[Senate Hearing 111-1192]
[From the U.S. Government Publishing Office]
S. Hrg. 111-1192
OVERSIGHT OF THE
ECONOMIC DEVELOPMENT ADMINISTRATION
=======================================================================
HEARING
before the
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
MAY 21, 2009
__________
Printed for the use of the Committee on Environment and Public Works
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana JAMES M. INHOFE, Oklahoma
THOMAS R. CARPER, Delaware GEORGE V. VOINOVICH, Ohio
FRANK R. LAUTENBERG, New Jersey DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland JOHN BARRASSO, Wyoming
BERNARD SANDERS, Vermont MIKE CRAPO, Idaho
AMY KLOBUCHAR, Minnesota CHRISTOPHER S. BOND, Missouri
SHELDON WHITEHOUSE, Rhode Island LAMAR ALEXANDER, Tennessee
TOM UDALL, New Mexico
JEFF MERKLEY, Oregon
KIRSTEN GILLIBRAND, New York
ARLEN SPECTER, Pennsylvania
Bettina Poirier, Staff Director
Ruth Van Mark, Minority Staff Director
C O N T E N T S
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Page
MAY 21, 2009
OPENING STATEMENTS
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma... 1
Boxer, Hon. Barbara, U.S. Senator from the State of California... 3
Bond, Hon. Christopher S., U.S. Senator from the State of
Missouri, prepared statement................................... 133
WITNESSES
Walters, Sandra R., Chief Financial Officer, Chief Administrative
Officer, Acting Assistant Secretary of Commerce for Economic
Development, Economic Development Administration............... 4
Prepared statement........................................... 6
Responses to additional questions from Senator Boxer......... 14
Response to an additional question from Senator Merkley...... 17
Responses to additional questions from Senator Inhofe........ 17
Kennedy, Hon. James, Commissioner, Butler County, Pennsylvania,
on behalf of the National Association of Regional Councils..... 19
Prepared statement........................................... 21
Responses to additional questions from Senator Inhofe........ 56
Phillips, LaVern W., President, Woodward Industrial Foundation... 82
Prepared statement........................................... 84
Response to an additional question from Senator Inhofe....... 87
Mazer, Leanne, Executive Director of the Tri-County Council for
Western Maryland............................................... 89
Prepared statement........................................... 91
Responses to additional questions from Senator Inhofe........ 105
OVERSIGHT OF THE ECONOMIC DEVELOPMENT ADMINISTRATION
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THURSDAY, MAY 21, 2009
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The full Committee met, pursuant to notice, at 10 a.m. in
room 406, Dirksen Senate Office Building, Hon. Barbara Boxer
(chairman of the full Committee) presiding.
Present: Senators Boxer, Inhofe, Cardin, Klobuchar, Udall,
and Merkley.
Senator Boxer. If everyone would kindly take their seats.
We are so grateful to you all for being here this morning.
We will start right away. Senator Inhofe has a competing
hearing on Armed Services, very urgent, that he has to go to.
So I am going to do something different today. I am going to
give him the opportunity to open it up. Senator Inhofe, please.
OPENING STATEMENT OF HON. JAMES M. INHOFE,
U.S. SENATOR FROM THE STATE OF OKLAHOMA
Senator Inhofe. Thank you, Madam Chairman. Thanks for
having this hearing today.
I am hoping that this will precipitate that this will get
us into the reauthorization. That is something that I have been
trying to do now for quite some time. I thought we were going
to get it done last year, but there were some problems, not
with this Committee but on the House side.
I want to welcome all of our witnesses, particularly LaVern
Phillips, the guy with the green tie, most appropriately, and
you would expect that. He is the President of the Woodward
Industrial Foundation. I was actually in his town to visit with
him 3 days ago and he was not there. But they have done some
wonderful things in Woodward and I am very, very proud of it.
I have had the pleasure of working with the State and local
interests to begin to address some of the infrastructural
problems in Northwest Oklahoma and the Panhandle. For example,
the WRDA 2007 authorized water and waste water treatment
related infrastructure, including $1.5 million for Woodward and
$16 million for Guymon. I also went to Guymon on the same day,
on Monday, LaVern.
Anyway, one of my trips to Woodward was last August. It was
for a $1 million EDA check presentation that will help build
the Woodward Community Campus. And when you look at the
successes that we have had in Oklahoma, and I think other
States have, too, the leverage is so impressive. We had a
total, I believe, in this last authorization of some $26
million and that was leveraged into $556 million. If we had
released all that stuff that we wasted on the bank bailouts in
programs like this, it sure would be worthwhile.
This is a program where liberals and conservatives get
together and say, this is what Government should be doing. I
think that the successes we have had in Oklahoma are very
similar to successes all around the Country.
The EDA's authorization expired on September 30th of last
year and I am concerned that the lapse in authorization may
leave the agency vulnerable to funding cuts during the
appropriations cycle and more generally result in uncertainty
for the agency as well as the struggling communities.
We have a lot of struggling communities, Madam Chairman, in
my State of Oklahoma. I have so many examples all over the
State. One thing is the EDA grant that we did down in Elgin,
Oklahoma. Mr. Phillips precipitated the building of a 150,000
square foot building in Laverne, Oklahoma which has a
population of 300. It shows you that things can be done and
that was all done with a very small EDA grant.
So, I am hoping this will lead to authorization, Madam
Chairman.
[The prepared statement of Senator Inhofe follows:]
Statement of Hon. James M. Inhofe, U.S. Senator
from the State of Oklahoma
Thank you, Chairman Boxer, for holding this hearing on the
Economic Development Administration. Oversight is an important
function of our Committee, and with reauthorization of the
agency several months overdue, as well as a more than tripling
of funding over the past year through regular appropriations,
disaster-related supplemental funding and stimulus bill
funding, an oversight hearing now is very timely.
I would like to welcome our witnesses, especially LaVern
Phillips, President of the Woodward Industrial Foundation in
Oklahoma. I visited the city many times, including just last
week. I also want to note that I understand that Mr. Phillips
and the rest of Woodward will be welcoming former President
George W. Bush to the city to celebrate the 4th of July this
year.
I've had the pleasure of working with State and local
interests to begin to address several infrastructure needs for
Northwest Oklahoma and the Panhandle. For example, WRDA 2007
authorized water and waste water treatment related
infrastructure, including $1.5 million for Woodward, $16
million for Guymon and $275,000 for Oklahoma Panhandle State
University. We were able to secure funding for transportation
improvements as well, including $6.4 million to construct a
viaduct on U.S. Highway 270 over the railroad tracks in
Woodward and $1 million to widen U.S. Highway 54 from north of
Optima to the Kansas State line. I intend to continue working
with dedicated professionals like Mr. Phillips to improve the
infrastructure, and therefore the economic viability and
quality of life, of this area.
One of my trips to Woodward was last August for a $1
million EDA check presentation that will help build the
Woodward Community Campus. I will let Mr. Phillips talk more
about the details of the project, but I would like to mention
that I very much support this project and was pleased to see it
recognized for funding by EDA.
