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CAPITALIZING ON RURAL AMERICA
A POLICY FORUM
(2005)

>> FUNDING FOR "CAPITALIZING ON RURAL AMERICA" HAS BEEN PROVIDED BY THE INDEPENDENT COMMUNITY BANKERS OF AMERICA... FOR 75 YEARS ICBA HAS WORKED TO PROMOTE THE FINANCIAL SERVICES OFFERED BY LOCAL COMMUNITY BANKS TO AMERICAN CONSUMERS, SMALL BUSINESSES, AND THE U.S. ECONOMY. ICBA, THE NATION'S VOICE FOR COMMUNITY BANKS. ON THE WEB AT ICBA.ORG.

BY THE IOWA BANKERS ASSOCIATION ... HELPING IOWA BANKS SERVE RURAL AMERICA WITH FINANCIAL SERVICES FOR BUSINESS, HOME, AND RETIREMENT. YOUR FUTURE, OUR FOCUS, IOWA BANKS.

BY THE FEDERAL HOME LOAN BANK OF DES MOINES, SUPPORTING RESIDENTAL MORTGAGE FINANCE AND COMMUNITY DEVELOPMENT THROUGH ITS MORE THAN 1,200 COMMUNITY FINANCIAL INSTITUTION MEMBERS. BY THE AMERICAN BANKERS ASSOCIATION, REPRESENTING THE NATION'S BANKING INDUSTRY SINCE 1875; AND BY THE MORTGAGE BANKERS ASSOCIATION, INVESTING IN COMMUNITIES THROUGH OVER 2,900 MEMBER COMPANIES TO HELP AMERICANS REALIZE THE DREAM OF HOME OWNERSHIP ... ON THE WEB AT WWW.MORTGAGEBANKERS.ORG.

EVEN AS THE SEED ENTERS THE GROUND, THE FUTURE HARVEST OF THE CROP IS PRICED AROUND THE GLOBE. THE REACH OF RURAL AMERICA IS EXTENSIVE. ITS ENORMOUS PHYSICAL INFRASTRUCTURE CONNECTS THIS NATION WITHIN A NATION TO THE REST OF THE WORLD. YET FOR DECADES, RURAL AMERICA HAS EMPTIED, A DIASPORA OF ITS MOST TALENTED. HAS ITS FUTURE BEEN SCATTERED AS WELL, OR IS RURAL AMERICA RIPE FOR A RESURRECTION? FROM WASHINGTON D.C., THE NATION'S POLICYMAKERS WILL ATTEMPT TO IDENTIFY THE BEST ROUTES TOWARD CAPITALIZING ON RURAL AMERICA WITH A POLICY FORUM. [ APPLAUSE ]

Miller: THANK YOU FOR JOINING US. WE'RE IN UNION STATION IN WASHINGTON, D.C., WHICH YOU MIGHT THINK IS A RATHER STRANGE PLACE TO BE TALKING ABOUT CAPITALIZING RURAL AMERICA, SINCE WE'RE IN THE MIDDLE OF A VERY, VERY LARGE CITY. BUT IT HAPPENS TO BE THE NATION'S CAPITAL WHERE POLICY IS MADE FOR ALL OF US AND, IN PARTICULAR, IT'S MADE FOR RURAL AMERICA. WE HAVE WITH US FIVE MEMBERS OF THE HOUSE OF REPRESENTATIVES. WE ARE EXPECTING A SIXTH TO JOIN US AS SOON AS SHE GETS OFF THE FLOOR OF THE HOUSE. LET'S MEET THEM.

Pomeroy: I'M EARL POMEROY. I REPRESENT THE STATE OF NORTH DAKOTA AND SERVE ON THE WAYS AND MEANS AND AGRICULTURE COMMITTEE. [APPLAUSE]

Miller: ARE YOU KEEPING YOUR PARTY AFFILIATION SECRET?

Pomeroy: I AM A BLUE DOG DEMOCRAT. [APPLAUSE] NORTH DAKOTA HAS ONE CONGRESSIONAL DISTRICT, SO I'M IT.

Peterson: I'M COLLIN PETERSON FROM THE SEVENTH DISTRICT OF MINNESOTA. I'M ALSO A BLUE DOG DEMOCRAT, ONE OF THE FOUNDING MEMBERS OF THAT GROUP. I REPRESENT 35 RURAL COUNTIES IN WESTERN MINNESOTA, FROM CANADA ALMOST TO IOWA. MY BIGGEST TOWN IS MOORHEAD, WHICH IS 30,000. THE SECOND BIGGEST TOWN IS 18,000 PEOPLE. I HAVE ONE OF THE MOST RURAL, MOST AGRICULTURAL DISTRICTS IN THE COUNTRY. [APPLAUSE]

Leach: MY NAME IS JIM LEACH. I REPRESENT THE SECOND DISTRICT OF THE FINEST RURAL STATE IN AMERICA, THAT BEING IOWA. [APPLAUSE] I'M A MEMBER OF THE FINANCIAL SERVICES COMMITTEE, AS WELL AS THE COMMITTEE ON INTERNATIONAL RELATIONS. I'M CONSIDERED A BIT OF A WISHY-WASHY REPUBLICAN. [LAUGHTER] [APPLAUSE]

Latham: I'M TOM LATHAM. I REPRESENT THE FOURTH CONGRESSIONAL DISTRICT IN THE GREAT STATE OF IOWA. AND, JIM, YOU'RE NOT WISHY-WASHY. YOU'RE A GREAT AMERICAN. THE FOURTH DISTRICT SPANS FROM THE FAR NORTHEAST CORNER OF THE STATE. IT COMES DOWN THROUGH NORTH CENTRAL IOWA. WE HAVE A VERY DIVERSE DISTRICT IN THAT WE HAVE EXTREMELY RURAL AREAS FROM THE BEAUTIFUL HILLS UP NORTHEAST TO IOWA STATE UNIVERSITY AT AMES, IOWA. WE SURROUND POLK COUNTY, WHICH IS DES MOINES, ON THREE SIDES. SO WE HAVE A VERY SUBURBAN ELEMENT ALSO TO THE DISTRICT. I SERVE ON THE HOUSE APPROPRIATIONS COMMITTEE AND SERVE AND HAVE SERVED FOR THE LAST NINE YEARS ON THE AGRICULTURE SUBCOMMITTEE, ALONG WITH SEVERAL OTHER SUBCOMMITTEES. [ APPLAUSE ]

Kennedy: I'M MARK KENNEDY, A REPUBLICAN FROM THE GREAT STATE OF MINNESOTA. I SERVE IN THE FINANCIAL SERVICES AND THE TRANSPORTATION COMMITTEE. I NEVER LIVED IN A TOWN OF MORE THAN A THOUSAND UNTIL I GRADUATED FROM COLLEGE. I'M THE SON OF A SMALL-TOWN BANKER, AND I HAD THE PLEASURE OF MARRYING SOMEBODY I MET IN 4-H, WHO WAS A FARMER'S DAUGHTER THAT WE JUST CELEBRATED 25 YEARS ABOUT A WEEK AGO. SO --

Miller: TELL US A TOUCH ABOUT THE DISTRICT. [ APPLAUSE ]

Miller: DO YOU CONSIDER THE DISTRICT A RURAL DISTRICT?

Kennedy: WE HAVE RURAL PARTS OF OUR DISTRICT. RIGHT NOW A GOOD SHARE OF OUR DISTRICT IS SWAPPING CORN AND BEANS FOR A WHOLE LOT OF HOUSES, AND THAT'S RURAL GROWTH GOING ON. BUT CORN AND BEANS AND OTHERS ARE DARING. WE HAVE THE LARGEST AGRICULTURAL COUNTY IN THE STATE OF MINNESOTA IN MY DISTRICT AS WELL.

Miller: WELCOME TO YOU ALL. NOW, I THINK YOU'VE BEEN TOLD THAT I'M A LAW PROFESSOR. WELL, THE TRUTH IS, FOR PURPOSES OF OUR DISCUSSION, I'M NOT. THE TRUTH IS I'M ONE OF YOUR COLLEAGUES. AND WHATEVER PARTY YOU ARE IN, I AM IN IT WITH YOU. I'M FRESHLY ELECTED FROM OUR 51ST STATE, NIRVANA. AND I COME FROM A DISTRICT IN THE CITY OF IDYLLIA, A BIG CITY BY ANY OF YOUR STANDARDS, WITH THE POSSIBLE EXCEPTION OF MINNEAPOLIS AND ST. PAUL OR DES MOINES. NOW, AS I UNDERSTAND IT, YOU'RE WORRIED ABOUT RURAL AMERICA. I'VE GOT TO TELL YOU, I COME FROM AN URBAN STATE. I'M NOT WORRIED ABOUT RURAL AMERICA. AND I WANT TO KNOW WHY I SHOULD CARE ABOUT RURAL AMERICA. I'VE GOT MY BIG-CITY CONSTITUENTS TO WORRY ABOUT. THEY NEED THE MONEY WE CAN APPROPRIATE. SO WHY SHOULD I CARE ABOUT YOUR ALMOST DESOLATE LITTLE DISTRICTS? CONGRESSMAN KENNEDY?

Kennedy: I THINK YOU SHOULD CARE BECAUSE IF YOU LOOK AT THE SOURCE OF HOME-GROWN VALUES, A LOT OF VERY WELL-EDUCATED YOUNG MEN AND WOMEN, IF YOU LOOK AT A LOT OF THE INDUSTRIES THAT BUILT THIS COUNTRY AND CONTINUE TO BE A SIGNIFICANT PART OF IT, NOT JUST AGRICULTURE --

Miller: BUT WHAT HAVE YOU DONE FOR US LATELY?

Kennedy: WHAT HAVE WE DONE FOR YOU LATELY? YOU KNOW, WE FED YOU. WE FED THE WORLD. WE HAVE ENTREPRENEURS THAT HAVE COME FROM THERE THAT HAVE CREATED INDUSTRIES THAT HAVE BEEN PROFOUND. IF YOU LOOK AT, FOR EXAMPLE, THE 3M COMPANY -- THAT'S ONE OF THE BIGGEST AND CERTAINLY ONE OF THE BIGGEST IN OUR STATE AND THE COUNTRY -- IT STARTED OUT IN RURAL MINNESOTA. SO I THINK YOU'VE GOT A LOT OF GREAT ATTRIBUTES ABOUT RURAL AMERICA THAT WE WANT TO CONTINUE TO KEEP AND PROSPER AND PROVIDE THAT OPPORTUNITY FOR THEM TO BE ABLE TO RAISE THEIR FAMILIES IN THE SAME AREAS WHERE THEY GREW UP.

Miller: BUT A LOT OF WHAT YOU'RE SAYING SOUNDS LIKE HISTORY TO ME. ISN'T IT TRUE THAT THERE IS AN EXODUS, THAT THERE'S A POPULATION DECLINE IN RURAL AMERICA? SO PEOPLE CAN TAKE CARE OF THEMSELVES BY LEAVING.

Pomeroy: YOU KNOW, COLLEAGUE, WE'RE REALLY GLAD YOU'RE HERE. WE NEEDED YOU.

Miller: WHY DO I DOUBT THAT? [ LAUGHTER ]

Pomeroy: WE GIVE YOUR CONSTITUENTS THE MOST ABUNDANT FOOD SUPPLY OF THE HIGHEST QUALITY AT THE LOWEST CONSUMER PRICES IN THE WESTERN WORLD. WE DO THAT WITH A FARM PROGRAM BASED ON FAMILY FARMING AGRICULTURE. AND THAT'S THE WAY THAT WE MAKE CERTAIN OUR LAND IS STEWARDED SAFELY THROUGH THE GENERATIONS WHILE PRODUCING, AGAIN, THIS HIGHEST QUALITY FOOD PRODUCT AT AFFORDABLE PRICES FOR OUR CONSUMERS.

Miller: BUT WITH MODERN TECHNOLOGY AND INCREASED PRODUCTIVITY, THAT CAN BE DONE BY A FEW RATHER SUBSTANTIAL CORPORATIONS.

Pomeroy: NO, I DON'T THINK THERE'S ANYONE IN YOUR DISTRICT THAT WOULD SWAP OUT THE PRODUCT OF A FAMILY FARM FOR SOME MEGA CORPORATION OPERATION, ONE THAT IS PRODUCING AT ALL COSTS, PRODUCTION AT ALL COSTS, QUARTERLY FINANCIAL RETURNS, IRRESPECTIVE OF DEROGATION TO THE LAND, IRRESPECTIVE OF ISSUES RELATIVE TO FOOD QUALITY.

Miller: ALTHOUGH IN THE BIG CITY WHERE I COME FROM, WE ARE SORT OF ENAMORED OF THE NOTION OF A GLOBAL ECONOMY, SO THAT, OKAY, YOU'VE BEEN GIVING US WHEAT AND CORN FOR ALL THESE YEARS, BUT NOW WE CAN GET IT FROM OTHER PLACES. WE CAN GET CITRUS FROM THE MIDDLE EAST. WHY DO WE HAVE TO PERPETUATE AN ECONOMY THAT IS CLEARLY FALTERING IN RURAL AMERICA? WHY DON'T WE JUST LET THE MARKETPLACE TAKE CARE OF IT?

Pomeroy: THE FINAL WORD -- AND I WANT MY COLLEAGUES TO SHARE IN THIS JOY -- [ LAUGHTER ] BUT THE FACT IS WE PRODUCE SAFE, HIGH-QUALITY, AND AFFORDABLE FOOD. WE DO THAT IN A WAY THAT IS UNDERGIRDING A MAJOR COMPONENT OF OUR ECONOMY; 16 PERCENT OF THE ECONOMY OF THE UNITED STATES COMES FROM AGRICULTURE. WE THINK THAT CERTAINLY AS WE LOOK AT WHERE OUR TRADE OPPORTUNITIES ARE AT A TIME WHEN WE RUN A HISTORIC TRADE IMBALANCE, IT'S AGRICULTURE THAT REPRESENTS REALLY ONE OF THE MOST VIBRANT COMPONENTS OF OUR ECONOMY. AS TO YOUR NOTION ABOUT RURAL AMERICA ALL GOING TO HELL A HANDBASKET, NOT SO. WE HAVE GOT SOME WONDERFUL OPPORTUNITIES OF NEW VITALITY IN RURAL AMERICA. THEY'RE GOING TO MAKE THEIR VERY IMPORTANT CONTRIBUTION TO OUR NATION'S ECONOMY AS WE CONTINUE TO DIVERSIFY THE ECONOMY OF RURAL AMERICA.

Miller: CONGRESSMAN LATHAM?

Latham: WELL, AGAIN, MY COLLEAGUE HERE, MY NEW COLLEAGUE, I WOULD JUST SAY, YOU KNOW, FIRST OF ALL, YOU WOULDN'T ASK THAT QUESTION IF YOUR MOUTH WAS FULL OF FOOD THAT IS PRODUCED IN THE MIDWEST AND THE HIGHEST QUALITY, LIKE EARL TALKED ABOUT, IN THE WORLD, THE MOST ABUNDANT SUPPLY AT THE MOST REASONABLE COST. WE'RE AT ABOUT 8-PERCENT OF DISPOSABLE INCOME TODAY FOR FOOD. IN A LOT OF COUNTRIES -- IT'S 50 TO 70 PERCENT IN THIRD WORLD COUNTRIES WHERE PEOPLE HAVE TO SPEND THEIR DISPOSABLE INCOME FOR JUST SUBSISTENCE, AND THAT IS A HUGE DIFFERENCE. FOOD IN YOUR TOWN OF IDYLLIA, I BELIEVE IT WAS, WHICH I THINK MY HOMETOWN OF ALEXANDER OF 168 MUST BE JUST SOUTH OF THERE --

Miller: WE PUT THAT IN ONE HIGH RISE. [ LAUGHTER ]

Latham: OH, ABSOLUTELY. AND I LIVE IN THE SUBURBS ON A FARM THERE. YOU KNOW, FOOD DOESN'T COME OFF A SHELF, AND I THINK THAT'S WHAT A LOT OF PEOPLE IN THE REAL URBAN AREAS BELIEVE, THAT FOOD IS SOMEHOW MANUFACTURED SOMEPLACE, THAT THERE ISN'T SOMEONE OUT THERE WORKING AND MAKING A LIVING TO DO THIS. BUT AGRICULTURE IS CHANGING AND RURAL AMERICA IS CHANGING VERY, VERY QUICKLY. WE HAVE GREAT OPPORTUNITIES. I THINK LIKE EARL TALKED ABOUT: WHEN WE LOOK AT ENERGY PRODUCTION TODAY, DO YOU WANT TO BE DEPENDENT ON FOREIGN OIL THE REST OF YOUR LIFE? WELL, THE BEST ANSWER TO THAT IS ALTERNATIVES, SUCH AS, ETHANOL, SOY DIESEL, BIOMASS, WIND ENERGY, ALL OF THE THINGS THAT WE HAVE IN THE MIDWEST IN RURAL AMERICA THAT CAN REALLY KEEP VALUE-ADDED AGRICULTURE HOME, PROVIDE INCOME FOR OUR RURAL AREAS, BUT ALSO REALLY HELP THE WHOLE COUNTRY AS FAR AS ENERGY INDEPENDENCE. WE HAVE A GREAT OPPORTUNITY, A GREAT FUTURE I THINK IN RURAL AMERICA.

Miller: THAT'S AN INTERESTING INSIGHT FOR THIS NEWLY ELECTED BIG-CITY KID. IT'S NOT ALL ABOUT AGRICULTURE, DISCUSSION ABOUT RURAL AMERICA AND CAPITALIZING. IT ISN'T JUST ABOUT -- CONGRESSMAN?

Leach: WE APPRECIATE YOUR PAROCHIAL PERSPECTIVE ABOUT CITIES. [ LAUGHTER ]

Miller: IT'S A HARD JOB, BUT SOMEBODY'S GOT TO DO IT.

