[Senate Hearing 110-799]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-799
 
                          PATH TO OPPORTUNITY:
                   JOBS AND THE ECONOMY IN APPALACHIA

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



                             FIELD HEARING

                               before the

                       COMMITTEE ON AGRICULTURE,
                        NUTRITION, AND FORESTRY

                          UNITED STATES SENATE


                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION


                               __________

                            OCTOBER 22, 2008

                               __________

                       Printed for the use of the
           Committee on Agriculture, Nutrition, and Forestry


  Available via the World Wide Web: http://www.agriculture.senate.gov



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           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY



                       TOM HARKIN, Iowa, Chairman

PATRICK J. LEAHY, Vermont            SAXBY CHAMBLISS, Georgia
KENT CONRAD, North Dakota            RICHARD G. LUGAR, Indiana
MAX BAUCUS, Montana                  THAD COCHRAN, Mississippi
BLANCHE L. LINCOLN, Arkansas         MITCH McCONNELL, Kentucky
DEBBIE A. STABENOW, Michigan         PAT ROBERTS, Kansas
E. BENJAMIN NELSON, Nebraska         LINDSEY GRAHAM, South Carolina
KEN SALAZAR, Colorado                NORM COLEMAN, Minnesota
SHERROD BROWN, Ohio                  MICHEAL D. CRAPO, Idaho
ROBERT P. CASEY, Jr., Pennsylvania   JOHN THUNE, South Dakota
AMY KLOBUCHAR, Minnesota             CHARLES E. GRASSLEY, Iowa

                Mark Halverson, Majority Staff Director

                    Jessica L. Williams, Chief Clerk

            Martha Scott Poindexter, Minority Staff Director

                 Vernie Hubert, Minority Chief Counsel

                                  (ii)


                            C O N T E N T S

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                                                                   Page

Field Hearing(s):

Path to Opportunity: Jobs and the Economy in Appalachia..........     1

                              ----------                              

                      Wednesday, October 22, 2008
                    STATEMENTS PRESENTED BY SENATORS

Brown, Hon. Sherrod, a U.S. Senator from the State of Ohio.......     1

                                Panel I

DiPietro, John, Severstal Employee, Steubenville, Ohio...........     4
Eadon, Harry A., Jr., President and Executive Director, 
  Tuscarawas County Port Authority, Dover, Ohio..................     5
Shaffer, Franklin C., Jr., Township Trustee, Bellaire, Ohio......     7

                                Panel II

Fluharty, Charles W., Vice President for Policy Programs, Rural 
  Policy Research Institute, Truman School of Public Affairs, 
  University of Missouri-Columbia................................    16
Martin, Debra, Director, Great Lakes Rural Community Assistance 
  Program, Fremont, Ohio.........................................    19
Ricer, Gary W., Chief Executive Officer, Guernsey, Monroe, and 
  Noble Tri-County Community Action Corporation, Caldwell, Ohio..    18
                              ----------                              

                                APPENDIX

Prepared Statements:
    DiPietro, John...............................................    30
    Eadon, Harry A., Jr..........................................    33
    Fluharty, Charles W..........................................    37
    Martin, Debra................................................    45
    Ricer, Gary W................................................    54
    Shaffer, Franklin C., Jr.....................................    57
Document(s) Submitted for the Record:
    Written letter from U.S. Department of Agriculture, Office of 
      the Secretary to Hon. Tom Harkin with attached fact sheet 
      on rural development.......................................    60
    ``How rural is Ohio?'', rural policy research institute......    69
    RUPRI state demographic & economic profiles..................    75



                          PATH TO OPPORTUNITY:



                   JOBS AND THE ECONOMY IN APPALACHIA

                              ----------                              


                      Wednesday, October 22, 2008

                                       U.S. Senate,
                                  Committee on Agriculture,
                                    Nutrition, and Forestry
                                                 Steubenville, Ohio
    The committee met, pursuant to notice, at 10:30 a.m., at 
Jefferson County Community College, Lecture Hall 2102, 4000 
Sunset Boulevard, Steubenville, Ohio, Hon. Sherrod Brown, 
presiding.
    Present or submitting a statement: Senator Brown.

STATEMENT OF HON. SHERROD BROWN, A U.S. SENATOR FROM THE STATE 
                            OF OHIO

    Senator Brown. I appreciate the panel. There will be two 
panels. I will get to them in a moment and introduce them.
    I would also like to thank Senator Tom Harkin, who is the 
Chairman of the Senate Agriculture Committee on which I sit, 
for his support of these hearings and for his leadership during 
the writing of the farm bill.
    This is an official Senate hearing, the Senate Agriculture 
Committee, and it comes to order. Everything said today, 
including questions, if we have time at the end, and I think we 
will, from the audience will be part of the hearing record, and 
anything that any of the three witnesses on panel one and panel 
two would like to submit to us within 2 weeks of adjourning 
this committee today, official adjournment, so you have time if 
you wish to send any other written testimony, including answers 
to questions that you might want to expand on that you didn't 
give us during that time.
    We will hear, as I said, from two panels. We will hear from 
the first panel, the three gentlemen sitting here, and then 
have a brief question and answer session before moving on to 
the second panel. If committee witnesses can keep their 
statements to about 5 minutes, in case you didn't see that 
clock there, then that would be helpful. If you go over a 
little, that is not a bit deal.
    Small-town Ohio, and I grew up in a city not much--a little 
bit larger than Steubenville, in Mansfield--small-town Ohio and 
medium-sized cities in rural Ohio clearly are hurting. When a 
plant closes, when young people leave Steubenville or Bellaire 
or St. Clairsville or Catons or Lisbon or East Liverpool and 
these communities, we know what happens to these communities as 
young people leave and as plants close down and they are 
obviously very related.
    Ohio's unemployment rate reached 7.4 percent this summer, 
the highest it has been in 15 years. Even prior to this steep 
economic downturn, Ohio still had hundreds of thousands fewer 
jobs than it did prior to the last recession. With aging 
infrastructure, with high unemployment, with underfunded 
schools, and with chronic gaps in access to affordable health 
care, rural areas in Ohio and throughout the Nation already 
face daunting economic challenges.
    For rural areas in small-town Ohio, an economic downturn 
like the one we find ourselves in now has the impact of a 
kidney punch after 12 rounds in a ring. Over one-half of Ohio's 
counties are rural, and there is no doubt these counties face 
economic obstacles.
    Of the ten counties in Ohio with the highest unemployment, 
every one of them is rural. Of the ten counties in Ohio with 
the highest poverty level, nine of the ten are rural. Of the 
ten counties in Ohio with the highest percentage of people 
eligible for Medicaid, nine of them are rural.
    Federal policymakers simply haven't devoted enough 
attention to rural America. We squander opportunity and dismiss 
unacceptable gaps in the kind of support that allows families 
to lift themselves out of poverty. It is time to change 
direction and invest in the tremendous potential that rural 
America holds, and you can see that in the young people, both 
high school and college, sitting in the audience today. 
Investment in rural communities is an investment in the 
American economic engine and the American dream.
    I am proud of what we have done collectively for rural 
communities and small towns in this State during the passage of 
2008 farm bill. USDA Rural Development Programs encourage rural 
business expansion and job creation and grants to expand 
broadband access across rural Ohio, something particularly 
young people here today understand how important broadband is 
to their future and to our economic future.
    These projects--we have invested more than $500 million in 
over 120 different projects in Ohio over the last 2 years. 
These projects range from a $6 million hospital expansion for 
Barnesville and Belmont County, the county next door to the 
south; a $20 million water treatment facility for Wellsville 
and Columbina County, the county directly to the north; $7 
million was provided last year for a new water distribution 
system in Tuscarawas County, two counties to the west; and in 
Jefferson County, Smithville received USDA funds that allowed 
for the purchase of a dump truck for road maintenance; and 
Dillonvale was able to purchase a new garbage truck. These 
projects wouldn't have occurred without a farm bill and without 
funding for Rural Development Programs.
    USDA Rural Development funding can help communities in many 
different ways. Some comes in the form of grants to communities 
for water and sewer projects and public safety projects. Others 
provide loans and loan guarantees for small businesses and 
rural housing programs. These loan guarantees in particular 
have seen a dramatic increase in usage during the recent 
overall credit crunch. Some lenders simply won't provide funds 
to small businesses and rural housing without the additional 
security provided by farm bill Rural Development Programs.
    The farm bill also funds so many programs that matter to 
Ohio, and we have made important strides toward providing 
additional investments in rural Ohio. As Ohio's first Senator 
to serve on the Agriculture Committee in over 40 years, I 
continue to work to fund these vital programs and ensure 
Ohioans receive the kind of support that will help them thrive. 
The farm bill provided a needed boost, but the people of small 
towns and rural communities deserve much more. That is why we 
are holding this hearing today.
    Since I have been in the Senate, the last 20 months or so, 
21 months or so, I have spent much of my time conducting 
roundtables, about 120 roundtables. About 15, 20 people have 
been to them, just in cross-sections of communities. Most of 
those roundtables have been in rural Ohio, and I have heard 
lots of questions. I have heard questions like, how can the 
Federal Government play a role to help rebuild small towns in 
Appalachia and across Ohio? What investments in infrastructure 
are needed to revitalize our rural communities and make them 
competitive in a global economy? How do we support small 
businesses who are struggling in the face of this credit crunch 
and the uncertainty of the financial crisis?
    These are the questions our witnesses are helping us answer 
today. I look forward to these remarks, to the remarks from 
them.
    And last, I should note that Randy Hunt, Director of the 
USDA Rural Development Programs here in Ohio, was invited to 
testify. However, the Bush administration did not allow him to 
attend. Mr. Hunt is a dedicated and well-respected public 
servant in this State, and as USDA Rural Development Programs 
play a significant role in addressing the challenges rural 
communities face, I know everyone here would appreciate hearing 
his perspective on these issues.
    I regret the decision of Secretary Schafer and the Bush 
administration because I don't think it is in the best 
interests of the people I serve, but today's hearing is too 
important to get mired in politics. It is not about the Bush 
administration or Republicans or Democrats. It is about people 
and communities facing the challenges and fighting to overcome 
these challenges. It is in the nation's best interest to 
support their success, and the Congress and the administration 
alike have an obligation to promote the nation's best interest. 
That is nonpartisan. That is simply a fact.
    We will move forward on the witnesses. Let me introduce the 
first panel. Our first panel will be John DiPietro to my left, 
your right, of Steubenville. Mr. DiPietro works at the 
Severstal plant here in Steubenville. Welcome.
    Next, we have Harry Eadon, Executive Director of the 
Tuscarawas County Port Authority--very nice to see you again--
located in Dover.
    And finally, we will hear from Frank Shaffer, a Township 
Trustee from, I say Bellaire, but you say ``Blair,'' right, in 
Belmont County. An aide in my first year in politics was from 
Bellaire, as you know, and always said ``Blair,'' so I guess 
that is how I say it.
    Mr. Shaffer. That is how we say it.
    Senator Brown. Take about 5 minutes. Mr. DiPietro, I will 
begin with you, then each of you will speak, and then I will 
ask each of the three of you questions.

