC has only been funded at 
approximately two-thirds of the amount authorized and 
recommended by Congress. I urge the appropriators to fund the 
Appalachian Regional Commission according to the authorized 
levels we have set and will set in the future, allowing the 
region to reach its full potential.
    Other regions not supported by regional economic 
development commissions are also at risk. Certain parts of the 
Southeast, Southwest, and Northeast have high unemployment, low 
per capita income, and lack the necessary healthcare, 
education, and water and wastewater facilities. Numerous 
proposals have been introduced to create economic development 
commissions using an ARC model for success. We will hear from 
proponents of these new regional authorities today.
    I look forward to hearing from all of our witnesses.
    Mr. Shuster. And, with that, I would like to recognize the 
Ranking Member, Ms. Norton, from the District of Columbia for 
an opening statement.
    Ms. Norton. Thank you very much, Mr. Chairman. And I 
particularly thank you for holding this hearing.
    We have periodically had hearings on the Appalachian 
Regional Commission work, and every time I sit at one of these 
hearings I want to amplify what I learn, because, if anything 
refutes the bad rap that Government programs are given, it is 
the success of the work of ARC in the Appalachian regions.
    I am also wonderfully gratified by the way in which ARC has 
leveraged much more in private sector funds simply because the 
Federal Government has stepped forward. I mean, I have seen how 
that can work in the District as well. But here Congress began 
in the 1960's to deal with the proverbial poor region of the 
United States, a part of the upper South that didn't have the 
same resources as other parts and had been in a cycle of 
perpetual poverty.
    I am going to let the Ranking Member of the Full Committee, 
who is more responsible for making sure this program survived 
decade after decade, regale you with what he knows about what 
Congress has done with this program. I am a youngster not in 
age, but certainly compared to him when it comes to this 
program.
    Here is a program that works with 13 governors, their 
Federal co-chairs, and look what they have done with 
Appalachia, which has essentially been written off as a poor 
region. You know, they didn't grow cotton, so they weren't like 
other parts of the South. They are not quite Sunbelt. They have 
got this very difficult industry: coal mining. Sure, their 
people want to work, but they haven't got much to work with, we 
were told.
    Here, before you get to the high tech area, to changes in 
the economy, what ARC did was to work with the economy they 
had. And it is amazing what a little bit of Federal money has 
done to transform the proverbial poor region of the United 
States of America, and the Chairman recounted some of it: 
poverty rates cut in half; infant mortality--and this is close 
to all of our hearts--reduced by two-thirds; the percent of 
adults with high school diplomas doubled. Here is an example of 
what very wise deployment of Federal funds can do to parts of 
the economy that would otherwise be written off.
    Appalachia simply could not have picked itself up by its 
own bootstraps. It needed somebody to help it get a hold of 
those straps. And look what they have shown. For me, this is 
the quintessential program. Not to say, Federal Government, why 
don't you just fund everything. But to say you can get funded 
if you do what ARC did, and get the confidence of the private 
sector with the funds we give, and then you will be on a roller 
coaster of your own making.
    Now, I am an extraordinary fan of this program. Ladies and 
gentlemen, I come from a big city. I can't get a dime of this 
program no matter what happens.
    [Laughter.]
    Ms. Norton. This is not a self interested advertisement for 
more Federal money. It is an opportunity to sit back and say, 
because this has been such a bipartisan effort, Mr. Chairman, 
let us shout it to the hilltops, not of what we have done, but 
of what you can do in order to make sure you have the success 
Appalachia has had.
    That is what my good friends at the table are trying to do. 
They are simply trying to take this model and put it to good 
use in their region, because while their regions had not been 
written off, their regions suffer from the very same problems: 
huge pockets of poverty, the absence of natural born resources, 
but hardworking people that just need the kind of help we were 
willing to give Appalachia.
    Now, don't mess with Appalachia. We are the rich Federal 
Government, and we do believe in investment. If this isn't the 
kind of investment we should make, I don't know what it is. 
What it means in Appalachia is we don't have to invest nearly 
as much in food stamps. We don't need to invest nearly as much 
in HUD and public housing. If you want to save the taxpayers 
money, that is the way to do it; take people off the Federal 
dole they must have just to live and give them what it takes 
for them to make themselves live.
    So I welcome my good friends, Congressman Bass, Congressman 
McHugh, Congressman McIntyre, Congressman Reyes, who want to 
address the same problems in their region. Along with the 
Chairman, I stand ready not simply to get them some money, but 
to use the Appalachia example to try to say, to the rest of our 
colleagues in the House and the Senate, this is what we should 
be doing with our Federal money. Thank you for coming.
    Mr. Shuster. Thank you very much.
    Now I would like to recognize the esteemed Ranking Member 
who probably authored much of the ARC a couple of years ago, 
Mr. Oberstar.
    Mr. Oberstar. Thank you, Mr. Chairman. Yes, indeed, I had 
the great privilege of being on the staff of this Committee at 
the time that the Appalachian Regional Commission legislation 
was crafted and the Economic Development Administration 
legislation was and, in fact, wrote the Committee report on the 
EDA legislation and worked very closely with our colleagues in 
the Senate, with Jennings Randolph and his staff on the ARC 
legislation.
    The Appalachian Regional Commission was really started by 
President John F. Kennedy, who directed Franklin D. Roosevelt, 
Jr. to head up a commission to travel through Appalachia, as 
Kennedy did, in the course of the presidential campaign to see 
for himself first-hand the problems, the needs, and talk to the 
people about potential solutions and a structure within which 
those solutions could be carried out. The recommendation of the 
Roosevelt commission was the Appalachian Regional Commission.
    In those days, in the early 1960's, Appalachia could be 
described as 80 acres and a mule. The way up for most people in 
Appalachia was a bus ticket north to Cleveland, Detroit, or 
Chicago. A hundred years of decline and deterioration, as the 
Roosevelt group noted, cannot be turned around in five years or 
ten years, it is going to be a long-term effort.
    And, wisely and rightly, they recommended dealing with the 
infrastructure throughout the 13 States or the portions of 13 
States, rebuild the roads, the water, the sewer, airports, the 
health facilities, vocational training. There were no 
vocational training facilities in those communities.
    Even much later, 20 years after establishment, your 
predecessor, Mr. Chairman, Bill Klinger, from Pennsylvania, and 
I traveled Appalachia holding hearings, we found the people 
literally were drinking their own sewage. The hard pan areas of 
West Virginia and Eastern Kentucky, where there was no drainage 
in the septic systems, were mingled with the groundwater and 
people had generations of intestinal disease, and it affects 
that. Appalachian Regional Commission created the means to do 
that.
    I went into a small town in West Virginia and our Committee 
was greeted by the mayor and the council, and after the public 
hearing he took us around to tour the town, went into a small 
shop and it was one of those cash registers, the old kind where 
you punch the buttons and the numbers pop up on the screen, and 
behind that cash register on the wall was a little sign that 
said ``God never put nobody in a place too small to grow.'' He 
said, before Appalachia, we were so far down we had to look up 
to see bottom.
    And, indeed, in 1965, per capita income in the counties of 
Appalachia was 45 percent of the national average. But 20 years 
later it was up to 75 percent. Jobs were being created; health 
care was instituted; vocational training centers were 
installed; the backbone Appalachian highway system was 
underway. Where you had to drive 40 miles to connect one town 
to another, now you could go just 10 or 15. Those are the 
successes. But more importantly, 1,600,000 jobs were created 
throughout Appalachia over its 35 years, 40 years.
    But you don't turn around a century decline in two or three 
decades. That is why, a few years ago, when the Commission 
submitted its report to Congress, the title was ``Halfway Home 
and a Long Way to Go.'' We still have a long way to go. We are 
making the right investments, making the right choices and 
decisions, and now there are proposals for other commissions 
similar.
    There were regional development commissions established in 
the 1960's, late 1960's, 1970's. We had the Upper Great Lakes 
Regional Commission, but it wasn't carefully monitored, it 
wasn't carefully evaluated, its investments weren't carefully 
targeted, the programming wasn't properly done, it didn't 
follow the Appalachia model as it should have done. And in 
establishing new commissions we need to take the lessons 
learned and apply them to the future.
    This hearing will give us an opportunity to take stock and 
chart a course for continuing the success of the Appalachian 
Regional Commission.
    Mr. Shuster. Thank you.
    Mr. Michaud, do you have an opening statement?
    Mr. Michaud. Thank you very much, Mr. Chairman. I want to 
thank the Ranking Member, as well, for holding this hearing. I 
am very glad that we are having this hearing in a way that 
includes both the reauthorization of the ARC and the 
consideration of possible new commissions, including the 
tripartisan bill that I introduced, along with five co-
sponsors, to create the Northeast Regional Economic Development 
Commission.
    I want to thank the panel for coming here today. I 
especially want to recognize my colleagues, Mr. McHugh and Mr. 
Bass, who are here today to give testimony. Their work and the 
work of their staffs have been invaluable in developing the 
Northeast Regional Commission bill. They are both truly 
dedicated to help improving the economy in our region. I admire 
their work and I wan to thank them both personally for their 
efforts.
    For 40 years the ARC has shown us an effective way to 
address regional economic distress. Now we must ask some basic 
questions: Should we be extending this approach to other areas? 
And, if so, how and where does it make sense to do so? One of 
the first points, there is no question that the ARC has been 
effective, as you heard from the previous speakers.
    The Federal investment in ARC has also been a good 
investment for the American taxpayers. In fiscal year 2005, 
each dollar of ARC funding leveraged $2.57 in other public 
funding and $8.46 in private funding. Clearly, a small Federal 
investment is going a long way towards creating jobs, 
infrastructure, business opportunity, and hope for the future.
    This track record of success leads us to other questions 
for today's hearing: Where and how else do we apply this 
approach? Mr. Chairman and Ranking Member, I would suggest a 
set of five principles or guidelines that we should use to 
decide whether we should add new regional commissions:
    First, any proposed region should have clear economic 
distress that has persisted over a long period of time. The 
Federal Government cannot react to every local downturn, but it 
should be focused on fighting long-term structural economic 
problems in a region.
    Second, the region should either be spread over multiple 
States or the economic problems that are addressed should be so 
severe that no State acting alone would be able to deal with 
them. In other words, there should be a clear Federal interest 
and a Federal role.
    Third,--and this is extremely important--the proposed 
regions should have a common character. It should be 
geographically linked together, and it should cover an area 
that has common economic challenges and assets. In other words, 
it should be an area where a region commission can address a 
clear set of regional problems and can use regional assets to 
help build new economic opportunities in those regions.
    Fourth, any new commission must have a clear, consistent 
structure with an appropriate balance of Federal, State, and 
local roles. The Federal Government should not be imposing 
solutions on the States, but it must maintain oversight. Local 
economic development professionals and stakeholders must have a 
strong role to play.
    And, finally, we should have a rational process with 
setting up new commissions. It should be done by this 
Committee, where the oversight has always been, and with clear 
understanding of that they would be administered in a similar 
efficient, common-sense model like the ARC.
    Mr. Chairman, of course, I have a small bias in this 
matter. I do believe that the Northeast Regional Economic 
Development Commission would meet all of these guidelines. 
While I am not an expert on the Southeast or the Southwest 
proposal, I believe that they do as well.
    Speaking for the Northeast, our region has a clear 
persistent pattern of longstanding economic distress. It 
spreads across several States and it has a common character: 
the loss of natural resource-based industry; an aging, 
crumbling infrastructure. A lack of transportation 
infrastructure has left it geographically isolated, just like 
the ARC region has historically.
    The bill would create a Northeast Regional Economic 
Development Commission. It is written to be consistent with the 
proven management structure of the ARC and with existing 
commissions, and it has a strong role for State and localities. 
And now it is being examined today in this Committee, which I 
believe will establish the history and oversight needed to take 
the next step forward.
    In closing, Mr. Chairman, I can say from personal 
experience that this commission is sorely needed. Like my 
father and my grandfather before me, when I left school, I went 
to work in the mill for 28 years before I got elected to 
Congress. And two days after I got sworn in to Congress, the 
mill I worked at went bankrupt and my hometown was devastated. 
The story of my town is not unusual in the State of Maine; the 
mill where I worked that has closed has been repeated 
throughout the Northeast. That is why this bill has a strong 
tripartisan group of co-sponsors. It also has the united 
support of economic development district directors, local NGOs, 
and major conservation groups.
    And I would like to recognize the representatives from 
Maine local economic development directors who are here today, 
as well as the Northern Forest Alliance, who are all here today 
to support this legislation. I look forward to hearing the 
testimony of the witnesses, especially Mr. Bass and Mr. McHugh 
and Mr. Daniels, and hopefully we will be able to move this 
legislation forward so we can improve the lives of people 
living in the most economically distressed region of our 
Country. So thank you very much, Mr. Chairman.
    Mr. Shuster. Thank you, Mr. Michaud.
    First, I would like to welcome all of our witnesses here 
today.
    Oh, Mr. Davis, I am sorry. Do you have an opening 
statement?
    Mr. Davis. If I could read it, it probably would be.
    [Laughter.]
    Mr. Davis. It will be very brief.
    Obviously, each of those of us who live in an area the ARC 
provides funding for, and options and opportunities for, has 
been a God-send and a blessing certainly to much of Appalachia. 
The district I represent is the fourth most rural residential 
district in America today. We have the third highest number of 
blue collar workers, meaning the lower wage earners.
    When you look at a district of that nature, you realize 
that ARC--perhaps those who would choose to be or would love 
have a commission similar to this a part of their area--has 
played such a diverse and important role in health care, in 
education, in economic development, in infrastructure. Our 
entire lifestyle has been changed by the options available to 
us through grants that otherwise would not have been available. 
There is an Appalachian highway called Highway 111 that goes 
all the way from Chattanooga through the center of my 
Congressional district that would not be there today had it not 
been for the Appalachian highway.
    So there is no one in this Committee or in this Congress 
that understands more the goodness that has come from the ARC 
and the goodness that could also be a part of the rest of 
America for those who are seeking a similar commission. So I 
applaud the work of the leaders of ARC.
    I see some here from my home State, one, Ms. Anne Pope, and 
others that are leaders of the ARC on the national level, but 
also those leaders that are city mayors and county mayors and 
industrial development boards, and those who are looking to 
sources that are able that they can leverage to use local 
funds, as well with Federal funding, to make a tremendous 
difference in the lives in all the areas that I mentioned.
    I yield back the rest of my time.
    Mr. Shuster. Thank you, Mr. Davis.