Leach: BUT IF YOU LOOK WHERE THE STATE OF AMERICAN IDEAS ARE, THE COMPUTER -- THE DIGITAL COMPUTER WAS INVENTED IN AMES, IOWA, AT IOWA STATE UNIVERSITY. THE CHIP WAS INVENTED BY A GRINNELL COLLEGE GRADUATE -- WE'RE A LAND THAT PRODUCES IDEAS -- BY A BURLINGTON BOY, BY THE WAY, BURLINGTON, IOWA. THE HEART OF CIVILIZED VALUES -- I REPRESENT A UNIVERSITY COMMUNITY, THE UNIVERSITY OF IOWA, IOWA CITY. I WOULD NOT TRADE IOWA CITY FOR ANY COMMUNITY IN AMERICA FOR THE DEPTH OF ITS CULTURE. IF YOU'RE LOOKING FOR IDEAS, WRITERS, IOWA CITY HAS GOT MORE WRITERS PER BLOCK THAN ANYPLACE IN THE WORLD. IF YOU'RE LOOKING FOR ART, WE HAVE A GREATER ART MUSEUM PER POPULATION THAN ANY CITY IN THE WORLD. WE WILL MATCH OUR CULTURE AGAINST YOUR URBAN CULTURE.

Miller: YOU REALIZE THAT ARTHUR MILLER WAS BORN IN MY DISTRICT. [ LAUGHTER ]

Leach: AND I'M SURE UP IN HEAVEN SOMEWHERE HE RECOGNIZES THAT ARTHUR MILLER WAS BORN IN HIS DISTRICT. SO I THINK THAT IS A FINE ATTRIBUTE FOR YOUR DISTRICT, AND WE COMMEND YOU FOR IT. BUT I WOULD ALSO JUST STRESS, BECAUSE IT HAS BEEN STRESSED ABOUT THE AGRICULTURAL BASE, WE'RE AWFULLY PROUD OF IT. BUT RURAL AMERICA IS SURPRISINGLY MANUFACTURING ORIENTED TOO. AND WHETHER YOU'RE DEALING WITH NAME PRODUCTS, MAYTAG, AMANA; WHETHER YOU'RE DEALING WITH COMPANY AFTER COMPANY THAT PRODUCES THINGS, WE'RE MAKING AND PRODUCING A PART OF THE WORLD. AND WE'RE A PART OF THE WORLD THAT DOESN'T SIT AROUND AND WATCH. WE ACTIVELY DO THINGS AND THIS IS THE HEART OF AMERICAN VALUES.

Miller: SO YOU EXPECT ME TO GO BACK TO MY DISTRICT AND SAY TO MY CONSTITUENTS IN THE BIG CITY THAT I VOTED ALL SORTS OF MONEY AND PROGRAMS FOR RURAL AMERICA BECAUSE THAT'S WHERE THE REAL AMERICA IS.

Leach: WELL, WE VOTED TO BAIL OUT SOME OF THE CITIES THAT YOU CONSIDER NIRVANISH.

Miller: OH, THAT'S BELOW THE BELT. [ LAUGHTER ]

Leach: WE'RE PROUD OF OUR CITIES BUT WE DON'T CHOOSE TO LIVE IN THEM.

Miller: NOW, WHEN YOU INTRODUCED YOURSELF, CONGRESSMAN PETERSON, YOU MADE A POINT ABOUT ALL THE SMALL COMMUNITIES IN YOUR DISTRICT.

Peterson: NOT EVERYBODY WANTS TO LIVE IN A BIG TOWN.

Miller: WHY ARE PEOPLE LEAVING?

Peterson: WELL, THEY'RE NOT NATURALLY LEAVING. I'VE GOT TOWNS THAT ARE GROWING SIGNIFICANTLY, SMALL TOWNS, 5,000 PEOPLE, 7,000 PEOPLE, THAT ARE GROWING LIKE CRAZY. I'VE GOT OTHER AREAS THAT ARE NOT GROWING, AND THERE'S A LOT OF DIFFERENT REASONS. YOU CAN'T PUT ANY ONE, YOU KNOW, REASON FOR IT. BUT I WOULD SAY TO YOU, KIND OF TO SUMMARIZE WHERE I THINK THE BIGGEST ISSUE WITH YOUR CONSTITUENTS IS THAT WE DON'T WANT TO GET IN A POSITION IN THIS COUNTRY THAT WE'VE GOTTEN INTO WITH OIL, WITH FOOD. I'D SAY THAT ONE OF THE MOST IMPORTANT NATIONAL SECURITY ISSUES IN THIS COUNTRY IS BEING ABLE TO PRODUCE FOOD TO FEED THIS NATION. AND IT'S NOT JUST FOOD. AND AGRICULTURE HAS CHANGED SO MUCH. REALISTICALLY, FIRST OF ALL, IF A BUNCH OF -- A FEW CORPORATIONS RAN THIS AGRICULTURE, THE PEOPLE IN YOUR DISTRICT WOULD PAY THREE OR FOUR TIMES WHAT THEY'RE PAYING TODAY, I'LL GUARANTEE YOU. IF THEY'VE GOT MONOPOLY CONTROL OF AGRICULTURE, FIRST OF ALL, THAT WOULD HAPPEN. SECOND, WE RECOGNIZE THAT WE'RE NOT GOING TO BE ABLE TO SURVIVE ON JUST COMMODITY AGRICULTURE. THE DAY OF YOU GROWING CORN AND SOYBEANS AND TAKING IT DOWN TO THE ELEVATOR AND SURVIVING IS FAST GOING BY THE WAYSIDE. SO WE'RE GETTING INTO A LOT OF OTHER THINGS, AS WAS MENTIONED, ETHANOL. THERE'S ALL KINDS OF NEW TECHNOLOGY COMING WHERE WE CAN GET ALL KINDS OF VERY VALUABLE PRODUCTS OUT OF CORN BEFORE WE EVEN MAKE IT INTO ETHANOL. SO THERE'S ALL KINDS OF THINGS THAT WE'RE DOING IN RURAL AMERICA THAT WOULDN'T HAPPEN IF PEOPLE WEREN'T OUT THERE IN RURAL AMERICA BECAUSE THEY'RE ON THE LAND. LASTLY, NOT EVERYBODY WANTS TO LIVE IN THESE BIG CITIES. I WOULDN'T, YOU KNOW -- I'M HERE IN WASHINGTON TWO, THREE DAYS A WEEK, BUT THAT'S ENOUGH FOR ME AND I'M BACK HOME. AND THERE'S NOTHING WRONG WITH THAT. IF YOUR FOLKS WANT TO LIVE THERE, I HAVE NO PROBLEM WITH THAT. BUT THEY SHOULDN'T HAVE ANY PROBLEM WITH US WANTING TO LIVE OUT IN THE RURAL AREA. AND THE ONLY WAY WE'RE GOING TO TAKE CARE OF THIS LAND IN THIS COUNTRY, WHICH IS A HUGE LANDMASS, IS IF WE'VE GOT PEOPLE OUT THERE TAKING CARE OF IT, WHICH THEY'RE DOING. YOU AREN'T GOING TO -- YOU'RE NOT GOING TO DEPOPULATE THE RURAL AREAS AND SET UP SOME KIND OF FEDERAL PROGRAM TO RUN IT. IT WOULD BE A DISASTER. SO THERE'S ALL KINDS OF REASONS --

Miller: THAT'S VERY THREATENING BECAUSE WHAT YOU'RE SAYING IS WITH 20 PERCENT OF THE AMERICAN POPULATION IN SO-CALLED RURAL AMERICA, IF THEY LEFT, THEY'D COME TO MY DISTRICT.

Peterson: PROBABLY.

Miller: AND MY DISTRICT DOESN'T NEED ANY FURTHER CROWDING, DOES IT. BUT YOU SAY YOU'VE GOT COMMUNITIES THAT ARE THRIVING, THAT ARE GROWING. BUT THE OVERALL STATISTICS FOR THE AREA SUGGESTS THAT THERE IS A POPULATION DECLINE. SO WHAT'S NEEDED? WHAT IS IT THAT YOU NEED?

Kennedy: WELL, LET ME JUST FIRST OF ALL SAY THAT, YOU KNOW, YOU TALKED EARLIER ABOUT BUYING THE FOOD FROM SOMEWHERE ELSE. IF YOU LOOK AT RURAL AMERICA, WE HAVE A POSITIVE TRADE SURPLUS? ONE-THIRD OF THE CASH RECEIPTS IN AGRICULTURE IS EXPORTED. TALKING ABOUT ENERGY, WE MIGHT HAVE AN ENERGY -- YOU KNOW, A POSITIVE BALANCE THERE AS WELL, IF YOU LET US LOOSE ON ETHANOL AND BIODIESEL AND OTHERS. SO THERE IS A BIG CONTRIBUTIONS. WHAT IS NEEDED, THERE NEEDS TO BE MORE OPPORTUNITIES. WE NEED TO MAKE SURE WE'VE GOT A STRONG INFRASTRUCTURE, WHETHER IT BE ROADS, WHETHER IT BE TELECOMMUNICATIONS, BOTH OF WHICH SHRINK THE DISTANCE BETWEEN COUNTRIES, BETWEEN CITIES, BETWEEN COUNTIES, AND I THINK GIVE A LOT OF OPPORTUNITIES. I WAS AT ONE PRINTER THAT TOOK AN ORDER FROM CHINA ON THE INTERNET, PRINTED IT, AND SHIPPED IT OUT WITHOUT EVER HAVING GONE OUTSIDE OF THEIR SMALL, RURAL COMMUNITY. HAVING THOSE TYPES OF OPPORTUNITIES WHICH I THINK INFRASTRUCTURE PROVIDES AND HAVING A FAVORABLE ENVIRONMENT OF LOWER TAXES AND LOWER REGULATIONS CAN PROVIDE THOSE OPPORTUNITIES FOR OUR YOUNG PEOPLE SO THEY CAN GROW UP IN AN AREA THAT THEY'D JUST AS SOON STAY IF THEY COULD.

Miller: FROM A BIG-CITY PERSON'S PERSPECTIVE, WHEN I THINK ABOUT AGRICULTURE, I SAY, OH, THOSE HEAVILY SUBSIDIZED PEOPLE. AREN'T YOU GETTING MORE THAN YOUR FAIR SHARE FROM THE FEDERAL GOVERNMENT AS IT IS?

Kennedy: I WOULD SAY IN THE STATE OF MINNESOTA, WE GET ABOUT 76 CENTS BACK FOR EVERY DOLLAR WE SEND TO WASHINGTON. SO, YOU KNOW, I THINK YOU AND NIRVANA ARE PROBABLY GETTING MORE THAN YOUR FAIR SHARE. AS WAS MENTIONED, IF YOU LOOK AT THE COST, THE LOWER COST OF AGRICULTURAL PRODUCTS THAT YOU'RE GETTING, IF YOU LOOK AT THE LESS DEPENDENCE ON FOREIGN ENERGY, IF YOU LOOK AT THE HIGH-QUALITY, WELL-EDUCATED, YOU KNOW, YOUNG KIDS THAT ARE COMING OUT AND HELPING TO POPULATE MANY OF THE BUSINESSES THAT ARE IN YOUR TOWN, LOOK AT THE INNOVATION THAT YOU GET. YOU REALLY GET A LOT OF GOOD THINGS IN RETURN FOR THE INVESTMENTS THAT WE DO MAKE IN RURAL AMERICA.

Miller: SO YOU'RE BEING -- YOU CLAIM YOU'RE BEING CHEATED 24 CENTS ON THE DOLLAR?

Peterson: MINNESOTA, ABSOLUTELY.

Miller: THAT'S A HELL OF AN ARBITRAGE.

Peterson: IT IS A HECK OF AN ARBITRAGE, SINCE HELL MUST BE IN SOME OTHER DISTRICT THAN MINE. [ LAUGHTER ] [ APPLAUSE ]

Miller: IS THIS SUBSIDY SYSTEM SOUND AS IT NOW STANDS?

Latham: YOU'RE ASKING ME? I WILL HAVE TO TELL YOU, I VOTED AGAINST THE FARM BILL. AND AS SOMEONE FROM A RURAL DISTRICT IN IOWA, IT'S NOT THE -- SOMETIMES THE SMARTEST POLITICAL THING TO DO. BUT MY PROBLEM WITH IT WAS THE FACT THAT IT WAS SHIFTING THE GREATEST SUBSIDIES TO THE LARGEST PRODUCERS. AND I CAN GIVE YOU A COPY OF MY FLOOR SPEECH AT THE TIME, BUT IN FACT WHAT I SAID THEN WAS THAT THE BIGGEST ARE GOING TO GET BIGGER, THEY'RE GOING TO PUSH OUT A LOT OF THE SMALL PEOPLE OUT OF AGRICULTURE, AND THAT RENTS ARE GOING TO GO UP, LAND VALUE IS GOING TO GO UP, IT'S GOING TO BE IMPOSSIBLE FOR THE NEXT GENERATION OF FARMERS TO GET IN THE BUSINESS. AND THAT'S PRETTY MUCH EXACTLY WHAT'S HAPPENED, BECAUSE WE HAD A POLICY THAT WAS DESIGNED ONLY TO SPEND "X" NUMBER OF DOLLARS. IT WASN'T DESIGNING A POLICY AND THEN PUTTING THE MONEY WITH IT. SO IN MY MIND, IT WAS UPSIDE DOWN. THERE'S SOME GOOD THINGS IN IT, RURAL DEVELOPMENT AND ALL OF THOSE THINGS THAT I THINK ARE VERY IMPORTANT. BUT WHAT WE'RE SEEING IN RURAL AMERICA IS NOT -- IN THE STATE OF IOWA, WE'VE BEEN PRETTY FLAT POPULATION-WISE. BUT WHAT WE'VE SEEN IS A SHIFT OF WHERE THE PEOPLE ARE. SINCE 1970, 69 OF THE 99 COUNTIES IN IOWA HAVE LOST POPULATION, BUT WE'VE GOT SOME GREAT COUNTIES. IN MY DISTRICT, SOME ARE GROWING VERY, VERY QUICKLY: STORY COUNTY, WHERE IOWA STATE UNIVERSITY IS; DALLAS COUNTY IS THE TENTH FASTEST GROWING COUNTY IN THE WHOLE COUNTRY, JUST WEST IN A SUBURB OF DES MOINES. AND THE REASON IS ECONOMIC COMMUNITIES AND THE VITALITY OF THE COMMUNITIES. AND I'VE GOT A LOT OF TOWNS WHO ARE NOW FINALLY SAYING LET'S WORK TOGETHER. AND WHAT I'VE SEEN IN THE PAST WAS YOU'LL HAVE THE CITY COUNCIL BATTLING THE ECONOMIC DEVELOPMENT FOLKS, BATTLING THE COUNTY SUPERVISORS, EVERYBODY WITH GREAT IDEAS BUT NOBODY WORKING TOGETHER. WHAT WE'RE SEEING NOW IS PEOPLE SAYING: LISTEN, WE CAN'T DO THIS ANYMORE; WE'RE GOING TO HAVE TO TEAM UP; WE'RE GOING TO HAVE TO GET -- I WAS AT A MEETING YESTERDAY UP IN NORTH CENTRAL IOWA WHERE THEY BROUGHT NINE COUNTIES TOGETHER TO WORK ON ECONOMIC DEVELOPMENT AS A UNIT, SET UP A FUND FOR ENTREPRENEURS, A VENTURE CAPITAL FUND TO BRING PEOPLE INTO THE AREA. WE'VE THOUGHT THIS THING THROUGH. WE'VE SEEN WHAT WORKS AND WE KNOW WHAT DOESN'T WORK. I THINK IT'S A COMBINATION OF REALLY GOOD PEOPLE WORKING VERY HARD AS A TEAM, AND WE WILL BE SUCCESSFUL AND WE WILL GROW. BUT, YOU KNOW, SOME AREAS HAVE GROWN. THEY'VE BEEN SUCCESSFUL. OTHERS HAVEN'T.

Pomeroy: MY COLLEAGUE, LET ME JUST TELL YOU THAT RURAL AMERICA DEPENDS UPON THE FAMILY FARM STRUCTURE. THAT DEPENDS UPON SOME ASSISTANCE WITH RISK THAT IS OTHERWISE UNTENABLE FOR FAMILY FARM PRODUCTION, RISK OF CROP FAILURE, RISK OF PRICE COLLAPSE. WE HAVE PROGRAMS THAT HELP ALLAY THE RISK THAT'S APPROPRIATE. THAT'S THE FOUNDATION FOR THE ECONOMY IN RURAL AMERICA. BUT BEYOND THAT, WE'RE NOT LOOKING TO GOVERNMENT JUST TO SOLVE ALL OUR PROBLEMS, BY NO MEANS. WE'VE GOT THE MOST WELL-EDUCATED, PRODUCTIVE FOLKS YOU ARE GOING TO FIND ANYWHERE. WHAT WE NEED IS SOME HELP WITH CAPITAL TO GROW OUR OPPORTUNITIES, EVERYTHING FROM MAKING CERTAIN WE'VE GOT ADEQUATE HOUSING STOCK SO WE CAN HOLD OUR WORK FORCE TO MAKING SURE THAT WE'RE GROWING BUSINESS. I BELIEVE THAT WHAT WE'RE SEEING IN THIS NEW COMPUTER AGE IS THE DISTANCES THAT HAVE BEDEVILED US FROM TIME BEGAN NOW FALL AWAY. AND BY GOLLY, IF THEY CAN DO SERVICE CALLS OUT OF BANGALORE, INDIA, WE CAN DO A DARN SIGHT BETTER, WE BELIEVE, OUT OF BISMARCK, NORTH DAKOTA.

Miller: SO THERE'S A TOUCH OF RESENTMENT ON THE JOB FLIGHT SIDE?

Pomeroy: YOU KNOW, I THINK THE JOB FLIGHT IS GOING TO COME FLYING OUR WAY AS WE LOOK AT TRULY WHAT CAN BE ACHIEVED WITHIN THE COST EFFECTIVENESS OF RURAL OPERATIONS, PROVIDED THAT WE CAN HAVE THE CAPITAL AVAILABLE TO GROW ECONOMIC OPPORTUNITY IN OUR RURAL AREAS.

