Hon. James L. Oberstar
Ranking Democratic Member
Committee on Transportation and Infrastructure
U.S. House of Representatives
Economic Development Administration National Conference
Washington, D.C.
May 7, 2003
It is a genuine pleasure to join you today, because it is all of you – the practitioners, the business and government leaders, the non-profit organization representatives, the university officials, and EDA employees (particularly the EDRs) – who really make the Economic Development Administration (EDA) programs work.
I can honestly say that I’ve been with EDA since the beginning. In 1965, I was present when President Lyndon Johnson signed the Public Works and Economic Development Act creating EDA. In fact, I still have the pen he used at the signing ceremony. Since that time, I have been a firm believer in EDA’s mission to create economic opportunity for those living and working in economically distressed communities. I know EDA works because I’ve seen it work: providing jobs, job training, and real economic opportunities in distressed communities across the country.
EDA’s primary mission is to create economic opportunities for all. And this mission remains as vital and necessary today as it was four decades ago. As our economy continues to struggle, the importance of EDA becomes even more apparent. In April, the national unemployment rate rose to 6 percent, the highest level since the summer of 1994. Since January 2001, the number of unemployed workers increased from 5.9 million people to 8.8 million – an increase of almost 50 percent. And people who are out of work find themselves out of work for longer periods of time. Within the last year, the number of long-term unemployed workers (unemployed for longer than six months) has increased to nearly 2 million and the average length of unemployment is almost 20 weeks, the highest it has been since 1984. As in every recession, it is the people living in our Nation’s economically distressed communities – the very people who are served by EDA – that are hardest hit by the economic downturn.
EDA is an agency with a true survival instinct. It has survived serious cuts in funding that would have irreparably crippled other agencies and it has outlived numerous attempts to eliminate it entirely. Through it all, EDA has seen its programs provide jobs and create economic opportunities.
Without a doubt the most difficult time for EDA was during the 1980’s. In his very first economic message to Congress, President Reagan singled out EDA for elimination. As the incoming Chairman of the Subcommittee on Economic Development, I immediately organized a series of hearings (30 days in all) to document the record of achievement of EDA and the Appalachian Regional Commission (ARC) and convince my colleagues, from both sides of the aisle, that these agencies were necessary and made a critical difference in the ability of communities to overcome decades of severe and persistent economic distress. And we did it, and today, both EDA and the ARC continue to effect positive change for people living in some of our Nation’s poorest communities.
Throughout the Reagan and Bush Administrations of the 1980’s and early 1990’s, EDA programs were unauthorized. Every Congress, the then-Public Works and Transportation Committee would mark up an EDA reauthorization bill and have it pass the House, only to see the Senate take no action. The agency survived through the annual appropriations. And every year during the House’s consideration of EDA’s appropriations bill, we saw a fight on the House Floor to eliminate the agency or slash its budget. Every year, we turned back those critics – but this was no way for an agency to have to exist.
Finally in 1998, then-Chairman Bud Shuster and I, with the active and aggressive support of EDA and the Clinton White House, were able to reauthorize EDA and the ARC. This was the first EDA or ARC reauthorization enacted in 16 years. My colleagues on the Transportation and Infrastructure Committee worked diligently and in a bipartisan manner to pass the reauthorization legislation, and finally overcome the decade-long “hold” in the Senate.
Since the 1998 reauthorization, EDA has been able to further document its truly impressive performance. According to a series of recent Rutgers University studies:
Ø EDA capital projects are on time (80-90 percent) and under budget (52 percent);
Ø They produce private-sector employment in 96 to 98 percent of the cases;
Ø Capital projects produce jobs at approximately $3,000 to $8,000 per job and EDA’s Revolving Loan Fund (RLF) projects produce jobs for even less ($1,000 per job); and
Ø For every $1 million in EDA public works funding:
Ø 325 direct permanent jobs are created;
Ø $10 million is leveraged in private-sector investment; and
Ø the local tax base is increased by $10 million.
These studies confirm my findings from the Subcommittee hearings in 1981: EDA programs create jobs and pay for themselves.
These programs are especially vital to state and local governments. Often, comprehensive economic development planning at the local level is required in order to take full advantage of EDA’s programs. Accordingly, EDA planning grants are essential for state and local governments to cooperatively tackle economic development challenges on a local and regional basis. Further, EDA grants are a vital resource for many smaller, rural communities. Deterioration of infrastructure facilities and institutions is especially prevalent in many rural counties. This deterioration is often part of a downward cycle that contributes to erosion of human and financial resources. And these rural counties in particular rely on EDA grants to improve their economic condition.
