February 20, 2009 Newsletter

In this issue:

Economic Recovery Bill Passed

State-Children’s Healthcare Insurance Program (S-CHIP) Bill Twice Vetoed By Bush Signed by Obama

Article: “Oberstar at the Pinnacle: Minnesota Congressman Expects to Put His Imprint on the Recovery--And On America’s Livability”

Article: “Buy America? For Minnesota’s Iron Range The Stakes Are High"

Economic Recovery Bill Passed

With negotiations going into late Friday night last week, the Senate for the second time passed the American Recovery and Reinvestment Act, this time a compromise bill between the differences in the earlier House and Senate versions. President Obama signed the bill earlier this week in Denver.

“This is an historic moment; it ranks with Franklin Roosevelt signing into law the Works Progress Administration bill in 1935,” Oberstar said after the House passed the compromise bill.

Under the economic recovery bill, in addition to other funding, Minnesota is expected to get $668 million for infrastructure investment funding, $134 million for grants to homeowners for installation of energy-efficient products, and $1.4 billion for education funding, including school improvement grants, increases to the maximum Pell Grant award, special education funding, and other sources of education funding.

The bill is expected to create an estimated 66,000 jobs in Minnesota over the next two years, 7,400 in the 8th Congressional District alone.

The State of Minnesota itself will also benefit from the recovery bill. Under the compromise bill, the State is expected to receive an estimated $815 million from the Federal government as part of the Federal government’s State Fiscal Stabilization Fund. That money can be used to patch holes in Minnesota’s state budget and provide funding to needy state programs, like education funding and local government assistance.

Oberstar was also a strong proponent for the “Buy America” provision which prohibits the use of foreign steel sold artificially below market prices for infrastructure projects funded by the federal government. Oberstar said that with the passage of this bill foreign steel companies would hope to flood the market.

“With a $64 billion investment in infrastructure that will require steel, [foreign steel companies] will want to come into our marketplace and unload their excess capacity below market prices and take jobs away from American workers -- we are not going to allow that to happen,” Oberstar said about the provision.

The stimulus bill also contains dollars for Trade Adjustment Assistance, which provides opportunities for workers displaced by foreign steel competition to take part in job training programs and receive relocation grants. The “Buy America” provision coupled with Trade Adjustment Assistance will be a shot in the arm for the Iron Range economy.

A large portion of this legislation was crafted in Congressman Oberstar’s Transportation Committee. Oberstar was also involved in the subsequent compromise negotiations. While the legislation is a very broad-based assault on the deteriorating economy, ranging from funding for alternative energy programs to school construction, Oberstar stressed that ultimately the bill is about jobs.

“Working class families are hurting right now,” Oberstar said. “The National Recovery and Reinvestment act will create good jobs, create opportunity, and put the American people back to work.”

State Children’s Healthcare Insurance Program (S-CHIP) Bill Twice Vetoed By Bush Signed by Obama

The State Children’s Healthcare Insurance Program received a boost earlier this month when President Barack Obama signed a reauthorization and expansion of the program that includes providing coverage to an additional 4.1 million children, putting the total covered under the program at more than 11 million.

The health insurance program was created in 1997 as a safety net to cover children in families with modest incomes but do not qualify for Medicaid.

“The Medicaid program covers children from very poor families across the country. There are, however, millions of working families who are falling through the cracks; they cannot afford health insurance because their employer does not offer it and the price of the coverage is beyond their reach but they do not qualify for Medicaid,” said Congressman Oberstar. “Providing healthcare coverage for the children of those families is the right thing to do.”

Two proposals passed by Congress in 2007 to reauthorize and expand S-CHIP coverage were vetoed by President Bush calling them too costly. Congressman Oberstar twice voted to override President Bush’s vetoes but both times Democrats fell short of the necessary votes to overturn a Presidential veto.

The S-CHIP bill will also help to bring healthcare costs down for healthcare consumers as a whole. Congressman Oberstar said that health insurance which allows families to get preventive care for their children “is much more cost-effective than using the emergency room as a primary care provider. The program also provides dental coverage for children and has a mental health parity provision. We are addressing health issues when children are young and that investment in children’s health pays off in the long run,” said Oberstar.