 STATEMENT OF JOHN DIPIETRO, SEVERSTAL EMPLOYEE, STEUBENVILLE, 
                              OHIO

    Mr. DiPietro. Good morning. My name is John DiPietro. I am 
59 years old and have worked for Severstal Wheeling, formerly 
known as Wheeling-Pittsburgh Steel, for 37-and-a-half years. I 
am married, and my wife and I have raised three children.
    What has happened at my company over this decade has 
affected my family, my job, my pension, my retirement savings, 
and my community. The elimination of steel jobs has depressed 
the local economy and caused a steady drop in employment, which 
in turn has affected our population and our tax base. My 
children have moved from the Ohio Valley due to better 
opportunities elsewhere.
    With the most recent shutdown of the Steubenville Cold 
Strip Department, my job as a wastewater treatment plant 
operator servicing the pickling line has been eliminated. I no 
longer have a specific work area. The company is calling it a 
temporary shutdown, but no one believes the pickler will be 
restarted. After 37-and-a-half years, I am a weekly assignee. 
This leads to frustration, anxiety, and loss of personal wages. 
The shutdown of the Cold Strip Department is the result of a 
lack of orders, reflective of the poor national economy and the 
fact that the mill is outdated.
    We are told that Severstal Wheeling needs to inject $11 
million in repairs to make the pickling line viable. Severstal 
is a global company that owns other facilities that can fill 
their orders. This leaves me and my coworkers in limbo, 
wondering if money will be invested in the Steubenville North 
Plant so that we can return to our jobs and a stable production 
schedule.
    Prior to the cold strip shutdown, I worked as a blast 
furnace recycle operator servicing the No. 1 blast furnace in 
Steubenville. The blast furnace operation was permanently 
closed in 2004. Many jobs were eliminated, hurting not only our 
workers, but our local economy, as well. Those of us affected 
had to acquire new skills in new work areas.
    Another aspect that has affected me is the lack of 
stability within the mill. Despite the increase in production 
at our mill, our employment is down. Currently, different areas 
of the mill are working 1 week, shut down the next week, and 
then return to operations the following week. Some areas of the 
mill are training workers for new assignments, while other area 
managers have chosen not to train dedicated employees who may 
have transferred into their areas. The instability in the 
production units and the uncertainty in the job assignments 
have led to turmoil and anxiety, and this is where I find 
myself today.
    My pension is another problem area. I am two-and-a-half 
years away from eligibility for retirement. Recent downward 
trends in the stock market have eroded my 401(k) plan. Greed 
and deregulation have touched us all.
    Unfortunately for me, this is the second hit to my 
retirement plan. The first hit was in 2003, when the Pension 
Benefit Guaranty Corporation froze my pension plan and my 
pension plan was eventually terminated. Under the former PBGC 
plan, as it was known, I was guaranteed $40 per year for every 
year of service. With this multiplier, at age 62, my monthly 
pension would have been $1,600 per month for 40 years of 
service. Because of the termination of my pension plan, the 
value of my pension plummeted to $780 per month, less than half 
of the previous contractual benefit. What I thought was a fact 
became a myth. How do you plan for something like that?
    Because of the decline in the steel industry, our 
educational systems have experienced a negative impact. 
Severstal Wheeling pays property taxes to two area school 
districts, and with the loss of wages and declining tax base, 
our schools receive less funding. The school districts, the 
administrations, faculty, and students suffer. As we all know, 
the children are the future of any community. If they aren't 
afforded a solid education along with job opportunities after 
graduation, the community will surely erode.
    On a personal note, I find myself wondering if our plant 
will ever return to normal operations. I wonder if our plant 
has a limited future due to the perils of our economic 
policies, the global economy, and consolidation within the 
steel industry. We at Severstal Wheeling are fighting for our 
very survival. Thanks.
    [The prepared statement of Mr. DiPietro can be found on 
page 30 in the appendix.]
    Senator Brown. Thank you, Mr. DiPietro.
    Mr. Eadon.

   STATEMENT OF HARRY A. EADON, JR., PRESIDENT AND EXECUTIVE 
    DIRECTOR, TUSCARAWAS COUNTY PORT AUTHORITY, DOVER, OHIO

    Mr. Eadon. Thank you, Mr. Brown. Thank you for this 
opportunity to present testimony regarding the USDA Rural 
Development Programs and how they may be utilized in the 
current economic crisis. My focus today will be on the USDA's 
Rural Development Intermediary Relending Program. However, each 
of the economic development financing tools available through 
Rural Development are important.
    The Tuscarawas Valley region may be considered a typical 
rural area. However, it is quite diverse, with each county 
facing unique challenges. Consequently, the counties, are they 
are able, create economic development strategies that address 
their particular needs. These strategies should encompass these 
basic focuses: Infrastructure improvement, business assistance, 
education and training, amenity-based development, and 
community development.
    The execution of these strategies usually depends on 
funding assistance from Federal and State governments. An 
example of the importance of such Federal support can be found 
in testimony given on April 1, 2008, by Mr. Thomas Dorr, USDA 
Under Secretary for Rural Development, before the Subcommittee 
on Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies.
    Mr. Dorr stated, ``The fiscal year 2009 budget request 
seeks a $49 million budget authority to support $738 million in 
direct and guaranteed loans and grants for rural business and 
cooperative programs. The budget proposes to fund the Business 
and Industry Guaranteed Loan Program, the Intermediary 
Relending Program, and the Rural Cooperative Development Grant 
Program. We anticipate that in fiscal year 2009, these programs 
will assist approximately 700 small businesses and create or 
save more than 34,000 jobs in rural communities.'' The reported 
effect of these programs is to leverage every Federal dollar 
with $15 of private capital.
    The diversity of the Tuscarawas Valley region can be 
characterized by the population and business density of each 
county. Examples of the diversity are Harrison and Tuscarawas 
Counties. Harrison County hosts 360 businesses and has a 
population just under 16,000, compared to Tuscarawas County 
with 2,315 businesses and a population of over 91,000. A 
further distinction is the types and diversities of businesses 
in each of these counties. But for all of the differences, one 
thing is the same, not only in this rural area but across the 
country. The current economic crisis has exacerbated the 
ability of businesses, large and small, to borrow money to fund 
current and future needs. The credit crunch is not a phenomenon 
only of Wall Street. It has come to Main Street.
    Pat Comanitz, the Kent State University Tuscarawas Small 
Business Development Center's Director from 1998 to 2008, 
estimates that only one of ten small businesses seeking funding 
find it through conventional bank financing, and that has been 
confirmed by the president of a regional bank. A case in point 
is ED Payment Systems, a small business which started in the 
Business Factory, a small business incubator in Dover, Ohio.
    Bill Treciak, the founder and president of the four-year-
old technology service company, has applied for both 
conventional and SBA advanced financing and been turned down 
more than a dozen times. To finance his business, Mr. Treciak 
has leveraged the equity in his family's home and obtained 
unsecured financing through high-interest credit card debt. ED 
Payment Systems is a service company and therefore is fueled by 
working capital. Even though the company has had positive net 
income for more than a year, and even though it has exhibited 
reasonable and sustainable growth, not only bank has lent him 
the money even to fuel that growth. Businesses like ED Payment 
Systems will benefit from reasonably costed alternatives to 
conventional financing.
    To help drive the implementation of business development 
strategies in each of these counties and to create a local 
response to a small business funding need, the TCPA has applied 
for a $500,000 IRP loan to seed a $585,000 revolving loan fund. 
The proposed service area for the revolving loan fund includes 
the following rural Ohio counties: Belmont, Carroll, Guernsey, 
Harrison, Holmes, and Tuscarawas.
    The purpose of a strong RLF is to provide funding 
alternatives to the region's existing businesses and to provide 
a tool to help create new business opportunities. This equates 
to both the retention and creation of jobs. The RLF will not 
replace or compete with conventional financing. Rather, it will 
enhance the ability of banks to participate in financing 
structures that previously were not possible through only 
conventional financing.
    Based upon the USDA's 15-times multiplier, the economic 
development impact of the TCPA's RLF to the region will be to 
induce the investment of more than $8 million of private 
capital. This is a regional solution to a regional challenge.
    The TCPA encourages Congress to act with due deliberation 
and speed to authorize the USDA's Rural Development budget 
request for funding these important economic development tools.
    This concludes my testimony and I will be happy to respond 
to your questions. Thank you.
    [The prepared statement of Mr. Eadon can be found on page 
33 in the appendix.]
    Senator Brown. Thank you, Mr. Eadon.
    Mr. Shaffer.