Miller: BUT ISN'T IT TRUE JUST -- I HATE TO SOUND LIKE A WALL STREET BANKER -- THE RATE OF RETURN THAT YOU CAN GET ON THE COASTS JUST IS HIGHER THAN THE RATE OF RETURN YOU CAN EXPECT IN THE MIDWEST.

Pomeroy: I THINK THAT YOU'RE SEEING RECOGNITION THAT THERE'S SOME WONDERFUL ECONOMIC OPPORTUNITIES IN RURAL AMERICA. INDEED BETWEEN THE '90S AND 2000, WE ACTUALLY HAD TWO MILLION MORE PEOPLE MOVE INTO RURAL AMERICA AT LARGE ACROSS THE COUNTRY THAN MOVE OUT. MY OWN STATE'S POPULATION REVERSED, A POPULATION DECLINE. WE'RE NOW HOLDING OUR OWN. WE'RE NOT GROWING A LOT BUT WE'RE HOLDING OUR OWN. I THINK THAT'S A REFLECTION THAT THE AG ECONOMY IS DIVERSIFYING. THERE ARE NOW MANUFACTURING AND COMPUTER OPPORTUNITIES THAT SIMPLY WEREN'T THERE TEN YEARS AGO.

Peterson: BEFORE WE GET OFF THE FARM SUBSIDIES, ONE OF THE REASONS THAT WE HAVE TO HAVE THESE SUBSIDIES IS BECAUSE WE'VE GOT SUCH A SCREWED UP TRADE SITUATION IN THIS WORLD. AND I'M WITH TOM, I'D LIKE TO GET RID OF THE FARM PROGRAM. THE PROBLEM IS THAT THE EUROPEANS -- I MEAN WE AGREED TO THIS. THE EUROPEANS WERE ALLOWED TO KEEP $60 SOME BILLION OF FARM SUBSIDIES, INCLUDING $7-, $8 BILLION OF EXPORT SUBSIDIES, AND WE LIMITED OUR TO $17 BILLION. BUT THE MAIN REASON, IN MY OPINION, THAT WE'VE GOT THE FARM PROGRAM, IS TO BASICALLY PROTECT OURSELVES FROM GOING OUT OF BUSINESS IN THE WORLD MARKET THE WAY IT HAS SCREWED UP WITH THESE UNFAIR TRADE DEALS. YOU'VE GOT BRAZIL DOWN THERE DOING OTHER THINGS AS WELL. AND SO, YOU KNOW, IF WE COULD STRAIGHTEN ALL OF THAT OUT AND WE GET ON A LEVEL PLAYING FIELD, YOU KNOW, WE COULD COMPETE. THE PROBLEM IS -- AND I REPRESENT THE BIGGEST -- EARL AND I REPRESENT THE BIGGEST SUGAR PRODUCING AREA IN AMERICA, A VALUE-ADDED INDUSTRY WHERE THE FARMERS OWN IT, THEY'VE INVESTED A LOT OF MONEY IN PLANTS. AND IF WE DIDN'T HAVE THE SUGAR PROGRAM, THE EUROPEANS WOULD END UP SELLING US ALL OF THE SUGAR, AND THEY'D BE PAYING THREE TIMES THE WORLD PRICE TO SEND IT TO US WITH SUBSIDIES THAT WE LET THEM KEEP OUT OF THEIR GOVERNMENT. SO THIS IS A MUCH MORE COMPLICATED ISSUE THAN JUST SHOULD WE GIVE FARMERS SUBSIDIES. I MEAN AGAIN, I GET BACK TO THE BOTTOM LINE IS THAT WE WANT TO BE ABLE TO PRODUCE THE FOOD FOR THIS COUNTRY IF WE GET IN A WAR WITH CHINA OR WITH NORTH KOREA OR SOME OTHER PLACE. AND THE EUROPEANS, ONE OF THE REASONS THEY HAVEN'T GIVEN UP THEIR SYSTEM IS BECAUSE THEY ALMOST LOST THE WAR, YOU KNOW, AND ALMOST STARVED TO DEATH IN WORLD WAR II BECAUSE THEY COULDN'T FEED THEMSELVES.

Miller: BUT, YOU KNOW, I'M HEARING JUSTIFICATIONS FOR THE SUBSIDY PROGRAM, WHICH --

PROTECTING ITS --

Miller: THEN I'M HEARING ABOUT ECONOMIC DEVELOPMENT WAY OUTSIDE THE AG CONTEXT. AND YOU LOOK AT THE OVERALL EXPENDITURES GOING INTO RURAL AMERICA, AND YOU SEE THE SUBSIDIES DWARF THE ECONOMIC DEVELOPMENT FUNDS. WHY IS THAT? CONGRESSMAN LEACH?

Leach: WELL, PART OF IT IS RELATED TO THE FACT THAT RURAL AMERICA IS NOT SHORT ON CREDIT. IN FACT, YOU USED A PHRASE THAT I WANT TO HOLD YOU TO A MINUTE, AND YOU MENTIONED RETURN ON INVESTMENT. BIGGER IS NOT ONLY NOT BETTER, IT'S NOT SMARTER. THERE IS NO RURAL BANK IN AMERICA THAT DOESN'T AVERAGE A HIGHER RATE OF RETURN THAN MOST BIG BANKS. IF YOU LOOK AT RURAL AMERICA'S FINANCIAL INSTITUTIONS, MY STATE, FOR EXAMPLE, HAS ONE OF THE STRONGEST SMALL COMMUNITY BANK CIRCUMSTANCES IN THE WORLD. IT ALSO HAS ONE OF THE MOST POWERFUL LARGE INSURANCE COMPANY NETWORKS OF ANYPLACE IN THE WORLD. WE'LL MATCH PRINCIPLE. WE'LL MATCH DUTCH INVESTMENTS OF AEGON, ING AGAINST ANY NIRVANA COMPANIES. I DON'T WANT TO MENTION AIG BUT -- [ LAUGHTER ] BUT THE POINT I'M MAKING IS THAT WE'RE PROUD OF THE QUALITY OF WHAT WE DO IN SOME OF THE MOST SOPHISTICATED AREAS OF HUMAN ENDEAVOR, AND WE THINK THAT YOU, SIR, IN YOUR LARGER STATE, MIGHT WELL WANT TO LOOK AT SOME OF THE MODELS FROM THE MIDWEST.

Miller: NOW, MUCH OF WHAT SOME OF YOU HAVE BEEN TALKING ABOUT SEEMS GENERATED ON A VERY LOCAL LEVEL, ON A SMALL SCALE, AND I'M NOT DISPARAGING THE SMALL SCALE. HOW DO YOU GET PEOPLE TO BE INNOVATIVE, CREATIVE, MAKE A PARADIGMSHIP, WHATEVER CLICHE YOU WANT TO USE? AND TO PICK UP CONGRESSMAN POMEROY'S POINT, HOW DO YOU GET THEM CAPITAL?

Leach: WELL, LET ME GO TO CAPITAL BECAUSE CAPITAL IS WELL AVAILABLE. ONE SOURCE OF CAPITAL IS THE HOST OF THIS AUDIENCE, THE FEDERAL HOME-OWNED BANK SYSTEM, WHICH IS A VERY EFFECTIVE MECHANISM OF A VERY SOPHISTICATED SECONDARY MARKET TO PROVIDE CAPITAL TO PRIMARY MARKETS. RURAL AMERICA IS NOT SHORT OF CAPITAL. RURAL AMERICA, AS YOU POINTED OUT, IS SHORT OF PEOPLE, AND IT'S SHORT OF SOME OF THE INFRASTRUCTURE TO BRING IDEAS TOGETHER TO LEVERAGE PEOPLE. AND THOSE ARE GREAT CHALLENGES THAT WE HAVE, BUT CAPITAL IS NOT A PROBLEM.

Miller: WHERE IS IT COMING FROM? IS IT COMING JUST FROM THE HOME LOAN BANK?

Leach: IT COMES FROM COMMUNITY BANKS AND IT COMES FROM CREDIT UNIONS. IT COMES FROM SMALL MICRO LENDING INSTITUTIONS. IT COMES FROM INSURANCE COMPANIES. IT -- WE HAVE A SYSTEM IN OUR STATE THAT IS VERY ORIENTED TO PEOPLE AND PEOPLE DEMAND. NOW, WE ALSO HAVE A DEMOGRAPHIC PROBLEM. WE'RE A LITTLE BIT OLDER THAN THE REST OF THE COUNTRY, AND THAT CREATES SOME DIFFICULTIES. BUT --

Miller: NOT IN MY MIND. [ LAUGHTER ] TO ME OLD IS GOOD. WHAT DIFFICULTIES?

Leach: WELL, IT TAKES YOUNG PEOPLE TO WORK IN SOME TYPES OF SETTINGS. THEREFORE, ONE OF THE THINGS THAT WE DO BUILD UPON -- IF YOU TAKE A RURAL STATE, YOU TAKE IOWA AS A MODEL, WE HAVE THREE PUBLIC UNIVERSITIES OF FINE DIMENSION. WE HAVE A SERIES OF SMALL COLLEGES, LIKE OHIO. AND WE ATTRACT YOUNG PEOPLE TO EDUCATE THEM. OUR CHALLENGE THEN IS TO HAVE THE OPPORTUNITY FOR THEM TO STAY. IF WE CAN DEVELOP THE OPPORTUNITY TO KEEP, WE'LL BE BETTER OFF. BUT IN TERMS OF ECONOMIC GROWTH, I MIGHT TELL YOU EDUCATION IS AN ENTERPRISE. AND IT'S ONE OF THE MOST EXTRAORDINARY ENTERPRISES, RELATIVELY SPEAKING, IN A SMALL STATE LIKE IOWA THAN IT IS TO A LARGER STATE. AND IT'S AN ENTERPRISE THAT BRINGS IN PEOPLE FROM AROUND THE WORLD. IT BRINGS IN PEOPLE FROM OTHER STATES, AS WELL AS IT TAKES CARE OF OUR OWN. AND WE DO A VERY GOOD JOB AT IT.

Miller: YOU'RE SPEAKING NOW OF EDUCATION.

Leach: THAT'S CORRECT.

Miller: NOW, THERE ARE SOME GREAT UNIVERSITIES IN YOUR RESPECTIVE STATES. SOME OF THEM ARE LAND GRANT SCHOOLS.

Leach: YES, THEY ARE.

Miller: WHY AREN'T THEY CONTRIBUTING TO THE INNOVATION OF THE COMMUNITIES?

Leach: TOM WILL RESPOND TO THAT FOOLISH QUESTION.

Latham: THAT WAS A VERY FOOLISH QUESTION. [ LAUGHTER ] BUT BEING FROM WHERE OUR COLLEAGUE IS FROM, WELL, YOU EXPECT THAT. [ LAUGHTER ]

Miller: YOU'RE CONVINCING ME NOT TO RUN FOR REELECTION. [ LAUGHTER ]

Latham: I'VE BEEN GIVEN THAT ADVICE TOO. [ LAUGHTER ] BUT ANYWAY -- I REPRESENT IOWA STATE UNIVERSITY, WHICH IS A LAND GRANT UNIVERSITY. WHAT WE'RE SEEING COMING FROM THE UNIVERSITIES TODAY, AND ESPECIALLY THE ONE I'M OBVIOUSLY MOST FAMILIAR WITH AT AMES, IS A GREAT SHIFT OF TECHNOLOGY OF THE BASIC SCIENCES, THE RESEARCH THAT'S DONE THERE IN THE HIGH-TECH, THE BIOTECHNOLOGY AREA, BIOPHARMACEUTICALS, ALL TYPES OF TREMENDOUS NEW OPPORTUNITIES THAT WE HAVE. AND WE'VE -- I'VE FUNDED THE BIOLOGIC CENTER TO BUILD ON THAT BASIS. WE HAVE A GREAT EFFORT GOING ON THERE AS FAR AS VENTURE CAPITAL BEING AVAILABLE IN A LIMITED BASIS TO START-UP COMPANIES THAT ARE OFFSHOOTS THAT THE TECHNOLOGY TRANSFER FROM IOWA STATE. THOSE TYPES OF THINGS ARE EXTRAORDINARILY EXCITING. WE TALKED A LITTLE BIT EARLIER AND COLLIN TALKED ABOUT OUR EXPORTS OVERSEAS AND OUR TRADE PROBLEM. OUR BIGGEST PROBLEM IN IOWA IS THE EXPORT OF OUR SMARTEST AND BEST YOUNG PEOPLE BECAUSE WE DON'T HAVE ENOUGH OPPORTUNITIES FOR THEM. AND WE DO HAVE A TREMENDOUS AMOUNT OF CAPITAL AVAILABLE, BUT THE ONE PROBLEM WE HAVE IN THE MIDWEST -- AND I WILL TELL YOU MY PARENTS AND THE GENERATIONS BEFORE, THEY HAVE EQUITY BUT THEY'RE RISK ADVERSE. THEY BELIEVE THEY WENT THROUGH THE DEPRESSION, THEY SAW REALLY HARD TIMES. THEY WILL NOT PUT ANY OF THEIR EQUITY AT RISK. AND THAT IS THE BIGGEST PROBLEM WE HAVE, I BELIEVE, IS TRUE VENTURE CAPITAL BEING AVAILABLE IN THE MARKETPLACE FOR START-UP BUSINESSES. AND THAT, TO ME, IS THE WAY THAT WE'RE GOING TO KEEP OUR YOUNG PEOPLE. WE'RE GOING TO BE ABLE TO TRANSFER THIS TECHNOLOGY INTO THE PRIVATE SECTOR. WE HAVE TREMENDOUS OPPORTUNITY. WE'RE GOING TO HAVE SOME MICROSOFTS, YOU KNOW, START RIGHT IN THAT TECHNOLOGY CENTER, BUT WE NEED THE CAPITAL, WE NEED THE INVESTMENT. I THINK GOING BACK TO THE FARM SUBSIDIES SOMEWHAT, IT'S NOT A MATTER OF HOW MUCH MONEY WE SPEND. WE'VE GOT TO SPEND IT SMARTER. YOUNG PEOPLE TODAY, TO KEEP THEM IN THE MIDWEST, WE HAVE TO LOOK AT QUALITY-OF-LIFE ISSUES FOR THEM TO STAY THERE. THEY'RE NOT GOING TO COME BACK, QUITE HONESTLY -- AND I LOVE MY HOMETOWN OF ALEXANDER, 168 PEOPLE, BUT WHAT DO YOU DO WHEN YOU'RE THERE? YOU DON'T HAVE A GROCERY STORE. YOU KNOW, YOU CAN'T BUY A GALLON OF GAS. YOU HAVE TO GO 10, 15 MILES FOR ANY KIND OF SERVICES.

Miller: YOU'RE NOT GOING TO TELL ME YOU DON'T HAVE A MCDONALDS.

Latham: WE HAVE NO STOPLIGHTS. WE HAVE NO -- I MEAN RUSH HOUR IS AT 3:15 WHEN NANCY SHERMOR GOES HOME FROM THE BANK. IT'S ONE OF THOSE, WHICH IS FABULOUS AS FAR AS A WAY OF LIFE. BUT HOW DO YOU GET YOUNG PEOPLE TO MOVE THERE?

Pomeroy: MY COLLEAGUE, I MIGHT -- I THINK THAT THE LAND GRANT SYSTEM, WHICH HAS REALLY BEEN A MODEL TO THE WORLD IN TERMS OF MAKING CERTAIN YOU'RE GETTING DIVERSIFIED RESEARCH LOCALLY APPLIED IN TERMS OF HOW TO MAKE THE MOST PRODUCTIVE USE OUT OF YOUR RURAL AREAS IS AS IMPORTANT NOW AS IT HAS BEEN OVER THE LAST 100 YEARS. AND YET WE SEE DEEP CUTS COMING IN AG RESEARCH. NOW, THAT'S A PROBLEM BECAUSE AG RESEARCH AND THEN TECHNOLOGY TRANSFER, USING THESE UNIVERSITIES TO TRANSFER THAT TECHNOLOGY INTO ECONOMIC DEVELOPMENT OPPORTUNITIES, NEW BUSINESSES IN OUR RURAL AREAS, THE CRITICAL PART OF, I THINK, HOW WE KEEP OUR RURAL SYSTEM GLOBALLY COMPETITIVE GOING FORWARD. SO WE'VE GOT SOMETHING THAT'S WORKED WELL, BUT WE NEED TO CONTINUE TO INVEST IN IT.

Miller: IS THE HELP -- ARE YOU LOOKING FOR THE FEDERAL GOVERNMENT TO REVERSE THAT, TO PROVIDE THE CAPITAL, TO DO THE RESEARCH?

Peterson: LET ME TELL YOU WHAT -- WHEN I WAS ELECTED IN 1991, THE FIRST THING I DID WAS HIRE AN ECONOMIC DEVELOPMENT PERSON ON MY STAFF. AND I'VE HAD SOMEBODY ON MY STAFF THE WHOLE TIME I'VE BEEN IN CONGRESS. FOR A WHILE I HAD TWO. AND WHAT WE DO IS WE GO OUT AND HELP THESE COMMUNITIES, WHETHER IT BE CITY, COUNTY, FIGURE OUT HOW THEY'RE GOING TO GROW, HOW THEY'RE GOING TO ATTRACT BUSINESSES, HOW THEY'RE GOING TO KEEP YOUNG PEOPLE IN THE COMMUNITIES, AND ALL THAT SORT OF THING. I THINK THE MOST IMPORTANT THING IS THAT ATTITUDE AT THE LOCAL LEVEL. YOU AREN'T GOING TO SOLVE THIS PROBLEM BY SOME FEDERAL PROGRAM SHOVING IT DOWN ON PEOPLE. IT'S MY EXPERIENCE THE WAY THIS WORKS IS WHEN YOU HAVE LOCAL PEOPLE THAT DECIDE THEY'RE GOING TO DO SOMETHING AND THEY GET TOGETHER AND MAKE IT HAPPEN. AND THEN THE RESOURCES THAT WE MAKE AVAILABLE AT THE FEDERAL LEVEL, THE STATE LEVEL, YOU KNOW, THROUGH THE FEDERAL HOME LOAN BANK, RURAL DEVELOPMENT, WHATEVER IT IS, CAN FIT INTO THAT. BUT IF YOU DON'T HAVE THAT PLAN AND THAT NUCLEUS AND THESE PEOPLE THAT WANT TO MAKE THIS HAPPEN, IN MY EXPERIENCE IT DOESN'T HAPPEN.