    Mr. Oberstar. I ask unanimous consent that the prepared 
statements be made part of the record.
    Mr. Shuster. Without objection, so ordered.
    I will start over. I want to welcome all of our witnesses. 
We appreciate your being here today. And I also want to ask 
unanimous consent that our witnesses' full statements be 
included in the record. Without objection, so ordered.
    Since your written testimony is going to be made part of 
the record, we would ask you to summarize in five minutes. And 
sometimes, for members of Congress, that can be difficult, so I 
will use the gavel liberally if I have to.
    Now, feel free to expound on your statements.
    We have three panels of witnesses today, and our first 
panel is comprised of our colleagues: Mr. Reyes from Texas, Mr. 
Bass from New Hampshire, Mr. McHugh from New York, and Mr. 
McIntyre from North Carolina.
    Thank you for being here with us today to discuss regional 
economic development authorities, and we will start with Mr. 
Reyes. Please proceed.

TESTIMONY OF THE HONORABLE SILVESTRE REYES, A REPRESENTATIVE IN 
  CONGRESS FROM THE STATE OF TEXAS; THE HONORABLE CHARLES F. 
   BASS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW 
 HAMPSHIRE; THE HONORABLE JOHN M. MCHUGH, A REPRESENTATIVE IN 
    CONGRESS FROM THE STATE OF NEW YORK; THE HONORABLE MIKE 
MCINTYRE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH 
                            CAROLINA

    Mr. Reyes. Thank you, Mr. Chairman. Thank you and Ranking 
Member Norton and, of course, my good friend Ranking Member 
Oberstar for your comments on this particular issue that is so 
vital to, I think, all of us in our regions.
    Members of the Subcommittee, I am here today to talk about 
the conditions that exist in many places along the U.S.-Mexico 
border to give you a better understanding of the great need for 
the creation of a regional economic development authority for 
the Southwest border region of the United States. It was 
because of this great need and the places like my congressional 
district of El Paso, Texas, that I introduced H.R. 5742.
    The Southwest border region as defined in H.R. 5742 
includes all counties within 150 miles of the U.S.-Mexico 
border. This region contains 11 counties in New Mexico, 65 
counties in Texas, 10 counties in Arizona, and 7 counties in 
California, for a combined total population of approximately 29 
million people.
    According to research compiled by the Interagency Task 
Force on the Economic Development of the Southwest Border, 20 
percent of the residents in my region of the Nation live below 
the poverty level. Unemployment rates often reach as high as 
five times the national unemployment rate, and the lack of 
adequate access to capital has created economic disparities 
that make it difficult for businesses to start up in this whole 
region.
    Border communities have long endured a depressed economy 
and low-paying jobs. We have some of the highest levels of 
unemployment and the lowest levels of income in the Country, 
and our economic challenges partly stem from our position as a 
border community.
    Economic development in border communities is difficult to 
stimulate without assistance from the government, private 
sector, and community nonprofits. H.R. 5742 would help foster 
planning in order to encourage infrastructure development, 
technology development, and deployment education and workforce 
development, and community development through 
entrepreneurship.
    Modeled in part after the Appalachian Regional Commission, 
which we heard from so eloquently from all your members, the 
Southwest Border Regional Authority would be successful because 
of four guiding principles.
    One, the Authority would fund proposals designed at the 
local level, followed by approval at the State level in order 
to meet regional economic development goals.
    Two, projects leading to the creation of a diversified 
regional economy would be prioritized. Currently, States and 
counties often are forced to compete against each other for 
limited funding.
    Third, the Authority would be an independent agency. Having 
the Authority set up in this manner would keep it from having 
to attempt to satisfy another Federal agency's mission 
requirements when determining which projects to fund.
    And, fourth, the Authority would be comprised of one 
Senate-confirmed Federal representative and the Governors of 
Texas, New Mexico, Arizona, and California. The proposed 
structure would allow equal representation by each State and a 
liaison back to the Federal agencies.
    For too long now, Mr. Chairman, the needs of the Southwest 
border region have been largely ignored, overlooked, and 
underfunded. It is time for Congress to recognize all of the 
challenges that are facing the border and to help the region 
make the most of its many assets. One important part of that 
effort would be to establish new economic development 
opportunities in the Southwest through an authority like the 
one in H.R. 5742, the Southwest Border Regional Authority Act.
    In closing, Mr. Chairman, I want to welcome a good friend 
and fellow Vietnam veteran, Judge Jake Brisbin, who you will 
hear from in the next panel. And I want to thank you and all 
the members of the Committee for giving me an opportunity to 
share with you some of my thoughts on this very important and 
vital legislation. Thank you very much.
    Mr. Shuster. Thank you very much, Mr. Reyes.
    Now, Mr. Bass.
    Mr. Bass. Thank you very much, Mr. Chairman and Ms. Norton. 
Bon jour.
    Mr. Shuster. To start, I don't speak French,
    [Laughter.]
    Mr. Michaud. I don't either. Well, Jim does.
    Mr. Bass. Reset the clock.
    Mr. Chairman, I ask unanimous consent to submit my 
statement, as well as some statements in support of this bill, 
1695, and a couple of newspaper articles.
    Mr. Shuster. Without objection, so ordered.
    Mr. Bass. Thank you. And I will be very brief.
    I think that the opening statements said it very well, 
especially Eleanor Norton's statement and Jim Oberstar's 
statements, about why we need these kinds of commissions. I 
would point out--I have a little map here which my friend from 
Maine is familiar with. If you look at this map, you can see 
the dark areas are areas of significant economic distress, and 
it happens to be, really, the exact area that would be covered 
by this new commission that we are talking about.
    The exception is northern Vermont, but that is because the 
biggest city in Vermont--Vermont is reversed from the rest of 
New England in that Burlington is up near the Canadian border. 
But it is different. There is a mountain range, as you know, 
that cuts through the middle here, and it really does more than 
just provide a barrier and beautiful scenery; it also cuts the 
two economies apart.
    Now the average household income in New Hampshire is well 
over $46,000 a year. Individual income, and I am mixing apples 
and oranges here a little bit, in northern New Hampshire is 
less than $17,000 a year. We have small, what used to be big 
businesses which are smaller businesses now, that are 
struggling. Our last paper mill, or next to last paper mill in 
the north country, shut down recently.
    And we see a concept here that could really change things 
around if we change the focus of economic development from a 
north-south effort--and we do have good transportation systems, 
but it still is a long way from Boston, Massachusetts up to 
Coos County, New Hampshire--and work on improving east-west 
communication, be it through transportation routes, roads and 
so forth, or be it through telecommunications and other forms 
of economic development, that we can make a real difference 
over a relatively short period of time in improving the 
livelihoods and the futures of these families that live in 
these areas.
    The scenery is beautiful up here, these are great 
communities, but these people live a hard life. And for 
relatively small investment we can take the model that was 
developed in the Appalachian region, have a regional commission 
in our area and really make a difference. So I urge you to 
favorably consider this legislation. I want to thank my friend 
from Maine for being the prime sponsor, and I yield back.
    Oh, Mr. Chairman?
    Mr. Shuster. Yes.
    Mr. Bass. I have a markup in my committee, if you wouldn't 
mind excusing me.
    Mr. Shuster. No, absolutely.
    Mr. Bass. Thank you.
    Mr. Shuster. Thanks a lot for coming. Appreciate your 
comments.
    Next, recognize Mr. McHugh.
    Mr. McHugh. Thank you very much, Mr. Chairman. And I should 
say, based on my brash remark about the fluency of some members 
here, that the distinguished Ranking Member of the Full 
Committee has been to my district. I have heard him speak 
French, and he would put to shame Louis XIV and all that came 
after. I was referring to my dear friend, Mr. Bass, whom I am 
questionable about his fluency.
    [Laughter.]
    Mr. McHugh. Having said that, thank you, Mr. Chairman, for 
having our full statements written in the record, and I take 
that opportunity just to make a few personal comments.
    First of all, let me also add my words of thanks to the 
distinguished member of the Committee, the gentleman from 
Maine, for his leadership in this. Obviously, his position both 
on this Committee and as a concerned member and a thoughtful 
legislator on these kinds of issues has been helpful, along 
with Mr. Bass and others. But I particularly want to extend my 
compliments to you, Mr. Chairman, to the Ranking Member, Ms. 
Norton, and, of course, to the distinguished Ranking Member of 
the Full Committee, as well as all the Subcommittee members for 
their understanding.
    I am not trying to, as we say in my part of the world, blow 
smoke up your skirts, but the opening statements were as 
eloquent as anything I have heard in nearly 14 years in 
Congress, and to have folks who may not be directly involved in 
the regions that are under discussion today and yet have such 
an appreciation and sensitivity and understanding is a warming 
fact, and I thank you so much for that.
    Let me just say a little bit about my district. And my dear 
friend, Charlie Bass, showed the larger swath of the proposed 
region that is embodied in the Northeast Regional Economic 
Development Commission, but like so many here today, Mr. 
McIntyre and others, I represent an amazing chunk of earth, 
over 14,700 square miles--that is about 30 percent of the land 
mass of the great State of New York--great diversity, the 
Adirondack Mountains, 1,000 islands, lakes, rivers, streams, 
unbelievable farmlands. As I said, such diversity. But the 
thing that they all share are economic challenges.
    Like all of my colleagues that have spoken here today, the 
indices of challenge unemployment, higher levels of out-
migration, generally lower levels of household income and such 
are far below national averages, far below State averages, and, 
in fact, are below those areas where commissions like this 
already exist.
    I have been a very frustrated person for the past 22 years 
in elective office and more than 35 years in public service, as 
we have tried to develop in good faith ways to address those 
challenges of poverty and economic decline. It is always a 
source of amazement to me how we are amazed when we put 
together a model of response, whether it be job creation, 
economic development, or a social program based on an urban 
model, apply it to rural areas, and then scratch our heads as 
to why it doesn't work.
    It seems to me one of the several genius aspects of the ARC 
is that it eschewed that kind of cookie-cutter approach. It 
understood that it has to have responses tailored to local 
challenges. It embodies, I think, everybody's idea of good 
government, melding together the local, the State, the Federal 
agencies, all overseen by a regional commission that used the 
resources provided to it on a needs basis and in a way in which 
the evaluation was made that this is going to produce results. 
And Ms. Norton was very eloquent in her statement about the 
return on investments that have attended the ARC, and I think 
that doesn't just happen by chance.
    We are here today, or at least I will speak for myself, 
some would say with a glint of envy. I would say, rather, with 
the effect of flattering through imitation the ARC. It is the 
model by which we all wish to--at least I do proceed in trying 
to bring that same kind of relief to equally deserving areas. 
And, as I said, I am just so warmed by the fact that you are 
holding this hearing and by the absolute great understanding 
that you bring to it.
    This is Hamilton County, and I will leave you with this 
thought. This is 7,200 square miles of that more than 14,700 
that I represent. It is one of the largest land masses in the 
State of New York as a county, and yet it has just over 5,000 
people. Those wonderful shades of green are not a celebration 
of my ancestors' homeland, Ireland, it is, instead, tax-exempt 
properties, properties that are locked up in what is known as 
the Adirondack Park. The Adirondack Park is, under the 
constitution of the State of New York, larger than Grand 
Canyon, Glacier, Yellowstone, and Yosemite Parks put together. 
That is great news, it is wonderful. However, as you see by 
that green area, it means you don't have a lot to work with in 
terms of economic development.
    The pink, those are housing, mostly residential areas from 
out-of-state folks or out-of-region folks who are seasonal 
residents. You can't see it, probably, the little yellow dots 
are the opportunity areas where economic development projects 
can legally and constitutionally be effected. That is the kind 
of challenge we face county after county. I have ten more of 
those in my district, and they are represented and replicated 
right up through Vermont, New Hampshire, and, of course, into 
the great State of Maine. That is why we are here asking for 
your help. You have already done a great job.
    Thank you, Mr. Chairman. I yield back.
    Mr. Shuster. Thank you very much, Mr. McHugh.
    And now recognize Mr. McIntyre for your statement.
    Mr. McIntyre. Thank you, Mr. Chairman. Many thanks to you 
to agree to hold this very important hearing today on 
legislation that I have introduced, H.R. 20, which is a bill to 
create the Southeast Crescent Authority.
    We currently have a broad range of support for this bill 
that includes bipartisan co-sponsors from States throughout the 
southeastern United States. A Chapel Hill, North Carolina think 
tank that has studied changes in the South over the last 40 
years included in its recent report information and statistics 
that examined the jobs, the population growth, the educational 
systems, the racial gaps, and the economy of all southern 
States.
    And the report states that even as the South's economy 
surged over the past two decades, structural shifts undermine 
the farm and factory base of the region's rural communities and 
transform metropolitan communities. The rising economic tide, 
it said, lifted so many boats that it was easy to ignore the 
structural changes at work. But when the tide ebbed at the 
close of the 1990's, it revealed serious weaknesses in the 
South's economy.
    In fact, in the last three years, the South lost 465,000 
manufacturing jobs, a 7.7 percent drop. Factory jobs declined 
by more than 10 percent in Alabama, Mississippi, North 
Carolina, and South Carolina more than the national average. 
And after 2001, the hemorrhaging continued, especially in the 
textile-dependent States of Georgia, North Carolina, and South 
Carolina. The forces of globalization and technology have 
fundamentally restructured the southern economy, creating and 
destroying both high-skilled and low-skilled jobs.
    Mr. Chairman, the time is now to work to change this 
pattern and ensure that those individuals, whether they are 
working in textiles, tobacco, or manufacturing--the traditional 
industries in the South--and those communities that have been 
effected are not left behind. And I an confident that the 
Southeast Crescent Authority will be a critical factor in doing 
just that, and, indeed, it will meet that five criteria that 
Congressman Michaud mentioned earlier in opening remarks.
    The southeastern portion of the United States, encompassing 
the States of Virginia, North Carolina, South Carolina, 
Georgia, Alabama, Mississippi, and Florida, is an area which 
has seen poverty rates well above the national average, coupled 
with record unemployment. In fact, in 2004, the South had a 
poverty rate of 14.1 percent, the highest rate--the highest 
rate--of all regions of the United States. In addition, over 10 
percent of the counties throughout this area had unemployment 
rates at least double the national average unemployment. In 
other words, the Southeast has led the way, unfortunately, both 
in having the highest level of poverty and the highest level of 
unemployment.
    The seven States of the Southeast Crescent Authority region 
also have experienced, as you well know, natural disasters. 