   STATEMENT OF FRANKLIN C. SHAFFER, JR., TOWNSHIP TRUSTEE, 
                         BELLAIRE, OHIO

    Mr. Shaffer. Thank you very much for having me here. It is 
my first time, so I am probably a little green at this. My 
testimony is from Mount Victory Road Water Project, and I lived 
this for 18 years of my life and these people are still living 
it and spending 10 years doing this.
    Mount Victory Road is located in the State of Ohio, Belmont 
County, Village of Powhatan Point, which is situated in the 
southeastern portion of Ohio just a few miles from a great 
water source, the Ohio River. More than 152 families live along 
the 28-mile stretch of rural road.
    A multitude of problems arises within their water sources, 
one of which includes wells that have to be drilled at no less 
than 50 feet or no deeper than 100 feet to tap a good water 
source. If drilled any further, they could be lost into a mine 
or sulfur from a mine could make the water unbearable to drink. 
Most of the wells will not sustain a family of three or more 
adequately. The families have to use the local laundromat 
several miles down the road, cut down daily on toilet flushing, 
being unable to take daily showers, have to choose from bathing 
your children or watering your animals, being unable to water 
gardens or lawns, using the local car wash to wash your car, 
limiting the amount of water usage within the home, doing 
dishes, running dishwashers, just to name a few. These also 
cause additional expenses to the families.
    There has been E. coli bacteria found in some wells, 
exposing people to illness and hospitalization, thus creating 
loss of jobs in families. This is a major health risk.
    The second source of water for the homes is a cistern, an 
artificial reservoir, tank, or container for storing or holding 
water, especially for catching and storing rainwater. These 
cisterns are mostly used for bathing, washing clothes, and 
flushing toilets. Due to a lack of water sources in a low 
economic area, some families have to resort to using the water 
for drinking, which is definitely a health hazard. These people 
cannot afford to purchase bottled water and have no choice but 
to drink cistern water that is unsafe. Must families must own a 
utility trailer or a truck with a water tank in order to haul 
water that is miles from their homes. Some farms have to haul 
multiple loads daily in order to water livestock. This is also 
an additional cost to the families, due to the fact that the 
local village and county charge for this water.
    There are also major fire and safety issues. If a house 
catches on fire, usually this leads to a complete loss of the 
home, animals, and sometimes lives. The water to extinguish the 
fire has to be hauled miles in a tanker truck or use of water 
buffaloes must be set up.
    The cost of this project is in the millions of dollars. Our 
local officials are willing to take on the project, but simply 
do not have near the funding needed to do the project without 
Federal assistance.
    If any person would like to get a slight feeling of what it 
is like to have to live without water, just take a shower, 
lather up, and shut off the water. Think about how to get the 
lather off of your body without water. Or just imagine what it 
is like to turn on the faucet and nothing come out at all, or 
what comes out of the faucet is not healthy to drink or use for 
cooking, or water that is black, yellow, and smells bad, that 
is, if there is water at all. Or just imagine loading the 
washing machine with clothes and the machine is stopped in mid-
cycle. All the clothes have to be removed and hauled, heavy and 
wet, to the laundromat to finish.
    This is not a temporary water loss. This is every day of 
life in this area. People who are fortunate enough to have 
municipal water do not have a clear understanding of what it 
feels like to live this way every day. Remember when your water 
may be shut down temporarily for a few hours or a day how 
inconvenient it is. Well, these people live this way every 
single day.
    In summary, this area is in desperate need of a municipal 
water source and it cannot be accomplished without the help of 
Federal assistance.
    One thing I would like to add, back to the part of flushing 
the toilets, a lot of times you have to keep Clorox next to 
your water, next to your commode, in order to dump Clorox in to 
cut down on the smell when you can't flush it each time. It is 
a definite problem.
    Thank you very much.
    [The prepared statement of Mr. Shaffer can be found on page 
57 in the appendix.]
    Senator Brown. Thank you, Mr. Shaffer. Thanks very much, 
all three of you.
    Mr. DiPietro, you mentioned your children have gone 
elsewhere. Where do they live?
    Mr. DiPietro. My oldest, Natalie, lives in Ada, Ohio.
    Senator Brown. Northwest of Columbus?
    Mr. DiPietro. Yes. She accepted a teaching position at Ohio 
Northern University last year. My daughter, Melissa, lives in 
Philadelphia. She works for Johnson and Johnson in financing. 
And my son, Anthony, is a senior at the Ohio State University.
    [Laughter.]
    Senator Brown. Is he coming home?
    Mr. DiPietro. I doubt it.
    Senator Brown. What jobs do we need to keep people in our 
communities? What kind of jobs would make your three children 
want to come back and live in--where do you actually personally 
live?
    Mr. DiPietro. Here. I live in Steubenville.
    Senator Brown. What would make people come back here, young 
people?
    Mr. DiPietro. I would say high-paying manufacturing jobs 
would be the key. Most of our jobs are minimum-wage jobs. At 
the local mills, it is all down hill. At Severstal, they've cut 
way back and just shut down the Cold Strip Department, as I 
said. So we are losing the good-paying jobs with the good 
benefits and people have no reason to stay here.
    Senator Brown. How many generations have you been here, 
your family?
    Mr. DiPietro. Well, my dad came here in 1920 from Italy.
    Senator Brown. 1920, did he work at the mill?
    Mr. DiPietro. Yes, he did. He worked at Weirton Steel for 
39 years.
    Senator Brown. What has happened to your friends and 
coworkers who have lost their jobs? Are they still here or did 
they--are they getting a job at $8 or $9 an hour now instead of 
having a good-paying, middle-class job?
    Mr. DiPietro. Most of them have left the area, the young 
ones. The older ones hold on and try to find a job locally. A 
lot of them are like me. They're in transition in the mill and 
move from department to department because of the work 
schedule, working a week, shutting down for a week. How long 
this is going to last, no one knows. They put a lot of money 
into the blast furnace in Mingo and the BOF, but it hasn't all 
started back up since the repairs were made, so we are kind of 
wondering what is going to happen.
    Senator Brown. Do people who have lost a $15 or $17 an hour 
job and now have a $9 or $10 or $11 an hour job, do they call 
themselves middle class still?
    Mr. DiPietro. I don't think so. I would strongly--working 
at Severstal, it would be tough with one income [inaudible] 
even making minimum wage or thereabout, trying--both working 
very hard, working 40 hours a week, doing everything they are 
supposed to do, playing by the rules, and yet they can't 
support their family or have health care.
    Senator Brown. What is your hourly wage, if I could ask?
    Mr. DiPietro. Right now, it is $18 an hour.
    Senator Brown. And your retirement has been adjusted down, 
I guess is a nice way of saying it, has been cut to $780 a 
month, you said?
    Mr. DiPietro. Yes. Under the--PBGC froze our plan and then 
said it wasn't a viable pension plan----
    Senator Brown. It wasn't because the company didn't pay in 
adequately.
    Mr. DiPietro. Right, and so we were locked in. At the time, 
I had 32 years of service. So I no longer gain any retirement 
earnings from that plan, so luckily, we had the Steelworkers 
Union who got us into a new pension plan, the Steelworkers 
Pension Trust, and so now we are accumulating money into that.
    Senator Brown. So you will have the $780 a month plus you 
will have some smaller amount----
    Mr. DiPietro. Yes.
    Senator Brown [continuing]. That you are earning now?
    Mr. DiPietro. Yes. Recently, we were allowed--given the 
option of taking our money that was contributed to the PBGC and 
rolling it over to an IRA or leaving it there. So since I was 
going to take this big hit, from $1,600 to less than $780, 
really, I decided to take that money in a lump sum and roll it 
over into an IRA. So now I am just basically earning a pension 
with Steelworkers Pension Trust.
    Senator Brown. Laid-off workers, if you know, they have got 
the information they need for assistance for job retraining, 
maybe through Jefferson Community College or pension health 
care. Are they able to get the information they need on how to 
move on with their lives when they get laid off?
    Mr. DiPietro. I think so. I think so. I think the community 
does a good job of getting the information out there where they 
can turn to, come here to Jefferson Community College and learn 
a new skill.
    Senator Brown. Are they getting it from the union? Are they 
getting it from the company? Are they getting it from jobs and 
community services----
    Mr. DiPietro. I don't think they are getting it from the 
company, but they are getting it from the community, the union, 
just advertisements.
    Senator Brown. So even if it is a non-union facility, they 
are able to find the information either from Jefferson 
Community College or other ways?
    Mr. DiPietro. Yes.
    Senator Brown. Thank you for your testimony and your 
comments.
    Mr. Eadon, one of the things that I am hopeful we do after 
the election with either President-Elect McCain or President-
Elect Obama is get serious about infrastructure investment. 
Talk through what--I obviously don't know an amount of money or 
we don't know for sure what direction it is going to go. That 
is going to be in part dependent on what the President-Elect 
wants to do and the new President wants to do come January, but 
what is the best way to spend infrastructure monies?
    Part of it is the stimulus package, because it puts people 
to work directly. I talked to the Governor at some length about 
this and there are projects in Ohio ready to go that just don't 
have financing now. It won't take a long time to inject money 
into the system, into these projects, so it puts operating 
engineers and laborers and sheet metal workers and engineers to 
work immediately. What is the best short-term and long-term 
kind of infrastructure stimulus for Tuscarawas County, or 
speaking more generally, larger than that?
    Mr. Eadon. For the region? I think there is--I think the 
answer is almost the same for both, both short-term and long-
term, because I think the solutions--we didn't find ourselves 
or drive ourselves into this position overnight. We drove 
ourselves into this position over a long period of time, so 
that coming out of this and stimulating our economy and 
changing our economy is going to take more than a year, even 2 
years or 3 years.
    I think in some ways we are already starting on that. 
Technology, I think, is certainly a method or a way of trying 
to dig ourselves of where we are at. When we are talking about 
high-paying manufacturing jobs, clearly, those are very 
important. High-paying jobs of any sort are important. 
Manufacturing jobs, though, now aren't manufacturing jobs that 
are less skill-based than what they were before. In fact, the 
skill base of many manufacturing jobs now requires advanced 
training, training beyond high school, and those are the kind 
of jobs that will bring kids back if they go off to school. 
Those are the kind of jobs that will bring kids back here to 
Steubenville or to our region.
    Technology jobs, advanced energy and fuel cell, biomass, 
wind energy, those kinds of jobs, both on the manufacturing 
side as well as the implementation side, are critical to our 
area and we certainly have the expertise in the area to do 
that. We have a tremendous history in this entire region for 
manufacturing expertise.
    You mentioned Mansfield. Mansfield has the same thing in 
brass and other kinds of industries. [Inaudible] Lake right 
next to Cleveland, exactly--it is the same thing again, small 
manufacturers as well as large manufacturers. So Ohio has a 
tremendous tradition and history of manufacturing expertise, 
and I would say advanced manufacturing expertise.
    Some of the other kinds of technology jobs that we train 
our young people for, and essentially we train them to leave--
gaming, advanced computer animation. We train people at OU, at 
Shawnee State, which is not too far from here, Tuscarawas 
County, at Kent State University-Tuscarawas. We graduate 150 
kids a year probably from those three institutions in advanced 
gaming, computer animation, and we have maybe ten or 15 jobs in 
this region for those 150 that we graduate. Consequently, they 
go someplace else.
    That is one of the reasons for the RLF and building in 
Central Ohio is a major one that we have been able to create is 
to provide capital for those students who have graduated to not 
come back, but to stay here and be entrepreneurs, start 
businesses here, because we believe that entrepreneurial 
business startups are more likely to stay in the region than to 
go someplace else. So if you are raised here, grew up here, and 
are educated here, and if you start a business here, then you 
start a family here, it is more likely that you are going to 