Miller: BUT IT DOESN'T JUST SPRING UP.

Peterson: SURE IT DOES. YOU HAVE PEOPLE IN THESE COMMUNITIES THAT ARE BRILLIANT, AND THEY HAVE COME UP WITH IDEAS AND CREATED JOBS AND BUSINESSES THAT YOU WOULDN'T BELIEVE. AND ONE OF THE THINGS THAT WE'VE GOT GOING IN THESE RURAL COMMUNITIES IS THAT WE'VE GOT ALL THESE FARMERS THAT ARE NO LONGER FARMING, BUT THEY ARE TREMENDOUS MECHANICS AND THEY KNOW HOW TO BUILD THINGS AND FIX THINGS AND SO FORTH. SO WE'VE DEVELOPED IN OUR AREA -- YOU KNOW, WE HAVE POLARIS, WE HAVE ARCTICAT, WE'RE THE ONLY DOMESTIC MANUFACTURERS OF SNOWMOBILES AND ATVs, AND WE'VE DONE A LOT OF THAT SORT OF THING. AND IT'S -- YOU KNOW, IT'S PEOPLE THAT HAD THE IDEA. IT'S COMMUNITIES THAT HAVE RECOGNIZED THAT WE'VE GOT TO HAVE OPPORTUNITIES FOR OUR YOUNG PEOPLE THAT ARE GOING TO GO TO MINNEAPOLIS, AND IT'S WORKED WHEN YOU'VE HAD A COMMUNITY THAT'S PULLED TOGETHER AND SAID WE'RE GOING TO MAKE THIS HAPPEN. AND IT WORKS.

Miller: THAT SOUNDS LIKE IDYLLIA. SUDDENLY PEOPLE -- THERE'S A SYNERGY IN THE AIR. THERE'S SOMETHING IN THE ATMOSPHERE THAT ONE DAY PEOPLE WAKE UP, YOUR DESCRIPTION OF EARLIER IN THE CONVERSATION, EIGHT COUNTIES GET TOGETHER AND DO SOMETHING.

Kennedy: IT'S A WHOLE LOT EASIER FOR ANY OF US TO WORK WITH A COMMUNITY -- A GROUP OF COMMUNITIES THAT ARE HAVING A TEAMWORK ATTITUDE, AN APPROACH OF "LET'S WORK TOGETHER."

Pomeroy: I'LL JUST ECHO THAT. WE'VE GOT ENOUGH OTHER THINGS GOING AGAINST US. WE CAN'T FURTHER DIVIDE OUR EFFORTS ALONG ARTIFICIAL POLITICAL SUBDIVISION BOUNDARIES. SO WE'RE VERY PROUD ALONG THE DISTRICTS THAT COLLIN AND I REPRESENT, WE'RE GOT FARGO-MOORHEAD, THEY FORM A JOINT CHAMBER OF COMMERCE. WHEN THEY GET DEVELOPMENT ON THE MINNESOTA SIDE, WELL, WE CHEER THAT JUST AS THEY'D CHEER OUR NORTH DAKOTA DEVELOPMENTS. I CHEER THOSE A LITTLE LOUDER EVEN. [ LAUGHTER ] BUT COOPERATION. FOR EXAMPLE, THE SUGAR BEET INDUSTRY HE REFERRED TO EARLIER, GROWERS ON BOTH SIDES OF THE VALLEYS PITCHED TOGETHER FORMED A COOPERATIVE, TOOK OVER THE MANUFACTURING PART OF THAT INDUSTRY. AND NOW THEY OWN THESE COOPERATIVE BUSINESSES ON EITHER SIDE OF THE RED RIVER VALLEY OF EITHER STATE, AND IT REPRESENT THIS KIND OF ENTREPRENEURIAL SPIRIT CUTTING ACROSS POLITICAL SUBDIVISION BOUNDARIES, WHICH IS ABSOLUTELY CRITICAL TO MAKE THINGS HAPPEN IN RURAL AMERICA.

Miller: AND LEADERSHIP? WHERE DOES THE LEADERSHIP COME FROM? IS IT SELF-APPOINTED? INSTITUTIONAL? CHARITY? I HAVEN'T HEARD ANY OF YOU SAY THE UNIVERSITIES ARE LEADERS IN TERMS OF ENTREPRENEURIAL DEVELOPMENT.

Leach: WELL, THEY HAVE BEEN. AND YOU'RE SEEING AT ALL THE MAJOR UNIVERSITIES IN MY STATE, AND I'M CONFIDENT IN MY NEIGHBORING STATES, ENTREPRENEURIAL CENTERS ESTABLISHED, WELL FUNDED WITH FINE IDEAS. WE HAVE -- THERE'S -- YOU NEED COOPERATION. YOU NEED EDUCATION. YOU NEED LEADERSHIP. AND THOSE THREE HAVE TO GO TOGETHER. THE RURAL STATES ARE EXCELLENT ON EDUCATION. THEY'RE GETTING BETTER IN COOPERATION. THE LEADERSHIP ISSUE IS THE INTANGIBLE THAT IS THE MOST DIFFICULT ONE, AND SOME OF IT IS SELF-POINTED. THAT'S WHAT AN ENTREPRENEUR IS, A PERSON THAT HAS AN IDEA AND HAS TO CONVINCE OTHERS TO GO ALONG. HE OR SHE ISN'T ELECTED TO ANYTHING. AND SO YOU NEED THAT ENTREPRENEURIAL SPIRIT. THEN THE INTERESTING PHENOMENA, BECAUSE IT IS TRULY PROFOUND, WE'RE IN A FAST CHANGING WORLD IN WHICH THE BIG ARE TAKING KNOCKS THAT WE DIDN'T EXPECT. AND THERE IS THE STATISTIC IN AMERICA THAT BIG BUSINESS HASN'T CREATED ANY JOBS OVER THE LAST FIFTY YEARS, RELATIVELY SPEAKING. ALL JOBS ARE SMALL BUSINESS IN TERMS OF THEIR GROWTH. AND TO PUT AN EMPHASIS ON THE SMALL, THE ADAPTABILITY OF THE SMALL, WE COULD WELL BE ENTERING A GENERATION OR TWO IN WHICH LARGE BUSINESS COULD HAVE MORE VULNERABILITIES THAN SMALL IN TERMS OF SURVIVABILITY. AND WE COULD SEE A SHIFT AWAY FROM COMMUNITIES LIKE YOURS TO COMMUNITIES THAT ARE SMALL.

Kennedy: I WOULD JUST SAY ANOTHER SOURCE OF LEADERSHIP COMES MANY TIMES FROM THE LOCAL BANK. I MEAN BANKS ARE ALL ABOUT HOW DO WE INVEST MONEY TO START UP AN ENTERPRISE, AND THEY'RE LOOKING FOR OPPORTUNITIES. ANOTHER IS THE BUSINESSES, YOU KNOW, THE ENTREPRENEURS THEMSELVES. A COMPANY THAT USED TO BE IN MY DISTRICT NOW IS IN COLLIN'S. SCHWAN'S IS PROVIDING LOTS OF OPPORTUNITY WHERE THEIR EXECUTIVES AND THEIR BUSINESS PEOPLE ARE GOING AROUND TO THE COMMUNITY AND SAYING HOW CAN WE MAKE THIS REGION A BETTER COMMUNITY. THE NEW MARKET TAX CREDIT WHERE WE LET PROFITABLE BUSINESSES WITHIN RURAL AREAS REINVEST PART OF THEIR TAXES BACK IN THEIR LOCAL COMMUNITIES FOR FUNDING DIFFERENT ENTREPRENEURIAL IDEAS AND COMING UP WITH NEW IDEAS TO CREATE JOBS IN THE REGION. THERE'S MANY SOURCES. AND TO TRY TO DECIDE AHEAD OF TIME WHERE THEY'RE GOING TO COME FROM IS PROBABLY LESS PRODUCTIVE THAN NURTURING THOSE IDEAS THAT DO COME OUT AND THOSE LEADERS THAT DO EMERGE.

Miller: AS SOMEBODY FROM THE BIG CITY, I'M JUST TRYING TO FIGURE OUT WHAT THE MODEL IS, WHAT THE MODEL IS. IF YOU'VE GOT THIS CAPACITY IN EFFECT TO SELF-GENERATE SOME NEW BUSINESS AND GENERATE THE COOPERATION, EVEN ACROSS TERRITORY, WHAT IS THE MODEL? WHAT MAKES IT WORK? HOW DO WE REPLICATE IT?

Kennedy: ONE AREA I'VE SEEN IS WE HAVE A FOUNDATION IN MINNESOTA CALLED THE BLANDEN FOUNDATION THAT BRINGS THE TOP LEADERS IN A COMMUNITY TOGETHER, SITS THEM DOWN FOR A PERIOD OF TIME, AND SAY: HOW CAN WE WORK TOGETHER; WHAT IDEAS DO WE HAVE; WHAT ARE OUR PROBLEMS; WHAT ARE OUR CHALLENGES; PUT THEM UP ON THE WALL AND THEN SIFT THROUGH THE IDEAS AND SAY WHAT'S THE BEST. YOU KNOW, I THINK IT'S NONPROFITS, IT'S BUSINESSES, IT'S BANKS, IT'S UNIVERSITIES, IT'S RURAL ECONOMIC DEVELOPMENT ORGANIZATIONS ALL COMING TOGETHER, CHANGING IDEAS, NOT REALLY CARING SO MUCH ABOUT WHO GETS CREDIT AND MORE ABOUT WHAT DO WE GET DONE.

Pomeroy: IN THE LEGISLATIVE REALM, I THINK WE WANT TO LOOK AT WAYS WHERE GOVERNMENT CAN HELP AND PLACES WHERE WE NEED TO, ON THE OTHER HAND, GET OUT OF THE WAY. WE'VE GOT A LOT OF ACTIVITY TAKING PLACE, AND IF IT'S BEING HAMSTRUNG BY UNNECESSARY REGULATION, WE'RE GOING TO DEAL WITH IT. ON THE OTHER HAND, YOU KNOW, WE'VE GOT SOME WONDERFUL IDEAS PERCOLATING OUT IN VERY SMALL BUSINESSES, AND EVERYTHING FROM CAPITAL STRUCTURES TO TAX ISSUES CAN BE VERY, VERY DIFFICULT TO DEAL WITH. RURAL DEVELOPMENT FUNDED THROUGH THE U.S. DEPARTMENT OF AGRICULTURE CAN PLAY VERY MUCH A NURTURING AND HELPFUL ROLE, BRINGING INFORMATION CRITICALLY NEEDED TO THESE RURAL ENTREPRENEURS SO THAT THEY MIGHT CHART THEIR OWN COURSE, LEARN BY BEST PRACTICES OUT THERE, AVOID MISTAKES THAT HAVE BEEN MADE BY OTHERS. SO I THINK THAT IN ADDITION TO STAYING OUT OF THE WAY, THERE'S SOME NURTURING AND ASSISTANCE THAT WE CAN ADVANCE AS WELL. AND THEN THERE ARE ALSO VERY SPECIFIC ISSUES LIKE TAX CREDITS, TAX INCENTIVES TO HELP IN THESE UNDERDEVELOPED RURAL AREAS THAT I THINK ALSO NEED TO BE PART OF THE PICTURE.

Miller: YOU SOUND ALMOST PSCHIZOID. AT ONE LEVEL, YOU SAY THERE'S SO MANY WAYS THE DEPARTMENT OF AGRICULTURE COULD HELP, BUT THEY'VE GOT TO STAY OUT OF THE WAY.

Pomeroy: THE FEDERAL GOVERNMENT CAN HELP. I DO THINK WE CAN HELP WITH BEST PRACTICES AND HELPING PEOPLE FERRET THEIR WAY ON A VERY DIFFICULT COURSE. ON THE OTHER HAND, WE OUGHT TO CONSTANTLY BE VIGILANT FOR WHERE THE REGULATORY OVERBURDEN IS SIMPLY BEYOND WHAT IS REASONABLE AND MAKES NO SENSE. OBVIOUSLY WE OUGHT TO CONTINUE TO TRY AND MAKE IT EASIER FOR PEOPLE. OFTEN -- I KNOW THE OLD LINE, "I'M FROM THE FEDERAL GOVERNMENT AND I'M HERE TO HELP," AND IT BRINGS SNICKERS WHEREVER YOU SAY IT. CLEARLY THERE'S MORE THAT CAN BE DONE TO MAKE IT EASIER FOR PEOPLE TO THRIVE, GIVEN THEIR OWN INITIATIVES AND TALENTS.

Miller: I MUST CONFESS, LAST NIGHT I KNEW I WAS GOING TO MEET YOU COLLEAGUES, SO I WANTED TO LEARN A LITTLE. I'M NOT BEYOND LEARNING, EVEN THOUGH I'M FROM THE BIG CITY. SO I TOOK OUT SOME STUFF, AND THERE ARE OVER 1,300 PROJECTS AND PROGRAMS FOR RURAL AMERICA. IT PUT ME TO SLEEP. I MEAN IT'S ABSOLUTELY ANESTHETIZING TO LOOK AT WHO'S GOT WHAT AND FIGURE OUT WHY IS IT THERE, WHY IS IT THERE. AND I CAN JUST SEE SOMEBODY FROM ONE OF YOUR COMMUNITIES WITH THE BEST OF INTENT AND ALL SORTS OF ENERGY THAT SAYS, HEY, THERE MUST BE A PROGRAM THAT WOULD HELP THE PARTICULAR ENTREPRENEURIAL INSTINCT I'VE GOT. THERE'S NO WAY TO NEGOTIATE THAT. HOW DO WE GET THAT OUT OF THE WAY, TO USE YOUR WORDS?

Pomeroy: I THINK THAT'S A CASE AGAIN WHERE IF YOU CAN ACCESS THE EXPERTISE OF RURAL DEVELOPMENT, WE CAN FIGURE OUT WHICH ONES APPLY, WHICH ONES DON'T, AND WORK AT IT. ON THE OTHER HAND, THE ONGOING EVALUATION OF WHERE ARE WE SIMPLY MAKING THIS WAY MORE COMPLICATED THAN IT OUGHT TO BE, THAT'S A CASE WHERE, YOU KNOW, I THINK BIPARTISAN COOPERATION REPRESENTING RURAL AMERICA, WE'RE PRETTY MUCH ALL IN AGREEMENT THERE. WE WANT TO MAKE IT EASIER, NOT HARDER.

Peterson: SOME OF THE COMPLICATION IS COMING OUT OF YOUR BIG CITY.

Miller: "MY" BIG CITY?!

Peterson: YES. [ LAUGHTER ] YOU HAVE FOLKS THERE WHO DON'T HAVE A CLUE ABOUT WHAT'S GOING ON IN RURAL AMERICA.

Miller: AND THEY DO THESE PROGRAMS?

Peterson: NO, AND THEY JOIN UP WITH SOME OF THESE ENVIRONMENTAL GROUPS AND THEY COME UP WITH ALL THESE CRAZY REGULATIONS THAT DRIVE US NUTS. RIGHT? SO PART OF THE PROBLEM WE HAVE OUT THERE IS BECAUSE THESE BIG CITY PEOPLE -- [ APPLAUSE ]

Miller: CONGRESSMAN, STOP PANDERING TO THE CROWD. [ LAUGHTER ]

Peterson: I JUST WANT TO MENTION ONE OTHER THING. ONE OTHER THING THAT WE HAVE THAT'S REALLY I THINK SEEING -- WE'RE SEEING A RESURGENCE IN THAT IS THE USE OF COOPERATIVES. THAT'S BEEN ONE OF THE THINGS THAT WE'VE USED OUT IN RURAL AREAS. FARMERS ARE VERY -- YOU KNOW, THEY'RE SMALL, THEY'RE INDEPENDENT. BUT THEY'VE GOTTEN TOGETHER WITH COOPERATIVES TO DO A LOT OF THESE THINGS THAT THEY WOULDN'T HAVE BEEN ABLE TO DO OTHERWISE TO BE ABLE TO RAISE THE CAPITAL TO DO IT. AND WE'RE SEEING A RESURGENCE OF THE USE OF THE COOPERATIVES WITH THESE ETHANOL PLANTS AND THESE OTHER THINGS THAT ARE HAPPENING OUT THERE. ONE OF THE THINGS WE'RE RUNNING INTO IS THAT WE NEED TO UPDATE THAT BECAUSE THERE'S SOME OTHER STRUCTURES WE WANT TO USE THERE. BUT THAT'S BEEN ONE OF THE THINGS THAT I THINK HAS HELPED US BRING THE CAPITAL IN IS TO MAKE SOME OF THESE THINGS HAPPEN.

Miller: I HAVE TO ASK YOU, HAVE YOU GIVEN UP ON THE BUREAUCRACY? DO YOU THINK THAT CULTURE IS HOPELESS?

Peterson: I THINK THAT THE CLOSER YOU CAN GET THESE PROGRAMS TO THE LOCAL AREA, THE BETTER OFF YOU'RE GOING TO BE. GENERAL, IF YOU HAVE WASHINGTON DESIGN THIS, WE WILL SCREW IT UP -- [ APPLAUSE ] -- BECAUSE THIS COUNTRY IS SO HUGE AND SO DIVERSE, LIKE THE FARM BILL. I WAS INVOLVED IN WRITING THE FARM BILL. THE AGRICULTURE IN CALIFORNIA COMPARED TO MINNESOTA, COMPARED TO MISSISSIPPI, TO COMPARED TO FLORIDA IS NO COMPARISON. WHEN YOU'RE TRYING TO DO A BILL THAT'S GOING TO WORK FOR ALL THESE DIFFERENT PEOPLE, WHAT YOU'RE GOING TO END UP WITH IS SOMETHING THAT NOBODY LIKES BUT EVERYBODY CAN LIVE WITH. THAT'S KIND OF WHAT YOU END UP WITH, WITH THESE FEDERAL PROGRAMS. SO AGAIN, I GO BACK TO THE MORE YOU CAN DO THIS STUFF AT THE LOCAL LEVEL, THE MORE YOU CAN HAVE PEOPLE AT THE LOCAL LEVEL FOCUSED IN ON THIS AND THEN HAVE PROGRAMS OUT THERE THAT -- WHERE THEY CAN BORROW MONEY AND ACCESS SOME OF THESE THINGS THAT THEY CAN'T MAYBE DO LOCALLY, I THINK THAT'S THE BEST MODEL AS OPPOSED TO PUSHING SOMETHING DOWN.