The Woodward project is one recent in a long line of smart
and incredibly beneficial investments EDA has made in Oklahoma.
In fact, over the past 6 years, EDA grants awarded in my home
State have resulted in more than 9,000 jobs being created or
saved. With an investment of about $26 million, we have
leveraged another 30 million in State and local dollars and
more than 558 million in private sector dollars.
That's real economic development with real jobs. I only
wish more of the so-called ``stimulus'' bill had been dedicated
to programs like EDA that are truly successful at spurring
economic development.
My belief in EDA's success is not just anecdotal either.
Studies show that EDA uses Federal dollars efficiently and
effectively, creating and retaining long-term jobs at an
average cost that is among the lowest in Government. Today's
hearing gives us an opportunity to discuss possible tools to
improve performance even further during the reauthorization
process.
The EDA's authorization expired on September 30, 2008. I am
concerned that the lapse in authorization may leave the agency
vulnerable to funding cuts during this appropriations cycle and
more generally result in uncertainty for the agency as well as
the struggling communities that depend on its assistance.
I had introduced a reauthorization bill in July 2008, and
this Committee reported a bipartisan bill in September.
Unfortunately the bill was never enacted. In February of this
year, I again introduced a bill to reauthorize and improve
EDA's programs.
Madam Chairman, I hope that this hearing is the first step
in our Committee again reporting an EDA reauthorization bill
and this time seeing it through to enactment. I look forward to
working with you and our colleagues to accomplish that task as
soon as possible. Thank you.
OPENING STATEMENT OF HON. BARBARA BOXER,
U.S. SENATOR FROM THE STATE OF CALIFORNIA
Senator Boxer. Senator Inhofe, my Ranking Member, I could
not agree with you more. We need to move on this soon.
Regardless of whom the Administration names, I feel we need to
get ahead of the curve here. I have talked to Gary Locke about
this. He is very supportive and excited about this.
I am going to put my statement on the record, but I am
going to through it just in about 2 minutes.
[The referenced material was not received at time of
print.]
We know the EDA has a long history of helping economically
distressed communities and, as my colleague has said,
leveraging funds in magnificent ways. This program was created
during the Johnson administration, so it certainly has been
proven. I bet some of you in this audience were born well after
that. Oh, but if could say that about myself.
[Laughter.]
Senator Boxer. As Senator Inhofe has said, from providing
money for water and sewer improvements to helping manufacturers
become more competitive in the global marketplace, the EDA
provides valuable assistance to communities across the Nation.
It is cost effective. It has a very important role to play in
economically challenging times.
I went out to Sacramento to an area that has just made a
proposal for EDA funding. It is like the perfect place. It is a
redevelopment area. They built a stadium there, a ballpark for
the farm team. It is the biggest field there. And they really
are just getting ready now to add housing and so on and so
forth. It is just the perfect place to leverage those types of
funds.
When the former Deputy Assistant Secretary of Commerce for
Economic Development testified before us in September, he
stated that from Fiscal Year 2004 to 2008, EDA awarded over
$1.29 billion in investments which are expected to create
392,000 jobs at an average cost of only $2,500 per job. Now I
would put that up against almost anything else that we do.
We know that Federal dollars spur large amounts of private
sector investment and it is estimated that for every dollar in
Federal funding, $33 in private sector investment was created.
This is really a great success story.
Congress recognized EDA's unique role in job creation in
the American Recovery and Reinvestment Act, our stimulus bill,
and I worked hard to get this $150 million. Boy, I had to work
hard to get it. But we did get it. And I want to thank Bettina
Poirier and her staff on that one because that was a climb.
But I do look forward today to hearing how those funds have
been distributed. It may be that they are still being
distributed. We want to know about that and how those funds are
helping our communities across the Nation.
We also provided EDA with a total of $500 million in
natural disaster assistance through supplemental appropriations
in 2008 and 2009 and I would love to hear about how those funds
are being used to support long-term post-disaster economic
recovery in response to hurricanes, floods and other disasters.
So, as was stated by my Ranking Member, EDA's authorization
expired at the end of September 2008, but the agency has been
able to continue operating through the appropriation of funds.
We do need to reauthorize and I intend to do it. So does
Senator Inhofe. And when the two of us get our mind to
something, we do it. Right, Ruthie? And so, we are going to do
it because we have got to push on this. This is a win-win.
I am going to get this going and then, Paul, will you tell
me when there is like 5 minutes left to go?
So, Sandra Walters, Acting Assistant Secretary of Economic
Development, accompanied by Dennis Alvord, we will start with
you.
STATEMENT OF SANDRA R. WALTERS, CHIEF FINANCIAL OFFICER, CHIEF
ADMINISTRATIVE OFFICER, ACTING ASSISTANT SECRETARY OF COMMERCE
FOR ECONOMIC DEVELOPMENT, ECONOMIC DEVELOPMENT ADMINISTRATION
Ms. Walters. Chairman Boxer, Ranking Member Inhofe and
members of the Committee, thank you for this opportunity to
testify on behalf of the Economic Development Administration.
EDA's mission is to lead the Federal economic development
agenda by promoting innovation and competitiveness, preparing
American regions for growth and success in the worldwide
economy. EDA's achievements have two major goals: attracting
private capital investment and creating higher skill, higher
wage jobs. EDA's achievements are a reflection of our policy
priorities: to encourage collaborative regional economic
development, to promote competitiveness and innovation, to
cultivate entrepreneurship, and to spur our economic
development partners to take advantage of the opportunities of
the worldwide marketplace.
As part of its 2010 budget request, the Administration has
emphasized two priority areas for EDA: regional innovation
clusters and business incubator networks. EDA is encouraged by
this focus and finds it consistent with the results of recent
EDA research, as well as best practice in the economic
development field overall.
EDA has a history of investing in regional innovation
clusters and business incubator projects, such as a $2.2
million investment to JumpStart in Northeast Ohio, which has
helped its clients create 650 new jobs and raise $43 million in
private sector investments, and a $1.25 million investment in
the Bio-Innovations Center in the New Orleans Medical District
which is assisting in the development of biotechnology-related
companies looking to commercialize technologies from the
greater New Orleans area universities and research
institutions.
Another critical element to our success is our focus on
planning, which research shows is essential for successful
economic development. EDA is pleased that Congress recently
provided the first funding increase in the planning program's
contemporary history.
At the direction of Congress, EDA established the Global
Climate Change Mitigation Incentive Fund in 2008 to advance the
connections between economic competitiveness and environmental
quality. By using the U.S. Green Building Council's Leadership
in Energy and Environmental Design, EDA is able to verify that
each fund-related investment effectively contributes to
sustainability and mitigates associated environmental impacts.
EDA is pleased that the President's 2010 budget request
provides for $16.5 million, which represents a $1.8 million
increase.
Another key area for EDA is responding to sudden and severe
economic dislocations. For example, EDA is on the front line in
assisting communities following natural disasters. Last year,
Congress allocated $500 million in two supplemental
appropriations to EDA in response to natural disasters that
severely impacted communities across the Nation. To date, EDA
has $411.3 million in projects in various stages of the
application process.
