[Congressional Record Volume 155, Number 116 (Wednesday, July 29, 2009)]
[House]
[Pages H9049-H9051]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                          WHERE ARE THE JOBS?

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentlewoman from Ohio (Mrs. Schmidt) is recognized 
for 60 minutes.
  Mrs. SCHMIDT. Mr. Speaker, I rise today to continue to ask the 
question, where are the jobs?
  Well, I can tell you where they're not. They're not in my district in 
southern Ohio because I just got an announcement on Monday night that 
really shocked me and made my blood boil. I found out that the 
Department of Energy was going to strip away thousands of jobs in my 
district.
  Now, I just want to give you a little background. Ohio is one of 
those States that has high unemployment. We're the seventh highest in 
the Nation. But when you look at my district, what you see is I've got 
really high unemployment in my district. In fact, two of my counties, 
Pike and Adams, have over 15 percent unemployment. Scioto County has 
almost 13 percent unemployment. Much higher than the national average, 
even higher than our State average of 11.2 percent. So we really need 
jobs. We need them badly.
  And what has occurred to me is that I think there must be a 
disconnect with the administration and the President. Let me go back 
and explain what's going on.
  I have a facility in my district in Pike County, the county that has 
15\1/2\ percent unemployment, called the American Centrifuge Plant, and 
this represents a very early use of commercial--use of new technology 
that would significantly reduce emissions of air pollutants and 
greenhouse gasses.
  The United States Enrichment Corporation, called USEC, is deploying 
American Centrifuge technology to provide the dependable, long-term, 
U.S.-owned and developed nuclear fuel production capability needed to 
support the country's nuclear power plants, nuclear submarines, and a 
robust nuclear deterrent.
  Mr. Speaker, we have dozens of nuclear power plants in this country 
that all require nuclear fuel. And we have a Navy who, as I speak, is 
sailing in every ocean across the globe. And we have weapons of mass 
destruction that will become a useless deterrent without fresh tritium.
  Without the American Centrifuge Plant, in 5 years' time, we will have 
no ability in the United States to enrich uranium to keep our lights 
on, our ships at sea, or a deterrent potential.
  In 5 years, we will be forced to purchase uranium from foreign 
suppliers as we do with most of our oil. I don't want to depend on 
foreigners for this kind of product.
  The American Centrifuge Plant holds great promise. Unfortunately, in 
order to meet this promise, USEC needed a loan guarantee from the 
Federal Government. Now, I want to repeat that. It needed a loan 
guarantee from the Federal Government. You see, USEC has already 
invested $1.5 billion and has offered another billion dollars of 
corporate support. It did this with the expectation that the Department 
of Energy would make available a $2 billion loan guarantee needed to 
finance the full-scale deployment of the American Centrifuge Plants.
  Now, I want to refer to this chart here. Why were they so confident 
in that? Well, you see on September 2, 2008, when President Obama was 
running for election, he wrote a letter to our Governor, Ted 
Strickland. This is the full letter so you can see it. I'm not taking 
it out of context.
  He said, Under my administration, energy programs that promote safe 
and environmentally sound technologies and are domestically produced, 
such as the enrichment facility in Ohio, will have my full support. I 
will work with the Department of Energy to help make loan guarantees 
available for this and other advanced energy programs that reduce 
carbon emissions and break the tie to high-cost and foreign-energy 
sources.
  This is what this letter said.
  So you understand that USEC was very, very confident that they were 
going to get that loan guarantee. But instead, on Monday night, the 
Department of Energy really pulled the rug out from all of us. I got a 
phone call asking me to call the White House, and I learned Monday 
night that the Department of Energy was going to withdraw its promise 
and they were actually asking USEC to withdraw its application and to 
try it again in 18 months.
  I was actually told on the phone that if they did that, then the 
Department of Energy would give them $45 million, $30 million, and 
another $15 million if they would rescind this. And that kind of 
shocked me.
  The next day it also shocked the folks at USEC because, you see, they 
had this letter that the President had given to our Governor, Ted 
Strickland, that said those loan guarantees would be given.
  Mr. Speaker, the American Centrifuge Plant currently supports more 
than 5,700 jobs and will help create 2,300 more within a year of 
commencement of the loan-guarantee funding. That's 2,300 additional 
jobs to my district.
  Now, because the Department of Energy has contradicted a promise that 
our President made in September of last year to our Governor and to 
those men and women in this area of the State, those jobs are in 
jeopardy. And I was on the phone with one of my constituents earlier 
today. Pink slips are being given out at the USEC plant.
  The Department of Energy has told the media the reasons for their 
denial were threefold: the cost subsidy estimate, a new requirement for 
another $300 million of capital, and the questions of technology.
  Well, the first question offered by the DOE is a little laughable. It 
turns out that the government isn't really backing these loans. 
Instead, the Department of Energy is charging a risk-of-failure fee to 
each of the folks that agrees to back the loans. These fees are pulled 
together to eliminate any risk to the taxpayers that actually have been 
given a loan guarantee.
  They determined that the fee for this loan would be $800 million on a 
$2 billion loan. So USEC is supposed to come up with $800 million on a 
$2 billion loan. I don't know about you, but in my neck of the woods, 
we call that like loan sharking.
  The second reason for denying the guarantee is a new need to set 
aside an additional 300 million for contingencies. Well, I can think 
where you and I see that that is headed. After the risk premium is 
paid, apparently USEC still has to come up with more money to make the 
Department of Energy feel more comfortable about giving these loans.

