[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
THE RECOVERY ACT:
STRENGTHENING OUR ECONOMY
=======================================================================
HEARING
before the
COMMITTEE ON THE BUDGET
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, JULY 24, 2009
__________
Serial No. 111-15
__________
Printed for the use of the Committee on the Budget
Available on the Internet:
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COMMITTEE ON THE BUDGET
JOHN M. SPRATT, Jr., South Carolina, Chairman
ALLYSON Y. SCHWARTZ, Pennsylvania PAUL RYAN, Wisconsin,
MARCY KAPTUR, Ohio Ranking Minority Member
XAVIER BECERRA, California JEB HENSARLING, Texas
LLOYD DOGGETT, Texas SCOTT GARRETT, New Jersey
EARL BLUMENAUER, Oregon MARIO DIAZ-BALART, Florida
MARION BERRY, Arkansas MICHAEL K. SIMPSON, Idaho
ALLEN BOYD, Florida PATRICK T. McHENRY, North Carolina
JAMES P. McGOVERN, Massachusetts CONNIE MACK, Florida
NIKI TSONGAS, Massachusetts JOHN CAMPBELL, California
BOB ETHERIDGE, North Carolina JIM JORDAN, Ohio
BETTY McCOLLUM, Minnesota CYNTHIA M. LUMMIS, Wyoming
CHARLIE MELANCON, Louisiana STEVE AUSTRIA, Ohio
JOHN A. YARMUTH, Kentucky ROBERT B. ADERHOLT, Alabama
ROBERT E. ANDREWS, New Jersey DEVIN NUNES, California
ROSA L. DeLAURO, Connecticut, GREGG HARPER, Mississippi
CHET EDWARDS, Texas ROBERT E. LATTA, Ohio
ROBERT C. ``BOBBY'' SCOTT, Virginia
JAMES R. LANGEVIN, Rhode Island
RICK LARSEN, Washington
TIMOTHY H. BISHOP, New York
GWEN MOORE, Wisconsin
GERALD E. CONNOLLY, Virginia
KURT SCHRADER, Oregon
Professional Staff
Thomas S. Kahn, Staff Director and Chief Counsel
Austin Smythe, Minority Staff Director
C O N T E N T S
Page
Hearing held in Washington, DC, July 24, 2009.................... 1
Statement of:
Hon. John M. Spratt, Jr., Chairman, House Committee on the
Budget..................................................... 1
Hon. Paul Ryan, ranking minority member, House Committee on
the Budget................................................. 2
Hon. Ken Salazar, Secretary, U.S. Department of the Interior. 3
Prepared statement of.................................... 6
Hon. Thomas J. Vilsack, Secretary, U.S. Department of
Agriculture................................................ 8
Prepared statement of.................................... 9
Hon. Ray LaHood, Secretary, U.S. Department of Transportation 13
Prepared statement of.................................... 15
THE RECOVERY ACT:
STRENGTHENING OUR ECONOMY
----------
FRIDAY, JULY 24, 2009
House of Representatives,
Committee on the Budget,
Washington, DC.
The committee met, pursuant to call, at 10:05 a.m., in room
210, Cannon House Office Building, Hon. John Spratt [chairman
of the committee] presiding.
Present: Representatives Spratt, Schwartz, Kaptur, Doggett,
McGovern, Tsongas, Etheridge, Yarmuth, DeLauro, Edwards, Scott,
Langevin, Bishop, Moore, Connolly, Schrader, Ryan, Garrett,
Diaz-Balart, Jordan, Lummis, Nunes, Harper, and Latta.
Chairman Spratt. I call the hearing to order and welcome
our three witnesses today. It is a distinguished panel indeed.
Secretary Salazar, Secretary Vilsack and Secretary LaHood.
The topic of today's hearing is the Recovery Act. Seven
months ago when President Obama took office, the country was on
the brink of a financial meltdown. Credit was frozen, home
mortgages--many of them subprime--were being foreclosed at
record rates. The economy was losing an average of 700,000 jobs
a month. The stock market had lost nearly $10 trillion in
wealth and headed downward. Congress and the Obama
administration took action, bold action. The boldest came in
late February when we enacted the American Recovery and
Reinvestment Act, an unprecedented Act, but so were the
circumstances.
The Recovery Acts has begun to bear fruit, although we
still have miles to go before we can say we are at full
recovery, a full economy. But we are faced no longer with the
severe critical financial conditions that we found at the
beginning of this year. The country has lost 6.5 million jobs
since the recession began in December 2007, 6.5 million jobs.
This is by far, the worst post-war downturn in employment, but
we have now slowed down the rate of job loss. The housing
market--beginning to pick up. Retail sales--beginning to turn
up. The forecast is for the economy to grow in the third
quarter.
The Recovery Act has provided a tax credit for 95 percent
of all working families, assisted 12 million jobless Americans
with extra unemployment benefits and increased food assistance
to low-income families. Already States have drawn down more
than an $23 billion in additional Medicaid funds as they deal
with record budget shortfalls. And the Recovery Act has already
allowed tens of thousands of teachers, law enforcement
officials, and firefighters to keep their jobs.
The economic recession that began during the previous
administration has taken its toll on the Federal budget, no
doubt about it, leaving the Obama administration and the
Congress with a massive deficit. That is the bad news: a
deficit of $1.7 trillion--$1.8 trillion this year. The good
news is many of conditions that are swelling the deficit to
these unprecedented levels are non-recurring, one-time events.
And if we can avoid the recurrence of these events, I think we
can credibly put the budget deficit on a downward glide path to
a trillion dollars next year and $525 billion in year 2014.
We are fortunate today to have three of the key officials
who are charged with implementing the Recovery Act. They in
order of when their agencies were incorporated, and I
understand that is the protocol: Ken Salazar, Secretary of
Interior; Tom Vilsack, Secretary of Agriculture; and Ray
LaHood, our old colleague, the Secretary of Transportation.
These three gentleman need no introduction, they have years of
experience working to improve the lives of Americans across the
country through their various previous positions in business,
and government, and politics. We have a former governor, a
former Senator, and a former Representative here this morning,
and three cabinet secretaries, which is probably a precedent
for this committee. We look forward to hearing your status
report on the Recovery Act, what is working and what is not by
the lags and results, and what you recommend for the months
ahead. We very much appreciate your taking time to join us
today, but before turning to you for your testimony, let me
turn to Mr. Ryan for any statement that he a cares to make. Mr.
Ryan.
Mr. Ryan. I thank the chairman. I also want to welcome the
witnesses, Secretary Salazar, Secretary Vilsack, and our good
old friend Secretary LaHood. I appreciate the opportunity for
this committee to once again meet on the subject of the
stimulus bill. Committee hearings are a key component of
Congress's fact-finding and oversight responsibilities. And I
will note that I am generally disappointed that we apparently
will not review in this committee the $1 trillion health care
expansion currently running through the House.
But let me turn to the subject of today's hearing, and that
is the stimulus bill. Prior to enactment the administration
said the key goal of the stimulus package was to save or create
millions of jobs. They even released a report showing that the
stimulus would cap the rise in the unemployment rate at 8
percent--and please bring the chart if you could.
Clearly, if look at this chart, that hasn't happened. The
unemployment rate is already at 9.5 percent, a 25-year high,
and nearly all economists see it rising further to 10 percent
by late this year. Since the stimulus was enacted, nearly 2
million jobs have been lost. The administration continues to
promise that we will see results soon and that we need to give
the stimulus more time to work. But most experts are predicting
a so-called jobless recovery. And least one member of the
Federal Reserve's policymaking committee believes that the
unemployment rate will linger at 10.5 percent through next
year. But while the benefits of the stimulus have turned out to
be meager and difficult to quantify, its costs have been large
and crystal clear. It will add $1 trillion to our debt; it
represents merely the first component of a spending-fueled
budget, a budget that will triple the national debt over the
next decade. And while the administration continues it tout its
commitment to create jobs, it is formulating policies that will
have the opposite effect in my opinion.
Their cap-and-trade plan will dramatically raise the cost
of operating a business and push jobs overseas. And their
health care plan will shackle individuals and businesses with
new mandates and taxes as they struggle to get out of this
recession. Economic growth and jobs will suffer as a result of
these policies.
Small businesses create 60 to 80 percent of the new jobs in
America. But the House health care plan will result in most
small businesses seeing their tax rate increase from 35 to 45
percent--over 50 percent if you include State level taxes. In
my home State of Wisconsin, the top tax rate on small
businesses, which is where most of our jobs come from, will be
54.27 percent, higher than France and Germany.
On Wednesday, the Majority Leader Hoyer, a man for whom I
have great respect, said the following on the House floor, ``It
is the private sector that drives our economy. It is the
private sector that will give us wealth and that creates jobs,
not the government. But the government can create policies
within which the private sector and particularly venture
capitalists can have the confidence that we are managing our
finances responsibly.'' I couldn't agree more, but I only wish
that the actual policies coming out of Congress were consistent
with this sentiment. With that, Chairman, I yield. Thank you.
Chairman Spratt. Thank you, Mr. Ryan. Just a couple of
housekeeping details before starting. I ask unanimous consent
that all members be allowed to submit an opening statement for
the record at this point. Without objection, so ordered.
STATEMENTS OF HON. KEN SALAZAR, SECRETARY OF THE INTERIOR; HON.
RAY LA HOOD, SECRETARY OF TRANSPORTATION; AND HON. THOMAS
VILSACK, SECRETARY OF AGRICULTURE
Chairman Spratt. Gentlemen, thank you for coming again. We
look forward to your testimony and we have received it
previously and made it part of the record without objection so
that you can summarize it as you see fit. But you are the only
panel today, you have an important message to bring, and we
would encourage you to take as much time as you feel is needed
to thoroughly cover the subject with respect to your cabinet
departments. Let's start in the order of recognition with
Secretary Salazar.
STATEMENT OF HON. KEN SALAZAR, SECRETARY,
U.S. DEPARTMENT OF THE INTERIOR
Secretary Salazar. Thank you, very much Chairman Spratt and
Ranking Member Ryan and all the members of the committee. It is
an honor to be here today to speak on a subject that is very
important to this Nation, and to all of you, and all the
Members of the Congress. It is a particular honor to be here
with my colleagues and friends, Secretary of Agriculture Tom
Vilsack, and Secretary of Transportation, Ray LaHood.
When I was sworn in as President Obama's Secretary of
Interior just over 6 months ago, we were in the throes of a
crisis which is the worst economic crisis that we have seen
since the great depression. We are losing 700,000 jobs a month,
bank lending was frozen. And we were at the risk of falling off
an economic cliff not seen for over 100 years in America.
The economic crisis that President Obama and this Congress
inherited was years in the making. Years of lax oversight,
years of irresponsible behavior at the highest level, years of
problems that unfortunately cannot be solved over night. Let
there be no doubt, America's recovery will take time. But make
no mistake, we have come a long ways in the 6 months since
January. Our economy is stabilizing, help is reaching those
hardest hit by this recession, confidence is returning and
America has begun to rebuild.
The Recovery Act is working. We see it working through the
investments that the Department of the Interior is making
through the Recovery Act. Congress entrusted the Department of
the Interior with the responsibility of investing $3 billion to
create jobs restoring America's National parks and treasured
landscapes, building clean drinking water infrastructure for
rural communities, fixing and upgrading aging schools in Indian
country, and taking on other critically important projects for
the Nation.
We are making these investments swiftly on the 18-month
timeline established by Congress. We are also making these
investments responsibly. We want to make sure that we get it
right, as you would want us to do. We want to ensure the
taxpayer dollars are not going to waste. Every project must be
worthy of the public's expenditures. Every contract must be
competed in a fair and open manner. And everything we do must
be transparent and open to public scrutiny. We are meeting
these goals and I am proud of the results that we have seen so
far.
Since Congress passed the Recovery Act, Interior and its
agencies have identified 3,382 projects which meet the high
standards that we have set, that is 3,382 projects which we are
overseeing. Ninety percent of the $3 billion we are investing
is helping us meet long deferred maintenance needs that have
built up in recent years, on roads, trails, facilities, water
infrastructure and in habitat that we manage.
The national park system alone has over $8 billion in
deferred maintenance priorities and there are more deferred
maintenance projects on the 500 million acres--or 20 percent of
the Nation's land mass--that we manage on behalf of the
American people. But we are making swift progress. Since we
released our final list of Recovery Act projects in late April,
the Interior has obligated $305 million in Recovery Act funding
which we estimate has already created more than 3,000 jobs, 400
projects are already underway.
By the end of October, we will have obligated nearly $1.1
billion. And in the next 6 months, we expect to obligate
another $1 billion. The pace is consistent with the
construction-based nature of the majority of projects. Just as
you can't build a new house overnight, some of our projects
will take time to complete. They will, however, employ people
at every step of the way. Surveyors, architects, contractors,
carpenters, plumbers, electricians, not to mention all those
who build and sell the materials that are going into these
projects, companies that sell solar panels, firms that design
stream gauges, all of these people and businesses will have an
opportunity to go to work.
We are seeing the benefits of the Interior's Recovery Act
investments in communities all across the country. It is
companies like DLM Contracting in Bozeman, Montana, as you will
see in this picture. In a normal summer construction season,
DLM employs 25 to 30 people. But this year there was no work
for the employees at DLM. They bid on 20 jobs last winter, that
is how bad it was. Twenty jobs and got none, they got none.
Since then, they have won two Recovery Act bids, including a
$7.1 million road project in Theodore Roosevelt National Park
in North Dakota. Brad Lewis, this is a citizen of America, says
the following, that the Recovery Act, ``made the difference for
the company this year.'' They have hired workers, they are
getting moving again. It's companies like AGC Architects in
Salt Lake City. Jill Jones is the owner of this company. She
says she would have lost over a third of her staff without the
Recovery Act working for her firm, and doing for the National
Park Service and other Federal agencies the work that she is
doing.
Thanks to the Recovery Act projects they are holding
strong, Jill's employees know their jobs are secure. She says
the Recovery Act has changed the confidence level of the 22
people working here. I believe it has a ripple effect that will
move across the country as more and more of these Recovery Act
projects hit the ground. It is people like Kelly Hanson, he is
a carpenter for Northern Management Services of Boise, Idaho,
one of 34 tradesmen and laborers who are working on the
renovation of the San Francisco Bay National Wildlife refuge
headquarters.
He says, ``I come from Idaho where the little towns are
getting hurt first. A lot of people I used to work for have
lost everything. Here in California they have never seen it so
bad. The stimulus money has cut through the red tape and put us
to work. I would be out of a job without it.'' You are hearing
from a lot of businesses like these. A large percentage of
Interior's obligated funds have been awarded to small and
disadvantage businesses. And we will hear more stories in the
coming months.
In the next 8 months we will begin an additional $1.8
billion of work that will create or save 19,000 more jobs in
this country. Under the Recovery Act, we will see a school
fixed in Standing Rock, North Dakota, and a school rise on the
Indian lands in Chinle, Arizona. We will see 450,000 people in
rural communities in South Dakota get clean drinking water from
three new water treatment facilities. We will see drought-
stricken communities in California get some help. And we will
make down payments on long-term water infrastructure needs in
California and around the country. We will see more and more
young people get to work in the outdoors.
The Fish and Wildlife Service's northeast region has
doubled the size of its youth conservation corps. Among our
young people unemployment is the highest; we have brought young
people to work on many of these public projects much in the
same way as Franklin Delano Roosevelt did in the 1930s through
the Civilian Conservation Corps.
Mr. Chairman and Ranking Member Ryan, members of the
committee, I look forward to continuing to work closely with
you to ensure that we are implementing the Recovery Act as
swiftly, as openly, and as responsibly as the American people
deserve. The Office of Inspector General at Interior is also a
key partner with us, for they are helping us implement the
Recovery Act with a very robust set of internal controls to
ensure adequate oversight and management of these funds. We
take our responsibility seriously under the law, very
seriously. And we can report today that the Recovery Act is
working. It is helping stabilize our economy, it is putting
people back to work, and it is helping us protect our Nation's
treasured landscapes for generations to come. Thank you, Mr.
Chairman.
Chairman Spratt. Secretary Salazar, thank you.
[The prepared statement of Secretary Salazar follows:]
Prepared Statement of Hon. Ken Salazar, Secretary,
U.S. Department of the Interior
Chairman Spratt, Ranking Member Ryan, and Members of the Committee,
thank you for giving me the opportunity to testify today. I am pleased
to be appearing with Secretary Vilsack from the Department of
Agriculture and Secretary LaHood from the Department of Transportation
to discuss implementation of the American Recovery and Reinvestment
Act.
INTRODUCTION
The Department of the Interior is investing $3 billion under the
Recovery Act in approximately 3,400 critical projects across this
nation in our unique portfolio of irreplaceable national treasures and
critical infrastructure in a manner that will create employment and
economic activity.