What you may not realize is at a rate of two to three times 
greater than any other region of the U.S. And this 
vulnerability to natural disasters only further exacerbates the 
ability to recover from economic distress.
    Now, SECA, the Southeast Crescent Authority, is modeled 
primarily after, as we have heard today put so eloquently, the 
successful Appalachian Regional Commission. Southeast Crescent 
Authority hopes to enjoin a local, State, and Federal 
partnership to lift our citizens out of poverty and to create 
jobs, the two areas where we are suffering so much. With this 
Federal allocation of funding, we have very specific programs 
that would help with community betterment: infrastructure, 
education and job training, health care, entrepreneurship, and 
leadership development. And the communities with the greatest 
need, those with the highest economic distress, would be the 
ones that are targeted, and help would be given according to 
the degree of distress so that we make sure that we are trying 
to help those areas that need the help most in the fastest 
possible way.
    Mr. Chairman, the Southeastern United States is one of the 
last areas of the Country not to have a Federal authority 
totally dedicated to ending poverty and strengthening 
communities. As you know, there have been very many commissions 
put in place and, of course, the Appalachian Regional 
Commission is the one that leads the way. We would like to see 
the Southeast Crescent Authority be that valuable tool to 
assist State and local officials, county development 
organizations, and many others in providing the resources and 
leveraging additional funds to allow our citizens to reach 
their economic potential.
    Now, on another panel today you are going to hear from Al 
Delia, who is sitting here in the front row, at the very end 
there, the Director for Federal Relations for East Carolina 
University, who has done extensive study, has done the 
background, has done the demographics, has done the charts, the 
population studies and the economic studies that would help 
underscore and lay the foundation for what could go ahead and 
be done with the Southeast Crescent Authority. He and I share 
the same excitement over the opportunities this bill has to 
offer in the southern region of the Country. I am confident we 
can use the ARC's successful partnership model, being that a 
good part of that Commission is in North Carolina and other 
States that are affected.
    And as a matter of economies, we know it costs a lot less 
to leverage local and State dollars and allow access to 
available Federal grants than to go behind and clean up the 
distress in the wake of unemployment, poverty, dropouts, and 
poor health care delivery.
    Again, I want to thank you, Mr. Chairman, and all the 
members of the Subcommittee and the Committee at large for your 
willingness to hold this hearing and to work with us, and we 
look forward to working with you. Indeed, the time is now, as 
you have heard from my colleagues and as you have heard from 
me, regarding the needs in our areas. The time is now. The need 
is great.
    The Southeast Crescent Authority is the answer to help us 
confront these problems head-on. Together I know we can do it, 
and with your help I know we will succeed. Thank you very much.
    Mr. Shuster. Thank you, Mr. McIntyre.
    Thank both of you for being here today. I have no 
questions. My questions will wait for the local economic folks.
    Ms. Norton. Mr. Chairman, I have just one question.
    Mr. Shuster. Go ahead, Ms. Norton.
    Ms. Norton. Because you have been preaching to the choir, 
and the Chairman wants to get on, to lay the record out, I do 
want to ask a question. In light of the fact that the Congress 
is having trouble funding things--and we would love to see this 
funded, or at least begun to be funded. In fact, we are trying 
to keep things from being de-funded, and here we are talking 
about an investment that we think is very much worth it.
    But the question I have really is a strategic question, 
because it does seem to me one is going to have to make fairly 
unique arguments to get any attention. So part of what I want 
to know is whether or not at least some funding, some pilot 
funding might be useful. That is the first thing.
    The second thing, frankly, is our colleagues want to help. 
And when we go to our colleagues, they really do want to help 
one another and want to help people who have a harder time than 
another time. But everybody has a stereotype of where people 
come from.
    Mr. McHugh, you come from New York State. I spent 12 of the 
best years of my life in New York City. Both my children were 
born in Mt. Sinai Hospital and, you know, I am a native 
Washingtonian who still loves New York. But I remember the back 
and forth between New York City, which felt it was funding the 
State, and the rigamarole on that.
    So when people hear New York State, they think about New 
York City. Too bad. Some of us know that New York is blessed 
with this one great big city, but, hey, there is a great big 
State there. We would have to somehow deal with some of the 
issues you are talking about fairly uniquely because, remember, 
some of these conditions exist in fairly large pockets around 
the Country.
    Mr. McIntyre, you come from North Carolina. If ever there 
is any symbol of the New South, it is North Carolina. My 
mother, by the way, was raised in North Carolina, and it wasn't 
so new then.
    Mr. McIntyre. Right.
    Ms. Norton. And it is the very essence of what we mean by 
the New South. But you are talking about something that most 
people--so what do we think about? We think about that research 
triangle and all of those well educated people and what they 
contribute to the State.
    Mr. McIntyre. That is Mr. Price's district.
    Ms. Norton. Yes.
    [Laughter.]
    Ms. Norton. And so, strategically, if we are going in, in 
this climate, talking about some way to get started on other 
regions, I would appreciate your strategic advice as much as 
what you have had to say, which it seems to me does arm us 
substantively.
    Mr. McHugh. Well, as always, the distinguished Ranking 
Member strikes at the heart of every challenge. Our good 
intentions in this Congress are never measured up to by our 
available resources, and I think particularly in this 
environment we all understand that. I hate to negotiate down 
from the starting line, particularly when Mr. Michaud is there, 
who has worked so hard on this, but I think it is an obvious 
statement to lay out the fact that when you are dealing with a 
regional commission--as all of these are of considerable size, 
there is a lot of first steps that have to be taken.
    The bill which we have proposed calls for $40 million, 
which, in the context of the Federal budget, it is not even 
lost in the couch, I mean, it won't even fall out of the 
pockets, really. But, nevertheless, I don't want to diminish 
the challenge that is there, and I think the adoption of the 
authorization is the first critical step. As an authorizer 
myself, I think that is where you have to start with any 
program, and then the battle is, traditionally, do you find a 
way to match the appropriation with the authorization. And we 
deal with that on Armed Services, as the Chairman knows, each 
and every day.
    So we would certainly have to, and willingly, work with you 
and defer to your judgment on that, but there are certain 
causes that I think merit a full authorization to help the next 
step in the battle.
    And as for New York, most New York City residents think the 
State ends at the Tappan Zee Bridge. I am heartened to hear 
that you were the exception to that. It is a big, beautiful 
State, but with a lot of challenges.
    Ms. Norton. Forty million dollars is so little, you would 
think that we wouldn't have, especially since we are talking 
about an authorization bill, then you would have the uphill 
battle.
    Mr. McIntyre?
    Mr. McIntyre. Right. And I would agree with my friend, 
Representative McHugh's comments. North Carolina in particular, 
for instance, my home State, we have exactly 100 counties. 
Fifteen of those fall into the category of places like the 
Research Triangle Park and down toward Charlotte and the Triad 
area, which is where Winston-Salem is.
    That means 85 percent of the State, which mathematically 
exactly equals 85 counties, are classified as rural, some of 
which qualify and are part of the Appalachian Regional 
Commission, which means that all those other counties that are 
not in the 15 that are the high-growth area, like around 
Raleigh-Durham, Charlotte, and Winston-Salem, are mainly in the 
middle part and the eastern part of the State, which is where I 
live. In fact, I fly into Raleigh-Durham every week, but then 
have another 100 miles to go home to the extremely rural area 
that I represent and the extremely rural area
    Ms. Norton. How much have you asked for, $40 million?
    Mr. McIntyre. At minimum, $40 million, to get started. And 
I think that is very reasonable help for that region
    Ms. Norton. What are your Senators doing? You know, for 
that little bit of money, you know, they tuck things into 
every, that is why the District suffers from not having any 
Senators. For that little bit of money, they could, you know, 
we are talking about pocket change. They put more in bills than 
any of us ever find out every time there is an appropriation 
period. Are they working
    Mr. McHugh. Well, we are the House with a heart.
    Ms. Norton. But are they working on this at all?
    Mr. McIntyre. Yes, they are supportive, our Senators are.
    Mr. McHugh. Ours are
    Mr. McIntyre. In fact--I am sorry--Senator Dole, who I was 
just with this morning on another issue, she has a companion 
bill that mirrors this exactly. So we are working this in both 
houses.
    Ms. Norton. Just let me suggest this. You know, you are 
right, that is shamefully little--that is a pilot, for goodness 
sakes, starting at that amount of money. Let me tell you what I 
fear. We did one region, that was Appalachia. The reason that 
pilot even crosses my mind is that I see some region, maybe 
with Senators who give this priority, among the $4 billion 
plucked out because some senator, for a lousy $40 million, is 
going to be able, maybe even in an appropriation without 
authorization, because you can get pilots that way.
    So, look, the last thing I want to do is bargain down, and 
I asked about the Senate because of the experience I and you 
have had with the Senate. What we have before us is four 
different regions all seeking money. I ask you, how do you 
think the Congress would parse this? Either they would give a 
small amount of money or somebody would decide what kind of an 
amount would allow this to get started. And we have been 
talking about these regions for some time, so I just ask you, 
as you leave this hearing, to help us think strategically, in 
this climate, how do we get started on additional regions.
    Mr. McHugh. Point well taken.
    Mr. McIntyre. We will be glad to. We will be happy to work 
with your staff.
    Mr. Shuster. Thank you very much. And I think it obviously 
is a difficult thing to do. Mr. Oberstar, four years ago, or 
eight years ago, authorized the Great Plains Economic 
Development Region, and it is yet to be funded. So that is 
going to be a tough one, but look forward to working with you. 
Thank you very much for being here.
    And as our first panel leaves and our second panel, I just 
want to inform you, second panel and third panel, we are going 
to be called for votes probably sometime between 2:30 and 3:00, 
so one thing I have learned as a Subcommittee chairman is how 
to manage the clock. So I might have job opportunities in the 
NFL managing some of those teams' clocks in the game. So, 
second panel, please approach.
    And our second panel is here to discuss the reauthorization 
of the Appalachian Regional Authority. Our second panel has 
three witnesses: Ms. Anne Pope, the Federal Co-Chair of ARC; 
Mr. Steven Robertson, who is Commissioner of the Governor's 
Office for Local Development for the State of Kentucky and 
Alternate to the States' Co-Chair for the ARC; and Mr. Ed 
Silvetti, who is a fantastic economic development person, also 
a good friend of mine who hails from my home county.
    I think you live in Blair County, don't you? OK.
    He is the Executive Director of the Southern Alleghenies 
Planning and Development Commission who is speaking on behalf 
of the National Association of Development Organizations this 
afternoon.
    I would like to welcome all of you and thank you for 
traveling to Washington, D.C. And, Ms. Pope, if you are ready.

   TESTIMONY OF ANNE B. POPE, FEDERAL CO-CHAIR, APPALACHIAN 
REGIONAL COMMISSION; STEVE ROBERTSON, COMMISSIONER, GOVERNOR'S 
 OFFICE FOR LOCAL DEVELOPMENT, STATE OF KENTUCKY, ALTERNATE TO 
 THE STATES' CO-CHAIR, APPALACHIAN REGIONAL COMMISSION; EDWARD 
SILVETTI, EXECUTIVE DIRECTOR, SOUTHERN ALLEGHENIES PLANNING AND 
  DEVELOPMENT COMMISSION, NATIONAL ASSOCIATION OF DEVELOPMENT 
                         ORGANIZATIONS

    Ms. Pope. Yes. Thank you, Mr. Chairman, for holding this 
hearing and giving me an opportunity to testify on behalf of 
the Bush Administration.
    President Bush is strongly committed to Appalachia. He 
recognizes that this region has not fully participated in the 
growth of the American economy. He will not be content until 
every person who wants to work has a job, and the President 
believes the ARC can play an important role in this.
    I appreciate your strong support, Mr. Chairman, for the 
work of ARC. Pennsylvania is an important ARC State, and most 
of the Ninth District is in our region.
    I am also pleased to be joined by Steve Robertson, Kentucky 
Governor Fletcher's ARC Alternate. Governor Fletcher is a 
strong advocate of ARC. Together we represent the Federal-State 
partnership that governs ARC.
    You will also hear from one of the leaders of economic 
development in Appalachia, Ed Silvetti, of Southern Alleghenies 
Planning and Development Commission. Of our 72 local 
development districts, they are all critical partners for ARC. 
Ed is a creative leader who understands the benefits of 
regionalism and knows how to get people to work together.
    Mr. Chairman, the economic landscape in Appalachia is 
shifting. Appalachia's traditional reliance on low-skill jobs 
and what we call the big four--manufacturing, mining, tobacco, 
and steel--is rapidly shifting to a more knowledge-based 
economy. We know that 80 percent of the high-growth jobs of 
tomorrow will be knowledge-based.
    Appalachia must adjust to these new realities if our people 
are going to compete. Our communities must create jobs in a new 
way, enhancing the skills of its workers and home-growing our 
own. We have to have innovative regional strategies that 
position our communities to compete in this global economy.
    ARC must adjust as well. We are becoming more performance-
based, increasing our leveraging, expanding our partnerships, 
and focusing on innovative regional strategies to help 
communities help themselves.
    I believe that, to be effective, an organization must have 
a plan, work that plan, and then measure what it has 
accomplished. For ARC, that plan is our strategic plan which we 
developed in 2004 by holding a series of meetings across the 
region. That plan basically says four things, four goals: 
increasing jobs; strengthening the capacity of our people; 
developing and improving regional physical infrastructure; and, 
four, building the Appalachian Development Highway System.
    So, over the next 10 years, our goals are to: create 
200,000 jobs; enhance the employability of 200,000 workers; 
three, provide basic infrastructure to 200,000 households; and 
open 250 miles of the Appalachian Development Highway System. 
Our plan declares our overall objective of Appalachia reaching 
socioeconomic parity with the rest of the Nation.
    To help us measure our progress, we have devised an 
economic index that compares Appalachia with the rest of the 
Nation. The index shows that we have more of the worst counties 
and fewer of the best than the rest of the Country.
    We know, at ARC, that to have the most impact, we need to 
work in three ways:
    Leveraging. There has been a lot of discussion about that 
today. We are working to increase our leveraging. And, last 
year, for every ARC dollar spent, $11 was leveraged from other 
sources, including $8 from the private sector.
    We know we have to increase our partnerships, both at the 
Federal Government level and in the private sector, which has 
been a primary goal of mine. A good example has been Microsoft. 
Microsoft is a key partner who, two years ago, put in $1 
million of software investment in the region. And when they saw 
the need and demand, they quickly doubled that to $2 million.
