U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

34–774 PDF 2007

THE STATE OF ECONOMIC

DEVELOPMENT

(110–2)

HEARING

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS AND 

EMERGENCY MANAGEMENT

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

JANUARY 23, 2007

Printed for the use of the 

Committee on Transportation and Infrastructure

(

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

JUANITA MILLENDER-MCDONALD, 

California 

ELIJAH E. CUMMINGS, Maryland 

ELLEN O. TAUSCHER, California 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

JULIA CARSON, Indiana 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

BRIAN HIGGINS, New York 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

DORIS O. MATSUI, California 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

MAZIE K. HIRONO, Hawaii 

BRUCE L. BRALEY, Iowa 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ACURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

JERRY MCNERNEY, California 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

WAYNE T. GILCHREST, Maryland 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

RICHARD H. BAKER, Louisiana 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

(II)

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS AND EMERGENCY

MANAGEMENT

ELEANOR HOLMES NORTON, District of Columbia, Chairwoman 

MICHAEL H. MICHAUD, Maine 

JASON ALTMIRE, Pennsylvania 

MICHAEL A. ARCURI, New York 

CHRISTOPHER P. CARNEY, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

STEVE COHEN, Tennessee 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

CHARLES W. DENT, Pennsylvania 

JOHN R. ‘RANDY’ KUHL, JR., New York 

JOHN L. MICA, Florida 

(Ex Officio) 

(III)

(V)

CONTENTS Page 

Summary of Subject Matter .................................................................................... vi 

TESTIMONY 

Glasmeier, Amy, Professor of Geography and Regional Planning and John 

Whisman Appalachian Scholar, Pennsylvania State University ..................... 9

Pages, Eric, President, Entreworks Consulting .................................................... 9

Reamer, Andrew, Fellow, Brookings Institute ...................................................... 9

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Altmire, Hon. Jason, of Pennsylvania .................................................................... 36

Arcuri, Hon. Michael A., of New York ................................................................... 37

Walz, Hon. Tim, of Minnesota ................................................................................ 38

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Glasmeier, Amy ....................................................................................................... 39

Pages, Eric ................................................................................................................ 166

Reamer, Andrew ...................................................................................................... 176

SUBMISSIONS FOR THE RECORD 

Glasmeier, Amy, Professor of Geography and Regional Planning and John 

Whisman Appalachian Scholar, Pennsylvania State University:

Additional written statement by Ann Markusen .............................................. 49

Revised oral statement ........................................................................................ 57

The Distinctive City: Production, Class and Identity, Ann Markusen and 

Greg Schrock, report, January 2006 ............................................................... 61

A Consumption Base Theory of Development: An Application to the Rural 

Cultural Economy, Ann Markusen, report, October 2006 ............................. 119

Nine Concrete Ways to Curtail the Economic War Among the States, Greg 

LeRoy, Executive Director, Good Jobs First, paper ....................................... 153

Pages, Eric, President, Entreworks Consulting, responses to questions ............ 173

Reamer, Andrew, Fellow, Brookings Institute:

Responses to questions ........................................................................................ 184

The Consequences of Eliminating Group Quarters Data from the Census 

Bureau’s American Community Survey, Andrew Reamer and Cynthia 

Taeuber, Metropolitan Policy Program, The Brookings Institute, paper, 

January 2006 .................................................................................................... 194

Letter, Hon. Carlos M. Gutierrez, Secretary of Commerce, January 19, 

2007 ................................................................................................................... 217

U.S. Census Bureau FY 2007, Impact of Alternative Proposal for Spending 

$58.3 million in cuts to Periodic Censuses and Programs, statement ......... 219

Letter to Hon. David Obey, a Representative in Congress from Wisconsin, 

from Melissa Armstrong, Chair, Council for Community and Economic 

Research, January 16, 2007 ............................................................................. 223

vi


34774.001
vii


34774.002
viii


34774.003
ix


34774.004
x


34774.005
xi


34774.006
(1)

THE STATE OF ECONOMIC DEVELOPMENT 

Tuesday, January 23, 2007

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC

BUILDINGS AND EMERGENCY MANAGEMENT, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:30 a.m., in room 

2167, Rayburn House Office Building, the Honorable Eleanor 

Holmes Norton [Chairwoman of the subcommittee] presiding. 

Ms. NORTON. Good morning, and may I welcome everyone to the 

first meeting of the Economic Development, Public Buildings, and 

Emergency Management Subcommittee. 

This Committee and Subcommittee have always been the most 

bipartisan in the Congress, and I am committed to building on this 

invaluable cornerstone of cooperation and mutual respect. Our long 

history of working together collegially has yielded a tradition of 

consensus on most matters that come before this Committee. 

In addition, I would like to thank Chairman Jim Oberstar, who 

is one of the architects of this tradition, for his leadership, encyclopedic expertise, and his lifetime commitment to transportation and 

infrastructure issues in the United States and, I should say, 

abroad, because his knowledge is worldwide. 

I particularly want to welcome our new colleagues, Representatives Jason Altmire of Pennsylvania, Michael Arcuri of New York, 

Christopher Carney of Pennsylvania, Steve Cohen of Tennessee, 

and William Walz of Minnesota, and, of course, our new Ranking 

Member, Mr. Graves of Missouri. 

Have I missed anybody? Representative Michael Michaud of 

Maine, who served on this Committee before. 

This is the first of a series of hearings that will focus on the state 

of economic development in the United States and the issues associated with smarter and more efficient economic development needed in our Country. 

Today’s hearing will focus not only on economic development in 

the United States today, but also on the direction that experts believe the United States must go in order to prepare for the challenges that the global economy requires if the Nation is to continue 

to thrive. 

Economic development was not a specific mission of the Federal 

Government until Congress passed the Public Works and Economic 

Development Act in 1965 and established the Economic Development Administration, or EDA. EDA was created to alleviate conditions of substantial and persistent unemployment in economically 

2

distressed areas and regions. The mission of EDA today remains 

much the same as it was when originally founded: ‘‘to enhance 

communities success in attracting private capital investment and 

lucrative job opportunities.’’

EDA has stated that to fulfill its mission, it must—and here I am 

quoting again—‘‘be guided by the principle that distressed communities must be empowered to develop and implement their own economic development and revitalization strategies.’’

As our hearings have documented, the Act has been enormously 

successful, particularly in using modest Federal funds to attract 

and leverage much in private sector investment. Future hearings 

will also focus on the reauthorization of the Economic Development 

Administration and regional economic development issues. 

To put economic development in context, we have to turn the 

page back 50 years, when President Eisenhower initiated the Federal Defense Highway System. This highway system not only 

linked our Country together into a coherent and efficient transportation hull, but it also boosted commerce and became the centerpiece of the world’s strongest economy. In addition, the legislation 

was the major economic development tool for most local communities. 

Later, with passage of the Public Works and Economic Development Act of 1965, the Federal Government specifically targeted 

economic distressed areas where the Federal highway system had 

not had a revitalizing effect. 

The Development Act addressed high unemployment, low incomes, under-employment, and out-migration as sign posts. As the 

economy of the United States continues to grow, these distressed 

areas, that often contain significant underused human and infrastructure resources, must remain clearly in focus in order to sustain their growth. 

The effort to build the Federal highway system is often cited as 

building America. But now, 50 years later, with aging and sometimes obsolete infrastructure, we must look to rebuilding America 

or lose 50 years of valuable investment. 

Today we must not only focus on rebuilding America, but also investigate how we can take the lessons from successful EDA projects 

and incorporate them into new efforts for distressed areas and, for 

that matter, other parts of the Country. 

If building the interstate highway system was a major part of 

building the old economy, how can traditional infrastructure that 

we have supported and must improve work in synergy with the 

new economy to push the envelope of economic development? We 

must take a fresh look at the infrastructure itself, asking, for example, how the rapidly developing information highway can supplement our current highway system. 

We are fortunate to be able to welcome our distinguished panel 

of experts on economic development that can inform the Subcommittee. The witnesses today include Amy Glasmeier of Penn 

State University; Eric Pages, President of EntreWorks, expert consultant on economic development as well; and Andrew Reamer, Fellow at the Brookings Institute. 

I now am happy to acknowledge the Ranking Member, Sam 

Graves of Missouri, for his opening statement. 

3

Mr. GRAVES. Thank you, Chairman Norton. 

Let me begin by congratulating you on your chairmanship to this 

Subcommittee. Obviously, your expertise and your hard work are 

a testament to what you have done. And this is a Committee that 

is obviously very important to the District, and I think the people 

of the District of Columbia are very fortunate to have you representing them. 

And thank you Chairman Oberstar. I think you made an excellent choice, and I look forward to working with you in the future. 

I also want to take this opportunity to thank our Ranking Republican, Mr. Mica, for providing me the opportunity to serve as Ranking Member. I am honored by the trust that you have placed in me, 

and I intend to work hard to make the most of this opportunity. 

I know you have a number of important issues before the Subcommittee, and I look forward to working with you and the Chairman on all of them. 

And I want to recognize Bill Shuster, the former chairman of the 

Subcommittee, for the outstanding job that he did as chairman. In 

the wake of Hurricane Katrina, you accomplished what a lot of people said you couldn’t do: you moved a massive FEMA reform bill 

through a jurisdiction gauntlet that included the Commerce Committee and Homeland Security Committee, and you had it signed 

into law during an election year, when almost nothing else made 

it to the President’s desk. And I think that is a truly impressive 

accomplishment which our Country is going to benefit for decades. 

The members of this Subcommittee have an outstanding record 

of accomplishment. I am pleased to be able to serve as the Subcommittee’s Ranking Member. I look forward to continuing the bipartisan tradition, as Chairman Norton pointed out. In many respects, the Subcommittee’s bipartisan approach is the key to its 

success. I intend to work with the Chairman on both our Republican and Democrat priorities so we can prevail over the Senate. 

As the Subcommittee moves forward and sets an agenda for the 

110th Congress, there are a number of issues I hope we can address. On the economic development front, I look forward to working with the Chairman to increase the impact of our limited economic development dollars. 

While economic globalization and increased international trade 

bring opportunities and lower cost goods to much of the Country, 

they can also bring severe economic dislocation, particularly in 

rural areas and manufacturing regions of our Country. I think it 

is important that our economic investments help spur innovation 

and opportunity in those areas, and not just in our large urban 

centers. 

With respect to public buildings jurisdiction, we need to find 

ways to do more with less. Whether we are authorizing new courthouses or modernizing government-owned buildings, the available 

resources are limited and the project lists go on forever. 

I also hope our Subcommittee will reassert its jurisdiction over 

the Capitol building and the grounds. The Capitol complex has a 

number of projects underway and in the planning phase that I believe our Subcommittee should be reviewing. I believe the Capitol 

Visitor Center, in particular, could benefit from our involvement. 

4

We also must ensure the FEMA reform bill is properly implemented. We cannot afford another response like we had during 

Hurricane Katrina. I know in my home State of Missouri disasters 

are serious business. We are a high risk flood State and we are 

home to the largest earthquake ever recorded in the lower 48 

States. The D.C. area is vulnerable to hurricanes and it is also the 

highest risk terrorist target in the Country. I look forward to working with the Department, State and local governments, emergency 

managers and first responders to make sure we reform our system 

and are ready for the next big disaster. 

As a general theme, we must exercise sufficient oversight to reduce fraud, waste, and abuse in all the programs under our jurisdiction. When you consider the building projects and the disaster 

relief programs that we oversee, the opportunity for waste is tremendous. We owe it to the American people to get the most out of 

their hard-earned tax dollars. 

Let me also thank our witnesses for being here today and for enduring our opening statements. I know I spent most of my time discussing our agenda for this Congress, but I want you to know that 

I look forward to your expert testimony and recommendations for 

the Federal Government’s economic development programs. 

Thank you again, Chairman Norton, and I look forward to the 

opportunity to work with you. 

Ms. NORTON. Thank you, Mr. Graves, and I appreciate your 

statement. 