Miller: SO IF YOU HAD A BIG ERASER, YOU'D JUST ERASE ALL THIS STUFF?

Peterson: WELL, I WOULDN'T ERASE IT ALL BUT I'D CHANGE SOME OF IT.

Latham: IF I COULD -- YOU KNOW, I AGREE VERY MUCH WITH WHAT COLLIN IS SAYING. AND ONE OF THE REASONS I ORIGINALLY RAN FOR CONGRESS ELEVEN YEARS AGO, WE WERE TRYING TO RUN A SMALL BUSINESS OUT ON A FARM, AND THE COST OF THE REGULATIONS THAT WERE PUT IN PLACE WERE KILLING US, JUST WASTEFUL SPENDING THAT WE HAD TO DO TO COMPLY WITH THE REGULATION THAT HAD NO RELEVANCE AND WENT INTO SOME BUREAUCRAT'S FILE SOMEPLACE. I DON'T KNOW IF YOU'RE AWARE, BUT WE'VE BEEN FUNDING ANOTHER FEDERAL AGENCY CALLED THE COMPLIANCE ALLIANCE TO HELP ALL THE SMALL BUSINESSES COMPLY WITH ALL THE REGULATIONS THAT THE FEDERAL GOVERNMENT PUTS ON THEM. SO WE HAVE TO HAVE ANOTHER PROGRAM TO HELP PEOPLE TRY TO COMPLY WITH EVERYTHING THAT WE'VE DUMPED ON THEM THE WAY IT IS.

Miller: IN THE BIG CITIES, THEY CALL THAT A PYRAMID SCHEME. [ LAUGHTER ]

Latham: AND ANYONE WHO LIVES IN RURAL AMERICA UNDERSTANDS THAT THEIR GREATEST ASSET IS THE ENVIRONMENT, IS TO CONSERVE. I MEAN, I LIVE ON A FARM. WE DRINK WATER OUT OF THE WELL FOR MY FAMILY, AND I'VE GOT FOUR GRANDCHILDREN. THE LAST THING IN THE WORLD I EVER WANT TO SEE IS THAT WELL POLLUTED SO THAT IT'S GOING TO POISON MY FAMILY. BUT IF YOUR FOLKS IN YOUR COMMUNITY BELIEVE THAT WE ARE SOMEHOW EVIL AND WE WANT TO DEROGATE, THAT WE'RE OUT THERE TO TAKE ADVANTAGE OF THE ASSETS THAT WE HAVE ONLY FOR A SHORT TERM -- I'M FOURTH GENERATION ON OUR FAMILY FARM. IF WE HAD DESTROYED THAT, WHAT WOULD WE HAVE? NOTHING. THAT IS OUR GREATEST ASSET. A LOT OF US IN AGRICULTURE RESENT SOME OF THE REGULATIONS FOR THE BEST OF INTENTIONS. AND NO ONE IS SAYING THAT WE SHOULD NOT HAVE CLEAN WATER AND EVERYTHING, BUT WE REALLY RESENT WHAT IT DOES TO US AND SOME KIND OF THE MONIKER THAT THEY HAVE ON THAT WE ARE SOMEHOW EVIL AND WANT TO RAPE AND PILLAGE OR SOMETHING OF THE LAND.

Miller: YOU DON'T SOUND OPTIMISTIC. THAT'S GOING TO CHANGE.

Latham: THAT'S THE GOOD NEWS.

Miller: CONGRESSMAN KENNEDY?

Kennedy: I WAS GOING TO SAY PART OF THESE 1,300 PROGRAMS COME FROM NIRVANA. IF YOU LOOK AT THE EDUCATION PROGRAMS WE HAVE, EVERY NEW MEMBER FROM NIRVANA WANTS TO DEVELOP THEIR OWN EDUCATION PROGRAM AND IT TAKES A GRANT PROGRAM AND YOU NEED TO HAVE SOME COMPLICATED PERSON TO FILL OUT THE FORMS. ONE OF THE THINGS THAT WE'VE DONE SINCE I'VE BEEN HERE IS SAYING, LISTEN, SMALL RURAL DISTRICTS CAN'T AFFORD A FULL-TIME GRANT WRITER. LET'S MAKE IT SIMPLER FOR THEM. LET'S HAVE JUST SOME BLOCK GRANTS PARTICULARLY FOR THE RURAL AREAS. AND I THINK THERE IS A LOT TO BE SAID FOR REGULATION. THE BIG COMPANIES CAN AFFORD TO HAVE A STAFF TO FIGURE OUT HOW TO FILL OUT ALL THESE FORMS. THE SMALL COMPANIES, THE SMALL FARMERS CAN'T. SO WHO YOU REALLY PENALIZE WITH REGULATIONS IS THE SMALL, THE SMALL FARMER, THE SMALL BUSINESSES. AND THAT'S WHERE A BIG PART OF THE SOLUTION IS TAKING 1,500 -- 1,300 AND NARROW IT DOWN TO 13.

Latham: HE MAKES A GREAT POINT. BIG BUSINESS LOVES REGULATIONS BECAUSE IT LIMITS COMPETITION. IT MAKES IT SO EXPENSIVE FOR ANY SMALL BUSINESS TO GET INTO A FIELD, JUST VIRTUALLY IMPOSSIBLE. WHETHER YOU'RE TALKING PHARMACEUTICALS, WHETHER YOU'RE TALKING SOME AREAS IN FINANCIAL SERVICES, WHATEVER, HUGE BUSINESS LOVES REGULATIONS.

Miller: WELL, I MUST SAY YOU'RE ALL TERRIBLY PERSUASIVE. SO WHATEVER IT IS YOU WANT, I'LL VOTE FOR IT. [ LAUGHTER AND APPLAUSE ]

Miller: THAT ENDS OUR FIRST PANEL DISCUSSION. AND WE'LL BE BACK VERY, VERY SHORTLY WITH A PANEL FROM THE UNITED STATES SENATE. THANK YOU. [ APPLAUSE ]

Miller: HELLO. THROUGH THE MAGIC OF TELEVISION, WE'RE BACK. THE SECOND PANEL, THIS TIME COMPOSED OF MEMBERS OF THE UNITED STATES SENATE AND THE SECRETARY OF AGRICULTURE. LET THEM EACH INTRODUCE THEMSELVES. MR. SECRETARY?

Johanns: I'M MIKE JOHANNS. I AM THE SECRETARY OF AGRICULTURE. I WAS CONFIRMED ABOUT THREE MONTHS AGO, AND I'VE BEEN ON THE JOB ABOUT THAT PERIOD OF TIME. MY PASSION FOR AGRICULTURE GOES VERY, VERY DEEP. I GREW UP ON A SMALL IOWA DAIRY FARM IN MITCHELL COUNTY, IOWA, WHICH IS NORTH CENTRAL IOWA. [ APPLAUSE ]

Thune: MY NAME IS JOHN THUNE, AND I REPRESENT THE STATE OF SOUTH DAKOTA IN THE UNITED STATES SENATE. I ALSO GREW UP IN A VERY REMOTE AREA OF SOUTH DAKOTA, A SMALL TOWN CALLED MURDO, POPULATION 600. AND IT WAS AN AGRICULTURAL COMMUNITY AND TOURISM ORIENTED. RIGHT ON INTERSTATE 90, WE HAD PEOPLE WHO WOULD TRAVEL BACK AND FORTH ACROSS OUR STATE, AND WE TRY TO FLAG DOWN AS MANY AS WE CAN AND GET THEM TO SPEND SOME MONEY IN OUR ECONOMY THERE. BUT VERY TOURISM AND AGRICULTURAL-BASED AREA BUT, LIKE MANY COMMUNITIES ACROSS SOUTH DAKOTA, STRUGGLING TO SURVIVE. [ APPLAUSE ]

Harkin: I'M TOM HARKIN, SENATOR FROM IOWA. I'LL GO JOHN THUNE ONE BETTER. I STILL LIVE IN THE TOWN IN WHICH I WAS BORN AND RAISED, 150 PEOPLE. SO THERE YOU GO. ALTHOUGH DES MOINES IS GETTING CLOSER ALL THE TIME. I SERVE ON THE AGRICULTURE COMMITTEE. I HAVE BEEN IN THE CONGRESS FOR THIRTY YEARS NOW, TEN IN THE HOUSE, TWENTY IN THE SENATE. I'M THE RANKING DEMOCRAT ON THE AGRICULTURE COMMITTEE. I ALSO SERVE ON THE APPROPRIATIONS COMMITTEE AND ON THE HEALTH AND EDUCATION COMMITTEE OF THE UNITED STATES SENATE. [ APPLAUSE ]

Grassley: CHUCK GRASSLEY, SENATOR FROM IOWA, CHAIRMAN OF THE SENATE FINANCE COMMITTEE. I'VE LIVED MY ENTIRE 71 YEARS IN THE SAME COMMUNITY OF NEW HARTFORD, IOWA. I FARMED BEFORE I CAME TO THE UNITED STATES SENATE. MY SON ROBIN OPERATES OUR FAMILY FARM OF CORN AND SOYBEANS. [ APPLAUSE ]

Coleman: I'M NORM COLEMAN, UNITED STATES SENATOR FROM MINNESOTA. I'VE ACTUALLY BEEN A MINNESOTAN FOR A MERE THIRTY YEARS. BUT I GREW UP IN BROOKLYN, NEW YORK, SO I AM A RURAL ADVOCATE BY CHOICE. [ LAUGHTER ] I SERVE ON THE AGRICULTURE COMMITTEE. I SERVE ON THE SMALL BUSINESS COMMITTEE. I ALSO SERVE ON THE FOREIGN RELATIONS COMMITTEE, SO TRADE IS IMPORTANT TO ME. AND IT'S A GREAT PLEASURE TO BE WITH YOU, AND IT'S A GREAT PLEASURE TO BE SITTING NEXT TO THE CHAIRMAN OF THE FINANCE COMMITTEE. [ APPLAUSE ]

Miller: GENTLEMEN, A FUNNY THING HAPPENED BETWEEN THE FIRST PANEL AND THE SECOND PANEL. THERE I WAS MINDING MY OWN BUSINESS, SERVING MY FRESHMAN YEAR IN THE HOUSE OF REPRESENTATIVES -- FROM THE GREAT STATE OF NIRVANA; BORN, BRED, GREW UP IN THE BIG CITY OF IDYLLIA -- WHEN A VACANCY OCCURRED AND I WAS ELECTED TO THE SENATE. NOW, WHEN I WAS IN THE HOUSE, I REALLY DIDN'T LEARN VERY MUCH ABOUT AGRICULTURE. SO I'M GLAD THAT I HAVE THIS OPPORTUNITY TO TALK TO YOU ABOUT AGRICULTURE IN RURAL AMERICA. I DID HAVE ONE CONVERSATION WITH A GROUP FROM THE HOUSE. THE FEELING I GOT WAS THAT IT WAS ABOUT FOOD, THAT THOSE OF US FROM THE BIG CITY, CITIES BIGGER THAN EVEN BROOKLYN, WE SHOULD WORRY ABOUT RURAL AMERICA OR FOOD. YOU KNOW, SENATOR GRASSLEY, I REMEMBER READING A STATEMENT YOU MADE ONCE THAT WE'RE NINE MEALS FROM STARVATION.

Grassley: FROM REVOLUTION BECAUSE PEOPLE CAN'T GET FOOD.

Miller: ISN'T THAT A SCARE TACTIC, I SHOULD WORRY ABOUT RURAL AMERICA? NONE OF MY CONSTITUENTS ARE WORRYING ABOUT RURAL AMERICA.

Grassley: WELL, THINK IF YOU -- THINK IF YOU AND YOUR WIFE AND KIDS, IF THE SITUATION WAS THE SAME FOR A MASSIVE AMOUNT OF PEOPLE AND YOU WENT THREE DAYS WITHOUT FOOD AND YOU DIDN'T KNOW THAT YOU WERE EVER GOING TO GET FOOD, I THINK PEOPLE THROUGHOUT THE WORLD HAVE ALREADY IN THE PAST, TO DEMONSTRATE WHAT I SAID, HAVE TAKEN DRASTIC ACTION UNDER THOSE.

Miller: I GET MY ORANGES FROM FLORIDA. I GET MY LAMB FROM NEW ZEALAND.

Grassley: BECAUSE OF THE STRENGTH OF RURAL AMERICA, OUR MARKET SYSTEM, THE STRENGTH OF THE FAMILY FARMER. THE FACT THAT WE LIVE IN A TEMPERATE ZONE, WE'RE GRAINERY FOR THE WORLD. WE'VE GOT INGENUITY THAT HAS MADE ALL THIS POSSIBLE. THAT'S WHY YOU DON'T HAVE TO WORRY ABOUT IT. WE WANT TO MAKE SURE YOU NEVER HAVE TO WORRY ABOUT IT.

Miller: AND THAT'S IT? THIS HYPOTHETICAL RISK ABOUT FOOD?

Grassley: WELL, YOU MEAN YOU HAVEN'T SEEN ON TELEVISION PEOPLE RIOTING FOR FOOD SOMEWHERE IN THE WORLD? YOU DON'T THINK IT COULD HAPPEN HERE?

Miller: WELL, ALMOST ANYTHING CAN HAPPEN SOMEWHERE IN THE WORLD, BUT SOMEHOW I DON'T WORRY ABOUT IT IN IDYLLIA.

Grassley: AND I THINK WE WANT TO MAINTAIN A SITUATION SO YOU DON'T HAVE TO WORRY ABOUT IT, BUT I THINK WE WHO ARE IN RURAL AMERICA, WE WHO ARE IN AGRICULTURE OUGHT TO BE TELLING OUR STORY SO THAT THERE'S SOME APPRECIATION OF THE FAMILY FARMER, OUR AGRICULTURAL SYSTEM, OUR MARKET SYSTEM, AND THE COHESION OF OUR SOCIETY THAT COMES AS A RESULT OF THE CERTAINTY OF FOOD.

Miller: SO IF I WERE --

Coleman: IT'S MORE THAN JUST ABOUT FOOD. I WAS AN URBAN MAYOR BEFORE I GOT ELECTED TO THE UNITED STATES SENATE. WE WENT THROUGH A RECESSION IN THIS COUNTRY A WHILE AGO. WE KIND OF WORKED OUR WAY OUT OF IT. THE "WALL STREET JOURNAL" NOTED THAT IT WAS AMERICAN AGRICULTURE WHICH KIND OF UPHELD THE ECONOMY DURING THE TIME THAT WE WERE SEEING CHALLENGES IN MANUFACTURING OF THE AREA, SO IN PART IT'S ABOUT THE ECONOMY. AND WE ARE INVOLVED IN A GLOBAL ECONOMY, AND AMERICAN PRODUCERS COMPETE WITH THE BEST IN THE WORLD. SO IN PART IT'S KIND OF THE ECONOMIC VITALITY OF OUR COMMUNITY. WHEN I WAS THE MAYOR OF ST. PAUL, I WOULD REMIND OUR URBAN CITIZENS, THEY'VE GOT A STAKE IN THE FUTURE OF OUR RURAL COMMUNITIES. AND IT'S ALSO ABOUT OTHER THINGS THAT PERHAPS ARE HARDER TO MEASURE. I THINK IT'S ABOUT VALUES. I THINK IT'S ABOUT WAY OF LIFE. I THINK IT'S ABOUT WHO WE ARE AS AMERICANS AND THE ABILITY TO KIND OF MAINTAIN THOSE THINGS.

Miller: WELL, THAT SOUNDS RIGHT, NICE AND APPROPRIATE IN OUR WORLD. DO YOU FOLKS IN RURAL AMERICA THINK YOU'RE BETTER THAN THE BIG-CITY PEOPLE? HAPPIER THAN THE BIG CITY PEOPLE? SENATOR?

Harkin: WE DON'T THINK IT, WE KNOW IT. [ LAUGHTER ] [ APPLAUSE ]

Miller: AS I'M SURE --

Coleman: SPOKEN LIKE A TRUE IOWAN.

Miller: WELL, I WAS GOING TO SAY I'M SURE THAT WHEN SENATOR COLEMAN WAS GROWING UP ON THE STREETS OF BROOKLYN, HE WOULD SAY TO YOU, "TOUCHY, TOUCHY. YOU GOT ME, YOU GOT ME!" WHAT IS THIS ABOUT, THIS BUSINESS ABOUT CAPITALIZING RURAL AMERICA?

Harkin: WELL, I THINK WHAT IT'S ABOUT IS RECOGNIZING THAT RURAL AMERICA IN THE PAST, AND AS SENATOR GRASSLEY SAID -- OR CHUCK, I'LL GO BY FIRST NAMES HERE -- SAID THAT WE HAVE IN RURAL AMERICA PROVIDED THE MOST ABUNDANT, CHEAPEST, BEST FOOD FOR PEOPLE IN THE HISTORY OF THE WORLD. SO YOU DON'T HAVE TO WORRY ABOUT IT. YOU DON'T HAVE TO REALLY WORRY ABOUT IT. BUT NOW SAY, WELL, OKAY, WELL THEN THAT'S OVER WITH. BUT THERE'S A NEW BEGINNING, A NEW THING FOR RURAL AMERICA, AND IT HAS TO DO WITH WHAT YOU'RE PUTTING IN THE TANK OF YOUR CAR. IT'S WHAT'S LIGHTING OUR LIVES. IT'S WHAT'S POWERING OUR GENERATORS. IT'S THE BIOMASS ENERGY THAT WE CAN HARVEST IN RURAL AMERICA TO GET US OFF THE OIL PIPELINE TO MAKE US MORE ENERGY INDEPENDENT. IT'S BIO-BASED MATERIALS THAT WILL ALLOW US TO MAKE NEW DRUGS, FOR EXAMPLE. IT'S BIO-BASED MATERIALS THAT WILL ALLOW US TO SHIFT FROM A PETROLEUM-BASED ECONOMY TO A BIOMASS-BASED ECONOMY. THAT'S THE FUTURE OF AMERICA, AND THE FUTURE STARTS IN RURAL AMERICA.