With these funds we are making the most significant improvements to
our buildings, trails, roads, and other public lands infrastructure
since President Franklin D. Roosevelt mobilized the Civilian
Conservation Corps in the midst of the Great Depression. We believe the
Recovery Act program will have a similar legacy of success in creating
desperately needed employment opportunities, while also making lasting
impacts in the preservation and enhancement of America's timeless
treasures, monuments to liberty, and icons of our culture and heritage.
At the same time we are making investments that will restore
functionality, improve energy efficiency, and advance important
national goals for renewable energy, environmental restoration, and
water conservation.
While we are implementing the Recovery Act with maximum focus on
expediting these critical investments to create jobs as quickly as
possible, we are placing equal emphasis on ensuring that projects are
worthy of the public's expenditure, contracts are competed in a fair
and open manner, and that our activity is transparent and open.
PROGRAM OVERVIEW
The Department of the Interior manages 500 million acres or
approximately 20% of the land mass in the Unites States, including 391
National Parks covering 84 million acres, 96 million acres managed by
the Fish and Wildlife Service, 56 million acres of Indian and tribal
lands held in trust, and 256 million acres under the Bureau of Land
Management. We are also the largest supplier of water in the Western
United States through the Bureau of Reclamation, including the
management of facilities such as the Hoover Dam, Glen Canyon Dam and a
huge network of other equally essential facilities.
The Department's Recovery Act program emphasizes critical
maintenance, rehabilitation and replacement of roads, trails, habitat,
facilities, and water infrastructure with over 90% of our $3 billion
funding these essential projects. Additionally, some of the funds are
going to important efforts in Indian Country such as construction and
renovation of schools, roads, and housing projects, loan guarantees for
small business, and workforce training. Finally, our program also will
make important investments in improving our scientific monitoring
network through the U.S. Geological Survey.
We are pursuing these investments in a manner that significantly
increases our commitment to engaging young people on our public lands.
Specifically, 346 of our Recovery Act projects will involve youth in
rebuilding trails, restoring critical habitat and performing other
essential activities.
Over 1,000 of our projects include energy efficiency and renewable
energy components which will both conserve energy and bring cost
savings to facilities across our system. In addition, the Bureau of
Land Management will invest $41 million in efforts to dramatically
enhance its ability to efficiently permit commercial scale renewable
energy projects on our public lands.
PROGRESS IMPLEMENTING ARRA
Five months ago, in February, when the Recovery Act was enacted by
the Congress and signed by the President, we had already initiated a
process to develop a set of projects using a merit-based process and
transparent criteria. While understanding the need to move quickly, we
continued this process in a careful and deliberate manner to ensure
that each of our projects had merit and could be executed within the
timeframe provided in the legislation. Each of our bureaus utilized
their inventory of projects that had already undergone significant
planning and design and clearances and developed plans consistent with
congressional direction.
We released our final list of projects in late April and we have
made great progress since then. As of July 17, 2009, DOI has obligated
$305 million in Recovery Act funding, creating approximately 3,300 job
years. We are projecting obligations of nearly $1.1 billion by the end
of FY 2009 and another $1 billion in the first and second quarters of
fiscal 2010. This pace is consistent with the construction-based nature
of the majority of our projects where each contract is fairly and
openly competed and money is obligated and spent at an increasing pace
over a 12 to 24 month period as work progresses. I am also pleased to
report that Interior continues to meet its commitment to small and
disadvantaged businesses.
We have initiated almost 400 projects to date, including:
27 Title XVI water reclamation and reuse projects totaling
$134.3 million in Recovery Act funds of which $131.8 million is
allocated to projects in drought-stricken California. This funding will
be leveraged by local sources to deliver more than $675 million in
Title XVI projects.
Three water treatment facilities totaling $93 million
which will provide better drinking water to approximately 450,000
people in rural communities in South Dakota, Iowa and Minnesota.
A trail rehabilitation project on the South Kaibab Trail
at Grand Canyon National Park.
A $56 million school replacement project for the Rough
Rock Community School replacement project in Chinle, Arizona and
another $8.2 million major renovation of Standing Rock High School in
Standing Rock, North Dakota.
One thing I need to make clear is that in our case, as with most
construction-based projects, jobs are created beginning with the
obligation of funds and are not tied to the actual outlay of dollars.
The Department pays only upon the demonstration of progress or
completion in the majority of our program. Thus, the discussion
regarding the pace of actual spending and its relationship to economic
activity is misplaced in our case, as obligations lead directly to new
jobs and economic activity.
Interior is working aggressively to accelerate the pace of its
contractual awards. We have engaged a highly qualified international
engineering firm to support us in this effort and are implementing
resource sharing, procurement and other strategies that will not only
help us better execute the Recovery Act, but also permanently improve
our efficiency and operating capacity.
While speed is critical, we are also very focused on doing good
projects and investing the public's dollars wisely and transparently.
We are working collaboratively with our Office of Inspector General to
execute the Recovery Act with a very robust set of internal controls to
ensure adequate oversight and management of these funds. The OIG is
also providing us with timely and focused input regarding our business
practices, areas of potential risk and mitigation strategies and
opportunities to implement best practices across our organization.
CONCLUSION
The Recovery Act has already made significant contributions to the
restoration of our nation's economic health, but its benefits are only
just beginning to be fully felt as the Department of the Interior's
work so clearly manifests. Over the next eight months, we will begin
approximately $1.8 billion of work creating at least 19,000 jobs in
projects that will leave a permanent legacy of good stewardship in many
of our most treasured landscapes, as well as providing critical water
infrastructure in rural communities across the West. We look forward to
the contributions this work will make to our nation's economic recovery
in the coming months on the timeframe established in the initial
legislation.
Chairman Spratt. Now Secretary Vilsack.
STATEMENT OF HON. TOM VILSACK, SECRETARY,
U.S. DEPARTMENT OF AGRICULTURE
Secretary Vilsack. Mr. Chairman, thank you to you and to
the ranking member and to members of this committee for the
opportunity to be here today, and I want to thank Secretary
Salazar and Secretary LaHood for their service, and I am proud
to be with them this morning.
I appreciate the opportunity to report to you on the United
States Department of Agriculture's work on the Recovery Act.
And I believe too that our report will reflect that the
Recovery Act is working. It is transitioning America from bad
times to better times and getting the work accomplished around
the Nation that Americans want done. The investments we are
making are not only creating economic stability, but also
funding the technology and infrastructure that will lay the
groundwork for future economic growth.
When President Obama took office, we were, indeed, as you
have indicated, Mr. Chairman, facing the worst economic crisis
in modern time. The economy was, in fact, losing 700,000 jobs
per month and shrinking at a rate of 6.3 percent. Foreclosures
were at record levels and housing investment had fallen by more
than 40 percent. Major financial institutions were failing and
credit was indeed frozen. Clearly, doing nothing in this
economic crisis was not an option. Less than 8 decades ago we
experienced the dramatic negative implications of inaction. We
have seen that the people hit hardest are ordinary Americans
who struggle to put food on the table, clothe their children
and maintain housing. We also know that every day we fail to
act, the long-term implications are that the road toward
financial stability is pushed further away, if not years into
the future. Thankfully, many of the folks who lived through the
Great Depression are still among us. It would have been an
affront to their experiences if we didn't do better this time
and take action to save our children from some of the suffering
and hardship they endured in their formative years.
The unraveling of the economy did offer a chance for us to
be both responsive and proactive through the passage of the
Recovery Act. Fortunately we will never know the full scope and
duration of the pain America would have endured had the Nation
not been mobilized into action. In less than 150 days, the
Recovery Act has worked to stabilize economic conditions and
helped those harmed by the economic crisis. The problems that
led the Nation to the brink were created over several years and
cannot be instantly solved. We have created the stability
needed to get us there and are making strides in helping those
negatively affected by the downturn.
From the respective of the USDA, we are reaching out to
every American every day to improve lives and prepare for
future economic prosperity. In less than 150 days, the USDA has
announced the availability of $27.4 billion of the $28 billion
of funds provided through the Recovery Act. We have provided
more than 45,636 loans to Americans who are deeply impacted by
the economic crisis, and have begun implementation of more than
a thousand Recovery Act projects.
The USDA has provided additional resources through our
nutrition assistance program. Over 33 million Americans
received a 13.6 percent increase in benefits under the
Supplemental Nutrition Assistance Program, or SNAP. For most
families of 4, this is an extra $80 per month at the grocery
store. It, in fact, creates $800 million a month in direct
stimulus to the economy. Research suggests that every dollar in
spending from SNAP results in $1.84 in total economic
activities. And further, our data indicates that 97 percent of
funding received through this program is spent within 30 days
of receipt.
Some of the other accomplishments to date at USDA include:
43,000 housing loans; 2,636 direct operating loans to farmers,
with 1,081 of those going to beginning farmers and 600 of those
going to socially disadvantaged farmers; 323 water and waste
projects; 600 community facility projects; more than 100
watershed projects; 288 floodplain easement projects; 169 wild
land fire management projects; and 343 capital improvement
projects in our forest service.
We are particularly enthusiastic about the rural broadband
funding provided under the Recovery Act, which provides $2.5
billion to provide broadband services to underserved and
unserved communities to position them for the next generation
of technology and economic growth.
Mr. Chairman, considering the state of the economy at the
close of 2008, we are in a remarkable position at present.
Including loans and guaranteed loans, we have, in fact,
announced $48 billion of the $52 billion in program level
funding, or more than 92 percent of the program level funding
provided to us in the statute.
Governmentwide, about 28 percent of the funds have been put
to work in about 24 percent of the days of the Recovery Act. We
are on track, but it is important for us to stay focused on the
mission at hand and to continue our commitment. It is going to
take time. The law was designed for 2 years of action. And it
is critically important we see the plan through. It is going to
take courage to hold our ground and remain committed to the
program of recovery for the American people.
Mr. Chairman, USDA is up to this challenge. I am proud to
represent the men and women of our Department here this
morning, and I will be happy to respond to questions from
members of the committee after Secretary LaHood has given his
comments.
Chairman Spratt. Thank you, Mr. Secretary.
[The prepared statement of Secretary Vilsack follows:]
Prepared Statement of Hon. Thomas J. Vilsack, Secretary,
U.S. Department of Agriculture
Mr. Chairman and Members of the Committee, thank you for the
opportunity to appear here today before the House Committee on the
Budget to provide an update and highlight the many successes of the
American Recovery and Reinvestment Act of 2009 (Recovery Act) for the
United States Department of Agriculture (USDA). I am pleased to be
here, along with Secretary LaHood and Secretary Salazar, to report that
the Recovery Act is working. The achievements of the legislation show
the Recovery Act is transitioning America from bad times to better
times and getting the work accomplished around the Nation that
Americans want to see completed. The investments we are making are not
only creating jobs and economic stability, but also funding the
technology and infrastructure that will lay the groundwork for future
economic growth.
THE RECOVERY ACT IN HISTORIC CONTEXT
Some critics argue the Recovery Act was unnecessary or is not
working. Some argue that because unemployment is rising, the
legislation has failed. It is important to remember the Recovery Act
was intended to slow the economy's downward spiral. Without this
legislation, economists have argued that conditions would be much
worse. The Recovery Act is working to slow the economic decline and
stabilize our economy.
When President Obama took office, the United States was facing the
worst economic crisis in at least two decades and the economy was in
the worst recession experienced in modern times. The American economy
was losing, on average, 700,000 jobs per month and shrinking at a rate
of 6.3 percent. The worst level the United States had seen since 1982.
Foreclosures were at record levels and the rate Americans were
investing in housing had fallen by more than 40 percent in eighteen
months. Major financial institutions, both private and government-
chartered, were failing because of this crisis. There was a near halt
at every level of the financial system from the commercial paper market
to consumer credit. Millions of folks with retirement investments lost
nearly $10 trillion in wealth in the stock market, which was on a
steady downward spiral. Americans' saving rate went from 8 percent of
income to almost zero and many were running up debts as they tried to
make ends meet.
Clearly, doing nothing in this economic crisis was not an option.
Less than eight decades ago, we experienced the dramatic negative
implications for inaction. We have seen the people hit hardest are
ordinary Americans who struggle to put food on the table, clothe their
children and maintain housing. We also know that every day we fail to
act, the long term implications and the road toward financial stability
is pushed further away--if not years into the future.
Thankfully, many of the folks who lived through the Great
Depression are still among us. It would have been an affront to their
experiences if we didn't do better this time and take action to save
our children from some of the suffering and hardship they endured in
their formative years. Unlike the case of an emerging natural disaster
which does not always provide the luxury of time to take mitigation
measures, the unraveling economy did offer a chance for us to be both
responsive and proactive. Through the foresight and wisdom of Congress,
and the Administration, swift action was taken to slow the economic
tsunami. On February 17, 2009 President Obama signed the American
Recovery and Reinvestment Act into law. Fortunately, we will never know
the full scope and duration of the pain America would have endured had
the Nation not been mobilized into action.
In less than 150 days, the Recovery Act has worked to stabilize
economic conditions and helped those harmed by the economic crisis. The
problems that led the Nation to the brink were created over several
years and cannot be instantly solved. While the Nation may not be in
full-scale recovery yet, we have created the stability needed to get us
there and made strides in helping those negatively affected by the
downturn. From the perspective of the United States Department of
Agriculture, we are reaching out to every American everyday in every
way through the far reach of our mission and authorities to improve
lives and prepare for future economic prosperity.
UNITED STATES DEPARTMENT OF AGRICULTURE ACHIEVEMENTS IN RECOVERY ACT
IMPLEMENTATION
USDA's goal is to quickly respond to current economic conditions by
preserving and creating high quality jobs, spurring rural economic
activity, and contributing to the Nation's overall financial health.
USDA will be open and transparent and responsive and accountable to the
American people as we deliver Recovery Act funding.
In less than 150 days, USDA has announced the availability of $27.4
billion of the $28 billion of funds provided through the Recovery Act.
In terms of obligations, USDA has obligated approximately $4.1 billion
of the $28 billion in budget authority provided to our Department. In
considering this, it is important to remember that USDA's ARRA funds
include almost $20 billion in enhanced SNAP benefits to be distributed
over a five year window. We have provided more than 45,636 loans to
Americans who were deeply impacted by the economic crisis and begun
implementation of more than 1,000 Recovery Act projects. In fact, just
this week, I announced more than $274 million in American Recovery and
Reinvestment Act (ARRA) funds for 191 forest facilities, trails and
related ecosystems projects.
Several of the facilities projects include new energy efficient
technologies. In fact, the solar panels proposed for the Forest
Service's San Dimas Technology and Development Center in southern
California will produce enough electricity to meet all of the center's
needs, thus making it a ``zero-net-energy'' facility. These projects
exemplify President Obama's commitment to sustainability, reducing our
environmental footprint and increasing energy efficiency, which will
benefit the 178 million people who visit the National Forests each
year, generate additional tourism activity and stimulate local
economies.
Under the Recovery Act, we have taken the opportunity provided to
reach those Americans who have been underserved and need assistance
most. USDA has distributed 2,636 Farm Operating Direct Loans to assist
eligible family farmers and ranchers in building and sustaining
successful farm operations. Of these 2,636 recipients, 1,081 are
beginning farmers and 600 are socially disadvantaged farmers. This is a
statistic that we are proud of and one on which we will continue to
focus on throughout Recovery Act implementation.
The additional funding provided by the Recovery Act has made it
possible to reach more farmers and ranchers where no lender is
available or able to provide credit. For farmers, the ability to absorb
input costs up front such as fertilizer and seed purchases, equipment
rental and labor costs is essential to ensuring a viable harvest. In
cases such as this, our Direct Farm Operating Loans have meant the
difference between agriculture producers growing a crop and perhaps a
profit this year, or simply closing down the operation. A lost farm has
serious negative ramifications to the surrounding community. The local
feed store, the farm equipment dealership, and the food supply chain
are all part of an interwoven connection across rural America.
USDA has provided additional resources through five major nutrition
assistance programs, as a result of Recovery Act funding. Over 33
million Americans received a 13.6 percent increase in benefits under
the Supplemental Nutrition Assistance Program (SNAP, formerly named
Food Stamps). For most families of four, this is an extra eighty
dollars per month at the grocery store, totaling $800 million a month
in direct stimulus to the economy. Our estimates show that money spent
on SNAP may have even larger effects on economic activity than other
types of government spending. And further, our data indicates that 97
percent of funding received through this program is spent within 30
days of receipt. Not only does this assistance allow families to
provide more nutritious and abundant meals for families, it also a
direct form of stimulus to our economy and goes to people who are
already certified as being in need.