I would like to ask the Chair of the full Committee for his remarks, particularly since we are talking about the Economic Development Act, which is, of course, his I shouldn’t say baby, but that 

is what it was. 

Mr. Oberstar. 

Mr. OBERSTAR. Thank you, Madam Chair. Congratulations on assuming the Chair of the Committee. You have worked hard, you 

have learned the subject matter. You have a deep personal interest 

in all of the issues under the jurisdiction under this Subcommittee, 

and you have proven yourself in the past as the Ranking Member 

and now I am delighted to see you assume the leadership role. 

Mr. Graves, congratulations on being designated as the Ranking 

Member. I have observed your participation diligently in the work 

of the full Committee on Transportation and Infrastructure. You 

are always there for the hearings and for the markups, and you 

have applied yourself vigorously. 

And I want to thank former Chairman Shuster for his leadership 

of the Subcommittee. He comes from a long family tradition of commitment to the subject matter of our full Committee and particularly of this Subcommittee and, again, you did a superb job as 

Chair of this Subcommittee, and none better than during the tour 

of the devastation of Katrina when we had the joint committee inquiry into the aftermath of Katrina and you toured throughout 

Baton Rouge, New Orleans, Mississippi, and into Alabama. Your 

expertise and your commitment personally to the subject matter at 

hand will be extremely valuable as we go forward, and I appreciate 

your continuing to participate. 

And to the Ranking Member of the full Committee, Mr. Mica, 

glad to have you participating. I know that you will diligently overVerDate 0ct 09 2002 11:43 Oct 05, 2007 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 P:\DOCS\34774.TXT HTRANS1 PsN: JASON
5

see the work of each of the subcommittees and participate in their 

deliberations. We have had discussion about the agenda of the full 

Committee and each of the subcommittees, and Mr. Mica and I are 

on track to achieving a good record for this Committee, an outstanding record of bipartisanship and participation in all of the 

works of this Committee. 

Now, this particular subject matter of today, as Chairman Norton said, I have a very keen personal interest, and I have a reminder at home: a green pen that was used by Lyndon Johnson to 

sign into law the Public Works and Economic Development Act of 

1965. I was a staff member for my predecessor, chief of staff for 

my predecessor, John Blotnik, at the time that legislation was written and participated in all of the subcommittee work, full committee, and the House-Senate conference in drafting the conference 

report on the Public Work and Economic Development Act. I 

worked on numerous—and I was at the White House for the signing of the bill, and that is why I have that one pen. 

And over the years, as time passed and I was elected to Congress, in my first opportunity to chair a subcommittee, I chose the 

Public Buildings and Grounds and Economic Development Subcommittee, and the ranking member of the subcommittee at the 

time was Bill Klinger of Pennsylvania, who had served as the chief 

counsel for EDA in a previous career. 

But we assumed the leadership of the subcommittee together at 

the time President Reagan proposed to abolish EDA and the Appalachian Regional Commission. We decided that we were going to 

prove the case that EDA and ARC together had served the Country 

well, that the investments made were indeed long-term, substantive, beneficial to the Country and to the communities, and 

that these two programs were grassroots-up initiatives; that the 

ideas for each project came from the community, not from Washington, not handed down to them by the Executive Branch or the 

National Legislative Branch. 

And that indeed is the success and the key and the brilliance of 

EDA and ARC together, that they are community generated and 

have community participation. And that is the key to success that 

we want to continue to nurture, to foster, and to support in the reauthorization of EDA and ARC. 

I was very pleased to hear Mr. Graves talk about reasserting jurisdiction over the Capitol Building, something that was siphoned 

away from our Committee in 1995, 1996, and Ranking Member 

Mica has a particularly keen interest and has spent a great deal 

of time looking over the shoulders of those who have been in charge 

of the Visitor Center project, which, as he will undoubtedly say, 

has far exceeded original cost estimates and could have been done 

for a good deal less, and very likely would have been had we retained our authority. We will work to reassert that authority in 

this Congress. 

I welcome our witnesses and, with Ms. Norton, I welcome the 

new members, those newly elected to this Congress and those new 

to the work of the Subcommittee. And I look forward to a very interesting hearing and a very productive year ahead of us. 

Thank you, Madam Chairman. 

6

Ms. NORTON. Thank you, Mr. Chairman. And I am pleased to ask 

the Ranking Member of the full Committee if he would mind offering a few remarks at this time. 

Mr. MICA. Well, thank you so much and congratulations to you 

Ms. Norton. I have worked with many members in Congress. I 

can’t think of anyone who is more effective and has provided better 

leadership than you. We have worked on a number of issues together and she is a tough representative, and look forward to working with her in her new capacity, but very pleased to have you in 

this position and look forward to working with you. 

I have already complimented the Chair on his ascension, after 

some 32 years, to the Chair of the full Committee and we have had 

a great working relationship and look forward to expanding on that 

as we work together on the six subcommittees and the full Committee’s efforts. That will be great. 

I thank again Mr. Shuster for his leadership in the past and welcome Mr. Graves. He will do an excellent job. I have watched his 

career too, and that is why he was elevated to this position. I think 

it is a very meaningful Subcommittee and the topic you launch 

today with I think is extremely important, economic development. 

Everything else is sort of second nature if we can provide good jobs 

and opportunities to people across the land, particularly in areas 

that need attention and combined resources of not only State and 

local and the private sector, but also the Federal Government. 

I have had the opportunity to read some of the testimony and I 

think you brought together some good witnesses, and they focus on 

maximizing local resources in concert with Federal and other State 

and private efforts, and I think that is a very good approach. They 

also talk about better preparing our workforces, which is essential 

in this era. 

I might say that I saw one of the testimonies also talks a little 

bit about export and might note for the record that 19 of 20 consumers in the future are outside the United States, and some of 

these areas that we are dealing with that need economic development assistance are not geared or prepared to compete in that 

international arena. So that is where the economic opportunities of 

consumes in the future lie. We need to do a better job in preparing 

and assisting those locales and efforts to compete in the global 

market. 

So those are a couple of points that I wanted to make. 

Finally, with limited resources—and these are big programs. You 

go through and there are 500 million I think we identified, sort of 

a combined effort in some of these programs, probably a little bit 

more here and there, and it has gone up and down, but better 

leveraging our limited funds I think is also a key to success, and 

I have seen some focus, or will be in this hearing, on that. 

I will mention, in conclusion, that—and I did have this in advance—I intend to see that we take full jurisdiction as we finish 

the Capitol Visitor Center. The irony of all this is the project started in this Committee. The only hearings held on the bills—and I 

offered the two bills; I think you offered one at one point—were 

heard in this Subcommittee. The project got launched from this 

Subcommittee and it will finish with the oversight of this SubVerDate 0ct 09 2002 11:43 Oct 05, 2007 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 P:\DOCS\34774.TXT HTRANS1 PsN: JASON
7

committee, and it will be the finest addition in the history of the 

United States Capitol, if not the largest. 

But we will maintain closer supervision of the project and I think 

it will be something that every American can be proud of. It is the 

first addition in the history of the Capitol to be built not just for 

the convenience of the members, but for the convenience primarily 

of the owners, the citizens and residents and visitors who come 

here. So I am pleased to put in a word for our stake in that effort. 

I think Ms. Norton knows my interest in the Federal Trade Commission building, that we expand the National Gallery of Arts and 

that we create a Federal cultural corridor and triangle. We have 

the responsibility for the larger vision. I mean, people can build 

buildings here and there, but we have to determine what this incredible national capital is going to look like 10, 20, 30 and generations down the pike, and I think that is an important project. I look 

forward to working with you. 

And finally FEMA. We have got an obligation to make certain 

that we avoid some of the problems of the past and make that 

agency that we are so dependent upon—I come from Florida. Others from around the Country, the Gulf States, New Orleans, or 

wherever we have been hit by a natural disaster know the importance of having a well functioning agency. We have seen the need 

for that and we need to make certain we have it together, so to 

speak, with our FEMA efforts. 

So a full platter, some exciting opportunities for a small Subcommittee but a very important, vital subcommittee within the 

Transportation and Infrastructure Committee, and I look forward 

to working with everyone as we move forward. Thank you. 

Ms. NORTON. Well, thank you very much, Mr. Mica, for those 

very interesting and helpful remarks. And, if I may, I would certainly want to thank you for the assistance that you gave to me 

and the leadership that you took in our effort to open Reagan National Charter Service years after all other airports were open. 

Your determination, including going to the hangar at Reagan National, helped to make the point to those involved that this had to 

happen, that we couldn’t leave a small plane or charter service 

closed down in the Nation’s capital. That and other projects in 

which you have worked so cooperatively with me, for that I am 

most grateful. 

Now, Mr. Graves, I don’t know if you want to introduce your 

members, but as a point of personal privilege I would like to ask 

my own former chair if he has any opening remarks, because it 

gives me the opportunity to thank him once again, personally, for 

the extraordinary bipartisan spirit in which he ran the Subcommittee. He knows that his father was a favorite of mine, so he 

knows I would have reported him if he hadn’t carried on that tradition. I am very grateful very much for your work on the Committee. 

Mr. SHUSTER. Well, thank you very much. I appreciate that, 

Madam Chairman. And as most members know, when I was chairman, I always appreciated limited opening statements and brief 

opening statements, but if the Chair will indulge me, since this is 

the opening hearing on the Committee, I think it is appropriate 

that I say something. 

8

First, to start off by congratulating the new Chairman of the 

Committee. I believe that we did some good work the last two 

years. We worked well together, I believe, and in a bipartisan manner. I think Mr. Graves pointed out that that is the key to the success, and I think that Chairman Oberstar pointed out the key to 

success in this Committee, whether it is the Subcommittee or the 

whole Committee, is working together in a bipartisan fashion, and 

hope to continue to do that. 

I congratulate Mr. Graves for his being appointed Ranking Member. I know he will bring the energy and thoughtfulness that he always brings to the table when he works on anything. 

And, finally, also to thank Mr. Mica for reappointing me to this 

Subcommittee. I think it is fair to say that this is not the most 

sought after Subcommittee on the full Committee, but it is one that 

I asked Mr. Mica I would like to be reappointed to because I think 

there is significant work to be done on this Subcommittee and I 

didn’t want to take the last two years of knowledge I think that 

I have gained on this Subcommittee. 

But there are important areas that we need to continue to focus 

on and I think, Madam Chairman, you were so effective in making 

sure we held the Federal Judiciary’s feet to the fire, and I hope we 

continue to do that when we are looking at their proposals for 

building new courthouses and, most importantly, utilizing those 

courthouses. 

I had a couple of meetings in the closing days of the last Congress with some members of the Federal Judiciary, and they assured us they were going to move forward with a study that is 

something that is going to be fair and we can count on to give us 

insight, although I do have to tell you when the Federal Judiciary 

says they take politics out of the Judiciary, well, what they did in 

the final days was to reappoint a new chairman of their sort of—

I don’t know what they call it exactly—their buildings and grounds 

committee, which happens to be the Federal judge who lives in my 

district and is a good friend of mine. 

Judge Brook Smith, who serves on the Sixth Circuit in Philadelphia is a good friend of mine, very conservative, and he has assured me that politics had nothing to do with it, but I know he is 

going to take a tough-minded, fair approach to these utilization 

studies, which I think are so very important to us that we are 

using taxpayer dollars in an appropriate way building these courthouses and, again, utilizing them. 

The national brokers contract I think is an important step we 

took two years ago to help improve the GSA’s ability to go out 

there and find, in a cost-effective manner, leases for us to house 

different Federal agencies across this Country. And then, finally, 

the important work we are doing here today and we are going to 

be doing on the reauthorization of EDA, the Appalachian Regional 

Commission, and the Delta Regional Commission, all extremely important to this Nation and extremely important to my district. 

And, finally, I want to welcome Ms. Glasmeier. Is that the way 

you pronounce it, Glasmeier? That is what I thought. We welcome 

you here as a professor at Penn State. I appreciate your being here. 