Johanns: SENATOR HARKIN IS SO RIGHT. YOU KNOW, I LOOK BACK TO THE DAYS WHEN I GREW UP ON THE FARM. AND IT WAS A VERY DIFFERENT ENVIRONMENT THAN IT IS TODAY: 160 ACRES, SOME COWS, SOME HOGS, SOME CATTLE. OUR VIEW OF THE WORLD WAS ARE WE COMPETING WITH THE FARMER DOWN THE ROAD OR THE FARMER 50 MILES FROM WHERE WE LIVED. OUR MARKET WAS MAYBE, AGAIN, A 50-MILE RADIUS. VASTLY DIFFERENT TODAY. WE ARE CLOSING IN ON FIVE BILLION GALLONS ANNUALLY OF ETHANOL THAT WE PRODUCE THAT PEOPLE IN AN URBAN SETTING PUT INTO THEIR CAR. THE BIODIESEL OF TOMORROW WILL REDEFINE HOW WE POWER LARGER VEHICLES, TRACTORS, BUSES, TRAINS, ET CETERA. THE OTHER THING I WOULD OFFER IS THIS: AT THE START OF MY LIFE, I WAS VERY MUCH ON THE PRODUCTION END OF AGRICULTURE FOR THE FIRST EIGHTEEN YEARS, LITERALLY TO THE POINT WHERE IT WAS PITCHFORK AND HOGHOUSE. AND NOW I'M ON THE CONSUMING END. I AM A CONSUMER OF WHAT THIS MARVELOUS SYSTEM LAYS AT MY DISPOSAL. WHAT DOES THAT MEAN FOR ME? WHAT IT MEANS FOR ME IS THIS: I CAN WALK INTO ANY GROCERY STORE IN AMERICA; I CAN HAVE A CHOICE OF FOODS THAT IS ABSOLUTELY UNPARALLELED; SAFE, SANITARY, HIGH QUALITY, BROUGHT TO US BY THE HARD WORK AND INGENUITY OF THE AMERICAN FARMER AND RANCHER. BUT THE MOST REMARKABLE THING ABOUT THAT IS I CAN DO THAT AND SPEND LESS OF MY DISPOSABLE INCOME THAN JUST ABOUT ANY OTHER PLACE IN THE WORLD. AND THAT IS REMARKABLE, REMARKABLE FOOD SECURITY. AND IT IS A REMARKABLE THING THAT I WILL -- I WILL BE ABLE TO SAY AT THE END OF EACH MONTH, I SPENT LESS OF MY DISPOSABLE INCOME THAN JUST ABOUT ANY COUNTERPART OF MINE ANYWHERE IN THE WORLD. AND IT DOESN'T HAPPEN ACCIDENTALLY. IT HAPPENS BECAUSE OF GOOD POLICY. IT HAPPENS BECAUSE OF THE HARD WORK OF FARMERS AND RANCHERS. FAR AND AWAY, THEY ARE THE MOST PRODUCTIVE BUNCH OF PEOPLE THAT MAYBE HAVE EVER OCCUPIED THIS EARTH. IT IS JUST A REMARKABLE PHENOMENA WHEN YOU TALK ABOUT AMERICAN AGRICULTURE.

Miller: SO MR. SECRETARY, WHAT IS THE PORTFOLIO OF THE DEPARTMENT OF AGRICULTURE? OBVIOUSLY, YOU MAKE IT SOUND AS IF IT'S FAR BROADER THAN FOOD.

Johanns: IT IS FAR BROADER THAN FOOD. WHEN LINCOLN STARTED THIS DEPARTMENT -- LITERALLY ABRAHAM LINCOLN WAS RESPONSIBLE FOR THE CREATION OF THE USDA. HE CALLED IT THE PEOPLE'S DEPARTMENT. AND BACK IN LINCOLN'S TIME, THE VAST MAJORITY OF THE NATION'S POPULATION WERE FARMERS OR RANCHERS, BUT THAT HAS CHANGED DRAMATICALLY. TODAY I CAN TELL YOU THAT WHEN I GO IN FRONT OF THE SENATE AG COMMITTEE OR WHEN I TALK TO THE CHAIRMAN OF THE FINANCE COMMITTEE, I TALK ABOUT OUR BUDGET. ABOUT 59 PERCENT IS NUTRITION PROGRAMS. FOOD STAMPS, WE ARE RESPONSIBLE FOR THAT PROGRAM. WIC, WOMEN, INFANT, AND CHILDREN'S PROGRAM, WE ARE RESPONSIBLE FOR THAT. THE FREE AND REDUCED SCHOOL LUNCH PROGRAM THAT EXISTS LITERALLY IN ALL OF OUR SCHOOLS THROUGHOUT THE UNITED STATES, THAT COMES THROUGH THE USDA. I CAN ALSO TELL YOU THAT WHEN THERE'S A FIRE IN ONE OF OUR NATIONAL FORESTS AND WE FLY PEOPLE IN TO FIGHT THAT FIRE, THAT FIRE SERVICE COMES OUT OF THE USDA. ACTUALLY A FAIRLY SMALL PART OF OUR BUDGET ANYMORE RELATES TO WHAT YOU WOULD TYPICALLY THINK OF. BUT THE OTHER THING I WOULD MENTION TOO, AND I BELIEVE VERY WISELY SO, A POLICY CHOICE WAS MADE BY THE HOUSE AND THE SENATE AS THINGS DEVELOPED THAT WE WOULD GET VERY INVOLVED IN RURAL ECONOMIC DEVELOPMENT AND IN HOUSING. SO WE ARE A VERY, VERY LARGE INVESTOR IN HOUSING STOCK, AND WE ARE A VERY LARGE INVESTOR IN RURAL ECONOMIC DEVELOPMENT OPPORTUNITIES. THAT HAS GROWN SIGNIFICANTLY IN THE PAST FOUR YEARS. THE LAST THING I'D MENTIONED BECAUSE I THINK IT'S IMPORTANT, CONSERVATION. WHEN YOU HEAR ABOUT THE CONSERVATION PROGRAMS, THESE SENATORS HAVE LED THE EFFORT IN THAT AREA. CONSERVATION PROGRAMS LITERALLY CAME THROUGH THE FARM BILL PROCESS OR THROUGH A LEGISLATIVE PROCESS, AND NOW WE SET ASIDE THOUSANDS AND THOUSANDS AND THOUSANDS OF ACRES DEDICATED TO CONSERVATION.

Miller: SO THIS IS A HUGE LANDMASS THAT WE'RE TRYING TO PRESERVE? ARE WE MAKING A MUSEUM OUT OF IT?

Johanns: NO, IT'S NOT A MUSEUM. IT'S A VERY, VERY ACTIVE OPERATION. IN FACT, SOME OF THE MOST ACTIVE OPERATIONS ARE THE CONSERVATION PROGRAMS. MAYBE IT'S THE PRESERVATION OF WETLANDS. MAYBE IT'S THE APPROPRIATE USE OF WATER. WE JUST ANNOUNCED A MAJOR PROGRAM IN THE STATE OF MINNESOTA RECENTLY. BEFORE THAT WE ANNOUNCED A PROGRAM IN A STATE, THE STATE I CAME FROM. AND I'LL ADD, I DIDN'T DO ANY DELIBERATIONS ON THAT, NO CONFLICT OF INTEREST. BUT THAT PROGRAM ALLOWED FARMERS TO TAKE LAND OUT OF PRODUCTION AND SAVE WATER, ONE OF OUR MOST IMPORTANT NATURAL RESOURCES. SO AGAIN, THE USDA IS SO MUCH MORE THAN A PROGRAM RELATIVE TO CROPS -- PROGRAM CROPS. IT IS SO MUCH MORE.

Miller: SO, SENATOR THUNE, WHAT IS IT THAT RURAL AMERICA NEEDS?

Thune: WELL, I THINK THAT WE HAVE -- WE'RE SORT OF IN A TRANSITIONAL PERIOD. THE PRODUCTION OF AGRICULTURE HAS BEEN A REMARKABLE THING, AS EVERYBODY HERE AS NOTED. BUT NOW FIGURING OUT A WAY TO CAPTURE MORE OF THE VALUE OF THOSE AGRICULTURAL PRODUCTS AND KEEP THEM IN THE RURAL ECONOMY, THAT'S WHAT WE'RE TALKING ABOUT DOING. WE GROW A LOT OF FOOD. WE HAVE THE BENEFIT OF HAVING ENOUGH IN THIS COUNTRY. OTHER ECONOMIES AROUND THE WORLD KNOW WHAT IT'S LIKE TO GO HUNGRY, WHICH IS WHY EUROPE SUBSIDIZES ITS AG ECONOMY AT THE LEVEL THAT IT DOES. AND I THINK PEOPLE IN THIS COUNTRY, WE DO BENEFIT FROM A CHEAP FOOD POLICY. BUT WE'VE GOT TO FIGURE OUT WAYS NOW, WHEN WE'VE GOT FEWER AND FEWER FARMERS FARMING MORE AND MORE ACREAGE, TO CONVERT SOME OF THAT -- SO THAT GRAIN THAT WE GROW INTO OTHER USES. AND ENERGY HAS BEEN A WONDERFUL SUCCESS STORY IN THE FORM OF ETHANOL. WE ALSO NEED TO CONTINUE TO DEVELOP AND PROVIDE INCENTIVES FOR, YOU KNOW, BIODIESEL AND BIOPRODUCTS. BUT FRANKLY, WE HAVE SOME UNIQUE CHALLENGES. PART OF IT IS HELPING OTHER PEOPLE AROUND THE COUNTRY UNDERSTAND WHAT MAKES RURAL AMERICA PARTICULAR AND TRYING TO FIGURE OUT A WAY TO KEEP THAT INVESTMENT IN OUR LOCAL ECONOMIES SO THAT FOLKS IN BROOKLYN -- I RECALL ONE TIME HAVING -- SOMEBODY IN MY OFFICE HAVING A CONVERSATION WITH SECRETARY JOHANNS' PREDECESSOR OVER AT USDA OR ONE OF HIS PEOPLE IN HIS OFFICE AND CALLING IN AND SAYING, YOU KNOW, "I'VE GOT THIS PROBLEM AND I NEED THE SECRETARY TO HAVE HELP WITH IT." AND THE LADY IN THE OFFICE SAID, "WELL, I'M SORRY, HE'S NOT AVAILABLE. WHAT'S YOUR PROBLEM?" "WELL, I REALLY NEED TO TALK TO HIM." AND SHE SAID, "WELL, WHO ARE YOU?" AND HE SAID, "WELL, I'M A PRODUCER FROM SOUTH DAKOTA." AND SHE SAID, "WELL, WHICH TV NETWORK ARE YOU WITH?" [ LAUGHTER ] TRUE STORY. I THINK SOMETIMES THAT'S THE GAP THAT WE HAVE OUT THERE. WE HAVE TO WORK REALLY HARD, AS WAS SAID EARLIER, AT TELLING OUR STORY AND MAKE PEOPLE APPRECIATE --

Miller: WHAT IS THE STORY? WHEN YOU GET BEYOND FOOD, WHAT IS THE STORY?

Thune: I THINK IT'S THE STORY THAT RURAL AMERICA IS THE BACKBONE OF OUR COUNTRY IN TERMS NOT ONLY I THINK OF THE ECONOMY. I THINK THE AG ECONOMY REALLY LEADS OTHER PARTS OF THE ECONOMY. BUT I ALSO THINK IT HAS TO DO WITH THE KIND OF PEOPLE THAT WE ARE. I THINK THAT THE WORK ETHIC THAT EXISTS AND THE QUALITY AND THE CHARACTER OF THE PEOPLE REALLY IS FOUNDATIONAL IN TERMS OF OUR COUNTRY'S SUCCESS. AND I THINK THAT -- I HOPE THAT WE DO A GOOD JOB OF HELPING OTHER PEOPLE UNDERSTAND THAT.

Miller: YOU HAVE THE SAME CONFIDENCE IN YOURSELVES THAT SENATOR HARKIN HAS, KNOWING THAT YOU'RE THE REAL AMERICANS.

Harkin: AS I SAID, I THINK THE FUTURE OF AMERICA IS IN RURAL AMERICA. BUT YOU ASKED EARLIER WHAT DO WE NEED. WELL, WE NEED THE KIND OF POLICIES THAT WILL ENABLE US TO MOVE, AS SENATOR THUNE SAID, INTO THIS NEW TRANSITION, THE TRANSITION FROM JUST A FOOD- AND FIBER-BASED INTO FOOD-, FIBER-, ENERGY-BASED, BIO-BASED MATERIALS IN RURAL AMERICA. SO WE NEED TO SET UP POLICIES THAT WILL HELP MOVE US IN THAT DIRECTION. WE ALSO NEED TO CAPITALIZE. YOU MENTIONED THAT WORD EARLIER, ARTHUR. WE NEED CAPITAL IN RURAL AMERICA, AND WE'RE NOT GETTING IT. VENTURE CAPITAL DOES NOT COME TO SMALL COMMUNITIES. IT'S HARD TO GET CAPITALIZATION INTO RURAL AREAS TO BEGIN TO BUILD THESE STRUCTURES. EVEN IF YOU'RE TALKING ABOUT INFRASTRUCTURE NEEDS, WE'RE NOT GETTING THE KIND OF MONEY THAT WE NEED FOR INFRASTRUCTURE. SO WE NEED TO THINK ABOUT HOW -- HOW WE GET CAPITAL AND HOW WE GET VENTURE CAPITAL INTO RURAL AMERICA.

Miller: I SENSE A LITTLE RESENTMENT THAT THAT VENTURE CAPITAL GOES TO THE COAST.

Harkin: YEAH, I'D SAY SO.

Miller: BUT IF YOU HAVE ALL OF THESE --

Harkin: THAT'S RIGHT.

Thune: WE HOPE IT GOES TO SOUTH DAKOTA. [ LAUGHTER ]

Miller: WELL, IT PASSES THROUGH, SENATOR. IF YOU -- THERE IS ALL OF THIS POTENTIAL FOR DEVELOPMENT, JUST USING ETHANOL AS AN EXAMPLE. WHY ISN'T THE CAPITAL COMING IN?

Harkin: WELL, BECAUSE THE CAPITAL GOES WHERE IT CAN GET THE MOST IMMEDIATE RETURN, HIGH RETURN. IT DOES TEND TO GO TO LARGELY -- AND YOUR MONEY INSTITUTIONS LIKE -- HE WOULD KNOW THIS BETTER THAN I. HE'S THE HEAD OF THE FINANCE COMMITTEE. BIG MONEY OPERATIONS, THEY LIKE TO PUT A LOT OF MONEY INTO ONE THING. THEY DON'T LIKE TO DEAL WITH SMALLER ENTITIES OUT THERE ALL THE TIME. TOO MUCH WORK AND EFFORT. SO WE NEED SOMEHOW TO BREAK THAT DOWN SO THAT WE CAN GET THAT VENTURE CAPITAL OUT TO SMALLER COMMUNITIES. WE PUT A PROVISION IN THE FARM BILL -- IN THE LAST FARM BILL THAT SET UP THINGS THAT WERE CALLED RURAL -- RURAL INVESTMENT PROGRAMS. THAT'S IN THE DEPARTMENT OF AGRICULTURE RIGHT NOW. ONE OTHER THING THAT WE CAN DO IS WE HAVE A LOT OF WEALTH IN RURAL AMERICA, AND SOMETIMES WE'RE NOT TAKING ADVANTAGE OF IT. AND WE SET UP A THING IN IOWA CALLED COMMUNITY-BASED FOUNDATIONS. WE TOOK ONE COUNTY IN IOWA WHERE THERE IS FIVE MILLION DOLLARS A YEAR TRANSFERS FROM ONE GENERATION TO THE NEXT IN LAND, FIVE MILLION IN A YEAR IN ONE COUNTY. THE COMMUNITY-BASED FOUNDATION SAYS, WELL, IF THEY CAN JUST GET 2 PERCENT OF THAT TO BE GIVEN TO A LEGAL INSTITUTION, A COMMUNITY FOUNDATION WHICH THEY CAN USE FOR STRUCTURES FOR MAKING THE COMMUNITY BETTER, THEY CAN BEGIN TO BUILD UP THEIR LOCAL AREAS. THERE'S FIVE BILLION DOLLARS A YEAR IN IOWA ALONE EVERY YEAR TRANSFERS. IF WE COULD CAPTURE SOME OF THAT -- BECAUSE PEOPLE WHO LIVE IN SMALL TOWNS, FARMERS, SMALL BUSINESS PEOPLE, HAVE GREAT LOYALTY TO THEIR TOWNS AND THEIR AREAS. IF THEY THOUGHT THAT THEY HAD A LEGAL INSTITUTION SET UP WHERE THEY COULD GIVE A PORTION, PERHAPS JUST A LITTLE BIT OF THE TRANSFER OF THEIR LAND TO THE NEXT GENERATION, THEY WOULD DO IT. AND WE'VE PROVEN THAT THEY WOULD DO IT. SO THAT'S ONE WAY I THINK WE CAN CAPTURE AND RECAPTURE A LOT OF THAT CAPITALIZATION FOR RURAL AMERICA.

Miller: AND IT'S NOT HAPPENING?

Harkin: IT'S NOT HAPPENING.

Miller: WHY?