Additionally, EDA received $150 million as part of the
American Recovery and Reinvestment Act of 2009 to respond to
sudden and severe economic dislocation and job loss due to
corporate restructuring. We are ahead of the curve in
implementation, having published a Federal Funding Opportunity
notice on March 11th, 2009. We allocated funds to each of our
six regional offices to initiate the process of disbursing
funds quickly to assist communities.
To date, EDA has $100.3 million in projects in various
stages of the application process.
Chairman Boxer, Ranking Member Inhofe and members of the
Committee, thank you for your time today and for inviting me to
give an overview of EDA's programs. With me today is Dennis
Alvord, the Acting Deputy Assistant Secretary of Commerce for
Economic Development, who oversees EDA's six regional offices.
We look forward to answering any questions you may have and
working with the Committee on legislation to reauthorize the
agency.
[The prepared statement of Ms. Walters follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Boxer. Thank you so much. Can I ask Dennis if he
could raise his hand so I know--great. Great. And when I get to
my questions, I am going to ask you for examples of some of
these projects that you are working on through the stimulus and
through the emergency. So be prepared to give us a couple of
examples. Not right now, when I get to questions.
Now we are going to hear from the Honorable James Kennedy.
He is the Commissioner, Butler County, Pennsylvania, on behalf
of the National Association of Regional Councils. After you
finish, I am going to go vote. If Senator Inhofe does get back,
I will ask him to convene and he can convene with Mr. Phillips
because I know he has a special interest in that. And then I
will come right back and we will continue.
So go ahead, Mr. Kennedy.
STATEMENT OF HON. JAMES KENNEDY, COMMISSIONER, BUTLER COUNTY,
PENNSYLVANIA, ON BEHALF OF THE NATIONAL ASSOCIATION OF REGIONAL
COUNCILS
Mr. Kennedy. Good morning and thank you, Chairman Boxer,
and Ranking Member Inhofe and the distinguished members of the
Committee. I am honored to be before you today to testify on
the Economic Development Administration, the EDA, and its
reauthorization, economic stimulus and the idea of sustainable
and livable communities.
I am James Kennedy, a Commissioner from Butler County, PA.
I sit on the Board of Directors of Southwestern Pennsylvania
Commission, SPC. I am also an elected Board Member and Past
President of the National Association of Regional Councils,
NARC, and President of the County Commissioners Association of
Pennsylvania. I am also a lifelong resident of Butler County
and serve proudly as a Commissioner, an avid regionalist and a
dairy and grain farmer.
On behalf of NARC and SPC, I am here to stress the
importance of the EDA programs, funding and activities, the
need for immediate reauthorization, SPC's successes and
challenges with EDA, and how EDA can revitalize to meet the
growing needs of our communities and regions.
NARC advocates multi-jurisdictional cooperation as the most
effective way to address community planning and development.
NARC is governed by the local elected officials, like me, and
represents regional planning organizations such as SPC that
work to improve America's communities, large, small, urban and
rural. Regional planning organizations are important to our
communities and for their delivery of funding and programs,
providing support and technical assistance, especially during
the economic crisis.
My regional council, SPC, represents the greater Pittsburgh
region, a 10-county area with diverse urban and rural make up
of 2.6 million people and 7,000 square miles. SPC is the MPO,
the LDD and the EDD, and is responsible for regional economic
development priorities with a wide range of public services
including the development and implementing of the region's
Comprehensive Economic Strategy, which brings critical funding
to our region for improved infrastructure, job opportunities
and resources.
In a time of softening economy, declining Federal and State
funding, rising unemployment, and the clear need for
substantial investments in the Country's infrastructure, we
must revive our Federal commitment to EDA's core mission, and
bring about more comprehensive regional planning activities.
For SPC, EDA recently provided $150,000 to Pittsburgh Life
Sciences for the expansion of the Executive-in-Residence
Program, which provides capital investments, customized company
formation and business growth services in the region of life
sciences, one of my region's largest targeted industrial
clusters. The investment part of the $300,000 project was
recently profiled in Science Progress as an innovative way to
create jobs and maintain long-term economic competitiveness.
Another EDA-supported project in our region is the
Armstrong County Industrial Development Council in Kittanning,
Pennsylvania which received $2 million to construct the
Northpointe Technology Center to house advanced technology
firms. This is part of the $4.4 million project that will
generate $20 million in private investment to help create 60
jobs, a typical return on investment for EDA funds.
Based on my experience as a local elected official, I
believe that the Federal Government should be reestablishing a
strong role in urban and rural economic development and support
local and regional efforts like those I mentioned, while
providing sustained local and regional authority and increased
funding to support these levels.
In order to accomplish NARC's recommendation, EDA would be
authorized a minimum of $500 million to sufficiently provide
funding operations for all levels of agencies, including
increased funding for flexibility and the EDA's core programs,
which should be the primary focus of EDA. EDDs have received
the same $52,000 per year in planning grants for the last 25
years and must be increased. The grants are vital to local
governments to address the economic development.
EDA funding is critical in my region, particularly as we
face 75 percent State funding cuts this year. We need to
leverage as much Federal funds and State and local funding as
possible in order to work regionally in order to get the
biggest return on our investment.
For Federal economic stimulus, my region conveyed stimulus
funding opportunities to potential applicants through public
participation panels.
Senator Boxer. Sir, I am going to have to interrupt because
your 5 minutes is up and I just ran out of time to vote. So we
will put the rest of your statement into the record. But I get
your message loud and clear and I am with you. We are going to
do this.
[The prepared statement of Mr. Kennedy follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[Recess.]
Senator Boxer. Well, I think that what probably happened is
that Senator Inhofe's colleagues on Armed Services nabbed him
away. We will see what happens. In any case, we have had two
excellent statements. We will place the full statement in the
record, Mr. Kennedy, and we will move to Mr. Phillips now.
Should we move to Mr. Phillips now? OK.
We move to LaVern Phillips, President, Woodward Industrial
Foundation. Welcome, sir.
STATEMENT OF LaVERN W. PHILLIPS, PRESIDENT, WOODWARD INDUSTRIAL
FOUNDATION
Mr. Phillips. Thank you, Chairman Boxer, Ranking Member
Inhofe and members of the Committee for the opportunity to
testify today.
I am here today to urge the Senate to reauthorize the
Economic Development Administration and to increase funding to
this critical Federal agency.
My name is LaVern W. Phillips. As President of the Woodward
Industrial Foundation in Woodward, Oklahoma, I am an economic
and community development specialist for Woodward and Northwest
Oklahoma. I previously served as Chairman of the Governor's
Economic Development Team for the State of Oklahoma.
The EDA supports important economic projects affecting the
citizens of the U.S. It also provides funding for the Economic
Development Districts that plan economic strategies for their
areas. Many small, rural communities simply cannot afford to
develop their own economic development plans.
The EDA supports a professional planner at the Oklahoma
Economic Development Authority who brings the region together
behind development of a comprehensive economic development
strategy. In my position with the Woodward Industrial
foundation, I work directly with the EDA district on this
regional plan.
Madam Chairman, we know how important it is to preserve our
rural American society and the EDA is an essential funding
resource and partner for rural communities in that endeavor.