Some of our other Recovery Act accomplishments within the first 150
days include:
Over 43,000 Single Family Housing Loans to purchase,
construct, or rehabilitate a home in a rural area. With these loans,
families can have a home, and contribute to a community.
323 Water and Waste Disposal loans and grants to construct
or improve facilities that will provide communities safe drinking water
and safe, sanitary waste disposal. Many of the benefiting communities
are small towns that either have no existing water infrastructure or
substandard or even unsafe facilities currently in place. These
projects not only improve public health and safety, but also offer
environmental improvements. And in some cases these projects provide
the necessary infrastructure to attract businesses and industry to the
area.
600 Community Facilities projects, including public safety
vehicles, libraries, and health care centers. These are wealth creation
projects that provide long-term economic and social improvements to
communities.
An excellent example of this kind of work is the Darlington County
Society Hill Library. This county received a Community Facility Loan in
the amount of $787,000 to construct a new 4,200 square foot library
building to replace an existing 850 square foot building located in the
in the town of Society Hill in South Carolina. The new library will
provide informational, educational, and recreational needs for the
4,000 residents who live in the greater Society Hill area of Darlington
County.
The need for a larger library to serve the needs of the community
has become more and more apparent. This community is isolated from the
larger more complete libraries in Darlington and Hartsville by nearly
seventeen miles in either direction. Junior high and high school
students depend on the library for research materials and computer
access. The local textile plant has laid-off the remainder of its
employees. These and other adults come to the library for help in
locating jobs, instructions in completing a resume, and using computers
to submit their resumes electronically.
The community and mayor support the library project and the County
Council donated one and one-half acres of land for the library. The
state senator secured $250,000 in state funds for the project and
several local corporations have donated $30,000. A local Friends
Library Group has raised approximately $10,000. This property is
located in the heart of the town at a convenient location.
80 Watershed and Flood Prevention Operations projects
providing flood prevention and mitigation for communities, improved
rural water supply, environmental mitigation measures and formation of
wetlands and wildlife habitat, and even increased water supplies for
rural firefighting.
FUTURE ECONOMIC GROWTH
We are proud of the work we have accomplished so far, but realize
there is a lot more work to be done. Through our work in the Recovery
Act, we have taken action that is long overdue and are funding
essential programs that benefit all of America. Clearly, these programs
and services are doing more than providing dollars into rural
communities. These projects represent the hopes and needs of people
across the Nation. In many cases, local communities have been waiting
for decades for these projects to be accomplished and the services to
be made available. Completing them sets the stage for additional
economic activity in the future. The Recovery Act has created the
opportunity and provided the resources to get the job done. An even
more expansive table illustrating the programs, services, and funding
made available through USDA Recovery Act programs is attached for the
record as Appendix A.
We are particularly enthusiastic about the Rural Broadband
initiatives funded under the Recovery Act. The Recovery Act provides
USDA with $2.5 billion to provide broadband services to rural and
underserved communities. In addition, the Recovery Act provides the
Department of Commerce with $4.7 billion to support grants to provide
broadband service to unserved and underserved areas. Many individuals,
schools, libraries, and healthcare facilities will obtain broadband
capabilities for the first time. The legislation provided clear
direction and a unique and historic opportunity to provide broadband
into rural areas that otherwise would not have the resources to install
broadband. Rural and poor areas are most often the ones that are not
considered good investments by companies installing broadband. We also
have an opportunity to give communities that might otherwise would be
overlooked a chance to be positioned for the next generation of
technology and the next phase of U.S. economic growth.
Rural Broadband means better and quicker access to information and
the infrastructure to operate and compete in a 21st century economy.
Access to rural high speed broadband will open up these areas to global
markets and global economic opportunities. The future business
development and the impact that broadband development can have on rural
America can only be compared with our efforts to provide
electrification and telecommunications to rural America in the 1930's
and 1940's. In those days, having a viable farm meant having access to
electricity for power for future equipment upgrades, refrigeration, and
product enhancement. So to, the provision of rural broadband will
prepare a generation of rural Americans for the 21st century economy by
providing access to high speed internet access that is necessary to
open up rural areas to global markets and global economic
opportunities.
RECOVERY ACT IMPLEMENTATION--NOT JUST BUSINESS AS USUAL
With Recovery Act implementation, time is of the essence. Keeping
farmers on the land and ensuring that local rural communities do not
permanently cease viability, has required swift action. We are pleased
that we are right on schedule with respect to obligating Recovery Act
dollars under the timeframe provided in the statute. But more so than
acting quickly and with a sense of urgency, we have set a goal
throughout the Executive Branch, including USDA, to act effectively and
also to seize the opportunity to also do business differently than in
the past. Within the Administration, unprecedented standards of
efficiency and accountability have been established. Recovery Act
dollars are not going toward Congressional earmarks or purposes of
political expediency. Government-wide, Recovery Act projects are coming
in as much as 10 to 30 percent under budget, which means the ability to
fund even more projects across the Nation. We have been pleased at USDA
to see that individual projects have not exceeded projected costs to
date and program implementation has been effective.
Beyond individual program efficiencies, we have also sought to
achieve better leveraging and synergy between programs--both within
USDA and also interDepartmentally. Within our Department, we have
established a Recovery Act implementation team, which looks at cross-
cutting implementation issues, identifies barriers, and recommends
solutions to levels of higher authority and policy decision-makers.
Also, the team functions to identify opportunities for coordination of
funding, so communities can get the most out of government programs.
In addition, the Administration has established Rural and Urban
coordinators across the Executive Branch to partner with federal
Departments and find opportunities to partner up on programs and
leverage government funding. For example, will installation of new high
speed rail service under consideration by the U.S. Department of
Transportation change the community needs for water and waste water
service? Will the relocation of a business alter the needs for
community facilities? Can investments made in rural broadband connect
with potential healthcare facility improvements that may be under
consideration through the U.S. Department of Health and Human Services?
These are the questions that we are asking, and through better
communication and collaboration, we will identify answers that better
serve all programs and funding resources.
I am proud that the USDA has served as a central hub for web-based
communication for the Federal government about projects supported by
the Recovery Act. Our web-based geospatial tool and mapping program has
provided a transparent means for the public to track the location,
purpose, and funding provided for all of our Recovery Act projects and
provide feedback. Thus far, the United States Department of Housing and
Urban Development has partnered to include its data on the site, and
many additional federal agencies will be coming online soon. The web-
based tool provides an easy way to identify and connect common projects
and achieve the kinds of synergy and efficiency that we are seeking.
LOOKING TO THE FUTURE
Mr. Chairman, considering the state of the economy at the close of
2008, we are in a remarkable position at present. In total, USDA has
announced $27 billion of the $28 billion of funds provided through the
Recovery Act. Including loans, we have announced $48 billion of the $52
billion in program level funding, or more than 92 percent of the
program level authority provided to us in the statute. Government-wide,
about 28 percent of the funds have been put to work in about 24 percent
of the days of the Recovery Act.
Soon, the Administration will start awarding over $15 billion in
grant funding for three visionary Recovery Act programs, broadband,
high speed rail and a smarter electric grid infrastructure. These
activities will not only create jobs now, but will shape America's
economy for tomorrow. Our efforts are contributing to stabilizing the
economy and we are beginning to see signs of progress.
It is important we stay focused on the mission at hand and we
continue our commitment to implement the Recovery Act approach that has
been established. The economic challenges we are working to overcome
were the result of years of deferred problems and accumulated negative
effects. Reversing this course is going to take a strong commitment. It
is going to take time. The law was designed for two years of action and
it is critically important we see the plan through. It is going to take
courage. It will take courage to stand our ground and acknowledge that
we do not want to replicate the difficult lessons that our grandparents
learned in the past. It will take the courage and commitment of the
Nation's leaders to hold their ground and remain committed to the
program of recovery for the American people. It is also going to take
the commitment of all American's to carry this through and ensure a
better tomorrow for our children.
Mr. Chairman, the United States Department of Agriculture is up to
this challenge. I am proud to represent the men and women of our
Department here this morning and I will be happy to respond to any
questions that Members of the Committee might have.
Chairman Spratt. Secretary LaHood.
STATEMENT OF HON. RAY LA HOOD, SECRETARY,
U.S. DEPARTMENT OF TRANSPORTATION
Secretary LaHood. Thank you, Mr. Chairman. I am delighted
to be here with my two colleagues from the Cabinet and to be
back at the Budget Committee, of which I was a member for one
term. And I thank you for the opportunity to discuss the U.S.
DOT progress in implementing the American Recovery and
Reinvestment Act of 2009.
The Recovery Act is an extraordinary response to a crisis
unlike any since the Great Depression. This landmark
legislation is the most sweeping, complex and ambitious
domestic aid package we have enacted in generations. It
reflects an unprecedented effort to jump-start our economy,
create or save millions of jobs, and put a down payment on
addressing long neglected challenges so our country can thrive
in the 21st century.
Since this legislation was enacted, the Department of
Transportation has been working hard to ensure that the
Recovery Act is implemented quickly, wisely and with
unprecedented transparency and accountability to finance
transportation projects throughout America.
Today I want to share with you our accomplishments and our
plans for the future.
To date, the Department has made nearly half of its funds--
$22 billion--available to States so they can green-light
priorities projects to rebuild and modernize roads, bridges,
transit systems, airports and seaports. We have approved over
6,600 projects for highways and other transportation project
nationwide. Of those, more than 3,200 roads, transit, and
airport improvement projects are underway right now.
Within DOT, our modal agencies are doing an outstanding job
of making recovery funds available as quickly as possible. So
far, the Federal Aviation Administration has allocated
virtually all of its stimulus funds--more than $1 billion--to
airports all over the country.
The Federal Highway Administration has obligated nearly
two-thirds of the $27.5 billion appropriated by Congress. More
than $1 billion in new Amtrak projects have been approved. And
for public transit an unprecedented $3.2 billion in grants have
already been awarded, and another $5 billion is in the
pipeline.
In the coming months, we will begin awarding grants from
our $8 billion fund to develop new high-speed passenger rail
corridors, which has generated a great deal of interest and
excitement around the country. And our discretionary $1.5
billion TIGER grant program will invest in priorities which are
multimodal projects to ensure more competitive and enhanced
liveability and sustainability.
Thanks to the excellent staff work and our productive
relationships with State DOT officials, every state met the
Congressional deadline to obligate 50 percent of the highway
formula funds allocated to them within the first 120 days,
which is what Congress asked us to do. Transit agencies around
the country are on track to meet a September 1 deadline for the
same milestone, with 50 percent of the formula funds obligated.
In speaking to governors, mayors, State transportation
officials, and private contractors all over the country, I have
been, since I was sworn in on January 27th, to 24 States and 41
cities. And I have found there is widespread agreement that
without these well timed Federal investments in infrastructure
and State services, our economy would probably be in much worse
shape.
While the Recovery Act cannot make up for all the jobs our
economy has shed, every single job these investments helped to
protect or create counts as a victory. Over 5,000 jobs have
already been supported through spending on transportation
products. And we estimate that over 500,000 jobs will
eventually be supported once the full effect of the Recovery
Act is felt in the Transportation industry; 500,000.
I also want to highlight our success in overseeing this
complex program while keeping our promise to America to meet
the high standards for transparency and accountability. I am
happy to report that in all 50 States and territories, not a
single case of serious abuse of funds has been identified. That
is a remarkable achievement for the fast-moving program of this
scope. I am very proud to say no earmarks, no sweetheart deals,
no boondoggles. A share of the credit goes to our DOT
management team for the Recovery Act, known as the TIGER team,
which has helped to keep our implementation on track, keep our
funds flowing and create a system for meeting all congressional
requirements.
In addition, we have completed three phases of risk
management plan for all Recovery Act programs and we will
continue to update our plan to ensure that all dollars are
spent effectively. As part of this plan we have developed a new
risk assessment tool that has been adopted by the Office of
Management and Budget for government-wide use. This tool
provides a strong foundation for managing our internal control
process.
And our accountability executive board continues to work
closely with the DOT Office of Inspector General and the
Government Accountability Office to maintain open lines of
communications with our auditors, so we may identify and
address any concerns as early as possible. I am confident that
years from now when we look back on the American Recovery and
Reinvestment Act, we will recognize that the investments we
made in infrastructure, energy conservation, education and
other vital needs mark a turning point in our economy. The
American people have said loud and clear they want us to
rebuild our crumbling roads and bridges, build clean and green
public transportation systems to help ease traffic congestion.
We are putting Americans to work doing just that.
I look forward to any questions that any of you may have.
Thank you, Mr. Chairman.
[The prepared statement of Secretary LaHood follows:]
Prepared Statement of Hon. Ray LaHood, Secretary,
U.S. Department of Transportation
Chairman Spratt, Ranking Member Ryan, and Members of the Committee,
thank you for the opportunity to appear before you today to discuss the
U.S. Department of Transportation's (DOT) progress in implementing the
American Recovery and Reinvestment Act of 2009 (Recovery Act). The
Recovery Act is an extraordinary response to a crisis unlike any since
the Great Depression. This landmark legislation is the most sweeping
and ambitious domestic aid package we have enacted in generations. It
reflects an unprecedented effort to jumpstart our economy, create or
save millions of jobs, and put a down payment on addressing long-
neglected challenges so our country can thrive in the 21st century.
Since this hallmark legislation was enacted, the Department of
Transportation has been working hard to ensure that the Recovery Act is
being implemented quickly, wisely, and with unprecedented transparency
and accountability to finance transportation projects throughout
America. Today, I want to share with you our accomplishments and our
plans for the future.
Less than six months after the enactment of the Recovery Act, the
Department has a great deal to show for taxpayers' investments.
Congress provided the Department of Transportation with more than $48
billion in Recovery Act funds. That is equal to nearly two-thirds of
our entire annual budget request for fiscal year 2010. It is an
enormous opportunity for us, and we are working overtime to make the
most of it.
To date, the Department has made nearly half of its funds--almost
$22 billion--available to the States and others so they can green-light
priority projects to rebuild and modernize roads, bridges, transit
systems, airports, and seaports. We have approved over 6,600 projects
for highway and other transportation projects nationwide. Of those,
more than 3,200 road, transit and airport improvement projects are
under way right now.
I am pleased to report to you that the Department has a strong
momentum going in the implementation of these programs. The Federal
Aviation Administration met the requirements in the Recovery Act and
has allocated virtually all of its stimulus grant funds--more than $1
billion--to airports all over the country. The Federal Highway
Administration (FHWA) has obligated nearly two-thirds of the $27.5
billion appropriated by Congress. More than $1 billion in new Amtrak
projects have been approved.
For public transit, an unprecedented $3.2 billion in grants has
already been awarded--and another $5 billion is in the pipeline. In
addition, we are currently reviewing grant applications that seek a
portion of the $100 million in stimulus funding intended to help
improve dozens of small shipyards around the country.
Transportation accounts for roughly 10 percent of the United States
Gross Domestic Product. The investments we make in this sector--and the
jobs we protect or create--are enormously important to our economic
recovery. To be sure, it is difficult to know the counterfactual. But
there are indications that the recovery funds are already having a
significant impact on state and local budgets and household budgets.
And it is important to bear in mind that the stimulus plans are being
implemented over the course of 18 months. As a consequence, the full
effect of the recovery will not be felt for many more months. The
Government Accountability Office (GAO) recently reported that the
recovery funds have helped states avoid major service cuts, tax hikes,
and widespread layoffs. As I talk to governors, mayors, state
transportation officials, and private contractors on a weekly basis all
over the country, there is widespread agreement that without these
well-timed Federal investments in infrastructure and state services, we
would probably be in much worse shape.
I am proud to say that the Department is showing how the Federal
Government can move quickly, effectively, and ethically to invest in
good projects and good jobs in every state in the Nation. Even before
the Recovery Act was enacted, DOT had developed an implementation
strategy to ensure that the agency would be prepared to implement our
elements of the legislation as quickly and effectively as possible. We
brought together an intermodal team of experts from our policy, legal,
financial, and information technology disciplines to work alongside
programmatic experts in our operating administrations to anticipate the
requirements in the new legislation. This new team--termed the
Transportation Investments Generating Economic Recovery, or TIGER,
Team--was tasked with coordinating and overseeing the Department's
responsibilities and reporting regularly to me on their progress.
The work of the TIGER Team has been instrumental in keeping our
implementation on track and I am pleased to report that the efforts of
our TIGER Team and many others throughout our Department have enabled
the Department to achieve success. To keep the funds flowing and to
ensure that accountability and transparency are maintained, our DOT
TIGER Team is tasked with a broad range of responsibilities. We have
established separate stewardship working groups to coordinate issues
such as data reporting, financial management, procurement and grants,
job creation, information technology, and accountability. The reporting
requirements in the legislation are extraordinary and have required the
Department to establish guidance on data and financial reporting to
ensure that information provided to the public is accurate and easy to
understand. For example, we have posted maps of the United States on
DOT's Recovery Act website showing the number of projects by State and
the amount of funds that have been obligated. We are constantly working
to refine these helpful depictions of the progress being made to
fulfill the President's objectives for the Recovery Act.