Article: “Oberstar at the Pinnacle: Minnesota Congressman Expects to Put His Imprint on the Recovery--And On America’s Livability”

From MinnPost
By Steve Berg
Appearing 1/22/09

In his more than four decades on Capitol Hill, no one has accused Jim Oberstar of cutting a dashing figure on the Washington stage. At 74, he still carries the rugged look and gait of his Iron Range boyhood. Only when he begins to speak in melodic tones — his storehouse of knowledge spilling out in encyclopedic detail, his command of numbers assuming a cadence almost of poetry — do you get the sense that here is an influential man.

Indeed, no one may influence the lifestyles of early- to mid-21st-century America more than Oberstar.

As chairman of the powerful House Committee on Transportation and Infrastructure, he will write the public-works portion of the stimulus/recovery package that Congress expects to pass in the first weeks of Barack Obama's presidency. Later this year he will write a reauthorization of the basic federal transportation law due to expire in September. Both efforts could leave a major imprint on how the nation pulls itself out of its economic tailspin and rebuilds itself at a critical moment in history.

The opportunity for a legacy
Global forces are dictating changes in the way Americans live and move around. A warming climate, unstable energy prices and excessive dependence on foreign oil supplies figure to move U.S. policy in a new direction, one that encourages less driving and more compact community design with alternative modes of travel. Add to that the urgent need to repair the nation's crumbling infrastructure — including roads, bridges, urban rail systems, harbors and waterways — and you begin to see both the enormity of Oberstar's task and the opportunity for an Oberstar legacy.

After 34 years in Congress, and 12 years before that as a congressional aide, the Minnesota Democrat is at the pinnacle of his career.

"I try not to think of this as a high point for me, I try to think of this as public service," he said last month while dashing from one meeting to the next. Sorting out the nation's transportation needs is considerably more complex now, he said, than in the in the 1960s and early '70s, when he worked for his 8th District predecessor, Rep. John Blatnik. Blatnik also rose to chair the same House committee, then called Public Works.

But nowadays there's little time for reflection on the path his career has taken. Everyone wants Oberstar's ear: road contractors, shipping companies, airlines, state officials, environmentalists, unions, manufacturers, traffic engineers, realtors and urban designers all have ideas for how best to spend the public's money.

Asked to summarize what he hopes to accomplish in the new transportation law, Oberstar said, "It comes down to one word: livability."

Seeking more efficiency in moving people, goods
The nation, he said, needs to reconfigure its transportation and land uses in ways that provide more efficiency in moving people and goods, more opportunity to compete for global prosperity, and more chances for people to live healthy, convenient lives that are more compatible with nature.

The current economic meltdown makes progress on infrastructure investments more compelling. "We have to put people back to work," he said, "and we have to get our economy in shape to compete."

Norman Ornstein, resident scholar at the American Enterprise Institute and one of the nation's top experts on Congress, has known Oberstar for decades. "He just kind of snuck up on us as a powerful figure," Ornstein said.

"His style is very Minnesota; to look at him and chat with him you wouldn't think he's a powerhouse. But spend a little time with him and you realize that he's a really nice guy and a very smart guy. He speaks French fluently. He knows the issue of transportation upside down. And he really cares. The issue has kind of come to him. It used to be that transportation was just pork. Now it's clear that it's vital to the economy and it affects our daily lives in big ways, and that Oberstar is at the center of something important that will affect our lives for a very long time."

More impact as committee chairman
Ornstein said it's probable that Obama considered Oberstar for his Cabinet. But the transportation post went to Republican Ray LaHood, a former member of Oberstar's committee. "Oberstar would probably have turned it down; he'll have more impact where he is," Ornstein said.

Oberstar views his big enterprise as two phases: The first part is the stimulus package aimed at expediting projects ready for construction in a matter of weeks. He cautions that the list must be limited to those that will produce jobs very quickly. The list also must be free from any hint of political favoritism. Obama has insisted that pet projects (earmarks) will be forbidden. Phase two is the bigger, broader transportation rewrite that could transform U.S. policy.

Oberstar opened a window into his thinking last month when, as part of $85 billion in transportation spending being considered for the stimulus plan, he suggested a 60-40 split in funding for roads and transit; $30 billion for highways and bridges and $12 billion for buses and trains. That ratio would push transit's share of federal gas-tax revenues considerably upward. For years, the split has favored cars and trucks, with roads getting more than 80 percent.

His approach would mark major shift
If Congress and the new president agree, the new ratio would reflect a major shift in federal policy. Transportation would be more clearly defined as moving people, not just cars. Concern for climate change, the environment, foreign oil dependence and traffic congestion would be reflected in funding formulas.

