Washington, D.C. – Congresswoman Rosa L. DeLauro (CT-3), chairwoman of the House Agriculture, Rural Development, Food and Drug Administration Appropriations Subcommittee, delivered the following opening statement during a subcommittee hearing on the proposed Fiscal Year 2009 budget for the U.S. Department of Agriculture, at which Thomas Dorr, Under Secretary of Rural Development, testified.

During the hearing, DeLauro questioned cuts in the Bush Administration’s suggested budget to key programs like direct single family loans, the water and waste program, and distance learning – the very programs that can make a difference in the everyday lives of rural Americans, sparking growth down the road.

Below is the text of her statement, as prepared for delivery.

The hearing will come to order. Mr. Dorr, I am glad we had the opportunity to meet yesterday to discuss this year’s rural development budget request. Thank you for coming to discuss the budget with the subcommittee today.

Federal efforts to strengthen rural America -- and to preserve the strength that it provides our entire nation -- are critical to facilitate growth and soften the impact of population loss.

Rural development is one of the most important areas in USDA’s broad portfolio touching almost every aspect of people’s lives in rural America . We have an obligation to get it right.

To be sure, not all rural areas are alike culturally or economically and each has its own unique challenges. What is clear, however, is that the challenges are growing. Undersecretary Dorr, your mission could not be more important. But our goals are straightforward: we seek not only to sustain our rural communities, but also to create new possibilities for growth and development in their small town economies. I look forward to your comments Mr. Dorr, and today’s discussion as we consider how your budget strives to meet those goals.

As the current economic downturn continues to weigh very heavily on families in every region of our nation, I believe we have a particular responsibility to ensure our rural communities have the tools to survive. I believe government has a duty to help provide the same quality of life opportunities to rural America that are shared by other parts of this country.

But I have some concerns about the USDA’s ability to meet that task. I outlined some of the concerns I have about the Administration’s rural development budget with you already but I would like to address them in greater depth today.

Overall, Rural Development funding is about $805 million below the amount provided in 2008, excluding the increases in the Rental Assistance and Salaries and Expense accounts. The Administration is making the same proposals to Congress that are routinely rejected year after year. Indeed, this years’ budget cuts to rural development are very similar those cuts proposed last year – only worse.

In particular: The budget request provides $24 million for the Rural Community Facilities Programs. That is $45 million (65%) below the amount provided in 2008.

The budget request provides $30 million for the Rural Business Programs -- $57 million (65%) below the amount provided in 2008. And $269 million for the Rural Water and Waste Disposal Programs or $290 million (52%) below 2008.

It eliminates funding for community facility grants and the rural business enterprise and opportunity programs.

It does the same when it comes to housing -- eliminating funding for the direct single-family housing loan program, and zeroing out the section 515 multi-family housing direct loan program. These programs offer interest assistance and focus primarily on the very-low and low income borrowers.

At the same time, the budget again proposes to increase fees for the guaranteed loan program from 2% to 3% making it even more expensive to the borrower while reducing the budget authority’s program cost.

Ultimately, between the fee proposal and eliminating the direct housing programs, the budget request provides $21 million, or $187 million (91%) below the amount provided in 2008.

These cuts to rural housing are particularly troubling in the context of today’s subprime mortgage crisis. Programs like these are supposed to offer a safe alternative to subprime mortgages for creditworthy low and moderate income rural homebuyers. Now is not the time to undermine them.

Addititionaly, I was a little surprised to see Rural Development transfer $7.6 million from the loan and grant programs to cover IT expenses in your ‘Salaries and Expense’ account in FY 2007. Instead of taking funds from these important programs, I am curious why you did not examine other areas such as the travel account.

What is more, I am concerned that, in general, this year’s budget proceeds on the assumption that the Farm Bill will pass. I know we are all hopeful, but we also have a responsibility to ask what contingency plans we intend to follow if, ONE, the Farm Bill does not pass; or TWO, the bill does not provide adequate funds.

In addition, to serious questions about the budget, I also believe we must take a hard look the your office’s announcement, last week, that Open Range has been approved to receive a $267 million loan to provide broadband service to 518 rural communities in 17 states. This loan represents 90 percent of the funds provided in FY 2008 for the broadband program and I think we should discuss the Rural Development Office’s ability to manage a project of this size.

There are no easy solutions to the big challenges facing rural America . Indeed, building a healthy rural economy requires more than simple supports for farm products. It means investing in entrepreneurship in rural areas, early childhood centers and rehabilitation and medical centers. It means providing infrastructure for electricity, clean water, water treatment, and yes, Internet broadband that connects rural communities to the global community – and the global economy. It means harnessing innovation, pursing energy independence, and making a bold new commitment to renewable energy. The list goes on, but if we are going to make rural America as productive and sustainable in the 21st Century as it was in the last, we are going to have step up and use our federal policy as a valuable tool to put middle and working-class rural families center-stage.

Today’s hearing is about examining this year’s budget through that lens. Does it soften the impact of population loss and take deliberate steps to foster new growth? Does it reflect our priorities as a nation and does it meet our obligation to Rural America?

Thank you again, Mr. Dorr for being here. I recognize our Ranking Member, Mr. Kingston.

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