While implementation of the Recovery Act presents significant
management challenges, DOT has taken steps through the TIGER Team to
provide effective oversight to ensure that the funds provided by
Congress are used efficiently and effectively, and to provide maximum
benefit to the public.
For example, DOT has developed a systematic and comprehensive
approach to risk assessment and management. The risk management tool
developed by DOT was so well regarded by the Office of Management and
Budget (OMB) that OMB subsequently adopted the tool for Government-wide
use. The tool uses a four-step approach, which is built upon the sound
foundation of internal controls assessments:
Formal assessment of potential programmatic risks;
Risk profile that categorizes the level of risk;
Risk management and mitigation plan; and
Validation and testing.
DOT has collaborated with other Federal agencies to share risk
management best practices and develop a comprehensive standard risk
assessment tool. The Department has completed three phases of its Risk
Management Plan for all Recovery Act programs and is currently
reviewing, validating, and evaluating all of its mitigation efforts. We
are continuously updating our risk management efforts to ensure that
Recovery Act dollars are effectively spent.
We have also created new business processes that make better use of
the work done by both the Office of Inspector General (OIG) and the
GAO. Early on, we established an Accountability Executive Board that
includes top officials from throughout the Department. This group
approached OIG and GAO seeking to better ensure that audit findings are
thoroughly considered in our Recovery Act programs. First, we broadened
the avenues of communication to make certain we had a clear
understanding of their concerns as rapidly as possible. We created new
mechanisms, including an Accountability Stewardship Group to bring
management and the auditors together frequently for a frank, two-way
exchange of information. Together with the Inspector General, I have
convened a fraud awareness session broadcast throughout DOT to ensure
everyone gets the message that we have zero tolerance for waste or
fraud. Simply put, I have asked our people to say something if they see
something. The Accountability Executive Board continues working with
the auditors to identify new and innovative ways that will better
enable DOT to anticipate challenges and incorporate the changes
necessary to provide the public with meaningful and effective
programmatic results.
To really understand how taxpayers and their communities are
benefiting, you need a ground-level perspective. In Pennsylvania, for
example, the Recovery Act has boosted the State's fiscal year 2009
highway and bridge construction program by more than half--adding over
$1 billion to the budget. That means more than 200 infrastructure
projects are funded today that would not even be on the books
otherwise. It also means that thousands of private-sector jobs will be
saved or created, lay-offs will be avoided, and that Pennsylvania can
count on good jobs for months to come.
Consider this: in April, contractors working in Pennsylvania
reported that stimulus funds helped them sustain or create about 130
jobs. By May, the total jumped to over 700 jobs. The job totals this
month will be even bigger.
In state after state, we are seeing a meaningful impact on jobs.
The Maryland Department of Transportation has recalled all of its laid-
off employees back to work. A private contractor in Massachusetts has
brought back nearly its entire workforce--more than 300 people.
In Missouri, Texas, Colorado, Georgia and elsewhere, this story is
being repeated. I have personally met with workers around the country
who would not be getting paid this week without stimulus-funded
transportation jobs. And because they are working, they can support
their families, pay their bills, and pump some dollars back into their
local economy.
While it will take time for the economy to recover, every single
job these investments help to protect, every worker who is recalled
from a layoff, and every new college graduate who finds that crucial
first job counts as a victory.
There have been questions about whether stimulus-funded projects
are in the communities that need them most. We have found that half the
states have obligated at least half of their recovery highway dollars
to economically distressed areas. I have urged the Nation's governors
to spend the funds saved from low bids to highway and transit projects
in depressed areas, wherever possible.
Our cities are benefiting too--making sweeping upgrades to transit
facilities and equipment to help fight congestion, reduce emissions,
and improve mobility for millions. Ninety percent of recovery funds for
transit go to urban areas--cities large and small. This means that
cities like South Bend, Indiana can finally replace a century-old
transit center with a new multi-modal complex. Minneapolis-St. Paul,
Fort Worth, and scores of other cities now have tens of millions of
dollars each to buy clean-fuel buses, build new transit facilities, and
make deferred repairs.
I am pleased to note that the Department continues to meet all of
its deadlines. From the beginning, the FHWA has moved at rapid speed.
On March 3, 2009, President Obama and Vice President Biden joined me at
DOT to announce that nearly $26.7 billion was available to the States
for highway investment. Within hours of the President's announcement,
states began approving projects--in full compliance with all Federal
laws and regulations. Just six weeks after approving the first project,
the President and Vice President returned to DOT on April 13 to
celebrate the 2000th transportation project approved for funding--
rebuilding a $68 million interchange on I-94 in Portage, Michigan.
Construction has now started on this project, which the State expects
will create 900 jobs this summer, increase safety, and reduce
congestion along one of Michigan's most important freight corridors.
Under the Recovery Act, 50 percent of the funds apportioned to a
State (excluding funds sub-allocated within the State) were required to
be obligated under a project agreement before June 30, 2009. I am
pleased to report that all States were able to meet the target by the
120-day deadline on June 29, which happened to be the 53rd anniversary
of the Interstate system. A similar requirement is included in the
Recovery Act for our transit programs. The Recovery Act calls for the
obligation of 50 percent of transit formula dollars in specific
geographic areas within 180 days of apportionment, which means by
September 1, 2009. We are well on our way to meeting that deadline, as
well.
I am confident that five years from now, when we look back on the
American Recovery and Reinvestment Act, we will recognize that the
investments we made in infrastructure, energy conservation, education,
and other vital needs marked a turning point. The American people have
said loud and clear that they want us to rebuild our crumbling roads
and bridges, and build clean and green public transportation systems to
help ease traffic congestion. We are putting Americans to work doing
just that.
But there is also more to come. The Recovery Act included $8
billion for a new high speed rail program. President Obama's vision for
high-speed rail mirrors that of President Eisenhower, the father of the
interstate highway system, which revolutionized the way Americans
traveled. Now, high-speed rail has the potential to reduce U.S.
dependence on oil, lower harmful carbon emissions, foster new economic
development, and give travelers more choices when it comes to moving
around the country. The Recovery Act also included a $1.5 billion
discretionary grant program for surface transportation to be
administered under my direction. These ``TIGER'' grants will be awarded
on a competitive basis for capital investments in surface
transportation infrastructure projects that will have a significant
impact on the Nation, a metropolitan area, or a region. In the months
ahead, we will also work with Congress to find creative new ways to
finance the kinds of transportation systems and services that Americans
need and deserve for the 21st century.
In closing, I firmly believe that the American Recovery and
Reinvestment Act is working, it is on track, and it will continue to
benefit our communities for many, many months. I can tell you that we
are making real progress in achieving the goals of the Recovery Act. I
have had the privilege of standing along side the President and the
Vice President at events marking the arrival of Recovery Act funds in
cities throughout America. I have seen first hand the excitement on the
faces of newly hired workers who now have a job. These people have
families to care for and communities that are counting on them. In
turn, they are helping to rebuild and refurbish our transportation
infrastructure so we can together keep America moving.
I again want to thank Chairman Spratt and the Members of the
Committee for inviting me here today. I will be happy to answer your
questions.
Chairman Spratt. Thank you all. Let me just review the
bidding, so to speak. The Recovery Act provided $787 billion in
spending and in tax relief; $183 billion of that has been
obligated as of July 10th, which means 28.8 percent has been
obligated--nearly a third, nearly 30 percent. And you gave
powerful testimony, each one of you with concrete evidence and
anecdotal illustrations. This is a fact that this is working
and if it we had not done it, we would be suffering severe
consequences, maybe even catastrophic conditions.
But in Main Street America, people are still saying, ``I
don't see the relief yet, I don't feel it.'' When can we tell
the American people that more benefits and more effects of the
Recovery Act are going to be felt and seen and in their daily
lives, and their jobs, and in their work and things of this
nature? Can you give us any sort of expectation like that, that
we can carry back to our constituents?
Secretary Salazar. Mr. Chairman, I would say that first of
all, we are already seeing the effects on the ground through
the illustrations that I and my colleagues have provided. There
are already people working who would not otherwise be working
if the Congress not taken the action that it took and the
President's leadership had not resulted in the stimulus
package. So I think the effects are already seen on the ground.
Secondly, the Recovery Act is a program that was supposed
to work over time. It was not supposed to essentially be a
magic wand that from one day to another would take the economy
out of the deep ditch which it had gotten into. The Congress
rightfully set forth a longer term program--over 18 months--to
get the money out. And so you will see jobs created during that
time period, but also into the future. In our own process in
the Department of Interior we recognize the contracts that we
are letting out will have people employed now and into the
future. That is a very positive economic impact of these
investments: they will create jobs in the long-term.
The kind of projects that we are investing in are going to
create a part of the economic engine for 10, 15, 20 years on
down the road. But I think the American people will see the
effects over the next couple of years in a very significant
way.
Chairman Spratt. Thank you. Secretary Vilsack?
Secretary Vilsack. Mr. Chairman, I would start by saying
that 33 million Americans are today receiving the benefits of
increased SNAP payments and food assistance payments. As I
indicated in my testimony, a family of four on average will get
about $80 more to be able to spend in a grocery store. And
because it generates economic activity by virtue of the fact
that about 97 percent of those resources are spent in the first
30 days, it means more grocery items have to be stocked, more
have to be trucked, more have to be processed, more product has
to be sold in order to be able to process the additional food
that is being purchased. So 33 million Americans are getting
benefits right now and have been for the last several months.
I would also say that if you spend any time at all in food
banks, as I have, you will see that the additional emergency
food assistance that the Recovery Act provided is really
helping a lot of families have nutritious meals, particularly
for America's children. We have, unfortunately, still today in
this country, 600,000 of our children who are hungry. These
food banks make a big difference in the lives of those
youngsters.
Third, I would say that when you are looking at several
hundred community facility projects, the projects are for the
most part construction projects that are putting people to
work. The chances are very good these are local contractors,
they are expanding libraries, they are building daycare
centers, or they are working on expanding health care
facilities in rural communities.
At the same time those activities are taking place, several
thousand people are already working today on the forest service
projects, and roughly 3,700 folks are employed because of the
watershed work that we are doing in the water treatment plants
that we are building. In those communities--and there are
roughly 40 States impacted by these benefits--in those 40
States when people turn on the tap in many of these communities
they will have clean drinking water.
So while there will be time for additional jobs being
created as a result of our investments, I think it is important
to see this Recovery Act in three components. First, it is
allowing people to transition through tough times. That is why
you extend unemployment benefits, that is why you provide tax
relief to 95 percent of working families, and that is why you
increase SNAP benefits through the Recovery Act.
At the same time, we are doing the work that Americans want
done: they want their roads improved, they want bridges to be
safe, they want dams to hold the water, and they want to
improve their community facilities in rural areas. That is
taking place, and it will continue to take place for the next
15 months.
Third, Americans understand that we owe it to our children
and grandchildren to build the foundation for a 21st century
economy, which is why high-speed rail, the broadband
initiative,and the smart grid investments will be made and will
build a much stronger, long-term economy for this country. So
it will take some time for folks to see unemployment rates
drop, but the fact is that the stock market stabilized and
credit is a bit more available. The fact that there is a better
attitude in terms of the long term I think is a reflection of
the some of the work the Recovery Act has done.
Chairman Spratt. Mr. LaHood, I will add this to your
question: Do you think that we undersold the potential of
boosting expenditures and highway projects--in particular
surface transportation projects? I think there was a request
for $32 billion and the amount that finally came through was
$28 billion--there was some dispute over whether or not the
highway money could be put to quick use with shovel-ready
projects. Do you think we undersold the potential of the
highway investments?
Secretary LaHood. Well, Mr. Chairman, the reality is that
much of this money is out the door. As I said, I have been to
24 States and 41 cities around the country. And everywhere I
go, I see orange cones all over America, and I see thousands of
people working, and I talk to these people. All of these people
that I talk to, without exception, were on unemployment in
January and February and March, and they are working today.
They are building roads and they are building bridges, they are
building runways and airports. Every airport that I have flown
into has taken advantage of the billion dollars that is now out
the door, and they are resurfacing runways and resurfacing
roads.
Part of the problem for us at DOT is that we said we wanted
projects that were ready to go. Well, in order to have the
State spend money, the legislature had to--in some instances--
appropriate the money for the project, and some legislatures
have taken time doing that. Other legislatures had to pass
capital budgets: in the instance of Illinois, the governor just
signed the match money for some projects under TEA-LU.
Now, there was no match under the Recovery Act. So whatever
delays were caused, were caused by the fact that legislatures
in some States wanted to have their say on how our money was
going to be spent. But there are a lot of projects going on in
America. And there is a lot of money out the door--over $20
billion is out the door--and almost 7,000 projects are funded,
and many of them are underway.
I just met with some folks with the Michigan delegation
where they don't have the kind of match money that they need
for some of these projects under the TEA-LU bill. And we
figured out a way to help them. So in instances where States
have had difficulty, we have worked with them, and I believe we
have made a difference. I believe that if you look around your
districts, and I say this to every member, and you go to these
projects, and you talk to people that are working, what they'll
tell you is they were on an unemployment roll in January and
February. And now they can make their house payment, make their
car payment, and put food on the table for their families. That
could not have happened without these funds. And I thank
Congress for having the courage to pass this kind of
opportunity for America. We are putting people to work.
Chairman Spratt. Thank you very much. Mr. Ryan.
Mr. Ryan. Thank you, Chairman. In Janesville, Wisconsin,
which is my hometown and the town I represent, the unemployment
rate is 13.2 percent. It is just about at that level in every
other county I represent. So we all want to get this right.
This is the worst we have seen in most of our lifetimes, so
getting the stimulus and getting the recovery right really
matters. That is why some of us are concerned that we are not
applying the right medicine at the right time to the economy to
get jobs growing. That is why we are concerned about the
forecast of many economists that we will have a jobless
recovery. That is why we are also very concerned that even
though the stimulus is starting to possibly--maybe--kick in,
right around the corner at the end of next year, massive tax
increases are already coming into law. Tax increases on
investment capital, tax increases on workers, tax increases on
small business.
And now we have a proposal that we may voting on next week
that is going to put even more tax increases on small
businesses bringing tax rate up above 50 percent. And so, we
think that the fiscal policy coming out of Congress just,
candidly, is the wrong fiscal policy.
A week ago, I went over to the Bureau of Public Debt. Now
Mrs. Lummis and I did this. And we spent about 5 minutes
watching smart employees at the Treasury Department in a room
with a bunch of flat screen TVs, sipping coffee, borrowing $40
billion in about 4 minutes. And we are doing this every day at
the Treasury Department. And we are being told by economists,
by bond traders, there will come a day where we can't keep
borrowing all this money. There is going to come a day where we
will not be able to fill a bond sale or there is going to come
a day where our financiers--48 percent of whom are foreign
governments, namely China and Japan--they aren't going to do
it. And so doing this on all this borrowed money has its
limitation. And so that is a real concern that we have on this
side of the aisle. Given that we were led to believe that this
would cap our unemployment at 8 percent, now we are at 9.5 and
going to 10, we are worried that this is not working.
I just have a quick question for each of the three of you.
Secretary Salazar, one of the areas where we think we can get
shovel-ready projects, where we think we can get good jobs, and
one of the concerns we have with the Federal Reserve and what
it's doing is we are fueling another commodity bubble. That
means we are going to have higher oil and gas prices around the
corner just like we had a year ago, which will dampen economic
activity. We have got trillions of cubic feet of natural gas
and billions of barrels of oil on our country, under our own
grounds, most of which are Federal lands. Will the
administration--whether it is the intermountain region for gas
and oil, outer continental shelf or Alaska--will the
administration this year lift the moratorium on this drilling
and accelerate and move toward increasing the leasing so we can
drill for oil and gas in our own country, create all those
jobs, and try and reduce not only our dependency on foreign
oil, but keep prices low?
Secretary Salazar. Thank you very much, Ranking Member
Ryan. Let me first say on your comment with respect to the debt
issue, the fact of the matter is this is a challenge which was
inherited by President Obama and this Congress.
Mr. Ryan. Absolutely.
Secretary Salazar. You were here at the time and you
remember the conversations about the mountain of debt that was
being created as Medicare Part D was passed and other actions
that were taken that created this mountain of debt.
Mr. Ryan. If you bring that up, Mr. Secretary, I will
simply add we just passed a budget resolution, the President's
budget resolution that triples that debt in the next 10 years.
