Letter to President-elect Obama, Vice President-Elect Biden, and Congressional Leaders

Letter

Senators Call for 'Economic Disaster' Relief in Stimulus for Communities with Massive Job Loss

In Letter to Pres.-Elect Obama and Congressional Leadership, Senators Outline Economic Development Needs of Distressed Communities

As Congress and the incoming Obama Administration craft an economic recovery package, a group of Senators today called for targeted economic development assistance for communities with massive job loss.

In a letter to President-Elect Barack Obama, Vice President-Elect Joseph Biden, and members of congressional leadership, U.S. Senators Sherrod Brown (D-OH), Debbie Stabenow (D-MI), Tom Carper (D-DE), and Sheldon Whitehouse (D-RI) today outlined how federal assistance can bring new jobs and economic activity to communities facing the double-blow of national economic recession and massive local job-loss.

"What may start as an isolated layoff or plant closing can quickly ripple through an entire community," wrote the Senators today in a letter to Obama and congressional leadership. "Mass layoffs and plant closings undermine the local tax base, at the expense of key government services, Main Street businesses, schools, and libraries."

"These communities cannot recover from the double blow of national economic recession and massive local job loss without specialized assistance from the federal government," continued the Senators in their letter. "Absent such assistance, communities that could contribute to national prosperity may instead require long-term safety net assistance. Investing now in the economic revitalization is not only the right thing to do, it is the smart thing to do."

The Senators referenced examples of job loss in their states that have had far-reaching effects on local communities. These include DHL's plans to close its plant in Wilmington, Ohio, G.M. layoffs in Detroit and Pontiac, Michigan, Chrysler's plant closing in Newark, Delaware. They also reference pockets of the country with unemployment rates well above the national average, including Providence County, Rhode Island with a 9.6 percent rate.

The letter outlined how, in addition to investment in infrastructure and state fiscal relief, an economic recovery package could help rebuild communities facing massive job loss. The Senators recommended investments in the following programs:

• Providing $2 billion through the Economic Development Administration's (EDA) "Economic Adjustment Assistance" programs, including its University Centers program, with priority consideration given to areas that have experienced sudden and severe economic dislocation or persistent and long-term economic distress due to corporate restructuring.
• Increasing by $50 million the "TAA for Firms" program, administered by EDA, which helps trade-impacted firms make adjustments that allow them to remain competitive.
• Investing an additional $700 million through the Wagner Peyser Act for reemployment services for unemployment insurance claimants, labor market information to help guide state and local decisions about economic development strategies, and other labor market exchange services.
• Investing an additional $1.5 billion in the existing WIA dislocated worker fund to retrain workers recently laid off, with $300 million reserved for National Emergency Grants (NEG) and for the remaining $1.2 billion, 25 percent reserved at the state level for supporting rapid response efforts in economically distressed areas.

A full copy of the Senators letter can be found below:

The Honorable Harry Reid The Honorable Nancy Pelosi
Majority Leader, U.S. Sena Speaker, U.S. House of Representatives
S. 221, U.S. Capitol H-232, U.S.
Washington, DC 20510 Washington, DC 20510

The Honorable Robert C. Byrd The Honorable Thad Cochran
Chairman Ranking Member
Committee on Appropriations Committee on Appropriations
Washington, DC 20510 Washington, DC 20510

The Honorable Barack Obama The Honorable Joseph Biden
President-Elect Vice President-Elect
The Office of the President-Elect The Office of the Vice President-Elect

Dear President-elect Obama, Vice President-Elect Biden, and Congressional Leaders:

We are writing to urge that the economic stimulus package include "disaster relief" for communities that are not only being battered by the credit crisis, the foreclosure crisis, and the national economic recession, but are weathering the consequences of sudden and extreme changes in the local economy.

What may start as an isolated layoff or plant closing can quickly ripple through an entire community. Mass layoffs and plant closings undermine the local tax base, at the expense of key government services, Main Street businesses, schools, and libraries.

As you know, there are pockets of the country with unemployment rates well above the national average, including Providence County, Rhode Island with a 9.6 percent rate. In addition, DHL's plans to exit the U.S. market mean the loss of an estimated 8,000 jobs in Wilmington, Ohio. Chrysler recently closed a plant in Newark, Delaware, while GM laid off some 1,600 hourly workers at plants in Detroit and Pontiac. This is in addition to the proposed 20,000 to 30,000 job cuts included in GM's long-term viability plans presented to Congress.

These communities cannot recover from the double blow of national economic recession and massive local job loss without specialized assistance from the federal government. Absent such assistance, communities that could contribute to national prosperity may instead require long-term safety net assistance. Investing now in the economic revitalization is not only the right thing to do, it is the smart thing to do.

• In addition to components already under consideration, which include substantial investments in infrastructure spending, state fiscal relief and assistance for workers, we recommend that the economic recovery package include:
• $2 billion through the Economic Development Administration's (EDA) "Economic Adjustment Assistance" programs, including its University Centers program, with priority consideration given to areas that have experienced sudden and severe economic dislocation or persistent and long-term economic distress due to corporate restructuring.
• Increasing by $50 million the "TAA for Firms" program, administered by EDA, which helps trade-impacted firms make adjustments that allow them to remain competitive.
• Investing an additional $700 million through the Wagner Peyser Act for reemployment services for unemployment insurance claimants, labor market information to help guide state and local decisions about economic development strategies, and other labor market exchange services.
• Investing an additional $1.5 billion in the existing WIA dislocated worker fund to retrain workers recently laid off, with $300 million reserved for National Emergency Grants (NEG) and for the remaining $1.2 billion, 25 percent reserved at the state level for supporting rapid response efforts in economically distressed areas.

In addition to providing emergency relief now to severely economically distressed communities, we look forward to working on a national strategy to better coordinate federal rapid response efforts in the future.
Pressures facing American workers, firms, and communities are likely to intensify in the coming months. The short- and long-term vulnerability of economically distressed communities in our states depends upon their ability and resources to avert layoffs, generate new job opportunities, train and connect displaced workers with these new jobs, and attract new business and investment.

We are confident that working together, we can help communities in economic distress thrive.

Sincerely,

Sherrod Brown Debbie Stabenow Thomas R. Carper Sheldon Whitehouse

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