It is with this history, and in this context, that the Transportation and Infrastructure Committee will consider EDA reauthorization. Last Congress, we reauthorized the Appalachian Regional Commission. We must build on that success and, once again, develop a bipartisan coalition to reauthorize EDA. It is imperative that we reauthorize EDA this year. The work that EDA does in impoverished communities is too important to subject it to the whims of the annual appropriations process. Further, having an agency fight for its very survival year in and year out gives it little time to actively plan and implement an economic development agenda. We cannot let this opportunity to tell EDA’s success stories and reauthorize its programs slip through our fingers. If it does, we could easily face another decade-long struggle to defend the agency.
The T&I Committee has already begun to tell those success stories. The Subcommittee on Economic Development, lead by Subcommittee Chairman Steve LaTourette and Ranking Member Eleanor Holmes Norton, has begun a series of hearings on EDA reauthorization. I expect that we will receive the Administration’s EDA reauthorization bill within the next few weeks and the Committee will then begin working aggressively on the EDA reauthorization legislation to ensure that the programs are reauthorized before the current authorizations expire in October.
I firmly believe that the House will pass an EDA reauthorization bill this year. However, if we are to avoid the trap of Senate holds of the 1980’s, we will need the active and aggressive support of the Administration. The Administration played a critical role in EDA reauthorization in 1998 and will need to play that same role this Congress if we are to achieve our objective. Although I am hopeful that the Administration will actively support EDA reauthorization, I remain concerned about the Administration’s commitment to EDA. In the last two years, EDA funding has been cut almost 30 percent (from $439 million in FY2001 to $321 million in FY2003) – more than any other agency that the T&I Committee authorizes. This Administration must recognize the critical role that EDA plays to our Nation’s economic growth if we are going to successfully reauthorize EDA this year.
During the reauthorization process, the T&I Committee will look for ways to ensure that EDA continues to bring economic development opportunities to all distressed communities, both rural and urban. We must ensure that the bread-and-butter of EDA – like water and sewer and industrial park development grants – do not fall by the wayside in the pursuit of “bang-for-the-buck” big ideas.
We will also be looking for innovative ways to improve and build on EDA’s programs. I know that several of my colleagues are interested in specifically authorizing an EDA brownfields program. I am interested in working with them on this initiative, and a variant to create an EDA “brightfields” program. Earlier this session, I, together with 18 Democrats on the T&I Committee, introduced H.R. 1491, the Securing Transportation Energy Efficiency for Tomorrow Act (Street Act). Section 103 of the bill would authorize EDA to establish a demonstration program for the development of “brightfields sites”. Brightfield sites are brownfield sites that are redeveloped through the incorporation of solar energy technologies. The Department of Energy is already implementing a successful brightfields program and I believe this type of program holds a lot of promise for economic development. Brightfields bring local governments, non-profit entities, and private sector business together to remediate environmental damage of brownfield sites and provide a clean and commercially viable renewable energy resource to local communities. I am hopeful that, as we consider the EDA reauthorization bill, our Committee will adopt these and other initiatives to build upon the proven success of EDA.
I also believe in the importance of regional economic development, particularly in regions of the country with severe and persistent economic distress. Later this month, I intend to introduce a bill to strengthen and reaffirm the role of regional economic development commissions. The Regional Economic and Infrastructure Development Act recognizes the importance of the regional commissions and provides a common framework for each of them. The bill reauthorizes the Mississippi Delta and the Northern Great Plains Regional Commissions and creates the Southeast Crescent Regional Commission and the Southwest Border Regional Commission. Given their particular circumstances, the ARC and the Denali Commission are not incorporated into this organic act.
The purpose of the bill is to strengthen the existing regional economic development commissions and authorize the proposed commissions within a common framework and provide them each with the funding necessary to begin to meet the needs of the distressed areas within their regions. I am frankly concerned that the Administration’s budget proposal slashes the budgets for the existing regional commissions. In FY2004, Congress authorized $88 million for the ARC’s economic development programs, but the Administration proposes little more than one-third of that ($33 million). Congress authorized $30 million for the Delta Regional Authority in FY 2004, but the Administration requested only $2 million. It is time that we affirm our commitment to regional economic development by funding these commissions at the levels necessary for them to make a real difference to distressed communities. The bill does just that by authorizing $50 million annually for each Commission.
I want to emphasize that this bill in no way replaces EDA reauthorization – it complements it. In Committee hearings last month relating to EDA reauthorization, we heard time and again from state and local officials about the importance of the having the regional commissions work hand-in-hand with EDA on local development issues.
The explosive growth of the 1990’s, a result of the marriage of technology and information, has given way to a sluggish economy marked by investor uncertainty and wariness of the future. However, EDA, the only federal agency tasked with the mission of supporting economic development in distressed areas, must continue to identify opportunities for future economic growth using its expertise and proven excellence.
It is crucial that we work to achieve bipartisan consensus early in this session and that the House pass an EDA reauthorization bill in the coming months. In the current uncertain economic climate, the reauthorization of EDA should be a top priority for this Administration.
It certainly is for me, and you have my pledge that I will work with you and for you to reauthorize the Economic Development Administration.