Secretary Salazar. And I will just say to all of you here,
I think it is an opportunity for this Nation to come together
and address the fiscal reality that we have to face, because it
has been ignored for far too long. And as you heard from the
President as he was in Ohio yesterday and other places, he is
focused on making sure that we have accountability and that we
address the fiscal challenge, including the huge deficits that
have been built up. So it is something that is very much on the
mind of the President and on the mind of the administration.
With respect to your question on energy, we are working and
have been working hard on the comprehensive energy plan. We
don't believe there is a one-way highway to energy independence
in America. I think that one-way highway has proven to be a
wrong highway. And the consequence of that has made America
vulnerable to the dangers of over-dependence on foreign oil: to
the dangers of pollution to our children, and has threatened
the economy of our country because of the fact that we export
so many dollars to bring in oil from places like the Middle
East and other places. So what we have been doing is working as
a team, people like Secretary LaHood and Vilsack and the whole
host of us in the government, to develop the President's vision
for a comprehensive energy plan. And you will see in that,
Congressman Ryan, that there have been production components of
what we are doing. We continue to lease vast swaths of land,
over 1.5 million acres of land on BLM, for oil and gas
production. We have held leases in the Gulf of Mexico, over a
million acres have been leased, and we continue to look at
opportunities for development.
So we will have a comprehensive plan that includes our
conventional resources, but also at the same time charts a new
beginning with renewable energy that really addresses the new
energy frontier that ultimately will address these long term
systemic challenges.
Mr. Ryan. I want to be kind with time. Just real quick
again, on the remaining moratorium, the lands that are
prohibited, will the administration in this comprehensive
energy plan work to lift the moratoriums on those current lands
that are now prohibited from drilling?
Secretary Salazar. We are looking very comprehensively at
the Outer Continental Shelf and areas that are under existing
moratoria and those areas where the moratoria was lifted. And
under the plan that we have in place we have provided until
September 20th for public comment on places that are
appropriate for drilling and for exploration and for those that
are not.
Mr. Ryan. Haven't decided yet basically, is that a have-
not-decided-yet answer?
Secretary Salazar. The answer is that there are places
where the debate has been a very theoretical and hypothetical
debate in large part because we don't have the information to
make decisions; for example, off the Atlantic. And so we are
being thoughtful as we move forward, and the time that we have
taken through September 20th will help us make sure that we are
drilling in the right places.
Mr. Ryan. Okay, so stay tuned, you are saying?
Secretary Salazar. Stay tuned.
Mr. Ryan. Secretary Vilsack, you come from Iowa, I come
from southern Wisconsin. We have similar agricultural
economies, so I feel like you can relate to the kind of economy
we have agriculturally. The administration had what I thought
was a very good proposal in its budget to phase out direct
payments from farmers with gross sales over $500,000. That
would produce $9.7 billion in savings over 10 years. Mr.
Blumenauer and I here on the Budget Committee tried to pass
that amendment, but we failed to do that in the budget
resolution. I encourage you to continue advancing these things
because we have to find savings. What is the administration's
proposal to continue on this? And have you had other success in
other committees such as the Agriculture Committee?
Secretary Vilsack. Representative Ryan, we are working very
hard with the Treasury Department to try to make sure that we
first and foremost ensure that the payments that are to be
received are received by those who are entitled to them. As you
probably know, there were anecdotal reports of people who were
not farmers receiving payments. We are working with the IRS and
we hope to be able to ensure and verify that people receiving
payments are in fact entitled to them, and we think there will
be savings there.
We are in the process of taking a look at a number of other
ways in which there could potentially be savings. This year is
the year in which we will be discussing crop insurance and the
deal that we have with insurance companies. We think that that
deal needs to be examined and looked at so that taxpayers
receive a fair shake and so that farmers receive a fair shake.
So there are opportunities there as well.
So we are continuing to look for ways in which we can do a
better job of shepherding the taxpayer money. The President
challenged his departments to begin that process with $100
million challenge. I can tell you that at USDA, just in our
Department alone, we can meet about a third of that challenge
in just the first 60 days in terms of resources that we are
saving and resources that we are not spending as had been
planned.
Mr. Ryan. I know we are mid farm bill, but the proposal was
made mid farm bill to cap direct payments over 500,000 AGI. I
just want to get clear, because I support this, I think you are
going in the right direction. Are you going to be advancing the
proposal in the next budget submission?
Secretary Vilsack. There have been criticisms about the
format and we are going to continue to work with folks to look
for ways in which we can ensure the assistance and the safety
net that farmers rely on and depend on, and clearly we have
seen a substantial need for it this year. You mentioned your
State of Wisconsin--I was in Wisconsin recently and as you well
know there is a serious problem with dairy farmers in this
State.
Mr. Ryan. Yep.
Secretary Vilsack. And we have been actually spending a
great deal of time trying to figure out how to help and assist
them. I would ask you, since we are sort of neighbors, you
might be helpful to us in terms of being able to respond to
those kinds of crises if you gave us a little more flexibility
in terms of section 32.
Mr. Ryan. Good point.
Secretary Vilsack. If you didn't direct quite as much of it
and gave us a little more flexibility, we might be able to have
responded even more effectively than we have.
Mr. Ryan. That's a good suggestion. Ray--Secretary LaHood.
I am comforted you are in this job, because I know you are a
man of great integrity who is going to watch how we spend our
dollars wisely in transportation. I support the highway program
and it is important to our State. The Highway Trust Fund was
intended to be user financed and that was the original idea.
And I think most people support that concept. But it is broken
and needs to be fixed. Last year we transferred $8 billion from
the general funds to patach last year's shortfall. We provided
$27 billion in stimulus funds to the general fund. Now the
Highway Trust Fund needs another $20 billion.
We have two seasons in Wisconsin, winter and road
construction season. So timing of these fixes really actually
matters. So what is the administration's proposal to fix this
problem, what is the timing in your mind, and do you support
general fund financing of the highway program?
Secretary LaHood. Well, we have put forth a proposal to the
leadership to extend the current highway bill for 18 months,
which we believe would cost $20 billion. And we have told
Congress that we would find the money and pay for it. So we are
not for the idea of just taking money from the general fund and
lopping it over into the Highway Trust Fund. We think we should
pay for it.
The Senate has passed that extension. There are three
committees of jurisdiction in the Senate, and all three of
those committees have passed that. We are looking now to the
House to do the same thing.
We think the idea that Congress could pass a very
comprehensive, robust transportation bill by the time this one
expires is just not possible. You all know it is not possible
to do it by September 30th. So rather than doing these 3-month
or 6-month or whatever extensions and just kind of leading
people along here that we are going to get somewhere,we think
an 18-month extension gives us a chance to work with all of you
on a very robust bill that helps us find the resources. Not
only use the Highway Trust Fund, which is deficient--I wouldn't
call it broke, it is deficient, though. Because people are
driving less, they are driving more fuel-efficient cars and so
not as much money is going into the trust fund. And we have
offered some sort of ``think outside the box'' ways of paying
for our roads and bridges, including tolling, including the
infrastructure bank, including public-private partnerships, and
some other mechanisms for using the Highway Trust Fund. Our
idea, which we think is a good one, is giving us an 18-month
extension, we will find the $20 billion to plug it--we are not
going to transfer money from one fund into another to do it.
And that gets us to the opportunity really to work with all of
you on a very good comprehensive transportation bill.
Mr. Ryan. All right, thank you.
Chairman Spratt. We have a vote on as you can see, and I am
going to miss the first vote just so we can keep going, but the
second vote we will recess so that we can go vote and cast four
votes, I believe. I understand, Mr. Salazar, you may need to
leave by 11:30, and if so, we appreciate you coming. If our
other two witnesses could stay with us until we return, we will
make available some office space to you so you can make use of
the time. We thank you very much and those of you who been in
Congress understand the situation, I am sure.
Now Mr. Doggett.
Mr. Doggett. Thank you, Mr. Chairman, and thanks to each of
you. You have had about 6 months to clean up a great mess that
took years to accumulate. And some of those who have had little
to say about this economic Recovery Act but varying forms of
the phrase ``no, never'' are ironically now complaining both
that we are spending too much money in Washington, but we are
not spending it fast enough. I think that you and your
employees could stand at the front door with shovels, I guess,
and shovel out government money as fast as you could. And when
you listen to some of these taped cable shows, people are given
the impression that is exactly what you are doing. That, of
course, would be outrageous.
And I salute you for your efforts to see that we not only
speed economic recovery, but we do it in a way where we are
accountable to the taxpayers. I want to encourage you to
continue spending that money as quickly as you prudently can,
but spending it as if every one of those dollars was coming out
of your personal wallet. I think if we do that, we will get
economic recovery and we'll be responsible to the taxpayer.
Secretary Vilsack, I want to talk with you about what is
the near-crisis situation we have in central Texas. I have
farmers and ranchers in a number of counties there that are
suffering from what is almost 2 feet low in the amount of
rainfall. It is a very serious drought. I just had
communication while we were here in the hearing from Judge
Ronnie McDonald in Bastrop talking about the widespread and
serious injury and damage to farmers and ranchers is his
county. I know the same is true in Caldwell, in Gonzales, and
Fayette and Lavaca counties. Day after day where the only
question is whether the temperature will be hot or hotter in
100-degree-plus weather just 1 day after another. In Colorado
County, some of our rice fields are about to dry up because of
such a shortage of water. It is estimated that already across
the State of Texas, we have over $3 billion of agricultural
losses. It was to anticipate problems of this nature which
could strike Iowa or Texas or Arizona or any other part of the
country that we enacted the provisions of the Farm Bill last
year. And I would just ask you to recognize how urgent the
problem is in central Texas and to tell us a little bit under
the SURE program, under livestock forge program, when our
farmers and ranchers can expect relief and what form it will
take.
Secretary Vilsack. Representative, we are certainly acutely
aware of the situation in Texas. We have received
correspondence from your office and from the office of a number
of Members of Congress, as well as the Governor. A number of
counties, I suspect, I don't know, but a number of counties
that you mentioned probably already have been declared disaster
areas.
Mr. Doggett. They have been.
Secretary Vilsack. By virtue of what action the President
has taken and by virtue of the action that I have taken, I will
tell you that we just recently concluded the rule-making
process on the livestock indemnity program that is available
for livestock operators who have been devastated by disaster.
And I know that payments were actually beginning to be made
from that program immediately after the rules were promulgated.
Mr. Doggett. So a rancher who has a livestock forage loss,
as just about everyone in my area does, they can go now through
their local farm service agency and make an application and
begin to receive payments?
Secretary Vilsack. There are a number of different
livestock and disaster programs. The forage program still in
the process of rule making. We anticipate that being concluded
this summer. And so opportunities will be available under that
specific program as it relates to forage, most likely this
fall, but if they fit within the LIP program they can begin
making application today.
As it relates to the SURE program, which is a more general
disaster relief program that Congress saw fit to create in the
Farm Bill, we were somewhat pushed back on our timetable
because of steps taken within the Recovery Act that altered the
calculations that would have to be made. We anticipate the
rules being completed on SURE this fall. The calculations and
data that will be required in order to calculate payments will
be available this fall and we anticipate later this year, the
first part of next year payments being made under SURE.
Mr. Doggett. I believe that under livestock compensation
program, previously you got 1 month of feed losses, now you
will get 3 months based on the price of corn, which I believe
has been rising. Does that mean that farmers and ranchers who
are eligible under that program can expect to get as much as 3
times what they would have gotten previously?
Secretary Vilsack. Well, I think they can expect to
hopefully get what they need to basically transition to better
times so that they can stay in business. Our goal with these
disaster programs is to keep people in business, not to force
them out. I might also add that to the extent that those
farmers may have a direct operating loan with the Farm Service
Administration we have asked our farm service administrators
throughout the country to take a very close look at refinancing
possibilities, extending payment periods of time. This is
particularly true for dairy farmers as well, taking a look at
interest rates that could be reduced, payments that could be
reduced or deferred in an effort to try to make sure we are
providing as much assistance and help as we possibly can.
Finally, we are continuing to encourage our institutional
purchasers of commodities and goods to continue looking at
areas where there are problems to see if we can boost the
market rates a little bit to help those who are struggling.
Mr. Doggett. Thank you so much for your leadership. We do
have really a crisis situation, and I hope you will be spurring
along all of your employees to try to address it.
Chairman Spratt. Mr. Nunes.
Mr. Nunes. Thank you, Mr. Chairman. Mr. LaHood, it is
always a pleasure to see you. Congratulations on your new post.
Mr. Vilsack, congratulations to you also and I want to thank
the work that you are doing with Chairman Peterson to help out
the Nation's dairy industry, and I appreciate the comments you
have already made on that. And Mr. Salazar, great to see you
again.
I want to draw your attention to the slide up here, this is
the State that you guys would all recognize as the State of
California. And as you are probably aware, there is a
government imposed drought that has been occurring here where
we have lost 40,000 jobs. This is an area the size of the State
of Rhode Island that out of production, either been abandoned
fallowed. The unemployment in this area is close to 20 percent
with some enclaves as high as 40 percent or even higher.
Mr. Salazar, you visited this area on April 15th to tour
the economic devastation. And on your visit you announced $260
million in stimulus funds. And I will quote from your press
release, ``To mitigate the effects of the devastating drought
that California is currently experiencing.'' Mr. Secretary, we
have talked about this before, but there is not a drought in
California. We have had 95 percent of average rainfall. What we
have is a man-made government-imposed drought because of the
Endangered Species Act as you are well aware.
Mr. Nunes. But you did take some action, and you provided
Recovery Act funding.
And I would like to draw your attention to the next slide.
As you can see on the monitor, the X's mark where the stimulus
funds went to, and you can see that those X's are nowhere close
to where the 40,000 jobs have been lost. After this was
sprinkled over Northern California for environmental purposes,
the crisis got worse in the San Joaquin Valley.
And, Mr. Salazar, you returned June 28 to hold a town hall
with the victims of this manmade catastrophe.
I would like to show you the next slide.
You issued another $130 million in stimulus funds, and
according to your testimony today, the funds were for water-
reuse projects with the goal to help alleviate some of the
devastation in the region. You can see that where the X's are,
that we still have no stimulus money. In full disclosure, your
press release also included $20 million for small water
infrastructure projects and $40 million in drought relief. They
are not reflected on this map because we don't know where the
money went to.
Mr. Secretary, in your testimony, you said, ``Over the next
18 months, we will begin approximately $1.8 billion in work,
creating at least 19,000 jobs.''
Mr. Salazar, it doesn't take stimulus money to put 40,000
people back to work. As you know, all we have to do is get
these pumps on and get water back to the San Joaquin Valley. It
is free. It doesn't take a dime. So I would ask one question of
you; simply, you know the situation with the biological
opinion. So I am going to ask a very specific question. And
that is, do you plan at this time to conduct a reconsult on the
Delta smelt biological opinion that will put folks back to
work?
Secretary Salazar. Congressman Nunes, first let me say, I
appreciate your passion and your desire to address this issue
which is causing a lot of pain in Central Valley in California.
I am fully aware of it. I have been in the area twice,
including with Governor Schwarzenegger in a meeting that we had
with you and other Members of the Congress in Fresno.
There really are two things that we have to do. First, we
have to take some short-term action, including dealing with
some of the projects that you and others here have suggested,
and we are trying to move those forward as expeditiously as we
can.
And, secondly, we have to look at the long-term issue in
California relative to water supply. We have a system which was
built for 18 million people, and actually California now has
over 30 million people. And we have the kind of challenges
there that really requires us to take a systemic view of the
water supply and the other demands that are creating the major
problem that we are encountering.
With respect to the Recovery Act dollars going into
California, if Governor Schwarzenegger would not want to take
these monies, he might have that option, although I think it
would be in the best people of California. We have $220 million
for California----
Mr. Nunes. Mr. Salazar, I apologize, but I have to
interrupt because I know your time is limited, and we have to
go.
But Mr. Vilsack, I just want to ask one simple question to
you. You are a farm guy from a farm State. Is it possible to
grow crops in Iowa without water?
You know the answer is no. I want to yield my remaining
time to Mrs. Lummis who has a question for you, Mr. Salazar.
Mrs. Lummis. Thank you, Mr. Nunes.
Mr. Salazar, one quick question on behalf of the Natural
Resources Committee Republicans. We haven't seen you yet in
front of that committee, and we would love to have you come and
visit with us about how stimulus money is being spent and other
issues. Can you tell me today whether you would be willing to
come and testify in front of the Natural Resources Committee?
Secretary Salazar. The answer to that is yes.
And I would be remiss if I didn't say that I have worked
closely with Chairman Rahall and will continue to work closely
with him. And if he were to request of me to come before the
committee, I would be honored to do so.