    And the third thing we know we have to do is find 
innovative regional partnerships that our States and 
communities can work together, regionally, and look for 
examples of innovation and try to replicate those innovative 
approaches across the region. A great example of that is our 
Appalachian Higher Education Network. This is a highly 
successful effort to increase the college-going rate in 
Appalachia, something in which we lag behind the rest of the 
Nation. ARC discovered a model in Ohio, and we have replicated 
that in eight other Appalachian States. Since 1998, the Network 
programs have reached nearly 11,000 high school seniors and 
boosted the college-going rate by 20 percent.
    Responding to the lack of equity capital in Appalachia, 
five our or States came together and created the Southern 
Appalachian Fund. ARC's million dollar investment attracted 
almost $12 million in funds, invested in eight companies, 
creating over 100 jobs.
    Telecommunications and technology has been a major priority 
of ARC. Over the past four years, ARC has invested $32 million, 
leveraging another $120 million in innovative projects such as 
SEDA-COGs, e-commerce initiative to promote the use of Internet 
small businesses in Pennsylvania; MEGAPOP, which is connecting 
all of Northeast Mississippi, and Connect Kentucky, which Steve 
Robertson is going to talk a little bit more about.
    Mr. Chairman, as we look to the future, ARC is adapting its 
programs to accommodate the economic changes that are sweeping 
across Appalachia. To help us better define Appalachia's 
economically weak counties, the Commission has adopted a new 
designation of ``at-risk'' to identify those counties that are 
just on the cusp of becoming distressed and need special 
attention. We will examine our programs to see how we can best 
assist these at-risk counties.
    We have a new program called Asset-Based Development, which 
basically is helping communities look for new ways to maximize 
the assets that are in their communities to help diversify 
their economic base. For example, Appalachia has vast natural 
resources that offer economic opportunities in areas such as 
wood products, value-added ag and energy. When one thinks of 
Appalachia, one obviously thinks of coal. But the region also 
is rich in other energy resources, such as oil and gas, wind, 
and biomass.
    In February, the Appalachian governors and myself agreed to 
develop an energy policy blueprint for the region, which is a 
roadmap using these energy resources to help spur economic 
growth and create jobs. We plan to unveil this blueprint later 
this fall.
    ARC has historically been about providing basic 
infrastructure. Let me assure you that the commitment will 
continue. Appalachia's water and wastewater services, 
particularly in our distressed counties, lag behind the U.S., 
while our per capita costs are higher. We will encourage 
regional approaches and innovative solutions to meet these 
basic infrastructure needs.
    Mr. Chairman, Appalachia is on the move. We have made 
progress: major reductions in poverty, infant mortality in 
distressed counties, and increases in educational attainment 
and small business investment. But we have not reached parity 
with the Nation, which is our goal. But I believe that ARC has 
positioned itself to respond effectively and help the region 
make significant strides in moving to parity with the Nation. 
We appreciate your help in this effort.
    Mr. Shuster. Thank you very much, Ms. Pope, for your 
testimony.
    Now, Mr. Robertson, you may proceed.
    Mr. Robertson. Thank you. Mr. Chairman and members of the 
Subcommittee, I want to thank you for inviting Ernie Fletcher, 
Governor of Kentucky, to testify today. He regrets that his 
schedule made it impossible for him to attend, but as the 
Appalachian Regional Commission's 2006 States' Co-Chairman, 
Governor Fletcher is proud to represent the 13 Governors from 
the region.
    Again, my name is Steve Robertson, and I am Governor 
Fletcher's alternate to the Committee, and I am the 
Commissioner of the Governor's Office for Local Development, 
and I am honored to be here to testify on behalf of Governor 
Fletcher and the other 12 governors in the ARC partnership.
    And certainly Kentucky Governor Fletcher understands the 
importance of leveraging a variety of funding sources, and he 
especially values the collaboration between my office in 
Kentucky and one of your colleagues, Congressman Hal Rogers and 
his staff, as we work together to utilize Federal dollars to 
identify the most viable projects in Appalachia Kentucky. We 
have a strong relationship there and certainly look forward to 
continuing that.
    The ARC has been a strategic partner and advocate for 
sustainable community and economic development in the 
Appalachian Region since its formation, and we are grateful for 
the organization's guidance and support. We want to commend the 
President and Congress for continuing to commit to the work of 
the Commission and want to thank you, Mr. Chairman, for holding 
this hearing today to consider a five-year reauthorization of 
ARC's non-highway program.
    ARC investments, combined with strong State and local 
government and private sector commitment and investments, have 
been instrumental in reducing the number of distressed counties 
in the region from 223 to 77 in fiscal year 2006. I believe 
this demonstrates significant results. Kentucky has 51 counties 
in the region. This year we have 32 distressed counties, 12 at-
risk, and 7 transitional.
    In 2005, ARC invested more than $8 million in program funds 
in Kentucky, which leveraged more than $33 million in other 
funds. We anticipate that these investments will lead to the 
creation or retention of more than 1100 jobs.
    Between 2001 and 2005, ARC invested more than $47 million 
in program funds in my State. This is expected to create or 
retain nearly 3500 jobs and serve more than 65,000 families 
with infrastructure improvements.
    ARC's mission is broader than other economic development 
programs, focusing not only on cyclical economic downturns, but 
on long-term systemic regional distress. ARC is often the lever 
that has brought other Federal funding sources to projects and 
localities suffering severe distress. ARC targets distressed 
counties and over the past five years has provided them 
annually with more than 65 percent of our congressionally 
allocated funds.
    The Commission has been about solving problems by building 
partnerships, leveraging our grant dollars, and being an 
advocate for the region. For every ARC dollar invested in 
infrastructure, Appalachia has gained about $33 in long-term 
benefits.
    I think it is important to note here that ARC's success in 
leveraging additional Federal, State, and local government 
funds, as well as private sector investments, is based on its 
bottom-up approach to identifying local needs and developing 
local plans to address them. ARC works in cooperation with 
local communities and the 72 local development districts across 
the region that provide guidance, technical assistance, 
strategic planning expertise, and oversight to ensure the ARC 
projects address the identified need and accomplish anticipated 
results.
    The Appalachian Region continues to face a unique and 
complex set of social and economic challenges. One of every 
five jobs lost in manufacturing has been in Appalachia. Income 
in Appalachia continues to lag the Nation; our counties still 
have a need for modern infrastructure.
    From our perspective, ARC's mission has not been completed. 
Seventy-seven counties are currently classified as severely 
distressed, and an additional 65 counties are on the brink of 
slipping back into the distressed classification.
    Mr. Chairman, you represent a district mostly within the 
Appalachian Region, so I know you see first-hand the benefits 
of the Pennsylvania ARC partnership and recognize that there is 
still work to be done, so reauthorization of ARC is essential.
    On behalf of Governor Fletcher and the other Appalachian 
governors, I want to express our commitment to working with you 
and the Appalachian Regional Commission to achieve our shared 
regional goals of socioeconomic parity with the Nation. We urge 
the Congress to reauthorize ARC for five years so we can work 
toward accomplishing these goals for the 23 million residents 
of the region. Thank you.
    Mr. Shuster. Thank you very much, Mr. Robertson.
    And now, Mr. Silvetti, you may proceed.
    Mr. Silvetti. Thank you. Mr. Chairman, members of the 
Subcommittee, thank you for the opportunity to testify for 
reauthorization of the Appalachian Regional Development Act and 
to offer just a few recommendation for its improvement.
    My name is Ed Silvetti, and I am Executive Director for 
Southern Alleghenies Planning and Development Commission, 
headquartered in Altoona, Pennsylvania. I am here also on 
behalf of the Development District Association of Appalachia 
and the National Association of Development Organizations. My 
gratitude for this invitation to comment on behalf of efforts 
to improve local economies and the quality of life for our 
fellow citizens within 72 local development districts 
throughout Appalachia. And on behalf of the Appalachian 
Regional Commission, an innovative, intergovernmental model 
that has successfully fostered community and economic 
development for over 40 years.
    Presently, I am Chair of the State Association in 
Pennsylvania of LDDs and I serve on the Board of the 
Development District Association of 72 LDDs throughout 
Appalachia. My experience provides a unique perspective, and I 
will try to convey this experience this afternoon to members of 
the Subcommittee.
    In 1975, I was a graduate student in the Institute of 
Public Administration at Penn State. I had a course entitled 
Intergovernmental Relations. The ARC was actually used as a 
case study for Federal-State-local partnership and cited as 
innovative and unique in targeting Federal resources in a 
multi-State region that sorely needed it by any standard.
    ARC has proved highly effective in planning, programming, 
and budgeting for projects and for organizing local leadership 
that has enhanced the lives of Appalachian citizens. ARC's 
model is a true intergovernmental model that preserves a direct 
Federal role with investment and policy decisions, but respects 
State priorities and the active participation of local 
governments through local development districts.
    This work remains a challenge today. But were it not for 
ARC, most investments in support of technical training, primary 
health care, and job creation would not have occurred as they 
did. Policy leaders at all levels have closely monitored ARC 
and consistently cite the Commission as the premier example for 
a successful regional approach to economic development. This 
has inspired leaders from other impoverished regions to seek 
replication of this model.
    LDDs serve 410 counties and 23 million people, promoting 
sustainable development, the environment, emergency 
preparedness, human services, public administration, and 
workforce development. This network has yielded impressive 
results, as further described in my written statement.
    In my local experience, ARC has participated in virtually 
every economic development related project of any consequence 
in my six county local development district. ARC investments 
have been critical on the cusp of emerging issues like 
telecommunications, civic leadership, and asset-based 
development. ARC has provided foresight and innovation.
    I testify today with certainty that the ARC process as a 
true intergovernmental partnership works exactly as it was 
planned, and as I was taught it should work more than 30 years 
ago in graduate school. The LDD planning process is 
comprehensive and includes investment strategies that guide our 
work. The Appalachian States and ARC staff can rest assured 
that due diligence has been performed and projects recommended 
meet the ARC guide and are consistent with ARC's goals and 
performance metrics.
    In partnership with the Commonwealth of Pennsylvania, ARC 
has funded numerous infrastructure projects, but also a program 
of direct technical assistance promoting the growth of small 
and medium sized businesses. This enterprise development 
program was innovative when first established and has since 
become a national standard for smart economic development.
    Earlier this year, one of our enterprise development 
clients received an exporting award from the U.S. Commercial 
Service. Our LDD received an award as well for its work with 
this company, Household Lumber near Bloom. Congressman Shuster, 
you helped present those awards. LDDs reflect the ARC's 
insistence that efforts be performance-based.
    Southern Alleghenies Commission has goals and objectives 
and measurable outputs and outcomes. We understand performance 
measurement, and we support our ARC partners here in Washington 
and in Harrisburg that ARC dollars be used to leverage other 
investments.
    The proposed five year reauthorization bill would allow ARC 
to annually designate those counties with fragile economies 
that are at risk of becoming economically distressed and 
codifies the ARC's existing practice in this area. We support 
permitting ARC to fund projects in at-risk counties at up to 70 
percent of project costs.
    Lastly, provisions allowing ARC to provide LDDs with a 
hardship waiver that increases their Federal share for 
administrative grants up to 75 percent from the current 50 is 
also strongly encouraged.
    Chairman Shuster and members of the Subcommittee, I believe 
the ARC has been unique and highly successful. It fulfills its 
intergovernmental mission and has demonstrated that Federal-
State-local partnerships result in significant long-term 
benefits. It is not lost upon those of us working in the field 
that proposals are being made to emulate ARC. Allow this good 
work to continue.
    Thank you, Mr. Chairman and members of the Subcommittee. I 
would love to answer any questions you might have.
    Mr. Shuster. Thank you very much.
    I have a couple questions for the panel.
    First, Ms. Pope, you had mentioned that you focused on 
increasing the number of young people that get a college 
education. I have two questions, or I guess one question, two 
concerns. It seems, from where I live in rural Pennsylvania, we 
at times have put too much emphasis on college and not on 
higher education, going on to technical school, and it seems a 
lot of kids are going to college when we would be better served 
if some of them would go to technical training and in technical 
fields.
    So can you comment on that a little bit, as well as it 
seems my experience has been kids go away to college, a lot of 
times they don't come back to rural Pennsylvania, they go to 
the city and take some years or they never come back. So can 
you talk about what your experience has been on those two 
fronts?
    Ms. Pope. Yes, Mr. Chairman. Let me address your first 
point about kids going to college. We sort of have a general 
umbrella of focusing on--we do have a college-going program 
where--Appalachia, you know, really lags the Nation in kids 
going on to college, so we have a specific program to do that.
    But one of our four primary goals is to increase the 
employability of our people. One way is increasing education; 
another way absolutely is increase their employability by 
enhanced training. We have a number of programs that get at 
encouraging our citizens to get their GED, workforce 
development programs. So I think that we have a program that is 
multi-layered to increase the employability that does get at 
the college-going rate and technical type schools.
    I will add that was a major push in, say, the 1960's and 
1970's, to get our citizens to have a high school diploma. We 
know today that is not enough to be competitive. They have to 
have college, some sort of post-secondary education or enhanced 
training to be competitive.
    Your second point we hear a lot, which is if we educate our 
young, they will leave. And when we had our strategic planning 
process, the number one concern of people across Appalachia was 
the brain drain, that our children, if we educate them, they 
will leave. That is a concern, but how we feel is that today 
they have to have that education and that enhanced 
employability to be competitive. The low-skilled training in 
Appalachia that would provide--earn a livable wage is no 
longer, so we feel that we have to educate our folks within 
Appalachia.
    But I think it is a bird in the hand, too. We have to do 
other things to help create jobs, and I think that is the 
primary difference. If there are no jobs, then they will have 
to leave. But we are working to try to create and retain jobs 
within the region as well.
    Mr. Shuster. Do you have any kind of numbers that indicate 
what percentage might be staying, college educated?
    Ms. Pope. Well, I mean, it varies vastly across the region. 
We can certainly get that to you, but it does vary greatly 
across our region.
    Mr. Shuster. And I certainly don't want to downplay the 
positives of a college education, but, again, we have seen in 
our schools--and I think, Ed, you know first-hand, and I will 
let you respond--that so many kids are going to college when we 
need, we have jobs and skilled profession, working in the 
electrical field, electricians and computers and things like 
that that don't require a college degree, but they make a 
significant living if they have that kind of training.
    Mr. Silvetti. I just wanted to mention that, you know, part 
of the effort that we undertake is looking at the growth 
industries in our region, looking where the good jobs are being 
created and try to foster kids coming up through school to get 
an education in those fields so they can stay in the area and 
earn a sustainable wage. That is an important part of the 
process, linking economic development efforts with education.