continue to grow that business and create jobs, retain jobs and 
create jobs, than if we educate you and send you someplace 
else.
    The other--as I mentioned, advanced manufacturing, I think, 
is critical to all of those as well as to information 
technology jobs. We have tremendous capabilities in this area 
because we are a rural area to house information technology 
jobs, and those, frankly, are very high-paying, very clean jobs 
that many of our young students that are graduating from 
institutions like Jefferson Community College would be, 
frankly, that would be perfect for them.
    Senator Brown. Talk a little more directly on 
infrastructure spending, on broadband and other ways. If the 
Federal Government is going to spend X-number of dollars on a 
stimulus package and part of it was infrastructure, that would 
mean X-number of dollars for Eastern Ohio. Where would that 
best be spent to create jobs immediately and create jobs longer 
term?
    Mr. Eadon. Well, certainly broadband is critical. The area 
of the State that you come from, you have got enormous 
resources for broadband compared to many rural areas. We are 
fortunate in Tuscarawas County to be close enough to the super-
computer network that we have broadband [inaudible] in 
Philadelphia and in Dover that is not just broadband, it is 
tremendous broadband. It is, in fact, the fastest, broadest 
connection that exists currently.
    But there are many others. As I drove from Tuscarawas 
County to Jefferson County today, most of the areas that I 
passed don't have that same capability. So to put rural Ohio on 
the same basis as the other more urban areas of Ohio, broadband 
is critical to be able to support businesses like advanced 
energy businesses, advanced manufacturing businesses, 
information technology businesses, computer animation, advanced 
gaming businesses. All of those are going to need significant 
resources of broadband.
    So you are exactly right, and I understand the farm bill 
addresses some of those issues for the rural U.S., and 
hopefully we will grab some of those dollars for rural Ohio.
    Senator Brown. Thank you. Thank you very much.
    Mr. Shaffer, do you live on Mount Victory yourself?
    Mr. Shaffer. I do not live there any longer. I lived there 
18 years and I moved from there to another----
    Senator Brown. Most people who live there have been there 
for generations?
    Mr. Shaffer. Yes, family farms. Their kids want to build 
houses on their farms.
    Senator Brown. Are most of the 152 families farmers? Or do 
they produce some of their----
    Mr. Shaffer. Probably half that or somewhere in that----
    Senator Brown. Full-time farmers?
    Mr. Shaffer. Not full time. Most of our farmers in our area 
are farmers and they have other jobs.
    Senator Brown. That pays for their health care and----
    Mr. Shaffer. Right. They have to go elsewhere to get it, 
and it is mostly part-time.
    Senator Brown. Do most of the 152 families have some 
farming operation, either a few beef cattle or some chickens--
--
    Mr. Shaffer. Right----
    Senator Brown [continuing]. Or big gardens----
    Mr. Shaffer. Or some form of livestock, if you understand 
what I am saying.
    Senator Brown. I assume it has been figured what this would 
cost to bring water to these 152 families.
    Mr. Shaffer. This figure is down to somewhere around $2.5 
million, I believe, at this point. I could be--give me a little 
bit of leeway there, but it is close to $2.5 million, I think. 
They have done some downsizing on some of the project and tried 
to adjust it a little more.
    Senator Brown. What are local residents doing to try to 
change this? I want them to have a very aggressive Township 
Trustee, but what else are they doing?
    Mr. Shaffer. As far as----
    Senator Brown. Just in organizing and----
    Mr. Shaffer. We have organized committee. I spent 10 years 
with commission meetings, attending every meeting. We have a 
group down there that goes out into the community and talks to 
the people and tries to communicate with them, you know, what 
is happening. Is that the direction you are going?
    Senator Brown. Yes.
    Mr. Shaffer. Yes. We have just the group of individuals. 
That is how we started this. Two of us started this. We got a 
petition together, and we go out and talk to our political 
officials. I have knocked on doors to help people get elected 
to try to----
    Senator Brown. And you have been doing this for 10 years?
    Mr. Shaffer. Ten years, yes, so I am still working on it, 
and I have had to work on it--I promised--I had two older 
ladies come to me. We were promised water. This is what they 
told me. They said, ``We were promised water 40 years ago.'' 
Well, funding ran out in the 1980's, I believe it was. They 
looked at me and said, ``Frank, you can get us water. I know 
you can.'' How you think I can get you water, I have no clue. 
That is what I told them. But I looked at it. I felt bad. I 
said, fine, I will take it on and we will see. I got another 
person. We went through the petition, drove people over. I have 
done everything. I have sent letters to different political 
officials, didn't get the good response I needed. I helped 
campaign for others. Whatever it takes to get this job done, I 
promised these people I would do it, and if it takes me the 
rest of my life, I am going to get these people water and that 
is it.
    Senator Brown. Are there other places in Belmont County 
that don't have access to water?
    Mr. Shaffer. There are very few. This is probably the last 
major section. There is one in the western end. They are 
looking at putting a tri-county deal together on that, up in 
the Piedmont Lake area. There are actually two big sections in 
Belmont County.
    Senator Brown. When you talk to the county commissioners, 
what do they say about--well, first of all, what do they say 
generally when you----
    Mr. Shaffer. They are willing to do this project. They were 
willing--we were fine. We have an infrastructure fund that is 
based--and they were willing to go forth with the whole 
project. Then the floods came and devastated and we needed up-
front cash for FEMA and other projects to get these--to 
recuperate from the flood, basically. Now, there is no money. 
It has depleted our infrastructure fund. They are willing to 
come up with their share, and up until this point, we have paid 
for all this, all the water projects. Now, we are finally 
having to come to the Federal Government and ask, or the State, 
whoever would be glad to help us, is where we are at.
    Senator Brown. Do you have an estimate on, when you cost 
this out to this point, you cost this $2.5 million project out, 
have you figured an estimate on what people would pay for their 
water and sewer if they had this system built?
    Mr. Shaffer. This would be water. There would be no sewage 
coming through there.
    Senator Brown. Just water, okay; so----
    Mr. Shaffer. This would just be water, and we are probably 
looking at somewhere around the $40 to $50----
    Senator Brown. A month.
    Mr. Shaffer [continuing]. A month, which is probably in the 
neighborhood of--they are probably paying more for this when 
they have to haul their water.
    Senator Brown. That is not an additional cost growing for 
them----
    Mr. Shaffer. Right. It is not an additional cost for them. 
They may be paying--some people are probably paying more for 
your water. Once you have to purchase bottled water, haul 
water, you have got to pay for that water and you have got to 
haul it in your truck. You have got wear and tear on your 
vehicle, because these are all dirt roads, back country roads.
    Senator Brown. Are these 150 families mostly pretty elderly 
or not?
    Mr. Shaffer. Some are, some aren't. Some have inherited 
their family farms.
    Senator Brown. What is the size of these family farms, 50 
acres? A hundred acres?
    Mr. Shaffer. Ranging probably from 50 to 100 acres, 
depending on the farm.
    Senator Brown. Thank you. One other question. You mentioned 
fire. Have there been major problems with fire there?
    Mr. Shaffer. There have been fires, and it is a total loss 
to the house.
    Senator Brown. So if a house catches on fire, there is no 
way the township fire department gets out there fast enough----
    Mr. Shaffer. They can get there. There is no place to pump 
the water from. Unless you can get possibly there are a couple 
ponds there, if they go to pumping ponds, or you bring in 
buffaloes where you have those tanker trucks that drive all the 
miles to get there.
    Senator Brown. There is no fire department tanker truck 
near enough to help in time?
    Mr. Shaffer. Not in time. There is no way that you can get 
a house without--some people have put in and use their cisterns 
and they have actually pumped the water from their cisterns to 
put the fire out, if they are capable. If you are lucky and it 
has been a rainy season and you have got some water in your 
cistern, you might be able to get some water from your cistern, 
but that is 1,500 gallons. How long will that last in the fire? 
At the most, it isn't a large house.
    Senator Brown. Let me ask you a question, the last 
question, and I will ask the same question to each of you. I 
will start with you, Mr. Eadon, and then Mr. DiPietro and 
Shaffer, you have time to think about it, too. If out of this 
hearing came one thing that the Federal Government could do to 
improve the lives of people in Eastern Ohio, what should it be? 
It is a hard question. Sorry.
    Mr. Eadon. I can't pass for another question?
    [Laughter.]
    Senator Brown. That is the only question.
    Mr. Eadon. I think probably the key thing would be to put 
dollars or make dollars available to regional efforts and let 
the folks that are living there every day figure out exactly 
how those dollars should be put to use to the best effect to 
create jobs and opportunities for our regions. Just an example 
would be infrastructure that the Columbus District Court order, 
which just recently opened up another section, which is a good 
thing for the State of Ohio for their foresight there, that 
when this order would open up a tremendous area that was not 
currently open to economic development because there is no 
infrastructure there. We need the dollars, and put those 
dollars in the region and we will figure out how to spend them 
correctly.
    Senator Brown. Mr. Shaffer? I know what your answer might 
be.
    Mr. Shaffer. It is going to be simply a two-part answer. I 
think there needs to be some money set aside and readily 
available for families that are in desperate need of water, 
sewage, that you can come up front. But you also need to set up 
a separate fund in order to bring in infrastructure, in order 
to bring in jobs into the area, because some of our, in my 
opinion, as far as jobs go in Belmont County and this local 
area, is the fact that there is no infrastructure available. 
Whether that means water, sewage, roads, bridges, you know, 
broad band, or whatever, there needs to be a separate fund set 
up for that. And you need to get that money here first.
    Right now, I believe that the money for infrastructure is 
set up if you have got the business to come in. We need to set 
the environment up in order to attract that business into this 
area.
    Senator Brown. Those are good answers.
    Mr. DiPietro.
    Mr. DiPietro. They have touched on the areas, jobs, 
education, and the infrastructure. If the government could help 
to entice companies to come into our area, it would be a big 
boon. Naturally, you need the infrastructure to bring the 
companies here, which we currently don't have. Jefferson County 
is lacking. There is talk of improvements, but there are two 
bridges that connect with West Virginia that are going to come 
down and be closed and that is going to hurt the area. 
Naturally, you need to put money into education. That is the 
key to the future.
    Senator Brown. Thank you, all three of you. You did very 
well. Thank you all, and thanks for being here. Certainly feel 
free to stay if you would like for the second panel. We will 
have a short break between the two panels, and if you have 
anything else you want to add, submit it. Call Joe Schultz in 
our office or Jean Wilson in the back here.
    Joe told me, because they need the audio transcript, to 
make sure you speak directly into the microphones. I probably 
should have said that at the beginning here. I am sorry. But I 
think you all spoke clearly enough that it is recorded well and 
we are counting on you to make sure that it was recorded well, 
right? So thank you.
    [Applause.]
    Senator Brown. On our second panel, we have Charles 
Fluharty, Director of the Rural Policy Research Institute in 
Columbia, Missouri. He is based out of the Harry Truman School 
of Public Affairs at the University of Missouri-Columbia. He 
was born right here in Steubenville, still has family here, so 
thank you for coming back.
    Gary Ricer is CEO of Guernsey, Monroe, and Noble Tri-County 
Community Action Corporation. It is located in--is your office 
located in Caldwell?
    Mr. Ricer. Based in Caldwell.
    Senator Brown. It is based in Caldwell in Noble County. It 
is nonprofit committee to reducing poverty in the Tri-county 
area.
    And Debra Martin is Director of the Great Lakes Rural 
Community Assistance Program located in Fremont. You had to 
leave early today, didn't you? I know that drive. Ms. Martin's 
organization assists low-income individuals in rural and other 
under-served areas.
    Mr. Fluharty, why don't you start? Thank you.