                              {time}  1930

  But the last question, I think, is the most surprising, because the 
last reason is one where they say they have got technical questions, 
and this is the one that is the most absurd of all, because, quite 
frankly, this technology is out there. France is using it, England is 
using it. Would it surprise you to know, Mr. Speaker, that Iran is 
using it?
  But what I found most disturbing is that the Department of Energy 
hired a technology expert, as required by law, and they went through 
the technology and wrote a long report, and in fact the guy ran back to 
give it to the Department of Energy on Tuesday. That was the day after 
the Department of Energy made their decision. They made that decision 
on Monday night. They made it without any regard for the report they 
were relying on for this very important project.
  It is not just a project, Mr. Speaker, that continues to help the 
folks in my district. And it is important to me, because, Mr. Speaker, 
this is my district, and these are my folks and these are my friends. I 
have become friends with these people.
  This is the part of my community that doesn't have a lot of job 
opportunities, and they welcomed this job opportunity. They embraced 
it. And I believe that the President believes in this project, as he 
stated on September 2, 2008. But I think there must be some sort of 
disconnect with the Department of Energy.
  There is a chart here, and I would like to go through the chart a 
little bit again so we can clearly understand what is going on.
  The issue: credit subsidy cost estimated by the DOE to be $800 
million. Well, let me be a little clearer. The estimate was never 
provided in writing. The methods of calculation were never disclosed or 
explained. An $800 million subsidy cost is not reasonable. I think it 
is outrageous, given USEC's fully

[[Page H9050]]