Harkin: WELL, BECAUSE WE HAVEN'T PROMOTED THE SETTING UP OF THESE KIND OF COMMUNITY FOUNDATIONS. WE NEED TO BE MORE PROACTIVE IN THAT, SET THEM UP LOCALLY. AS I SAID, WE'VE STARTED IT IN IOWA. SOME OTHER STATES HAVE STARTED IT, BUT IT'S JUST BEEN VERY SMALL. BUT WE NEED TO HAVE THE TAX POLICIES IN PLACE. AND I THINK WE NEED TO PROMOTE IT MORE AS JUST GENERICALLY AROUND THE COUNTRY TO SET UP COMMUNITY-BASED FOUNDATIONS LIKE THAT.

Grassley: SHORT OF -- TO SUPPLEMENT WHAT HE SAYS, AND MAYBE THROUGH NATIONAL POLICY, SOME THINGS THAT WE TRY TO DO TO ENCOURAGE WHERE THERE'S A LACK OF VENTURE CAPITAL -- AND I WOULD SAY 25 YEARS AGO, AND NOW WE'VE DONE IT AGAIN FOR ANOTHER PRODUCT -- THE ETHANOL TAX CREDIT AS A EXAMPLE. NOW BIODIESEL. THE WIND ENERGY TAX CREDIT 14 YEARS AGO, THIS HAS BROUGHT SOME INVESTMENT TO IOWA. FOR ETHANOL, BIODIESEL, IOWA HAPPENS TO BE THIRD OF THE 50 STATES IN THE PRODUCTION OF WIND ENERGY. THE BIGGEST PROJECT IN THE HISTORY OF OUR COUNTRY; $340 MILLION IS GOING UP NOW FOR WIND ENERGY, AS ONE EXAMPLE. SO WE TRY TO MAKE UP FOR SOME OF THIS THROUGH INVESTMENT THROUGH THE ENCOURAGEMENT OF TAX POLICY AND TAX CREDITS. BUT THAT WOULD BE JUST A SPIT IN THE OCEAN COMPARED TO WHAT SENATOR HARKIN IS TALKING ABOUT AS FAR AS IF WE COULD GET IT DONE IN THE PRIVATE SECTOR AND DONE THROUGH A CHARITABLE FOUNDATION APPROACH.

Coleman: THERE IS A -- FIRST OF ALL, I WANT TO SECOND THIS VISION ABOUT THE FUTURE OF ENERGY IN RURAL AMERICA. I WAS IN BRAZIL JUST RECENTLY. FIFTY PERCENT OF ALL THE NEW CAR PRODUCTION IN BRAZIL ARE FLEX FUEL ON ETHANOL. BRAZIL IS THE FIFTH LARGEST COUNTRY IN THE WORLD. THIS IS NOT A TINY LITTLE COUNTRY OVER THERE. THE LARGEST MANUFACTURER OF CARS IN BRAZIL IS GENERAL MOTORS. SO IT'S NOT A TECHNOLOGY ISSUE. WE HAVE JUST BEGUN TO SCRATCH THE SURFACE IN TERMS OF WHAT RURAL AMERICA CONTRIBUTED IN ENERGY AND WHETHER IT'S SOYBEAN OIL, WHETHER IT'S BIODIESEL, WHETHER IT'S ETHANOL, WHETHER IT'S A WHOLE RANGE OF OPPORTUNITIES. BRAZIL'S ETHANOL IS RUN ON SUGAR. SO WE'VE GOT A HUGE OPPORTUNITY THERE. I WANT TO GET BACK TO THE FORUM QUESTION OF WHAT DOES RURAL AMERICA NEED, AND PART OF IT IS SIMPLY INFRASTRUCTURE. THERE IS A GOVERNMENT ROLE THERE. PRIVATE MONEY FLOWS WHEN YOU GET A RETURN ON INVESTMENT. WE NEED A BASE. AND YOU'RE NOT GOING TO HAVE THAT BASE IF YOU DON'T HAVE WASTEWATER TREATMENT SYSTEM. YOU CAN'T BUILD A SOYBEAN OIL PROCESSING PLANT IF YOU DON'T HAVE THE WASTEWATER TREATMENT SYSTEM TO DEAL WITH THE PRODUCT. AND SO GOVERNMENT HAS A RESPONSIBILITY TO BE INVOLVED IN THE INFRASTRUCTURE PIECE. I'M AN OPTIMIST AND I FIRMLY BELIEVE, ARTHUR, THAT IF WE CAN DO THE INVESTMENTS WE HAVE IN INFRASTRUCTURE, WASTEWATER TREATMENT, ROADS AND HIGHWAYS, SCHOOLS AND HOSPITALS, THAT WITH THE POTENTIAL THAT'S OUT THERE, THE OPPORTUNITY BOTH OBVIOUSLY IN THE FOOD AREA AND THE KIND OF GLOBAL MARKET OPPORTUNITIES, BUT ENERGY IN PARTICULAR, THAT YOU'LL SEE INVESTMENT. WE ARE SEEING IT. WE'VE GOT 14 FARMER-OWNED ETHANOL CO-OPS IN MINNESOTA. EVERY ONE IS A $30-MILLION, $40-MILLION INVESTMENT. WE'RE JUST BEGINNING TO SCRATCH THE SURFACE WITH WHAT WE CAN DO WITH SOYBEAN OIL AND BIODIESEL. SO I THINK THE OPPORTUNITY IS OUT THERE, BUT WE'VE GOT TO BE CANDID AND ADMIT WE HAVE MAJOR, MAJOR INFRASTRUCTURE ISSUES IN RURAL MINNESOTA THAT LOCAL COMMUNITIES CANNOT TAKE CARE OF THEMSELVES.

Miller: AND YOU'RE LOOKING TO GOVERNMENT, FEDERAL GOVERNMENT --

Coleman: I THINK GOVERNMENT DOES INFRASTRUCTURE. THAT'S OUR PIECE. WE DO INFRASTRUCTURE. GOVERNMENT SHAPES AN ENVIRONMENT IN WHICH FOLKS IN THE PRIVATE SECTOR INVEST. BUT THERE ARE SOME BASICS THAT YOU'VE GOT TO DO IF YOU'RE GOING TO GET INVESTMENT. YOU KNOW, YOU'VE GOT TO DO ROADS AND HIGHWAYS, AND THAT'S PART OF WHY WE'RE DOING A HIGHWAY BILL AS WE'RE TALKING. WE DO INFRASTRUCTURE. WE DO IT IN A MINOR WAY NOW. WE HAVE A COMMUNITY DEVELOPMENT BLOCK PROGRAM, A GRANT PROGRAM. WE'VE GOT $500,000 FOR A WASTEWATER TREATMENT SYSTEM OUT OF THAT PROGRAM FOR BREWSTER, MINNESOTA, AND THEY GOT A $30-MILLION INVESTMENT IN A SOYBEAN OIL PROCESSING PLANT. THAT'S THE RETURN ON INVESTMENT. WE HAVE TO HAVE A MUCH BIGGER VISION, THOUGH, OF HOW WE DO THAT. AND WHETHER IT'S BONDING OR SOMETHING ELSE, WE HAVE SOME REAL IMMEDIATE INFRASTRUCTURE NEEDS IN RURAL MINNESOTA THAT WE'RE SIMPLY NOT MEETING.

Miller: HOW DO YOU TELL THAT STORY TO THE REST OF THE COUNTRY?

Coleman: I THINK IN PART YOU TELL THEM WHERE WE STARTED THIS CONVERSATION. YOU TELL THEM THE IMPORTANCE OF HAVING THE SAFEST MOST AFFORDABLE FOOD SUPPLY IN THE WORLD. YOU TELL THEM -- AND I THINK THE STORY WILL BE TOLD MORE AND MORE ON THE ENERGY SIDE. AS GAS GOES TO -- AS PETROLEUM-BASED GAS IS GOING TO 2.60, 2.70, 2.80, WHO KNOWS, MAYBE $3 SOMETIME, PEOPLE ARE GOING TO BE LOOKING. THEY'RE GOING TO BE LISTENING FOR THE ANSWER, AND THE ANSWER IS OUT THERE. AND RURAL AMERICA PLAYS A PART, BUT YOU'RE NOT GOING TO REACH THAT POINT IN TIME IF YOU DON'T HAVE THE COMMUNITIES, YOU DON'T HAVE THE PRODUCERS, YOU DON'T HAVE THE GROWTH, YOU DON'T HAVE ALL THAT YOU NEED TO MAKE THAT WORK.

Thune: AND I WOULD WANT TO ADD ONE THING IN TERMS OF INFRASTRUCTURE. AND NORM IS EXACTLY RIGHT, WHICH IS WHY WE NEED -- WE'VE BEEN KICKING AROUND A HIGHWAY BILL A LONG TIME OUT HERE. WE'RE ON THE SIXTH, I THINK, EXTENSION, AND WE NEED TO GET A PERMANENT BILL IN PLACE BECAUSE THAT IS PART OF BUILDING INFRASTRUCTURE THAT'S IMPORTANT TO ATTRACT ECONOMIC DEVELOPMENT TO RURAL AREAS. BUT I WOULD ADD ONE OTHER COMPONENT TO THAT. I THINK THAT'S TECHNOLOGY. I THINK THAT WE HAVE TO HAVE THE CAPACITY IN RURAL AREAS FOR WIRELESS BROADBAND FOR PEOPLE ALL ACROSS THE STATE. NOW, THERE ARE PARTS OF SOUTH DAKOTA, AND I HAVE TO SAY THERE ARE SOMETIMES I'M GLAD I'M THERE THAT ARE BLACKBERRY FREE AND CELL PHONE FREE, BECAUSE SOMETIMES IT'S NICE TO GET AWAY FROM THEM. BUT THE TRUTH IS YOU CANNOT SURVIVE IN TODAY'S ECONOMY UNLESS -- IN THIS INFORMATION-BASED ECONOMY UNLESS YOU HAVE ACCESS TO THAT KIND OF TECHNOLOGY. AND I THINK THAT IS -- THERE ARE THINGS THAT WE CAN DO THAT ARE INCENTIVE BASED THAT WILL HELP ATTRACT PRIVATE SECTOR INVESTMENT THERE, TAX CREDITS, TAX INCENTIVES, THINGS LIKE THAT. BUT THE TRUTH OF THE MATTER IS THAT IF YOU GET BEHIND THE CURVE NOT ONLY ON THE HIGHWAYS AND THE ROADS AND BRIDGES COMPONENT PART OF IT BUT THE INFORMATION HIGHWAY, WE'RE NOT GOING TO BE ABLE TO KEEP UP.

Miller: WHAT ARE THE THINGS ON THE INFORMATION HIGHWAY YOU NEED FOR YOUR RURAL AMERICA? I REALIZE IT WILL ALLOW EVERYBODY TO E-BAY TO THEIR HEART'S CONTENT. WHAT IS IT THAT YOU WANT ON THAT BROADBAND OR HIGHWAY, WHATEVER YOU'VE --

Thune: I THINK THERE ARE A COUPLE OF PIECES TO IT. ONE OBVIOUSLY IS ECONOMIC DEVELOPMENT. IF YOU'VE GET A MODEM AND A CELL PHONE AND A FAX, YOU CAN DO BUSINESS ANYMORE. IT CONNECTS YOU TO THE OUTSIDE WORLD. WHEN I WAS GROWING UP, I THOUGHT THAT LIFE BEGAN AND ENDED AT THE CITY LIMITS OF MURDO, IN MY TOWN OF 600 PEOPLE. WELL, NOWADAYS MY CHILDREN WHO ARE IN HIGH SCHOOL HAVE ACCESS TO THE WORLD. WHEN THEY WRITE PAPERS, THEY DON'T HAVE TO GO TO THE LIBRARY, THEY JUST GET ON THE COMPUTER. SO IT OPENS UP ALL KINDS OF OPPORTUNITIES, BUT IT ALL COMES DOWN TO MEETING FUNDAMENTAL NEEDS LIKE HEALTH CARE. TELEMEDICINE IS SOMETHING THAT CAN BE USED TO ADDRESS HEALTH CARE NEEDS IN RURAL AREAS WHERE YOU'VE GOT PEOPLE, IN SOME CASES VETERANS WHO ARE OLDER OR PEOPLE WHO ARE ON MEDICARE WHO ARE OLDER, THAT MAYBE CAN'T DRIVE A HUNDRED MILES TO THE CLOSEST HOSPITAL OR CLINIC BUT WITH THE USE OF TECHNOLOGY CAN BE TREATED. AND THAT'S -- THAT'S AN IMPORTANT PART OF IT AS WELL.

Johanns: IF I MIGHT ADD SOMETHING TO THIS BECAUSE THE SENATOR HAS REALLY STRUCK ON SOMETHING THAT'S VERY IMPORTANT. INFRASTRUCTURE, TELECOMMUNICATIONS ABILITY MAKES ALL THE DIFFERENCE IN THE WORLD. LET ME GIVE YOU AN EXAMPLE. THIS IS SOMETHING THAT I ACTUALLY EXPERIENCED AS THE GOVERNOR OF NEBRASKA. WE HAD A SMALL COMMUNITY OUT IN THE SAND HILLS OF NEBRASKA. AND WE CONVINCED AN OMAHA-BASED COMPANY TO OPEN A CALL CENTER IN THIS COMMUNITY. ONE OF THE THINGS THAT WE NEEDED WAS THAT BROADBAND SERVICE, NOT NECESSARILY TO DO HOMEWORK ON. IN FACT, THAT WASN'T THE ISSUE. THEY NEEDED TO MOVE MASSIVE AMOUNTS OF DATA BETWEEN THAT CALL CENTER IN THE SAND HILLS AND THE HOME OFFICE, IF YOU WILL, IN OMAHA. AND SO WE WERE ABLE TO CONVINCE THE TELEPHONE COMPANY TO MAKE THAT INVESTMENT. THE CALL CENTER LOCATED THERE. SIXTY JOBS CREATED. IN A COMMUNITY OF 1,500 TO 2,000, 60 JOBS IS CREATING A MASSIVE ECONOMIC INFUSION. I HAD A WOMAN COME TO ME WHO WAS MARRIED TO A RANCHER IN THAT AREA, AND SHE SAID, YOU KNOW, "MIKE, I WOULD DO THIS JOB JUST FOR THE HEALTH PLAN FOR MY CHILDREN, BECAUSE THERE IS NO HEALTH PLAN ON THE RANCH OTHER THAN THE ONE WE BUY." NOW, WHAT'S THE BENEFIT TO THE COMPANY? IF THERE IS A BUSINESS OUT THERE LISTENING TO THIS, EXPLORE THE OPPORTUNITIES IN RURAL AMERICA. THEY ARE FANTASTIC. YOU WILL GET A WORK FORCE THAT IS ABSOLUTELY UNMATCHED. I REMEMBER THE OWNER OF THIS BUSINESS TELLING ME A STORY THAT ON THE DAY OF A SNOWSTORM, HE EXPECTED THE OFFICE WOULD BE BASICALLY EMPTY. IT WASN'T EMPTY AT ALL. PEOPLE WERE DRIVING IN ON TRACTORS TO GET TO WORK. I MEAN IT WAS THE MOST REMARKABLE THING. HE SAID THIS BECAME THE MOST PRODUCTIVE OFFICE WE HAD IN THE SYSTEM BECAUSE OF THE POWERFUL WORK ETHIC. THESE CITIZENS WERE SO APPRECIATIVE OF THE JOB. LIKE I SAID, IF YOU'RE A BUSINESS OUT THERE LISTENING, COME TO US AND TALK TO US. WE'VE GOT GREAT OPPORTUNITIES FOR YOU IN RURAL AMERICA.

Miller: LET ME PLAY DEVIL'S ADVOCATE AND PUSH YOU ON THE WORK FORCE. CONCEDE THE ETHANAL. BUT ISN'T IT ALSO TRUE THAT YOU'RE SUFFERING POPULATION LOSS, THAT SOME OF YOUR BEST -- SOME OF YOUR BEST AND BRIGHTEST ARE LEAVING, AND THAT THAT WORK FORCE IS AGING FASTER THAN THE WORK FORCE IN THE REST OF THE COUNTRY?

Johanns: YOU KNOW, THERE ARE SOME PARTS OF THE COUNTRY WHERE WE HAVE HAD POPULATION LOSS. BUT I WILL ALSO OFFER THIS: YOU CAN REVERSE THAT WITH A QUALITY JOB AND DECENT HOUSING BECAUSE MANY PEOPLE WANT THE LIFESTYLE OF A SMALLER COMMUNITY. LINCOLN OR WASHINGTON OR SIOUX FALLS OR DES MOINES IS NOT FOR EVERYONE. AND THERE ARE MANY WHO GROW UP AND WOULD LOVE TO STAY WHERE THEY'RE AT, BUT PART OF WHAT WE HAVE TO DO IS TO CREATE THAT PLATFORM BY WHICH THE ECONOMIC OPPORTUNITIES CAN SPRING. IF YOU LOOK AT THE OVERALL PICTURE, IT IS IMPROVING IN TERMS OF THAT OUTMIGRATION SITUATION. IF YOU LOOK AT INDIVIDUAL COUNTIES IN THE COUNTRY, VERY DEFINITELY THERE ARE COUNTIES THAT HAVE SUFFERED OUTMIGRATION OVER A PERIOD OF TIME. BUT YOU ONLY -- YOU WILL ONLY STEM THAT TIDE BY CREATING AN ECONOMIC OPPORTUNITY. AND I WOULD MAKE THE CASE, WHEN I WAS GOVERNOR I ALWAYS SAID 93 COUNTY ECONOMIC DEVELOPMENT -- WE HAD 93 COUNTIES IN OUR STATE. I WOULD SAY NATIONAL ECONOMIC DEVELOPMENT, YOU CANNOT HAVE YOUR SMALL TOWNS BOARDING UP, SHUTTING OUT THE LIGHTS, CLOSING DOWN, AND HAVE IT TURN OUT WELL FOR AMERICA. I FEEL VERY STRONGLY YOU HAVE TO HAVE AN ECONOMIC DEVELOPMENT INITIATIVE THAT IS NATIONWIDE. AND YOU CAN DO IT, BUT IT DOES TAKE -- IT DOES TAKE THE KIND OF INVESTMENT -- I WOULD POINT OUT $50 BILLION HAS BEEN INVESTED IN THE LAST FOUR YEARS IN INFRASTRUCTURE, BUT IT'S A BIG COUNTRY. IT'S A BIG COUNTRY SO THERE WILL ALWAYS BE MORE TO DO.

