Testimony of
Acting Assistant Secretary of Commerce for
Economic Development
Sandy K. Baruah
Before the Senate Environment and Public Works
Committee
.
Chairman Inhofe, Ranking Member Jeffords, Members of the
Committee, thank you for the opportunity to testify on the Economic Development
Administration’s (EDA) response to Hurricane Katrina and the agency’s current
actions in helping the
This is a timely matter for me to comment on as I have just
returned from the affected region. Yesterday,
I saw firsthand the devastation wrought on the great City of
As a first priority, I am thankful to be able to report that
no EDA personnel or their families suffered fatality or injury as result of
Hurricanes Katrina, Rita or Wilma. Our
Economic Development Representative in
Moving forward, the Administration, the Department of
Commerce, and EDA are committed to the economic revitalization of the
Background: EDA Disaster Assistance
EDA promotes innovation and competitiveness, preparing American regions for growth and success in the worldwide economy.
EDA has a long and successful history of supporting long-term recovery following natural disasters. EDA’s participation in major disaster recovery efforts has traditionally supplemented the lead roles assigned to the Federal Emergency Management Agency (FEMA).
Under existing statutory authority, EDA administers disaster program funds through targeted grants to disaster-impacted communities designed to achieve long-term economic recovery. EDA disaster recovery efforts assist communities in shifting their focus when appropriate from the short-term emergency response to the long-term economic impacts of the disaster, and enabling the development of an economic recovery program that reflects local priorities.
While early EDA investments focus on the important first post-disaster steps of planning, assessment and technical assistance, the most critical need after rescue and recovery efforts are completed is to get people back to work and ensure continued and strategic economic recovery. This is accomplished through implementation of investments in support of job creation, retention and private investment. EDA’s regional office staff deploys and works closely with impacted State and local governments, special districts, nonprofit organizations, and businesses in providing technical assistance in support of EDA program investments.
Immediately following a disaster EDA regional staff use local and State contacts to identify critical implementation investments, namely infrastructure improvements, impacted by or relevant to the disaster event. Because of the competitive nature of our grant awarding process, EDA has the flexibility to target our existing resources to those areas affected by disasters quickly.
Additionally, under the National Response Plan, EDA represents the Department of Commerce as a Primary Agency in Emergency Support Function (ESF) #14, for Long-Term Community Recovery and Mitigation. ESF #14 provides a framework for federal government support to state, regional, local and tribal governments, non-governmental organizations and the private sector designed to enable community recovery from the long-term consequences of an Incident of National Significance.
Finally, FEMA may ask EDA to perform economic impact
evaluations or carry out other specific tasks through special “mission
assignments.” Past FEMA mission
assignments have tasked EDA to perform economic impact assessments in
EDA Response to
Hurricane Katrina
EDA anticipated, prepared and responded quickly to Hurricane Katrina.
Under the direction of Commerce Secretary Carlos Gutierrez, prior to Hurricane Katrina’s landfall, EDA began preparing for its potential role in economic recovery efforts in the affected region, including identifying $4 million in funding to assist economic recovery priorities. Once the scope of Hurricane Katrina’s damage became evident, EDA successfully reprogrammed $8.3 million in de-obligated funds (including the $4 million initially identified) to dedicate to the redevelopment effort. Secretary Gutierrez later announced this grant during a tour of the affected region. Consistent with EDA statute and regulation, the agency worked with State and local leadership to develop economic planning and technical assistance recovery projects in Alabama, Louisiana and Mississippi, and has obligated $8.8 million (including the $8.3 million reprogramming) for investments of $4 million each for Louisiana and Mississippi and two separate investments of $450,000 for economic planning and $390,000 for Economic Adjustment in Alabama.
In making these investments, EDA headquarters and regional staff devised and approved necessary measures to facilitate streamlined investment strategies and rapid deployment of funds to impacted states. This included making expedited processing of applications an immediate mission priority. EDA regional staff also worked directly with the three governors’ offices to identify appropriate state agencies as recipients and, consistent with EDA’s mission, to develop the appropriate scopes of work for the States.
Also, in the immediate aftermath of Hurricane Katrina, I
established an internal taskforce of headquarters and regional staff to monitor
and coordinate the bureau’s actions and response. I assigned EDA’s Austin Regional Office
Director, an experienced, SES-level career executive to lead this internal task
force. EDA personnel continue to engage
local and State leadership throughout the
For example, working in cooperation with the
Future EDA Assistance
for
EDA will continue to work through its established economic development networks, including regional development organizations, universities, non-profit and community- and faith-based organizations to leverage all available resources for the recovery effort.
In our supporting role, EDA can bring a variety of existing program resources to this task. EDA’s principal program for addressing sudden and severe economic dislocation, including natural disasters, is its Economic Adjustment Program. This program utilizes a flexible and comprehensive set of tools to help impacted areas achieve long-term economic recovery, including:
While our program tools are flexible, EDA must initially rely on its statute to identify those eligible to receive EDA investment dollars. Eligible recipients include State and local governments, public and private non-profit organizations, and regional economic development districts. Businesses are not eligible for direct assistance under EDA’s major programs. EDA does not have the capability, personnel or authority to administer direct loans to businesses. Additionally, the bureau would be challenged to adequately oversee new revolving loan funds (RLF), which have been an ongoing concern of the Department of Commerce’s Office of Inspector General and once established, must be administered in perpetuity by EDA.
EDA-supported recovery efforts aim to produce quantifiable results for the areas impacted by the disaster. EDA designs its investments to ensure significant leveraging of private and non-profit resources to guarantee accountability for the taxpayer dollars invested. Additionally, the bureau will consult and work closely with the Office of the Inspector General with regards to the award and administration of all Katrina related disaster recovery funds. EDA views the Office of Inspector General as a valuable partner in helping to ensure that federal resources are as effective as possible for the intended beneficiaries.
EDA investments in the Katrina affected region are administered
by EDA’s
Redevelopment
Strategy
While it is important that federal, State, and local governments move as quickly as possible to address the economic impacts in the Gulf Coast region, economic revitalization efforts must also be based on a sound understanding of the economic landscape before and after the Hurricanes to ensure that federal efforts are market-based, enhance regional competitiveness, support long-term development of the regional economy, and achieve the intended results. To this end, it is vitally important to work not only with State and local officials, but also with the region’s business leaders.
The Administration is focused on ensuring that economic
recovery funding is effective and truly focused on rebuilding the
Thank you for allowing me to testify before you today. I am pleased to answer any questions you may have.