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

55–118 PDF 2010

EDA: LESSONS LEARNED 

FROM THE RECOVERY ACT 

AND NEW PLANS TO 

STRENGTHEN ECONOMIC 

DEVELOPMENT 

(111–91) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND 

EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

February 25, 2010 

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, Vice 

Chair 

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 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ARCURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

LAURA A. RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

SOLOMON P. ORTIZ, Texas 

PHIL HARE, Illinois 

JOHN A. BOCCIERI, Ohio 

MARK H. SCHAUER, Michigan 

BETSY MARKEY, Colorado 

MICHAEL E. MCMAHON, New York 

THOMAS S. P. PERRIELLO, Virginia 

DINA TITUS, Nevada 

HARRY TEAGUE, New Mexico 

JOHN GARAMENDI, California 

VACANCY 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

VERNON J. EHLERS, Michigan 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

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 

CONNIE MACK, Florida 

LYNN A WESTMORELAND, Georgia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

ROBERT E. LATTA, Ohio 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

AARON SCHOCK, Illinois 

PETE OLSON, Texas 

(II) 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY

MANAGEMENT

ELEANOR HOLMES NORTON, District of Columbia, Chair 

BETSY MARKEY, Colorado 

MICHAEL H. MICHAUD, Maine 

HEATH SHULER, North Carolina 

RUSS CARNAHAN, Missouri 

TIMOTHY J. WALZ, Minnesota 

MICHAEL A. ARCURI, New York 

CHRISTOPHER P. CARNEY, Pennsylvania 

DONNA F. EDWARDS, Maryland 

THOMAS S. P. PERRIELLO, Virginia, Vice 

Chair 

JAMES L. OBERSTAR, Minnesota 

VACANCY 

(Ex Officio) 

MARIO DIAZ-BALART, Florida 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

MARY FALLIN, Oklahoma 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

PETE OLSON, Texas 

VACANCY 

(III) 

(V) 

CONTENTS Page 

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

TESTIMONY 

Dooley, Charlie, County Executive, St. Louis County, International Economic 

Development Council ........................................................................................... 28 

Fernandez, Honorable John R., Assistant Secretary of Commerce for Economic Development, Economic Development Administration .......................... 5 

Masingill, Chris, Director of Intergovernmental Affairs, Office of Governor 

Mike Beebe, on Behalf of Delta Regional Authority ......................................... 5 

Molnar, Larry, President, Educational Association of University Centers ......... 28 

Newcomb, Jay, Council President, Dorchester County Council ........................... 28 

Norton, Michael, Executive Director, Northwest Arkansas Economic Development District, National Association of Development Organizations ............... 28 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Dooley, Charlie ......................................................................................................... 49 

Fernandez, Honorable John R. ............................................................................... 68 

Masingill, Chris ....................................................................................................... 76 

Molnar, Larry ........................................................................................................... 82 

Newcomb, Jay .......................................................................................................... 87 

Norton, Michael ....................................................................................................... 90 

vi 


Insert offset folio 1 here 55118.001
vii 


Insert offset folio 2 here 55118.002
viii 


Insert offset folio 3 here 55118.003
ix 


Insert offset folio 4 here 55118.004
x 


Insert offset folio 5 here 55118.005
(1) 

HEARING ON EDA: LESSONS LEARNED FROM 

THE RECOVERY ACT AND NEW PLANS TO 

STRENGTHEN ECONOMIC DEVELOPMENT 

Thursday, February 25, 2010 

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 2:30 p.m., in Room 

2167, Rayburn House Office Building, the Honorable Eleanor 

Holmes Norton [Chairwoman of the Subcommittee] presiding. 

Ms. NORTON. My apologies to all of you and certainly to our 

Ranking Member. I have been in meetings with the leadership of 

our Committee on legislative matters that could not be delayed, but 

I certainly don’t want to delay this very important hearing; it is the 

second hearing of its kind and it is a hearing about an important 

priority and reauthorization of this Subcommittee. 

So I want to welcome all of today’s witnesses and all of you who 

are in attendance. We look forward to important testimony on the 

reauthorization of the Economic Development Administration, or 

EDA, as part of its on the ground activities under the American 

Recovery and Reinvestment Act and its other activities. Today’s 

hearing is actually the second Subcommittee hearing on proposals 

for the reauthorization of EDA and, in addition, this hearing will 

provide the Subcommittee the opportunity to hear from EDA on the 

ARRA, American Recovery and Reinvestment Act, or stimulus 

grant activity. This Subcommittee has conducted vigorous oversight 

of ARRA funds under its jurisdiction, including oversight of EDA 

use of these funds in four stimulus tracking hearings, and we intend to maintain the pace we have established to make sure that 

the taxpayer funds are used to create jobs now and to get the best 

value for the taxpayer. 

This Subcommittee has jurisdiction over authorization and oversight of programs promoting economic development in communities 

suffering long-term economic distress, including jurisdiction over 

the EDA, which is part of the U.S. Department of Commerce. The 

Public Works and Economic Development Act of 1965, which created EDA, authorizes partnerships between the Federal Government and State and local development entities to alleviate substantial and persistent unemployment in economically distressed areas 

and regions. A more critical partner, even, than the State and local 

development agencies is the business community in a given State 

2 

or locality. One of the most important goals in national economic 

development activities is to enhance community success in attracting private capital investment and long-term job opportunities. The 

work of the EDA is relatively small, but highly visible, as a part 

of Federal efforts to enhance economic opportunity nationwide because it does so by leveraging a rather small amount of Federal 

funds with private and local and State funding to increase the 

overall productivity of economically distressed and poor communities and their share of the Country’s general prosperity. 

I represent a highly urbanized district, the District of Columbia, 

which received some EDA project funding to help in the reconstruction of the historic Eastern Market, so I know firsthand the importance of economic devolvement, including the job benefits associated with strong, vibrant economic development programs. As of 

January 2010, for example, the District of Columbia had an unemployment rate of 12.1 percent while the national rate was 9.7 percent, but many EDA districts have even more serious and more 

persistent unemployment. EDA, however, not only helps create new 

job opportunities, but also helps sustain the gains made in distressed communities across the Nation. 

EDA was created to address issues of poverty, high unemployment, and geographic isolation by identifying distressed counties 

and setting aside the bulk of investment dollars to ameliorate these 

very drastic conditions. Under the EDA standard definition, distressed counties generally have an unemployment rate of at least 

1 percent greater than the national average for the most recent 24- 

month period, or per capita income of 80 percent or less than the 

national average. By leveraging relatively small amounts of money, 

the Federal Government has allowed EDA to engage private businesses, as well as States and localities, to reduce persistent poverty. 

An important part of EDA’s efforts are grants for public works 

and development and access to technical assistance and planning. 

This Subcommittee is particularly interested in the revolving loan 

fund and its ability to assist local development authorities, as well 

as EDA administration of the program. The revolving loan fund finances investments that capitalize an intermediary to make loans 

to local businesses that otherwise cannot access commercial credit. 

In today’s troubled and uncertain economic times, the nuts and 

bolts of economic development for undeveloped areas are of even 

greater importance. EDA projects are essential for job creation 

through the support of facilities and infrastructure, such as water 

and sewer lines, for industrial parks and expanding business incubator facilities. The EDA has built a track record for leveraging 

public investment into such private development and necessary infrastructure. 

EDA’s ability to deliver to America’s most distressed areas recently was on display with the ARRA. EDA received $150 million 

for projects across the Nation. On September 25, 2009, EDA, to its 

credit, awarded its final ARRA project. According to Committee 

records, EDA has awarded 68 grants in 37 States totaling $147 

million. That is all of it; the rest of it is for administration of the 

funds. In a recent report, EDA indicated it had broken ground on 

20 of these projects, totaling $45 million, representing 31 percent 

3 

of the amount allocated to support these investments. Among the 

wide-ranging grants were $2.3 million in Accomac, Virginia, for 

construction of 66 miles of fiber optic broadband network lines; $2 

million to the Georgia Ports Authority to enhance the port’s service 

capacity; $1.5 million to help build a food incubator facility; as well 

as multiple grants across the Nation for the expansion of industrial 

parks. 

Today we will hear from local government officials, economic development professionals, and industry experts about the ARRA and 

what it has done to improve the economic fortunes of distressed 

communities across the Nation. After four decades now of EDA’s 

work in job creation, this Subcommittee is in a position to analyze 

the Federal role in the extent to which EDA is building and sustaining relationships with States and localities and, importantly, 

with businesses, citizens, and Economic Development Districts. We 

will consider increasing our focus on regions that cross State lines 

as well, with special emphasis on economic development that produces jobs. We will examine existing grant programs for economic 

development assistance, university centers, research and evaluation, global climate change mitigation, and technical assistance. 

And, of course, we will scrutinize how funding decisions are made 

and how past funding decisions reflect on the efficiency of EDA. 

This afternoon we are pleased to hear from witnesses with deep 

experience with EDA and from policy makers and grant recipients 

who can help this Subcommittee ensure that we can maintain the 

past success of EDA and garner further support for its reauthorization. 

I am very pleased to ask the Ranking Member if he has any 

opening remarks. 

Mr. DIAZ-BALART. Thank you very much, Madam Chairwoman. 

Let me first thank you for this hearing. Obviously, as you well 

know, you do not need to excuse yourself for being just a few minutes late, because we all know what the crazy schedules are in this 

place. 

I also want to thank the witnesses, who are obviously the stars 

of any hearing. Thank you for being here today. 

I don’t want to be repetitive of what you have just said, Madam 

Chairwoman, but I think a couple things need to be repeated. We 

do know that the EDA received $150 million of the Recovery Act 

and, as of September 1st of last year, 93 percent of those funds 

were allocated for 68 projects. Now, we all, again, know that EDA 

was established pursuant to the Public Works and Economic Development Act of 1965, and at the time Congress recognized that there 

were areas in the Country that were experiencing chronic high unemployment and all sorts of other issues, low per capita incomes, 

etcetera. In addition, Congress also recognized that there were 

communities impacted by sudden and severe economic dislocations 

because of plant closings and natural disasters and such events. So 

EDA was created to help spur job growth in these economic distressed areas of our Country. 

Given the number of studies out there—and there have been so 

many studies over the years—EDA has a really good track record, 

and stories reveal that EDA’s programs create jobs at an average 

cost of $4,000 per job. When was the last time we heard that? ExVerDate Aug 31 2005 15:51 Jun 03, 2010 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 P:\DOCS\55118 JASON
4 

cept for the EDA, when have we heard that about stimulus money? 

Four thousands per job created. And of every $1 million of EDA 

funding, it attracts $11 million of private and other public funding. 

Those are, I think, impressive numbers. 

EDA grants have assisted communities devastated by natural 

disasters. I can tell you that one of those was Homestead in South 

Florida, which is a district I represent. Those grants facilitated private sector investment and helped to create hundreds of jobs. What 

is critical to point out here is that the EDA funds are not just intended to be the sole source of the funding, but that, again, attracts 

other funds, making those jobs, frankly, long-term jobs, not just 

provisional. So, rather, EDA’s investments are put to work with 

private sector and local funding. When the Federal funding is gone, 

those jobs, then, hopefully won’t go away. So this ensures that they 

are real investments, that they are real jobs and these are real 

long-term investments of taxpayers’ money. 

The EDA, despite having a good record, they still didn’t conduct 

business as usual when identifying projects under the Recovery 

Act, and some would have said, why not? You have a success 

record, so why not just do that? Well, they still thought outside the 

box. It obligated its funds a full year ahead of schedule and modified its process to ensure that most recent data on unemployment 

and poverty rates were used. And, again, they have to be commended for this as well. 

So obviously there are always ways that things can be improved, 

but I believe that the EDA is a model and should have been one 

of the models that other agencies should follow when allocating 

their Recovery Act funding. 

I hope that today we can hear from the witnesses on lessons 

learned from the Recovery Act process and how EDA’s programs 

have worked, how they can be improved, and what suggestions 

they will have for us. I also hope that we will be able to—by the 

way, Madam Chairwoman—move forward on reauthorizing the 

EDA in the near future. 

So, again, I want to thank you, Madam Chairwoman. I want to 

thank the witnesses, and I look forward to hearing from you today. 

Thank you, Madam Chairwoman. 

Ms. NORTON. Thank you very much, Mr. Diaz-Balart. 

I am pleased to recognize Mr. Carnahan of Missouri, if he has 

any opening remarks. 

Mr. CARNAHAN. Just very briefly, Madam Chair and Ranking 

Member. Thank you for having this hearing. 

I want to welcome our witnesses. We got to see Assistant Secretary Fernandez recently in St. Louis for some important announcements with funding that is going to help clean up and market an empty Chrysler plant that has left a big economic hole in 

the St. Louis region, and was part of an important strategy going 

forward. We think that is one of the tremendous assets of the St. 

Louis region and one that those funds are going to help, I think, 

package and get that back into use, back to be economically productive, and back with good jobs. So you can come back as often 

as you like, Secretary Fernandez, with news like that. 

We look forward to hearing from our witnesses and also pleased 

to have our St. Louis County executive here on the second panel, 

5 

Charlie Dooley, with his economic team, Denny Coleman. They do 

great work and we are honored that they are here to share their 

story with the Subcommittee. 

Thank you. 

Ms. NORTON. You ought to be very proud of them and we will 

hear from them on the second of two panels. 

We are going to begin with the Assistant Secretary of Commerce 

for Economic Development at EDA, John Fernandez; and then we 

are going to hear from Charles Masingill, who is Director of Governmental Affairs for the Office of Governor Mark Beebe of the 

Delta Regional Authority. 

Mr. Fernandez. 

TESTIMONY OF THE HONORABLE JOHN R. FERNANDEZ, ASSISTANT SECRETARY OF COMMERCE FOR ECONOMIC DEVELOPMENT, ECONOMIC DEVELOPMENT ADMINISTRATION; 

AND CHRIS MASINGILL, DIRECTOR OF INTERGOVERNMENTAL AFFAIRS, OFFICE OF GOVERNOR MIKE BEEBE, ON 

BEHALF OF DELTA REGIONAL AUTHORITY 

Mr. FERNANDEZ. Thank you very much, Madam Chairwoman and 

Ranking Member. 

And to Congressman Carnahan, I really appreciate the opportunity to be here today to testify on behalf of our agency. 

As a former mayor, I certainly know how important the EDA’s 

work can be. The EDA was an important partner of mine when my 

community faced a plant closing of a consumer electronics business. 

Now, as the leader of EDA, I am proud of the agency’s reputation 

fostering sustainable economic growth. EDA’s success is due in no 

small part to its focus on job creation and the program’s flexibility. 

EDA works directly with local economic development officials 

through a bottom up approach that both supports and relies upon 

a well established network of national and regional economic development professionals. This collaborative approach results in grant 

investments that are well defined, timely, and linked to longer 

term sustainable strategies. Linking EDA’s investments to a community’s strategic economic development plan enables the Federal 

Government to better leverage public and private sector investments. 

Rather than a one size fits all approach, EDA can fund customized solutions developed by our local partners, ranging from 

traditional infrastructure investments, revolving loan funds, and 

planning grants and other resources. And by quickly responding to 

the often changing economic needs, EDA is able to help speed the 

transition to a more entrepreneurial innovation-driven economy. For example, EDA invested $2 million in Renton, Washington to 

mitigate the economic impact of the loss of Airbus manufacturing 

jobs. The investment there supported the redevelopment of a 46- 

acre mixed use site for businesses that focus on commercial services, high technology, and life sciences, and in the process help diversify their economy. 

EDA also invested $920,000 in the Institute for Advanced Learning Research in Danville, Virginia. EDA’s assistance to the IALR 

has aided in the start-up or expansion of 30 companies through 

successful technology commercialization. 

6 

Now, EDA is an integral part of the Administration’s effort to 

implement a new national innovation policy. A few months ago the 

White House announced a blueprint for this new agenda, and the 

importance of long-term strategies and collaboration are at its core. 

This collaboration will help regions assess their competitive 

strengths, design a strategy to bring together the technology, the 

human capital, and the financial capital it will take to compete. 

