May 27, 1965
PAGE 11914
DEBATE ON PUBLIC WORKS AND ECONOMIC DEVELOPMENT ACT OF 1965
Mr. MUSKIE. Mr. President, a century ago Joshua Chamberlain, military hero of the War between the States, president of Bowdoin College and Governor of Maine expressed his philosophy of government in these words:
A government has something more to do than to govern, and to levy taxes to pay the governors. It is something more than a police to arrest evil and punish wrong. It must also encourage good, point out improvements, open roads of prosperity and infuse life into all right enterprises. It should combine the best minds of the State for all the high ends for which society is established and to which man aspires. That gives us much to do.
These eloquent words could today serve as a fitting preface for the Public Works and Economic Development Act of 1965 which we now consider. This act indeed encourages good -- points out and opens roads for economic improvement and enhanced prosperity -- infuses life into right enterprises -- and brings together the best minds of the State, at all levels of government and occupation to work together for all the high ends -- economic and social -- to which man aspires.
This act is the logical culmination of the effects of significant economic and social forces which have acted upon our society over the past two decades. These forces, perhaps revolutionary in perspective, have improved the American standard of economic and social living and the pattern of national economic growth. These forces, too, have brought into focus the important truths that all Americans, in all places, throughout our land are entitled to an equality of opportunity whether that opportunity be for justice, for political representation, for education, for health, for outdoor enjoyment, for the use of resources, or for economic enhancement.
Equality of opportunity for all men, I suggest, is the underlying theme of our major legislative efforts in this decade of the 1960's. For in this land of plenty, in the midst of our affluence, we are confronted with the paradox of unemployment, poverty, and misery -- the products of unequal economic opportunity.
For some years, many States have recognized the uneven nature of economic operations and developments as functions of opportunity.
In my own State, for example, we organized in 1955 the Department of Economic Development, to coordinate our industrial and recreational development programs. In 1957 this was followed by the Maine Industrial Building Authority, to guarantee industrial building loans. Both of these programs represent efforts by Government to provide the means -- the opportunity -- the catalyst -- by and through which local communities can utilize local initiative and local resources to solve their economic problems. I am proud that both of these measures were enacted while I was Governor of Maine. Progress has been good in these State-oriented programs but a great need has remained. Thus it was both logical and necessary for the Federal Government to become a partner with the States in this search for economic opportunity for all people.
This came to pass in the Area Redevelopment Act of 1961 which I was pleased to cosponsor.
In its few years of operation, ARA has been of immense assistance to large areas which need help -- help, I might add, not forced upon anyone -- but requested, in partnership with local endeavor -- viably used and still required. The record for Maine in this regard is worthy of brief comment and example.
ARA projects have been active in nine Maine counties. One of these is Aroostook County in the extreme northern tip of Maine. An area as large as Connecticut and Rhode Island combined, with a population of about 100,000, Aroostook is a largely underdeveloped area. It is rich in natural resources, but concentration in a single industry -- potato farming -- has made the county's economy subject to violent fluctuations of the potato market.
ARA has proven its promise and great potential for economic development by expanding economic opportunity in Aroostook County. ARA has approved $11.5 million in industrial loans to industries in Aroostook. As a result of this, 3,015 direct jobs have been created or projected for this area. The average cost per job is $3,900 and the average annual total income resulting from this direct effort is over $10 million.
Moreover, these loans have helped to diversify Aroostook's industrial base in wood products, potato processing, and the establishment of a broad-based sugarbeet industry of great potential to Maine's future economy.
About 1,200 jobs have been created elsewhere in Maine through ARA assisted projects and more than 700 people have completed ARA training programs. The total impact in jobs is over 4,000, providing an annual income of more than $14 million.
One of the more dramatic events in the life of ARA also happened in Maine. As a result of the shutdown of two textile mills in Lisbon Falls, Maine, during the summer-fall of 1964, this community was confronted with a sudden high rise unemployment situation affecting about 80 percent of its total work force of 1,150. To meet this crisis, President Johnson ordered a Federal task force to this community to assist them in their time of need. Out of this force of 10 or more Federal agencies, the main economic thrust, giving greatest relief to this chaotic situation, came from ARA in the form of a loan to a corporation which bought the largest of the two mills and reopened it at about 50 percent of its former work force.
Here indeed was opportunity created. There are many more promising prospects in a variety of Maine industries. Pending at this time, but unfunded, because of the exhaustion of ARA funds are nearly $6 million worth of these "opportunity" projects.
The passage of this bill, S. 1648, will assure the continued availability of opportunity to many Maine communities and other areas throughout our land. As we consider its substantive content, I would urge all Members of this body to think of this bill in terms of opportunity -- not handouts -- of opportunity for the broad economic growth of the underdeveloped communities of our country; and of opportunity for the impoverished family to hold their heads high and for a man, his wife, and their children to rise in stature among their peers through their own productive capacities.
For opportunity is precisely what this bill offers -- just as opportunity is the essential hallmark of our American way of life.
The committee in its consideration of this bill focused considerable attention on those sections pertinent to regional and local planning and development action. Much will yet be said on these points, but briefly let me conclude my remarks with emphasis on the new "economic development district" and "development" center concepts.
We must remember, that in establishing a national regional economic development program we are dealing with different regions of the country. Each of these regions has a different economic and resource base, and each has a different need in terms of development programs. In many ways New England has the most cohesive and coordinated set of States in the Union. But even here there are divisions. The States and their component parts are not all homogeneous in terms of economic and development program need. We forget this division at our peril.
That we have not forgotten this basic fact is evident. Section 403 provides for the encouragement of local area development through multi county economic development districts by authorizing a 10-percent increase in development facility grants for projects in such districts and by emphasizing the need for coordinated district planning and programing.