    Mr. Shuster. The second question I have is on the increase 
in the affordable access to advanced telecommunications and 
those types of things. How has that been going, can you sort of 
give us a report card? It was reauthorized, that was a new part 
in the reauthorization, I believe.
    Ms. Pope. Yes. And that reauthorization has been having us 
focus on and putting emphasis on telecommunications has been 
very helpful to us. It has been a focus of the Commission; it 
is a special initiative. We take money and focus it on that. Of 
the $34 million that we spent over the last four years, we have 
leveraged over $120 million. And the example that I gave of 
Microsoft, but for our special telecommunications initiative, I 
think that would have been difficult.
    So it has been very helpful to us. I would say it has been 
very successful. Our goal is to get high-speed broadband access 
to all 410 counties in our region, and we are certainly well on 
the way. We know the private sector is key in this, and we are 
working with Microsoft, Verizon, and others to try to encourage 
speeding up bringing broadband to certain markets, particularly 
in our distressed counties.
    Mr. Shuster. Mr. Robertson, you want to give a State's 
perspective on that? Do you see that?
    Mr. Robertson. I do. Thank you, Mr. Chairman. In Kentucky, 
Governor Fletcher has placed a high importance on having 
broadband availability across the entire State by the end of 
2007. ARC has played a critical role in the funding component 
of leveraging private investment and other State dollars to 
enter communities, particularly our 51 ARC counties, to analyze 
their broadband needs and help these communities figure out 
what their next steps are to create the environment where a 
private provider will want to enter and provide the service.
    And certainly, over the last two years, in Kentucky, I 
believe we have gone from 60 percent to 77 percent 
availability, and I think those numbers are a bit dated. I 
spoke with someone in the State this morning, and they are 
hopeful that by the middle part of next year we will be at 90 
percent availability across the State.
    And when you start to reach that point, especially when you 
get into Appalachia, you know, that is when these communities 
who now have plans partially funded by ARC monies, I mean, they 
are able to go out and leverage satellite companies to provide 
the last mile to make sure their residents have access. But 
certainly the focus on telecommunications has been critical in 
Kentucky and ARC has been a critical part of that.
    Mr. Shuster. Mr. Silvetti, you want to respond locally?
    Mr. Silvetti. I wanted to mention what the LDDs in 
Pennsylvania just finished doing. We finished a huge process of 
mapping advanced telecommunications deployment in Pennsylvania 
by cable companies, by the telecom. What we are going to do 
now, under Pennsylvania Act 30, we positioned ourselves to 
prepare bona fide requests for services which will go into the 
telecommunications providers in Pennsylvania. And there is a 
time line within that State Act that require them to provide 
that broadband and other telecommunications services. I think 
we are doing a lot of good work in this area.
    Mr. Shuster. Thank you very much.
    I think we are going to take a recess here. It is going to 
probably be about 45 minutes, is my guess, two 15-minute votes 
and a 5-minute vote.
    Ms. Norton. Just so I can ask my questions on the record.
    Mr. Shuster. OK. Exactly. We will let you go ahead. I don't 
know if you are going to grill them for 45 minutes?
    [Laughter.]
    Mr. Shuster. No, OK. And we would probably like to come 
back and I think there might be some questions. Mr. Davis or 
Mr. Michaud, do you have any questions for the panel? OK, go 
ahead.
    Mr. Davis. And I praise you for what you all have done. I 
look at my district and I see transitional, several of those. I 
have probably almost a third or probably 40 percent of the 
counties in the district that I represent in the eastern part 
of that area. It is unbelievable the impact that has been made. 
Thanks for what you do and thanks for being here. I apologize 
for not being able to come back after the hearing today.
    Ms. Pope. Thank you, Congressman.
    Mr. Shuster. That is it, Mr. Davis? That was short. That is 
not typical for a member of Congress.
    Mr. Davis. That is all you need to say.
    Mr. Shuster. OK. And what we are going to do is Ms. Norton 
has, I am sure, several questions. We will let you go ahead and 
answer, and when she is done, we will excuse you. I have asked 
a couple of questions, the main questions I wanted to. We won't 
hold you up. Then we will be back for the third panel. My guess 
is we are going to get back here quarter after 3 to 3:30, and 
more than likely it will be closer to 3:30. So thank you all 
for coming, and I will leave you in the good hands of Ms. 
Norton.
    Ms. Pope. Thank you, Mr. Chairman.
    Mr. Shuster. Recognize Ms. Norton for questions.
    Ms. Norton. Mr. Davis said to be easy on you all. That is 
easy. It is easy to be easy on you all.
    I do have a follow-up to the Chairman's question about 
education, because I was really intrigued since we know that 
education is the key to everything, more so than ever, because 
there are going to be jobs for nobody without education, 
because the whole rest of the world has education. They are 
beating the socks off of us now, even among our highly educated 
areas.
    There is no question in my mind that a kid who gets exposed 
in Appalachia to the world has a real temptation to go seek her 
fortune in the world. I mean, I grew up in a big city, the 
District of Columbia. It was a small, segregated southern town. 
First thing I wanted to do was go away to school. The next 
thing I wanted to do was not come home until they grew up. And, 
in fact, I am a native Washingtonian, third generation 
Washingtonian. I came back when they grew up. Actually, I came 
back because I was appointed to a Federal position. And I am 
not sure I would have come back. I was in New York.
    I think we have got to put ourselves in the heads of these 
youngsters, who have grandfathers and fathers, generations of 
poverty, and I am sure many of the people you are talking about 
are the first people in their family ever to go to college. So 
anything--and I wasn't the first in my family to go to college. 
But, if anything, for these kids it has to be a shock and a 
real awakening to the world.
    I note that State university tuition have risen at a faster 
rate than the tuition even of private universities. That is 
nothing to brag about because their tuition were so high, 
places like Georgetown and Yale and Harvard. The rate couldn't 
get much faster. But I have been astounded, for example, in 
neighboring jurisdictions, to see rates that--I don't know what 
is wrong with folks, but rates that go up 10 percent a year. 
That is keeping millions and millions of kids simply out of 
college once they see that, particularly since the Congress has 
kept Pell grants flat for a very long time.
    My question is who pays for these children to go to 
college, State college, for example? Do they pay for it? I 
realize these are small tuitions, but I want to know who pays 
for them to go to college.
    Ms. Pope. You want me to take a stab?
    Ms. Norton. That is a factual question. Do these children, 
who, of course, get activated by jobs and other opportunities, 
are they going to State colleges? Are they paying their tuition 
to go to State colleges?
    Mr. Silvetti. I can answer that with a very recent example. 
I have a niece. My youngest sister's daughter just graduated 
from Penn State. She has accepted a teaching position, 
chemistry and biology, in the Hershey, Pennsylvania school 
district. She is $18,000 in debt. My sister and my brother-in-
law are $18,000 in debt after four years at Penn State and she 
was on a partial academic scholarship.
    Ms. Norton. Well, who pays for these poor children to go to 
college?
    Ms. Pope. Our Appalachian Higher Education Network, which 
really has been highly successful in States where they are, in 
the high schools where they are, we are seeing double digit 
increases.
    Ms. Norton. I am asking a question.
    Ms. Pope. Well
    Ms. Norton. Who pays for these children to go to college? 
Mine is a factual question. Do they go on scholarships? Do they 
go on--do the States--I don't know, I am just asking. I am 
really searching for information.
    Mr. Silvetti. I will say one thing also. One of the things 
our local development district does is administer Federal 
Workforce Investment Act dollars, and we see a lot of people 
coming back into the workforce who couldn't afford to go to 
school when they got out of high school, they don't have 
marketable skills, now they are coming back and we are helping 
to pay for their education with funds such as under the 
Workforce Investment Act. But that is only a portion of it as 
well.
    Ms. Norton. Also, people have lost jobs because of
    Mr. Silvetti. Lost jobs or even people who have well, 
basically have lost their jobs or have no marketable skills and 
end up back in another system.
    Ms. Norton. That we ought to fund much more fully, because 
those are the people who are already planted in the district 
and are not likely to, you know, run off to New York or 
someplace.
    Ms. Pope. Well, and I would like to add, Delegate Norton, 
that it is no one answer, it is cobbled together. I mean, some 
of it is Pell grants, some of it is the kids work through 
college, their families struggle. You are exactly
    Ms. Norton. Let me--I have a suggestion, that is all. I 
know who is not going to college. The Pell grant is a very 
declining value. I know all these students qualify for Pell 
grants, and I know State college and universities are very tend 
to be, especially if you are talking about the associate 
degrees, tend to be very reasonable. The poorer you are, the 
greater that amount of money that you have to spend on tuition, 
books, et cetera.
    By the way, Mr. Silvetti, even young people tend to work 
and go to college now. You know, your full-time student is 
fairly rare, kind of still a middle-class phenomenon. Except 
the reason it is a middle-class phenomenon is the parents 
really aren't paying for it. You say the parents had the 
$18,000 debt. I really wonder. The fact is that most of the 
time, if you think about what is happening in our Country 
today, the baby-boomers aren't willing to make the sacrifices, 
so the youngsters are postponing buying a house or whatever you 
are supposed to do with money.
    Let me just suggest this to you. I would hesitate--I would 
hate to even ask you to gather statistics. I am not worried 
that we don't benefit even if they move, because they are 
unlikely to move to Paris or to even South America. They are 
probably moving to somewhere in the United States, where they 
are contributing to the overall economy, so we benefit no 
matter what. You and we want the benefit to flow as directly as 
possible to where the investment was made. We have freedom of 
movement in this Country, and the last thing we want to say is 
you can't move any place.
    I just want to cite, and ask you to consider, one of the 
most successful programs of the Federal Government, along with 
this program, and that is our tuition forgiveness programs for 
doctors, now social workers, nurses. If you think anybody was 
going to go, who had an M.D. or a nursing degree, where you are 
talking about, I don't need to tell you what they would say to 
you. When people get out even of college--yes, sir, Mr. 
Silvetti, even of college--and even out of State college, they 
have debts today, almost all of them, that they would prefer 
not to have.
    And, by the way, youngsters today don't just go to college 
and just do poor, the peer culture says you have got to at 
least look like you are not a pauper. So they go to college and 
they do have some consumer goods that they buy, and they come 
out and, you know, they just have all this debt and they have 
these credit cards and the rest of it, and we are trying to 
teach them how to deal with all of that.
    But I don't see that there is a lot of incentive, even with 
the enormous success you have, for not taking your little 
associate degree and your little college degree and going and 
you are talking about leveraging it? I am not sure they do the 
inflationary effect or the cost of living effect. But I do 
think that the grass looks greener on the other side, and that 
in some other State it may look like, with your little degree, 
even if it is teaching or some other extraordinarily important 
but low-pay occupation, the pay is going to look better 
someplace else.
    I just would like to see your ARC, or whoever in ARC might 
be inclined to look at the Federal model. I ask you to look at 
the model. I ask you to look at the model because this is what 
we have discovered, that the physicians--and if ever there are 
people that are fairly sophisticated and on their own who are 
not going to rural areas and to poor areas where they don't 
have movies, it is physicians.
    And, yet, we find that once they go for the minimum of I 
think it is three years, and if you stay longer you get a 
greater percentage of your--they tend to remain. There is 
enormous satisfaction, apparently. It comes from seeing that 
you were needed. You know, you went. You were motivated by the 
fact of this huge debt.
    I don't have any idea whether this would work, but I do not 
believe that in an era where you are doing so well, that it 
would not be beneficial to show the rest of the Country what 
can be done if you give an incentive for people to remain here. 
You might want to do it in certain occupations. I don't know 
how to do it, all I know is that without any information 
whatsoever, it is hard for me to believe that a young person 
exposed to the internet, exposed to movies, exposed to books 
that you are required to read in college, would not have an 
enormous incentive to take her education and run. And I am 
pleased that she is not going to run out of our Country, for 
the most part. Ninety-nine percent of them, unless we are 
running them to Iraq, are probably going to be right here 
contributing to our economy.
    But I would like you--and this I don't ask for for the 
record, because I am not trying to show that people leave the 
area, but I would like to ask you to look at some slice of the 
students who have been educated and see what happened to them. 
And if corrective action is needed to consider what kind of 
corrective--I say corrective--what kind of action might be 
taken. Because even if you kept them for three years, if you 
kept them for two years, in America, if you stay in one place 
for two years, that is considered, wow, because we all are so 
mobile.
    So even if you kept them for a short period of time, you 
will aid your economy. That is why I asked that question, not 
because I was trying to ask why haven't you already done that. 
You have done the right thing by simply getting these young 
people educated.
    I would like to know what the Ohio model is that you say 
has been replicated. I was intrigued that you say you found a 
model, you used that, and that has encouraged people to go to 
college.
    Ms. Pope. Yes. It is really an attitude adjustment model, 
and what it is designed--the man, Wayne White, who was the 
inspiration for this model, found that the kids in Appalachia 
for some reason didn't believe they were college material. They 
didn't think, just as you said, Delegate Norton, their family 
didn't go, their mother and father, their grandparents didn't 
go. They were able to find work, so they didn't need to go. 
Historically in Appalachia education has not been emphasized. 
So this is a program that merely opens the world up to them.
    Ms. Norton. So what did you do, go into high schools and 
try to
    Ms. Pope. We go into high, it is primarily, what we do is 
there is a network that is in nine States now, Ohio plus eight 
other States. And a community college, usually, or university 
is where the center is housed, but the primary focus is in the 
high schools. And what it does is it goes into the high 
schools, it talks about the importance of going to college. 
They take the kids to technical colleges, to community 
colleges; they go on visits. And just that exposure to college 
has had a tremendous success. As I say, 20 percent or more in 
most every place that it is. So it has been extremely 
successful.
    But I also would like to add we are doing other things 
also. I mean, we know the importance of math and science, and 
we are partnering with NASA and with the Oak Ridge National Lab 
to try to encourage the study of math and science and how 
important it is. So we are doing things sort of in a multi-
tiered way to try to change, you know, an emphasis toward 
education.
    Ms. Norton. I congratulate you on this very, very important 
turnaround, the notion of who can go to college.
    Let me ask you to tell me something about places within 
Appalachia, within the ARC counties where the model hasn't 
seemed to work and why do you think it hasn't.
    Ms. Pope. This particular model?
    Ms. Norton. No. The model that is being used as the core 
model for the program. There must have been some places where 
there has greater success than others. I am asking for places 
where there seems to have been less success. What do you 
believe has been the reason for that?