  STATEMENT OF CHARLES W. FLUHARTY, VICE PRESIDENT FOR POLICY 
  PROGRAMS, RURAL POLICY RESEARCH INSTITUTE, TRUMAN SCHOOL OF 
        PUBLIC AFFAIRS, UNIVERSITY OF MISSOURI-COLUMBIA

    Mr. Fluharty. Thank you, Senator. First of all, welcome to 
my home county. It is great to be back.
    Senator Brown. Welcome back to my home State.
    Mr. Fluharty. Thank you. I will be here soon for good.
    I would like to start by commending Chairman Harkin and you 
for doing this hearing here in Steubenville. You honor us with 
this hearing and we thank you for that.
    Just an aside, relating to our prior panel, I just came 
back from Cyprus, got off the 767, flew into Columbus, got to 
the farm late last night, and do you know what the first thing 
I did was? I went on the back porch and checked the cistern to 
see if there was enough water to have a bath to come and be 
with you today, and that is indeed a true story. Since the 
strip mining came through our area, we have been without water 
on our farm ever since then, and so it is a rather ubiquitous 
problem.
    Senator Brown. Where is your farm?
    Mr. Fluharty. In Smithfield.
    Senator Brown. Pretty country.
    Mr. Fluharty. It is. Our farm has been in the family 150 
years. We came to the valley over West Virginia in about 1780, 
and when my ancestors left Ireland, something bad had to have 
happened because you didn't leave Ireland in 1780, but we have 
been in this valley forever and we appreciate you being here.
    I would like to also thank Dr. Meeks. In RUPRI, we work 
closely with the Rural Community College Alliance and I do 
believe our community colleges really are building an extension 
service for the knowledge age and I just think it is great that 
we are here.
    I would like to just say that it is 40 years since I 
graduated from the College of Steubenville, and in that 40 
years, the indicators in our valley vis-a-vis the rest of Ohio 
have deteriorated, as you know. It is a challenge.
    As I said in my testimony, I would just like to say that I 
think we are entering into a public discussion about the 
relationship between the public and private sector in America, 
and I just hope, Senator, that your witness for the rural 
differential challenge in that will be carried forward.
    We are in a valley where extraction industries have been as 
the ``company store'', be it mining, manufacturing, steel, and 
it is transitioning. Our rural conservative community banks 
have great assets. They have not gone the way of our major 
investment banks, hedge funds, and large banks because of their 
conservative nature and that is fantastic. But that same 
conservative dynamic is now going to mean boards and leaders in 
banks with capital that have been patient are going to be less 
willing to lend in the current crisis. It is going to really 
point to a need for leveraging and public sector investment to 
scale those and also to look at community foundations and 
equity capital. I think there are opportunities under your 
committee to do some of that.
    I would just like to say three or four things. First of 
all, in my testimony, I talk about some ideas. I want to share 
those quickly with you and then close with some thoughts about 
the valley.
    First of all, we really are going to rethink regional 
scale. I think our valley now is uniquely positioned. We are 
going to build regional, distributed energy systems. We are 
going to build regional sewage systems. We are going to build 
regional transportation systems. Ohio is uniquely positioned 
between rural and urban, and we have a settlement pattern which 
advantages all of this.
    Second, if you look at CDBG and CSBG, it is very 
interesting. We have the potential to really think about 
changing that $500 per capita rural disadvantage, which I talk 
to your committee about all the time-Federal investments for 
urban versus rural. If we would think about a renewable Rural 
Development Community Block Grant--to look at distributed 
energy, distributed food systems, linking institutional buying 
programs with local farmers through distributed transportation, 
we could create a very interesting dynamic to advantage the 
micropolitan regional centers in Ohio.
    We have a chance in RCIP, the Rural Collaborative 
Investment Program, in the committee. Our chairman brought that 
forward with a billion dollar commitment, which unfortunately 
did not get funded. Every program we are going to talk about 
here today could be funded under that kind of an investment 
from the Federal Government.
    The other important thing is, there is a Community 
Development Revolving Loan Fund in there that is now 
authorized. We have huge equity in rural America. We are 
sitting on ninety percent of free capital in rural America. It 
has just not been able to be channeled into entrepreneurship 
and innovation. I would hope that in the future, we could think 
about this when we look at how we change institutional 
investments as we move forward.
    In my testimony, I talked about the EU advantages that 
currently our rural competitors in the European Union have that 
we don't. It is not that they are better than we are. It is 
just that their Federal system positions them better than we, 
and there are two types of rural development. There is the 
broad rural development in the sectors, and in everything from 
health care to equity capital, we have to think about the rural 
differential disadvantage. But the key issue is the Rural 
Development Programs that you have statutory authority over. 
Hopefully, we can talk about what the EU does that we don't do 
right now to really target those and prioritize them.
    I was honored this summer to take 25 of our nation's CEOs 
from agricultural organizations to Europe for a two-week tour 
to look at what is going on in Europe that we aren't doing to 
lift agriculture in rural America. At the end of that trip, Don 
Villwock, who is President of the Indiana Farm Bureau, in our 
final session asked an interesting question. He said, why is 
every rural town we have looked at in Europe so much better 
than my rural town? The reason is public sector-private sector 
linkage in ways that we aren't currently doing in the United 
States. I think there are huge opportunities there in the 
future. I think a Senator that can champion this from an urban-
rural State, such as Ohio, has a unique opportunity to advance 
this understanding.
    I just commend you for coming here for this hearing and I 
look forward to the Q and A session.
    [The prepared statement of Mr. Fluharty can be found on 
page 37 in the appendix.]
    Senator Brown. Thank you very much for your testimony.
    Mr. Ricer.