In addition the bill also makes eligible for assistance development centers which are not distressed in themselves but where economic investment will contribute to the alleviation of high unemployment and low income in dependent surrounding areas.
These two elements of the bill are excellent commonsense clauses. They recognize the basic fact that you cannot build our national house of economic enhancement and stability from the roof down but from the foundation up -- and indeed from the individual grass-roots bricks of that foundation.
We have had important experience with this concept in rural Aroostook County, Maine, where loans to community developments in centers such as Presque Isle could not stand alone but where economic stimulation was provided to surrounding low-income rural areas through the development of agricultural product processing facilities.
The other provisions of this bill are designed to work in harmony with the loan concept.
Title I of the bill, in a way, is an extension of the accelerated public works program which is out of funds. There is an important distinction though between this program and accelerated public works. The Accelerated Public Works Act was designed to help ease a general unemployment problem facing the Nation at the time it was passed. Funds for public works projects were made available to areas suffering the highest rates of unemployment.
Under S. 1648, the principal purpose is to increase the amount of Federal funds being expended both for general improvement of the physical structure of an area and for specific improvements related to projected economic development. The idea is to assist the areas of need to improve and strengthen physical facilities, or infrastructure, so that they may be better able to support long-term economic development.
The criteria for the approval of public facility and development facility projects under S. 1648 are more restrictive than they were under accelerated public works because, as I have just noted, the principal test to be applied in this new bill is the contribution the project will make to the long-term well-being of an area; not as it was under accelerated public works, the temporary relief of unemployment.
Some of the kinds of public facility projects to be financed under titles I and II of this bill -- title II provides for loans for these facilities -- can be partially financed under existing programs and others cannot. I have a partial listing of these projects with a notation as to whether or not partial financing is available under other programs. Without objection, I would like to place this listing in the RECORD at this point.
There being no objection, the listing was ordered to be printed in the RECORD, as follows:
[List omitted]
Mr. MUSKIE. Mr. President, even though some of these projects can be assisted through grants under existing programs the idea behind S. 1648 is to provide additional assistance to projects that are located in areas of economic distress.
In the majority of eligible areas grants of up to 50 percent will be available. In the hardest hit areas, supplemental grants of up to 30 percent will be made. In no case will a project be entitled to more than 80-percent grant assistance under the bill.
The supplemental grants, incidentally, can apply to those projects receiving a grant under this program as well as to projects receiving direct grants under other programs.
Let me give an example of how this works. If a community waste treatment facility were entitled to a 30-percent grant from the Public Health Service, an additional 20-percent direct grant could be made under S. 1648. If that facility were located in a severely distressed area it could apply for an additional 30 percent under the supplemental grant provision of title I. The total Federal money in that project then would be the maximum 80 percent.
On the other hand if an airport project were entitled to a 75-percent grant from the FAA, only an additional 5 percent could be granted under the Public Works and Economic Development Act. Never can the total be greater than 80 percent and only the hardest hit areas would be entitled to an amount greater than 50 percent.
Under title II of S. 1648 loans can be made for public facility and development facility projects, and loans and working capital guarantees can be made for promising industrial and commercial projects. There is also a provision that enables the Secretary of Commerce to contract to pay to, or on behalf of businesses, a portion of the interest costs which they incur in financing their expansions from private lending sources.
Much of this title reflects an extension of the better features and experiences of the area redevelopment program, which is about to phase out. It is a very important part of this act since it provides the only direct financial assistance for privately financed industrial and commercial enterprises. These are the facilities that provide the permanent employment we are seeking to create under this legislation.
Title III also represents an extension of the Area Redevelopment Act program and incorporates some of the excellent provisions for technical assistance, planning, and research we have in the Appalachian regional program.
Title IV sets forth the eligibility requirements for the designation of redevelopment areas and development districts -- groupings of counties and/or a labor market areas wishing to join together in an economic development effort. The criteria for area eligibility under S. 1648 follow quite closely the standards that were established for eligibility under the Area Redevelopment Act.
The provisions and standards for the establishment of multi-State regions are combined in title V. In this title is the recognition that the Appalachian regional experiment, even though just getting started, offers a means to deal with chronic depression problems extending across State lines. This title encourages and assists States in getting together to work jointly on common problems. An authorization of $15 million annually, which I consider modest relative to the amount of work to be done, is authorized to help economic development regions in planning, in undertaking technical assistance programs, and to help finance their administrative expenses.
I want to congratulate the chairman of the Public Works Committee [Mr. McNAMARA] for the manner in which he has developed and moved this legislation. I also would like to compliment the ranking majority member of the Public Works Committee [Mr. RANDOLPH] and ranking minority member [Mr. COOPER], both of whom have made major contributions to making this a bill that will have great impact on improving our depressed areas.
I have had the unique experience of sitting on both of the committees which handled this bill. I would like to congratulate Senator DOUGLAS, the principal sponsor of S. 1648 and the father of the Area Redevelopment Act, whose work on the Banking and Currency Committee in considering this bill was most important. The chairman of the Banking and Currency Committee [Mr. ROBERTSON] also deserves congratulations for making it possible to move this bill so rapidly to the Senate.
Our Nation has evolved greatly from the Jeffersonian concepts of an agrarian social base. Today many of our greatest economic problems center in urban or rural areas. The basic premise of national economic dependence upon strong, viable, and individual local economies is still valid.
As strong as our local foundation is built so will our national economic house stand, today, tomorrow, and for years in the future. The emphasis provided in S. 1648 on this basic fact convinces me that this is strong, good legislation. I urge its enactment.