And also to let you know that my daughter will be, next fall, a 

freshman on the main campus there, so maybe we will run into 

9

each other as I am up there checking in on her from time to time, 

although she has insisted I give her a two hour rule that when I 

cross the Centre County line, I have to announce two hours before 

I cross it. So welcome here today. 

Thank you all for being here today. And I yield back. 

Ms. NORTON. Is there any other member who desires to make a 

statement before we call the witnesses forward? 

[No response.] 

Ms. NORTON. I would now like to welcome our witnesses, then. 

The Subcommittee especially appreciates that Professor Glasmeier 

has traveled a good distance to testify this morning. 

I ask unanimous consent that our witnesses’ full statements be 

included in the record. Without objection, so ordered. 

Perhaps we should begin the panel with Ms. Glasmeier, Professor Glasmeier. 

TESTIMONY OF AMY GLASMEIER, PROFESSOR OF GEOGRAPHY 

& REGIONAL PLANNING AND JOHN WHISMAN APPALACHIAN 

SCHOLAR, PENNSYLVANIA STATE UNIVERSITY; ERIC PAGES, 

PRESIDENT, ENTREWORKS CONSULTING; ANDREW REAMER, 

FELLOW, BROOKINGS INSTITUTE 

Ms. GLASMEIER. Thank you very much. I am pleased to be here 

before the Committee. 

I would like to offer the Committee, in its beginning deliberations, a copy of an atlas I did a couple years ago on poverty in the 

United States. It is a good geographical representation of where the 

Nation has been over the last 40 years and it will help you see 

where we have done a lot of good work and also identify places 

where there is still work to be done. 

I might also like to comment that Dr. Markusen’s absence here 

is due to a family health problem, but her comments are available 

for your review. 

In addition to being a professor at Penn State, I am also the 

John Whisman Appalachian Scholar and I work with the Appalachian Regional Commission. This is the second time I have held 

that post and in that job I am responsible for assisting the Commission in thinking through big problems and big future issues. So 

my comments today are largely a reflection of having the opportunity to think about what are problems within that region, but 

also the extent to which those kind of problems we see nationally. 

And I want to commend the Committee by noting that the two 

pieces of legislation that people have mentioned, the creation of 

EDA and the creation of ARC, has really contributed to the well 

being of America’s communities. You can’t go through a small town 

in the United States and drive down a main street without seeing 

the benefits of American investment. You can’t drive by a small 

airport and not realize that there are Federal resources involved. 

You can’t look at a health clinic and not recognize that there probably, 30 years ago, was some sort of Federal involvement in that. 

You can’t look at a broadband system and not wonder whether or 

not there is some sort of Federal support. You can’t look at a vocational training program and not recognize that somewhere along 

the line Federal policy has been involved in recognizing the value 

of those investments that we make in our communities. 

10

I work in parts of Appalachia, but I also work in the Mississippi 

Delta and other parts of the Country, and while we have made 

those investments, there are still many communities that are, in a 

sense, waiting for their investments, and so I look forward to the 

Committee’s work in the coming years to make those needs realized. 

I am going to focus my comments really on points I think are 

critical when you think about the work ahead, and I am going to 

think about them in terms of how to focus attention. 

The first that I recognize, in working with Federal agencies, is 

that economic development has traditionally emphasized the creation of jobs through, in large measure, the provision of infrastructure. That has had a huge impact and now the time has come to 

think about what we add to that to make America a competitive 

and creative economy in the 21st century. The bottom line is we 

need to integrate what we do. Right now we work at different agencies over different programs, and there is a great degree of independence and there is a lack of integration. It makes it difficult for 

communities to use programs; it also makes it difficult for communities to recognize resources. 

We need to focus on strategy. The United States is somewhat 

unique, at least in my experience traveling around the world, in 

that we don’t think strategically about economic development. We 

do it more as a process, but we don’t really think about a strategy. 

And I can think of countries like Spain or Britain or Japan where, 

at the very highest level of government, it is about what is the 

country we want to be and we work back from that perspective. 

And I think we need to think about that as a strategic approach 

to future economic development. 

We need to think about economic development not as a countyby-county activity, but as an activity that is done on a regional 

basis. While the ARC or the Mississippi Delta stand as examples 

of regionalism, regionalism is a practice that needs to be implemented across the Country, and the reason is because economic activity does not stop at the borders of counties. Economic problems 

do not end at the city lines. Economies are increasingly regionally 

developmental, and we can use the regional scale as a basis for 

performance. 

We need to also think about planning. One of the most important 

elements of the Economic Development Administration’s practice 

over all these years has been the fact that it has instituted in communities the notion to plan, the fact that you just don’t decide to 

do something without some idea of what the problem is and what 

the cause and the consequences are. There is not enough emphasis 

in the available funds today for planning, and yet communities are 

facing a whole set of new realities that they are very ill prepared 

to manage. So we need to think about how to strengthen the planning function. 

We need to think about cooperation. Cooperation is easy to say; 

it is harder to do. When it is all said and done and resources are 

scarce, communities find themselves in competition, and while they 

may speak as if they are working together, often they find themselves very far apart. So we have to have programs that really reinforce and facilitate cooperation. In some instances, because we 

11

don’t know how to do it very well, we actually may have to mandate it. 

And then, finally, my last comment focuses on opportunity. The 

future of the United States is very much tied to the possibility of 

an energy security potential. Right now, the United States’ renewable energy industry is not globally competitive. Countries from 

other parts of the world are far more well placed to be the global 

leaders in renewable energy technologies. The rate of growth in renewable energy industries—solar, wind, biofuels—are 25 percent 

per year for the last five years. So it is a situation in which the 

potential is enormous to generate jobs, to generate new technology 

and capabilities, and to create regional integration. 

We need to have leadership to do that. It is one thing to say we 

should have new energy capabilities; it is another to actually see 

it occur in a coordinated and an integrated and a regional fashion. 

So I see that as an opportunity that this Committee could take 

leadership on and to really drive the idea of energy security home 

through the process of economic development. 

Ms. NORTON. Thank you very much. 

Actually, I will leave it to you as to who is next. Would you like 

to be next Mr. Pages? 

Mr. PAGES. Thank you Madam Chair. Chairman Oberstar, members of the Subcommittee, I appreciate the opportunity to appear 

before you today. 

My name is Erik Pages. I am President of EntreWorks Consulting, which is a private economic development consulting firm 

based in Arlington. I am going to speak to you today based on my 

experience running this firm, where we have had clients in 28 

States, so we have had the distinct honor and pleasure of seeing 

economic development in the grassroots all across the United 

States. I also have experience serving in the EDA, so I have Federal experience working in economic development as well. 

I am going to focus my remarks today on how the Federal Government can help incentivize economic development in rural America, so I am going to exclusively focus on this. This, again, will be 

based on my experience as a private consultant, but also I serve 

as a Senior Fellow at the RUPRI Center for Rural Entrepreneurship, so I have some experience from that perspective as well. 

As Subcommittee members certainly know, rural America faces 

profound economic development challenges. The last few decades 

have seen an unprecedented flowering of wealth, innovation, and 

entrepreneurship in the American economy. Unfortunately, a lot of 

this wealth and innovation has bypassed rural America. If you look 

at recent research, 10 percent of American counties account for 

three-quarters of the Nation’s job growth in the last decade, between 1993 and 2003. Eight of those counties are located in rural 

America. So the vast majority of innovation and job growth in the 

American economy is occurring in suburban and urban settings. So 

there is a significant challenge facing rural communities. 

What is the solution? Well, the solution, there is no one-size-fitsall solution for promoting economic development in rural America. 

In fact, it is pretty hard to develop a single monolithic definition 

of a rural community. Jackson Hole, the Pine Ridge Indian Reservation, the cornfields of Iowa, the Mississippi Delta, all of these 

12

kinds of communities are rural, yet they have very vastly different 

situations. 

So each community’s solution is going to have to be unique. It 

is going to have to be locally generated, locally designed, locally 

driven. But I have seen it in my practice and I have seen throughout my career that economic development investments from the 

Federal Government can help incentivize and promote innovation 

for these small towns and rural communities. 

Now, what can the Federal Government do? What should be the 

appropriate Federal role? Well, again, no economic development 

strategy is going to succeed through Federal investment alone. 

Leadership has to come from the grassroots. Local leaders must 

recognize the need for change, build partnerships to succeed with 

change, and they are going to have to do it themselves. They are 

going to have to be the leaders in terms of development and implementation of these programs. 

However, given the financial and the demographic challenges facing many rural communities, Federal investments are needed to 

help, and I believe that Congress must assume a more prominent 

leadership role in this effort. The past decade has witnessed a serious erosion of the Federal Government’s ability to support local 

and innovative economic development strategies. We need to reverse these patterns and begin making real and sustained investments that help empower local communities, and I will leave you 

with a few recommendations that I think the Subcommittee should 

consider. 

First is the simple one, to continue to support Federal investments in economic development. And I know most of the members 

of this Subcommittee support that position. As you know, many of 

the key Federal agencies, such as the EDA, the Small Business Administration, have faced serious budget cuts in the past decades. At 

a minimum, the Committee and the Subcommittee should support 

efforts to maintain EDA’s budget at the current level, $284 million, 

and perhaps even consider an expansion of these programs. Other 

programs that you might consider for expansion would be programs 

that support stem education, science technology, engineering and 

math, as well as some SBA programs such as the small business 

development centers and micro loan programs. And I would be 

more than happy to discuss any of this during the Q&A period. 

Another opportunity to support rural development will occur outside of this Subcommittee’s jurisdiction when we debate the Farm 

Bill this year. There is certain to be in the Farm Bill major discussions of new strategies for empowering or innovative approaches to 

rural development. I would encourage all of you to actively become 

engaged in that debate over this year’s Farm Bill. It is a tremendous opportunity to energize innovative rural economic development strategies. 

The third strategy—and I would follow Ms. Glasmeier on this a 

little bit—is to support regional approaches. And, again, this can 

take multiple forms, such as support for regional development authorities such as the ARC, the Delta Authority, as well as new proposals such as Congressman Michaud’s Northeast Regional Commission and other efforts such as the Southeast Crescent Authority. Actually, some of the more recent programs that the AdminisVerDate 0ct 09 2002 11:43 Oct 05, 2007 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 P:\DOCS\34774.TXT HTRANS1 PsN: JASON
13

tration has been involved in have done a very good job in terms of 

energizing regionalism. In particular, I would encourage you to 

take a look at the Department of Labor’s WIRED program, which 

has done quite a good job of encouraging regional collaboration. 

And then, finally, I would just throw out three other quick ideas 

that are perhaps somewhat counterintuitive in terms of supporting 

rural development strategies. First is to encourage and support 

new immigrants into our economy. We are seeing a massive influx 

of immigration into rural communities, and these new immigrants 

are going to be the entrepreneurs of our future. They are going to 

be the drivers of rural prosperity in the future, and we need to support these new Americans as they begin to start and grow businesses and create jobs and create prosperity. 

I would also second Ms. Glasmeier’s comments about supporting 

energy R&D. Investment in alternative energy R&D is also an investment in rural development, which is well poised to prosper in 

this emerging cluster. 

And then last, but not least, I would encourage you to consider 

expanding support for new kinds of infrastructure, particularly 

broadband. Broadband is the highway of the future. I know it 

sounds cliche, but it is going to be the driver of economic development for rural communities in the future. They need to be on par 

with Metro and suburban areas in terms of deploying broadband. 

I will stop and I look forward to your Q&A, and thank you for 

the opportunity to appear before you. 

Ms. NORTON. Thank you Mr. Pages. 

Mr. Reamer. 

Mr. REAMER. Good morning Madam Chair, Chairman Oberstar, 

Congressman Graves, Congressman Mica, and distinguished members of the Subcommittee. I appreciate your invitation to speak 

today. 

At the Brookings Institution I examine the Federal role in promoting regional development and in producing the economic data 

needed by public and private decision makers. I was a development 

consultant for many years and EDA was a frequent client. 