Mrs. Lummis. Thank you very much.
I thank the gentleman for yielding. And I also want to add
my concern about the situation in the San Joaquin Valley. There
are rare, and I do mean rare, circumstances where the
Endangered Species Act should not be allowed to destroy
people's lives, destroy them. And that is happening in the San
Joaquin Valley.
I am a person who has a State that is very impacted by the
Endangered Species Act, including wolves and humpback chubs and
other species. But nothing we are experiencing in Wyoming is as
bad as what I see in the San Joaquin Valley.
And I do agree with Mr. Nunes that there have to be
alternatives to this manmade drought in the San Joaquin Valley.
I thank you for your time, Secretary Salazar.
I will be back after we vote, Mr. Vilsack and Mr. LaHood,
to ask you questions as well.
And I want to thank all three of you very much for
appearing before the committee today.
Secretary Salazar. Thank you.
May I, Mr. Chairman, just respond for purposes of the
record?
Mr. McGovern [presiding]. Absolutely.
Secretary Salazar. Mrs. Lummis, both you and Congressman
Nunes put the label on this as a manmade drought.
I beg to differ. We have been seeing very significant
changes in water supply in California, including changes in
precipitation and timing of precipitation. So this is an issue
which has been going on for several years, and it has gotten
worse over time. We are all hands on deck trying to figure out
a solution to the problem.
But at the end of the day, as I have said to Mr. Nunes on
several occasions, we need to figure out a way of moving
forward together. And, frankly, labeling in terms of ``manmade
drought versus reality'' is, frankly, not helpful to us. We
have got to come together because there are a lot of people who
are suffering in the San Joaquin Valley, as you say.
Mrs. Lummis. Mr. Chairman, I will pass your comments on to
Mr. Nunes. And I thank you very much for being here.
Secretary Salazar. Thank you.
Mr. McGovern. I have a couple of quick questions before we
recess for these votes. I am going to take advantage of the
fact that I got put in the Chair. As a Representative from
Massachusetts, I have seen the stimulus work. I have seen what
the Reinvestment and Recovery Act has done. We are seeing more
infrastructure projects being created and being built.
And in my home City of Worcester, for example, I will give
you just one example. The recovery money that has come for
education alone has prevented the layoffs of over 500 teachers
and support staff. Now, you don't get any credit for averting a
disaster, but the bottom line is that my City of Worcester,
Massachusetts, would have been devastated if that recovery
money had not come. And of all the cities and towns I
represent, the same thing is true.
What would have been the impact if you fired and laid off
500 teachers and support staff in the second largest city of
Massachusetts? You would have had larger class sizes. The
quality of our education would have suffered. It would have
been a disaster.
The same for our law enforcement, our parks, and so many
other things. So, I think maybe there is a problem with
messaging here or maybe we are not crowing enough about the
fact that some things are actually happening. But I think
people need to understand that, without this stimulus package--
and I think Secretary LaHood put it very clearly--you would
have a lot more people unemployed and the state of the economy
would be much worse.
I just have two quick questions, one first for Secretary
Vilsack. As Chairman Spratt made clear at the beginning of this
hearing, the economy was broken when President Obama took
office, and it has taken an enormous toll on jobs and families.
And because so many family circumstances have taken a turn for
the worse, many more now qualify for Federal benefits like
unemployment insurance, food stamps, and school meals. We have
seen the numbers of people participating in the food stamp
program climbing. In April of this year, 34 million people were
on food stamps. That includes one in four children in the
United States, a 20 percent climb over last year.
Now, I would think that this means millions more children
are now eligible for free or reduced-price school meals but we
haven't seen a rapid growth in those programs. Since all
children on food stamps automatically qualify for reduced-price
or free school meals, I would have expected to see an increase.
And I wonder if the many families who are new to receiving
unemployment benefits or food stamps might not be aware that
their kids are also eligible for free or reduced-price school
meals.
So my question is, can you tell me what steps the
administration is taking to educate parents who may be recently
unemployed or new applicants to food stamps about the free and
reduced-price school meals program? And is there going to be an
outreach campaign in the coming year to make sure that all
eligible children are enrolled? And since we expect
unemployment to continue to rise, how is the USDA working with
States and with schools every month in an ongoing way to make
sure that we reach newly eligible children with this benefit?
I raise this question because, my two sisters are school
teachers, and sometimes kids come to school and they don't eat.
You can't learn with a hungry stomach. And so I am curious to
have an answer to that question.
But let me ask my other question to Secretary LaHood and
then we can recess here. It is great to see you back, and we
miss you in Congress. We miss your civility in particular.
But, Mr. Secretary, as you know the Commuter Benefits
Equity Act was included in the Recovery Act, and the provision
increased the monthly limit of transportation fringe benefits
to $230, making it on par with the parking benefit for the next
2 years. This helps get people out of their cars and into mass
transit, provides families with much-needed relief in their
commuting costs, and gives local companies a new benefit as a
recruiting tool.
So as we continue to invest heavily in rail and public
transportation, and this stimulus package does provide that, do
you think the Commuter Benefit Equity Act should be made
permanent? And, do you have any other ideas to provide
incentives to workers and employers to increase their use of
public transit?
Secretary Vilsack. Thank you, Mr. Chairman.
The USDA is working with States and local communities and
school districts as well as advocacy groups to make sure that
the message does indeed get out about the opportunities that
these programs can provide for families.
I will tell you that one of the most important recent
changes we have made in the school nutrition programs is to
have a direct certification process. As families apply for or
qualify for TANF, they ultimately qualify their children for
free and reduced-price lunch. We are making sure that that word
gets out and that school districts do a good job of providing
information on the direct certification program. We are
mandating or requiring schools to provide applications for
these programs for children when school begins. Many schools,
in fact most schools, probably have a parent kit. Within that
parent kit will be information relative to the school nutrition
programs as well as other assistance programs.
This February we issued guidance to schools to develop
strategies, including simplifying the process for allowing
families to sign up, rapid action on benefit applications,
conducting direct certification, as I indicated, and
aggressively encouraging them to focus on outreach efforts.
Additionally, we are working to make sure that people are
aware of these programs during the summer. As you know, there
are summer feeding programs. We are continuing to figure out
ways and strategies for expanding those opportunities. And we
can assure you that we are also using every technology tool
available. Our Web site promotes this. We are developing
products and programs for schools, online tool kits that make
it easy for them to develop programs for outreach. So all of
this is being done.
Mr. McGovern. I appreciate that.
Mr. LaHood.
Secretary LaHood. First, Mr. McGovern, let me say nobody in
the Congress has provided the leadership you have on hunger and
the anti-hunger and the coalition that you cochair. You have
done an extraordinary job in highlighting it every day that you
are here. And I know of your deep interest in that because I
served with you on that coalition. So thank you for continuing
your leadership and being very vigilant about it.
At our department, people think that I have a lot of power,
but most everything that gets decided has to be run up 14
flagpoles before it can be decided.
I like the idea of the commuter benefit equity program
because it gets people out of cars. It certainly works in
cities like Washington, D.C., and other cities. If it was up to
me--it is a good program, and we are going to do all we can to
work with you and others in the Congress to promote it as a
program that goes to everything we talk about in terms of
livability and creating opportunities for people other than
just an automobile.
Mr. McGovern. I appreciate that. And your answer is good
enough for me. I have always found it somewhat strange that we
all talk about the need to try to get more people to utilize
public transportation, and yet we provide more incentives for
people to drive to work than we do to take public
transportation. I appreciate your answers. I appreciate you all
being here.
Without objection, the committee will stand in recess
subject to the call of the chair when these votes are over.
Thank you.
[Recess.]
Chairman Spratt [presiding]. I next recognize Mr. Garrett
of New Jersey.
Mr. Garrett. Just a couple questions actually. There were
articles, as I am sure you are aware, in the Washington Post a
short time back, and it talks about that a Republican proposal
to halt spending on the Federal stimulus has prompted a
partisan dustup. It refers to Senator Kyl, who called President
Obama's economic plan ineffective. And following that,
apparently several letters were written from the administration
to the State Governor, and one apparently came from you.
And in it, as far as I know, you can correct me if I am
wrong on this, it says to the Governor: If you prefer to
forfeit the money we are making available to the State, please
let us know.
Is that correct? And why would you pick his one State to
send that letter to?
Secretary LaHood. It is correct that I did send a letter to
the Governor. The money from our economic recovery portion is
going to the States. It is not going through Congress. It goes
to State DOTs.
Mr. Garrett. So why did you pick his State? And why
wouldn't you send it to all the States, saying that one Senator
doesn't want this spent, so we are going to ask all the
Senators? Was this just done because you were trying to make
some political hay out of this situation? Why just pick one
State?
Secretary LaHood. Well, because Senator Kyl, who is a
friend of mine, was on national television on a Sunday talking
show saying that he thought that the money didn't need to be
spent, if they couldn't spend the money, then maybe we should
send the money back to Washington. I just wanted to double
check with the person who was in charge of the money.
Senator Kyl is not in charge of the money, Congressman; t
he Governor is. And I wanted to be sure that the Governor was
not in the same line of thinking as Senator Kyl. And the reason
I did it was----
Mr. Garrett. Well, let me ask you a question.
Secretary LaHood. Let me finish. I want to answer your
question.
Mr. Garrett. It is my time.
Secretary LaHood. Well, it is your time. Do you want me to
answer your question or not?
Mr. Garrett. I will ask the questions, and I will look for
your answers.
Secretary LaHood. I haven't answered the one yet.
Mr. Garrett. Well, why did you just--did he say that he did
not want the money going to his State?
Secretary LaHood. He did. That is exactly--if you go back
and look at the transcript of that program, what he said was
that we should send this money back, it is not being spent. And
I wanted to check with the person who is responsible for
spending the money, the Governor. That is why I sent the
letter.
Mr. Garrett. So he only wanted it just spent from his State
and not any other State.
Secretary LaHood. He was talking about Arizona.
Mr. Garrett. When he was saying the money is being used
ineffectively? He is not talking about the entire--regardless
of whether he is talking about his State or all the States, is
it appropriate for a Cabinet Secretary to contact the Governor
of that State to request whether the money should come back?
Could you see, if you were sitting on the other side, if you
were still wearing your hat as a Congressman or a Senator, that
you could see that as a veiled threat from the administration?
Would you consider that if you were still a Member of Congress?
Secretary LaHood. Not at all.
Mr. Garrett. You wouldn't think that?
Secretary LaHood. Not at all.
Mr. Garrett. Should I have any concerns that I even raise
this that I would get a letter sent to Governor Corzine of New
Jersey saying, well, the Congressman voted against the stimulus
and so, therefore, we are wondering whether you want to receive
the money?
Secretary LaHood. Congressman, the letter was not sent
because of anybody's vote. It was sent because of a statement
that was made on national television about maybe we should send
the money back. And I wanted to check with the elected official
in the State that has responsibility. It had nothing to do with
anybody's vote.
And, by the way, I have worked very closely with Governor
Corzine and, as a result, your State, Congressman, has received
millions of dollars for projects that are putting people to
work who are working today that were on unemployment in January
or February. Your Governor has been a real leader in this, by
the way.
Mr. Garrett. And so if I make a statement that there is
legislation out there right now that suggests that the rest of
the money that has not already been spent should go back to
Treasury; so if I go out publicly and support that legislation,
have not voted on it because I probably won't vote--or anybody
else who supports that type of legislation, make public
statements--would that lead anybody from the Cabinet----
Secretary LaHood. Congressman, we don't base our decisions
on how people vote.
Mr. Garrett. You do base them by public statements,
apparently, though.
Secretary LaHood. I wanted to check to make sure that
Arizona wanted to spend the money. And, by the way, the next
day, we allocated over $20 million for their transit program.
Mr. Garrett. Did anyone else in the administration or
outside the administration encourage you to write that letter?
Secretary LaHood. I don't need any encouragement to write
letters to Governors, Congressman.
Mr. Garrett. Did anyone inside or outside the
administration contact you or encourage you to write that
letter?
Secretary LaHood. I don't need any encouragement from
anybody to write letters, Congressman. My job is to work with
Governors.
Mr. Garrett. Just answer that question. Did anyone else
inside or outside the administration encourage you to write
that letter?
Secretary LaHood. Congressman, my responsibility is to work
with Governors----
Mr. Garrett. Answer the question.
Secretary LaHood. Let me answer it.
Mr. Garrett. It is a yes or no. Did anyone in or outside
the administration encourage you to write that letter?
Secretary LaHood. I don't need any encouragement.
Mr. Garrett. Can you answer the question, whether you need
the encouragement or not----
Secretary LaHood. I don't need any encouragement.
Mr. Garrett. Can you answer the question?
Secretary LaHood. That is my answer.
Mr. Garrett. Mr. Chairman, would the witness please answer
the question? Did anyone inside or outside the administration
encourage you to write that letter? Whether you need the
encouragement or not, did anyone encourage you to write that
letter?
Secretary LaHood. No.
Mr. Garrett. Did anyone talk to you about writing that
letter?
Secretary LaHood. No.
Mr. Garrett. It was all entirely your decision?
Secretary LaHood. Congressman--do you want me to answer, or
do you want to go on? My answer is, we work with Governors all
the time. That is our job. They are responsible. And so we
wanted to contact the Governor of Arizona because of what the
senior Senator or the junior Senator from Arizona had said on
television.
Mr. Garrett. Thank you, Mr. Secretary.
Chairman Spratt. Mrs. Tsongas.
Ms. Tsongas. Thank you for your testimony and for your hard
work to help our economy recover and get our country back on
track.
We have heard today and will continue to hear claims here
and in the press that the Recovery Act has failed. And while we
are not specifically discussing the education funding included
in the Recovery Act, I did reach out across my district and
wanted to share with you some quotes from school
superintendents, because I think they reveal how critical this
funding has been and will continue to be.
The superintendent of the Lowell School District, which is
the largest city that I represent, told us, ``Thank goodness
for the stimulus, and thank goodness for stimulus money next
year. Without it, we would have had to cut 120 teachers.'' 120
teachers represent roughly 10 percent of their teaching staff.
In Groton Dunstable, a much smaller community, we heard,
``Without the stimulus funding, we would have had to let eight
teachers go. With the funding, we were able to keep them.''
And in Chelmsford, a mid-sized suburb, ``We were able to
replace outdated textbooks, replace some science equipment,
train staff, and retain 14 teachers.''
These communities and many others I have heard from have
had to make real sacrifices and have suffered deep cuts. And
while these numbers are not large in and of themselves given
the tremendous loss in jobs, you can imagine how important they
are to each community and how, when multiplied across the
country, what a difference it has made in saving jobs and
preserving education for our young people.
Furthermore, for those individuals who have lost their
jobs, in my district the communities of Lowell, again, and
Methuen, have unemployment in the double digits; while in
Lawrence, a mid-sized city, unemployment is over 17 percent,
almost twice the national average. And unemployment
compensation, food stamps, and the other forms of nutrition
assistance funds included in the Recovery Act have been a
crucial lifeline.
And I thank you, Secretary Vilsack, for your work in
getting that funding out.
But I have a slightly different question. When we passed
the Recovery Act, we committed to closely monitor the use of
funds to deter waste, fraud, and abuse. Very important, and we
in Massachusetts have learned the hard lesson with the Big Dig
of not closely monitoring how we spend public funds.
As a result, the Recovery Act has been one of the most
transparent spending bills passed by Congress. But,
unfortunately, one side effect of that is that the
administrative burden required to get recovery funds out
quickly is very high on local communities and agencies. In
fact, I have communities who don't even have grant writers.
What is each of you doing to help overcome this burden, to
help smaller communities and organizations access these funds
and help get the money out quickly and efficiently to them as
well?
Secretary Vilsack. Representative, I might focus on
broadband for just a second because I think that is a good
example in response to your question.
As you know, USDA and the Commerce Department received
appropriations for broadband. Rather than having two separate
applications and creating confusion and more difficulty for
communities or for the private sector to apply for those
resources, we worked with the Commerce Department to put out a
single notice of funds availability, and we worked with the
Commerce Department to have a single web-based application
process on broadband.USA. We won't even ask the folks to
determine whether they want to apply for the USDA or their
Commerce Department money. We will do this by zip code and by
virtue of the information that we have. We will make sure it
gets funneled to the right department. This is one way of
trying to get resources to people as quickly as possible and to
have them be able to apply as easily as possible.
We are also very committed to transparency. We at USDA
created a geospatial map of the country. You can click on every
State. You can find out precisely what USDA has been doing and
what HUD has been doing and other departments are joining as
well. So, over time, you will have a single U.S. map that will
allow you to have a sense of all of the projects and where they
are located.
Ms. Tsongas. Thank you.