collateralized $1 billion parent guarantee, standard credit, and, yes, 
yield exposures of $24 million to $74 million based on credit ratings 
of C to BB-minus and assets recoveries of only 20 to 30 percent of the 
cost.
  The DOE calculation clearly ignores the value of $1.5 billion 
invested by USEC to date and another billion of non-project collateral 
offered by USEC, consisting primarily of natural and enriched uranium 
inventories.
  The second issue, an additional need for $300 million of additional 
capital. USEC offered a legally binding capital commitment, which DOE 
agreed met statutory and regulatory requirements.
  USEC's fully collateralized $1 billion parent guarantee designed to 
permit loan to commerce while USEC raised additional equity while fully 
protecting the taxpayers. USEC's financial adviser stated that with the 
loan guarantee, $100 million to $150 million of capital could be raised 
in the public market. USEC has commenced discussions with strategic 
suppliers to obtain vendor financing for the balance.
  And the final, the technical readiness of American Centrifuge 
Technology. The DOE LGPO concluded that ACT was not ready to move to 
commercial scale operations prior to receiving the independent 
engineer's written assessment. The independent engineer had only been 
working for 12 days when DOE acted. DOE was scheduled to review the 
classified independent engineer report on July 28, and the DOE 
representative traveled to Tennessee to do so, unaware of the LGPO's 
decision the night before.
  American Centrifuge is based on technology which DOE initially 
developed in the 1970s and the 1980s and subsequently operated it for 
10 years. USEC-approved centrifuges have been operating in the Lead 
Cascade for over 225,000 hours. The DOE has acknowledged that USEC met 
the milestone under the 2002 agreement between DOE and USEC, which 
requires obtaining satisfactory reliability and performance data from 
Lead Cascade operations, the last requirement to be met besides 
obtaining financing prior to commencing commercial plant construction 
and operations.
  Mr. Speaker, I don't understand what is going on here, I don't think 
that this body understands what is going on here, and I am not even 
sure that the President even understands what is going on here with the 
Department of Energy.
  But I am very confused. More than that, I am very outraged because I 
believe that we have to have energy independence, but we also have to 
have security for this Nation. Energy independence depends upon a 
variety of sources of energy, including nuclear power, but you have to 
have the stuff to make that nuclear power. In 5 years, we will no 
longer be the people that are producing the stuff that it takes to make 
that nuclear power. That is why this project is so important, not just 
for the 2,000 jobs that will be lost.
  Mr. Space, can you join me here today? One of the other folks that is 
affected is my very good friend from a district right across from me, 
Zack Space.
  Zack, I just laid out what has gone on with the Department of Energy. 
I have laid out the fact that our President promised that the 
Department of Energy would give out these loans to Governor Strickland 
on September 2. I have laid out what I think is a disconnect between 
the Department of Energy and our President, because I just truly 
believe the President wants to make good on this promise. I have laid 
out the impact it has to your community and my community in southern 
Ohio and also to our security across the Nation.
  So, whatever you would like to add, I welcome you to the discussion.
  Mr. SPACE. I thank the gentlelady. I appreciate the work that you 
have done in bringing attention to this very important issue. There are 
a couple of things I would like to speak about, and I will be as brief 
as I can.
  Mrs. SCHMIDT. Take as much time as you want, Zack. It is fine with 
me.
  Mr. SPACE. First of all, what is happening in Appalachian Ohio, in 
fact what is happening in Appalachia America, is the same thing that 
John Kennedy drew attention to in the early 1960s when he visited 
Appalachia. He drew attention to poverty and hopelessness, suffering, a 
lack of infrastructure, a lack of opportunity. I think it is very 
important not just for you and I to understand this, we do, Jean, but 
for our President and the Department of Energy and the American public 
in general to understand that many of those same needs that Kennedy 
identified so many years ago still exist.
  This Piketon facility has the potential to help breathe new life into 
a large region in southern Ohio, a region where unemployment rates now 
are typically on a county-by-county basis reaching 16 percent; a region 
in which poverty rates in some of those counties exceed 30 percent; a 
region where families, working families, men and women, have to take 
their children to soup kitchens to eat. This is happening in America; 
this is happening in southern Ohio.
  The second thing I would like to point out is this is our future. We 
have heard so much about the promise afforded by energy-related jobs, 
the new economic sector in our economy that I believe holds so much 
potential, so much potential to put people back to work, to provide 
good wages, to allow families to buy homes, send their kids to college 
and save for retirement. This project falls squarely within the promise 
afforded by that new economic sector.
  I would like to take this brief moment that you have so graciously 
allotted me, Jean, to urge the Department of Energy to reconsider, to 
look at this situation as one which can provide hope to many Ohioans, 
many Americans who don't have it right now.
  I commend you again for bringing attention to this matter, to 
advocating for it with the passion that you have, and I pledge to work 
with you moving forward as we do everything we can to bring vibrancy 
back to the economy of southern Ohio.
  Mrs. SCHMIDT. May I ask you to engage in a little conversation on 
this. I think it is very important, Mr. Speaker, to note that Mr. Space 
and I, while our districts do connect, we are from different sides of 
the aisle, and yet I find oftentimes there is as much agreement on both 
sides of the aisle, far from the rancorous debate that occurs on some 
of the issues that folks might hear.
  This is an issue that is very important to not just me, but to Zack 
Space as well, because we understand Appalachia. We understand the 
needs of this community and how when you lose a job in this community, 
it is so hard to get it back. It is not like other communities, where 
when you lose one, in time it can be replaced. When you lose one in 
this part of the world, it doesn't get replaced.
  Do you agree, Zack?
  Mr. SPACE. Jean, I see it and you see it and we all see it far too 
often where we allow ourselves to be separated by a political divide. 
This aisle that runs between us now is nothing but an empty space, and 
when we talk about things like this project, we are not talking about 
what is right for Democrats or what is right for Republicans, what is 
right for those who are liberal versus those who are conservative. We 
are talking about what is right for America.
  I think not just in this case, but in all cases we should explore 
every opportunity to bridge that divide, to forget about the party 
politics, whether it is energy or health care or job opportunities, 
like we have here. All of us need to strive much harder to overcome 
those ideological differences, find common ground and work for what is 
right for this country.
  Mrs. SCHMIDT. Mr. Space, I have been reminded that we are on the 
House floor, and my apologies that I didn't refer to you as Congressman 
Space or Mr. Space and talked to you as we do off the floor in a 
friendly tone. So now I will refer to you as Mr. Space.
  But you and I agree on this. I think, Mr. Space, you will also agree 
about the importance of this not just to our community, but to the 
Nation. We need to have uranium enrichment in order to develop nuclear 
energy in order to keep our lights on in this country. And I don't 
think you and I want to rely on getting this product from a foreign 
nation.
  We rely too much on getting our oil from foreign governments. We 
don't want to rely on foreign governments for this, which is so 
important to keeping our lights on, to our Navy, to our ability to keep 
the bad guys out of the United States.