Our projects reach every region and every segment of the population, from those with GEDs to those with Ph.Ds. In the Great 

Plains, communities are adding thousands of jobs thanks to the 

new wind power industry. I just returned from a visit to Duluth, 

Minnesota, where the community colleges are partnering with the 

region’s aircraft manufacturing industry. In Blacksburg, Virginia, 

the local science park is attracting an average of 20 new companies 

a year to a distressed part of the Appalachian region. 

We are extremely proud of the role that EDA has played for the 

past 45 years in creating strong and sustained economic growth in 

regions all across America. However, as the world changes and our 

global economy grows more complex, EDA must reinvigorate itself 

to rise to these new challenges. Reauthorization presents a window 

of opportunity to allow EDA to align its priorities and program 

structures to improve the competitiveness of American communities. The enormous challenges we face today require a deliberate 

effort to ensure that EDA works even more effectively. The goal of 

EDA is to not only usher in new expansion, but to make sure it 

is more enduring, rewarding, and broad-based. 

Chairwoman Norton, Ranking Member Diaz-Balart, and Members of the Subcommittee, I want to thank you again for inviting 

me to testify today, and I look forward to answering any questions 

you might have. 

Ms. NORTON. Thank you, Mr. Fernandez. I compliment the Administration for sending us someone who had on-the-ground experience with the Act—that has been particularly useful in FEMA as 

well—so that whoever gets appointed is not reinventing his own 

wheel. 

Mr. FERNANDEZ. Thank you. 

Ms. NORTON. I appreciate your testimony as a former mayor. 

Mr. FERNANDEZ. I appreciate that. 

Ms. NORTON. Mr. Masingill, who is testifying on behalf of the 

Delta Regional Authority. Mr. Masingill. 

Mr. MASINGILL. Thank you, Madam Chairwoman. Let me say 

how grateful I am for the opportunity to testify on behalf of the 

Delta Regional Authority to you, Madam Chairwoman, Mr. Ranking Member, and Members of the Subcommittee, and also Assistant 

Secretary Fernandez. 

The DRA represents a region that is culturally rich, which we 

have suffered from some of the greatest poverty in our Nation in 

too many areas and by the objective measures our education attainment levels are too low. Too often our community infrastructure is 

old and decrepit; our health outcomes from birth onward impede 

the best development of our human capital. Lastly, the placement 

in the use of technology is clearly more from the last century than 

the past. 

7 

This independent Federal agency, the first of its kind in 40 

years, was to become a Federal-State-local nexus of economic development in this part of the Country. The purpose of the DRA has 

been very simple: to help reduce and mitigate the poverty so pervasive throughout the region, to reduce the fragmentation and duplication of development services, serve as a regional planner and coordinator working with and reporting to other development agencies, and administer a congressionally funded grant program which 

would concentrate on transportation and public infrastructure, particularly now with information technology, including business development that emphasizes entrepreneurship and job training. 

Today I would like to just report real quickly on some of our successes through the Federal grants program. 

In the eight grant cycles, 510 projects, $75 million leveraged 

more than 350 from other government agencies, almost a 5 to 1 leverage ratio, more than $1.5 billion from the private sector, which 

is a ratio of 20 to 1 private dollars to DRA dollars. That means in 

an overall eight year context, investments made and pledged total 

almost $1.9 billion, with an overall ratio of 25 to 1. 

What are these dollars delivering to the region? Well, since the 

inception of the DRA’s Federal grant program, 294 projects have 

been completed with the following results: more than 11,000 jobs 

created or retained, almost 12,000 families with new water or 

sewer, more than 3,000 individuals trained for jobs. Even in today’s 

economic climate we can give you those results. 

Further, DRA now has 140 projects which are active with project 

outcomes including more than 23,000 families that will receive improved water and sewer, about 24,000 jobs which will be created 

and/or retained, and almost 6,000 will be trained. 

I might add that most of our active projects cited include participation agreements, participation agreements between the grantee 

and the Authority, such that if the outcomes promised by the 

grantee do not materialize, then the DRA would require the pro 

ratio share of that shortfall be remitted back to the DRA. In other 

words, if a grantee promises 10 jobs and they create only 6, then 

the grantee will repay 40 percent of its grants back to the Authority. 

Additional DRA initiatives include the Delta Regional Development Plan, which is the Authority’s plan to strengthen and help 

save both the small and rural towns within our region; the iDelta 

broadband plan for the region, how our communities can reduce 

technology deficits between themselves and the rest of the Nation; 

our Multi-Modal Transportation—Assets, Needs and Recommendations is the Authority’s report to Congress and the Administration 

that was presented in 2008 to bring the basics for local transportation logistics and distribution development more succinct within 

the region. Over 600 community leaders in 17 different meetings 

throughout the region were a part of that. And as our region traditionally maintains some of the lowest health outcomes and therefore maintains one of the least healthiest workforces, clearly hindering economic development, our Health Delta initiative works to 

improve health outcomes throughout all cohorts—age, race, and 

gender. 

8 

We combine that with some USDA funds to help with a three 

multi-county diabetes mitigation pilot and demonstration projects; 

working in partnership with the Department of Defense’s Innovative Readiness Training, whereby communities receive two weeks 

of free medical and dental care; and we work with the State Department’s J1-visa waiver program, which we call the Delta Doctors program, whereby we assist more than 100 foreign-trained 

physicians to practice at least three years in some of our medically 

underserved areas. 

In short, DRA is working to improve local communities in ways 

they need it done, and that help is certainly not limited to water 

and sewer projects. DRA works to deliver its outcomes through 

multiple, flexible, adaptable, and timely approaches, where success 

can be built on. 

As it speaks specifically to the Recovery funds, DRA did not receive any funds specifically, although we collaborate with projects 

all throughout the region. For example, in Arkansas, where I represent, the Dumas Technology Center. We combined our current 

DRA resources with Recovery resources from the State to help 

move that project forward in job training specifically. 

I would like to add, though, that since the Recovery’s implementation and in the context of DRA’s future plans to continue 

strengthening our Nation’s foundation through building job growth 

and sustainable regional economies through the EDA, we think the 

future is bright between DRA and EDA, particularly as we work 

to enhance our joint coordination and collaboration on economic development matters. Initial conversations have begun between the 

Authority and EDA’s regional office about emerging projects and 

endeavors which we think will eventually bring more resources into 

our region and help to better more sustaining environment we 

need, especially in our most economically distressed communities. 

I would also point out to the Assistant Secretary that Pedro 

Garza and Phil Paradice are some of the best, and we have a close 

working relationship with your two regional directors. 

Further, during the past 12 months, DRA has worked to better 

ensure that its programs are better synchronized with those in 

other Federal agencies, EDA included. And from our perspective 

maybe even EDA in particular we have found EDA staff to be extremely accessible and extremely helpful as they provide us with 

much needed insight and counsel. The Authority is ready to participate more broadly and more often with this cabinet level agency, 

and from that perspective we believe our ability to mitigate our region’s poverty through improved health and economic outcomes, 

while reducing fragmentation and duplication is now more in hand 

than ever. 

We appreciate your opportunity to speak with you and we appreciate the support of this body. Thank you, Madam Chairwoman. 

Ms. NORTON. Thank you, Mr. Masingill. Mr. Masingill, before I 

begin questioning, I would like to ask another Member who has 

joined us, Mr. Michaud, if he has any opening remarks before we 

begin questioning. All right, he will wait for questions, then. Mr. 

Michaud is from the State of Maine. 

Mr. Fernandez, you heard me say how pleased I am that your 

funds have been all obligated. Now, let’s talk about outlays, beVerDate Aug 31 2005 15:51 Jun 03, 2010 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 P:\DOCS\55118 JASON
9 

cause that was mixed up. When people go to find their jobs, they 

will look to who is being paid. This Subcommittee recognizes fully 

that even with shovel-ready projects there is some lead time to 

start a project. But in light of the depth of the recession, I must 

ask you when EDA expects to outlay all of the ARRA funds, and 

were you required to outlay them all by the end of this fiscal year? 

Mr. FERNANDEZ. Madam Chairwoman, I think it is a very important point, because when we obligate people actually start spending 

money. It may be their money, but they are spending money, creating jobs. 

Ms. NORTON. Which then you have to pay back. 

Mr. FERNANDEZ. Yes. Our construction grants are all handled on 

a reimbursable rate. So the work actually does begin and then we 

reimburse. To date, as you had mentioned, I think our number is 

up to actually 24 projects that have broken ground. It is my—— 

Ms. NORTON. Now, that means that every week or even two 

weeks somebody is being paid some money to do something. 

Mr. FERNANDEZ. And some people are being paid even before 

them, Madam Chairman, because they are designing, they are acquiring right-of-way, they are doing all the kinds of technical stuff 

that you have to do when you go build roads or whatever the infrastructure might be. 

Ms. NORTON. It is very hard to capture that, because it is part 

of what we call start-up. But it may make the program look like 

no money is being expended because these are fairly technical construction and preconstruction matters, design matters, but it is the 

way it works. We try to use these hearings to educate people as 

we educate ourselves so they understand something is happening 

in these regions. 

Mr. FERNANDEZ. Well, I can tell you from my experience as a 

mayor, when I get that Federal commitment to fund a project, I 

start doing work on it, and that means hiring the firms that may 

be finalizing design. Real money is being spent, jobs are being 

saved or created to move those projects forward, even though I 

know I am not going to get reimbursed until I complete my work. 

So there is a difference and a distinction between disbursement 

and allocation, but it is that allocation and commitment up front 

that really is the green light for job creation and for investment to 

happen. 

We will be at the point, I believe, where the vast majority of our 

projects will break ground by July 1st of this year. So we are moving quickly as you can on these kinds of construction projects. 

Ms. NORTON. Now, you are here, Mr. Masingill, as part as a kind 

of case in point for the various authorities—— 

Mr. MASINGILL. Yes, ma’am. 

Ms. NORTON.—the EDA districts under our jurisdiction, because 

there are a number of them. I am particularly interested in something that is somewhat new certainly in the President’s budget, to 

direct a substantial amount of—I don’t know if this is in the President’s budget or not—I guess this is my question—because it was 

in the Recovery Act to give a substantial amount of the funds to 

green and blue jobs, by which I think we mean blue collar jobs. I 

wonder how that kind of directive gets executed and whether or not 

10 

you, Mr. Masingill, received or any part of your jurisdiction received Recovery Act funds with this same mandate. 

Mr. MASINGILL. To my knowledge, ma’am, the DRA did not receive any of the Recovery dollars for these purposes, but we certainly stand ready to do that and we are happy to do that with any 

of the Federal agencies that would like to partner with the DRA. 

Ms. NORTON. Now, green and blue jobs, explain if there is any 

difference or why the Administration put both colors in it directive. 

Mr. FERNANDEZ. Is that question for me, Madam Chairwoman? 

Ms. NORTON. You, Mr. Fernandez. It was directed to EDA. 

Mr. FERNANDEZ. Yes. Green and blue. We use blue in reference 

to the oceans and lakes and the waterways. 

Ms. NORTON. Do you think that is what it meant? 

Mr. FERNANDEZ. Yes. It does in our world. Department of Commerce with—— 

Ms. NORTON. So tell me, then, how it worked out. What blue 

jobs, as opposed to green jobs? 

Mr. FERNANDEZ. Well, we have not specifically, to date, invested 

in a blue project, but we are certainly coordinating with our colleagues at NOAA—— 

Ms. NORTON. So what would be a blue project? 

Mr. FERNANDEZ. You know, there is research and aquiculture, 

development of aquiculture, transitioning some of the work on our 

coastal communities with the fishing communities and other kinds 

of development related to the ocean. 

Ms. NORTON. Now, I want to just note for the record—because we 

are looking at regional cross State ways to capture the EDA. Of 

course, this would take more funding. I will get to that in a minute. 

After this question, I have a number of other questions, but I am 

going to the two Members who are here. 

But what we are talking about when we say distressed areas, 

areas of persistent unemployment, Appalachian Regional Commission, which I think was the first, the Delta Regional Authority, the 

southwest border—that is Arizona and I think Louisiana, parts of 

those States—northern border, Maine and parts of New York; the 

northern Great Plains and the southeast crescent. Almost every 

part of the Country wants to be a part of this program, even with 

this relatively small amount of funding. 

One way to capture what we are doing is to understand how jobs 

are created. For example, this is not, and never will be—it is a 

rather prosperous region—but if we were trying to create jobs in 

the District of Columbia, we would be foolish just to look to the 

District of Columbia. We would look to the national capital region. 

The District of Columbia is a big city. It is suitable for certain 

kinds of jobs. Private business is more likely to go to parts of our 

region for other jobs. So State lines don’t mean much. Our own 

Metro crosses all the borders. Yes, there are individual projects in 

the District of Columbia. I was able to get EDA projects for part 

of the historic—actually, reconstruction—it burned to the ground— 

of the oldest open market I think left standing in the United 

States. But it happened to be in a lower income district on the border of districts that are beginning to burgeon, and it was contributing to that. 

11 

Now, I would like to get some sense from you, as we look to reauthorization and into the many parts of the Country that want to 

be a part of EDA, what you think—I don’t know if you would call 

them regional innovation clusters—how you believe the Subcommittee should go about looking for cross-border authorization 

for EDA. 

Mr. FERNANDEZ. Thank you. As you noted, we are very committed to the notion of regional collaboration, regional innovation 

clusters, in large part because we think economies don’t always follow some of the arbitrary borders that we have to create for political reasons. 

You know, you mentioned the District—— 

Ms. NORTON. And, of course, even if they didn’t, it wouldn’t make 

a lot of sense—— 

Mr. FERNANDEZ. No. 

Ms. NORTON. —to recreate an industry just across the line to 

compete with another industry, instead of trying to do business together. No antitrust laws would keep you from doing that. 

Mr. FERNANDEZ. Well, the mantra that I use often is that we 

need to look at those communities across the border not as competitors, but as collaborators, because it is those regional economies 

that are going to create the kind of competitive strength we need 

not to compete with the city across the street or across the river, 

but to compete with the region across the ocean; and it is the 

strength of these regional economies, I believe, that are going to 

give us the kind of competitiveness we need. 

You mentioned the District. Another exciting project that we are 

working on at the very earliest stages right now are the St. Elizabeth initiative, and as we work with a newly established White 

House interagency group, the focus on the new DHS headquarters, 

all investment that is going on in that part of the District, there 

is a tremendous opportunity to look at that as part of a regional 

cluster focused around some of the technology related to Homeland 

Security, FEMA, and some of the other agencies that are going to 

be there. So there are tremendous opportunities to do the very kind 

of work—— 

Ms. NORTON. Are there any kind of natural regional clusters in 

operation now, and what are they? 

Mr. FERNANDEZ. There are many regional clusters that exist, 

some which were funded by the EDA at their beginning and some 

that were not. For example, there is the Prosperity Partnership 

which is in the Puget Sound area. That initial group was funded 

by a $200,000 EDA planning grant and it has evolved into a strong 

association of a number of clusters, some around biomedical, the 

biomedical industry as well. We focused on—there is an auto cluster that we have been supporting in Alabama. So there are a number of these kind of broad regions. Existing economic development 

districts can collaborate, and we want to strongly encourage that 

kind of collaboration as well. 

Ms. NORTON. Well, I think encourage is the word, because we 

don’t want to make the mistake of deciding where the borders of 

economic development are. 

Mr. FERNANDEZ. Right. 

12 

Ms. NORTON. I mean, we know where the borders of the State 

are, but we have to go where the economic development is. 

Now, Mr. Masingill, yours is called something that sounds like 

a very big region. 

Mr. MASINGILL. Yes, ma’am. 

Ms. NORTON. Delta Regional Authority. 

Mr. MASINGILL. Yes, ma’am. 

Ms. NORTON. Have you had an occasion to have regional clusters 

that go outside of the State or the county of jurisdiction, and how 

have you kept rivalries or conflict from developing when you go out 

and one says, no, it has to be done my way because it is really in 

my county or most of it is in my county? How do we keep that from 

happening? 