Secretary LaHood. If you don't mind, Mr. Chairman, if I can
just respond, because I just want you to know that, in those
areas where people don't have the ability to have grant writers
or--some of these areas have access to metropolitan planning
groups who do have grant writers who can help the communities.
But in the event there is a community that doesn't have
anybody, maybe what we could do is try and be helpful to them
and reach out to them through our offices, and put them in
touch with people that can be helpful.
I would think that some of these metropolitan planning
organizations would have people that could reach out to them,
and we have relationships with them also. So maybe what we
should do is get the names of some of these folks and see if we
can be helpful in identifying people that can help them jump
through the bureaucratic hoops to access some of these dollars.
Ms. Tsongas. Well, we have been a resource to them, and
they have worked with planning agencies. But I was just on the
floor of the House today talking to a Member from Arizona who
was saying that in communities who are very isolated, they
really suffer in many ways, but one is that they just don't
have the capacity to stay on top of it. And it is obviously our
role as Members of Congress to do everything we can for our
communities. But I think it is important that you hear it and
be aware of it from your point of view.
Secretary LaHood. Good point. Thank you.
Chairman Spratt. Mrs. Lummis.
Mrs. Lummis. Thank you, Mr. Chairman.
Secretary Vilsack, thank you to coming to the Ag Committee
earlier this year on several occasions. It was great to have
your testimony there.
That said, I do have a bone to pick with you about Forest
Service stimulus funds.
As you know, the U.S. Forest Service has so far distributed
nearly $940 million, or over 80 percent of its total stimulus
dollars. Of the portion of that spending that has gone to the
Rocky Mountain region, an almost unnoticeable amount has
reached our National Forests in Wyoming. The media has asserted
that Wyoming may be getting punished as our congressional
delegation all voted against the stimulus bill.
I am willing to assume that your Department is more above-
board than that, but can you please explain to me and to my
constituents the disparity between Forest Service stimulus
dollars in Wyoming compared to our neighboring States?
Secretary Vilsack. Congresswoman, I would be happy to do
that. But I should tell you that, as you probably know, we are
in the process of continuing to make decisions about Forest
Service projects. And while this is not public, I can tell you
that I am fairly confident, based on what we have planned, that
there will be about $6.5 million going to Wyoming in this next
allocation.
And the reason why we haven't gotten to Wyoming until now
is the selection criteria was based on the unemployment
circumstances and the conditions of the State. And so we ranked
programs and projects based on the capacity to try to help
folks get through difficult times.
Your State, because of the good leadership that it has with
Governor Freudenthal and others, obviously did not have the
unemployment rate quite as high as other States, and so we went
through the process of making sure we got the money to the
States that were most in need. So but money is coming, as has
been the case with all of the other programs that I talked
about earlier. Wyoming, as I look at this, received close to
$50 million in other stimulus money.
Mrs. Lummis. Mr. Chairman, I would like to point out that,
right now, Utah, which has received $12 million in Forest
monies, has a lower unemployment rate than Wyoming. We have
more forests, and we have an enormous problem with bark
beetles. They are projected to destroy between 90 and 100
percent of the lodge poll pine in southern Wyoming, Northern
Colorado by 2012. So we are in a desperate situation with
regard to bark beetles.
And our unemployment rate now exceeds that of Utah, which
has received $12 million.
I am, however, encouraged to hear that we will be receiving
$6.5 million. Can you tell me when that will occur?
Secretary Vilsack. I think it is in the process of being
reviewed by either my staff or OMB, so it should be relatively
shortly. I should also indicate to you that there were other
criteria in addition to unemployment: the risk of forest fire;
the capacity to create and retain sustainable jobs; the
capacity to use wood-to-energy or biomass projects; the
opportunity and capacity to create jobs that would contribute
to greener operations, recreation sites, roads, trails, and
other facilities. In other words, there were 2,700 projects
that were submitted to us. We did our best to try to rank them
based on a variety of criteria.
I can reassure you that there was absolutely no
determination relative to votes. Until you told me that you
voted against the stimulus, I had no idea that that was your
vote. And, frankly, in terms of my job, I don't care.
My job is to make sure that these resources are used to
create jobs, to help people transition from bad times to better
times, and create that 21st century economy. And we are very
focused on doing that job.
Mrs. Lummis. Thank you, Mr. Vilsack. I appreciate that,
because our press has been suggesting that our votes may have
had something to do with the fact that Wyoming had not received
the funds. I am pleased to hear they are coming.
Briefly, Secretary LaHood, I would just like to make a
comment. Because Wyoming has 29 people per lane-mile and the
national average is 128, Wyoming's per capita contribution to
the highway fund is $314, where the national average
contribution is it only $109.
And I want to tell you, I am grateful for the stimulus
funds we have received for highways in Wyoming. That has been
an area where we are pleased. But in terms of the long-term
trust fund issues, I just wanted to suggest to you that because
of our small population and huge amounts of highways,
tremendously important economic and transportation corridors,
and the fact that our small population puts a higher burden per
lane-mile than other States, that as you are coming up with a
long-term resolution to the Highway Trust Fund issues, we hope
you will take that into consideration.
And I want to thank you for being here, and I want to thank
you, Mr. Chairman, for holding this hearing.
Secretary LaHood. Mr. Chairman, let me just say in response
to the Congresswoman, I know this Highway Trust Fund formula is
an issue for many, many Members. It was during the time that I
served, and it continues to be.
I have talked to both of your Senators from Wyoming about
this. And I think you will be in a good position, along with
your Senators, to really work on this as we work through how to
really make the formula fair.
I know how important these roads are to States like
Wyoming. I really do. I mean, they are the lifeline for
economic development and opportunities, and so we will work
with you on that.
Mrs. Lummis. I will look forward to it. Thank you so much.
Mr. Chairman, thanks a lot for holding this hearing.
Chairman Spratt. And, Mr. Secretary, you can include me in
South Carolina among those who would like to see a new formula.
Mr. Yarmuth from Kentucky.
Mr. Yarmuth. Thank you, Mr. Chairman.
Secretaries, thank you very much for being here, and thank
you for all you have done. I guess you have redefined the term
``hit the ground running.'' And while you are both experts in
your respective fields, I know that you didn't count on having
to jump into this level of activity and this level of response.
And I know the public officials of my State in Kentucky, both
parties, are very grateful for the assistance and cooperation
we have gotten from you.
I particularly am impressed by the evidence that you have
provided today about the job creation and the economic stimulus
that has taken place. There is a lot of cognitive dissonance
out there right now. And the other day, we sat and listened as
130 of our Republican colleagues were on the floor repeating
the mantra: where are the jobs, where are the jobs, where are
the jobs.
And you have vividly demonstrated to us today where the
jobs are. I would like to add one example of that. It didn't
come from either of your Departments. But directly as a result
of energy stimulus funds, General Electric's appliance park in
Louisville, which is the head of their Consumer Products
Division, has announced that they are bringing back 400 jobs
from China to manufacture a revolutionary energy-saving water
heater in our district. It would not have happened without the
recovery funds that we provided.
And one other point I would like to make about this, and
Mr. Garrett talked about possible legislation to rescind part
of the stimulus funds or recall them back or change it in some
way, and Mr. Ryan also referenced all these mythical tax
increases that are going to occur. We never hear much from the
other side about the tax cuts that were in the Recovery Act
package, $288 billion. 95 percent of American families are
receiving about $80 a month, which basically pays for their
gasoline, for most people. And I wonder if our colleagues on
the other side would want to rescind that part of the package.
And so I will ask a question eventually. I think Secretary
Salazar referred to this, that these jobs are not only jobs for
this period, but they provide sustaining economic benefit. And
my question to both of you is, is there any way we could have
spent the nontax-cut portion of the stimulus money in a way
that would not only create jobs but that would have more
effectively created the jobs and provided sustained economic
benefit for the country?
Secretary LaHood. Well, I don't know of another way. I
think when you look at what the President was talking about
during the campaign, he continued to talk about the idea that
the quickest way to get people to work is to rebuild the
infrastructure in America. And it is no secret around here or
anywhere in America that a lot of our infrastructure had been
ignored for a long time. There just weren't enough resources.
Every State was either going broke or didn't have the money.
And I think we have proven at DOT--if you just look at the
airport money, $1 billion is out the door. It is spent. And as
I said, I have been to 24 States in 41 cities. Every city that
I fly into, there is a runway either being resurfaced, rebuilt,
or lengthened. That could not have happened.
And there are people out there working. You go out on the
highways--and these are real people. These are people that were
on unemployment, that didn't know whether they were going to
have a paycheck by June or July. And now they do. I mean, this
is real results. And it could not have been done any quicker or
any better.
And, you know, Congress put some tough deadlines on us, and
we have met them, thanks to the professional people at DOT, and
our relationships with airport officials, with highway DOT
secretaries, with transit officials. We have over $3 billion
out the door now so people can buy buses. There is a company up
in St. Cloud, Minnesota, called New Flier Bus Company. They put
on a third shift because of all the bus orders they have
received from transit districts that are now ordering buses as
a result of the stimulus money. There are people building
buses. And so we see it working all over the country. We really
do.
Mr. Yarmuth. Secretary Vilsack, I know you talked about the
33 million families having increased assistance through the
SNAP program and so forth and the economic spin-off of that:
1.84 times the economic benefit. How does that preserve jobs as
well?
Secretary Vilsack. Well, if you think about what happens
with these SNAP payments, they get placed on electronic benefit
cards. It gives families of four on the average about $80 more
a month; 97 percent of that $80 is spent in 30 days. So if you
want to talk about putting money to work quickly, there is no
better, no quicker way to do it than the food assistance
program.
Now, that family goes into the grocery store and purchases
additional items, which means that grocery store has to stock
additional items to replace the ones that have been sold. That
means that they are able to maintain their workforce, and it
puts a little more money into the grocery store's bottom line.
So, perhaps in distressed areas, in areas where we are
concerned about food deserts, grocery stores can make it.
I was at a ShopRite yesterday in Philadelphia that just got
started during the toughest economic times, and they are making
money in large part because of that $80 a month for a family of
four. And I will tell you, this is a company that employs 2,700
people.
Because there has to be more stocked, it means there has to
be more trucked. That puts trucks on the road. It gives people
the opportunity to continue transporting goods. If more has to
be trucked, that means more has to be processed. If more has to
be processed, that means people have to continue working to
process that food and to produce it, to can it, to freeze it,
to whatever. That means that more has to be purchased, and that
ultimately helps those who are farmers and ranchers, who are
just extraordinary individuals, because they have the capacity
to create not just enough food for us but also enough food for
many, many millions of people around the world.
So it is a process that basically cascades through the
economy and does it quickly. It is sort of like an IV bolus of
Lidocaine if your heart is standing still, that food assistance
is getting your heart pumping again.
Mr. Yarmuth. Thank you very much for that. And, again,
thank you for your service to the country.
Chairman Spratt. Mr. Schrader.
Mr. Schrader. Thank you, Mr. Chair.
I appreciate both of you being here. You are doing
wonderful work, and this country needs it in the most
impressive way. Someone at the hearing here had talked about
meager benefits of the recovery program. And when I look at the
Department of Transportation's results, as of today looking at
the Aviation Administration, Secretary, you have talked about
the billion dollars that is out there, 347 projects, with tons
of jobs for Americans. The Highway Administration already has
5,700 some odd jobs in all 50 States, with 64 percent of the
funds already out the door. I look at the rail division and
another $1 billion worth of Amtrak grants, which is very big in
my part of the country, quite frankly.
I just think this seems to me to be a little bit more than
meager results. And I am very impressed with how the Department
of Transportation has put that out there. I appreciate you
coming to Oregon in particular. And I can speak personally that
the jobs that are created in my county, the innovation with the
American street car that is being born, if you will, in my
State, puts us on a competitive basis that we have never had
before. It is an innovation that would never have occurred, I
don't think, without this recovery package.
If you could comment just briefly on how you are able to
meet these deadlines. There also has been a lot of talk about
how government can't do anything right, it is always screwed
up, it is totally inefficient. I mean, based on the lack of
fraud you have testified to and the deadlines that you seem to
be meeting, I think you are doing a heck of a job. Could you
comment on that?
Secretary LaHood. Thank you, Congressman. I appreciate
that.
And I appreciate the chance to come to your beautiful
State. And I have told people many, many times as I was riding
in a vehicle to the event where we inaugurated the street car,
I saw I would say between 50 and 100 people riding their bikes
to work. I mean, you are the model for liveable communities.
You are the model for what I think people around the country
would like to replicate. And you have been way ahead of the
curve on so many things. So we have had great fun in your State
and great opportunities to meet very, very innovative people.
The way that we have been able to meet all the deadlines,
beat all the deadlines--not only meet them but beat them--was
because of the extraordinary professional people we have at
DOT. I mean, they have been waiting for a long time for this
kind of opportunity. They love their work. They love to help
people build roads and runways and create opportunities for
jobs.
All of this is done by the professional people at DOT. They
have done the work. They deserve the credit for getting the
money out the door and beating the timeframes Congress gave us.
And, again, I want to repeat this: no earmarks, no boondoggles,
no sweetheart deals. If you look on recovery.gov, what you will
see is where the money is being spent, how many jobs it saves
state by State. This was really established by the White House.
The President stated it: Get it right. Spend the money
correctly. This is a lot of money.
And our people have done it, and we are grateful to them
for carrying out what the President's vision is for
transportation. And we are going to be doing it on high-speed
rail. We are going to be doing it with our discretionary
grants. People are working very hard to make sure that's is all
done correctly, too.
Mr. Schrader. Thank you.
Secretary Vilsack, like Ms. Lummis, I appreciate your
coming before the Ag Committee and all the hard work you are
doing, especially since you are having trouble getting people
appointed to actually do the work. You guys are doing yeoman's
labors, I think, in the Department.
If you could comment, again, I am just impressed with the
fact that a lot of the projects you are doing are coming in 20
and 30 percent under budget. How are you able to do that? That
sounds like excellent work. I wish even private industry could
get that advantage sometimes.
Secretary Vilsack. Well, thank you for the opportunity to
talk about the hardworking folks at USDA. One of the things we
have attempted to do is try to partner with local governments
and State governments to try to streamline the process. We have
encouraged our folks to take a look at ways in which
applications can be simplified and reduced without sacrificing
quality of evaluation. We have had people work long hours.
Oftentimes it is not appreciated; this is not a 9-to-5 job at
USDA. We say we are every way, every day, USDA. And that means
we are working all the time around the clock.
Because we have 3,000 offices between our Rural Development
Offices and our Farm Service Agency Offices, we've got people
working overtime in all of those offices at the ground level
trying to help people understand these programs and be able to
apply for them. And so, through partnerships, through process
improvement, we have been able to get the work done. We are
very pleased with the progress. We are going to continue to
push forward.
The fact that we have got 43,000 people, 43,000 families to
have the opportunity to have home ownership in rural
communities means a lot to me, because our rural communities
have suffered from depopulation. And being able to have young
families be able to purchase homes is a very meaningful thing
for rural America. So I am pleased with the progress so far. We
have a lot of work yet to do.
Mr. Schrader. Thank you, Mr. Secretary.
It is working well in Oregon, farm loans, and the trade
adjustment assistance is making a big difference in my State.
Chairman Spratt. Mr. Etheridge.
Mr. Etheridge. Thank you, Mr. Chairman.
Let me thank each of you for coming, and join the others
for thanking you for your service.
I have run an agency before I got here, and it is not easy,
because everybody else thinks they can do a better job than you
can and they don't have to do it on a day-to-day basis. So
thank you. And I mean that sincerely.
Let me just share a couple things and then ask you a
question, because North Carolina is one of those unique States.
When the unemployment comes, they are very seldom get hit.
Unfortunately, this time we are the fourth highest State in the
Nation in terms of job loss in the last 12 months. The
unemployment rate now is over 11 percent statewide, and I have
got counties in my district approaching 15 percent.
That being said, let me also turn to one other point, and
talk about funds. The administration, through just your two
offices and Education has announced $2.3 billion; has made
available $1.5 billion. Department of Agriculture has announced
$26 million, made available $98 million--I think that number
may be off a bit since the $98 million is more than the
announced. But be that as it may, things are happening. DOT:
$844 million announced, $416 million already made available.
The only thing I would say to you, Secretary LaHood, all we
need to do is give you more resources so we can get it done.
And count me on that group, because I really think for some of
these projects, we can put a lot more people to work. The
reason for that is our State and most States are suffering from
a bad situation of shortage of funds. So if it had not been for
these funds, they would be in deep mud. We are one of the few
States yet to adopt a budget. They sent one to the Governor
yesterday, almost $1 billion, and that wasn't enough.
Secretary Vilsack, you understand that. Now they have got
to go back and do it again and have more money to make things
meet. So let me thank you for your help and what you are doing.