[[Page H9051]]

  Mr. SPACE. I thank the gentlelady for bringing up such an important 
subject, and that subject is one of national security. There are a lot 
of different components that go into what makes us strong as a country. 
Certainly the size of our Army, the money and the resources we allocate 
to military defense are very important. But perhaps there is no greater 
ingredient to our national security than developing right here at home 
within our borders energy independence. We have as a nation waited far 
too long to aggressively address this issue.
  I think many of the painful votes, if you will, many of the divisive 
issues, many of the arguments that we have on this floor of this great 
House are happening right now because we have as a nation waited far 
too long to address the issue of energy independence.
  The gentlelady and I are both old enough to remember what it was like 
in this country back in the early 1970s when OPEC first formed its 
embargo on oil. It was like a slap in the face to our country. 
Suddenly, and without warning, we found ourselves almost wholly 
dependent upon not just other nations, but other nations who meant to 
do us harm, for something so fundamentally important as our energy 
needs.
  As we look back today to 35 years ago, almost 40 years ago, we think 
of this: What if, what if we would have done the right thing and 
aggressively pursued energy independence? What if we would have 
approached that issue like this Nation has with other issues in the 
past, the Manhattan Project, the Apollo project, where failure was not 
an option? What if we had done that?
  I will tell you, we would not be having the debate, we would not be 
having the struggles, we would not be having the problems with our 
foreign relations. We would not be having nearly the problems we are 
experiencing today with our economy if we had done the right thing.
  Now is the time to act. This project fits perfectly with what should 
be all of our priorities, and that is an aim toward energy 
independence.

                              {time}  1945

  Mrs. SCHMIDT. I totally agree with my good colleague and friend from 
Ohio. The time is now. I remember the seventies. I remember standing in 
line--because I was the even day, and my friends were the odd day--to 
get gasoline. We can't do that again. You and I have seen the price of 
gasoline last summer be twice the price that it is this summer. Thank 
heavens it's lower, but we can't afford the opportunity for them to put 
the squeeze on us and on our economy. While this isn't going to remove 
our dependence on foreign oil, this project is going to remove our 
dependence on using oil for things that we don't need to use it for.
  That's why we need a total comprehensive energy policy. It has to 
include nuclear, and we have to have not just the technology but the 
stuff that it takes to make that technology happen. All I can say is, 
this project, the American Centrifuge Plant, is producing the uranium 
enrichment that we need; and if we don't allow this project to go 
forward, in 5 years you and I are going to be standing here screaming 
at the well because we're going to be beholden to France or England or 
another country for this uranium enrichment that we so sorely need 
right now.
  I am so thankful that you are joining me in this fight. I don't know 
what we can do besides calling the Department of Energy, maybe asking 
our friends to call the Department of Energy, maybe asking our friends 
to call the President. I don't know what else you and I can do. But I'm 
going to fight until we can fight no more, and then I am going to 
continue on.
  Mr. SPACE. In yielding back to the gentlelady, my friend and 
colleague from Ohio, I would submit that we have taken one very 
important step in moving in that direction, and that is by ridding 
ourselves of our partisan bonds and working together in a common cause. 
You and I both know that oftentimes we do not agree on the issues, but 
this is one where we can find common ground. Let this be not just the 
beginning of a rectification of a wrong in southern Ohio with respect 
to USEC plants, but the beginning of a new relationship, a new day in 
American politics where Democrats and Republicans work together in 
solving not Democratic problems, not Republican problems, but American 
problems.
  Mrs. SCHMIDT. I thank the gentleman. I just want to say, Mr. Speaker, 
that I believe we can work across the aisle. I have seen us work across 
the aisle on other issues. This one is a very, very important issue. I 
am not going to belabor this point too much longer, but only to say 
that if we don't act now and ask the Department of Energy to reverse 
its course, this isn't just something that's going to put a further 
blight on my district, my good colleague Mr. Space's district and the 
rest of Appalachia and Ohio, but this is going to really put a cloud 
across our economic security, our national security and our Nation. The 
Department of Energy can go back. They can look at the technical data, 
which they didn't do when they issued their decision. They can go back 
and look at what they're asking USEC to cough up and recognize what 
USEC has already put on the table. They can go back and understand that 
the President made this promise to our Governor on September 2. They 
can go back, and they can do the right thing because it's not just the 
right thing for my community, Mr. Space's community or Ohio. It's not 
just the right thing because our President made a pledge to our 
Governor. It's the right thing for our Nation.
  I yield back the balance of my time.

                          ____________________