Mr. MASINGILL. Well, that is actually a very good question for 

the Delta Regional Authority. Actually, in Congress’s wisdom, one 

of the things that you provided the Delta Regional Authority to do 

is we can use our money, our Federal dollars to leverage other Federal dollars because we can use our Federal dollars as local match 

money. We are one of the few Federal entities that can do that. So 

we can take our money, EDA money, and we can leverage that for 

even additional dollars across county lines or across State lines. 

Many of our projects that we actually use as a priority, because of 

our Delta Regional Plan, which we use as a benchmark for trying 

to encourage communities to work across their own county lines, 

one of the examples is I had mentioned where we collaborate with 

Recovery dollars and our DRA money, is the Dumas Technology 

Center, which is being used in Dumas, Arkansas to serve multiple 

counties and multiple communities that would normally, a few 

years ago, couldn’t even be in the same room together. But now we 

have taken both Federal dollars, State dollars, and recovery dollars, and we are creating a center where people will get trained, 

where we can have additional job creation opportunities and work 

across county lines and community lines. DRA is really, at the 

heart, that is what we try to convince communities to do all the 

time. 

Ms. NORTON. So you see what is happening: it has grown like top 

seed, because that is how the economy grows, and you follow the 

economy. And we have to make sure, in the reauthorization bill, we 

reauthorize it; not telling it where to grow, but say go where the 

money is. And I appreciate what you have just indicated, that the 

carrot and the stick, here is a little bit of Federal money. 

Mr. MASINGILL. That is right. 

Ms. NORTON. So if you all will come to the table across county 

lines, across State lines, maybe you can get this little bit of Federal 

money, and the business community wants you to take this little 

bit of Federal money because then they will come with funds as 

well. With enough Federal money and State and local money, this 

is how you grow a little bit of money into funds where everybody 

is at the table and therefore has a stake. 

I am going to move to the other Members before I ask anymore 

questions. I see Mr. Cao has come in. 

Mr. Cao, of Louisiana, I will ask you if you have any questions. 

Mr. CAO. Yes, I do, Madam Chair. 

13 

First of all, thank you for being here. I know that your time is 

extremely valuable. I just have a couple of questions to ask you. 

The EDA offered to the City of New Orleans the public-private partnership in the amount of $1 million, based on my understanding. The present mayor has not taken an interest; however, 

we do have a mayor-elect and he does show an interest in the $1 

million public-private partnership. And my question to you here is 

are you still prepared to commit the $1 million to the public-private 

partnership in New Orleans? 

Mr. FERNANDEZ. Congressman Cao, let me get back to you on 

that. I am not sure—— 

Ms. NORTON. Is your microphone on, Mr. Fernandez? 

Mr. FERNANDEZ. Yes, it is. 

I am not sure exactly what the status of that proposal is right 

now, but I will certainly get back to you and your office as soon 

as we wrap here and talk to our regional director. I am not sure 

what the nature of that agreement was. 

Mr. CAO. After Hurricane Katrina, there were many Federal 

agencies that came down to assist in our recovery, but there was 

a lack of coordination between the different agencies and we have 

looked at legislation to establish a Federal interagency disaster recovery task force with the purpose of ensuring Federal agencies are 

coordinated in the recovery roles. How is interagency coordination 

progressing and what is your role in this effort? 

Mr. FERNANDEZ. That is a great question. President Obama has 

made a huge commitment to ensure that this Administration works 

very closely on our long-term recovery disaster recovery work, established a high level interagency working group led by the Secretary of HUD, as well as Homeland Security. EDA, along with our 

colleagues at NOAA, were designated as the lead agencies within 

the Department of Commerce to participate in that activity. We 

have been very involved in that. 

I believe there is going to be a report published very soon on 

some of the best practices and action, how we are going to move 

forward. You know, at EDA, we really take this seriously. We view 

our role as second responders after disasters, but that second response is critical to work with communities to rebuild in a strong, 

sustainable way, and I think the work and the commitment of the 

President in this regard is just as high level as it needs to be; it 

is a big priority. 

Mr. CAO. Can you provide me with some information with respect to what available fundings are there still in connection with 

hurricane recovery for Orleans and Jefferson Parishes? 

Mr. FERNANDEZ. I will have to get back to you on that. I know 

that with our last supplemental from 2008, in total we are on track 

to spend the last $200 million out of the total $500 million by June 

1st of this year, but I would have to look at how it breaks out by 

region. But we will certainly get back to you on that. 

Mr. CAO. And how do you go about in assessing regional needs 

to arrive at a determination? 

Mr. FERNANDEZ. Could you clarify in terms of the need for the 

types of projects or the—— 

Mr. CAO. To arrive at your determination with respect to funding 

priorities. 

14 

Mr. FERNANDEZ. Okay. We work with the Committee to come up 

with a spend plan, and part of that includes the estimates in terms 

of the economic impact of the various disasters, with an overlay of 

economic conditions as well. But it is really driven by the magnitude of the damage, and then we allocate those resources across 

our six EDA regions, and then, of course, we respond to requests 

on a typical basis of our other programs. 

Mr. CAO. One of the most devastated areas in the City of New 

Orleans is the area of New Orleans East, where I live, which presently lacks health care; there isn’t a hospital around for 30 miles. 

And I know that we are looking for potential fundings to rebuild 

a hospital. I am just wondering whether or not there is any kind 

of Federal fundings under the EDA to address that issue. 

Mr. FERNANDEZ. Well, depending on the nature of the hospital, 

there would likely be an eligible applicant for EDA funds, if it is 

a nonprofit. But, again, the short answer is yes. The magnitude of 

the resources, I would have to look at the extent of the request and 

how much funds are in that particular region. 

Mr. CAO. Thank you very much. 

Thank you, Madam Chair. 

Ms. NORTON. Thank you very much, Mr. Cao. Your question on 

the role of the EDA in long-term disasters is apropos, one of the 

important matters that we believe needs clarification in the statute. Now, in the statute, EDA does have a role for long-term recovery in disasters, but I must tell you, in the FEMA hearings, by now 

I think it is fair to say—at least since I have been Chair, countless 

FEMA hearings—I don’t think we have ever had the occasion to 

call EDA forward one time. 

There is something wrong with that, since we have been mostly 

concerned with long-term recovery for a long time. Part of it may 

have to do with how few funds EDA has, but let me tell you what 

it does have: it has expertise that FEMA does not have in longterm recovery. Now, I know there is a White House long-term disaster recovery working group, and we know you are in there with 

giant agencies like FEMA and HUD, and I am not sure what role 

you are playing in that working group. 

Before I go to Mr. Carnahan, since it has been raised by Mr. Cao, 

can I ask you what role are you playing? Is it a minor role, is it 

no role at all? Are you at the table with this White House longterm disaster recovery working group that is supposed to have recommendations this spring on what the Federal Government ought 

to be doing with long-term recovery of the kind Mr. Cao just addressed? 

Mr. FERNANDEZ. The short answer is yes, we are definitely at the 

table. Despite our size, we like to think of ourselves as the little 

agency that can, and I am very pleased to report that the work we 

have been doing with other agencies in regard to this initiative, as 

well as others, I think has been unprecedented in terms of the level 

of cooperation and the spirit of how we are going to work together. 

And despite our size, our sister agencies in that group have looked 

to the EDA for leadership on these long-term recovery strategies. 

So while I have not read the draft of the report, it is my sense that 

you will see a very clear strong role for EDA in moving forward. 

15 

Ms. NORTON. Well, Mr. Fernandez, you need to carry this message back to the White House: we are going to reauthorize EDA 

this year. We have to get this bill through this House and get it 

through the other body, where you have to raise your hand in order 

to go to the john. It is very difficult to get a bill through two bodies 

now. Not so hard here, where we have regular order. 

So that if the White House long-term recovery disaster working 

group wants to have any influence on reauthorization, where we intend to clarify what we have been saying in this hearing, and certainly EDA’s role, they have got to get this Subcommittee something tout de suite, or as soon as possible, or else it will be another 

set of recommendations that are lying on the shelf. 

I want to go next to Mr. Carnahan. 

Mr. CARNAHAN. Thank you, Madam Chair. I want to acknowledge, as I begin, the 45th anniversary of the EDA and that it has 

been one of the most successful economic tools that we have had 

at our disposal here, and also acknowledge that it also is a primer 

for additional private dollars to get to where they are needed. We 

have seen those in the St. Louis region. I already mentioned the 

Chrysler plant in Fenton, but over the years we have also seen aid 

through EDA when there was defense downsizing in the 1990s that 

really hit the St. Louis region, and we also saw EDA efforts after 

the Midwestern floods. So we have been very thankful for working 

with the agency through the years. 

I wanted to ask a couple specifics from some of the users of EDA 

back home and get your thoughts. Under the economic adjustment 

program, the use of funding is mostly limited to building construction program planning grants. I have heard some suggest that this 

is unnecessarily limiting. I wanted to ask your thoughts about that 

and what do you think about expanding the eligibility of the use 

of these funds to include support for innovation in 

entrepreneurism. 

Mr. FERNANDEZ. Thank you. The economic adjustment assistance 

program historically has been primarily used for construction, but 

under the existing legislation we do have the flexibility to use it 

for other non-capital investments. For example, that is the source 

of our revolving loan fund investments, and we use it for some 

strategic planning and other types of support for incubators, accelerators. 

On an annual basis we encourage the Congress to support the 

Economic Adjustment Program. It is our most flexible fund and it 

is certainly well aligned to be a catalyst for the kinds of investments that are critical to drive innovation-led economic development. It, frankly, gets down to just a matter of resources and that 

limits us in terms of the EAA. 

Mr. CARNAHAN. Next I want to ask about the revolving loan program. Under its current structure, companies must start to pay 

back the loans very quickly, in fact, sometimes before they have the 

capital to do so. What do you think about restructuring the program so that it would not have to be repaid so quickly? Specifically, 

what do you think about the idea of a royalty payment or some 

other capture of profits and eliminating personal guarantees? 

Mr. FERNANDEZ. We are very interested in looking at the RLF 

program, and I stressed in my opening comments about how we 

16 

can modernize and fine-tune some of the great programs we have 

to make them even better, particularly in today’s economy. So I 

think we would be very happy to work with the staff and our stakeholders, and we get suggestions from our stakeholders all the time 

for areas of improvement, particularly with the RLF, the revolving 

loan fund. Another suggestion we hear often is to also have more 

flexibility for our intermediary organizations, the grant recipients, 

to even include non-debt finance structures as part of their program. 

Everywhere I go, one of the biggest issues that I hear about are 

access to capital, and particularly in the context of our innovation 

economy, where we have seen such a complete realignment of 

where money comes from particularly in regard to start-up businesses, early stage companies. Everyone talks about the so-called 

valley of death. Well, it has become a whole lot broader and a 

whole lot deeper, and an agency our size certainly isn’t going to 

solve all those problems, but I think we can be very interested in 

working with the Committee to look at ways that we can fine tune 

that program to help solve that problem where appropriate. 

Mr. CARNAHAN. Well, I would very much be interested in doing 

that. I know many of the economic development officials, some of 

whom are here today from St. Louis, but also some of the folks 

from our incubators back home, have, I think, some really good 

ideas, and we would like to share those with you in terms of going 

forward. Thank you. 

Mr. FERNANDEZ. You are welcome. 

Ms. NORTON. Thank you very much, Mr. Carnahan. 

Mr. Michaud. 

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

I want to thank both of you for coming this afternoon, as well. 

Mr. Masingill, in your experience—and I heard you talk about 

EDA a little bit earlier—have you found EDA to be very helpful in 

working with the Delta Regional and are there any things that you 

think that they should be doing differently that would actually be 

more assistance to what you are doing in your commission? 

Mr. MASINGILL. Thank you, Congressman, for that question. We 

have found the EDA to be a good partner and we are actually trying to find ways to strengthen that partnership. We do think that 

there are many more opportunities where we can collaborate in 

strengthening our resources and their resources for local investment. 

The Chairwoman mentioned regional partnerships. Well, the 

Delta Regional Authority, at its core, is a regional collaborator, is 

a regional planner, and is a regional economic developer, and we 

see ourselves playing a role with bringing in more Federal resources and opportunity to collaborate and to make good investments and stronger partnerships. We have had some great relationships. 

I mentioned two with Pedro Garza and Phil Paradice. We want 

to strengthen that relationship and we want to be in the best position to do that so we can show, through what we have already done 

with our investments in the number of private sector investments 

that we have been able to bring to the table with over 20 to 1 with 

17 

projects that we have had over some of our successes, we can 

strengthen that relationship. 

But we look to the future and hope that that future is bright 

with EDA and we stand ready to make them look good and make 

us look good. 

Mr. MICHAUD. Thank you. 

Mr. Fernandez, as you know, this Subcommittee and Congress, 

during the last session, actually established three new regional 

commissions. One, actually the President nominated a former EDA 

employee Sandy Blitz, to the Northern Border Regional Commission, which is actually the only one that he has nominated anyone 

to as a Federal co-chair. What do you see the role of EDA in getting 

these commissions up and running and working collaboratively 

with the new commissions? 

Mr. FERNANDEZ. Thank you, Congressman. I think our role can 

be as just described, as a true collaborator and partner. We have 

technical assistance we can provide; we have other kinds of resources that we make available to local economic development or 

regional economic development organizations to assist them in 

their work, and I think there is a lot of those types of assets. I 

think our folks on the ground in our regional offices are a tremendous asset to work with these commissions as they share a lot of 

ideas and identify projects that we can collectively work on and 

fund. 

Mr. MICHAUD. You were at the full Committee hearing the other 

day when we were talking about how the Recovery money has been 

moving forward, and one of my concerns I raised is we are talking 

about jobs and trying to maximize the amount of money that Congress—try to get jobs moving. The concern, however, is what appears to be the Administration, on one hand they are saying one 

hand; on the other hand they are doing others. And it was more 

specific to the United States trade representatives encouraging 

Mexico to qualify under WTO for the government procurement act 

so they actually can access some of the stimulus money, which is 

contrary to what Congress wanted. 

What is your agency and, more specific, the Department of Commerce doing to ensure that the Administration is moving forward 

in one direction versus what seems to be competing directions? 

Mr. FERNANDEZ. Thank you. Candidly, I am not familiar with the 

specific proposal in terms of the U.S. trade rep, but I can tell you 

specifically for EDA, by law, those kinds of entities would not even 

be eligible for our funding. 

Mr. MICHAUD. You had mentioned access to capital is important, 

and I have heard a lot of small business say that access to capital 

is still a huge problem. I know it is not within your jurisdiction, 

but do you feel that your agency should actually recommend to the 

President or the Small Business Administration ways that we can 

actually free up some capital, i.e., I know the credit unions actually 

have a lot of capital available; however, the law—there is a cap on 

giving loans for businesses. Do you think that we ought to increase 

that cap to help free up the capital for small businesses? 

Mr. FERNANDEZ. Candidly, I am not sure I have an answer for 

that. I mean, I know that there is a role and we do have opportunities to discuss these issues. I think EDA can help play a role in 

18 

solving some of those issues. I can tell you I have only been in this 

job for a few months, and in my prior life as a private investor trying to help companies grow, it is a very real issue and it is extremely difficult to get financing in today’s environment. Very good 

projects are sitting on the shelf ready to go, and we need to collectively, all of us, work to figure out ways to accelerate a lot of this 

innovation and business expansion that is ready. 

Mr. MICHAUD. Well, thank you very much. 

And thank you, Madam Chair. I look forward to working with 

you and hopefully the Administration—different agencies within 

the Administration will work collaboratively, as well, in the same 

direction so that we can get the jobs and the economy moving once 

again. So thank you. 

Ms. NORTON. I will go to the Ranking Member when he gets his 

bearings, so, if he will allow me, I will ask just one or two questions I think would be of interest to the entire Subcommittee. 