And, Mr. Secretary, let me ask you a question. Because I
have visited a number of our emergency food assistance programs
and shelters and food banks, and there are a lot of vulnerable
Americans out there. We made money available in this fund as
well as in the regular fund. I would appreciate your comment on
the resources that have thus far been distributed and what
impact they have had, and are there more in the pipeline?
Simply because of increasing unemployment, more people now are
turning to food banks and other help just to be able to sustain
where they are.
The second question for you. I am sorry that this is all
agriculture. We are in a situation where, in North Carolina, we
have probably the most diverse agriculture or at least one of
the most diverse in the country, as you well know. And our pork
and poultry operations are suffering big time. Exports are a
major part of it. As they change operations through the
economic times, I would like you to comment on direct loans in
the Recovery Act: how many of those loans have been made so
far, and are there more loans in the pipeline?
We have a number of farmers in my district, and in our
State, but they are really spread across about 10 States. As a
result of the economic downturn, a lot of these corporate
contractors have pulled those contracts. And you have been
trying to help us, I will go ahead and say that out front
because we need to do something to get it resolved. They pulled
the contracts. These guys are sitting there, and we are a State
who doesn't protect all the homestead. Their homes are
obligated, all the land and the livestock. And I think it will
come back. But over the next 18 months, for those who can't get
it refinanced, they could lose everything they have got and be
out of business. And that is devastating to some of these
communities, because they tend to be in groups.
And I would hope that we can continue to work with your
office to find a way to give them a bridge over the next 18
months, even if it is nothing more than interest, so they can
get back to where this recovery comes and save them. And I
would appreciate your comments on the food banks and on the
overall aspect.
Secretary Vilsack. Representative, as you indicated, you
have seen directly the benefit of the Recovery Act on the
capacity of food banks to meet ever-increasing needs. I am sure
you have seen the stacks and stacks of food products and many
of them wholesome foods. I have seen chicken and pork. I have
been to food banks where people have said, ``thank you for the
stimulus money; otherwise, we would not be able to provide
hundreds of thousands of additional meals for families who are
struggling.''
We have essentially announced most, if not all, of the
emergency food assistance money that the stimulus provided for.
There may be just a little left, but for the most part, it has
been distributed. We tried to get this out as quickly as we
possibly could on a State-by-State basis and put it to work as
quickly as possible for two reasons: One, because there is the
need; and, two, because more product being purchased obviously
helps those poultry farmers and the pork farmers and all the
farmers in the country.
And we are certainly aware of the stress that your poultry
farmers have undergone and the pork farmers in your State,
keenly aware. One of the reasons we have done that is that we
have been able to use some of the powers that you have given us
to purchase more product. We have been able to encourage our
institutional purchasers to think about purchasing more pork
and poultry. We have instructed the Farm Service Agencies and
offices--in fact, we just recently sent a letter out to all of
the direct loan borrowers asking them, if they are having
difficulty, to consider going into the Farm Service Office and
instructing the Farm Service folks to look for ways in which
those loans can be restructured, refinanced, redone so that
interest rates are reduced, so that payments are deferred, so
that principal is reduced, if that is appropriate, in an effort
to try to keep folks on the farm.
Now, we have also sent a similar letter to the commercial
banks that have been working with us through our guaranteed
loan program, encouraging them to do the same, because it is in
their long-term best interest to keep that customer on the
farm. So we have also suggested the capacity of loans where
collateral has been provided that has to be sold, that the
collateral when it is sold, instead of the money going to us or
to the bank, it is allowed to be used for essentials for farm
families or to be able to put a crop in or to be able to
survive and transition.
As it relates to the operating loans, we put into place
2,636 direct operating loans; 1,081 of them to beginning
farmers; 600 of them to socially disadvantaged farmers. That
used up all of the resources under the stimulus proposal. We
obviously have our own appropriation, and it was recently
supplemented. And we are in the process of getting those loans
out the door as quickly as we possibly can to as many farmers
as we can help as we can possibly can.
So, as it relates to direct operating loans, there is still
supplemental money available.
Mr. Etheridge. Thank you.
Thank you, Mr. Chairman, because that is an indication of a
tremendous need out there. Thank you.
Chairman Spratt. Ms. Kaptur.
Ms. Kaptur. Thank you, Mr. Chairman.
Welcome, Mr. Secretaries. Thank you for your service to our
country. It must be very difficult to inherit major departments
of our government at a time of exceptional economic need and
try to keep your staffs motivated and all pulling in the same
direction. I really admire you both for the work that you are
doing. Thank you very much.
I represent one of the 10 most economically challenged
communities of over 250,000 people in the country. I also have
an unusual district in that it is both industrial and
agricultural. The unemployment rates in the agricultural
regions are now over 18 percent, and in the major city I
represent a minimum of 15.4 percent.
I wanted to ask Secretary Vilsack, I don't know if you have
traveled through Cleveland, Toledo and Detroit, all along Lake
Erie we have a series of communities in deep economic distress
related to the washout in the automotive, steel and machine
tool industries. I vote for all the programs--for food stamps
and now renamed SNAP and so forth. And we appreciate the
emergency assistance. But I would strongly encourage you, and
we just met with Secretary Solis this morning, to look at the
WIA and the TANF programs as well as your own authorities to
think about the following:in communities like ours, around the
Great Lakes we can grow our own food and we can harvest what is
likely to be plowed under this fall. We need that food.
We have food banks where the increase has gone up anywhere
50 to 100 percent. We have volunteers serving food who are worn
out. We have to find a way to supplement the emergency food
efforts going on in our region and we can put some of the
unemployed to work helping us. It would literally lift spirits
in regions like ours where a pall has set over the community
because of the continuing washout in jobs.
I understand you have hired someone there over at your
department, Roberta Jeanquart, who came from the RC&D. You
couldn't have a better person. She comes from the Midwest and
has enormous experience. We need somebody over there to think
out of the box on how to meet the rising food needs.
I had a call last year from one of our companies saying
Marcy, can you use 400 acres of cabbage? I said, yeah, how am I
going to get it picked? So I called Silver Queen and I called
the Ohio Farm Bureau, they helped us get trucks up there one
weekend. But we can process, we can pick, we can grow in new
vertical systems that we have put up. But we need USDA pulling
with us, not fragmented. And one of the programs I want to
mention to you is under the 2008 farm bill, section 6015, which
is the Rural Business Cooperative Loan Program, we authorized
over $3 billion dollars for RBS. And to date not a single penny
has been spent.
And that program can you directed to help the underserved.
And we would very much like to see that program's muscle used,
as well as the other Federal agencies in helping us glean what
we can, not waste one piece of fruit, one vegetable this year,
to process that. And I think if we work across the government
we can get it done.
Would you be willing to work with us in Ohio and in
Michigan looking at your broad authorities in order to do that?
Secretary Vilsack. Representative, absolutely. And I would
tell you that we have been working on a program within USDA
which is indeed thinking outside the box, which will be
entitled Know Your Farmer, Know Your Food. The purpose of it is
to try to directly link local production with local
consumption, and not just farmers' markers but institutional
consumers.
Now when you do that, in fact, I was in Philadelphia
yesterday visiting with folks about this program that they have
in Philadelphia. What you do is you have to take a look at the
entire supply chain and you have to figure out how you can
create sufficient quantities and be able to store it, process
it, truck it and distribute it. We are and will be using our
resources to create that supply chain to better link production
with consumption. It is one of the wealth-creation strategies
that we will be adopting as part of a new rural development
initiative within the department. We wanted to make sure we had
the structure right before we began committing resources.
Ms. Kaptur. Well, Mr. Secretary, please look inside the
urban areas where we have so many hungry people. We have them
out in the rural areas as well. We were just talking to members
from Arizona and South Carolina about that. And I would urge
you to invite the members to USDA who represent communities
with over 15 percent unemployment now, in both urban and rural
America. There is a discrete number of those. We have thoughts
about what we need in our areas and how to link them to the
unemployment programs and the TANF programs across the
government. It isn't just your jurisdiction, but this food need
is truly severe and the helpers are wearing out.
I know my time is expired, Mr. Chairman. Let me just say on
the Emerald Ash Borer Remediation Program, we are going to lose
10 percent of the tree cover in our area. We have been trying
to work with the USDA, Department of the Interior, Department
of Labor to hire people from the ranks of the unemployed. It
has been almost impossible to try to get these big massive
departments to work together to create jobs through the tree
replanting programs. We would like to draw that to your
attention and hopefully get a better response out of the
Agency.
Secretary Vilsack. I would be happy to take a look at that.
I will tell you that we have not been a team for very long, but
I think Secretary LaHood would probably agree with this, we are
working across lines. We are not trying to work in our
individual silos. There have been constant meetings with other
cabinet secretaries to try to coordinate. That is one of the
reasons on the Recovery Act we are working with other
departments to provide the transparency that the President and
the Congress wanted. We are going to continue to try to break
down those barriers, because we recognize we can leverage
resources more effectively when we do.
Ms. Kaptur. Thank you. Thank you, Mr. Chairman.
Chairman Spratt. Ms. DeLauro.
Ms. DeLauro. I want to say thank you to the Secretaries for
being here. It is wonderful to see you both. I just want to
stay to Secretary LaHood, we miss you on the subcommittee.
Secretary LaHood. Thank you.
Ms. DeLauro. It is great to see you here today. I am going
to try to talk fast, Mr. Chairman, and get in a couple of
questions to each of the Secretaries. Secretary LaHood, this is
about the recovery program and maintenance of efforts that the
governors have to certify to about not cutting their own
transportation investment efforts.
In our State of Connecticut, the governor has made such a
certification. The first question is, have all the governors
made that commitment? What is the Department doing to make sure
that States are maintaining their own investment plans? And
second to that, again with Connecticut, $440 million made
available, $262 million has been obligated, $71,000 to date has
been outlaid. And is it accurate to look at outlays as a
measure of economic activity or should we view outlays as a
lagging indicator here?
Secretary LaHood. Well, I think the maintenance of effort
has been a problem and we are working with the States, but
every State is required by law to meet it. We are holding
people's feet to the fire, but we are working with them,
because we know it is somewhat of a problem, but it is required
by law. We talk about this every week when we talk about our
recovery activities and we are working with folks.
We can check off the boxes, we can approve projects and
then the States have to hire contractors and then the money
begins to flow. A lot of money is beginning to flow now,
because we have checked a lot of boxes. A lot of projects have
been approved. The States have to award the contracts and then
people really begin working.
Look, we know the unemployment figures are the lagging
indicator. The reflection of unemployment a couple of months
ago is what will be reflected in the figures. And we think
unemployment has come down in the building trades, people that
build roads, and bridges, and runways and buses and all of
that, but it probably won't be reflected for a couple more
months.
Ms. DeLauro. Thank you very much. I tried to explain it in
a nanosecond, honestly for this institution in 4 weeks to pass
the size of the effort that we did.
Secretary LaHood. Right.
Ms. DeLauro. Now you get newspapers and editorials saying,
well, where is the Federal Government? The Federal Government
has been there.
Secretary LaHood. Right, right, right.
Ms. DeLauro. I will submit some questions for the record--
--
Secretary LaHood. Okay.
Ms. DeLauro [continuing]. That have to do with the Federal
highway authority requirement.
Secretary LaHood. Yes, we will answer them.
Ms. DeLauro. Secretary Vilsack, I appreciated your comments
to Congressman Yarmuth in walking through how that $1 triggers
$1.83, if you will, in economic activity. Quite frankly,
there's real excitement about the opportunity and what kind of
a stimulative effect food stamps and food assistance can be,
whether it is food stamps or emergency food aid.
Let me ask a couple of questions related here. We also
provided some additional administrative funds to address the
rising demand for food stamps. Can you give us a sense of some
of the ways in which States are spending those funds? And
secondly, with regard to the emergency food assistance program,
you talked about the States, how is that being distributed in
the States? Is it competitive? Is it formula? What is the story
on that and how are those funds being spent?
Secretary Vilsack. I must admit I am a little confused
here, because I usually refer to you as Madam Chair.
Ms. DeLauro. No, no.
Secretary Vilsack. But I guess I can't do that here.
Representative, as it relates to your first question, the
administrative expense money is going to States. As you know,
States are very, very significantly strapped. As a former
governor, what you generally do when you are faced with that is
you take a look first and foremost at your State employment
base. You try to determine whether or not there is any way that
you can ride out the storm through retirements, not filling
vacancies. The problem with that is that the work that was
otherwise to be done by those individuals is not being done and
you have to push it aside. In times of crisis the last thing
you want to do is to reduce the workforce in your Department of
Human Services or whatever it is called in the various States.
To the extent that we provided additional administrative
money, States are using those resources to do two things. One
is to maintain staff, and two is to make sure that they have
adequate technology to properly fund and properly keep track of
these resources.
Absent those monies, what you would probably see are delays
in the distribution of those resources, glitches in the
technology, families who are applying, not getting permission
as quickly as possible, the emergency food assistance not being
given out as quickly as possible and families would have been
suffering. And we would have lost the stimulus effect of 97
percent of those monies being spent in the first 30 days. I
must admit that I have lost your second question.
Ms. DeLauro. It was about TFAB.
Ms. Schwartz. If the gentlewoman would yield, for just a
moment.
Ms. DeLauro. I would be happy to.
Ms. Schwartz. I just want to say I have to run for a
conference call, but I would be happy to yield you my 5
minutes. I would be happy to do that, Congresswoman DeLauro has
been very kind to me over the years. I just wanted to thank
both of the Secretaries very much, they both have been in
Philadelphia, of course, Secretary, just as recent as
yesterday. I am sorry I couldn't be with you, we were here. But
I can say for Pennsylvania's 13th congressional district, for
Philadelphia and southeastern Pennsylvania, the resources and
support you have provided--Secretary LaHood, we stood at the
airport--those are very significant dollars, significant
projects that are really helping us. We would love to see more,
we would love to see more people back to work, but we look
forward to working with you. And I would be happy to yield the
remaining minutes I have to Congresswoman DeLauro.
Ms. DeLauro. I thank the gentlelady. It is much
appreciated. I will not take the full 5 minutes. I know you
have been here a long time this morning and I want to be
cognizant of the chairman.
Secretary Vilsack. The TFAB monies were distributed based
on a formula of each State receiving an amount. Connecticut,
for example, received in TFAB administrative money $221,000 and
about $884,000 of additional resources. The use of those monies
has been predominantly to allow for transportation and storage
of resources and the purchase of additional commodities.
I can tell you, as I said earlier, I have been in a number
of these food banks and it is amazing. They actually have
segregated the stimulus purchases from the regular purchases,
and it is remarkable how much food has been purchased from
stimulus dollars. And then they will turn to you and they will
say, ``this is feeding and providing hundreds of thousands of
meals, hundreds of thousands of meals.'' And then you see folks
who have never had to have assistance before, never have had
assistance before, who are going to food banks. And thankfully,
there are volunteers and there are people concerned about this
who are manning those food banks and volunteering. I know I, as
part of the President's United We Serve, I did some volunteer
time at one of the food banks sorting some of the cans that
were donated. It is a remarkable reaction by a very gracious
and compassionate Nation.
Ms. DeLauro. You say it beautifully. I read a quote of a
man who had a job, lost his job, a professional job. And his
quote was, ``I never felt so humiliated. I felt like a lowlife,
but I had to go to the food bank because it was the only way I
was going to be able to feed my kids.''
First of all, we should never make anyone feel that way
about struggling with real challenges in their life and having
to reach their hand out for a need. But it is remarkable the
role that these food banks are playing in today's difficult
economy and making sure that people have food on their plate
for themselves and for their kids. Let me just say a big thank
you to the two of you f or your commitment, but also for your
own personal vision and compassion for what is happening in our
country today, we are grateful.
Chairman Spratt. Thank you.
Ms. DeLauro. Thank you, Mr. Chairman.
Chairman Spratt. Thank you, Ms. DeLauro, Secretary Vilsack
and Secretary LaHood, I know the demands upon your time are
enormous this time of year.
Mr. Ryan. May I interrupt? Chairman, may I ask unanimous
consent to submit a question for the record for the three
Secretaries for some technical issues?
Chairman Spratt. By all means, all members including the
ranking member.
Mr. Ryan. Thank you.
Chairman Spratt. Will have 7 days without objection to
submit questions for the record.
Once again, I know the demands upon your time are enormous,
but it speaks volumes for your commitment and this
administration's commitment to turning this economy around, for
you to come and give us these forthright, clear, credible
answers. I think we leave here believing that the Recovery Act
is working and will continue to work by design and it will help
pull us out the worst slump since the 1930s. Thank you very
much, indeed, for your contribution.
[Whereupon, at 12:40 p.m., the committee was adjourned.]