    Ms. Pope. Well, I think our greatest challenge, quite 
frankly, when you look at that map right there and see the red, 
which are our most severely economically distressed counties, 
those are counties that have severe, widespread, and 
generational poverty. They are so economically distressed. 
There is a lack of infrastructure, there is a lack of 
investments, in many cases over many generations.
    Ms. Norton. Have you targeted those areas first?
    Ms. Pope. Yes, ma'am.
    Ms. Norton. Or primarily?
    Ms. Pope. Yes, ma'am. We target the red sort of the 
greatest need first. We take money, we carve money off the top, 
and that
    Ms. Norton. So they are the hardest to deal with, then, 
despite being targeted.
    Ms. Pope. Yes. And we take money off the top that can only 
be spent in those communities. We have what we call an enhanced 
distressed program which really goes into the communities and 
works on the lack of civic infrastructure.
    Ms. Norton. Yes, well, I am asking why haven't things 
worked. Is it just, you know, the overall question of poverty? 
Because obviously it has worked some places.
    Ms. Pope. Well, I think it has. I mean, I think we have 
made a great deal of success. We have cut the number of 
distressed counties in half. But we have a ways to go.
    Ms. Norton. Were those counties on the cusp, and they just 
needed a little less help?
    Ms. Pope. Well, yes and no. Some are on the cusp, but some 
were in severe economic distress. And I would like to say that 
I hope that ARC has been a part. They have worked and worked 
their way out of distress.
    Ms. Norton. Just one more question. Could you just give us 
an example of how you leverage private money when you are 
talking about an area where you haven't had an educated 
workforce? I know you said Microsoft, for example. Of course, 
Microsoft is one of these good corporations.
    But how do you get someone to want to come--you have got 
some Federal money, yes, but they can come virtually anywhere; 
they can come to D.C. or Northern Virginia or Maryland and find 
a workforce that is already ready to go. Is it your low wage 
rate? What is it that would make a company want to make 
substantial investment in a part of the Country where the 
workforce is still getting educated and where there is no 
tradition of higher education and, indeed, where there has been 
generational poverty?
    Ms. Pope. Well, let me take a stab at it, Delegate Norton. 
I think what we have seen is there is not any one answer that 
we know. We know that there has to be investment in 
infrastructure. We know there has to be roads. We know there 
has to be high-speed band access with this new global world. We 
know that our people have to be trained. And so we have to make 
a multi-tiered investment, and that is what our program is 
based on.
    Ms. Norton. And even though the workforce is not what it is 
in suburban areas, with infrastructure investment they have 
shown an interest in these areas?
    Ms. Pope. I will give you an example. There is a high-tech 
company that is going into one of our most severely distressed 
areas of Southwest Virginia. They just made an announcement a 
few months ago. ARC is making an investment where they are 
going to create 300 high-tech jobs with a salary ranging from 
$40,000 to $70,000. And that is just a start. They are 
investing $7 million in a facility
    Ms. Norton. Why are they doing that?
    Ms. Pope. I think it is several reasons. I think the 
company, there are roads that are going into that area. The 
workforce has a good work ethic; they want to train, they want 
to learn, they want to train.
    Ms. Norton. And what is it that this company makes did you 
say? I am sorry.
    Ms. Pope. It is a high technology company.
    Ms. Norton. What are you doing? What will the workforce be 
doing?
    Ms. Pope. Software. Developing software.
    Ms. Norton. Wearing those white coats?
    Ms. Pope. Yes.
    Ms. Norton. Good work if you can get it.
    Ms. Pope. And one is Northrop Grumman that is making--this 
is in Lebanon, Virginia. So we are working to help. We are 
partnering with them to help train the workforce.
    Ms. Norton. Actually, when I mentioned low wage rate, 
although parts of the Country like this part, which have higher 
wage rates, you know, fuss and fume, you have got to take 
advantage of it. You have got to take advantage of the fact 
that, yes, this is a market economy, and people will look to 
where they can get reasonable products for less labor costs. 
And if you have got that, then the investment in higher 
education and keeping them there is going to be very important.
    We could not be more impressed by what you are doing, and 
we just ask for you to help your friends and neighbors who were 
here earlier to try to get what you got.
    So I will ask that the hearing be recessed until the 
Chairman returns.
    Ms. Pope. Thank you, Delegate Norton.
    [Recess.]
    Mr. Shuster. The Committee will come to order. Thank you 
all for waiting. I was only five minutes off. I was in the rush 
hour to get back here or I would have got back here on time. 
Those elevators in the Capitol building aren't that efficient; 
they all go to the same floor at the same time, it seems like.
    I want to welcome the third panel. Thank you for being 
here. The third panel we are hearing from today will discuss 
other proposed regional economic development authorities. We 
are joined today by Mr. Jonathan Daniels, President and CEO of 
Eastern Maine Development Corporation, who will discuss the 
proposed Northeast Regional Development Commission; Mr. Al 
Delia, President and CEO of North Carolina Eastern Region, who 
is here today to discuss the proposed Southeast Crescent 
Authority; and Mr. Jake Brisbin, Executive Director of the Rio 
Grande Council of Governments, who will discuss the proposed 
Southwestern Regional Border Authority.
    I hope our third panel will continue to provide us with 
insight into these issues.
    With that, I recognize Mr. Daniels. You may proceed.

TESTIMONY OF JONATHAN DANIELS, PRESIDENT AND CEO, EASTERN MAINE 
DEVELOPMENT CORPORATION; ALBERT A. DELIA, PRESIDENT AND CEO OF 
 NORTH CAROLINA EASTERN REGION, DIRECTOR OF FEDERAL RELATIONS, 
    EAST CAROLINA UNIVERSITY; JAKE BRISBIN, JR., EXECUTIVE 
          DIRECTOR, RIO GRANDE COUNCIL OF GOVERNMENTS

    Mr. Daniels. Thank you, Mr. Chairman and the honorable 
members of the Subcommittee, for the opportunity to testify 
this afternoon on behalf of the legislation to establish the 
Northeast Regional Economic Development Commission. I would 
also like to thank Congressman Michaud for his leadership, as 
well as the co-sponsors in the development of this legislation.
    As was mentioned, my name is Jonathan Daniels, and I am 
here today as President and CEO of an economic development 
district in Maine, and it is in that capacity that I will offer 
my testimony.
    My organization is one of six economic development 
districts in the State, a State that was recently cited by the 
Federal Reserve Bank of Boston for an economy that is virtually 
stagnant, and one of only two States--joining Louisiana--for 
its negative growth over the last year. A look at the map of 
Maine shows just how significant job losses have been over the 
past 12 years just due to trade-related impacts.
    Of the 145 businesses that are certified under the Trade 
Adjustment Act in Maine, there have been more than 18,000 job 
losses. While a few of these operations have reopened, 
available employment opportunities continue to wane. 
Additionally, this map does not note the recent decision by 
BRAC to close the Brunswick Naval Air Station, which will not 
only impact the nearly 3,000 employee workforce on the base, 
but the State of Maine as a whole. And while I am speaking 
primarily of conditions in Maine, the problems we face are 
emblematic of the entire proposed commission region.
    This afternoon, Mr. Chairman, I would like to succinctly 
discuss the need for the authorization and funding of the 
multi-State Northeast Regional Development Commission as part 
of an overarching package that will further our efforts to 
create a sustainable, diverse economic region at the time when 
our traditional industries are closing in favor of more 
service-oriented economy.
    As someone who typically stands against the creation of 
additional entities as a cure for the ills of economic 
distress, in this case I see a new federally sanctioned 
development zone as an opportunity to put forth the 
infrastructure that will support the activities of the existing 
development districts, while eliminating the redundancies that 
plague the current system. While the ultimate number of 
counties designated within this zone has not yet been 
determined, we evaluated 23 rim counties that represent a rural 
distressed cross-section of Maine, New Hampshire, Vermont, and 
Upper State New York, as well as the six reservations 
supporting the five Native American nations represented within 
these counties.
    Why should this region be considered for the creation of 
such a commission? We evaluated five separate criteria in our 
analysis which serves as a basis for determining the general 
economic and social health of the region. And you are also 
going to be able to see some charts which are going to show 
graphically where our region stands against some of the other 
regions that are being considered.
    Change of population migration or, in the case of the 
proposed commission region, out-migration. The region as a 
whole saw a .3 percent reduction in population from 1990 to 
2000. In comparison, the ARC region saw a 9 percent increase, 
while the United States as a whole saw an increase of 13.2 
percent. The most significant display of out-migration occurred 
in Aroostook County, the northern section of the State of 
Maine, which saw a 15 percent reduction in population over a 
10-year time period from 1990 to 2000.
    Poverty. Thirteen point 6 percent of the population within 
the prescribed region live in poverty according to 2000 census 
data, which matches both the national average and the poverty 
rate in the ARC region, with the highest level of poverty in 
the northeast region within Washington County, Maine at 20.3 
percent.
    Median household income. The average median household 
income in the region is more than $8,000 less than the national 
average. And at the extreme, Washington County, Maine is twice 
that, or in excess of $16,000 below the national average of 
$41,000.
    Unemployment. According to 2005 Bureau of Labor Statistics 
data, the unemployment rate sits at 5.6 percent, or half a 
point above the national average. Again, Washington County, a 
recurring theme, has the distinction of having the highest 
rate, at 8.4 percent.
    And per capita income as a percentage of national average. 
This is often the best indicator of economic health of a 
region. The region as a whole stands at only 76 percent of the 
national average of per capita income. There is not a single 
county within the proposed commission region that meets the 
national average, with Franklin County, New York falling 35 
percent below the national average.
    Now, as you can see from the map that is going to be put up 
showing the initial data collection region, there is an obvious 
distress pattern that runs from Maine into New York. And you 
can see from the dark green and lighter green sections--we 
actually tabbed this as gangrene because of the amount of 
economic distress in the region, and it is also tabbed as the 
``Ice Belt,'' as the economic conditions in the region that sit 
below just the Canadian border are extremely cold.
    How do we begin to address the distress that exists within 
the Northeast region?
    One, we need to create an entity that emphasizes and 
assists in the development of infrastructure through public 
investment that supports private sector business development, 
enhances educational attainment that spurs job skills training 
and stimulates entrepreneurship.
    We must put forth a bottoms-up approach that allows the 
development strategies that are created at a local level to be 
integrated into an overall regional plan that fosters an 
efficient model of collaboration that can help leverage 
additional public and private sector investment.
    We must provide a critical mass of funding for the 
commission. This funding will be carefully administered and 
invested in the projects that strengthen our traditional 
industries, while helping us invest in projects that will 
create a more diverse, sustainable economy.
    Ultimately, we need to authorize the creation of a 
Northeast Regional Economic Development Commission that will 
ensure proper capacity to deal with the chronic distress that 
besets the region.
    Mr. Chairman and members of the Committee, I would like to 
thank you for the opportunity to address this issue this 
afternoon and to provide evidence that I hope will prove 
significant in making a decision for approval for this 
commission. I would be happy to answer any questions. Thank 
you.
    Mr. Shuster. Thank you very much, Mr. Daniels. Can you just 
point out where was Mr. McHugh's--the county that Mr. McHugh 
pointed out, the big green one in the corner there?
    Mr. Daniels. Right up in this section. This would be his.
    Mr. Shuster. Was it Hamilton County?
    Mr. Daniels. Hamilton County, yes.
    Mr. Shuster. Is that one of those dark green ones there?
    Mr. Daniels. Yes, sir.
    Mr. Shuster. All right.
    I now recognize Mr. Delia for your statement.
    Mr. Delia. Chairman Shuster, Mr. Michaud, ladies and 
gentlemen, I am pleased to be here today to once again testify 
in support of House Resolution 20, a bill to create the 
Southeast Crescent Authority.
    My name is Al Delia, and I am currently the Director of 
Federal Relations for East Carolina University in Greenville, 
North Carolina, and soon--in fact, within about three weeks--I 
will assume a new position, as President and Chief Executive 
Officer of North Carolina's Eastern Region, one of seven 
regional economic development organizations in North Carolina.
    I last had the privilege of testifying before this 
Subcommittee on September 12th, 2002, shortly after legislation 
to create the Southeast Crescent Authority was first introduced 
by Representative Mike McIntyre and co-sponsored by a number of 
his colleagues from both sides of the aisle throughout the 
Southeast United States and, indeed, from other parts of the 
Country.
    In the interval of time between my first appearance before 
this Subcommittee, nearly four years ago today, and today, I am 
sorry to report that the deep and persistent poverty found 
throughout the rural parts of the 429-county region known as 
the Southeast Crescent has not improved. In fact, evidence 
points to an increase in poverty in many of the areas of the 
region.
    Over the last 40 years, an amazing transformation has 
occurred in and around the larger metropolitan areas of the 
Southeastern United States. Modern economically successful 
cities like Richmond, Raleigh, Charlotte, Atlanta, Birmingham, 
and Orlando represent islands of wealth surrounded by a vast 
sea of rural poverty.
    Everyone across the Country and, indeed, around the globe 
knows the story of these new South enclaves of wealth and 
success, but today I want to focus my remarks on those parts of 
the South to which few bear witness. It is the South that I 
have dedicated two decades of my life to try to change to 
improve to help restore the promise of America to those who 
often live with little hope and empty promises.
    It is a place that brings up the rear when measuring 
educational attainment. It is a place that brings up the rear 
in economic opportunity. It is a place that brings up the rear 
in the health of its people. It is a place that brings up the 
rear in per capita wages. It is a place that often lacks basic 
infrastructures other places of the Country take for granted. 
In essence, it is a place that simply lags behind the rest of 
the Country.
    This place is the rural South. Those of us that have the 
opportunity to travel through the picturesque landscapes of 
small towns, rich farmland, and expansive coastal plains often 
on our way to luxurious mountaintop or oceanfront homes--do not 
absorb the reality that 20 percent, 30 percent, and sometimes 
over 40 percent of the people we pass along the way live below 
the poverty line. These figures represent double, triple, and 
quadruple the national average poverty rates. The rural South 
is a place with an abundance of rich soil and poor people.
    The seven-State region of the proposed Southeast Crescent 
Authority has the highest rates of unemployment, the highest 
number of people trapped in deep and persistent poverty, and 
the most occurrences of economically devastating natural 
disasters, as Congressman McIntyre mentioned, two to three 
times the national average. We have borne the highest and 
disproportionate share of America's price for leading the 
global economic changes that resulted from NAFTA and CAFTA. 