I was shocked, frankly, when you consider the productivity of 

EDA and where the money goes, to find out that your fiscal year 

2001 budget was $438 million and today—I had to hold my 

breath—it is $293 million. That kind of reduction is breathtaking, 

especially since—this has just been handed to me, so I don’t believe 

all of you have it, but if you can see the colors, you will notice 

something about the EDA budget that you won’t see in lots of other 

Federal budgets. Not only has the amount gone down precipitously 

and disastrously, cut not quite in half, but it is being bled to death, 

but look at who was really bleeding. 

The blue represents the funds essentially that go out to the districts and for projects. That is the color you see. The red, by the 

way, represents funds that they got on a basis of Louisiana, when 

they were pulled in for long-term recovery in a few instances. So 

the blue is what the States get. Now, look at how little money of 

the goes to personnel costs. You have to look at the top for that 

yellow to find how much of it goes to people in Washington or in 

the regions pushing paper, paper that is necessary. 

I don’t know where you will find a Federal program where so 

much of the program just goes straight out to the States and localities, and yet the cuts make me really wonder about the future of 

this program, whatever authorization we do. We know, for example, from our own records, that 30 to 40 percent of the folks who 

are left in this very small cluster at the yellow top are eligible for 

retirement this year or next. So I have to ask you a survival question, and that is the $293 million, that what is in the President’s 

budget for this year, was that increased from the prior year? 

Mr. FERNANDEZ. No. Our budget proposal for 2011 is essentially—— 

Ms. NORTON. Say that again, please. 

Mr. FERNANDEZ. Our budget proposal for fiscal year 2011 is flatlined. It is part of the Administration’s focus on dealing with the 

deficit. So in many ways we think the fact that it is not being reduced and that there continues to be support at the current funding level does represent the Administration’s understanding of the 

capacity of the agency to be in important and the work we do is 

important. 

19 

Ms. NORTON. I understand the Administration’s—I am sorry, 

what? 

Mr. FERNANDEZ. Our request for 2011 is for funding at the same 

level we requested for 2010. 

Ms. NORTON. Which is, of course, a reduction, because—— 

Mr. FERNANDEZ. You all gave us a little bit more money than we 

asked for. 

Ms. NORTON. Well, if we don’t, I really wonder if you are going 

to be in business. These Federal workers can leave. The only reason you are holding them, Federal workers around the Country 

who are not doing the work that would have been done by many 

more people, if you see the difference. 

Mr. FERNANDEZ. I can tell you, though—and you know this probably better than I—but the folks at EDA are incredibly committed 

to the work they do. 

Ms. NORTON. Well, they are not only committed. I think you 

couldn’t hold such people who have Federal pensions if you were 

not in the deepest recession since the Great Depression. These people are staying at work to continue earning a living even though 

they would have a rather nice pension if they went out. That does 

show tremendous devotion to their work, but it really makes me 

wonder, when you have this colossal reduction, in a few years, 

about the future of the agency. 

You testified, I think it is, Mr. Fernandez, $1 million gets you 

what, $12 million from elsewhere? Was that your testimony? 

Mr. FERNANDEZ. I think that may have been the Ranking Member’s comment. 

Ms. NORTON. Just let me ask. What you get, how can you assure 

this Subcommittee that what you are getting isn’t what you would 

have gotten anyway? How do we know that what is happening in 

the economic development districts wasn’t about to happen even if 

we hadn’t come in with our little carrot that produced what you say 

are the results we see? 

Mr. FERNANDEZ. Well, that has always been one of the most central questions around investments in economic development. When 

I was mayor, you see it at a State level, certainly here. It is the 

whole ‘‘but for’’ discussion. And from my experience as a recipient, 

you know, certainly but for the EDA investment, we couldn’t have 

built the new access road to facilitate the redevelopment of a closed 

factory. I mean, we just simply couldn’t do it. There are other examples that I think the grantees can speak even more clearly about 

than I. 

When I was in Minnesota last week, I met a town whose total 

population is 981. Not thousand; 981. But they are part of the Iron 

Ridge Region. And it just so happens because of their location, the 

need to expand a water line to facilitate the major investment in 

a new steel mill required an investment from or at least an expansion of that town’s assets. I can tell you they do not have $1.4 million. So we provided that grant for $1.4 million. The private sector 

is investing $1.6 billion, and there is going to be tremendous job 

creation. 

Now, one might argue, well, if they can do $1.6 billion, why 

didn’t they go $1.6 billion and $1.4 million? There are always those 

questions, but I think that the reality is that the town was responVerDate Aug 31 2005 15:51 Jun 03, 2010 Jkt 000000 PO 00000 Frm 00029 Fmt 6633 Sfmt 6633 P:\DOCS\55118 JASON
20 

sible for the water line, to fund, and there was no way they were 

going to be able to get that done without our support. 

People will always argue about it. I think that one way to look 

at it is are we getting a good return on investment, I think there 

is evidence strong for that in terms of the job creation. 

I think the Ranking Member’s comments, just to be clear, in 

terms of the 4,000 per job were specifically related to the investment in incubators in rural areas. It is a very strong number. Our 

overall numbers in 2009 are very close to that. 

If you look at the return on investment in terms of private sector 

investment that is leveraged, it is a very strong return on investment. So while I can’t swear that every single project only happened but for that last dollar, our recipients will tell you it is that 

commitment of Federal money through the EDA is the catalyst to 

get other people to commit. So I think it is essential and it is a 

very important way for us to leverage a small investment into 

something that is very meaningful. 

Ms. NORTON. Yes, and may be penny wise and pound foolish for 

somebody who is ultimately going to put up most of the money not 

to move until somebody with a little bit of money comes forward, 

but that is how the world operates. 

Mr. FERNANDEZ. Right. 

Ms. NORTON. And I do think your track record does show that 

somehow, especially with the Federal Government—something 

magic about that—is willing to come forward with some understanding of some kind of oversight, some kind of insistence upon 

return for the dollar, some kind of overall protection, bringing 

State and local governments into it, and you get a partnership that 

catalyzes. 

Last dollar money is outsize money, and we better understand it. 

It is the puniest part of the money, often, but it often is the biggest 

bang. 

I am going to ask Mr. Diaz-Balart if he has any questions at this 

time. 

Mr. DIAZ-BALART. Thank you, Madam Chairwoman. I will actually be brief. I have a couple to Mr. Masingill, if I may. 

You mentioned that most of your active projects include participation agreements? 

Mr. MASINGILL. Yes, sir. 

Mr. DIAZ-BALART. And that these agreements, as you point out, 

require that the grantees meet the outcomes promised and, if they 

don’t, they have to repay a portion of the funding. Talk to me a little bit about how you enforce that. What is the enforcement mechanism? If you can kind of elaborate on that—— 

Mr. MASINGILL. Sure. 

Mr. DIAZ-BALART.—because it is a wonderful thing to hear, actually. 

And also if you could let me know do you have projects that have 

not met those goals and have you had to go after that, and how 

successful have you been? If you could just elaborate a little bit on 

that. 

Mr. MASINGILL. Yes, sir, be happy to. Fortunately, from what I 

have been educated, we have not had to initiate that effort except 

for a couple of times. 

21 

Mr. DIAZ-BALART. Well, possibly because you have in the contract. I am sure that is a little of an incentive to submit real applications, right? 

Mr. MASINGILL. Yes, sir. And they also know we will audit and 

we will monitor those projects as they go along. There is a project 

actually right now in one of our States that it looks like we are 

going to have to go in and do that. They started a project knowing 

that the project wasn’t going to be fully completed, knowing that 

they had a participation agreement, in the time they communicated 

to us, they had already spent our money. 

They know that we will, through legal methods, through our 

methods that we have, go in and reclaim that. We have only had 

to do it, to my knowledge, once or twice, but I will make sure, Mr. 

Ranking Member, we get that information specific back to the 

Committee so you will have those in detail. 

But from my information, we have only had to do that once or 

twice, and we try to do a lot of work on the front end. We use our 

local development districts; they are our front-line project developers and they are a key partner with the Delta Regional Authority, and we use them to help at the local level as we are putting 

the grant agreements together and the participation agreements together. 

And it is not always easy; we have to go to the Committee and 

we have to go to the private sector and go this is what this document means, this is how important it is, because we want to be 

very clear not only with the local officials, but also when we come 

back and report back to Congress the investments that we have 

made into this project and what the return is going to be. So when 

I tell you that we have 13 jobs created and 9,000 jobs retained, 

then I can speak to you and tell you those are real numbers, because we go into those projects, we audit those projects, and they 

know if the private sector does not produce those numbers, then we 

go back after our resources. 

Mr. DIAZ-BALART. It would be fair to say that none of those jobs, 

therefore, would be in Congressional districts that don’t exist, for 

example. 

Mr. MASINGILL. No, sir. 

Mr. DIAZ-BALART. Mayor, Mr. Secretary—I don’t know which one 

you would rather have, because I know that once a mayor, always 

a mayor, correct, sir? 

Mr. FERNANDEZ. I prefer John. 

Mr. DIAZ-BALART. Do you all do something similar to that or is 

that something you have all looked at doing to—— 

Mr. FERNANDEZ. You know, I have asked that question a couple 

times, and there are some complexities related to it. We do have 

the ability to terminate agreements and get Federal share reimbursement. I don’t believe it is as clear as a clawback provision 

that we use in Bloomington and many other communities, and in 

part that is because we give grants to organizations to make investments that often I guess the—I am not sure what the analogy—almost like the chain of custody, it is maybe two or three entities removed from the direct investment from EDA, so it gets a little bit more complex in terms of how to do that specifically. But 

22 

we are certainly very mindful of the need to get what we invest in 

and, if not, we do have the ability to have those funds repaid. 

Mr. DIAZ-BALART. Again, you have a very good track record, but 

it would be interesting to see if there is any way to kind of look 

at that model. 

Mr. FERNANDEZ. I think your point is well taken. By having 

those authorities in those agreements, it often encourages folks to 

under-promise and over-deliver. 

Mr. DIAZ-BALART. Right. A little bit of an editorial note, not for 

you all to necessarily comment on, but if that was the case in the 

rest of the stimulus, the American people would probably have billions of dollars back. 

Anyway, thank you for being here today. 

Ms. NORTON. How do you know that, Mr. Chairman? The money 

is still being—it has been authorized, it is still being outlaid. 

Mr. DIAZ-BALART. That is true. 

Ms. NORTON. Even Mr. Fernandez said—which has authorized 

all of his money, has outlaid only—what is it? And he explained 

while you were in the back—— 

Mr. FERNANDEZ. The money that has actually gone out the door 

is around 30 percent of the total. 

Ms. NORTON. But that much of the money is being spent in startup. That doesn’t show until reimbursement—— 

Mr. FERNANDEZ. All of our grants are reimbursable, so the entities are spending that money. 

Mr. DIAZ-BALART. I am not referring to this area, because this 

area is—— 

Ms. NORTON. I know, but it is the same thing with stimulus 

funds. 

Mr. DIAZ-BALART. Well, Madam Chairwoman, we have all seen 

the reports about stimulus money going to campaign consulting 

firms, going to congressional districts that don’t exist, going to—I 

mean, we have all seen that. This is not the time or the moment 

or place, but—— 

Ms. NORTON. The fraud ratio in the stimulus funds is de minimis. I wish I could say that—and I am talking stimulus funds now, 

not funds for EDA. We can differ on these funds, but part of what 

we have been doing and that we tried to get Mr. Fernandez to explain how fund spending comes online, and the construction field 

is fairly technical, but it is certainly the case that you don’t say to 

a contractor you have a $4 million contract to hire 100 workers, 

here is $4 million. That is what gets you fraud. 

You say, okay, you are authorized for $4 million and we are 

going to monitor you—this is ordinary practice, now—we are going 

to monitor you, and as you produce you are going to get this $4 

million per week or per receipt, and you are not going to get a dime 

from us until you are able to show you deserve reimbursement. 

Otherwise, there would be wholesale fraud in funds for, for example, transportation and infrastructure. 

So it is important to place all of this in context to understand 

your concern, because I would join you, Mr. Ranking Member, Mr. 

Diaz-Balart, in whatever has been found. Nobody thought that you 

were going to authorize almost a trillion dollars and, for the first 

23 

time ever in the Congress of the United States, keep track of it online without having some of it end up going in the wrong place. 

What I am pleased about is that you do not have enough fraud 

in this program to shake a stick at, and the reason you don’t is because it is online, everybody can look at it; we can look at outlays, 

we can look at authorization. So we better watch out. We are trying to get some more of this money out for our transportation and 

infrastructure funds. 

Mr. DIAZ-BALART. Madam Chairman, if I may. 

Ms. NORTON. Yes, sir, of course. 

Mr. DIAZ-BALART. Clearly, clearly, where we obviously always 

have concurred is the fact that—and you and the Chairman and everybody has been very vocal about the fact that we never thought— 

we always thought that more money should go to infrastructure. 

Ms. NORTON. Precisely. 

Mr. DIAZ-BALART. Because that is the place where—— 

Ms. NORTON. We could track it. 

Mr. DIAZ-BALART. We could track it, jobs are created; it is nonrecurring money and you have the projects there for a long, long 

time. I think the debate obviously goes in other areas, and, again, 

we can have that debate for another day. Obviously, these two gentlemen are in areas where not only can we track it, but their record 

is as good as it gets. 

Ms. NORTON. And the Subcommittee is in bipartisan agreement 

about their record. 

Mr. DIAZ-BALART. Absolutely. But I would take it a step further. 

I think the Committee has been very vocal about, in transportation 

projects, that that is money well spent. That is clearly money well 

spent. When you go outside of transportation—and this is not the 

time to debate and you are always very generous with your time 

and allow me to speak, but there we will agree to disagree as to, 

yes, the money is tracked, but even when the money is tracked we 

have seen that the money has gone to places where it, frankly, 

shouldn’t. But that is for another day. Thank you, Madam Chairwoman. 

Ms. NORTON. Of course, Mr. Diaz-Balart. 

Before I end with one or two questions, could I ask Mr. Michaud 

if he has any further questions? 

Mr. MICHAUD. Yes, just one. And I want to thank you, Madam 

Chair, for bringing that chart up as far as the funding as it relates 

to EDA and once again I want to thank Mr. Fernandez. When you 

look at the return on investment, you are absolutely right, there is 

a huge return on investment. 

However, I do have a concern, being a Democrat, of how committed this Administration really is as far as creating jobs, and I 

am just wondering if it wasn’t for the Massachusetts election, 

whether we would be talking about jobs at this point in time. But 

that being said, EDA does a great job and I would like to actually 

know what the amount of money request of projects that are out 

there that should be funded. If you don’t have it now, later on. Because what I am thinking about, Madam Chair, is I think we have 

to move forward and reauthorize EDA. I don’t think we can wait 

for the Administration to come onboard. 

24 

But I also—getting back to your previous Ranking Member and 

your conversation, I would also be very interested in probably reprogramming some of the stimulus money that has not been spent 

and to put that money towards EDA, where we can actually get our 

good return for investment. I don’t think spending money to China 

is a good return on investment, and I think EDA definitely could 

use that money more effectively here in the United States and 

would hopefully work with you, Madam Chair, to get the reauthorization done, as well as having a bigger increase in EDA funding, 

and I am willing to support redirecting some of the stimulus money 

to where it actually will have a positive impact on economic development and jobs. That is how committed I am to making sure we 

move forward. 

So, with that, I will yield back. I would be interested, if you know 

off the top of your head or later on for the Committee, what is the 

request out there for funding. 

Ms. NORTON. Mr. Masingill seems like he wanted to respond to 

your inquiry. 

Mr. Fernandez? 

Mr. FERNANDEZ. First of all, there are a lot of things we can 

agree on, but I think I would take exception with the notion that 

this Administration is not committed to job creation. I think there 

is no question about the President and his cabinet’s commitment 

to moving this economy forward, rescuing it, rebuilding it as well, 

and there are numerous examples of the work all of us are doing 

to move forward on job creation. 