Oberstar has also tipped his hand on other matters. "We need to think bigger and more inclusively than in the past," he said.

For example, he wants to relieve highway congestion in coastal areas by offering shippers better opportunities to move freight over water, even for relatively short distances. Likewise, he favors the building of high-speed rail corridors to lure drivers out of their cars for midrange trips — such as from the Twin Cities to Chicago. He wonders if electric utilities couldn't be coaxed into running streetcar systems, as many once did. He ponders ways to charge vehicles for highway use by weight and distance as a way to augment faltering gasoline-tax revenues. And he favors flexible travel arrangements by which a traveler in small-town Minnesota could buy a single ticket that would take her seamlessly by bus to a regional airport and then by air connections to anywhere in the world.

The broader benefits of travel
It was travel, after all, that expanded Oberstar's own horizons. He grew up in Chisholm, the son of Slovenian immigrants. His father, a miner, saved $2,500 in quarters to send young James off to the College of St. Thomas in St. Paul. He graduated with honors in French and political science in 1956 and promptly set off for grad school in Belgium. He earned a master's degree in European studies at the College of Europe in Bruges in 1957. After further studies in Quebec and at Georgetown University, he taught English and French in Haiti before landing a job as Blatnik's chief of staff in 1963.

Oberstar won election to Congress in 1974 and, despite failing to get his party's Senate nomination in 1984, has never lost an election. His politics, says the National Journal, reflect a liberal Catholic outlook: conservative on issues like abortion and gun control but liberal on socio-economic matters. Oberstar believes in an active government and is skeptical that the market can provide a fair enough distribution to move people forward.

During his long legislative career, he has made himself an expert on the airline industry. He has championed domestic steel and adoption as favorite issues. Another emphasis has been physical fitness as a way to reduce obesity in children. Oberstar is himself an active cyclist (both in Minnesota and near his home in Potomac, Md.), and has influenced federal policies that include biking and walking as a transportation choice. His "safe routes to school" program encourages communities to build bike paths and sidewalks as healthy options for kids.

An old-school politician
While scholarly in manner, Oberstar is an old-school politician. He doesn't apologize for using his status to deliver generously for his district and state. For him, earmark is not a dirty word. Within days of the 35W bridge collapse in Minneapolis, Oberstar had secured $250 million in federal money for a replacement.

"It's the biggest earmark Minnesota ever got, and nobody complained," said former Rep. Martin Sabo, a Democrat who served alongside Oberstar for 28 years. Asked to assess Oberstar's success, Sabo credited his dogged persistence and his talent for working with Republican colleagues.

Ornstein agreed. "I don't know anybody who doesn't like him," he said.

Not always patient
Oberstar is not always a patient man. He has sharply criticized Gov. Tim Pawlenty for failing to raise state funds to meet federal matches for transit and other infrastructure projects. "If these people had their way, we'd still be traveling by horse and buggy," he once quipped.

On a weekday last month, the congressman ducked into a meeting with real-estate developers, local officials and others in downtown Minneapolis.

"We have an enormous challenge ahead of us," he began. "But, in a terrible economy, people now see the benefit of updating our infrastructure," he said, not only to add jobs but to sharpen our competitive edge. He said that states have already identified about 4,000 highway projects.

Over the longer term, however, public heath and land use must have more influence over transportation policy, he told the gathering. Cities like Dallas and Phoenix have been able to generate hundreds of millions of dollars of real-estate investment along their light-rail lines, for example, offering people a chance at healthier lives.

"We need a new direction," he said. Then, quite suddenly, he was off to his next meeting.

Article: “Buy America? For Minnesota's Iron Range The Stakes Are High”

From MinnPost
By Cynthia Dizikies
Appearing 2/5/09

WASHINGTON, D.C. — The battle over "Buy America" — one that could have serious consequences for Minnesota's Iron Range — came to a head on Wednesday night when the Senate agreed to temper provisions in the economic stimulus package that would require U.S.-made iron, steel and manufactured goods to be used in public works projects funded through the bill.

The Senate version, which expanded on the "Buy America" measures passed by the House, sparked something of a controversy in Washington and overseas this week with the European Union threatening retaliation and even President Barack Obama advising against sending a "protectionist message" and essentially urging Congress to revise the language.