For some time, the U.S. economy has been undergoing an often 

exhilarating, often wrenching restructuring process, one that has 

transformed regional economies across the Nation and led to major 

geographic shifts in jobs and income. While some places have 

emerged in better shape than others, none has escaped the pain 

and the uncertainty of this process. 

We are in a world dramatically different than that of 1965, when 

Congress created EDA. Then the Nation appeared to have a stable 

economic structure with well understood roles: Detroit for cars, 

Hartford for insurance, Houston for oil, and so forth. Economic development was seen as remedial work for places left behind in the 

post-war boom. 

In 2007’s brave new world of opportunity, vulnerability, and uncertainty, regional development agencies have created and implemented a diverse array of strategies. However, these usually have 

one element in common: seeking to create defensible market niches 

that provide high value-added products and services. Defensible 

niches are ones that cannot be easily replicated in other locations. 

For example, Boston, San Francisco, and San Diego have very 

14

strong positions in the biomedical industry, and Louisville and 

Memphis have similar positions in air freight. Value-added is simply sales minus materials. Higher value-added usually means higher wages. 

Creating and sustained high value-added defensible niches requires ongoing investment in a wide array of regional assets, such 

as innovative capacity, entrepreneurial base, workforce, business 

networks, physical facilities, infrastructure, and venture capital. 

This is a highly complex process and not easily achieved. 

In light of the ongoing economic restructuring in this Country, I 

recommend that the Subcommittee consider legislatively broadening EDA’s mission from aiding distressed regions to facilitating 

the competitiveness of all regions. In a widespread, constant restructuring process, all regions can benefit from some form of support. Moreover, the Nation’s competitiveness is very much a function of the competitiveness of its various regions. Thus, Federal regional policy becomes an important component of national economic 

policy. 

EDA was created on the assumption that depressed regions 

lacked the resources to provide the tangible assets—roads, industrial parks—necessary to attract industry. In 2007, regional competitiveness is less a function of tangible assets than of intangible 

ones, the ability of firms to be innovative and intelligent and entrepreneurial and effectively battle in an intensely competitive marketplace. 

The new role of regional development organizations is to see that 

firms get access to the softer assets they need to develop these 

qualities and to prosper in the community. To carry out this role, 

development organizations at the regional level need access to current accurate information about the region’s economic performance 

and structure, the expertise to create and implement a realistic regional vision for defensible niches and a roadmap for achieving that 

vision, and knowledge in a diverse set of realms such as workforce 

development, technology transfer, physical infrastructure, including, as Mr. Pages said, telecommunications, entrepreneurship, and 

venture capital. 

To fulfill the broader mission I laid out earlier, I suggest that 

EDA carry out a series of information-focused activities which support development agencies in this role. In particular, I suggest that 

EDA see that Federal statistical agencies produce the type of economic statistics that regional development organizations need, 

greatly increase its support for economic development research in 

order to better understand the dynamics of regional economies and 

what it takes to be a successful development organization, support 

electronic peer-to-peer networks among development practitioners 

that facilitate access to learning and effective practices, and utilize 

State economic development departments as mechanisms for providing expertise and support to regional agencies. State economic 

development departments are large enough to have economies of 

scale in delivering services and yet are close enough to the ground 

to be able to provide hands-on assistance to regional agencies. Lastly, I would like to see EDA provide a series of online references and 

analytic tools for economic development practitioners. EDA began 

to explore the use of such tools but has stopped. 

15

The cost of these various information tools is remarkably modest, 

a small fraction of EDA’s overall costs. Low costs and nationwide 

accessibility mean that the return on the Federal investment on information tools would be quite large. A reformulated EDA would 

continue its grant programs for distressed regions. The proposed 

information focused activities would be of significant additional 

help to such regions. 

In its proposed new role, EDA would require a different skill set 

and culture. Staff should have hands-on experience in the new 

wave of economic development. They would need to know how to 

advocate for the development community before other Federal 

agencies. 

As it is difficult to transform the agency as currently organized, 

I suggest the Subcommittee consider chartering EDA as a quasigovernmental organization. For similar reasons, many States have 

moved their development department outside of State government, 

and Congress might consider a similar step. 

Thank you for the opportunity to speak, Madam Chair. I look forward to any questions you might have. 

Ms. NORTON. Well, let me thank all three of today’s witnesses for 

very intriguing testimony. Let me begin with a couple of questions 

of my own. 

Forty-five, 50 years ago, in fact, until recent times, I think, Ms. 

Glasmeier, indeed, the statute itself makes the link to development 

and jobs, and, indeed, at that time, in that age, if there was a recession, typically the country looked to infrastructure, because you 

always need infrastructure improvements, and at the same time 

jobs, of course, came forward. Infrastructure continues to be vital 

in both aspects. But 21st century infrastructure turns out to be as 

much a new technology infrastructure, and one would say, or one 

could say that it might reduce jobs, rather than create them, the 

way there is an automatic link between physical infrastructure and 

jobs. And, indeed, for sure, having a strong back or knowing a craft 

may not be enough to get you a job. More expertise, fewer jobs may 

be the wave of the new technology infrastructure in the global 

economy. 

I wish you would address that possibility as we look to late-arriving regions that are competing not in the old economy, but in a 

brand new economy. 

Mr. PAGES. Well, Madam Chair, I think my primary comment is 

that I think you have hit the nail on the head in the sense that 

we are still using old metrics in the field of economic development. 

We clearly know that jobs is not the only thing to count, yet we 

still are kind of caught in the old system; we still rely on jobs. 

Clearly, the future of economic future is not about job creation, it 

is about wealth generation, and we need to look at new ways that 

we can measure wealth. 

As I think you sort of noted implicitly in your comments, what 

is more important is a good job that pays well, that requires a lot 

of skills and has a lot of spillover effects tied to it is more important than just any job. And it really is more important that we 

think about wealth creation, and the way we create wealth is 

through new businesses, through fast growing businesses, and we 

need to think about new strategies that build assets in that kind 

16

of way, that focus on creating wealth, as opposed to just creating 

jobs. 

Ms. NORTON. Ms. Glasmeier, did you have something you would 

like to say to that? 

Ms. GLASMEIER. Yes. I would like to continue Mr. Pages’ comments and say that we need smart firms. And I would say my own 

research tells me that American firms, in some degrees and in 

many places, are smart. But a lot of them are not smart and a lot 

of them have what I would call lifestyle firms: they work in their 

business to make enough money to have a good life, to send their 

kids to collect. They are not thinking about what the internationalization of the economy means unless it knocks at the back door 

of their factory and announces itself as you have just lost this account or business is declining. 

In general, I would say American corporations, or firms in particular, rather than corporations, because that sounds like big organizations, since we are such a large economy, it has been easy to 

think of economic opportunities in the business community from 

the perspective of what goes on in the United States, and not as 

much being concerned about what is taking place outside the U.S. 

I would argue that in addition to what we think in terms of the 

need for infrastructure, for the change in the skills of workers, that 

we need to have our businesses be strategic. They need to be selfconscious. They need to realize that the world out there is no 

longer something that stops at the border, but that is completely 

pervading our Country. And that calls for a series of programs and 

interventions that we only see in very few places and only in experimental forum. So that requires taking on a set of educational processes and practices that we have only begun to understand. But I 

see a real issue associated with our firms being competitive. 

Ms. NORTON. Let me ask one more question before moving to Mr. 

Graves. In this hearing we are stepping back and trying to look 

with fresh eyes at everything. It seems to me that includes looking 

with fresh eyes—and all of you have alluded to this in one way or 

another—the whole notion of regional economies in the first place. 

I was particularly interested when Mr. Reamer talked about defensible market initiatives. It is hard to think of countries having a 

niche any longer. We all live in regions; we prosper when the region prospers. 

But these regions don’t operate within States any longer. These 

regions don’t operate within a Nation any longer. These regions operate within a world economy. And, thus, it is one thing to have 

developed the old Northeast regions when, in essence, one region 

was competing with another. It is quite another to advise an underdeveloped region how it should develop in the 21st century. 

I am wondering if there is any defensible market niche, if there 

is any coherent regional notion in the world economy today that is 

not resource-based, for example, based on natural resources in a 

particular economy. You could understand that niche could—might, 

I should say—survive in an international economy. Even human 

capital now crosses all lines. 

So I want us to look at, when we say regional economy with underdeveloped regions who depend often on the Federal Government 

for whatever expertise they will get in strategy and planning, how 

17

the whole notion of region as a basis for Federal economic investment can be not only defended, but can be used to assure that we 

are addressing the real needs of those regions so that they will survive for some period of time, at least the period of time that one 

might expect given the investment. 

Mr. REAMER. Madam Chair, very good points. A defensible market niche does not mean that you are assured that you can exist, 

but you have a better chance, once you have leadership, of maintaining that. So a place like Silicon Valley cannot be easily replicated elsewhere, but it has to stay on its toes constantly. There 

is an incredibly effective regional entity called Joint Venture Silicon Valley that has worked for several decades bringing together 

regional leaders to make sure they keep their competitive edge, 

and that group really has been on the cutting edge of how a region 

can work together to maintain its competitiveness. 

So several challenges here. One is that regions are not political 

entities; regions are typically made up of a large number of political subdivisions. How do you organize regionally to make decisions 

to develop consensus when you have four cities, 20 counties, all 

with political leadership? 

The second point is that, echoing my testimony, I think an important element of EDA’s role now, as compared to 40 years ago, 

is helping regions build the capacity to create a defensible vision 

and a roadmap, that it is not something that is taught in graduate 

school. There are hundreds and hundreds of experiments around 

the Country about how to do this, and part of EDA’s role is to keep 

tabs of what is happening around the Country and help regions 

share information learned from one another; collect, codify, make 

explicit that kind of information so that regions in Nebraska and 

regions in North Dakota and regions in Missouri and regions in 

Pennsylvania have the benefit of learning from other regions. 

Ms. NORTON. Mr. Pages? 

Mr. PAGES. Yes. I would just add that, particularly from the 

rural perspective that I was talking about in my remarks, I mean, 

the reason we talk about regions is they generate scale and they 

generate ambition. Small communities, rural counties cannot have 

all the resources that a business needs in their community, there 

is simply not enough people; it is just a numbers game. By broadening yourself out as a region, you can get all of the resources in 

that broader region that a business needs to succeed. It also broadens the vision of the businesses to think it is not enough for me 

to go sell, I am a D.C.-based business and I do business in Maryland or I do business in Virginia; I need to sell globally. And a region broadens the perspective there. 

And what I have learned from my experience is that communities won’t come together, a county and a city or two counties 

won’t come together unless they face a tremendous crisis or a tremendous opportunity. We don’t want them to face a tremendous 

crisis. The role of the Federal Government is to generate those 

kinds of opportunities. You see them through EDA grants or I referenced the WIRED project over at the Department of Labor. This 

has forced people to think regionally, to come together around an 

opportunity of a catalyzing Federal investment that will force them 

18

to do things differently. That is what we want EDA to be able to 

do, to encourage communities to do this before a crisis hits. 

Ms. NORTON. Yes, Ms. Glasmeier. 

Ms. GLASMEIER. You made the point that increasingly it is not 

about competing in the Nation, it is actually competing internationally, and yet most economic development ends up being one community competing against another community. If there was a way 

in which we could change the manner in which we describe what 

is going on and what the problems are, and allow places or help 

places understand that they are not competing against each other, 

they actually are competing with the outside world, then you might 

be able to foster more cooperation and you could allow—and then 

places could actually see what their own individual advantages are. 

Because when you get away from the burden of thinking it is 

your neighbor who is going to steal the factory that is coming down 

the road, to recognizing that factory might not come here if your 

nation is not, overall, competitive, then you can begin to see how 

communities could start imaging that cooperation has some value. 

If we all think we are in it together, as opposed to us all individually operating as if we are going to lose something, then we might 

actually be able to plan some sort of future. But that has to be reinforced and, in a sense, policed within a policy framework because, 

otherwise, communities are simply going to work on the basis of 

bigger-than-neighbor policies. 