Mr. MICHAUD. If I might right there. I didn’t say wasn’t committed, I said how committed. Because I talked to the President directly over a year ago about how we were going to move forward 

with a manufacturing policy. And I can answer your question in regard to demand, if you will, at least in regard to 2009. In 2009, we 

received 1,338 applications for EDA funding. The total amount of 

funds requested were approximately $1.7 billion. We were able to 

fund 936 of those projects for a total investment of about $578 million. So we were able to fund about 54 percent of what was requested. 

Now, I am not saying the other 46 were projects we would want 

to fund. Because it is a competitive process, and some of those may 

not have simply been good projects. But there is clearly demand. 

Prior to this hearing, we had asked our partners at NADO to just 

do a quick survey for me, some of the, what our EDDs and other 

organizations think are out there. I think they can speak for themselves. There is clearly a pipeline and a demand for our work. That 

is something we certainly learned during the Recovery Act work. 

Ms. NORTON. Well, thank you, Mr. Michaud. Mr. Michaud and a 

number of us are working very hard on jobs, and we are concentrating on that more than anything else now. But I don’t want you 

to misunderstand what Mr. Michaud was urging. Mr. Michaud 

comes from the State of Maine. What always amazes me about 

Maine is the size of the State versus the size of the population. 

What is the population in Maine, Mr. Michaud? 

Mr. MICHAUD. About 1.3 million. 

Ms. NORTON. Now, let me make my point this way. You have 1.3 

million and one of the largest land masses. You can imagine, if 

25 

those people are throughout the State, wherever there happen to 

be resources, the best places, you have a very large State with 

pockets, really deep pockets of persistent poverty. Its own version 

of a kind of Appalachia, only in a very expansive area. 

What Mr. Michaud asked you about, in my mind, echoes a corollary complaint of the Congressional Black Caucus. They weren’t 

saying that all this money spent for job creation wasn’t absolutely 

essential. This President found a depression on the doorstep, 

stopped it in its tracks and the economy is growing for the first 

time, with the last part of the economy always to grow, jobs, far 

behind and too far behind. But nobody now says we are in the 

same recession we were in before. Very tough steps that were 

taken. 

Step two. Now that we know that we are in a collapse of the financial system of the United States, not simply an economic recession of the kind that almost comes back by itself, we have to look 

to the issue of targeting. Or else in Maine and in Missouri and 

even, I indicated that there is 12 percent unemployment in this 

city. Imagine what it is in some other large cities, because this is 

not by any means the worst off. What we are going to see is gradually coming back in other places and hardly any bite taken out of 

unemployment where unemployment is highest. 

Well, what can the Administration do about this? Every time he 

talks about jobs, every time we talk about jobs, somebody screams 

deficit. Something that we must work on, except anybody who 

reads history knows that in 1937 Roosevelt responded to concerns 

about the deficit during a depression. Indeed, attended in his budget to some deficit. And he went into a double dip recession that historians now say that the newspapers called the Roosevelt Depression. 

And I hate to remind everybody of this, but I went back and read 

this history. I hope you understand how we got out of the Great 

Depression, that it wasn’t by a jobs bill or even by the great creation or the wonderful creation of the programs we are depending 

on essentially now, unemployment, Social Security, all the rest of 

it. We got out of the Great Depression because of World War II. 

We took a huge part of the workforce known as men, drafted them, 

thereby leaving a labor shortage, made guns and tanks in Detroit, 

not shipping it to all parts of the world and getting parts there and 

getting most of it from other parts of the world. Voila, we got out 

of the Depression. 

So those of you who think that what we are doing now with this 

under a trillion dollars is going to get us out of this have to know 

that what we are doing now is going to keep us, at least job poor, 

for a number of years. So what does Mr. Carnahan do in the meantime? What does Mr. Michaud do? Indeed, Mr. Diaz-Balart comes 

from a very rich State. But he has got some of this in his State. 

What do people in the big cities do? Now they have to go back and 

say, yes, continue to make jobs for everybody. But you have got to 

target some of this money to the people who are worse off, and not 

think that if you do jobs in the public sector, for example, as we 

have with Mr. Diaz-Balart and our pulling together to get more 

and more of this money. We got too little of it in the stimulus bill. 

26 

You can’t believe with that per capita funding that Maine or Missouri or the great cities are going to be better off. The only way 

to target it is to look at what mechanisms do you already have. Mr. 

Fernandez, you have to take back the message from this Subcommittee that unless one of the few mechanisms, there may be 

others, there are poverty programs, there are things like that in all 

of our districts. But unless you find a way to target money in that 

way, using what we already have, these districts are going to continue to be the ones with 17 percent, 20 percent, 25 percent unemployment. And there is no other way to do it. So just putting more 

money in the pipeline does not do it. 

So when you tell us level funding for EDA, which means a cut 

in funding, another cut in funding, I understand it went from almost half a million dollars in 2000 to where you are today, but we 

expect this Administration, that is what you are hearing here on 

this side of the table, to target more of this money. So in desperation, you hear a Member that I can’t say I disagree with saying, 

look, we have programmed some money to target it to the people 

who are worse off in the United States, perhaps through EDA, or 

maybe Members of this Subcommittee on both sides of the aisle 

should write to the Appropriations Committee to ask them since 

they still have the final say on appropriation, to put more money 

into EDA and condition it on going to only the highest unemployment parts of the United States through EDA. 

I can’t think of anything else to do. Before I go further, if Members want to indicate whether you join with me in asking appropriators to relieve us of this targeting problem, I would be glad to 

work with all of you. 

Finally, let me just ask you, look, what changes do you want in 

the statute that we haven’t gotten to? We are going to reauthorize 

it. You heard the Members say, we are ready to go, White House, 

ready or not. We are not going to get through this year, have us 

come to the end of 2010 and say, I am sorry, we are still getting 

our act together. This is the second hearing. What do you want in 

the statute that is not there now? 

Mr. FERNANDEZ. As I talked about earlier in our discussion 

today, I think the areas that we are most interested in working 

with the Committee and others to enhance are in the Revolving 

Loan Fund program, to make sure that it is in line with the current needs. We want to make sure that our infrastructure investments are broad enough to support many of the innovation infrastructure needs of science parks, research parks, et cetera. And we 

certainly want to look for opportunities to incent and encourage the 

kind of broad cross district and other kinds of regional initiatives. 

I think the global climate fund is something we would like to 

talk about as well. 

Ms. NORTON. What kind of funding? 

Mr. FERNANDEZ. The Global Climate Mitigation Fund. When it 

was first enacted, it was fairly narrowly conceived in the context 

of green buildings and LEED construction. The report that was included in our fiscal 2010 budget, the Congress encouraged us to 

look at a broader application of that program, and green manufacturing, other kinds of alternative energy support. We agree with 

27 

those recommendations and would like to continue to work on how 

we modify that program as well. 

I think you will have from us, and you understand the process, 

but we will have detailed language to share with you in terms of 

our recommendation here in very short order. 

Ms. NORTON. When do you think you will have that language, 

Mr. Fernandez? Because I am telling you, this ship is leaving the 

port. 

Mr. FERNANDEZ. As fast as we can get through the vetting process. 

Ms. NORTON. You tell OMB for us, because I know the vetter is, 

that we are talking about a statute here. We are not so much talking about money. We are talking about reauthorization. When a 

statute is not reauthorized, this has not been reauthorized for some 

years, it suffers in all parts of the process. 

Mr. FERNANDEZ. There are other people involved in this. But I 

want to be real clear that part of the delay, it is my responsibility, 

not others. When I came on in September, we discussed greatly the 

notion of reauthorization. And the truth of the matter is, our authorizations, we have a nice statute. There is tremendous flexibility, we can do a lot of really good work. We wanted to make sure 

we had input and a lot of conversations with stakeholders. Certainly our grant recipient community, local officials and others. 

So while there is a process that often is slower than we would 

like, I want to make it clear that the initial delays are mine. Because I wanted to make sure that our recommendations were the 

right recommendations, not just the quickest. 

Ms. NORTON. I recognize the statute is very—we don’t authorize, 

even initially, statutes that are not very broad. We depend upon reauthorization based on what we have learned from how the statute 

operates to bring us to reauthorization, to add to it. 

But let me tell you how it works up here. When a statute is not 

reauthorized, it doesn’t get funding. The appropriators are quite 

willing to leave you even when the Administration, even if the Administration were to request more funding, it looks and sees 

whether or not it has been reauthorized, and then it says, you 

know what, the authorizing Committee hasn’t told us anything 

about whether or not this statute ought to remain as it was. So 

this is giving money in the blind. 

So I can tell you that you are not going to be taken seriously by 

the appropriators, and even by what I hope will be a letter to them, 

just by telling us you have a broad statute. Everybody has a broad 

statute. The appropriators want to know, are they spending their 

money correctly, are the authorizers saying no changes whatsoever 

are needed. We don’t think broad changes are needed. But you 

yourself have run down a list of changes that are needed, or at 

least clarified in the statute. 

So let me tell you what, Mr. Fernandez, by the end of March, we 

need to hear from you, if not in the specific language, at least from 

what it is you most desire. Because we are looking to the end of 

an election year. And what we don’t get done by September 30th 

in both houses is likely not to be done at all. 

Mr. FERNANDEZ. I can assure you it will be sooner than that. The 

language has been drafted. So I hope you will have it very soon. 

28 

Ms. NORTON. That is very reassuring. Let me thank you both for 

coming forward. This is very, very helpful to us. I thank all our last 

panel. Thank you. 

And the second panel, we are very anxious to hear, they are on 

the ground. Would you please come forward, the three. I will call 

your names and ask for you to speak in this order. Mr. Charlie 

Dooley, County Executive, St. Louis County International Economic 

Development Council; Larry Molnar, the President of the Educational Association of University centers; Jay Newcomb, Council 

President, Dorchester County Council; and finally, Michael Norton, 

no kin, of the Northwest Arkansas Economic Development District 

and the National Association of Development Organizations. We 

are very anxious to hear from all of you. 

Why don’t we begin with Mr. Dooley? 

TESTIMONY OF CHARLIE DOOLEY, COUNTY EXECUTIVE, ST. 

LOUIS COUNTY, INTERNATIONAL ECONOMIC DEVELOPMENT 

COUNCIL; LARRY MOLNAR, PRESIDENT, EDUCATIONAL ASSOCIATION OF UNIVERSITY CENTERS; JAY NEWCOMB, 

COUNCIL PRESIDENT, DORCHESTER COUNTY COUNCIL; MICHAEL NORTON, EXECUTIVE DIRECTOR, NORTHWEST ARKANSAS ECONOMIC DEVELOPMENT DISTRICT, NATIONAL 

ASSOCIATION OF DEVELOPMENT ORGANIZATIONS 

Mr. DOOLEY. Good afternoon, Chairman Norton, Ranking Member Diaz-Balart, and Members of the Committee. Thank you very 

much for the opportunity to be here today. 

My name is Charlie A. Dooley. I am the County Executive of St. 

Louis County, Missouri. Today I am speaking on behalf of the 

International Economic Development Council, the world’s largest 

organization for the economic development profession. First, please 

allow me to commend Chairman Norton and the great work the 

Committee is doing. I would like to thank and acknowledge our 

Congressman, Russ Carnahan, for his great work and support in 

our region with EDA. 

We also would like to acknowledge Chairman James Oberstar, a 

champion for EDA, and a recipient of the 2005 IEDC Federal Leadership in Economic Development Award, and acknowledge Assistant Secretary of Commerce, John Fernandez, and Deputy Assistant 

Secretary, Brian McGarvin, for the great work they have done in 

the short time they have been in office. 

Nationwide, the struggling economy has placed great challenges 

on our communities. Tight credit markets have prevented businesses of all sizes and industries from growing and accessing capital. As the flow of credit has slowed to a trickle, we have seen too 

many businesses forced to scale back. We need resources of EDA 

to help dig out of this economic slump. 

EDA and St. Louis County have a history of partnership and success. That partnership dates back to the early 1990s when a shift 

in the defense industry in St. Louis hit us very hard. Just last 

week, when Assistant Secretary John Fernandez traveled to St. 

Louis, he helped us launch a plan for revitalization of the closed 

Chrysler plant. 

I would like to share with you the importance of EDA to the recovery of my county and communities across the Country. EntreVerDate Aug 31 2005 15:51 Jun 03, 2010 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 P:\DOCS\55118 JASON
29 

preneurial development: our region established an incubator system which provides small businesses with low-cost space and 

shared support services. Revolving loan fund: EDA helped us create 

a revolving loan fund for small businesses. One of the great success 

stories of this special loan program is the company, World Wide 

Technology. It is now the largest privately-held, minority-owned 

company in the Country. 

International trade development: EDA has been vital in helping 

foster international trade through creation of the World Trade Center in St. Louis. EDA has continued to support our efforts in global 

trade, by providing Federal grants to form the U.S. Midwest-China 

Hub Commission. The goal is to make St. Louis a cargo hub for 

U.S. Midwest-China trade. 

The MET Center: St. Louis County built the Metropolitan Education and Training Center with EDA funding. This high tech, 

hands on facility trains displaced and disadvantaged workers. EDA 

has enabled our region to maintain competitiveness in technology 

and commercialization. The creation of the Center for Emerging 

Technologies and the soon to open Mid-County Plant Sciences Incubator are both at the cutting edge of plant and life science innovations, which ultimately creates jobs and economic development for 

our region. 

Whether it has been in response to defense down-sizing, national 

disasters or plant closures, EDA has been at the forefront of a Federal response to grow a stronger and more diverse economy. EDA 

is a vital partner in economic development. 

On behalf of IEDC and communities around the Nation, we express our strongest possible support for the Economic Development 

Administration. We urge the Committee to swiftly complete reauthorization of a funding level of $500 million for EDA. 

We look forward to a continued partnership with EDA in making 

our communities and Country stronger and more competitive. In 

these difficult times, it is all about jobs, jobs, jobs. Economic development means jobs for our communities. And EDA is our strongest 

Federal partner in helping to create jobs and opportunities for our 

citizens. 

Thank you, Madam Chairman. 

Ms. NORTON. Thank you very much, Mr. Dooley. 

Mr. Molnar? 

Mr. MOLNAR. Thank you, Madam Chairwoman and Members. 

As you consider the lessons learned for the Economic Development Administration from its Recovery Act investments and new 

plans to strengthen economic development through this important 

agency, I testify to you today as President of the Educational Association of University Centers. This is the advocacy organization 

that represents the higher education infrastructure in our Country 

and its economic development role in economic recovery and economic development, including the EDA University Center program 

that has operated for over 30 years in a very important role in our 

Nation’s economy. 

The higher education infrastructure in our Country is very much 

taken up with innovation, technology transfer, technology commercialization, entrepreneurship, new venture creation, business incuVerDate Aug 31 2005 15:51 Jun 03, 2010 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6633 P:\DOCS\55118 JASON
30 

bation. Those elements of our future economy are well known and 

are much experienced in the university community. 

In regard to the universities’ participation in ARRA Funding, I 

can speak of my institution, the University of Michigan, that has 

received over $150 million from a number of Federal agencies. One 

of the initiatives is the establishment of a Department of Energy 

sponsored, Energy Frontier Research Center, that will explore new 

materials to more efficiently convert solar energy to electricity. Dr. 

Stephen Forrest, our Vice President for Research at the University 

of Michigan, has stated ‘‘People at the University have enormous 

ability to grow new materials at the nano scale and bring new 

products to market.’’ 

We have also received ARRA funding for our business assistance 

program at the University of Michigan. We are working with 

Michigan manufacturers, over 100 of them. We are going into several years of our work and of companies that we have been working 

for more than a year, 24 percent have actually added employees 

during this economic environment. So here you have a university 

that is working with private sector companies to help them diversify, help them create new jobs and hire new people. 

As this Committee considers the reauthorization of EDA, there 

are some modest proposals that we would like to make on behalf 

of the University Center program that we think will increase its effectiveness. There are just over 50 EDA University Centers but 

there are eight States, including the District of Columbia, that do 

not have University Centers. This should be rectified. All States 

should have access to this important program. University Centers have been receiving an average of $125,000 

a year in Federal funding for over 20 years now. We think that it 

is high time that that amount be increased. We know we are not 

Appropriations here, but we would like to recommend that that 

amount be increased to $250,000. Another thing that EDA might 

consider that would help the University Center program is to reduce the local cost match, or the university’s responsibility from a 

one to one to an 80-20, given the constraints on the higher education system and universities economically. 