Our experience in Northwest Oklahoma is a good example.
Woodward is the regional hub of Northwest Oklahoma and
community leaders have worked hard to expand and diversify
financial opportunity for residents, especially our young
people. Their diligence has paid off, and our region has
reversed the loss of population common in many rural areas. Now
we are taking the next step by providing easier access to
higher education.
Intensive studies in 2000 and 2004, sponsored by the city
of Woodward and coordinated by the Oklahoma Community
Institute, identified the need for a multi-purpose education
and conference center campus. The initiative is now called the
Woodward Community Campus Project.
Within the next few months, the city of Woodward will begin
construction on a 36,000 square foot multipurpose conference
and educational center on 40 acres of prime land within the
city limits adjacent to the USDA Southern Plains Range Research
Station. Next door, Northwestern Oklahoma State University has
just completed construction of a 22,000 square foot Woodward
branch to provide higher education opportunities for full-time
students and young married students working to support their
families.
These two facilities will be linked together via
interactive television and video conferencing with Northwestern
Oklahoma State University's main campus in Alva. The Woodward
Community Campus will offer academic, entrepreneurial, work
force and economic development programs to address problems
facing rural communities. The facilities will open up career
options so people can remain in rural Northwest Oklahoma.
The EDA is providing $1 million for the construction of
public infrastructure needed by the Woodward Community Campus.
This is only 15.5 percent of the cost of the conference and
education center, with the city of Woodward committing the
remaining 84.5 percent or $5.4 million.
But this is the main point I want to make today: That
relatively small percentage of EDA funding was essential to the
success of the project. Without EDA's help, the Woodward
Community Campus, and the creation of good, new jobs, simply
would not happen.
So let me use this forum today to thank EDA and to tell of
the positive experience I had working with the agency. The EDA
Austin Regional Office Staff and their Director, Pedro Garza,
are true professionals dedicated to job creation and preserving
rural America.
I respectfully urge this Committee to fully fund the U.S.
Economic Development Administration and to adopt a 5-year
authorization bill that provides stability and policy direction
for the agency.
Thank you, Madam Chairman, Senator Inhofe and members of
the Committee for the opportunity to testify, and I welcome
your questions.
[The prepared statement of Mr. Phillips follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Boxer. Thanks so much, Mr. Phillips. And our last,
but not least, speaker, is Leanne Mazer, Executive, Tri-County
Council for Western Maryland, on behalf of the National
Association of Development Organizations. Welcome.
STATEMENT OF LEANNE MAZER, EXECUTIVE DIRECTOR OF THE TRI-COUNTY
COUNCIL FOR WESTERN MARYLAND
Ms. Mazer. Good morning Chairman Boxer, Senator Inhofe and
members of the Committee.
My name is Leanne Mazer. I currently serve as Immediate
Past President of the National Association of Development
Organizations and Executive Director of the Tri-County Council
for Western Maryland, an EDA-designated economic development
district serving the three western-most counties in the State.
Thank you for the opportunity to testify in support of a
multi-year reauthorization bill for the Economic Development
Administration, as well as discussing the agency's role in
post-disaster and stimulus recovery efforts. I will limit my
oral remarks to four main points.
First, EDA has a proven track record in helping its local
partners create and retain high-quality jobs in distressed
areas, including those suffering from chronic poverty and those
suffering from economic dislocations caused by plant closures
or downsizing, natural disasters or changes in global trade.
In reauthorizing the agency, we encourage the Committee to
restore the local match rates for distressed communities to at
least the pre-2005 agency rule changes. This is one of the most
important legislative fixes needed to help the agency serve
distressed areas.
Senator Boxer. Could you repeat that sentence again?
Ms. Mazer. Absolutely. In reauthorizing the agency, we
would encourage the Committee to restore the local match rates
for distressed communities to at least the pre-2005 agency rule
changes. This is one of the most important legislative fixes
needed to help the agency serve distressed areas.
Second, Madam Chair, we would urge Congress to strengthen
local control of EDA's Revolving Loan Fund Program. The RLF
Program is a proven economic development tool for addressing
the credit needs in under-served areas. RLFs are managed by
public and private nonprofit organizations to further local
economic development goals by lending their capital and then
re-lending funds as payments are made on the initial loans.
Locally managed RLFs have provided business capital to
thousands of new and existing companies that have difficulty
securing conventional financing. Over the years, EDA has
provided grants to nearly 600 RLFs with net assets approaching
$850 million.
EDA's RLF Program has the unique distinction of being one
of the only Federal grant programs that never loses its Federal
identity. The initial RLF grant, and any income or interest
derived from it, is considered Federal property forever. RLF
operators are forced to continually comply with expensive and
burdensome reporting requirements, even those dating back to
the late 1970s. Ownership of EDA RLFs should be fully
transferred to local intermediaries once all of the initial
funds have been loaned out, repaid and fully revolved.
Third, NATO and its members respectfully urge Congress to
increase the minimum funding level for EDA's partnership
planning program from $27 million to $34 million. This small
yet highly effective program provides essential seed capital
and matching funds for 378 economic development districts,
numerous Tribal planning partners, and other State and local
entities. With an average grant of only $54,000, the EDA
planning program provides matching funds to multi-county
organizations, such as Tri-County Council for Western Maryland,
to help local governments and others work together on a
regional basis to develop solutions, partnerships and
strategies for addressing area-wide economic development
issues.
EDA's on time project completion rate, high rates of
leveraging private sector investment, and impressive job
creation statistics are tied directly to the groundwork and
planning that proceeds project development and implementation.
With the growing complexities of the growing economy, increased
mandates by EDA, and mounting local economic pressures, a
modest increase in the annual EDA planning grants for economic
development districts would make a significant difference.
Finally, Madam Chair, there is a need to provide broader
incentives to foster regional collaboration and partnerships
among local governments, along with the private sector,
educational and nonprofit institutions. While the EDA
reauthorization bill established two new performance award
programs, these incentives are very limited in scope and have
demonstrated little impact. EPA would benefit from much broader
and more aggressive policy incentives and approaches related to
regional economic collaboration and cooperation.
Congress is urged to build upon the existing set of multi-
jurisdictional EDDs to encourage and facilitate regional
development activities including increasing the EDA's share in
projects with significant regional impact and collaboration.
Madam Chair and members of the Committee, thank you again
for the opportunity to testify today, and I would welcome any
questions.
[The prepared statement of Ms. Mazer follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Boxer. Thank you so much.
Ms. Walters, I am not going to ask you to respond to these
ideas that Ms. Mazer put out. But could you be sure that you
and your staff could, first of all, tell us if any of her ideas
are ideas that you are thinking about and, if not, would you be
willing to write us, and let us know in writing, how you would
feel about her recommendations? Should we call on Mr. Alvord?
Mr. Alvord. Yes, Senator, in fact these are ideas that we
are considering internally and we are certainly open to
exploring them further.
Senator Boxer. OK, excellent. For Senator Inhofe and me, we
would love to get your feedback from the Administration, and as
well from Mr. Kennedy and Mr. Phillips. If they could take some
time to look at these ideas and give us feedback, we would
appreciate it. If there are a few that are consensus ideas, I
would like to include them in the new approach.