At the same time, members of the United Steelworkers union, many traveling from North Eastern Minnesota, descended on the Capitol Tuesday and Wednesday to lobby in support of the strengthened measures that (for the purposes of the stimulus money) would expand on a 1982 law basically requiring that U.S. steel and iron be used in federal highway and transit projects.

"Why should we give our stimulus package over, and buy our steel from foreign companies when we can buy it right here in the state?" said Ray Pierce Sr., president of the United Steelworkers Local 6115 at the Virginia, Minn., taconite plant, who traveled with others to Washington, D.C., to meet with Iron Range Rep. Jim Oberstar (D-Minn.) and Sen. Amy Klobuchar (D-Minn.).

Plant shutting down
Pierce, who works at Minorca Mine, which is owned by steelmaking giant ArcelorMittal, said that his plant may be shutting down temporarily this year because of the economy.

"We are the ones right now that are hurting," said Pierce. "Let's get our economy picked back up and growing rather than sit there and take this big stimulus package and put the money overseas."

The amendment that the Senate accepted on a voice vote Wednesday night added language, which specified that the provisions should be "applied in a manner consistent with United States obligations under international agreements."

The United States has treaties with more than 50 countries. Those nations may now be eligible for exceptions to the restrictions.

Craig Pagel, president of the Iron Mining Association of Minnesota, an industry group and lobbying organization, said that it was hard to tell just yet how the amendment might affect Minnesota.

"The economic impact to northeastern Minnesota may not be as great as it would have been if it would have required that only steel poured in the United States be used," Pagel said.

The Senate rejected another amendment that would have gone much further by eliminating all the "Buy America" provisions. The amendment, offered by Sen. John McCain (R-Ariz.), was soundly defeated by a 65 to 31 vote. Earlier in the day, however, the suggestion that the provisions might be removed from the bill provoked strong words of frustration from Oberstar.

"If this 'buy-America' provision is not in this legislation, I'm off, I'm not supporting it," Oberstar said. "I'm not going to have U.S. taxpayer dollars support foreign steel to displace U.S. steel workers in the mills and in the mines. Period."

Given the support for the provisions in both the House and Senate, it is not likely that Oberstar will have to make good on this ultimatum — but the controversy over "Buy America" still raises some interesting questions.

Pros and cons of 'Buy America'
On the one hand, "Buy America" supporters argue that the provision will have a direct and positive effect on American lives and therefore the U.S. economy. The Iron Range, for instance, produces about 80 percent of the nation's iron ore, which is used in making steel. More demand equals more jobs equals more people paying taxes on social security, health care, and, of course, more spending.

On the Iron Range, it's simple: "Mining is the engine that drives the economy," Pagel said.

To make his point that it would be absurd not to use U.S. iron and steel in U.S. transportation and infrastructure projects, Oberstar reflects on a the Bong Memorial Bridge, which connects Duluth to Superior, Wis. At the time of construction, Oberstar led an effort to prevent Japanese steel from being used in the bridge.

"I said, 'We'll have iron ore from the Mesabi Range going under a bridge built with Japanese steel… intolerable," Oberstar said.

In an interview with MinnPost Wednesday, Oberstar also pointed out that as other countries —particularly China — see their economies decline, the market place is likely to be flooded with excess steel.

"So they are going to dump that steel in the world market place. And, where do you think it is going to go? The U.S. open market," said Oberstar.

To put this into some perspective, in 2007, the U.S. produced about 91.5 million tons of crude steel. China produced 502 million.

On the other hand, economists have argued that the "Buy America" provisions might do more damage than good. A study by the Peterson Institute for International economics suggested that the provisions could adversely affect international trade and U.S. reputation abroad. The study said that the provisions would create about 9,000 U.S. jobs but that the resulting retaliation overseas would hurt U.S. exports and may cost at least 6,500 U.S. jobs. Similarly, the U.S. Chamber of Commerce has come out against the measures, saying that they violate free trade.

"It might help one sector for a limited period of time… but overall there is a high probability of losing thousands of more jobs," said Chris Braddok, director of procurement policy at the U.S. Chamber of Commerce.

Terry Roe, director of the Center for Political Economy at the University of Minnesota, agreed that the provisions represented a tradeoff.

"This would certainly mean an increase in employment and continuing processing of Taconite ore, which is actually pretty high quality," said Roe, but he added that the U.S. products are likely to be "bought at a higher price than we can get them in the world market. Therefore the goods that are ultimately produced will enter our market at a higher price."