Ms. NORTON. Thank you very much. 

I will go to Mr. Graves now. 

Mr. GRAVES. Thank you, Chairman Norton. 

I tend to look at things a little bit simple. In fact, Ms. Glasmeier, 

you pointed out some very basic problems with looking at this regional concept. I come from a little tiny town in Northwest Missouri—I still live there—population 2,000. I will kind of lay this out 

for you. We have Omaha, Nebraska that is 75, 80 miles to our 

north; we have St. Joe, Missouri that is 70 miles to my south; and 

we have the Town of Merryville, which is about 40 miles to our 

east. Merryville has a population of about 10,000. 

I look at regions as a few counties. But you can’t get those folks 

to talk to each other. If the Town of Merryville has got a hot tip 

on a company or the Town of St. Joe has a hot tip on a company, 

they are not talking to the little towns out there about how they 

are going to be able to add to this process. They are not talking. 

And my question to you is so how do we get them to change this 

paradigm—because they are not going to—they aren’t competing 

against each other? The reality is they are competing against each 

other. The smaller communities, they can’t afford consultants, they 

can’t—for heaven’s sake, a lot of them don’t even know how to fill 

out some of the paperwork, they don’t have somebody with the experience to fill out the paperwork to apply for some of these wonderful opportunities or proposals or projects or programs that are 

out there that the States and Federal Government have to offer. 

But we can’t even get a town, some towns to talk to the outlying 

county, you know, outside their city limits, let alone go across county lines. And being where I am, seven miles from the Iowa border, 

you know, that is just like a wall that is thrown up between the 

19

two States, and then you have States competing against each other 

too. 

So I would be very interested in knowing how we break through 

that realistically, not theoretically but realistically break through 

that, and even what sector can we look at. Do you have a specific 

sector, you know, that might work or something? I would be very 

interested because I just don’t see that paradigm change. All of 

you, I would appreciate your comments. 

Mr. REAMER. EDA has a program of economic development districts, and I am not fully familiar with it, but I think EDA strongly 

encourages, particularly in rural areas, that counties join together 

and form a district in order to be eligible to receive EDA funds. 

That is certainly one mechanism for bringing together counties in 

rural areas to talk to each other and plan collectively. 

Mr. PAGES. I would just add, Mr. Graves, I mean, this is the classic dilemma we face in economic development every day out in the 

field, and, you know, I like to step back a little bit and think about, 

you know, we often talk about the three-legged stool of economic 

development: you can take business from elsewhere, you can keep 

the business as you have, or you can grow businesses. You are 

largely talking about business recruitment and business attraction, 

which has been the paradigm for economic development for the 

past several decades. To me, that is a zero sum game, and it is 

going to be very difficult to get two States to agree to cooperate on 

that issue, or two counties or two cities. 

So I say let’s not even fight that fight. Let’s focus on homegrown 

economic development strategies that try to increase startups, that 

try to increase fast-growing businesses that are based on the assets 

in the community. So, again, it comes back to this issue of the distinctive niche. What is the distinctive niche in your community? 

What are the businesses that the current residents of that community can develop? 

If you sort of take it away from the zero sum game to a game 

like that, where it is really about each community strengthening 

itself, again, I am not going to sugar coat this, people don’t just 

have this ‘‘aha’’ moment when you make this pitch, it is still challenging. But it is much simpler to bring people together around 

business retention or around a business growth strategy as opposed 

to around a business recruitment strategy. And so that would be 

at least one strategy I would suggest to create these kinds of regional alliances. 

Ms. GLASMEIER. One of the reasons that it is easy to do this competition is because data is configured in a way that we can draw 

boundaries, and so counties have their own boundary and data 

come in that package, and you have two of them and they don’t 

have to share and they don’t have to look at one another because 

they have their own packets of data. We have the ability to look 

below the county level, and what we find when we look below the 

county level is that most places are these little spots of development. 

If we were to ask places to begin to look beyond the county 

boundary and to say draw us a landscape of economic opportunity 

that takes into account your neighbors and create small incentives 

for local areas to learn how to do this—because it is not something 

20

that they know how to do naturally, but the information is out 

there; they have the extension offices that are there to help them 

figure out that type of view—then you may actually have places 

that are bigger actually looking at these smaller places and saying, 

well, gee, you know, you are not actually competing directly with 

me and you might actually have people who work in my area, so 

that they start to realize that they are all in this little net together. 

The second issue is just to make incentive programs. For example, in the case of renewables, the Appalachian Regional Commission just put together a blueprint on energy. We realize that there 

is not enough money to do much of anything in a packaged way, 

for the Commission to come out and say here is a lot of money to 

go after this. So what they are thinking, instead, is how can they 

start conversations that are within geographic areas that make 

sense for the types of renewables that can be done and what are 

the institutional actors in these places that actually could profitably work together. 

So you are talking about providing resources for conversations 

that lead people to say, gee, we are next to one another, it makes 

sense to work together on this, and it doesn’t set up a competitive 

situation because the problem can’t be solved on a point basis; it 

can’t be one community that gets everything, it just won’t work 

that way. 

Mr. GRAVES. Thanks, Madam Chairman. 

Ms. NORTON. Thank you very much Mr. Graves. 

I want to go to Mr. Michaud, but I do want to say, because I 

think Mr. Graves asked the question that small communities 

across the Country are all asking, I just want to suggest an analogy based on synergy from, yes, a big city, but the synergy analogy, 

I think, works. 

The District attracts tourists because the great monuments are 

here, and it has produced a tourist economy here. Well, Virginia 

understood that not all of the tourists wanted to stay in the expensive hotels in the District of Columbia, so if you go to Virginia or 

Maryland, you can get yourself a cheaper hotel. Half the people 

who come here, of the 20 million people, are school children. That 

means that Virginia and the District and Maryland work together 

on tourism. Even though it is the basis for our economy, they get 

enough spillover or synergy so that we are all in it together, as it 

were. 

Mr. Michaud? 

Mr. MICHAUD. Thank you very much, Madam Chair. Before I 

begin, I want to congratulate you for becoming Chair of this Subcommittee and want to thank you for your work over the past Congresses dealing with economic development. I really enjoyed working with you and, at the time, Chairman Shuster. 

I want to congratulate Mr. Graves and look forward to working 

with him in the upcoming Congress. 

Just a couple of quick questions. 

Mr. Pages, I read your opening statements and your answering 

of questions. I agree with your assessment on things that are going 

on. One of your comments you made, that there is no cookie cutter 

type of approach when you look at regional economic development 

21

commissions. I agree with that wholeheartedly, being involved in 

the Northeast Regional Commission. 

My question to Mr. Reamer and Ms. Glasmeier is do you agree 

with that approach as well, that each region is different and there 

should be a different regional approach as we look at the different 

regions around the Country? 

Mr. REAMER. Absolutely. I once wrote an article called ‘‘Custom 

Fit, Not Cookie Cutter.’’ The strategy for each region comes out of 

its own intrinsic set of assets. And back to the point about defensible market niches, that comes out of the particular unique set of 

assets in that region. 

Actually, one of the dangers in economic development is around 

what I call magical thinking. You might remember 10 years ago 

every region in the Country wanted to be the next Silicon Valley, 

so regions were trying to become something that they could not be. 

And part of EDA’s role, I think, is to help regions be realistic and 

develop their own strategies that fit their particular and unique 

circumstances, and an important part of that is actually the Federal statistical system that Ms. Glasmeier just alluded to, that we 

need data, regions need data to understand what their distinct assets are, and a key role of the Federal Government is providing 

those data; otherwise, regions are flying blind and they are susceptible to magical thinking. 

Ms. GLASMEIER. I spent a sabbatical last year up in New Hampshire and I wandered around in your region, so I have some sense 

of what some of the challenges are. And I also am from sort of the 

north central part of Pennsylvania in which we had an industrial 

economy and it is pretty much gone now. And I think we need to 

distinguish between places which are development-ready and 

places that have yet to be developed, because those are two different types of circumstances, and, yes, they need individually tailored programs, but they also have some common problems. 

So for example, in the southern tier of New York and the northern region of Pennsylvania, we have a former industrial economy 

with a declining infrastructure, a workforce that has been made 

moribund, and we are actually attracting immigrants who have 

lower levels of education than the base population. These are people that went away and are coming back, and there is really nothing for them to do. 

That is quite different from what you find in Central Appalachia, 

where basically that is a part of the Country whose economy has 

been inactive for a very long period of time. So we have to deal 

with those base conditions and, in a sense, make sure that places 

are development-ready, that there are certain minimum requirements. I mean, the old mill regions have an infrastructure which 

is corroding over time. 

If the investments aren’t made just to stay where they are, it is 

going to be hard to put together a regional strategy. So we have 

to look at places and realize that there are different economic histories that lead them to the place where they are at, and having 

an individual approach is correct, but there has to be minimum 

standards; otherwise, you are not going to be able to develop off of 

that. 

22

Mr. MICHAUD. My second question is, coming from the State of 

Maine, clearly, it is very rural, and at times you have economic developers in conflict with environmentalists. What role do you think 

resource conservation should play in economic development, particularly in rural States? 

Mr. PAGES. I think that for many rural communities the future 

is in resource conservation, particularly in communities that have 

scenic amenities or have some proximity to a Metro area. I mean, 

the trends in economic development, the exciting things that are 

happening in rural communities are really around those kinds of 

issues, around tourism, agrotourism, sustainable fuels, retiree attraction—which is really sort of a tourism kind of strategy as well, 

all tied to the scenic beauty and the amenities in rural communities; and you have to say you want to build off an asset. 

Well, for many communities in Maine—and I know Maine very 

well, sir—it is one of the most beautiful places in the Country. 

That is the asset for many Maine communities, is that it is so lovely up there. And to protect that asset is going to be the driver of 

economic growth for many communities in Maine and elsewhere 

across rural America. 

Ms. GLASMEIER. One of the challenges that rural places like the 

northern part of Maine face is the lack of telecommunications access. If you want to have a vibrant economy in a rural place which 

is sparsely settled, there needs to be some connectivity. And we can 

see, in work that we have been doing in Pennsylvania, that you can 

have tourist highways, but if the broadband interconnect isn’t 

there, then the ability for people to really be a successful tourist 

is diminished. So one of the challenges to take advantage of natural assets is going to be infrastructure of the future, which is still 

nascent money of these locations. 

Mr. REAMER. I want to reiterate a point I made earlier. I think 

because rural areas around the Country are struggling with this 

issue, how to do this, that EDA has a role in collecting the experiences from around the Country and finding a way to share them 

so people are not having to reinvent the wheel in Maine when 

someone has a similar experience in Oregon. 

Ms. NORTON. Mr. Walz? 

Mr. WALZ. Well, thank you, Madam Chair, and thank you to all 

of you for taking the time to come to us today and share your insights on this critical issue. 

I come from Southern Minnesota. I am truly at the heart of the 

biofuels. I have been driving a van for many years that is fueled 

by 85 percent corn; and the cornfield is right there, the farmerowned co-op 100 percent is right next door to it, and the station 

owned by the co-op is right there, you can see it all within a mile 

radius. We have come a long way in that and I agree with Mr. 

Pages on this, there has been some great entrepreneurship in doing 

this. 

The efficiency of the biofuels, that industry knows that it is not 

the savior when it comes to energy, but they do know that they 

started the conversation and moved us forward. They also know 

that, compared to the rest of the world, as Ms. Glasmeier noted, 

we are in our infancy on that, and I think one of the reasons is 

this idea of the regionalism. And I must confess I also am a geogVerDate 0ct 09 2002 11:43 Oct 05, 2007 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 P:\DOCS\34774.TXT HTRANS1 PsN: JASON
23

rapher and trained in that, so I talk regionalism a lot. But I think 

Mr. Pages made a good point. 