STATEMENT OF GARY W. RICER, CHIEF EXECUTIVE OFFICER, GUERNSEY, 
  MONROE, AND NOBLE TRI-COUNTY COMMUNITY ACTION CORPORATION, 
                         CALDWELL, OHIO

    Mr. Ricer. Thank you for this opportunity to address the 
panel. My name is Gary Ricer, CEO for Guernsey, Monroe, and 
Noble Tri-County Community Action Corporation.
    We currently implement close to 40 public service programs 
encompassing a 1,500 square mile radius. Our mission is to 
serve the impoverished, less fortunate of Appalachia Ohio and 
offer a hand up as opposed to a handout. Our services include 
but are not limited to workforce development and retraining, 
housing and weatherization, teen prevention services, operation 
of three senior citizens' centers, seven Head Start schools, 
the Healthy Smiles dental clinic, home energy assistance 
programs, two broadband connectivity centers, and a myriad of 
other initiatives.
    In 2003, GMN Tri-County became the first and only Community 
Action in the Nation to receive a Federal High Speed 
Connectivity Grant. In 2007, we received our second Federal 
Broadband Grant. Funds provided by the USDA Rural Development 
were $383,284 in 2003 for Woodsfield, the Monroe County seat, 
and $316,840 in 2007 for Graysville, southern Monroe County. 
Funds provide for a two-phase broadband initiative, first being 
the establishment of a broadband connectivity center, whereas 
higher learning is offered in a library-type setting.
    For the first time in the history of Monroe, students can 
receive a college accredited degree from an institution of 
higher learning without having to travel long distances. We 
further are pursuing collaboration with local government, 
whereas a common pleas court judge can arraign prisoners, 
alleviating exorbitant transportation costs and eliminating 
security threats to the general public. The possibilities of 
utilization of our federally funded broadband connectivity 
centers are endless. It has been a win-win situation met with 
overwhelming success by local government and the general public 
alike.
    The second piece of our Federal funds allow for the 
providing of high-speed internet to our subscribers through the 
strategic placement of a tower grid and repeater with back haul 
stations. The average cost is $29.95 per month, making 
broadband not only affordable, but leveling the playing field 
globally for conducting business from these rural remote 
locations. Due to the geographically rough, rugged, hilly 
terrain of Appalachia, most subscribers have no other 
opportunity to receive high-speed broadband. Critical end 
users, or CEUs, police, fire, EMS, et cetera, receive our 
service at no charge.
    From helping a student electronically research homework, to 
a grandmother swiftly receiving anticipated family pictures, to 
the rural business entrepreneur downloading critically 
important large files in record time, to an emergency squad 
paramedic researching medical information when seconds count, 
rural America desperately needs broadband connectivity. 
Needless to say, our waiting list is long and impatient.
    In closing, in representing those we serve, I am 
respectfully requesting future funding be constant, far-
reaching, and if at all possible, increased. One means this 
might be accomplished is shifting a mere 10 percent from the 
hundreds of millions in broadband loan programs, which in my 
opinion are underutilized, to broadband grant programs. This 
approach would serve tens of thousands more of your rural 
constituents in record time reaching measurable objectives 
without the time-consuming fight for increased appropriations.
    Our Federal Field Monitor, Ron Mellon, has referred to GMN 
Broadband as the poster child for rural broadband in America. 
We are successfully operating a broadband program that would 
normally cost several millions of dollars to build and maintain 
on a shoestring budget of a fraction of that. I have a full-
time staff of only two who climb the towers, answer the phones, 
complete the billing, conduct free seminars, public 
presentations, install the radios, and so on.
    We have close to 400 square miles coverage area currently, 
have grown in subscribership by over 500 percent in 2 years, 
and have literally dozens on a waiting list, not to mention our 
constant battle with the peaks and valleys of Appalachia 
limiting our wireless penetration. We have repeaters in 
farmers' fields on grain silos, water system storage tanks, and 
everything in between.
    To our Federal representatives, agencies, and its members, 
thanks so much for the vision to grasp the importance of 
broadband for rural America. Please continue to fight to 
provide Appalachians an on ramp to the information superhighway 
of the 21st century. Thank you.
    [The prepared statement of Mr. Ricer can be found on page 
54 in the appendix.]
    Senator Brown. Thank you.
    Ms. Martin.