One final thing that might help the program, currently we have 

to undergo a competition every three years, which means every 

University Center only has a funding cycle for three years. We 

think that a five year cycle would be more appropriate. We even 

think that reverting to a peer review process that we had prior to 

the last Administration, which worked very effectively in the higher education system might be a model to look back upon that would 

make the program more effective. 

Certainly, the economic security, national security, global competitiveness of our Nation are increasingly bound with the higher 

education system, with colleges and universities and community 

colleges. We are undergoing a fundamental economic transformation as we know, from an industrial economy to a post-industrial economy. Again, that is where the universities play a role 

with new inventions, new technology, and producing class after 

class of well-educated, eager young people who want to contribute 

to our economy and want to play a role in our Nation and its global 

competitiveness. 

31 

In closing, I think the EDA is essential to our economy moving 

forward. The University Center program is an important program 

within EDA. We think that it can be enhanced and improved. But 

most of all, we support the reauthorization of EDA and will continue to do that. I am speaking broadly for the higher education 

infrastructure in the United States. Thank you for the opportunity 

to testify. 

Ms. NORTON. Thank you very much, Mr. Molnar. 

Mr. Newcomb, of the Dorchester County Council. 

Mr. NEWCOMB. Thank you, Chairwoman Norton and Members of 

the Subcommittee. 

Thank you for this opportunity to testify on behalf of the Dorchester County Council and the citizens of Dorchester County, 

Maryland, on the lessons learned from the Recovery Act and new 

plans to strengthen economic development. 

Dorchester County is shaped like the heart of the Eastern Shore. 

And with this money, it has kept our county growing. It is a great 

project. We have been awarded in this from EDA, to spur growth 

and prosperity, a $3 million grant. This will lead the Federal economic development agenda by promoting innovation and competitiveness and preparing American regions for growth and success in 

the world-wide economy, as was stated by Assistant Secretary 

Fernandez. 

Dorchester County has 1,500 miles of shoreline. It is one of the 

largest land/water masses in Maryland, nearly 600 square miles of 

land and 70 square miles of water. The County has currently 790 

businesses employing 9,460 workers, of which approximately 12 

percent of these businesses have 100 workers or more. We have 

been traditionally dependent upon food processing, light manufacturing and high tech assembly to fuel the economy. Now since the 

recent downsizings and offshore manufacturing trends that caused 

a major loss of jobs. Even in times of economic boom, we have lost 

our economic growth. Current unemployment is 12.1 percent as of 

December 2009. 

Between 2007 and present, Dorchester County with its population of 30,000 has lost nearly 1,000 jobs. With this EDA grant 

award, the County will now be able to diversify its industry mix 

to include value-added agriculture, innovative aquaculture and 

high tech manufacturing. We also have existing companies that are 

working on green initiative sand bio-mass projects 

As an elected official, I can testify first-hand that successful economic development is achieved by investing in local economic, 

human and physical infrastructure. The recent 2009 American Recovery and Reinvestment Act funding awarded to Dorchester County to develop the new technology park will be a great spur in 

growth and prosperity, not only county-wide, but regionally. The 

use of these funds will serve as a major catalyst for implementing 

economic strategy and career awareness beginning at our elementary level through high school. 

To prepare the youth of our community for jobs, Dorchester 

County recently approved local funding to build a new Career and 

Technology School in joint venture with the State of Maryland, 

which is another $32 million project. One we got the money for this 

tech park, we feel as though the Technology School would be a big 

32 

asset. This will also ensure growth of our own industry leaders as 

well as attract new talent to our county. Additionally, collegebound students will have another opportunity to receive career 

training in technology, because we have Chesapeake College, which 

is also in my home town of Cambridge, and another one in Wye 

Mills. 

We are also in a joint venture with Germany, with a new prospective opportunity for international companies coming to Dorchester. Also, the Federal funding we got from the Federal Government helped create a fiber optic superhighway through the NASA 

facility on Wallops Island through the Eastern Shore and Southern 

Maryland will increase the potential of our technology park. Also, 

we have the Maryland Department of Environmental Science, at 

Horn’s point, which is great for our oysters, which is a great thing 

for Maryland the Chesapeake Bay, to try to develop a disease-free 

oyster and the expansion of our crab industry. And also with this 

money and tech park, the FAA has given us money to extend our 

runway at our airport, which is just adjacent to the new technology 

park. 

Also, we have the Hyatt Regency golf resort in Cambridge, Maryland, which has brought a lot of business and guests and tourism 

to the county, which we are greatly known for. Also, we are now 

starting, with Federal and State help, the Harriett Tubman Park 

and Museum, which will be in Dorchester County. And you talked 

earlier about the things we do with the oyster, like I said, the Department of Science at Horn’s point is going to try to do the disease-free oyster. 

Green industry, also, we have a company looking at power, taking our chicken manure and our tree waste to generate electricity. 

The job at the tech park we will are going to be bid, hopefully within a couple of weeks. We have gone through all the studies and all 

the environmental, everything is ready to go. We are to get the proceeds to start the project by May 15th. So this is a shovel-ready 

project. 

Also, we were talking about jobs, we just now went to a bid on 

a landfill cell. We got 20 bidders for that one landfill cell. So that 

shows how much we need these jobs, if we had that many bidders 

to bid on just the expansion of our landfill. We feel it will help create jobs in our county. 

Again, Ms. Norton, thank you for letting us speak today in regard to the lessons learned from the Recovery Act. If you have any 

questions, I would be pleased to answer them. 

Ms. NORTON. Thank you, Mr. Newcomb. 

And finally, Mr. Michael Norton, of the Northwest Arkansas Economic Development District and also representing the National Association of Development Organizations. Mr. Norton? 

Mr. MICHAEL NORTON. Good afternoon, Chairwoman Norton, 

Ranking Member Diaz-Balart and Members of the Subcommittee, 

Congressman Carnahan and Congressman Michaud. 

My name is Mike Norton. I currently serve as the President of 

the National Association of Development Organizations and Executive Director of the Northwest Arkansas Development District, an 

EDA-designed economic development district, serving nine counties 

in the northwest corner of the State. Thank you for the opportunity 

33 

to testify in support of a multi-year reauthorization bill for the Economic Development Administration. 

I will limit my remarks to four main points. First, EDA has a 

proven track record of helping its local partners create and retain 

high quality jobs in distressed areas, including those suffering from 

chronic poverty, economic dislocation caused by plant closures or 

downsizing, natural disaster or changes in the global economy. 

This has been reinforced with the agency’s recent performance in 

making sound use of its $150 million in American Recovery and 

Reinvestment Act funding and $500 million in post-disaster recovery assistance. 

In reauthorizing the agency, we encourage the Committee to restore the local match rates for distressed communities to at least 

the pre-2005 agency rules changes. This is one of the most important legislative fixes needed to help the agency serve distressed 

areas. 

Second, Madam Chair, we urge Congress to strengthen local control of EDA’s Revolving Loan Fund program. The RLF program is 

a proven economic tool for addressing the credit needs in underserved areas. RLFs are managed by public and private non-profit 

organizations to further local economic development goals while 

lending their capital and then re-lending funds as payments are 

made on the initial loans. Local management of Revolving Loan 

Funds have provided businesses capital to thousands of new and 

existing companies that have difficulty securing conventional financing. 

Over the years, EDA has provided grants to nearly 600 revolving loan funds, with net assets approaching $850 million. EDA’s RLF 

program has the unique distinction of being one of the only Federal 

grant programs that never loses its Federal identity. The initial 

RLF grant and any interest derived from it is considered Federal 

property forever. RLF operators must comply with expensive and 

burdensome reporting requirements forever, including my own, 

which began operating in 1978. Ownership of EDA’s RLF should be 

fully transferred to local intermediaries once all the initial funds 

have been loaned out, repaid fully, revolved. 

Third, NADO’s members urge Congress to increase the minimum 

funding level for EDA’s partnership planning program from $27 

million to $34 million. This highly-effective program provides essential seed capital and matching funds for 378 economic development districts, numerous tribal planning partners and other State 

and local entities. 

EDA’s planning program provides matching fund to multi-county 

organizations, such as the Northwest Arkansas Economic Development District, to help local governments and others work together 

on a regional basis to develop solutions, partnerships and strategies for addressing regional economic development issues. EDA’s 

on-time project completion rate, high rate of leveraging private sector investment and impressive job creation statistics are directly 

tied to the groundwork and planning that precedes project development and implementation. 

Finally, there is a need to provide new incentives that foster regional partnerships among local governments, private industries 

and educational and non-profit institutions. While the 2004 EDA 

34 

reauthorization bill established two new performance award programs, these initiatives are very limited in scope and have demonstrated little impact. 

EDA would benefit from broad, more aggressive policy incentives 

and approaches related to the regional economic development collaboration and cooperation. Congress is urged to build on the existing national network of economic development districts, regional 

development organizations, council of governments, local development organizations, whatever you want to call them, to facilitate 

and encourage collaboration among regional development. 

Madam Chair and Members of the Committee, thank you again 

for the opportunity to testify today. I would welcome any questions 

or comments. 

Ms. NORTON. Thank you very much, Mr. Norton. 

I am going to ask Mr. Newcomb a question, then I am going to 

go to the Ranking Member and the other Members before I ask further questions. We are particularly interested in your from the 

ground, on the ground reports to us as we try to be responsive in 

a reauthorization. 

It is Mr. Newcomb who has ARRA funds, isn’t that correct? 

Mr. NEWCOMB. Yes, ma’am. 

Ms. NORTON. Did you have any EDA fund before this funding? 

Mr. NEWCOMB. No, ma’am, not for this project. 

Ms. NORTON. What? 

Mr. NEWCOMB. Not for this project, no, ma’am. 

Ms. NORTON. Not for this project, but the jurisdiction did have 

it? 

Mr. NEWCOMB. Yes, ma’am. 

Ms. NORTON. Now, I am trying to test the leveraging effect of 

funding. Is this technology park that drew that funds, and you got 

them competitively, is the entire $3 million grant that your county, 

Dorchester County received for the technology park? 

Mr. NEWCOMB. Yes, ma’am. It is going to be for the infrastructure inside the park, water and sewer, streets and some of the infrastructure for the water and sewer from existing city limits to our 

tech park. 

Ms. NORTON. Was there any non-Federal share? 

Mr. NEWCOMB. Yes, ma’am. The county bought the land, the 

State bid a project with this, we are dealing also with the FAA. We 

have a rail line involved. So we have several different agencies, and 

yes, the locals did put a lot of money into it. 

Ms. NORTON. Do you have any sense of what is the entire package for this technology park? 

Mr. NEWCOMB. If I could ask Ms. Keisha, she is with me, could 

I just ask her, please? 

Ms. NORTON. Is there staff who knows? There is $3 million 

from—— 

Mr. NEWCOMB. That is from EDA, yes, ma’am. 

Ms. NORTON. But I don’t have a sense of—— 

Mr. NEWCOMB. This is our economic development person. She 

can tell you exactly. 

Ms. HAYTH. If I may, do you mind if I come to the podium? 

Ms. NORTON. Yes, surely. You have to give your name. 

35 

Ms. HAYTH. My name is Keisha Hayth. I am the economic devel- opment director for Dorchester County. It is an $8 million project. 

Ms. NORTON. Eight million dollars. 

Ms. HAYTH. Yes, $8 million total. We have, local share is about 

$2 million, USDA commitment of $1.7 million and State commitment of $1.7 million as well. 

Ms. NORTON. What is the private sector involvement, if any, in 

this project? 

Ms. HAYTH. Well, the private sector involvement will be, once we 

sell the lots in the technology park, that involvement will be about 

$40 million, I believe. 

Ms. NORTON. And because of what? What is the technology park? 

Ms. HAYTH. The technology park will be an area, it is 113 acres 

where we have 14 lots divided to sell to individual businesses, to 

develop their own business. 

Ms. NORTON. Why would they want to develop a business in Dorchester County? 

Ms. HAYTH. Because we have the available labor force, we are 

growing our technology base right now. We have commitments 

from the University of Maryland, Horn Point Lab, where they do 

research studies on the Chesapeake Bay. So we have a niche, currently, that truly supports technology businesses in Dorchester 

County. 

Ms. NORTON. So you see from $3 million we can yield a $40 million technological park with of course State and local fund also involved. But all told, that is still just $8 million. 

And jobs, would you say there is an available workforce with the 

skills to do the jobs that these technology companies would come? 

They are not coming unless there are some folks who can do it and 

have shown they can do it. They are going to stay close to the University of Maryland, they are going to stay up here near where 

D.C. is unless you show them there is a workforce that is trained 

to do it. 

Mr. NEWCOMB. Yes, ma’am, and also we have had very much interest from even outside of the D.C. area, people who are interested 

in relocating. We had a gentleman who was in the office yesterday 

who was very excited about the tech park and can’t wait until it 

is done. 

Ms. NORTON. What we are looking at, I think, is not only the 

leveraging, or listening to is not only the leveraging effect of a little 

bit of money. But we are looking at how business looks to where 

it should go. It is looking for labor that doesn’t cost as much as 

around the University of Maryland, for example, which is helping 

you as well here. And these areas precisely because they have had 

persistent development problems, if they can produce the workforce, have a much better chance that those closest to home here 

do of getting those jobs. 

I am going to go to Mr. Carnahan and ask him if he has any 

questions for this panel. 

Mr. CARNAHAN. Thank you, Madam Chairman, and thanks to all 

the panel. I want to direct my remarks to county executive Dooley 

and again welcome him and his team from St. Louis. 

The St. Louis region, like many others, has been hit with this 

economic recession. I have been working with other elected leaders 

36 

like yourself, business community, labor community, to put together a regional economic plan that links together some of our 

Federal initiatives, State initiatives, local initiatives and the private sector, to continue to help our region to grow. The Federal initiatives have been a key component of that. EDA has been a longtime and strong partner to leverage this private investment that 

we need so much now to grow jobs. 

I do have concerns, as the Chairwoman expressed, about the lack 

of a reauthorization and about the decrease in funding that has 

come from the Administration. I want to really compliment you 

being here on behalf of International Economic Development Council, and really the points that you raised in your full written testimony, number one, in terms of increasing funding, Chairwoman 

Norton and I sent a letter out supporting increased funding, like 

the Senate Committee had put out $500 million for EDA. 

I think that is very important in these tough economic times, 

augmenting EDA staff, positioning EDA as a lead organization for 

economic recovery following disasters, reviewing the definition of 

distressed communities to assure it is up to date with today’s economic realities. And also, I think of particular importance in these 

economic times, lowering or weighting the local match requirements. When some of this money is laying around and communities 

may be short or struggling to come up with those local match dollars, now is not the time to be holding that bar too high, so communities and projects can’t reach these funds that are already out 

there. 

So again, I just want to say thank you for the work that you 

have done locally. And give us a sense of how you think some of 

these changes that you have presented here today and that the organization, the International Economic Development Council, have 

presented, how do you think those would impact the St. Louis region and St. Louis County in particular, where you serve as county 

executive? 

Mr. DOOLEY. Thank you very much, Congressman. I think that 

is a good question. Let me say by frameworking that, St. Louis 

County is the largest county by population in the State of Missouri, 

1 million people. So we look at ourselves as the economic engine 

of the State and the region. If St. Louis County does not do well, 

we believe it has a negative impact on the entire State. 

So I believe the State and the region look to St. Louis County 

for leadership in creating jobs and opportunity for our community. 

If we look at the MET Center, for example, for the displaced workers and disenfranchised workers, how do you get people back to 

work? We believe people want to work. But they need work that 

is meaningful and they can support their families. The MET Center 

is doing just that. 