So, Dennis Alvord, I have asked you, given the needs in
this Country and we know what they are, we have got credit
problems, we have got jobless problems, are there any barriers
that will impact EDA's efforts to fully distribute the stimulus
funds. Now, we had a report, it looked like a lot of them were
already in the works, but do you have any concerns that you may
not be able to get all of those out?
Mr. Alvord. No. I think that we are quite confident that we
will be able to get the money out and obligated and we are
working to do that as diligently and quickly as we can.
We have been hampered in that, up until this fiscal year,
we had not received any additional salary and expense resources
to support the administration of that funding, both the awards
of the grants and then the administration and oversight of them
having made the awards. This fiscal year, we were grateful that
Congress recognized those needs and provided us some additional
funding in the form of $3 million as part of the Bureau's RLF
allocation as well as $4 million from its EDAP allocation that
can be directed to meeting some of these needs.
As a result, we are in the process of advertising and
filling a number of term positions that will help us meeting
those needs. In the interim, our regional office staff has
really been doing yeoman's work to get these grants queued up
and awarded and I am very pleased with the progress that they
have been making.
Senator Boxer. Good. So, you feel that you will be able to
send out that stimulus, you will be able to spend out?
Mr. Alvord. I have complete confidence. In fact, we have
set an internal stretch goal to have our $150 million in
stimulus funding full obligated by the end of this fiscal year,
a full year in advance of the expiration of those funds.
Senator Boxer. Well, I think that it shows what a great
program this is. Despite the fact that there is a credit crunch
and other problems, it is still doing what Mr. Phillips so
eloquently said. It stimulates. It is a small amount but it
gets things really started. It is really, I think, a great
program.
Could you give us one or two examples, off the top of your
head, of some stimulus programs that you have funded? I do not
care which State, just to give us a sense of it.
Mr. Alvord. Absolutely. Well, I would say that I am pleased
to report that EDA investments related to the Recovery Act
really run the gamut. You know, they are targeting to
supporting near-term recovery and they range from traditional
brick and mortar type investments of rail spurs, water and
sewer type investments, infrastructure to support port
improvements, to really more cutting edge and leading edge
economic development investments and things like business
incubators, science and technology parks, green buildings and
other activities.
The focus is on investments that we can get started quickly
and that are going to be----
Senator Boxer. Could you give me an example of one or two?
Mr. Alvord. Sure. They run the range of things like
capitalization----
Senator Boxer. Just give me an example of a real program,
not just they run the range. In Oklahoma you did this, in
California you did this. Just give me a couple.
Mr. Alvord. Sure. In the Western United States we are
looking at capitalizing a revolving loan fund to assist with a
region that has been impacted by natural resource depletion.
That is going to help that industry to have the capital that it
needs in this time of credit crunch to reform that----
Senator Boxer. What States are those?
Mr. Alvord. There is one in the State of Montana that we
are looking at right now as a prospective investment.
Senator Boxer. Can you give me an example of something that
you already did?
Mr. Alvord. Well, we have not yet made an award related to
ARRA. We are on the very cusp of being able to make an award.
Senator Boxer. OK.
Mr. Alvord. We have a pipeline that represents about $100
million of the $150 million----
Senator Boxer. Will you please do us a favor? Will you
please give us a report of, let us say, your first 10 grants?
Would you do that for Senator Inhofe and I? Send it to us, and
we will inform the Committee. Would you do that?
Mr. Alvord. I would be happy to do so.
Senator Boxer. OK. Very good. Senator Inhofe.
Senator Inhofe. Thank you. Madam Chairman, I was a little
confused as to your line of questioning there when you say,
give us an example of the grants. Were you talking about----
Senator Boxer. From the stimulus.
Senator Inhofe. From the stimulus. Part of the $150
million?
Senator Boxer. Yes. I am just trying to understand.
Senator Inhofe. OK. All right. Well, first of all, Ms.
Mazer, you mentioned something about stronger incentives to
reward regional collaboration. Could you expand on what you
mean? What do you have in mind? Do you want to advise us as to
something that we should have that would promote the regional
concept?
Ms. Mazer. Yes, Senator, thank you. Research has shown
that, to be competitive in the global economy, we have to work
regionally. NATO would actually just like to work with the
Committee to explore some ideas to use match rates and maybe
apply other types of incentives to reward those projects that
create a real regional significant impact.
Senator Inhofe. Good, good. Mr. Phillips, you know, we
could have had any number of people from Oklahoma. I am glad we
had you. You are very articulate and we made great progress. I
think that the example that he gave is as good an example as
you can have. In the example in my opening statement, in
talking about what $2.25 million did down there. That actually
has opened up a half-billion dollars down in that part of the
State, that is the Southwestern part of Oklahoma as opposed to
the Northwestern part.
For the knowledge of our members up here, Woodward is kind
of the gate of the Panhandle of Oklahoma. It is an area that is
very much like Colorado. It is very sparsely populated. I have
used your example, LaVern, several times as to the success of
this kind of a program.
Is there anything else that you would like to say? Because
I want to make sure you get all the time possible on examples
that we have done and that you are familiar with in Northwest
Oklahoma.
Mr. Phillips. Well, thank you, Senator.
Senator Inhofe. In your opening statement, I got in halfway
through, did you cover all the windmills and the other stuff
that we have?
Mr. Phillips. No, I have not.
Senator Inhofe. I will give you that opportunity. I want to
make sure the Chairman knows that we are leading the way of all
50 States right now. I want everyone to know that, in terms of
our wind generation.
Senator Boxer. I did not know that.
Senator Inhofe. And it's all right where he is.
Mr. Phillips. Thank you, Senator. We are very pleased. I
like to say that we are definitely and oil and gas community,
and agriculture, and those two entities have their ups and
downs and now we are leading the State and the region in wind
power development. Right now, we have about 300 towers in our
immediate area and I think before too long we will be kind of
like Sweetwater, Texas is: we will be the epicenter for wind
power. One of the things, it does not replace oil and gas. It
is kind of like T. Boone Pickens says, which is that we need to
quit buying fuel, or crude, from people that do not like us.
And we are doing that as a Nation, importing over 75 percent of
our fuel right now.
I think we can help, in our part of the State, solve this
Nation's energy crisis by the natural resource that we have
which is wind, and it is huge investment by those companies
that are coming in. But when you do a wind farm of 80 turbines,
you are talking about $160 million in investment. It helps the
landowner. It helps the public education by the ad valorem
taxes. So, it is a real benefit, Senator, and we are excited
about being able to contribute to the Nation's energy crisis.
Senator Inhofe. That's true. Of course, there is some
disagreement at this table. But I think, my position, I have
always said we want all of the above. And certainly Oklahoma is
known, not just for oil and gas, but also coal. But people are
not aware of what we are doing right now. The fact that OG&E
right now is the major contractor and is using wind power and
we are leading the way there. I like to use Northwestern
Oklahoma as an example of how we can wean ourselves off the
obligations we have, as you termed so accurately, from people
who do not like us.