    STATEMENT OF DEBRA MARTIN, DIRECTOR, GREAT LAKES RURAL 
          COMMUNITY ASSISTANCE PROGRAM, FREMONT, OHIO

    Ms. Martin. Well, thank you, Senator Brown, for the 
opportunity to be here today, and I would just like to say that 
we applaud the committee's efforts to look at the current 
economic crisis in the context of how it affects rural America 
and to ensure that our small communities aren't overlooked as 
you look for solutions to stimulate the economy. As you had 
mentioned, small communities frequently are overlooked and I 
think that in the current climate, that it would be very easy 
for that to happen.
    I work with the Great Lakes--I am the Director of the Great 
Lakes RCAP. RCAP is a program that nationwide provides 
assistance to small communities to help them deal with their 
water, wastewater, and other community development needs. In 
Ohio, we serve over 100 communities a year, including the 
project Mr. Shaffer was here to talk about, and most of the 
projects that you mentioned in your opening statement. So we do 
work all over the State. Unfortunately, the issues that Mr. 
Shaffer talked about are not unique to his area but are a 
common thing that we see all over the State.
    You know, I know that we are facing a severe 
infrastructure, if not crisis, we are close to that in this 
country, and I think that as our cities' infrastructure 
crumbles and as State and local revenues and budgets continue 
to shrink and revenues shrink and credit gets tighter, it gets 
very difficult for small communities to compete in that kind of 
environment. So one of the things I wanted to point out is that 
USDA Rural Development is one of the only programs that exist 
that is available exclusively to small rural communities.
    Unfortunately, if you look at what has happened with Rural 
Development's funding over the last, well, since 2003, funding, 
whether it is for housing or the water and sewer programs, 
their business lending, community facilities, all that funding 
has decreased somewhere between 25 and 35 percent during that 
time period. And if you look at the administration's proposed 
government 2009 budget, it is slashed from those already 
decreased levels.
    Another thing that has happened in that same time period is 
in 2003, the grant funds as a percentage of the overall Rural 
Development allocation were at about 39 percent, speaking about 
the water and the sewer program now. The grant funds now are 
allocated at a percentage that is under 25 percent. 
Unfortunately, in the smaller communities, without the grant 
funds, it becomes very, very difficult to develop projects that 
are affordable.
    Most of the sewer systems that we are working with 
communities to develop today in rural areas, those are usually 
paying somewhere around $60 to $65 for sewer service. They are 
already paying usually in the neighborhood of $40 to $45 for 
water. If you look at EPA statistics, they estimate that users 
in rural areas are paying three to four times what their urban 
counterparts are paying for those same services.
    So I think it is really critical as we move forward that 
Rural Development's funding be restored to a level that will 
allow them to help small communities. I mean, infrastructure 
forms the basis of any future development in terms of job 
creation and those kinds of things. I would hope that as an 
economic stimulus package is considered, that there will be 
some consideration given to setting aside part of those funds 
for infrastructure and specifically for infrastructure in rural 
areas.
    Statistics show that for every million dollars that is 
invested in infrastructure, 30,000 jobs are created. So not 
only do we have the opportunity to create jobs and stimulate 
the economy, but we have the opportunity to also make an 
investment in our future and to do so in a way that fixes 
another serious problem that our country is facing.
    So I just urge you that as you consider ways to stimulate 
the economy that infrastructure be a part of that equation, and 
I know it may seem counterintuitive to say we need to spend 
more money at a time when it appears that we are already 
spending a lot of money, but in fact, a number of leading 
economists in the last couple of weeks have come out and said 
exactly that, that this is not the time to worry about deficits 
or those kinds of things but this is the time that the Federal 
Government really needs to step up and get the economy moving. 
So I hope that you will consider infrastructure and 
particularly infrastructure for small communities as one way of 
doing that.
    We thank you for the opportunity to talk about what is 
important to small communities.
    [The prepared statement of Ms. Martin can be found on page 
45 in the appendix.]
    Senator Brown. Thank you, Ms. Martin, and I think that most 
economists are saying that now about spending, including some 
conservative economists and conservative elected officials know 
that this is a time you don't focus on balanced budgets. You 
focus on putting people to work.
    Mr. Fluharty, again, thank you for being here. I know it 
was not directly, so thank you.
    Mr. Fluharty. I wouldn't have missed it for the world, 
Senator.
    Senator Brown. Thanks.
    Mr. Fluharty. Thank you for being here.
    Senator Brown. Talk to me about the Farm Bureau guy from 
Indiana and his comments. Give us some more details about 
European rural areas. Is it partly transportation, their train 
system? Is it partly just more focus? What do they do?
    Mr. Fluharty. Much more than that, and I am honored to 
currently serve as a German Marshall Fund Transatlantic Fellow, 
so I realized after my fifth farm bill that we would never 
secure sufficient funding for Rural Development unless American 
agriculture believed it was in their best interest. I spent 10 
years as an Ag association executive. My family has been in 
farming for 125 years. After this farm bill, it became clear to 
me that we are already rewriting the 2013 bill as Europe is 
rethinking their common Ag policy and moving forward to do one 
in 2013.
    I just want to commend you for being on the Ag Committee. 
It is absolutely critical that states like Ohio begin to weigh 
in on the urban impact of a dynamic rural economy. Ag producers 
in the United States secure 90 percent of their household 
income off the farm--90 percent. Both the EU and the US are 
moving away from farm maintenance. This is our last farm bill 
like the last one. But it is going to be critical that we 
retain these investments in this rural geography.
    I wish we had time to talk about the EU, because they have 
essentially been much smarter with public sector investments, 
and I took these 20 CEOs and presidents to Europe to show them 
how agriculture is supported in Europe at the same time rural 
economies are. And what you learn is three things. There is an 
integrated strategic planning and evaluative framework. You 
know, your work on the committee, there is no evaluation of 
your Rural Development Programs. We have a lot of programs. It 
is the vision we lack. Therefore, we don't integrate Governor 
Strickland's investment with the county's investments, with the 
CDBG and CSBG grants, and with your R&D monies. In Europe, they 
do all that.
    Second, they target monies to prioritizations coming out of 
that. And as we think about what we will do in the future, we 
really do need to think about where agriculture moves. Those 
ladies and gentlemen came away from that realizing there is a 
different model that they need to consider. Those folks are 
going to stay together. We are building a coalition of 
agriculture for rural development and these are the leading 
CEOs of all of our Ag groups.
    The real question is, why did we add a billion dollars in 
mandatory funding in the 2002 bill for the RSIP we worked on 
and that is all gone today? RUPRI has a cooperative agreement 
with USDA RD to help them. There is no doubt leveraging federal 
money helps. In B&I, we put $340 million in outlays out in the 
most recent year and we got $6 billion in return, and 137,000 
jobs.
    The problem with moving fully to a market approach is there 
are market anomalies and there are market failures and there 
are areas that will never compete for that because they start 
out research and resource poor. In Europe, they divide that 
much better. Now, neither side of the coin has it right, but I 
would definitely argue we are going to have to think about 
greater grants commitments from the Federal Government, and it 
may come in a stimulus rather than in the R&D jurisdiction. If 
we simply go with leveraging, we will fully continue the 
suburban homogeny that is grabbing that and areas like rural 
Appalachia in Ohio will be disadvantaged.
    The RCIP program that was passed would allow everything you 
talked about today to be built regionally, to be locally 
flexible, to be leveraged, and it creates a community 
foundation IRP to create endowments to let rural wealth come 
in. There are models we could use. My concern very much is we 
are at 3 percent of our Ag bill in this country for rural 
America. It is at 17 in Europe and growing. Our competitors are 
not Columbus and Detroit, it is the rural regions of Europe 
that are competing with us and they are doing a much wiser job 
of investing public sector funds in disadvantaged areas.
    And I would love to visit further about that because there 
are things this committee has to do because you have the 
statutory jurisdiction, and I think a leader from Ohio who sees 
the urban-rural link in regional systems, I would like to ask 
you to be our champion for----
    Senator Brown. How is a rural area in Ohio competing with a 
rural area in Germany?
    Mr. Fluharty. We are a global economy.
    Senator Brown. Is it vis-a-vis manufacturing or----
    Mr. Fluharty. It is absolutely everything, and if you ask 
any of the businesses that these ladies and gentlemen are 
working with, they are thinking about global customers right 
now. You know, it is interesting and it is instructive. My 
father came back here. He was a reporter for AP in Columbus in 
the 1940's. He came back to the valley in 1946 to help start 
the College of Steubenville, now Franciscan University. I think 
he spent his whole life there. It was really a community 
college then.
    These two institutions have meant a huge, a huge deal to 
this valley and I watched dad all through high school. He would 
come home every night and the mills are going, the mines are 
going, everything is fine. One of God's graces is as we grow 
older, he exchanges our experience for a little wisdom. I said 
1 day, Dad, why are you doing this for? And he said, ``Someday, 
the mills and the mines will be gone.'' The history of our 
valley is we extract what is richest and take it somewhere else 
and we don't invest in our people. I learned later that is 
because his father had three or four newspapers in West 
Virginia that he lost in the boon of the oil in the 1930's and 
1940's.
    We need to realize 90 percent of the new jobs in our valley 
are going to come from entrepreneurship and innovation. I loved 
the earlier comment about cellulosic ethanol and natural 
resources. Here we sit with Columbus, Akron, Charleston, 
Pittsburgh in this wonderful area right here in the middle of 
it. We need to be thinking about human capital and social 
capital, like what JCC does, and building small businesses.
    Now, those small businesses don't compete with Cleveland. 
They compete globally. And so thinking about how we link 
regional assets wherever they are so that an advanced 
manufacturing firm can sell in Japan, that is really our future 
and we are not doing it nearly as well. We lack integration in 
our rural development services for regions and we lack focus. 
Europe invests 6 percent of their money on community capacity 
technical assistance so that if someone wants to start 
something here, it is part of their program.
    As you asked, what is going on for that man who is going 
through a pension situation, a community college has to find 
him. There really are ways to think rethink how organizations 
like these that are doing really strong regional work can be 
given flexible dollars to do it more smartly. I am absolutely 
convinced we can do that.
    Senator Brown. Thank you. Thanks again.
    Mr. Ricer, you mentioned that to move 10 percent--a 10 
percent shift from loans to grants for broadband. Give me, if 
you would, sort of the three steps that we should follow that 
we can do together to extend broadband to this part of the 
State and to rural areas. What should the Federal Government be 
doing with Community Action Agencies and others to progress as 
fast as we should?
    Mr. Ricer. Well, I think the beginning would be to increase 
funding, heighten education and awareness, two of the success 
stories and how rural communities, in particular Appalachia, 
have struggled, and then perhaps third being to leverage State 
and local dollars in any way, shape, or form. I know in order 
for our small agency to make this happen, we had--for instance, 
we needed a small match for some State project monies we were 
going for. We had the county commissioners come up with $2,500 
in an impoverished, double-digit unemployment county and the 
present commissioner said, ``If I have to sell cookies on the 
steps of the courthouse, we want broadband.''