Economic restructuring that have all but eliminated textile 
jobs, caused by commodity prices to plummet, and cut 
manufacturing employment by more than half in many areas.
    However, I do not appear before you today to paint a dark 
picture of the region. Nor do I sit before you today with hat 
in hand asking for charity. Four years ago I told this 
Subcommittee that the future of the rural South, like our well 
known sunshine, was bright and warm. I said that our 
opportunities in the economy of tomorrow were too numerous to 
count.
    Well, today is yesterday's tomorrow and my convictions and 
my predictions have proven to be solid and true. In those parts 
of the rural South where resources and opportunities converge 
we have seen economic success emerge. However, in too many 
places we continue to lack the resources to take full advantage 
of the opportunities.
    It is appropriate that today I testify on the heels of this 
Subcommittee's consideration to reauthorize the Appalachian 
Regional Commission. The Southeast Crescent Authority is 
closely modeled after the ARC, and like those leaders of a 
generation ago in the Appalachian Region, the leaders and the 
people of the Southeast Crescent are ready and willing to do 
their part. SECA is designed to assist areas of the region that 
are mired in poverty, just as other government-sponsored 
economic initiatives have in the past in other parts of the 
Country.
    One former ARC national co-chair told me that the ARC 
rarely puts in the most money to a project, but it often puts 
in the first or the last money into a project. In effect, the 
ARC money is the glue that holds projects together. No such 
glue is available in Eastern Norther Carolina or in the rest of 
the Southeast Crescent region.
    As proof of the power of that glue, one need only look at 
the change the ARC region has undergone in just over four 
decades. These numbers have been spoken about a lot today. But 
in 1960, as we have heard, before the creation of ARC, 223 
counties were classified as distressed, and today that number 
is down to 77. What other federally-funded program can claim 
that level of success? This statistic alone is testament to the 
excellent work and outstanding success of the Appalachian 
Regional Commission. We in the Southeast Crescent region want 
an opportunity to replicate ARC's success, and perhaps even 
improve upon its record.
    Thanks to the lessons we have learned from the good work of 
the ARC, I am more convinced today than ever before that the 
Southeast Crescent is uniquely positioned to take swift and 
full advantage of the creation of the Southeast Crescent 
Authority.
    We know that the creation of SECA, the Southeast Crescent 
Authority, will not solve the economic woes of an entire region 
by itself, but it is one tool, an effective and affordable 
tool, that will begin to create economic opportunity and hope. 
While other parts of the United States with economic challenges 
have the advantage of federally-funded economic development 
commissions or authorities, such as the Appalachian Regional 
Commission, the Delta Regional Authority, the Denali 
Commission, Northern Great Plains, to help deal with the deep 
and persistent poverty of their regions, the Southeast Crescent 
region continues to struggle without a Federal partnership.
    In creating SECA, Congress must insist that four things 
occur: that, one, funding be adequate to the task and all 
monies dedicated to this purpose be used wisely and quickly; 
two, that planning at the local, State, and multi-State level 
must be integrated and comprehensive; three, that the 
organizational structures, policies, regulations, and 
guidelines with the Authority must become operational quickly 
and reflect the best of the policies, regulations, structures 
and guidelines, and experiences of each of the other four 
currently authorized regional commissions; and, four, projects 
must benefit the most distressed areas, that these projects are 
truly targeted to improve economic or community needs and that 
the goals established are attainable, that projects have long-
term benefits, and that potentially eligible projects are 
placed in a project pipeline prior to SECA becoming operational 
so that, once resources are available, projects may be funded 
and make a difference on the ground quickly.
    In my written testimony I expand on each of these 
requirements on which I believe Congress must insist.
    I had the honor and privilege of working with fine people 
from each of the seven States of the Southeast Crescent region 
for a cause I believe in. During the past several years, we 
have learned much about the successes and structures of the 
ARC, and that is why we want to follow the model of the ARC. 
Support for the Southeast Crescent region is broad and deep.
    I have had the opportunity to travel to each of the seven 
States to meet with the local development district in each 
State, and I am happy to report that in each of the seven 
States there has been unanimous support among the councils of 
governments and local development districts for creation of the 
ARC. And, indeed, two and a half years ago, the Southern 
Governors Association also unanimously endorsed the creation of 
the Southeast Crescent Authority.
    As I have said, we have learned much from the challenges 
and the obstacles faced by some of the other commissions, and 
we believe that the lessons we have learned from other regional 
authorities and commissions, and experiences from those will 
allow SECA to become the model of success for future 
Congresses.
    In closing, Mr. Chairman, I want to express my thanks to 
you and to your Subcommittee for your willingness to hold this 
hearing and to listen to testimony on the need to expand the 
successful 40-year experiment of the Appalachian Regional 
Commission by creating new regional authorities and commissions 
in other parts of the Country.
    At the risk of singling out only one member among many that 
have played important and tenacious roles in keeping the needs 
of the Southeast Crescent region and its people before this 
body, I want to take this opportunity to particularly thank 
Representative Mike McIntyre. I look forward to working with 
you and all the members of this Subcommittee, and to work with 
your fine majority and minority staffs to help to enact this 
important legislation. Thank you.
    Mr. Shuster. Thank you, Mr. Delia.
    Now I recognize Mr. Brisbin for your opening statement.
    Mr. Brisbin. Thank you. Thank you, Mr. Chairman and members 
of the Committee, for the opportunity to testify today about 
the concept of Federal-State regional commissions and, more 
specifically, the pending legislation proposal, H.R. 5742, for 
the Southwest Regional Border Authority. I also want to extend 
my appreciation to Representatives Henry Bonilla and Silvestre 
Reyes for the dedication and hard work along the border. 
Congressman Reyes is not just my Congressman, on the border, as 
we say, he es mi hermano.
    My oral testimony will be comprised of three main parts: my 
background and experience, why we need the legislation, and how 
I envision it to be the answer to many of the most pressing 
problems of the Southwest border. I will try to keep statistics 
and recitation of numbers you have already heard to an absolute 
minimum.
    I have been a commissioner, a mayor, and a county judge for 
border entities. The county I served as county judge shares 
over 100 miles of border with Mexico. Public policy has always 
been my first love, but I did own and operate a successful 
telecommunications firm on the border for 16 years. I currently 
serve as the Executive Director of the Rio Grande Council of 
Governments, a regional organization that covers over 22,000 
square miles and parts of two States.
    I am also a member of the Board of Directors of the 
National Association of Development Organizations and Chairman 
of the NATO Task Force on Homeland Security. My reason for 
telling you this is this experience has led me to the 
conclusion that regionalism employed in an area of commonality 
can be highly effective both in terms of cost and goal 
attainment.
    This Country has a chronic problem along its southwestern 
border: employment, economic development, infrastructure 
construction, and financing are all in short supply. One might 
say that the same could be said of many places, and that might 
be true, but where else have national policies such as trade, 
immigration, and homeland security contributed in such a way as 
to inhibit a region's ability to keep pace with the rest of 
this great Nation?
    The Southwest has regionally undergone a transformation in 
the public eye from the unknown part of the United States to 
the entry point for many of our most pressing problems. If you 
think that is scary to the rest of the Country, consider our 
dilemma: we are overwhelmed with needs, and most of those needs 
are growing exponentially. Trying to address those needs by 
shaping our remedies to Federal programs already in existence 
is often just a temporary fix and a poor fit. More often than 
not, the guidelines simply don't work on the border.
    Federal programs such as the EDA and the Small Business 
Administration have proved to be useful tools in our past 
efforts. We have no desire to supplant those agencies. Their 
usefulness has been proven over time. I envision the Southwest 
Regional Border Authority to be the primary tool to address the 
current needs of our border communities. The joint Federal and 
State makeup with its bottom-up approach and with the 
guidelines adjusted to fit border realities is the right way.
    This, of course, is nothing new. The other regional 
commissions currently in place and those proposed are proof 
that there is merit in the idea. The new Federal funds would be 
coherently managed from a regional approach and the return on 
those funds to the Federal coffers would be significant. All 
those involved in the business of economic development have 
seen this model work many times. In short, we ask that you give 
us, the residents and governments of the Nation's southwestern 
border region decision-making power in regards to the use of 
Federal and State funds for water, sewer, telecommunications, 
technology, and transportation infrastructure to generate a 
healthier economy.
    The success of councils of governments and regional 
organizations in Texas, New Mexico, Arizona, and California is 
a documented fact. The regionalism concept is working now. The 
one glaring shortcoming is the difficulty in matching the needs 
with the programs. The Southwest Region Border Authority would 
be the tool to make it all come together, the final buy-in by 
the Federal and State governments to the realization that 
regions are unique and the best answers to local problems are 
found at the local and regional level.
    End result, we get locally determined needs addressed 
through a regional approach, coordinated at ever level and 
reviewed for economic impact, benefit, and priority. 
Unfortunately, this can't be done from Washington, D.C., all 
respect due being given. The reality of living on the border is 
filled with events unfamiliar to most Americans. It is a great 
challenge to make the region a contributor to the Nation's 
wealth, not a statistical anomaly in a Nation of prosperity. We 
welcome the challenge, hope for your support, and totally 
embrace the concept of the Southwest Regional Border Authority.
    I am happy to respond to any questions the Committee might 
have, and thank you for this opportunity, Mr. Chairman.
    Mr. Shuster. Thank you, Mr. Brisbin.
    I am going to open the questions up.
    Mr. Michaud, why don't you go ahead and start off?
    Mr. Michaud. Thank you very much, Mr. Chairman.
    Mr. Daniels, as I stated in my opening remarks that the 
Northern Forest Alliance was here to support the Northeast 
region's bill, and it also gained support of conservation 
groups. Some might wonder why would those organizations support 
an economic development bill. When the co-sponsors and I 
carefully drafted the scope of this Commission, we included 
focus on land use, conservation, and sustainable development. 
In your view, why are these issues important when it comes to 
economic development in the Northeast?
    Mr. Daniels. Thank you. Briefly, having a partner such as 
Northern Forest Alliance, Northern Forest Center work hand-in-
hand with economic development agencies I think it is unique, 
and it has changed, it is evolving, as I think all of us have 
taken a look at the economy over the last few years. It is 
changing our natural resource. Base economy is shifting. In 
1970, when we had 25,000 people working in the paper industry, 
we now have 10,000 people working in the paper industry, and a 
lot of those jobs have really shifted out. So we need to find 
new ways to create sustainable economic development.
    If you look at now, a great example is the advance in 
engineered wood composites facilities at the University of 
Maine, utilizing underappreciated, underutilized species, 
injecting it with composite resins and creating value-added 
products. Many of those are being tested right now by the U.S. 
Army and by the Department of Defense, and recently that 
facility in the University of Maine was chartered as a center 
of excellence for the U.S. Army. So taking a traditional 
natural resource base within our area and being able to provide 
new technology--in this case composites--we are really 
utilizing the existing resources and creating that 
sustainability that we need.
    And that is not only in Maine, but it needs to be done 
throughout. That can be done simultaneously with looking at the 
tourism industry, $1.5 billion a year in the State of Maine. 
But we need to do a better job of packaging that.
    So bringing in partners such as Northern Forest Alliance, 
looking at opportunities, looking at sustainable options that 
are occurring within composites and utilizing natural resource 
base economy, this in itself--we need to have a commission in 
order to solidify that development strategy. Right now we are 
doing it as a component here and a component there. We need 
that overarching commission in place to be able to bring all of 
those parties together, take the local development strategies 
and create an overarching package which we can implement on a 
regional basis. That is what this commission needs to be put 
forth to do.
    Mr. Michaud. My second question is, what kind of investment 
could you see this commission focusing on that would have a 
significant impact on the economy for the region, the Northeast 
region?
    Mr. Daniels. And I think we have heard this in a couple 
different instances today, certainly within the Appalachian 
Regional Commission region, talking about transportation 
development, talking about broadband access. Transportation as 
a whole, the transportation reauthorization bill last year came 
forth and established the high-priority corridor from Calais, 
Maine to Watertown, New York and really set the stage for 
transportation investment. We need to go beyond that and be 
able to not only take a look at the major routes within that 
east-west corridor, but take a look at the arterial system and 
be able to connect that arterial system to an enhanced 
transportation corridor.
    Broadband access, I have got a great example right now. I 
am working with a business that has been in town for about 100 
years. They have evolved, and it is a high-tech 150-person shop 
just north of Bangor. Because of the lack of broadband access, 
they have given us exactly two years, and the clock is ticking, 
or else they are going to pack up their business and move it 
down to Atlanta, Georgia. We do not have the broadband 
capabilities.
    There is another one, Jackson Laboratory, well known within 
the world of applied science and biotech. Right now, because of 
the technology they have, in order for them to ship information 
off the island, they have to shut their entire operation down 
for three hours each night to download information to get it 
out of Jackson Laboratory throughout the world, because there 
is not enough broadband capacity.
    And it is not only those large operations, but it is the 
two-person, three-person shop that is doing design work 
somewhere in Maine that needs to be able to ship their design 
plans down to New York or throughout the world, and they are 
not able to do that right now. Basically, those businesses are 
not able to develop or they are shutting down.
    Mr. Michaud. Thank you, Mr. Daniels. And I want to thank 
the other two members of the panel.
    Thank you very much, Mr. Chairman, once again for having 
this hearing.
    Mr. Shuster. Thank you.
    My first question is, when you came up with the Northeast 
region, why did you cut out those southern New York counties 
there? Because, if I am not mistaken, most of them are across 
the border from they are all across the border from 
Pennsylvania. But those are regions in Pennsylvania that aren't 
that don't have that much economic growth and activity going 
on.
    So how did you get that? And the second part of the 
question is, besides the obvious, why did you include 
Connecticut? And the obvious being you get two more senators 
and a couple more members of Congress to support this. But you 
have got Connecticut and Rhode Island, and even a chunk of 
Massachusetts over there don't seem to be--I mean, they seem to 
be doing pretty well. How did you come up with the region?
    Mr. Daniels. Actually, the 23--and this expands a little 
bit on the 23 initial counties that we did evaluate. I think we 
certainly, as we take a look at the legislation, need to come 
to a final total. I have heard anywhere from 34 to 40, anywhere 
in there, as long as they meet those distress factors. I think 
what it does do, it certainly strengthens, as we bring more 
counties in, the needs.
    And I happen to be a resident of Upstate New York, happened 
to live in Hamilton County at one point, certainly was part of 
that distress. I don't think we have come up with a full total 
as of yet, so to cut that off at that level I couldn't give you 
an answer right now.
