April 09, 2019

Chairs DeFazio, Titus Statements from Hearing on “Building Prosperity: EDA’s Role in Economic Development and Recovery”

Washington, D.C. — The following are opening remarks, as prepared for delivery, from Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR), and Chair of the Subcommittee on Economic Development, Public Buildings, and Emergency Management Dina Titus (D-NV) during today’s hearing titled: “Building Prosperity: EDA’s Role in Economic Development and Recovery.”

Chair DeFazio:

Thank you Chairwoman Titus. This is the first time in several years that this committee has met to look specifically at the Economic Development Administration (EDA), and I believe it is long overdue. EDA is the only agency in the federal government focused exclusively on economic development, but it is often unheralded for the important work that it does.

Operating in communities devastated by foreign competition, factory closure, military base closure, natural resource depletion, prolonged unemployment, or natural disaster, the EDA is truly an economic lifeline. This is particularly true for the city of Coos Bay in my district.

The loss of the logging industry on federal forestland and declining fishery stocks have plagued large swaths of my southwestern Oregon district. Once thriving towns are struggling to hold on, and young people who can get out are leaving their childhood homes. Aging populations with few options are stuck in place, largely isolated from the urban centers in the northern Willamette Valley.

Consequently, an emerging crisis on the southern Oregon coast is a nursing and doctor shortage. Nearly one in three health care workers in Coos and adjoining Curry counties are over the age of 55, and there are limited training programs in the area.

Southwest Oregon Community College in Coos Bay has a nursing program, but its growth and modernization has been limited by antiquated and undersized facilities lacking modern lab space and room to grow.

In 2013, the college began fundraising and planning for a new science and health technology center that will allow it to increase its enrollment by nearly 50% immediately and eventually nearly triple the program size over time.

The college spent several years fundraising and received more private donations than anyone expected possible in such a small and economically distressed community. However, despite their best efforts, the college still did not have enough funding to build its new health and technology center. Just as administrators were preparing to give up, the EDA awarded the college a $3 million grant to get the project over the finish line.

The EDA grant provided the absolute last dollars needed to fund the project that had been fundraising for six years. Without this funding, the college was unsure if or how the project would move forward and the residents of Coos County would suffer the consequences.

This story is exemplary of the work that EDA does. They come into communities that are barely hanging on and provide a lifeline to help turn the local economy around. EDA provides hope where there has otherwise been little cause for optimism.  Much of EDA’s work occurs in rural areas.  In fact, historically, about two-thirds of EDA funding has been awarded to rural areas.

For this reason, I find it perplexing that the Trump Administration proposed in each of its last three budgets to eliminate the EDA. It is unfathomable to me that the President would want to eliminate the only federal agency that is specifically focused on local and regional economic development. Moreover, EDA grants and loans produce a great return on investment. EDA investments generate between 2.2 and 5 jobs per $10,000 in funding.

Cutting the EDA is counterproductive and disproportionately hurts private sector job growth and small, rural communities. Instead, we should be working to reauthorize and provide more funding for the agency.

That is why I look forward to working with Chair Titus and my colleagues across the aisle on a comprehensive reauthorization of the EDA.

I thank our witnesses for taking time out of their busy schedules to appear before our Committee to discuss this often over looked, but promising agency.  I yield back the balance of my time.

Chair DeFazio’s remarks as delivered can be found here.

Chair Titus:

Good afternoon. I want to welcome everyone to the first hearing of the Economic Development, Public Buildings, and Emergency Management Subcommittee in the 116th Congress. This hearing is entitled: “Building Prosperity: EDA’s Role in Economic Development and Recovery”. 

I want to recognize the Ranking Member, Mark Meadows, and the welcome all the new members of the subcommittee. I look forward to working with Ranking Member Meadows and members on both sides of the aisle on the many issues we have before this subcommittee.

Additionally, I want to welcome back Dr. John Fleming, Assistant Secretary of Commerce for Economic Development. Dr. Fleming served in this body and I want to congratulate you on your recent confirmation and welcome to the EDA.