My question to you is, on this, I believe that we are doing those 

things as entrepreneurship. I do believe we are creating the new 

base of jobs. I have seen this absolutely save small communities 

out there in what they are doing. My question to you is we have 

some of these great regional authorities to help with this because 

the infrastructure is a huge issue, from broadband to rail to roads, 

and we see the ARC—and, granted, grossly underfunded and Delta 

and things like that—but the Northern Great Plains Regional Authority, we hear all this great talk about how we are going to become the Midwest is going to be the new Mideast when it comes 

to production of energy, but the last Congress made it easy for me 

to remember how much the commitment is to that: zero dollars for 

that regional authority. 

And my question to you is is that regional authority, in your 

opinions—and I have listened to you here—can that help us now 

that we have built that groundwork infrastructure on entrepreneurship, we have started to get the investment and people are 

ready, but they are being hampered by the very things you said, 

the border with Iowa and those type of things. 

So I am not sure who I am addressing this to. I guess I am just 

asking you. I think we are on the verge of something incredible in 

an economy, and it feels like we are hampered by this. 

Thank you. 

Ms. GLASMEIER. Thank you. I guess what I would say is I think 

that there are some lessons that can be learned from the other regional commissions. At the same time, I don’t want to make it 

seem like they are the answer to everything, because I think that 

we do have these really large challenges. If the national economy 

isn’t growing vibrantly, then that is a problem. If businesses are 

not generating jobs that are skill matched with what the citizenry 

is capable of doing, then that is a problem. 

But recognizing that those are real sort of structural constraints, 

I would say that we have to think in terms of development-ready. 

To what extent are these places that we might describe as regions 

actually development-ready? One of the things that is a part of the 

legacy of the Appalachian Regional Commission was taking a region that was truly not developmentally ready to a point where 

now you can actually initiate economic development and it actually 

works. 

I think the Midwest is challenged by different sets of issues than 

what we see at the ARC. At the same time I think issues such as 

population-out migration and essentially infrastructure that is not 

being reinvested in will act as a continuous challenge in attempting 

to make that a region as a whole. But how do you keep people in 

the region and how do you formulate new entrepreneurial activities 

seem to me to be, you know, underlying what that regional enterprise could be a part of. 

Ms. NORTON. Mr. Cohen. 

Mr. COHEN. Thank you Madam Chairman. 

I guess to ask the group, or whomever wants to offer help, how 

do you define economically distressed community in terms of getting economic development agency grants? 

24

Mr. REAMER. If you hang on a second, I think I have the legislation here. It is in the legislation. There is a series of criteria. I 

think you have to have a per capita income less than 80 percent 

of the national average and an unemployment rate above a certain 

amount. You have to have any one of three criteria. 

Mr. COHEN. And how is that measured, is it by the city or could 

it be—for instance, you studied Memphis, as I see in your remarks. 

Memphis has a lot of economically distressed areas. It may not 

meet that definition, but there are parts of the city that do, and 

there are parts of every inner city that does. Do those inner cities 

that have that need, do they qualify or are they disadvantaged because of the suburbs that raise their overall economic level? 

Mr. REAMER. Actually, my guess is that it is the political subdivision, but I am not certain. 

Mr. COHEN. Madam Chair, if that is accurate, is there a way that 

we can look at the definition? Because I think the great—I represent an inner city, as the Chair does, and there is no place in 

America—I know the rural areas need help, but there is no place 

that needs more help than inner city America, and it has been neglected for 150 years and gone through a lot of Jim Crow, really, 

to get to this point. They have been neglected. 

And Katrina exposed it, but it has always been there. And I 

think probably in 1965, when this program was started, Lyndon 

Johnson understood the need for it, but it has kind of been neglected. And I would think that we need to find a definition of economic distress that incorporated inner cities, even if they have got 

burbs around them that are burgeoning, that the inner city that 

needs that help is available for that grant program. 

Mr. REAMER. Congressman Cohen, I actually found the legislation and it says a small area that meets one or more of the criteria 

of poverty or high unemployment and lies within a larger community in less economic distress shall be eligible without regard to political or other subdivisions. 

Mr. COHEN. So that would include the inner city. 

Mr. REAMER. Yes. 

Mr. COHEN. And I have noticed, Madam Chairman—I appreciate 

your understanding and expressing about the global economy and 

not being regional, but as Mr. Reamer probably understands from 

his study, Memphis is the center of the Country, and if we concentrate everything there, it will concentrically go out and help all. 

[Laughter.] 

Ms. NORTON. I understand perfectly. 

[Laughter.] 

Ms. NORTON. Mr. Shuster. 

Mr. SHUSTER. Thank you, Madam Chairman. 

My question, following up with what Mr. Graves was talking 

about—and he is absolutely right, it is very, very difficult to get 

counties—I am in a very rural area, as I believe Dr. Glasmeier 

knows, south of State College—it is very difficult to get them to 

communicate, although they have started to communicate. And I 

wonder if you had come up with any ideas on how do you—especially in rural areas, or in rural areas, because I think it is a lot 

easier in urban areas to find that center of gravity, but in rural 

areas do you have any ideas on how do you put together regions 

25

or how do we go about saying if we are going to change, reauthorize EDA to encourage people to operate regionally, do you look at 

the resources, whether it is people, whether it is income levels, 

their tax base? I think you can find centers of gravity. 

In my district, Altoona is the center of gravity. Over the mountain is Johnstown. Well, quite frankly, they both believe they are 

centers of gravity and they are never going to—well, I shouldn’t 

say never, but they are rarely going to be able to cooperate. So do 

you have ideas on different measurements or different ways we can 

put into law that you need to come up with this is the criteria for 

regional cooperation? 

Mr. PAGES. I guess I am not sure this is something that you 

would legislation, but from my experience in practice is that you 

have a different region around different centers of gravity. Every 

community will have a different region around tourism than it will 

around business, than it will around commuting patterns, and my 

only criterion in terms of Federal investment would be to require 

that these are regional approaches and then let the locals define 

the region. In some ways, you know, people will often ask how do 

you define a region. 

I say what do the businesses think is a region? Or to give you 

an example from Pennsylvania, Central Pennsylvania, a lot of people say what is the Central Pennsylvania region? It is the Channel 

8 viewing area, which you may know from Harrisburg. People say 

that is the region. So it is often unique things like that. 

And I guess my experience is when you have squabbling counties 

or squabbling cities, squabbling political jurisdictions, is to start 

with the easy stuff, and the easy stuff is tourism or the easy stuff 

is youth engagement or, you know, try to slow the brain drain, 

strategies like that that are kind of, you know, less threatening to, 

you know, you are going to take the manufacturing plant that is 

going to move to my community. 

And, really, it is just baby steps, you know, build regional perspective around safer issues and then move to more difficult issues. 

It is really almost like a marriage or dating between the communities as you bring them together, and you need to start with 

things that are going to be less threatening to the sort of the economic centers of the communities. Again, I mean, that is more impressionistic than ways you might legislate, but that at least is one 

perspective. 

Mr. SHUSTER. I appreciate that, and I would like to hear from 

the other two, but just to point out to you that the Channel 8 viewing area is the other Central Pennsylvania. I am in the Western 

Central Pennsylvania. 

Anybody else care to———

Ms. GLASMEIER. I would say that that economic development districts are a place to look to because that is an already identifiable 

unit and people do cooperate in that context. It is also the case that 

today we are in better position to use data spatially, to actually see 

what regions look like. So what Mr. Pages described in terms of 

tourism, you look at what the tourism economy looks like and you 

can look at it statistically. Now, we can’t do it like surgery, but we 

can do it on a basis to give people some sense of it is not always 

beggar thy neighbor. Maybe it is, you know, we are not in competiVerDate 0ct 09 2002 11:43 Oct 05, 2007 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 P:\DOCS\34774.TXT HTRANS1 PsN: JASON
26

tion, maybe if we cooperate. So it is by using information so people 

and places can see that they can work together, that is going to encourage them to work together. And you already have units of 

planning that have that mind-set anyway; to try to reinforce them 

and provide them with incentives to work with communities to cooperate. 

Mr. REAMER. Three quick points. One is that money is an incentive, so if money is available only through organizing a development district, then that provides people with an incentive to cooperate. 

Secondly, just for your information, the Bureau of Economic 

Analysis takes the entire Country, rural-urban, and divides it into 

regions. So you can look in Pennsylvania and see what that Federal agency thinks are regions and use that as an organizing tool. 

Third point is I left each of you a packet of some examples of 

Federal statistical tools, one of which is a very innovative tool the 

Census Bureau has called On The Map, and you will see for your 

district, Congressman Shuster, you can map where people live in 

relationship to where they work. And as Dr. Glasmeier says, by 

giving people in a region a picture to show how they are interrelated, that in fact people live in one place but may work in another place, that that gives people a larger sense of who ′′us′′ is, 

broader than perhaps a more narrow definition. 

Mr. SHUSTER. And a final question to Dr. Glasmeier. How would 

you grade Penn State’s economic development efforts? I have talked 

to other members of the Pennsylvania delegation, and one in particular was talking about some of these universities—Georgia Tech 

I think was pointed out to me—and I don’t know this for a fact, 

but that Georgia Tech has just been a great boon for its region. A 

hundred miles around where Georgia Tech is—I don’t even actually 

know where Georgia Tech is located except in the State of Georgia—but they have done a great deal of technology transfer and 

caused some great things to happen. 

How would you grade Penn State’s efforts in technology transfer 

and what they have done to Central Pennsylvania? Because, as you 

well know, you go from Centre County down to Philipsburg or you 

go down to some of the other towns and it is Appalachia again; 

they are depressed areas that are within 30 minutes or less of 

what should be a hub of economic radiation. 

Ms. GLASMEIER. Georgia Tech is a really good example of an institution that new 50 years ago that it was important that science 

and technology knowledge generated in an institution was distributed around the State. So Georgia really is quite unusual, and it 

is actually the Georgia Tech Economic Institute that has these operations outside of the metropolitan area of Atlanta, and what they 

provide is sector-specific knowledge and expertise. 

At Penn State we don’t have something that is organized around 

a sectoral approach. What we do have, which is true for every State 

in the Country, is you have a land grant institution like Penn State 

and you have your extension-related educators, and they are very 

well versed in economic development practice and knowledge of 

their communities, and they work in individual communities and 

you call them up, you got a problem—we just lost a plant, we need 

somebody to come here and do an economic impact study—and usuVerDate 0ct 09 2002 11:43 Oct 05, 2007 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 P:\DOCS\34774.TXT HTRANS1 PsN: JASON
27

ally there is somebody on staff that can do that. That is certainly 

true at Penn State as well. 

Mr. SHUSTER. So the grade you would give Penn State? 

Mr. PAGES. You have got to give them an A. 

Ms. GLASMEIER. No, I can’t give them an A. I would give 

them———

Mr. REAMER. Isn’t it pass-fail? 

Ms. GLASMEIER. Pardon? 

Mr. REAMER. Is it pass-fail? 

Ms. GLASMEIER. Is it pass-fail? Right. That seems like the easy 

way out. I would give us a B. 

Mr. SHUSTER. OK. All right, fair enough. 

Ms. GLASMEIER. And I am a hard grader. 

Mr. SHUSTER. OK. Well, I am probably a tougher grader than 

you are, so I won’t tell you what my grade is. It is not a B, but 

it is certainly not an F or a D. But I would encourage Penn State 

to work with communities. As you well know, Blair County, which 

is to the south of Centre County, where I live, Mifflin County, all 

surrounding Penn State, and I have said Penn State certainly has 

the intellectual capital, but they just don’t have the workforce, and 

that is where those counties around have great workforces that we 

need to be tapping into and working with them. 

So I appreciate it. I look forward to maybe getting together with 

you, as I said, after this meeting sometime and talk about your 

ideas and what we can do to encourage that. 

Thank you again, all of you, for being here. 

Ms. GLASMEIER. I was just going to make one comment, which 

is I am working with the local development districts of the ARC, 

and we are putting together a program that would be used to try 

to convert firms from current practice to the capacity to work in 

the renewable industry, and that is obviously a regional approach 

that goes across the State, and it is working quite well. 