    Mr. Shuster. I answered my own question. That is part of 
the ARC. But Connecticut and Massachusetts, those areas, why 
did you include them, is it the obvious?
    Mr. Daniels. Those are shown purely as those are successful 
regions right now, just not as distressed as the northern part 
of the area. So when we developed the map as a whole, we just 
wanted to show that as you go north, the areas of distress get 
much worse.
    Mr. Shuster. Oh, so you are not saying that is not the 
region you are proposing?
    Mr. Daniels. No, no.
    Mr. Shuster. OK.
    Mr. Daniels. There is actually another map that we do have 
that basically takes from Washington County, Maine, just on the 
right-hand side of the map, the dark green, and runs all the 
way to about Watertown, New York. Those are the 23 counties 
that originally were evaluated, the rim counties that are just 
south of the Canadian border.
    Mr. Shuster. OK.
    And a question for Mr. Daniels and Mr. Brisbin. You are 
both on State's borders with Canada and Mexico. Do you see 
cooperation, international cooperation on these types of 
economic development commissions?
    Mr. Daniels. Certainly. I happen to sit as part of the 
Board of Directors of the Atlantic Provinces Chambers of 
Commerce, which represents 14,500 businesses in Atlantic 
Canada. They were the ones that made the overture towards us to 
make sure that there is cooperation. Issues that impact the 
economy in Northern Maine, Northern Vermont, Northern New York, 
Northern New Hampshire, impact those in Quebec, Ontario, and 
New Brunswick.
    So we need to be able--we are such a small region as a 
whole. We just don't have the critical mass to tackle any type 
of economic issue by ourselves, so we need to be able to have 
the Federal Governments of both the United States and of Canada 
working to address the economic distress.
    Mr. Shuster. I don't know if they have counties in Canada. 
But are the regions similar, economically, as they are in New 
York, Vermont, and Maine?
    Mr. Daniels. If we expanded this map all the way to 
Halifax, Nova Scotia, you would see the same level of distress 
pattern running all the way from Western New York all the way 
through Nova Scotia, and even into Newfoundland and Labrador. 
And it is probably even more so than we are suffering right 
now. But, yes, you do have that same pattern.
    Mr. Shuster. And how much cooperation is going on in that 
part of the world with Canada on, for instance, sewage 
treatment facility or water waste treatment facilities and 
things like that? Is that happening, cooperation?
    Mr. Daniels. I can't speak to that. What I can speak is 
that we are looking at joint energy policy. The Province of 
Quebec is far ahead of us in their hydropower, their renewable 
energy resources, so what we are doing is we are looking at 
ways and there is a joint committee that is made up of the 
eastern Canadian premiers and the New England governors, and 
they are getting together and they are going to be working on 
environment and energy and how those can work together so that 
we can deal with some of the energy problems and the high 
energy costs associated in the region.
    Mr. Shuster. So if I travel up there into Maine today, 
would I see Canadian power coming across to one of those 
counties, supplying utilities for them?
    Mr. Daniels. Bangor Hydroelectric is owned by Emera, which 
is Nova Scotia Power, which is Nova Scotian. And there is an 
$85 million investment that is being made now running from 
eastern Maine down into the greater Bangor central Maine region 
that is called the 345 kV Line Northeast Reliability 
Interconnect, and it will allow power to flow in both 
directions, and it really ties into the Point Lepreau Nuclear 
Power Plant in Canada.
    Mr. Shuster. Mr. Brisbin?
    Mr. Brisbin. Chairman Shuster, to address your question, 
yes, currently there is a border counties coalition group that 
is made up of representatives from northern Mexico and all of 
the counties along the U.S.-Mexico border. They are doing work 
together. There is a mayors conference that does work together. 
There is currently wheeling of energy back and forth across the 
Mexican border.
    And other than AND Bank and Border Economic Cooperation 
Commission, there are no other specific projects going on. It 
is a very difficult process for us in that we are dealing with 
a country that is not nearly as developed as we are, and we are 
dealing with the northern end of it, which is their least 
developed portion of that country.
    But, frankly, along the border, we don't breathe without 
talking to each other, because it is a river for the most part. 
I mean, it is not--there is so much interchange and interplay. 
I mean, El Paso is home to a joint area, when you include the 
City of Juarez, of 2.5 million people.
    So there is so much interchange going on on a daily basis 
that when we look at policy, whether it be water planning or 
anything of that nature, we bring them to the table too. We 
can't always cooperate to the degree that we can because they 
lack the resources we do. That is a frank statement. But is 
there the will to do it and are there mechanisms to do it? Yes. 
And I would assume that this would improve that.
    Mr. Shuster. Back to sewage and water. Do we supply any of 
those utilities, that infrastructure, to Juarez?
    Mr. Brisbin. I think that we have done joint projects with 
sewage treatment and we are doing--I guess our usage of the 
water is based on their usage and then a common policy is 
adapted, as well as the discharge into the Rio Grande, et 
cetera. I do not know if there is a case where they are 
actually receiving water from us, although I know that there 
are contingency plans to do that on an emergency basis.
    Mr. Shuster. And, Mr. Delia, you are in the eastern United 
States, the Carolinas. It is a hurricane-prone region. Can you 
comment on past recoveries, the programs, and their role in 
economic development?
    Mr. Delia. I would be happy to. A couple of words about the 
rate of natural disasters that occur in the Southeast region. 
Between 1980 and 2000, those two census periods, we had 2.5 
times the number of billion--that is with a B--billion dollars 
disasters come through the region than anywhere else in the 
Country. Now, if you--and that was during a time when the 
prevalence of hurricanes, predominantly, was lower than it is 
right now in this new two or three decade period that 
geologically and climatologically we are going through.
    The disasters that occur in the Southeast region, because 
of the depth of poverty of most of the region--and let me frame 
that depth of poverty. We have a 429-county region. When you 
take out the metropolitan areas of Raleigh, Charlotte, Miami, 
et cetera, everything else is in poverty. Seventy-three percent 
of the counties in that 429-county region have poverty rates 
above the national average. Almost 43 percent of the counties 
have poverty rates double, triple, and quadruple the national 
average.
    So when it comes to recovery, the Federal Government has 
done a good job in terms of economic recovery and, 
unfortunately, we have all too much good experience in how to 
begin to recover from economic disasters. You can take a look 
at the recovery effort in the Carolinas, particularly North 
Carolina, from Hurricane Floyd and the flooding that ensued.
    So we had very good immediate recovery, economic recovery, 
but the real problem is the long-term recovery. The real 
problem is creating the infrastructure and the economic 
opportunity that will allow businesses and individuals to ride 
out those storms and build wealth, and that has not happened, 
one statistic which goes counterintuitive to what people 
envision for North Carolina. Delegate Norton mentioned North 
Carolina is kind of the poster child for the new South. When we 
think about the highest number of per capita PhDs in the 
Country being in Chapel Hill and Raleigh Research Triangle 
Park. If you move 80 miles east of there, you have the lowest 
number of high school graduates in the Country.
    In 1999, North Carolina had the highest number--and clearly 
also the highest per capita number--of outhouses in the United 
States, on the cusp of the 21st century. We now no longer have 
that statistic because they were wiped out in three days during 
Hurricane Floyd. Now, what that means is that suddenly not 
everybody got indoor toilets. What it means is
    Mr. Shuster. A lot of troubled people.
    Mr. Delia. There are a lot of troubled people, but there is 
a lot of straight piping that is occurring in terms of water 
and sewer and so forth. So the problems may have begun to look 
different, but they are still there.
    Mr. Shuster. And I said to Representative McIntyre, when we 
were talking about it before the hearing, North Carolina--he 
said 80 miles from the Triangle, and I said, isn't that the 
beach? No, it is not that far. So my understanding of North 
Carolina is what Ms. Norton said, that it is the new South and 
you don't think of this type of areas that have poverty and 
lack of education.
    Mr. Delia. Mr. Chairman, if you take a look at the Research 
Triangle Park and you look at the beaches, the Outer Banks, you 
have got about a 220 mile stretch that you have got to go 
through. Twenty miles outside of the Research Triangle Park you 
are in poverty; 20 miles west of the beach you are in poverty. 
So you are looking at 180-mile east-west stretch where you have 
got incredibly deep and persistent poverty, persistent to the 
point that it has been the same, 20 percent, 30 percent, 40 
percent unemployment poverty rates, ever since the statistic 
has been kept by the Census Bureau, so we are talking 40-plus 
years.
    Mr. Shuster. And you mentioned 423 counties?
    Mr. Delia. Four hundred twenty-nine.
    Mr. Shuster. How many of those would be distressed 
counties?
    Mr. Delia. Ultimately, it depends on your definition of 
distressed.
    Mr. Shuster. Well, using the ARC's definition.
    Mr. Delia. Using the ARC, you are looking at probably about 
43 percent of those counties would be labeled distressed.
    Mr. Shuster. Two hundred, roughly, or close to it.
    Mr. Delia. Right.
    Mr. Shuster. What about in the Southwest?
    Mr. Brisbin. I think it is roughly 75 percent. I think it 
is roughly 75 percent.
    Mr. Shuster. And how many counties?
    Mr. Brisbin. I think there are about 130, Mr. Chairman, I 
think. And I think probably 85 or 90 of them would be 
distressed counties.
    Mr. Shuster. And what about in the Northeast region?
    Mr. Daniels. We looked at 23 initial counties, and I think 
that count is going to expand, but I think as you take a look 
at the size of the county, as you get into Aroostook County, 
Aroostook County is the size of Massachusetts and Connecticut 
combined, so you are looking at a fairly large stretch. But the 
scope of the county certainly is much larger than the southern 
model.
    Mr. Shuster. And what percentage of the counties would you 
say are going to be distressed? I guess that would be the three 
dark green counties?
    Mr. Daniels. I think you are looking at about 90 percent of 
what is currently being evaluated would be fully distressed.
    Mr. Shuster. OK. And my final question is if you had a 
magic wand, or if Congress said, OK, we are going to create all 
three of these, what would you take from ARC that you think 
that they do really well? Not all of it, but just one or two. 
And what did they do that you think we don't want to do that 
because we don't think that has worked well, if there is 
anything?
    Mr. Daniels. I think the basic management model and the 
development model.
    Mr. Shuster. That is where they have done well?
    Mr. Daniels. They have certainly done well. We are right 
now in the development phase. We are certainly where they were 
back in--not 1960, but certainly in the 1970's, when they had a 
little bit of history under their belt. There are significant 
differences in that a lot of the distress and how they have 
come upon their distress is very different, and how they go 
about meeting those distress factors is going to be very 
different. I think certainly what we need to do is have the 
flexibility
    Mr. Shuster. Why would they be different? I mean, because 
they are basically measurements of unemployment and education 
level. There are four measurements? Income, poverty, 
unemployment.
    Mr. Daniels. Those basic distress factors, I think some of 
the programs and how we--we have been--I think we would take 
the model of transportation and broadband access, a lot of the 
core development components, health care I think as well, put 
those foundations in place and be able to address the real core 
to those distress factors.
    Mr. Shuster. So flexibility is what you
    Mr. Daniels. We need to be able to have the flexibility.
    Mr. Shuster. Mr. Delia, the same question.
    Mr. Delia. I agree with Mr. Daniels' assessment in terms of 
flexibility and the management structure, but I would add one 
which, in my view, is really the overarching reason to create 
these commissions, and it is not the money. The money is 
certainly very helpful and required, but it is the ability to 
coordinate response to needs at the local level.
    What the ARC has done exceedingly well, and the Delta 
Regional Authority has begun to do exceedingly well, is bring 
together Federal resources from diverse Federal departments and 
agencies in concert with State resources, local government 
resources, and even, to a larger extent than even those, 
private resources to attack a problem in a holistic way. That I 
think is the secret to the success of the ARC, that 
coordinating role, and that, Mr. Chairman, I think is the 
single most important thing that these commissions would bring 
to our region, is that overarching coordinating and planning 
role.
    Mr. Shuster. I agree with you that on that. I think that 
these Federal programs need to have coordination. I know you 
look at fire companies around America, and I am sure a lot of 
volunteer fire--I have got a volunteer fire company one mile 
down the street from it, and they both want money and somebody 
has got to say to them, whether it is the State, the Feds, or 
local saying, look, let's consolidate; we don't need 2 
firehouses or we don't need 2 waste treatment facilities or 60 
different water supplies in a region, consolidate the water 
too.
    Mr. Brisbin?
    Mr. Brisbin. I too agree, Mr. Chairman. The combination of 
the State and Federal resources being coordinated, that is the 
critical thing and that is the thing that is lacking from other 
programs that are currently in place. And also I think one of 
the things that we really like about the ARC is the idea of the 
State and Federal voting equity on the chairmanship of the 
board, and having some you have got Federal accountability, but 
you also have the ability for the States to present their case, 
and I think in that structure that is a key part of it.
    Mr. Shuster. Right. Well, just that panel we had here today 
with Federal, the State, and the local, that is what it is all 
about.
    Mr. Michaud, do you have any other questions?
    Mr. Michaud. No. Just want to note that was a good question 
that Matt probably--your question about is that the region. No, 
the Massachusetts, Connecticut, and Rhode Island were just put 
there so you can see the comparison of Maine and New York and 
upstate New Hampshire and Vermont.
    Mr. Shuster. Well, again, besides the obvious to me, 
picking up two senators in Connecticut is not a bad strategy.
    Mr. Michaud. But I do know we have finite resources, and 
when we put the region together, as you can see, pretty much 
all of Maine, the top tier of the other States definitely have 
problems.
    Mr. Shuster. Right.
    Mr. Michaud. And I might also add there have been some 
areas I know in Maine, labor market areas, where the 
unemployment rate has been as high as 35 percent, so it is 
devastating.
    Mr. Shuster. OK, well, again, we want to thank the three of 
you for coming here today. We appreciate your taking the time 
and shining some light on this. As I said, I showed my 
ignorance to Mr. McIntyre when I thought he was talking about 
the beach, and I couldn't understand how you couldn't have 
economic prosperity in that part of the Carolinas. So, again, 
thank you all for being here today.
    I need to ask unanimous consent that the record of today's 
hearing remain open until such time as our witnesses have 
provided answers to any questions that may be submitted to them 
in writing and unanimous consent that during such time the 
record remains open, additional comments offered by individuals 
or groups may be included the record of today's hearing. 
Without objection, so ordered.
    Again, thank you very much for being here today. And if no 
other members have anything else to add, then we stand 
adjourned.
    [Whereupon, at 4:20 p.m., the subcommittee was adjourned.]

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