Today’s hearing will take a closer look at a federal agency that delivers one of the greatest returns on investment to the American taxpayer: the Economic Development Administration.

Our witnesses today will highlight some local examples of how EDA’s grant programs have facilitated large-scale economic revitalization and transition in communities that have been in distress. Further, we will explore EDA’s important role in disaster recovery and look ahead to how EDA can respond to emerging changes in our country’s workforce.

Created in 1965 by the Public Works and Economic Development Act, the EDA has, for the last 54 years, been the only federal agency specifically dedicated to local and regional economic development.

The EDA serves as a clearinghouse for economic development in the federal government and plays a critical role in coordinating federal economic development programs.

With a wide variety of grant programs including planning, public works, trade assistance, economic adjustment, and innovation, EDA provides needed funding to economically distressed communities to strengthen their local business environment, ensure job creation, and fuel sustainable economic growth.

In both its application process and annual reports to Congress, EDA prioritizes job retention and creation as well as private sector leveraging to ensure the greatest return on investment to the American taxpayer.

Despite a comparatively small $300 million annual budget, EDA has helped create or retain more than 275,000 private sector jobs and attract more than $39 billion in private investment in the past six years alone.

These grants, which are awarded only to communities facing significant economic distress, are a lifeline and oftentimes the only source of economic development funding available. EDA grants provide additional capacity, technical and strategic expertise, and targeted infrastructure investments that are guaranteed to preserve or attract new jobs.          

EDA has been front and center in responding to massive economic changes brought on by industry failure, trade competition, and persistent unemployment.

Through its trade adjustment assistance for firms program, EDA works with U.S. manufacturing, production, and service firms to help modernize work practices or business models to stay competitive in global markets.

Public Works grants help communities make targeted infrastructure investments like sewer or water access, rail spurs, and roadways to prepare sites for new industry or expanded industry operations.

In addition to its foundational economic development mission, EDA plays an integral role in helping communities recover from disasters. Fires, floods, hurricanes, and winter storms are enormously disruptive events that continue to have an impact well after the storm has passed and debris has been cleared.

Congress, realizing the EDA’s record of success in spurring revitalization and economic recovery, has routinely provided sizable appropriations to EDA for disaster recovery. Most recently, Congress appropriated $600 million in disaster recovery funding in the 2018 Disaster Supplemental to respond to Hurricanes Harvey, Irma, and Maria as well as wildfires and other federally declared disasters in 2017.

These resources provide some of the only economic development focused disaster assistance and are crucial to helping communities return to normal after a major event.

After the first responders have left, EDA stays on the ground to help put together the pieces of an economy fractured by natural or other disasters. It helps create economic development plans, provides revolving loans, and fortifies infrastructure to ensure that companies wiped out by disaster return to their communities and are resilient to future disaster events.

Each disaster is different and the needs following disasters are equally diverse. Fortunately, EDA funds are flexible enough within their mission driven purpose to apply to the unique circumstances each community has faced.

Whether it is protecting a manufacturing facility from flooding, creating a small business development center in a fire-ravaged town, or rebuilding a boat manufacturer following a tornado, EDA grants have brought prosperity and recovery to communities hardest hit by natural disasters.

The disaster recovery role, while funded through sporadic appropriations, is just as central to the EDA’s mission as its continually-appropriated programs.

I hope that after today’s hearing, you will join me in seeing the vitality and importance of the Economic Development Administration in our country’s efforts to promote prosperity.

Despite its sterling record of accomplishment, the EDA has been operating for the last eleven years on expired authorization. Even worse, this Administration has proposed in each of its last three budgets to eliminate the EDA altogether.

Congress’ failure to reauthorize the EDA means we have missed the opportunity to strengthen programs, increase funding to better meet needs, and expand EDA’s mission to respond to a changing economy.

This Congress, I intend to advance an EDA reauthorization that will provide certainty to the communities we are elected to serve that the federal government will remain a committed partner in the pursuit of economic growth.

I look forward to furthering that discussion in today’s hearing and learning from our witnesses. I now recognize the Ranking Member, Mr. Meadows, for an opening statement.

Chair Titus’s remarks as delivered can be found here.