Mr. SHUSTER. Energy is what you are talking about, renewable? 

Ms. GLASMEIER. It is energy, but it is the idea, it is the LDDs 

that are working together. 

Mr. SHUSTER. OK. Thank you very much. 

Thank you. 

Mr. REAMER. Mr. Shuster, can I also make a comment about 

technology transfer? 

Mr. SHUSTER. As long as the Chairman says it is OK. 

Ms. NORTON. By all means. By all means. 

Mr. REAMER. Thank you. I did a study for EDA on the role of 

technology transfer and economic development, and I found that 

the rate of innovation, the rate of technology transfer increased 

dramatically the larger the city. Georgia Tech is in Atlanta, so 

places like Atlanta, places like Chicago, places like New York have 

much higher rates of tech transfer and patent formation and product development than do more rural areas. And there has been a 

lot of hope given to universities that are not in major cities, like 

Penn State, that they could produce the technology that would encourage firms to locate there. It is much more difficult outside of 

large Metro areas to do that. 

Mr. SHUSTER. Thank you. 

28

Ms. NORTON. Thank you. I must say, Mr. Shuster, I think a message before the end of the day will get back to Penn State. 

Mr. SHUSTER. I hope. 

Ms. NORTON. The chairman is going to come back. He hasn’t had 

a round of questions. Let me ask a few while we are waiting for 

him. 

I am intrigued, Mr. Pages, by your testimony that says that 71 

percent of rural counties actually gained population during the 

1990’s. And I think it makes you wonder even yet again about 

what definitions we are using. Does that increase in population correlate with improved economic development, or are we really talking about ‘‘rural counties’’ in the traditional sense of the word? 

Mr. PAGES. A very good question Madam Chair. What is driving 

that statistics of the increase in migration to rural counties are 

really several things. One is—I mentioned briefly in the testimony—new immigration, particularly in the Southeast and in the 

Midwest. You are seeing lots of immigrants moving to rural communities. You are also seeing some level of retiree migration, people moving to second homes or moving out of the big city to a more 

pastoral lifestyle is driving some of that. 

I would say generally what you are seeing, though, is that the 

rural communities that are showing this in migration are becoming 

less and less rural. I mean, these tend to be counties that are located closer to Metro areas, so I don’t know———

Ms. NORTON. But you say 71 percent. 

Mr. PAGES. Right. 

Ms. NORTON. That sounds like most of them. 

Mr. PAGES. Well, you would get the communities in the outer 

ring of the suburbs here in Washington, D.C., many of them would 

be classified as rural and would show that increase. 

But I think generally it is a very positive sign. At a minimum 

it is a reversal of a trend that has been going on for several decades, so I think if you are looking for good news about rural America, that is one very prominent piece. 

Ms. NORTON. Mr. Chairman? 

Mr. OBERSTAR. Thank you Madam Chair. 

I appreciate the testimony of the witnesses, including that of Ann 

Markusen, which will be submitted and included in the record, and 

I hope her husband is doing well; he had a serious fall. Ann I have 

known for years and she is one of our premier thinkers on the subject of regional economic development and industrial economics. 

You discussed, each of you, the upgrading of technology and the 

application of technology to economic development. In the 

SAFETEA transportation bill that we passed in the 109th Congress 

there was a provision allowing States, State DOTs to use the median right-of-way for fiber optic cable to serve underserved principally rural areas. That was our intent. It was my idea of making 

the median the REA of the Internet. 

I don’t know of any States that have yet moved to use that authority, although it is certainly out there and Massachusetts has 

expressed interest in doing so. I have talked with folks in Minnesota and I have spoken about this at various conferences, but it 

is something that you should look at as a means of stimulating the 

29

capacity of rural areas to compete in today’s economy, commuting 

by Internet. 

I listened with great interest to Mr. Graves’ example of his hometown. I think many others of us on the full Committee and Subcommittee have that same experience, a small community with 

large population centers in reasonable distance but far away, and 

then what constitutes regional development. We have several regional commissions in addition to the Appalachian Regional Commission, and my experience with regional economic development 

commissions was largely in Northern Minnesota, Northern Wisconsin, and Northern Michigan with the Upper Great Lakes Regional Commission. 

What I found as staff director for my predecessor working on the 

specifics of projects, communities applying, was how do you create 

and define a project of regional significance, one that is really and 

truly going to benefit all three States. And I think Mr. Pages is expressing the same thing. When you hear something regional, is it 

all going to be swallowed up by one big community? You know, the 

largest population center in my district is Duluth, it is 85,000 people. The Superior metropolitan area is 135,000, 140,000 people. But 

how do you identify a multi-State regional project? 

Ms. GLASMEIER. I can think of one that comes up in the area of 

providing world health care and links broadband. Right now, individual hospitals may or may not have advanced broadband applications, and there are two factors that seem to limit the real high utilization. One is the age of the doctor, the extent to which the doctor 

population is over the age of 50 and not used to using computers. 

I don’t think you can do anything about that, but what you can 

do is you can link hospitals into a telecommunications-base network that allows them to share knowledge both in terms of the 

kinds of problems that they have, but also the access that doctors 

have to specialties that are beyond the local region. And that is not 

inconsequential when it comes to providing sophisticated medical 

knowledge that would otherwise require the person who happens 

to be in Duluth to travel to Minneapolis or maybe even to travel 

to Wisconsin or to some part of Michigan to get some care. 

So there are ways in which certain kinds of existing functions 

can be coordinated in a manner. Then there is no sort of hub, it 

is a distributed system in which everybody has a potential to benefit. 

Mr. OBERSTAR. Well, that is a very good example, and I can take 

it a little further. In, if you can imagine, Minnesota and the point 

that Minnesota goes out to Lake Superior and Duluth is sort of 

right there, and about 50 miles south is Moose Lake and about 150 

miles southwest is Crosby on the other iron ore mining country, the 

Cayuna Range. A surgical practice at Crosby perfected amongst 

their practice the art of laparoscopy, the science of laparoscopy, microscopic surgical intervention. It is the least invasive and intrusive of surgeries. 

So then they got about a piece of a satellite and they created another clinic at Moose Lake, 135 miles away, and they trained a doctor there in laparoscopy and installed a laparoscopy surgical suite 

at Moose Lake. So every day this surgeon performs laparoscopy 

30

with the team in Crosby through the satellite doing rounds and 

overseeing surgical work. 

In addition, by the way, this team at Crosby established a similar laparoscopy practice in Haiti, and daily they work with a surgeon in the central highlands of Haiti and support a surgeon there 

who does laparoscopy. 

That is regional. It is not multi-State. In this case it is international. 

I would like you to think further about how we can help these 

newly created regional commissions craft a policy that will direct 

their funds to truly regional projects. 

Ms. Glasmeier, in your remarks about renewable energy, we 

have great potential in this Subcommittee and its jurisdiction over 

Federal civilian office space, nearly 900 million of Federal civilian 

office space to equip Federal buildings with solar power. In fact, 

our Subcommittee is going to consider and then report a bill for 

floor action to equip the Department of Energy building, which was 

constructed with a south-facing wall, blank, no windows, to accommodate solar facilities—in this case I think, most likely, 

photovoltaics, and produce enough energy to run the building. We 

ought to turn the lights on at the Department of Energy with solar 

power and make it an example for the rest of the Country. 

In fact, in this very Subcommittee, in 1977 a hearing was held 

on the use of photovoltaics in Federal office buildings to create, 

jump-start, if you will, stimulate a national photovoltaic industry 

and reduce the cost of electricity produced by photovoltaics from 

$1.75 a kilowatt hour in 1977 over a five year period reducing it 

down to 7 or 8 cents kilowatt hour, which was the industry standard. 

Well, I introduced legislation, got it enacted; Senator Humphrey 

did in the Senate. Together we got this bill passed. It was funded 

during the last days of the Carter administration and then 

defunded by the incoming Reagan administration, and nothing has 

happened since then. It is time to reactivate. 

Where is solar power so important? In rural areas. The U.S. Forest Service has weather reporting stations in remote areas that are 

operated by photovoltaics. The National Park Service does the 

same. NOAA operates weather buoys using photovoltaics that 

transmit. Our entire space program runs on photovoltaics, and on 

those long distance travels up to Pluto they use nuclear power. We 

can do that here. 

And in rural areas it would be extremely important to develop 

these types of renewable energy initiatives. There is a very successful project on a dairy farm in the central part of my district, Hubb 

& Shield Farm, where all of the manure is moved by the minute 

into a digester where methane is produced; and the methane is 

drawn off, the digester scrubbed, run through a generator, produces electrical power from manure-generated methane that runs 

the entire Hubb & Shield Farm and has produced a million kilowatts into the rural electric grid. He has got 200 head of dairy 

cows. He figures that each dairy cow is worth a barrel of oil, because that is the equivalent of the electricity produced on that farm 

by each cow in the course of a year. 

31

The same can be done with hog operations. I know Mr. Graves 

actively operates his farm and I know he can readily understand 

what we are talking about here. 

I would like to get your thoughts about the role of the economic 

development representative, the EDR of the EDA structure. Have 

you given thought to the role of the EDR, the local grassroots-up 

implementation of EDA’s programs? 

And the background for this is that there is a restructuring underway within EDA that will remove the economic development 

representative from communities within the region and centralize 

the function into the regional office seat, Chicago or other similar 

regional offices, and operate the service of the EDR out of that central location. I would like to have your thoughts about that. 

Mr. PAGES. Mr. Chairman, I had the pleasure of working at EDA 

during the early 1990’s, when we had a more extensive EDR operation in place and, really, the EDRs were kind of the public face 

of the agency, and if you really wanted to know kind of what was 

happening at the grassroots, you would talk to the EDR. And when 

people thought of EDA, they said, oh yeah, Joe the EDR or Mary 

the EDR, and they really were our public face. And I think both 

the EDRs and the regional offices are critical, because EDA is different from other Federal agencies; it responds to the grassroots 

rather than says here is the solution and we will give you a grant. 

It says come up with some ideas, some innovative ideas, and we 

will do what we can to support you. 

So you need those people that are out there in the field who understand what is happening———

Mr. OBERSTAR. And if I may interrupt you, the EDR is also the 

filter to tell folks, look, you have got a germ of an idea here, but 

it isn’t packaged right, it isn’t going to fit, it isn’t going to work, 

some other place has tried it, it hasn’t worked. He is the filter, or 

she, the filter to weed out that project. 

Mr. PAGES. And I would agree with you 100 percent. In fact, you 

know, for many of these communities who have maybe one FTE or 

two people in total working in economic development as professionals, to spend a lot of time on grant applications that they are 

not going to be able to win is, you know, very inefficient use of 

their time. They have got very limited time and resources. So that 

screening mechanism is very important. For some communities it 

is better to get a quick no than to spend a lot of time doing an application. We don’t count how much time, cost and resources go 

into these RFPs and into the grant applications. It is quite significant, and if we can help communities on that front, that is also an 

important contribution. 

Mr. REAMER. I would agree with that. I think the EDR structure 

has been—my experience has been it has been very helpful to have 

these people on the ground facilitating the process. 

In the information-oriented approach that I am suggesting EDA 

add to its current functions, I think EDRs would be important as 

well as a source of expertise to help local development agencies understand how to do their jobs better and as a way of collecting intelligence at a local level and bringing it back to EDA. I mean, this 

army of 50 people around the Country is a great resource for EDA 

to learn about what is going on on the ground, and it would be the 

32

starting point of a mechanism, as I was saying earlier, to share information across the Country about what works, what doesn’t 

work, and EDRs I think are a terrific resource in that kind of effort. 

Mr. OBERSTAR. I like your reference to the Army, except that the 

Army has been reduced to a platoon with the reduction in the number of EDRs, and about to be reduced further. 

Mr. PAGES. I would just make one other final suggestion, if you 

would indulge me, Mr. Chairman, on the EDRs. 

Mr. OBERSTAR. Sure. 