    So I think the more that you look, I feel that 
infrastructure is the key. It is something that sometimes you 
don't see immediate results. People, the general public, 
taxpayers are a little hesitant sometimes. They would rather 
see--and not that they are not important, but new affordable 
housing or new colleges or new schools or new industry. But the 
beginning starts with infrastructure. You don't see it, but I 
agree with Mr. Shaffer, what he said earlier when they were 
talking about what businesses are you going to serve if we get 
water. What business do you have? Well, infrastructure, in his 
case water, would bring increased stimulus for businesses to 
come in.
    But I think broadband is not only the new wave, it is here 
to stay. It is a necessity. It is a shock that some of the 
third-world countries--I was blown away by some of the other 
countries that are actually ahead of America, especially the 
rural pockets in some of these other areas as opposed to 
America and the rural areas.
    I think with anything, it starts with funding, and then 
leveraging that funding and squeezing. Get a dollar out of a 
dime. Squeeze it as far as you can and then show the measurable 
objectives to show that it is successful and then you will 
become more supportive.
    In our area, we are the only game in town, for the most 
part. The so-called big brother doesn't want to come in, and 
when talking to some of these larger investors in AT&T or 
whatever, the lady told me, we have shareholders. Our 
shareholders won't let us invest. Now, would you rather go to 
an area where you can serve 1,000 in a month or 50 in a month 
in hookups? But with Community Action, we have boards of 
directors that are willing to take that risk of whatever 
corporate money we need to leverage with that. That is our 
mission. That is our purpose.
    Senator Brown. You got $2,500 from Monroe. What did you get 
other places? How did you do?
    Mr. Ricer. It depends. A lot of it is from in kind, for 
instance, we went on a lady's property that was roughly--she 
probably had a $50,000-an-acre piece of ground in a really 
beautiful area, prime, ripe for development, and----
    Senator Brown. This was where?
    Mr. Ricer. Graysville. This is our second Federal project. 
And we were able to secure this entire knob, one of the highest 
elevations in Monroe County, erect a 180-foot tower, which in a 
population that has 118 people in it--and, of course, we have 
got a 25-mile radius, range, with the Motorola canopies that we 
are using. But Mrs. Harman said, we put this 200-foot tower 
right in the middle of town on my property, on the highest 
point, I want my grandson to have this Internet. He loves these 
games and stuff. You give me--so the tradeoff was, we gave her 
free service forever, as long as GMN is there, she will never 
pay for high-speed wireless. She gave us a premium spot. We are 
going to have hundreds of customers. We have got 69 on the 
waiting list right now.
    Senator Brown. Is broadband the most important single thing 
to keep young people in communities like that?
    Mr. Ricer. Senator, I am not sure it is the most important, 
but I would think, especially today, it is in the top three. It 
is really critical. It is what keeps--you level the playing 
field. I mean, if you can operate a business and get an 
education in a rural area like this, in the old days, years 
ago, you had to go to the cities if you wanted certain things, 
certain types of education, certain types of incomes, and 
certain types of malls and so forth, where electronically and 
wirelessly now it may not be--they may not have a mall next to 
them if you are in Monroe County or Noble County, but you have 
the opportunity to create a business that can be very lucrative 
and very successful and stimulate the local economy and hire 
people from--like the saying says, if you want to sit at your 
roll-top desk in your pajamas, you can operate a very 
profitable business. Thank you.
    Senator Brown. Ms. Martin, how many [inaudible] roads are 
there around the State?
    Ms. Martin. Oh, you know, I can't say what the exact number 
is, but I can tell you that they are everywhere. I mean, 
certainly the Southern Ohio area, anywhere you move away from 
the river, water becomes difficult to find, so all of the 
Southern Ohio, at least in areas that aren't currently served 
by public water systems, you are going to find that same 
problem.
    On the sewer side, the problem literally is everywhere 
around the State. I mean, there are just countless areas that 
are being mandated by EPA to install sewers. We are working on 
a project right now right here in Jefferson County that there 
are issues, there have been issues for a number of years. The 
septic systems are failing, there is no question about that, 
because they overflow into the streets where kids are riding 
their bikes. But there just isn't enough money.
    I mean, Rural Development has already offered $7.5 million 
to sewer the area and it still isn't enough. You know, I mean, 
the choice for residents that live in that area is to either 
pay a $25,000 assessment so that they can make their bill only 
$50 a month or to pay $145 or so a month in their monthly rate. 
So those types of projects are--you know, that is one. I could 
probably off the top of my head tell you ten more just like it.
    I know we work with about 100 communities or so every year, 
and I can tell you that we still have not, even though we have 
got ten people in the field working around the State, we 
actually have more people in Ohio working on the RCAP program 
than any State in the country because we have been very 
aggressive in trying to get funding to help small communities, 
and despite that, we still are not able to address the demand. 
We still have communities that are on a waiting list right now 
that need water or sewer that we just are not able to get to. 
So I don't know exactly how many there are, but I know that it 
is too many for us to be able to address.
    Senator Brown. Tell me a success story. Tell me one of the 
best success stories you can come up with to deal with what Mr. 
Shaffer is working so hard on.
    Ms. Martin. OK. Well, I will tell you one that I worked on 
personally, because I used to work in the field. There was a 
project very much like the one that he described, except that 
it was in Noble County, but same thing. People were hauling 
their water in the wintertime, having to go into the 
laundromats to get water. There just wasn't any water 
available. All the things that he mentioned have brought back 
memories of that project, as he said, trying to ration water 
between the livestock and your kids and trying to figure out 
how you do that.
    So this was a project that they had been working on for 
about 10 years, trying to get it done, just had not had any 
success. I think part of the problem was, you know, in small 
systems, the only way to really get a project done today, 
because of the expense, is to put together multiple sources of 
funding. So Rural Development alone, there just isn't enough 
money there, so we have to look at Rural Development and CDBG 
and come to legislators for STAG grants [ph.] and look at just 
a number of funding sources to try to make this thing feasible, 
and so that is what we were doing in that project, is trying to 
figure out how we put all these sources together.
    The biggest problem that a lot of communities run into is 
you get into this chicken or egg thing where nobody wants to be 
the first to commit their funds because they are not sure if 
the other funds will be there, and so they had sort of gone 
around in circles for about 10 years. And so we were able to 
step in and put together a package that we thought would be 
reasonable and then work with all the different agencies to 
say, you know, we need to try to make this come together at the 
same time.
    Ultimately, it did, and you don't realize how much you take 
water for granted when you live in a city. But I remember as we 
had the ceremony to celebrate the fact that the water lines 
were going in, I remember one woman coming up and just hugging 
me. I had never seen her in my life and she came up and just 
hugged me and said, ``You have no idea what this means to us.'' 
Until you haul water--she said, ``I have six kids, and until 
you haul laundry down the ridge in the middle of winter to try 
to get it to a laundromat or figure out how you are going to 
get enough water for your kids and your livestock at the same 
time in the summer,'' she said, ``you couldn't possibly know 
what this means,'' so----
    Senator Brown. The burden is greater on women than men, is 
that right?
    Ms. Martin. It probably is.
    Senator Brown. There was a wonderful passage in a Robert 
Caro book many years ago. He had done a three-part biography of 
Lyndon Johnson, and in the first part for about ten pages early 
in the book he explained what life in the hill country was like 
in Texas before electrification, and it was especially 
difficult for women. It is hard on everybody, but especially 
difficult for women.
    But just to close, the last question I asked the first 
panel, give me--try to keep it to 2 minutes--if we could do one 
thing. I will start and just go left to right. If we could do 
one thing, the Federal Government could do one thing in the 
next year to answer the concerns that you have and your 
commitments to communities around this country and around this 
State, what would it be? Two minutes.
    Mr. Fluharty. First of all, understand it is not a rural 
problem, it is not an Appalachian problem, it is an American 
problem. Fifty-three percent of the rural people in Ohio live 
in metropolitan areas. So funding for Rural Development is 
important to them, but they are not able to access that right 
now.
    The rural-urban dependency is a great opportunity to assure 
that urban decisionmakers begin to commit to rural America. We 
know what to do. It is a matter of political will, Senator, and 
you know that. It made great sense to pass RCIP. We could not 
secure the funds.
    So I think the most critical thing you and your colleagues 
could do in this crisis is to continue to make the case that 
thinking about the small rural impacts of large sector programs 
must be part of our elected officials' thinking. It scares me 
greatly that the rural differential that is going to be a huge 
challenge in every sector will be missed, and I just urge you 
as a champion for disadvantaged folks everywhere to think about 
your role on the Ag Committee and begin to say rural and urban 
America are linked and need to think about one another. Thank 
you.
    Senator Brown. Thank you.
    Mr. Ricer.
    Mr. Ricer. I would say, again, to continue efforts in 
funding in rural America for infrastructure would be my wish or 
hope. When I feel you see the trend now and in the future, 
there are a lot of times we are seeing from the urban areas, 
they are coming into the rural areas for the cost of living. It 
is cheaper. The crime rate is lower. Areas are more sparsely 
populated. And I know if you look all the way up along the Ohio 
River, all the 29 counties of Appalachia, I feel that you see a 
lot of absentee landowners and you see, whereas years ago it 
may have been fourth and fifth generation agriculture, farming, 
mining, factories, you have got a lot of people coming in that 
perhaps have made their money somewhere else and are wanting to 
invest where they can leverage it and that is in rural America, 
or in our case, rural Appalachia in Southeastern Ohio and 
Eastern Ohio.
    So I think if the Federal Government will continue to 
invest in the rural areas, they will see tenfold the economic 
stimulus and growth in a short timeframe. I think it is the 
best bang for the buck. It is a wise use of the money.
    Senator Brown. Thank you.
    Ms. Martin.
    Ms. Martin. Well, I would just echo what has already been 
said in terms of making an investment in infrastructure and 
particularly making an investment in rural areas. I think the 
need for a comprehensive rural policy, as you mentioned, is 
great, something we haven't really had and something that 
definitely is needed. And I think that, as I said, I don't 
think we are going to see any future development in rural 
areas, not just in water and sewer infrastructure but in all of 
our infrastructure. It is really something that is reaching 
crisis proportions in this country and not just in rural areas 
but in urban areas, as well. And so I would like to see 
increased infrastructure investment and just urge that we don't 
leave out the smaller rural communities out of that equation as 
we move forward looking at that.
    Senator Brown. Thank you. Thanks to all three of you. As I 
said to the first panel, if you have additional comments or 
written statements you would like to submit to the committee, 
you work through Joe Schultz or Jean Wilson, and I thank you 
all. Mr. Eadon, thank you for being here, and thank you very 
much, Mr. Shaffer, and Mr. DiPietro. I thank the three of you 
very much.
    The committee is adjourned, and I thank Jefferson Community 
College again and the mayor for joining us. The committee is 
adjourned. Thank you.
    [Applause.]
    [Whereupon, at 12 p.m., the committee was Adjourned]
      
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