Mr. Kennedy, could you be more specific about the stimulus
funding issue raised in your testimony? I do not really think
you had a chance to elaborate on that.
Mr. Kennedy. Our comments on the testimony reflected SPC's
support in the establishment and success of the coordinated
regional process that SPC goes through for the EDA projects and
recommendations for funding. We know that the coordination of
these types of things between the locals and the regional
organizations and Federal agencies works.
We believe that is a better conduct of consultation of EDA
and the applicant grants and SPC's established regional
economic development committees which are composed of
practitioners and local elected officials and businesses and
ensure the projects are coordinated with the regional approved
economic development plan.
What happens over time is, in the practice of grant
seeking, it has been done through direct contact through the
www.grants.gov. Our preference to best ensure consistency in
the public transparency process is for EDA project submissions
or applicants to go first through the regional economic
development coordinating committee structure that works within
our region and many others. This would expedite project
approval, funding and implementation and ensure the
consideration for these consistencies.
Senator Inhofe. Thank you, Mr. Kennedy, and for the benefit
of the rest of our Committee here I just want to make sure I am
on record as saying that we are very anxious, I think the
Chairman and I are both anxious, to get this thing reauthorized
and get it done because it is one of the things where
conservatives and liberals alike can really serve well. I am
very proud of what we have done in Oklahoma. So, maybe we can
get some deadlines and get the House lined up and get this
done.
Senator Boxer. Yes.
Senator Inhofe. And I am going to go to my second round of
questions at Armed Services now.
Senator Boxer. Thank you, Senator Inhofe, so much. I look
forward to marking this bill up in the very near future.
Senator Merkley. And we will go Merkley, Udall and Cardin
in order of arrival. Senator Merkley.
Senator Merkley. Thank you very much, Madam Chair.
I just want say to Senator Walters and Dennis Alvord that
when my staff reached out to our folks in Oregon, they had
nothing but praise for your regional staff and the cooperation
you have demonstrated with the grants underway. Anytime that
type of robust praise gets expressed, I want to feed it back.
Apparently, you are doing some things very, very well.
One of those partners is Vernon Jorgen [phonetically],
which had devastating floods and they received a grant to help
with a topographic study to try to avoid rebuilding in a manner
that endangers them again and they wanted to note that these
funds are incredibly important since, especially during this
economic crisis, local funds and State funds are very hard to
obtain.
In that light, they mentioned that at some time in the
past, the match rate was one local dollar to three grant
dollars, and that it had been changed to a one to one ratio.
And that was extremely difficult for them to come up with under
the current circumstances.
I thought maybe I would just ask you all to give a little
bit of history of when that changed and why it changed and
whether it is under consideration for economically distressed
communities to change that ratio back.
Mr. Alvord. First of all, thank you very much for the kind
words. It is always good to hear feedback about the good work
that I know our regions are doing out in the field.
With regards to the match rates, I think that there was a
change in the grant rate structure that occurred during EDA's
last reauthorization in 2004. That change was driven, I think,
largely by the economic conditions at the time and the amount
of appropriations that EDA had and the need to do as much as it
could with the available resources at its disposal. EDA is
certainly cognizant of the very pressing economic conditions
that we are facing nationally today and we do have a fair
amount of flexibility under PUEDA [phonetically] to address
grant rate issues.
In fact, while the standard matching rate is 50 percent
Federal to 50 percent local, we do have the authority, under
statute, to go to an 80 percent Federal share on a sliding
scale based on the economic distress in the region. And in some
exigent circumstances, we can go in fact beyond that up to 100
percent if the local community can demonstrate an exhaustion of
taxing and borrowing authority.
We have taken great pains to ensure that we get out to our
regions maximum flexibility with regard to dealing with these
issues and we have well-established procedures and can
certainly work with them on grant rate issues as they arise.
Senator Merkley. Thank you very much for clarifying that.
Had you not already had that flexibility, I was going to
suggest that might be appropriate. So you are way ahead.
And a second issue has come up with the university partners
in Oregon. Those partners now participate in a competitive
grant program started under the Bush administration and the
feedback from the universities was that this pits very types of
programs against each other in a single grant competition,
something like apples and oranges, one stimulating
manufacturing in one place versus development of tourism in
another.
So the universities thought they were doing a tremendous
amount more effort to do applications in a setting that really
is very hard to score between these, and whether or not we
should revisit the competitive nature of the university grant
program. Any thoughts or insights on that?
Mr. Alvord. Yes. I think that is absolutely correct.
Several years ago, EDA did make a shift to a competitive
university center competition. We think that this has been very
beneficial to the program, that is has really helped us to
reinvigorate the program. I am certainly sensitive to the
issues that you mention in that there is a very diverse mix of
applicants for this program. We have smaller learning
institutions, large, major research universities and really
everything between.
We have tried to craft a Federal funding opportunity and
notice that it allows for those different types of institutions
to compete on a level playing field and to recognize that there
are certainly significant economic differences across the
Country. The needs of one part of the Country may be very
different from another. So, an emphasis on manufacturing in one
section of the Country may need to be addressed by the
university center applicant whereas service industries or some
other type of economic issue might need to be addressed in
another.
In crafting the program, we have tried to provide the
maximum amount of flexibility available. It is a program for
which the demand outstretches the resources. We think the
competition has been beneficial in getting us the best possible
applicants. We are certainly open to continuing to look at the
criteria that we use in making those selections.
Senator Merkley. Thank you very much. I appreciate that. My
staff will follow up with you with one more question but I am
going to hold it for now so that we can get on to some
questions from my colleagues.
Senator Boxer. Thank you so much, Senator Merkley. Senator
Udall.
Senator Udall. Thank you, Madam Chair. I thank all of the
witnesses for being here today.
Let me revisit one of the topics that I believe our Chair
brought up earlier on the issues of increasing cost share. I am
going to focus on a little bit different issue, but I am also
interested in what she mentioned.
When, and I understand your desire to stretch your limited
budget, and this question is really directed to Mr. Alvord and
Ms. Walters, I understand your desire to stretch your limited
budget at far as you can, but high cost shares can be an
obstacle when we are dealing with economically distressed
areas. I am particularly worried about the ability of small,
rural communities and tribal communities to meet their cost
shares to achieve positive economic development in New Mexico.
Has there been any study on the impact of these higher cost
share requirements on small communities or tribal communities?
Have you heard any complaints that they are not able to meet
these?
Mr. Alvord. I am not aware that there has been a study per
se, either an internal study or an academic study of any kind.
I am aware, anecdotally, you know, I have heard from regional
office staff and practitioners in the field, about the
challenges that they are confronting in meeting these cost
shares. We have tried to be very responsive to meeting those
needs by utilizing the flexibility that we have under statute
to provide additional Federal share whenever we can. In fact,
in rolling out our national disaster supplemental
appropriations and our Recovery Act supplemental
appropriations, we put specific internal guidance in place
giving greater flexibility to our regional offices to make
determinations about the appropriate level of cost share based
on the conditions on the ground for those communities that met
a certain threshold level of distress or showed a certain level
of demonstration that they were not able to meet that share.