Mr. PAGES. One thing the Subcommittee might want to consider 

is to cross-train the EDRs in to the offerings and the programs of 

other agencies, rather than just have them focus on EDA. You 

often see this with State regional reps for State economic development departments. Basically market all of the State programs, as 

opposed to just one program in the Department of Commerce or the 

Department of Economic Development. 

Mr. OBERSTAR. I agree with you, and I think they should be, and 

in Minnesota our now retired EDR worked very closely with the 

State rural development agency of USDA and coordinated efforts to 

bring to bear the resources of both agencies on the needs of small 

towns. 

There are many other questions I would like to pursue but, 

Madam Chair, I think there are some things I might submit for the 

record. I will yield back my time at this point. 

Ms. NORTON. Well, if anyone deserves to ask questions, it is the 

man who started it all, and we appreciate that effort and the depth 

of your questions. 

I just have a couple of questions that I would like to ask. One 

has to do with testimony we have received ever since I have been 

on this Committee, really impressive testimony that I cannot recall 

receiving in any other committee or subcommittee about very impressive results from leveraging private resources and, indeed, very 

impressive history of measurable outputs from the Federal investment. 

We are in a period of, we call it here, pay-go. All of you, in one 

form or another, spoke about the underfunding of EDA. We are not 

going to see a big infusion of funds. I would like anything you could 

tell me about how we might better leverage small amounts of Federal funds to encourage the kind of proportionately greater private 

investment that is virtually the hallmark of this bill, and may be 

its only real future. 

Mr. REAMER. In my testimony, I alluded to the power of information-based tools. I mean, the Government has several tools at its 

disposal to promote social change. One is money tools: grants, tax 

credits. Another is information. Money, by definition, is expensive; 

and information is relatively cheap. So, Madam Chair, in terms of 

levering private investment, private investors need data on markets to know where to make decisions, where to make investments, 

and the Federal statistical system is the primary source of data for 

governments and for businesses to make those investments; where 

to put a store, where to put a highway, where to build a school. 

So I think in terms of bang for the buck in economic development, that a robust statistical system that really costs pennies per 

33

taxpayer has enormous, enormous payoff, that businesses and 

planning agencies, regional development agencies need those population statistics, need those statistics on jobs and income, need 

those statistics on the workforce to know where to make those decisions. And I very much encourage this Committee to be a strong 

advocate for a robust Federal statistical system because, again, for 

$25 million you could do a few things to expand the data resources 

available to regional developers and the businesses in their areas 

with remarkable payoff. 

Ms. NORTON. Mr. Reamer, they look fairly broadly now. They 

look at educational-base, they look at cheap labor costs. They stop 

there and then they go on. Now, if there is some value added beyond that, I think you are right, the Federal Government is going 

to have to virtually teach business how to find it, because they obviously look in the same way abroad and are not on their own 

going to invest much more deeply in the data, and it is very important for us to know ways in which Federal data—if you have anything more to add to the record on that, what kinds of Federal data 

might encourage the private sector to go beyond where they look 

now. 

Mr. REAMER. I would be happy to do that. 

Ms. NORTON. Ms. Glasmeier? 

Ms. GLASMEIER. I would just like to reinforce what Mr. Reamer 

said and use two examples. The first is in the case of broadband. 

Right now, broadband information is held on a proprietary basis by 

the providers. If you are interested in economic development and 

you want to know whether there is broadband capability, and you 

are looking at a rural State or a rural region within a State, you 

have to go to somebody within the public sector to get that information, and the question is do they have that information, and 

most of the time they don’t have it; they don’t know where the last 

mile is. So to the extent that there can be encouragement that that 

information be made available so that business enterprises could 

actually make good decisions, that is important. 

The second issue or second example is in the case of renewables. 

Right now, States have widely different policies about the prospects 

for renewable energy. If you are a company from Spain and you 

want to make an investment in the United States because we are 

a really big market and we are completely underdeveloped, how do 

you go about doing that? How do you find the information that you 

need about what the State regulatory framework is, what is the 

local labor force capabilities, what are the other due diligence requirements of operating in an individual State? That information 

is not coordinated, you have to dig it out with a bulldozer. It is very 

inefficient. 

So what does that mean for a foreign investor? Quite frankly, 

there are many other places around the world that they could go 

and sell their business as well. So if we don’t make investments in 

information tools so somebody that lives in Spain who wants to 

make an investment here can do it in the comfort of their home, 

then those opportunities will simply go someplace else like Singapore, where they already have that information. 

So it is not about should we, it is that we have to. And if we are 

willing to ignore the fact that the rest of the world is moving ahead 

34

of us, then that is our own cost. But we have to realize we are not 

playing on the field with all the tools that we need. 

Mr. PAGES. If I could just add. I would agree with Mr. Reamer 

generally that the smartest investment for leveraging would be to 

invest in statistical and information resources. But I also recognize 

that you face a difficult budget environment in terms of supporting 

our, or at least my, proposals to increase funding for some of these 

programs. I realize that is often easier said than done. 

But one other resource that the Subcommittee might want to 

look at is that there have been significant Federal investments already in revolving loan funds. EDA does that, the Department of 

Agriculture does that. And many of these revolving loan funds are 

underutilized at this point in time, and there might be ways to encourage improved marketing or, you know, new ways to get that 

funding out. These are previous Federal investments that are sitting there unused, and we ought to find ways to be able to tap that 

resource. 

Ms. NORTON. Here in the Congress I found a piece of land five 

minutes from the Capitol. It made a slum out of the whole neighborhood; owned by the Federal Government. I put in a bill for a 

public-private partnership. It is now being developed by the private 

sector. You couldn’t do that before because it was Federal land. The 

local community—there was a question from our colleague from 

Memphis about inner cities. It happens to be a poor local community down there. The investment from the private sector is renewing the entire section. The Federal Government hasn’t put a dime 

in that. The land was there. It took a piece of legislation. And I 

am very interested in seeing how that might apply in other parts 

of the Country. 

As I close this hearing, I don’t want to leave the impression that 

the Transportation and Infrastructure Committee believes that traditional infrastructure is no longer important for developing rural 

and, for that matter, other areas. I want to stress that particularly 

in the Midwest and in the Northeast, where many of our underdeveloped areas are located, there is a hugely aging infrastructure 

precisely because these were the first parts of our Country to develop. We are about to lose billions of dollars in investment because 

we are letting it go to seed, if you will forgive me. We are letting 

it rust out of existence, so that we will have to begin all over again. 

And with what investment? With what funds? 

I am very interested, for example, in tying infrastructure funds, 

or at least in doing some kind of experiment in tying infrastructure 

funds with upkeep of the infrastructure. There isn’t a lot of incentive for cities, for example, to build a road. What is it, 80 percent 

Federal? Should be, certainly should be. 

But what is the incentive? Unless the Federal Government encourages the reinvestment in the very substantial investment it 

has made in the first place. The infrastructure needs of these underdeveloped areas often remain underdeveloped, and in the Committee Subcommittees over and over again we hear about the development of water and wastewater infrastructure, which is not 

only aging, but some believe even dangerously aging. So we face 

the rebuilding America notion that I mentioned in my opening tesVerDate 0ct 09 2002 11:43 Oct 05, 2007 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 P:\DOCS\34774.TXT HTRANS1 PsN: JASON
35

timony, as much as I am interested in the vision of the future and 

the 21st economy in which we clearly already live. 

I want to particularly thank each of you for your own testimony 

and your willingness to come today, prepare testimony, make us 

think more clearly about our own mission. What we have heard 

has been extremely helpful. I invite you to continue to submit, as 

you have heard our questions, ideas to us as you face the difficult 

task of trying to carry EDA into yet another context, far more challenging. 

It is very much more difficult to be in an underdeveloped area 

in 2007, to virtually be starting from scratch than it was for your 

great-grandfather, who may have lived in Massachusetts, who 

could have done so with and did do so with his own labor and with 

an expanding economy that was a perfect match for the labor that 

was provided. And now we are saying, oh, you are late in coming 

and, by the way, the economy that might have done it has passed 

you by, so hop on this world, see if you can continue to function. 

We have got to think that way. 

And, frankly, what comes in on us—and you heard some of it 

from my colleagues on both sides—people want to talk about their 

problem. That is what their constituents sent them here for. So we 

would never get a look at what is really, really driving the problems of the members were it not for testimony such as yours. 

I ask unanimous consent that the record of today’s hearing remain open until such time as our witnesses have provided answers 

to any questions that may be submitted to them and unanimous 

consent that during such time the record remains open, additional 

comments offered by the witnesses or groups may be included in 

the record of today’s hearing. Without objection, so ordered. 

Thank you all again. 

[Whereupon, at 12:33 p.m., the subcommittee was adjourned.]

36


34774.007
37


34774.008
38


34774.195
39


34774.009
40


34774.010
41


34774.011
42


34774.012
43


34774.013
44


34774.014
45


34774.015
46


34774.016
47


34774.017
48


34774.018
49


34774.019
50


34774.020
51


34774.021
52


34774.022
53


34774.023
54


34774.024
55


34774.025
56


34774.026
57


34774.027
58


34774.028
59


34774.029
60


34774.030
61


34774.031
62


34774.032
63


34774.033
64


34774.034
65


34774.035
66


34774.036
67


34774.037
68


34774.038
69


34774.039
70


34774.040
71


34774.041
72


34774.042
73


34774.043
74


34774.044
75


34774.045
76


34774.046
77


34774.047
78


34774.048
79


34774.049
80


34774.050
81


34774.051
82


34774.052
83


34774.053
84


34774.054
85


34774.055
86


34774.056
87


34774.057
88


34774.058
89


34774.059
90


34774.060
91


34774.061
92


34774.062
93


34774.063
94


34774.064
95


34774.065
96


34774.066
97


34774.067
98


34774.068
99


34774.069
100


34774.070
101


34774.071
102


34774.072
103


34774.073
104


34774.074
105


34774.075
106


34774.076
107


34774.077
108


34774.078
109


34774.079
110


34774.080
111


34774.081
112


34774.082
113


34774.083
114


34774.084
115


34774.085
116


34774.086
117


34774.087
118


34774.088
119


34774.089
120


34774.090
121


34774.091
122


34774.092
123


34774.093
124


34774.094
125


34774.095
126


34774.096
127


34774.097
128


34774.098
129


34774.099
130


34774.100
131


34774.101
132


34774.102
133


34774.103
134


34774.104
135


34774.105
136


34774.106
137


34774.107
138


34774.108
139


34774.109
140


34774.110
141


34774.111
142


34774.112
143


34774.113
144


34774.114
145


34774.115
146


34774.116
147


34774.117
148


34774.118
149


34774.119
150


34774.120
151


34774.121
152


34774.122
153


34774.123
154


34774.124
155


34774.125
156


34774.126
157


34774.127
158


34774.128
159


34774.129
160


34774.130
161


34774.131
162


34774.132
163


34774.133
164


34774.134
165


34774.135
166


34774.136
167


34774.137
168


34774.138
169


34774.139
170


34774.140
171


34774.141
172


34774.142
173


34774.143
174


34774.144
175


34774.145
176


34774.146
177


34774.147
178


34774.148
179


34774.149
180


34774.150
181


34774.151
182


34774.152
183


34774.153
184


34774.154
185


34774.155
186


34774.156
187


34774.157
188


34774.158
189


34774.159
190


34774.160
191


34774.161
192


34774.162
193


34774.163
194


34774.164
195


34774.165
196


34774.166
197


34774.167
198


34774.168
199


34774.169
200


34774.170
201


34774.171
202


34774.172
203


34774.173
204


34774.174
205


34774.175
206


34774.176
207


34774.177
208


34774.178
209


34774.179
210


34774.180
211


34774.181
212


34774.182
213


34774.183
214


34774.184
215


34774.185
216


34774.186
217


34774.187
218


34774.188
219


34774.189
220


34774.190
221


34774.191
222


34774.192
223


34774.193
224

Æ


34774.194