EDA money, we believe, is seed money which has actually been 

talked about earlier, it is just a small bit of money that can make 

a big difference in people’s lives. When you talk about the World 

Wide Technology Company, in the early 1990s, they borrowed 

$200,000. And today they are the largest privately-held company, 

minority-owned, in the Country. That is tremendous success. That 

is the type of success we are looking for. 

37 

We are talking about now, when the Assistant Secretary was in 

St. Louis on last week, about the closure of the Chrysler plant, 

they granted us $1.575 million. Our match from the State, from 

county and from the city of $575,000, that is going to leverage us 

to how we can best use 295 acres of land, which is probably about 

5 million square feet of space. That is a lot of space, Congressman. 

Additionally, an additional 2 million square feet in supplying 

space. So we have a great opportunity to move our community forward. What is best is we can create those green jobs for the future, 

but we need jobs today. We are talking about the incubator specifically for green jobs. So that is an opportunity. 

And working closely with Washington University, which is one of 

the top five universities in the country when it comes to green technology and opportunity. So it is a great resource opportunity. The 

plant and life science down at Danforth Place, we are going to be 

partnering with them as well, another opportunity at creating real 

jobs for real people right now. 

And one of the things I think that was most satisfying to me, 

when you go to some of these centers’ ceremonies and see those individuals graduate, and then Washington University is right there 

to say, I have a job for you, that is tremendous. They have hope, 

but they have a real job, real success and that can make a difference in our community. 

Mr. CARNAHAN. Great. Thank you very much, and thank you for 

the work that you do with me and my office and our leaders 

throughout the St. Louis region. 

Mr. DOOLEY. Thank you, sir. 

Ms. NORTON. Mr. Michaud? 

Mr. MICHAUD. Thank you. 

I, too, want to thank all of you for coming out this afternoon to 

give your testimony. I look forward to working with you as we reauthorize EDA’s programs. My question is, and we heard Mr. 

Fernandez earlier when I asked a question about the requests out 

there, that he said that they got requests for approximately $1.7 

billion, not saying that all $1.7 billion would actually qualify, but 

that is what the request was. 

What do you think that we should authorize the funding level for 

EDA, having been involved in this type of work for some time? 

What do you think would be the appropriate level? 

I will start with Mr. Dooley. 

Mr. DOOLEY. Again, we have asked, in my statement earlier, for 

$500 million, but if they actually were going to give us $1.7 billion, 

let’s take it all. Can you imagine what we can do with $1.7 billion, 

when what we have done with just the little smidgen that we have 

right now? We could really make a difference, and we are talking 

about jobs and opportunity for our Country. 

I mean, I think that is a wise investment. It is about investing 

in ourselves, and I am all for it. 

Mr. MOLNAR. From the higher education perspective, we get about $7.1 million, $7.3 million a year annually to support these 

50 or 53 universities, each getting $125,000 a year. If you tripled 

that, just in the University Center Program, the return on investment would be tremendous. So I think that is an entirely appropriate figure, especially given the discussion of, Madam Chairman, 

38 

in this budget relative to other huge agencies. And when you look 

on a performance basis, you know, we are getting a lot of bang for 

our buck. 

Mr. NEWCOMB. Yes, with the infrastructure of this, I mean, this 

project has been going on now for like eight years, so now with this 

final stage of money from all the agencies put together, we finally 

can make this project reality. And we would also like the next 

phase to probably have an incubator put in one of the lots, on our 

lot that we still own as a county, to help get up and going the companies to expand into a tech park. 

So all the money, additional money, whatever you all can, we 

would be glad to get more of our percentage of it. 

Mr. MICHAEL NORTON. Well, regional development organizations, 

of course, are asking for $34 million. They had an increase in 2004 

of $10,000 per district, the first increase for the 378 organizations 

since 1972. 

Now, the public works projects, I think if you look at the $150 

million that came through the American Recovery and Reinvestment Act and also the $500 million that was post-disaster, that 

was put out the door pretty quickly. That was because EDA has 

a delivery system which is the regional development organizations. 

In a survey that we have done recently, with just one-third of the 

member organizations responding, we are looking at $1.3 billion, 

$1.5 billion in potential projects. EDA’s investment in that, for 

$235 million, could have a return of an additional private leverage 

of $4.77 billion. So there is a good return on the investment. There 

is a delivery system in place. 

So if you put the money out there, we will find projects for it. 

Mr. MICHAUD. Thank you. And it does sound like it is a very 

good return on investment. 

My next question, if you look at a lot of the programs at EDA, 

and we heard Mr. Fernandez talked about mill closures and, you 

know, industrial parks and training, retraining of employees, that 

deals with job loss. Part of it is because of, you know, unfair trade 

policies or other unfair policies. 

I guess my question would be for Mr. Dooley or the other three, 

if you can respond, looking at your organization, you said you have 

members in six different continents and primarily most in the 

United States. Rather than, you know, spending money to help create jobs, which I think is very important, but I also think it is important that we keep what we currently have. Have any of your organizations, and I will start with Mr. Dooley, focused on some of 

the reasons why we are losing some of the jobs? And can we actually probably focus on how we can keep those jobs, as well as create 

new jobs? 

A good example, although it is not EDA, is at the Department 

of Commerce, there has been a group that has actually asked the 

Department of Commerce to investigate China’s currency manipulation and unfair subsidies in coated paper, and what that is going 

to do for the paper industry here in the United States. 

Have your organizations looked at what you might be able to do 

prospective to help prevent loss of jobs, versus just trying to create 

the jobs that are not there? 

We will start with Mr. Dooley. 

39 

Mr. DOOLEY. Well, Congressman, that is an extremely good question. Let me start by saying this. First of all, we looked at we are 

in a global competition, and not just a regional competition or a 

State to State competition. It is a global competition, how to retain 

those good-paying jobs, how can we be competitive. 

And one of the things we looked at is our costs of labor, our cost 

to do business, our tax structure, our skilled workforce, our quality 

of life. All those things attract business and opportunity for our 

community. 

So you just can’t work on just one front. It is many fronts you 

have to work on. It is about, for example, how do you attract young 

people to your community? St. Louis metropolitan area have great 

universities, Washington University, St. Louis University, University of Missouri-St. Louis, a lot of great opportunities for talent to 

come to St. Louis, but how do we keep those young people there? 

And one of the ways we think about is an entrepreneur program. 

We have three incubators about ideas, young ideas, fresh ideas. If 

you have an idea, we want to support you. We want to mentor you. 

We want you to be successful. But we have to create an activity, 

an excitement about what is going on in our community. If you create that excitement, that possibility that if you have an idea you 

can make a difference, we believe that is the first step in moving 

our community forward. 

But we have got to have that excitement about what is going on. 

We have got to have that competitiveness. We have got to have 

that skilled workforce, that quality of life, the tax base, all those 

things works on concert that make sense, and have appropriate incentive programs for businesses as well to keep them there. Sometimes other areas of the States, of the Country has incentives that 

we have to adjust to. We have to deal with that as well. 

So it is a combination of things. It is a very difficult thing, but 

we believe we are up to the task, given the right tools. EDA is one 

of those great tools that we have to work with. It can make a difference not only in attracting businesses, but keeping the existing 

businesses there, but encourage them to expand their base. 

Thank you. 

Mr. MOLNAR. Four things in the higher education system. Number one, helping communities retain what they have. EDA is funding the University of Michigan. We are partnered with Ohio University, Cleveland State, and Purdue University, working in Michigan, Ohio, Indiana, Illinois, Wisconsin and Minnesota in plant closing communities. 

So EDA is in about 50 communities with a program that universities are involved in, helping these communities find their way 

back to economic health. 

Second of all, the trade impact. Although not authorized by this 

Committee, it is Ways and Means, but there is the Trade Adjustment Assistance Program for firms and now for communities that 

EDA is funding. So that is a response to adverse economic impacts 

of imports. So there is a program there. 

The program I mentioned in Michigan, where almost 24 percent 

of the companies that are in the program, is modeled on the Trade 

Adjustment Assistance Program. So almost 25 percent of those 

40 

companies are adding new jobs based on the Trade Adjustment Assistance model. 

And then finally, many universities are involved in business incubators. I am the President of, and the University of Michigan 

hosts, the Michigan Business Incubation Association. So we are 

there for that. 

EDA is currently funding my university to do a national study 

of business incubation. We are studying hundreds of incubators to 

correlate best practices in incubators with the success of the companies once they move out of the incubators. So what do you do in 

the incubator that makes the company successful later on? 

Mr. NEWCOMB. Just Monday, I went to Baltimore. We had a seminar with Senator Mikulski and Senator Ben Cardin, and the topic 

was, Save Small Businesses: What can we do to keep the business 

in our community? Just like J.M. Clayton has been there, a seafood 

processing plant that has been there for over 100 years, and he was 

at the seminar, what can you do to help me? You give all these tax 

breaks, incentives to new companies. What can you do for me? 

So a major topic on one of our agendas coming up, meetings, and 

try to meet with the local business that has been here for so many 

years. And that is a problem. When kids graduate, they go. We do 

not have good jobs there. That is why I am hoping with this tech 

park and a new school of technology we are building, hope we can 

keep our young people stay there and grow and make some businesses, and also keep our old businesses. 

Mr. MICHAEL NORTON. Workforce and capital. And I would probably go back to the Revolving Loan Fund when we talk about capital. When the Revolving Loan Fund was created in 1978, it was 

intended to encourage financial institutions to inject money into 

more risky projects or startup businesses or job growth expansion 

of businesses. 

Well, in today’s world, where you have more non-traditional type 

loans, you have college incubators, but the ones coming out of these 

that you are trying to fund in many cases are like I.T., software 

development, robotics. And those are the things that we are trying 

to fund through RLF, but they are not traditional. They don’t bring 

brick and mortar collateral. So the financial institutions have a 

real difficult time partnering. 

Well, in the RLF loans, in many cases, you are required to have 

a portfolio 50-50 with a financial institution. It makes it very difficult. And we really want the technology-type jobs in our area. 

That is where we need to grow the jobs. And we are also working, 

in addition to that, to workforce. We need a workforce that is with 

the university systems, is trained or has the ability to be trained. 

Mr. MICHAUD. Thank you, Madam Chair and Mr. Ranking Member, for having this. I really appreciate your commitment to economic development and creating jobs and keeping what jobs we 

currently have. So thank you very much, Madam Chair. 

Ms. NORTON. Well, thank you, Mr. Michaud. In light of your penetrating question about China and where some of this money may 

have gone despite our best efforts, I was curious about Mr. Dooley’s 

Midwest China Hub and how it helps the region. When you see 

China connected to something in the Midwest, which is associated 

with jobs going the other way, you want to learn more about it. 

41 

Mr. DOOLEY. Madam Chair, I would be glad to talk about that. 

First off, we think that in St. Louis, we call it the U.S. Midwest 

China Hub. We believe it is an opportunity for the St. Louis metropolitan area, specifically the Midwest, not just St. Louis, will be the 

hub, but the Midwest itself is the gateway. 

We hold the opinion that if we are talking about doing business 

with 1.5 billion people, why not St. Louis? There is an opportunity 

not only for the Midwest-China, but they have got to do business 

with us. But even more so, it can help the Lambert Airport, our 

metropolitan airport, as well, which is right now is only operating 

at 45 percent of its capacity. We have got to improve that opportunity as well. 

Ms. NORTON. So how would it work? So how does China get into 

this mix? 

Mr. DOOLEY. Well, again, China, I will give you an example. We 

talked about, and some in our region, we said that if the cargo goes 

to Chicago, there is a lot of delays, an hour delay, two hours delays. 

Sometimes it is like 87, it is like it is 82 percent on-time. We are 

saying in St. Louis, we have the capacity, that would not exist. 

Ms. NORTON. So this is important, because everybody knows 

what it takes to go through Chicago. 

Mr. DOOLEY. Yes. 

Ms. NORTON. Now, how do you get China or companies that do 

business with China, let’s say Wal-Mart. God knows it does a lot 

of business with China. How do you get Wal-Mart to assist the St. 

Louis area by bypassing Chicago? I would think that a company 

like that would already know not to go to Chicago. 

Mr. DOOLEY. The challenge on us is not getting the business to 

St. Louis, but once they get there and unload, what goes back. 

Ms. NORTON. Back to where? 

Mr. DOOLEY. To China. Our goods and services, what do we have 

that, if it is agriculture or if it is—— 

Ms. NORTON. That you want to trade with China? 

Mr. DOOLEY. They have to trade with somebody. It might as well 

be with us. 

Ms. NORTON. Well, can you give me some examples of how the 

Midwest China Hub has reversed the process so that you now get 

China to buy stuff instead of our buying all of China’s stuff? 

Mr. DOOLEY. What we are saying is that if they having delays 

in Chicago or some other airports, the delay would not be in St. 

Louis. Right now, for example, China is not using their own airplane. They are using foreign airplane. And eventually, they want 

to use their own. If they use that, and come to us, again, with initiative, they can come to St. Louis, unload their cargo there. 

At the same time, St. Louis and the Midwest States can guarantee things being sold, going back to them, if it is agriculture or 

some kind of plants, things of that nature; low technology or electronics. It can go back to them as well, and it can be a two way 

street. It is not a one way street. 

Ms. NORTON. Is this in existence now? And if so, how long? 

Mr. DOOLEY. Right now, we in the process of developing this 

process, and we just got an EDA grant where we have the opportunity to investigate it, to review it. Right now, we hiring an individual to look at the world markets and see what the possibilities 

42 

are, and we will know something by November of this year if it is 

possible to create that connection. 

Ms. NORTON. I wish you would share with this Subcommittee 

what you find in November so that we can see whether or not this 

is fruitful to be done in other China-stealing parts of the Country 

as well. 

Mr. DOOLEY. We believe, Madam Chair, that, you know, again, 

you have got business on the East Coast and the West Coast, but 

the Midwest is left blank. We believe it is a tremendous opportunity. We call it a game change, the big idea. 

Ms. NORTON. Well, we will be very interested, so anything in 

writing you get in November, please share with the Subcommittee. 

Mr. Norton, I want to get straight what, if anything, we can do 

about this Revolving Fund. And you have some of it in your testimony. Now, you say that Revolving Fund in a business deal encourages businesses because they know that they are the lender of 

first resort in the event of a default. Now, part of the reason that 

they feel so secure is this very paperwork. And I want you all to 

indicate what the Subcommittee can do. It might not even take a 

statute. It may take something less than that. 

But when they see the Federal Government in the picture, they 

feel a certain level of security as well. From the field, we hear, because they know we are watching, and they know we require all 

this paperwork. And I am one who hates paperwork. I think that 

is what gives Government a bad name. But I also know that if 

there are issues, you saw the Ranking Member say, you know, even 

when he saw a little bit of something that wasn’t going right, his 

job is to call it out. 

So there is great reluctance to just say, here is some money, you 

folks. And let’s see if you will do the right thing and we will monitor you a little bit. So I would like to hear from any of you, but 

especially you, Mr. Norton, speaking for the Association, if we were 

to adopt the proposal you put forward of turning over the revolving 

funds after the first round of repayment, how would that affect private investment? How would that affect the private lenders? And 

how would that aid the program? And how would that ensure that 

we wouldn’t have difficulties with the program? 

Mr. MICHAEL NORTON. I think all that we were asking for is that 

we not have to report twice a year with respect to it. 

Ms. NORTON. As opposed to what today? 

Mr. MICHAEL NORTON. Well, we do report annually and semiannually each year on our revolving loan fund programs. 

Ms. NORTON. So what would be different? 

Mr. MICHAEL NORTON. Well, when it was originally developed, 

we received a grant, our organization, I will speak for the way that 

we did. In 1978, we received a grant in the amount of $720,000. 

And we have taken that money and used it, loaned it out, and they 

repaid it, and we would re-lend that money back out. 

We have made since 1978 more than $4 million worth of loans 

with that initial seed capital. 

Ms. NORTON. With that little bit of money. Yes. 