Senator Udall. You are willing to work with them if they
come in and make the case that they are not able to meet the
cost share?
Mr. Alvord. We absolutely are. I think part of what makes
our program so strong is that we have looked at every
prospective grant application on a case by case basis. We
evaluate the distress and the particular nature of the
investment, and we try to account for that and work with
grantees to the best of our ability.
Senator Udall. Now, you have also raised the issue of the
American Reinvestment and Recovery Act moneys that are out
there. I wanted to follow up on that because New Mexico is in
the Austin Region and, the way you allocated money, raises some
questions, I think. New Mexico has the second lowest total of
$13 million, just above the Denver Region at $9 million, and
both are less than half of what has been allocated to the four
other regions.
So, I am wondering, what were the economic and demographic
criteria that were used to derive the formula for distributing
the funding to the six regional offices?
Mr. Alvord. Well, EDA has different allocation algorithms
that it uses for all of its different sources of funding. So,
for our regular economic development assistance programs, we
have different allocations that we use for, say, public works,
economic adjustment, planning, technical assistance, those are
all based on different criteria. Likewise, when we received the
disaster supplemental funding, we developed an allegation
algorithm that was particular to the circumstances on the
ground there. In that case, we are responding to counties that
have had some type of natural disaster designation by FEMA.
In the case of the Recovery Act funding, the Act charged
EDA to respond to sudden and severe economic dislocation and
job loss as a result of corporate restructuring. While we think
that EDA's regular allocation formula for our public works and
economic adjustment programs do a pretty good job at getting at
that, they do in fact have what we think of as somewhat lagging
indicators in that they look at a 24-month unemployment and
they look at poverty levels as among the different elements in
that allocation.
So, for the purposes of the Recovery Act, we thought that
it would be prudent to really try to target those areas of the
Country that have the most acute economic distress at this
time. As a result, we decided to utilize the most contemporary
snapshot of unemployment that we could capture and we fell back
on utilization of 3 month unemployment levels for the
allocation of that funding. We think that resulted in a good
distribution across our six regional offices relative to
economic distress. I should say that, in comparing that to the
standard EDA allocation, there is not a significant difference
in the way that funding would have gone out had we utilized the
standard formula. It is really rather small tweaks around the
edges. It is certainly not order of magnitude differences in
the allocation.
Senator Udall. OK, well, I would like my staff to follow up
with you because I think on the unemployment front, I mean, we
have three counties in New Mexico that have significantly
higher unemployment than the national average. So, we have high
unemployment and then the poverty is, well, the entire State
would qualify for EDA assistance since our per capita income is
80 percent of the national level. So, I think there is a real
argument for looking at the way you develop the criteria to do
that, especially if we are going to do another round of this.
So, thank you very much. And thank you, Madam Chair.
Senator Boxer. Senator Udall, I just wanted to let you and
Senator Cardin know that before you got here this panel gave
very strong support for EDA reauthorization and some ideas from
Ms. Mazer about how we can make it better along the lines of
your questioning, Senator Udall, and Senator Merkley's.
Senator Inhofe and I are very anxious to get this done.
There is very strong bipartisan support, which is great. So
what I would urge you to do is, if you have, and you and your
staff want to make sure you communicate with my staff and
Senator Inhofe's staff as we go about the reauthorization
because I would like to get it right. I think the other thing
is they also reported that they have got about 100 million, am
I right, of applications in the pipeline for the stimulus and
they have not awarded anything yet but they are going to send
us their first 10 awards so that we can keep up with what is
happening.
But this is an example of a great program that is working
now when bank lending is so tight. We need the jobs and it is
very important. So that is why Senator Inhofe and I want to
move quickly. So please, all of you are so helpful to us, let
us get your advice in their now so that we do not have to face
amendments and we can just get everything in the bill.
Senator Cardin.
Senator Cardin. Well, Madam Chair, thank you for having
this hearing. I appreciate your commitment on the EDA program
and trying to have it reauthorized in the right way and to get
the funding levels working with the appropriators so that we
can get the funding levels appropriate for the mission.
I want to particularly welcome Leanne Mazer to the panel.
All of you, I welcome, but Leanne is my constituent and does a
great job in the Western part of our State with the Tri-County
Council. I know she is here for NATO this morning, to talk on
behalf of the organization. But we are very proud of the work
that you do with the tri-county areas.
EDA programs become particularly important in the Western
part of our State. The economic challenges are very difficult,
to bring in jobs. It is not in a major population center and we
are trying to create new job opportunities. A State like
Maryland, many times people think you are the Baltimore-
Washington Corridor. It is where most people live. That is
where jobs are created. But we have a major priority to create
opportunities in all parts of our State, and the Tri-County
Council has done a fabulous job.
And the EDA program has been a valuable tool, Madam Chair,
for that part of our State. For all of Maryland, it has been
very valuable. We have had, in a 2-year period in Maryland, 14
projects that have created 1,800-plus jobs, leveraging $160
million in investments. So, it is a huge issue.
I saw in your testimony about the cost benefit ratios,
which are very, very impressive, $2,000 to $4,000 for creation
of a job that will double in a short period of time. That is an
impressive number as far as the work.
I really do urge us to get the recovery money out quickly.
I understand the responsibility that we have to make sure it is
spent appropriately and all the requirements are met. But our
effort right now is to create jobs. And the EDA program can
create jobs, particularly in those parts of our community where
it is difficult to get investments made. I would just urge us,
consistent with the requirements of Federal law, to do
everything we can to expedite the process so that we can get
the benefits of the Recovery Act.
Ms. Mazer, I just want to ask you, there has been a lot of
conversation about the match requirements or what the locals
have to come in with in order to be able to qualify for an EDA
and it is your testimony that there has been a change in
attitudes in the agencies in the last several years that has
made it even more difficult for distressed communities to be
able to come up with the match. Senator Udall has already
talked about the need to modify. Can you be more specific as to
what you would like to see in the Reauthorization Act, as it
relates to, particularly, in distressed communities, their
needs to match or to come up with a share of the EDA grant?
Ms. Mazer. Absolutely. Thank you. And thank you for the
kind words, Senator.
The match rates changed, actually, during the 2005
rulemaking process. It was not the intent of Congress to change
the match rates. That was part of the rulemaking process that
followed.
Particularly given the current economic environment where
the economy changes so quickly, we have mentioned the 24-month
period where we look at those characteristics of distress. I
think it would be our request just to roll back EDA's match
requirements to those pre-2005 levels, which would still
maintain the flexibility that EDA has to go beyond that.
Senator Cardin. I should ask EDA that. The reason for
change by regulation in 2005?
Mr. Alvord. I believe, Senator, that the change was made as
a result of recognition of the current economic conditions and
EDA's appropriation levels at that time. The desire to extend
the EDA funding as far as we possibly could, and address as
many communities and areas as we could, with the acknowledgment
that we do have the flexibility under statute to fund on a
sliding scale, between 50 and 80 percent based on the level of
economic distress. It was to really target that funding to
those areas that had the most acute economic distress. That was
the rationale, I believe, at the time that was done. I was not
involved in that decisionmaking process.