Mr. MICHAEL NORTON. And that program has now grown to about $850 million nationally. So it is not that we are not going 

to be responsible or that it is not going to meet any of the CongresVerDate Aug 31 2005 15:51 Jun 03, 2010 Jkt 000000 PO 00000 Frm 00052 Fmt 6633 Sfmt 6633 P:\DOCS\55118 JASON
43 

sional requirements. The issue is taking the time to report and 

having to comply. 

We would ask that it be more flexible because we do need to fund 

more non-traditional type loans, those that don’t bring collateral. 

Ms. NORTON. Well now, why wouldn’t the Federal monitors let 

you do that? 

Mr. MICHAEL NORTON. Well, right now, we work with the financial institutions to try to make loans and encourage them. Now, if 

we take a second position, obviously, they are going to take a first 

position, and so we are not as protected. So if we make a loan, in 

many cases, in a first position, we have a better investment than 

we would working with a financial institution. 

But that is where the types of jobs creation, and that is what we 

are talking about. We are not talking about traditional loans. We 

are talking about trying to create jobs. We are talking about trying 

to expand jobs within our regions. And we are certainly not going 

to let that money get away. Because if they don’t pay it back, we 

can’t re-loan it or lend it back out again, and it affects our portfolios. 

Ms. NORTON. I wish that all of you would submit proposals for 

streamlining that we could sell, so that we could assure all of those 

concerned when there is Federal money that goes to localities and 

to States and to Economic Development Districts that there is no 

risk to the private sector or to the government, because I am very 

interested in—I think paperwork starts because bureaucrats are 

risk-averse. 

Now, when you have had a program that is going on this long, 

it does seem to me there ought to be some basis, at least for some 

who have been involved in the program, maybe there is a way to 

get it or to graduate to it. I just don’t know. But anything you could 

offer, Mr. Norton, or any of the rest of you, would be very useful 

to us as we go to reauthorization, because this is a constant concern from the field. 

Mr. MICHAEL NORTON. We will do so. 

Ms. NORTON. Mr. Molnar, I had a question for you on these university centers. They don’t cost the Government a lot. And you are 

from the University of Michigan, isn’t that correct? Now here, this 

is one of the great public or private universities in the United 

States. And I am trying to find out how a little community somewhere in Michigan, which sends very few students to the great 

flagship university or even perhaps to some of the other universities in the State system, how you are able, you are doing a study 

of the whole darned thing for the Government. 

But I would like some indication of how you are able, with your 

extraordinary global status, to somehow reach to communities 

which have very little to do with the flagship university. 

Mr. MOLNAR. It is a good question. I will give you a good example. We have just finished up a study. We do a lot of work with 

business incubation on campus. We do what we call market and 

feasibility analyses. First of all, is there a market for what we are 

proposing to invest in? Is there enough of a critical mass of entrepreneurs in the region so if you open the door, they would come 

and who would they be and what do they need? Second of all, is 

it feasible to meet that demand? 

44 

So we survey hundreds and hundreds of entrepreneurs, homebased businesses, spinoffs from existing companies, to make sure 

that there is a need for—— 

Ms. NORTON. Now, where do you get the money to do that? 

Mr. MOLNAR. EDA often funds that. 

Ms. NORTON. So all of that comes from the EDA. 

Mr. MOLNAR. Not all of it. No, the community chips in. Rural Development at USDA chips in a little bit. EDA will chip in a little 

bit. 

Ms. NORTON. Because in return for that, you are helping them 

to target where the money does the most good. 

Mr. MOLNAR. Exactly. We just finished a study up in Clare, 

Michigan, which happens to be Senator Stabenow’s, our Senator’s, 

home town. We identified a critical mass of about 55 entrepreneurs 

who said if you open the doors today, we would be there. 

We are going to EDA now for the $1.3 million it is going to take 

to acquire an existing facility and revitalize it. In the meantime, 

we are helping the community identify lawyers and accountants 

and people with packaging, marketing, distribution expertise in the 

region that will help that group of companies who’s going to have 

to wait a couple of years until the doors are open, but they are 

ready to go right now. 

So we are in effect building a program for them, and basically 

handing it off to them, giving the tools that they need to run it 

themselves. And I am doing that in five rural communities in 

Michigan as we speak. 

Ms. NORTON. Now, how much funding do you get from the EDA 

annually? 

Mr. MOLNAR. One hundred sixty-three thousand dollars. 

Ms. NORTON. And how much is your total budget? 

Mr. MOLNAR. It is double that. 

Ms. NORTON. And that comes from where? 

Mr. MOLNAR. That comes from the university. 

Ms. NORTON. So the university, having seen the EDA put in its 

$160,000 or so budget, feels that it is worth it to actually put university funds into this pot, and that is what enables you to do it. 

Mr. MOLNAR. Yes. 

Ms. NORTON. And of course, that means that is a lot of State 

funds, too, I guess as well. 

Mr. MOLNAR. There are some State funds, but Michigan is in 

dire straits economically, so we try to survive on our own resources 

and what we can leverage. 

Ms. NORTON. So the university feels it important enough to take 

it right out of university funds. 

Mr. MOLNAR. Absolutely. 

Ms. NORTON. Not in extra State funds to the university. 

Mr. MOLNAR. Right. 

Ms. NORTON. This is very important to know, because this 

leveraging shows even here. 

Mr. MOLNAR. Sure. And this is going, you know, across the 

United States, the 50 or so centers. And we would like to see, as 

we said, one here in the District and then the other eight States 

that don’t have them. 

Ms. NORTON. Yes, don’t think I am not listening. 

45 

[Laughter.] 

Ms. NORTON. Peer review. Make me understand. I am still a 

tenured Professor of Law at Georgetown. So I only know peer review when it comes to how things get measured in the university 

community. But I was confused when you said the three-year funding cycle makes an unstable environment, but it used to be peer 

review. So what was it like in funding, competitive funding, but 

funding from the Federal Government, who was the peer reviewer? 

How does that work as opposed to the three-year funding cycle that 

you are involved in now? 

Mr. MOLNAR. Right, right. I was involved in a number of peer reviews of other institutions, a representative, a university center director from another university center within the region, the Chicago region in my case, so the University of Minnesota might come 

down to the University of Michigan; a university center director 

from a State other than Michigan or outside the region, so maybe 

somebody from California would come in; somebody from the regional office in Chicago, and often somebody from headquarters 

here at EDA. 

It would be a two-day review. The first day would be in the office 

looking at clients and what have you. And the second day would 

be going out and actually making site visits and what have you. 

And at the end of that, a two or three-hour session where we would 

go down and we would actually grade and rank the performance. 

Usually, we would meet with university officials, the president or 

the provost. And from that, there is always room for improvement, 

so we would always leave them with something that we thought 

that they could work on. 

Ms. NORTON. Well, how does the funding work? If you are funding now on a three-year cycle, does that leave something up in the 

air, because then you have to come back to continue it? I just don’t 

know how that works. 

Mr. MOLNAR. Well, if it is a three-year cycle, when you get the 

18-month point, you are going down hill and so you have only 18 

months of assured funding. As you know, economic development 

takes a little—you know, it takes a little bit of time to come to fruition. So are you really going to make a commitment to a community when you have 18 or 12 months left and don’t know if you will 

be able to finish out the project? 

So we think continuity is an important thing. Accountability is, 

too, so through the peer review process, if you make a determination that this program is not performing the way it should be, 

maybe they have six months or 12 months to get it in order. And 

if it is not up to par, then the funding should be—— 

Ms. NORTON. Oh, the peer review occurs every what—used to 

occur. See, I am asking about this because apparently that is the 

way it used to be. 

Mr. MOLNAR. Yes. 

Ms. NORTON. Was it—— 

Mr. MOLNAR. Every three years. 

Ms. NORTON. Why was it abolished? 

Mr. MOLNAR. It was a decision made by the prior Administration 

when they were in the leadership at EDA. 

Ms. NORTON. Do they give a reason? 

46 

Mr. MOLNAR. Well, competition is a good thing and we agree 

competition is a good thing. We compete all the time with NSF and 

NIH grants. We are used to that. But we are not just a project. 

This is an ongoing program where we develop relationships and 

networks and make commitments. And if you don’t have the time 

to do those and you are doing a good job—— 

Ms. NORTON. But they may be interested in making sure that 

more entities get the funds. 

Mr. MOLNAR. And we think that that is a worthy goal and we 

support if 100 percent. 

Ms. NORTON. So do you think the five-year notion is better? We 

get the notion of competition, and that above all, we are for competition given these grants and how little money there is. Do you 

think a five-year period as some kind of compromise would—— 

Mr. MOLNAR. It would be a great improvement and we would 

support it. 

Ms. NORTON. Could I ask Mr. Diaz-Balart if he has any questions? 

Mr. DIAZ-BALART. Thank you, Madam Chairman. No more questions. 

Ms. NORTON. I think I have really only one more question. It is 

really for Mr. Dooley. 

And that is, to ask you if EDA has been of any help in the shutdown of the Chrysler plant in Fenton. You were one of those communities that suffered very substantially. 

Mr. DOOLEY. Yes, Madam Chair, they have. They have given us a $1.575 million grant. The State has given some money as well, 

and the City of Fenton has given money, and St. Louis County has 

given money, totaling $2.1 million. 

Ms. NORTON. For use how? 

Mr. DOOLEY. That is to be used to how best to market and to use 

that existing space of 295 acres of land. 

Ms. NORTON. Are you finding a way with all of that land—— 

Mr. DOOLEY. Trying to figure out a way. 

Ms. NORTON. And in this economy, this is such a big mountain 

to climb. You suffered such a huge loss. This quick, could you fill 

that space? 

Mr. DOOLEY. The idea is—— 

Ms. NORTON. Some kind of park or divide it up or—— 

Mr. DOOLEY. That is what the money is for is to figure out what 

is the best use. But here is the critical problem is if we sit on our 

hands and do nothing, nothing will happen. We are of the opinion 

we have to start doing something in order for something to come 

to us. That is key. 

Ms. NORTON. Well, let me tell you why I believe in that. The land 

is cheaper, labor is cheaper than I hope it ever will be again. We 

saw part of the District of Columbia clear out when the District of 

Columbia went into some real decline in the end of the 1990s because it was carrying State functions and it was the only city in 

the United States carrying State functions. It got to be too much 

for it, and all kinds of the Federal Government didn’t put any 

money in, but a whole reorganization of the way things were done, 

and the city has been really quite better off than many cities for 

that matter. 

47 

But as a result of that, lots of people began to move out of the 

District of Columbia. We now have our population rising. Why did 

it rise and what happened as a result of this terrible period when 

people were moving out? Well, over in the lowest income area of 

the city, you had old plots of land just like the land in Fenton, 

where nobody would do anything on. And there is would lie there. 

We never thought we would see Ward 8, as we call it, ever come 

back because there is that cheap land over there. There are all 

these dwellings that nobody can do anything with. 

Lo and behold, almost all of the housing startups have been in 

this lowest income area. And we used some of the funds for mixeduse housing so that you have people in—single—we have whole 

huge communities of single family housing. Some of those people 

are subsidized. You wouldn’t know who they are. They are screened 

to a fare-thee-well, but they are right alongside their more naturally funded middle class neighbors. 

But what enabled us to do it with Fannie Mae, when there was 

a good Fannie Mae, but remember, this is market-based housing, 

except for what subsidies we put in, was that the place cleared out. 

So if you had some money when the place was gone, and you are 

in business in a market economy, the first thing you do is to look 

at that cheap land and at the fact that there is less competition to 

get a hold of it, something of the kind that I think is happening 

in Mr. Newcomb’s area. You know, and because they now have a 

labor force—in his case, it is jobs. In the case of Ward 8, it was 

land for homes and for apartment housing. We saw the area 

bounce back the moment there was anybody with any money. 

Mr. Dooley, you are very wise when you say, well, if you don’t 

act like you are going to do something with the area, then nothing 

in fact is going to happen. I am going to get myself a university 

center here real quick so that, Mr. Molnar, somebody can help us 

with areas like to repeat what happened in the 1990s very naturally. 

Remember, the word is naturally. It is a market economy. It 

doesn’t need much help from you. There is money out there. Look 

at what is happening on Wall Street. Everybody has come alive 

there. Where are they going to put that money? Well, they are not 

going to put it in the middle of the District of Columbia or in the 

middle of New York City. They are going to look for cheap land and 

a workforce that can do what has to be done. And we are trying 

our best with some of the development funds in the community, 

college funds, to make those two match up. 

I will tell you what we are going to do. You see that we have 

marvelous unity here on this Subcommittee about the worth of this 

program. We sit on a number of agencies. You know, Mr. DiazBalart and I sit on FEMA. You know, we had the worst of the 

worst circumstances, and we have seen it come back. We sit on 

GSA, a very complicated agency. 

And recognize that EDA is small, more compact, but we know 

this much, that doesn’t account for why it is so efficient and why 

we have this tremendous bang for the dollar. 

So you can expect that this Subcommittee will proceed forthwith, 

the fastest reauthorization. The Senate is already looking at the 

bill, already has its own amendments, its own version of the bill. 

48 

It is not as if both sides are not raring to go. I do not think that 

Democrats or Republicans can face the people in 2010 with an outstanding EDA reauthorization. We know where the people are. We 

know what they want. If whatever money EDA has, I think I speak 

for you, Mr. Diaz-Balart, when I say you have our commitment to 

do all that this Subcommittee can do to get this bill reauthorized 

this calendar year. 

Thank you very much. Your testimony has been most useful to 

us. 

We are adjourned. 

[Whereupon, at 5:12 p.m., the Subcommittee was adjourned.] 

49 


Insert offset folio 6 here 55118.006
50 


Insert offset folio 7 here 55118.007
51 


Insert offset folio 8 here 55118.008
52 


Insert offset folio 9 here 55118.009
53 


Insert offset folio 10 here 55118.010
54 


Insert offset folio 11 here 55118.011
55 


Insert offset folio 12 here 55118.012
56 


Insert offset folio 13 here 55118.013
57 


Insert offset folio 14 here 55118.014
58 


Insert offset folio 15 here 55118.015
59 


Insert offset folio 16 here 55118.016
60 


Insert offset folio 17 here 55118.017
61 


Insert offset folio 18 here 55118.018
62 


Insert offset folio 19 here 55118.019
63 


Insert offset folio 20 here 55118.020
64 


Insert offset folio 21 here 55118.021
65 


Insert offset folio 22 here 55118.022
66 


Insert offset folio 23 here 55118.023
67 


Insert offset folio 24 here 55118.024
68 


Insert offset folio 25 here 55118.025
69 


Insert offset folio 26 here 55118.026
70 


Insert offset folio 27 here 55118.027
71 


Insert offset folio 28 here 55118.028
72 


Insert offset folio 29 here 55118.029
73 


Insert offset folio 30 here 55118.030
74 


Insert offset folio 31 here 55118.031
75 


Insert offset folio 32 here 55118.032
76 


Insert offset folio 33 here 55118.033
77 


Insert offset folio 34 here 55118.034
78 


Insert offset folio 35 here 55118.035
79 


Insert offset folio 36 here 55118.036
80 


Insert offset folio 37 here 55118.037
81 


Insert offset folio 38 here 55118.038
82 


Insert offset folio 39 here 55118.039
83 


Insert offset folio 40 here 55118.040
84 


Insert offset folio 41 here 55118.041
85 


Insert offset folio 42 here 55118.042
86 


Insert offset folio 43 here 55118.043
87 


Insert offset folio 44 here 55118.044
88 


Insert offset folio 45 here 55118.045
89 


Insert offset folio 46 here 55118.046
90 


Insert offset folio 47 here 55118.047
91 


Insert offset folio 48 here 55118.048
92 


Insert offset folio 49 here 55118.049
93 


Insert offset folio 50 here 55118.050
94 


Insert offset folio 51 here 55118.051
95 


Insert offset folio 52 here 55118.052
96 


Insert offset folio 53 here 55118.053
97 


Insert offset folio 54 here 55118.054
98 


Insert offset folio 55 here 55118.055
99 


Insert offset folio 56 here 55118.056
100 


Insert offset folio 57 here 55118.057
101 

Æ 


Insert offset folio 58 here 55118.058