Senator Cardin. It seems like the change in 2005 made it
more difficult for all communities, including distressed
communities. They may be in a position on the discretionary
provisions, but they overall requirements make it more
difficult. And, of course, this economic recession makes it
even more problematic for communities to come up with the
matches. It is not unusual for us to waive, totally, the
matches during these types of periods.
Mr. Alvord. We agree, and are trying to be as flexible as
we can in addressing match rates with the discretion that we
have.
Senator Cardin. Well, we might have to help you a little
bit there.
Thank you, Madam Chair.
Senator Boxer. Mr. Kennedy, I thought maybe you could, I
wanted to hear a specific project, if you could, of how EDA has
helped Southwestern Pennsylvania. Can you give us an idea, like
Mr. Phillips did, of a specific project?
Mr. Kennedy. On EDA projects that have been specific to the
Pittsburgh region, a Pittsburgh science facility was awarded
some money and we did do that in order to make sure that we
would get that money flowing within that sector. It was a
recognized project in the community----
Senator Boxer. Science Center?
Mr. Kennedy. Pittsburgh Life Sciences Greenhouse. We can
respond better and give you other investments that we have
made. We would be glad to do that in writing.
Senator Boxer. I would so appreciate that.
Well, let me just thank the panel. You know, this is not
one of those issues that everybody comes in the door and is
banging down the door to hear about. But it is such a quiet
success story, the work that you do. And I know it because,
when I go around my State, my State is suffering mightily from
economic downturn and high unemployment and pockets of
unemployment of 15 percent, 25 percent. There is one particular
county that just told me about EDA about a year ago, that it
just came in and just saved the community. It rallied around,
they leveraged the funds, and it was fantastic.
I would like to know, under the rulemaking, what type of
discretion you do have? If you could get back to me in writing,
because, to the extent that we will do our reauthorization, we
want to know if you need more discretion, if the way to do it
is to give you full discretion in a high unemployment area, a
distressed area, so let us know.
But again, the fact that we did not have a lot of
penetrating questions from Democrats and Republicans shows me
that this is a project program that they really, really
support.
So, we thank you very much, EDA folks, for your, as
President Obama likes to say, your empathy, your understanding,
what your job is, what your role is, and I think you can hear,
from the folks on the ground, that it is working.
So, this reauthorization is a priority for me, it is a
priority for Senator Inhofe and I think it is very key. We are
not worried about the program being zeroed out or anything. But
it certainly is better to have an authorization. Otherwise,
there is no guidance and it is just not going to be viewed as a
priority.
We commit that we are going to get this done. And we look
forward to hearing from all of you specific examples from your
region, and then from Mr. Alvord and Ms. Walters the first 10
grants that are made. I really need to know because I want to
highlight those. So, we are waiting for that. Do you think it
will be in the next 30 days that you will do that funding?
Mr. Alvord. I suspect that it will, yes.
Senator Boxer. If you are saying that you are getting it
out the door, you know, then you probably have to start getting
it out the door. So, we are very excited to hear about those.
Is there anything else? Oh, I would ask unanimous consent
that statements from the International Economic Development
Council and Educational Associate of Universities be inserted
in the record and since I am the only one here, I see that
there is no objection to that. So, we will do that.
[The referenced documents follow:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Boxer. We stand adjourned. We will work together
with you on the reauthorization.
[Whereupon, at 11:15 a.m., the committee was adjourned.]
[An additional statement submitted for the record follows:]
Statement of Hon. Christopher S. Bond, U.S. Senator
from the State of Missouri
First, thank you, Chairman Boxer and Ranking Member Inhofe.
I am pleased to be here to discuss a subject vital to the State
of Missouri and the Country, the reauthorization and oversight
of the Economic Development Administration.
In addition, I appreciate all the witnesses appearing
before us today. Your experiences with this issue and this
agency are important to understanding the economic impact the
EDA has across the country and how best to craft a
reauthorization that improves EDA in order to make the United
States more efficient and competitive during this difficult
economic time.
The Economic Development Administration was established
nearly 45 years ago under the Public Works and Economic
Development Act of 1965. During those years, our economy has
enjoyed significant economic growth and has weathered through
some tough times.
This hearing couldn't come at a more pertinent time as we
face another period of economic challenge. At this time, it is
important to maximize the utility of all our economic tools to
better equip our country to address the problems we face today.
A properly formed and funded EDA reauthorization can be one of
those tools.
The EDA is the only Federal agency that concentrates on
private sector economic sustainability. While other agencies
play an important role in helping communities in times of
crises, it is EDA that can provide long-term economic
stability.
It is important to reauthorize EDA in order for it to keep
pace with the changing economic climate and to enable the EDA
to continue to fulfill its mission of leading ``the Federal
economic development agenda by promoting innovation and
competitiveness, preparing American regions for growth and
success in the world economy.''
The EDA investment in economic development initiatives
across Missouri has worked to diversify our job base by
focusing on high-tech, high-growth industries. This refocusing
has allowed Missouri to compete globally for the private
investment that attracts and maintain higher paying jobs in the
area.
For example, EDA awarded a $2.9 million grant as seed
capital for the Center of Research, Technology and
Entrepreneurial Expertise (CORTEX) in St. Louis. The Federal
funds helped immediately leverage over $30 million to create a
life science research and commercialization district that
focuses on transforming scientific innovation into new
companies to create jobs in the St. Louis urban core. In the
long run, this research center is expected to encourage over
$400 million in investment by concentrating the essential life
science resources.
Recently, the EDA also provided $1.7 million for the
development of a Midwest-China Air Cargo Hub in the St. Louis
area. The development of this trade route will put St. Louis at
the center of Chinese U.S. commerce. By doing so, it will
increase access for our U.S. exports, cultivate commercial
opportunities, generate new jobs and provide sustainable
economic development in a community that suffered the economic
distress of a natural disaster.
In the past, the symbol for economic growth and development
was embodied in the bricks and mortar of buildings. They
represented a place where people went to work and where
business got done. However, while that ideal remains partially
true, we are beginning to see a shift.
The economic promise of this country is no longer
encapsulated in a building; it is in the promise of ideas. It
is in the patents being developed across the country in this
nation's incubators and laboratories. It is the recognition and
development of potential new trade routes.
By supporting these ideas, we will be investing in the job
creation of tomorrow. We must provide EDA with the ability to
empower these ideas in order to grow our economy and offset the
economic strain of disaster.
As we move forward, there are many issues that need to be
addressed in reauthorization include altering local match
levels during this time of economic hardship, more attention
paid to the economic development needs in rural communities and
EDA staffing in local offices. In addition, I want to see EDA
refocus on the basics with more attention and funding going to
public works, flexible economic adjustment assistance and an
efficient revolving loan fund.
We must build a reauthorization that provides the tools
necessary to generate good jobs in the areas that need them the
most to keep the United States competitive.
Again, I thank Senators Boxer and Inhofe and the witnesses
for their hard work. I look forward to your testimony and
working together to ensure that the EDA continues to be a vital
tool to help empower economic development.
[all]