Miller: HE'S NOT SATISFIED.

Coleman: YOU ASKED, WHAT IS IT, THE $64,000 QUESTION. WHAT ARE WE DOING TO ALLOW KIDS THE OPPORTUNITY -- TO GIVE THEM THE CHOICE -- TO GIVE THEM THE CHOICE TO RETURN TO WHERE THEY GREW UP? BECAUSE THAT'S THE PROBLEM WITH -- WE'RE LOSING YOUNG PEOPLE, THEY'RE GOING TO SCHOOL, THEY'RE GOING TO COLLEGE, THEY GRADUATE. DO THEY HAVE A CHOICE? THEY HAVE AN OPPORTUNITY TO COME BACK? SO IT'S KIND OF A -- THE OPPORTUNITIES ARE IN PART TIED TO A COUPLE OF VERY SIMPLE FUNDAMENTAL THINGS, AND ONE IS A JOB -- A GOOD JOB, QUALITY EDUCATION, HEALTH CARE, SAFETY. THAT'S WHAT -- I DON'T CARE WHETHER YOU'RE LIVING IN A CITY OR A RURAL COMMUNITY. THOSE ARE THE BASIC ISSUES. SO THE CHALLENGE WE FACE AND ONE OF THE CHALLENGES WE FACE IS THE CHALLENGE OF ECONOMIC OPPORTUNITY. AND WITHOUT ECONOMIC OPPORTUNITY, FOLKS ARE NOT GOING TO BE ABLE TO MAKE THE CHOICE. IT'S THEIR CHOICE. THEY MAY CHOOSE TO OR NOT TO. BUT YOU DON'T NEED MASSIVE NUMBERS TO REVERSE, YOU KNOW, AN OUTMIGRATION. I WAS MAYOR OF A CITY, THE CITY OF ST. PAUL, 287,000. THE CHAMBER -- I TALKED TO RICH DALY IN CHICAGO AND RUDY GIULIANA IN NEW YORK. AND IN ORDER FOR THEM TO HAVE AN IMPACT, THEY NEEDED SOME MASSIVE DEAL. I HAD TO BRING IN ONE COMPANY. I BROUGHT IN, IN ONE PLACE, A THOUSAND EMPLOYEES. THAT WAS THE BIGGEST DEAL EVER. BUT IT'S ALL A MATTER OF SCALE. SO YOU BRING IN 60 JOBS, AND THAT'S A BIG DEAL. SO THESE ARE OF SCALE AND YOU CAN REVERSE THE OUTMIGRATION, BUT I THINK YOU'VE GOT TO BE ABLE TO ANSWER THAT QUESTION: ARE WE CREATING AN OPPORTUNITY FOR OUR KIDS TO MAKE A CHOICE TO COME BACK?

Miller: OKAY, LET ME GO DOWN THAT PATHWAY. EACH OF YOUR STATES, YOURS TOO MR. SECRETARY, NEBRASKA, THERE ARE SMALL COMMUNITIES. THE WHOLE LANDSCAPE IS DOTTED WITH SMALL COMMUNITIES. SOME OF THEM SEEM TO HAVE CREATED OPPORTUNITY, AND THEY ARE NOT SUFFERING THE OUTMIGRATION PROBLEM. OTHERS SEEM TO HAVE FALLEN BY THE WAYSIDE. MAYBE NOT COMPLETELY BOARDED UP BUT, IN MANY RESPECTS, CLOSE TO IT. HOW DO YOU DO IT?

Grassley: I THINK LEADERSHIP IN THE COMMUNITIES, I THINK: PEOPLE THAT ARE REALLY COMMUNITY ORIENTED; PEOPLE THAT ARE NOT JUST SELF-LESS, THINKING ABOUT THEMSELVES; PEOPLE WORKING TOGETHER; PEOPLE THAT ENCOURAGE A PARTNERSHIP, COOPERATION.

Miller: HOW DO YOU GENERATE THAT? THAT SOUNDS VERY, VERY MYSTICAL.

Grassley: I THINK SOME PLACES -- I THINK IN IOWA, SOME PLACES WHERE IT'S REALLY -- IT'S ALMOST LIKE IT'S THE BACKGROUND OF THE REGION, YOU KNOW. LET'S TAKE, IN IOWA, A COUPLE DUTCH COMMUNITIES AS JUST AN EXAMPLE. IT MAY HAVE SOMETHING TO DO WITH THEIR ETHNIC BACKGROUND. THERE MIGHT BE INSTANCES WHERE WE'VE GOT AN OPPORTUNITY TO LEARN FROM PEOPLE THAT ARE JUST WILLING TO WORK HARD AND BE PRODUCTIVE. I THINK IT IS WHERE PEOPLE ARE WILLING TO INVEST IN THEIR COMMUNITY AND THINK IN TERMS OF THEIR INVESTMENT IN, LET'S SAY, A CORPORATION THAT CREATES JOBS, THAT THEY'RE -- THAT THEY'RE DOING THAT AS MUCH FOR THEIR COMMUNITY AS THEY'RE DOING IT FOR THEMSELVES. I DON'T KNOW WHETHER I HAVE AN ANSWER. IT JUST SEEMS TO BE A PHENOMENON THAT SOME PLACES MAKE A DIFFERENCE. BUT IT SEEMS TO ME THAT IT'S ALWAYS BEEN DYNAMIC, FAIRLY YOUNG LEADERSHIP OF PEOPLE FORTY TO FIFTIES THAT HAVE MADE A DIFFERENCE.

Miller: YOU'RE SHAKING YOUR HEAD.

Thune: WELL, I AGREE. I THINK YOU CAN DRIVE INTO TOWNS IN SOUTH DAKOTA, OR I'M SURE IN IOWA OR MINNESOTA OR NEBRASKA, AND YOU CAN TELL ALMOST DRIVING INTO A TOWN JUST HOW -- WHETHER THEY'VE GOT A PROACTIVE, PROGRESSIVE TYPE LEADERSHIP. BUT I DO THINK IT COMES BACK TO IT IS AN ISSUE OF BUILDING LEADERSHIP CAPACITY IN SOME OF THE RURAL AREAS OF THE COUNTRY. AND SENATOR GRASSLEY IS RIGHT. SOME OF THAT JUST SORT OF IS INDIGENOUS. I THINK THERE ARE SOME COMMUNITIES THAT HAVE THIS SENSE OF LOYALTY AND THEY WANT TO MAKE THE COMMUNITY WORK AND THEY'RE COMMITTED TO IT AND YOU'VE GOT PEOPLE WHO WILL ROLL UP THEIR SLEEVES AND DO ALL THE VOLUNTEER WORK THAT'S NECESSARY TO KEEP THAT COMMUNITY GOING. BUT I THINK THAT WE AS POLITICAL LEADERS, CIVIC LEADERS, BUSINESS LEADERS, ALSO NEED TO BE LOOKING AT HOW DO WE DEVELOP AND BUILD THOSE FARM TEAMS, THOSE LEADERS OF TOMORROW SO THAT WE BUILD THAT LEADERSHIP CAPACITY, BECAUSE YOU DO HAVE TO HAVE A COMMAND STRUCTURE IN PLACE. YOU'VE GOT A VERY ABLE WORK FORCE WHO HAS A GREAT WORK ETHIC AND, IN MANY CASES, IN OUR STATE OF SOUTH DAKOTA, A VERY FAVORABLE BUSINESS CLIMATE. BUT WE SEE A LOT OF OUTMIGRATION BECAUSE YOUNG PEOPLE GO WHERE THE OPPORTUNITY IS. SO WE LOSE A LOT OF OUR HUMAN CAPITAL LEAVING THE STATE AND GOING OTHER PLACES. BUT I THINK THAT WE'VE GOT TO MAKE A MORE INTENSIVE EFFORT TO BUILD THAT LEADERSHIP CAPACITY SO THAT PEOPLE HAVE A INVESTED INTEREST, THEY ARE INVESTED, THEY HAVE OWNERSHIP IN THAT COMMUNITY, AND THEY WANT TO MAKE IT GO. YOU CAN SEE THAT. YOU CAN SEE THAT IN COMMUNITIES.

Miller: BUT THAT DOESN'T SOUND AS IF IT'S SOMETHING THAT'S BUILT BY THE FEDERAL GOVERNMENT.

Thune: I DON'T THINK IT IS. I THINK IT'S ONE OF THOSE -- IT'S SOMEWHAT INTANGIBLE IN A WAY, BUT I DO THINK THAT IT CAN BE -- IT TAKES A COLLECTIVE EFFORT, PROBABLY NOT A GOVERNMENT EFFORT BUT CERTAINLY AT THE COMMUNITY LEVEL, AT THAT GRASS-ROOTS LEVEL. AND POLITICAL LEADERS, I THINK, CAN BE A PART OF THAT SOLUTION BY HELPING DEVELOP THOSE FARM TEAMS, THOSE YOUNG LEADERS. BUT YOU'RE RIGHT, IT'S NOT SOMETHING THAT GOVERNMENT CAN WAVE THE MAGIC WAND. AND I THINK IT'S -- IT'S SOMETHING THAT WE ALL -- IF WE WANT TO KEEP OUR RURAL ECONOMY GOING, IF WE WANT TO SAVE OUR SMALL TOWNS, AND IF THE SMALL TOWNS WANT TO SAVE THEMSELVES, FRANKLY, THEY HAVE TO STEP UP AND BE WILLING TO, ONE, PROVIDE THAT KIND OF LEADERSHIP AND HELP BUILD LEADERSHIP CAPACITY FOR THE FUTURE, CREATE THAT FARM TEAM.

Coleman: I DON'T THINK ANYBODY UP HERE IS SITTING HERE THINKING THE FEDERAL GOVERNMENT IS GOING TO SOLVE ALL THESE ISSUES. MAYBE TOM -- NO, I'M JUST KIDDING. [ LAUGHTER ] I MEAN NONE OF US. I MEAN NO ONE IS TALKING ABOUT THAT. WE PLAY A ROLE. THERE'S A ROLL TO BE PLAYED. 4-H PLAYS A ROLE. COMMUNITY FOUNDATIONS PLAY -- WE PLAY A ROLE IN DOING THE THINGS WE DO REGARDING TAX POLICY THAT GENERATE -- THAT ALLOW SMALL BUSINESS TO GROW. WE DO THINGS, YOU KNOW, REGARDING THINGS LIKE THE DEATH TAX, THE ESTATE TAX THAT ALLOWS FOLKS TO PASS ON PROPERTY. BUT WE'RE NOT -- WE HAVE A ROLE IN THIS. BUT PUBLIC/PRIVATE PARTNERSHIP, QUALITY EDUCATION, COMMUNITY GROUPS, FOUNDATIONS, THERE ARE A LOT OF OTHER PLAYERS AT THE TABLE THAT HAVE TO BE AT THE TABLE. AND I'VE GOT TO BELIEVE THAT WE ALL RECOGNIZE THAT.

Miller: IT'S SORT OF A MIXED PICTURE. YOU TALK ABOUT THE NEED FOR INFRASTRUCTURE. OKAY, THAT CAN BE DONE ON THE FEDERAL LEVEL. SENATOR HARKIN TALKS ABOUT COMMUNITY FOUNDATIONS. HE SAYS THERE'S A LOT OF MONEY IN RURAL AMERICA; WE'VE JUST GOT TO TEASE IT OUT. AND EVERY ONCE IN A WHILE, A BIG COMPANY LIKE DUPONT WANDERS IN AND PERHAPS DOES BIOTECH OR ADVANCED AGRICULTURAL DEVELOPMENT OR PHARMACEUTICALS. BUT, OF COURSE, THOSE ARE ONE-SHOT EVENTS THAT WILL AFFECT ONE AREA. AND SO FAR I HAVEN'T HEARD ANY WAY OF FINDING THE LEADER. IS THE LEADER A RELIGIOUS FIGURE, A CHARITABLE FIGURE, AN EDUCATOR?

Harkin: WELL, YOU CAN TEACH ENTREPRENEURSHIP. AND WE HAVE A -- WE HAVE A CENTER IN IOWA, THE PAPPAJOHN CENTER -- YOU'RE FAMILIAR WITH THAT -- IN WHICH WE'RE TEACHING YOUNG PEOPLE TO BE ENTREPRENEURS. NOW, THERE'S A LOT OF GREAT IDEAS IN SMALL TOWNS. BUT A LOT OF TIMES THEY DON'T HAVE THE TRAINING, THEY DON'T HAVE THE KNOWLEDGE BASE, AND THEY MAY NOT HAVE SOME OF THE OTHER THINGS THEY NEED, BUT THEY'VE GOT GOOD IDEAS. BUT HOW DO YOU TRAIN PEOPLE TO BE GOOD ENTREPRENEURS. THAT CAN BE TAUGHT. AND SO WE NEED TO ESTABLISH I THINK CENTERS AROUND THE COUNTRY. NOW, WE'VE HELPED WITH FEDERAL MONEY FOR THE ONE IN IOWA, BUT IT'S BEEN PERSONAL. THIS PERSON JUST PUT IN HIS OWN PERSONAL MONEY INTO IT. I DON'T KNOW IF IT'S GOTTEN ANY STATE MONEY. I DON'T KNOW IF THEY'VE GOTTEN ANY STATE MONEY, I DON'T KNOW. BUT THEY'RE DOING A LOT OF GOOD THINGS AROUND THE STATE OF IOWA IN TERMS OF TEACHING ENTREPRENEURIAL SKILLS TO PEOPLE.

Miller: THAT SOUNDS LIKE A JOB FOR YOUR STATE UNIVERSITIES.

Harkin: WELL, THEY'RE INVOLVED. THEY'RE INVOLVED IN THAT REGARD ALSO. BUT I THINK THIS IS A UNIQUE THING THAT NEEDS TO BE FORMED AROUND BUSINESS ENTITIES. THEY'RE MORE CAPABLE I THINK PERHAPS IN GETTING ENTREPRENEURS WHO KNOW HOW TO DO THIS INVOLVED RATHER THAN JUST THE UNIVERSITY. WE DO HAVE OUR UNIVERSITIES INVOLVED. BUT NOT AS SORT OF THE LINCHPIN OF IT. THEY'VE SORT OF COME IN ON THE SIDE ON IT, FOR EXAMPLE.

Miller: BUT THE GREAT TRADITION IN THE MIDWEST --

Harkin: I CAN'T HELP BUT SAY ONE OTHER THING. THIS HAS BEEN ROLLING AROUND IN MY HEAD EVER SINCE YOU ASKED THE QUESTION YOU SAID, YOU KNOW, ABOUT WHY DO SOME COMMUNITIES GO AHEAD AND SOME DON'T. MY OLD FRIEND JOHN CRYSTAL, GOD REST HIM, ONCE SAID, YOU SHOW ME A PROGRESSIVE PROSPEROUS COMMUNITY AND I WILL SHOW YOU A PROGRESSIVE BANKER: A BANKER WHO UNDERSTANDS THEY CAN'T BE OVERCAPITALIZED; A BANKER WHO UNDERSTANDS ABOUT TAKING THAT CAPITAL AND INVESTING IT LOCALLY AND BUILDING THOSE LOCAL STRUCTURES.

Grassley: A BANKER THAT'S NOT PUTTING ALL OF HIS MONEY INTO MUNICIPAL BONDS OR U.S. FEDERAL BONDS. HE'S GOT IT OUT THERE WORKING IN THE COMMUNITY.

Harkin: YOU GOT IT.

Miller: SO A BANKER COULD BE AN ANCHOR.

Grassley: SURE.

Miller: ALMOST ANYBODY I SUPPOSE COULD BE AN ANCHOR IF THAT INDIVIDUAL IS SELF-GENERATED OR THAT INDIVIDUAL'S INSTITUTION SELF-GENERATES.

Thune: I THINK ONE THING, ARTHUR, THAT, TOO, IF YOU WANT TO CREATE A MODEL OR PROVIDE AN EXAMPLE FOR SUCCESS, YOU FIND -- YOU GO TO THE PEOPLE THAT HAVE BEEN SUCCESSFUL. IN A LOT OF CASES, YOU'VE GOT TO INCORPORATE. I THINK ACADEMIC, OUR UNIVERSITIES NEED TO INCORPORATE MORE OF THE PEOPLE OUT IN THE PRIVATE SECTOR WHO HAVE SUCCEEDED. EVEN PEOPLE IN SOUTH DAKOTA WHO HAVE DONE REALLY WELL HAVE A GREAT STORY TO TELL. THEY KNOW HOW THEY DID IT. THEY CAN CONVEY AND TEACH AND COMMUNITY THEIR -- THOSE SKILLS AND HELP TRAIN THOSE LEADERS FOR THE FUTURE. AND I THINK THAT IT DOES TAKE A COOPERATIVE EFFORT ON THE PART OF OUR INSTITUTIONS OF HIGHER LEARNING TOO, TO INVOLVE AND INCORPORATE THOSE PEOPLE THAT HAVE BEEN SUCCESSFUL IN THE PRIVATE SECTOR. IF YOU WANT TO MAKE SOMEBODY SUCCESSFUL, PUT THEM WITH SOMEBODY THAT'S BEEN SUCCESSFUL.

Coleman: WE WOULD BE REMISS ON THIS PANEL, ARTHUR, IF WE DIDN'T TALK ABOUT THE ROLE OF LAND GRANT INSTITUTIONS, THE UNIVERSITY OF MINNESOTA, THE UNIVERSITY OF IOWA, ACROSS THE BOARD, IOWA STATE. THEY PLAY AN IMPORTANT -- EXTENSION SERVICES PLAY AN IMPORTANT PART IN DEVELOPING SOME OF THIS EXPERTISE. WE WOULD ALSO -- AND COMMUNITY COLLEGES IS ANOTHER PIECE. COMMUNITY COLLEGES PLAY A BIG ROLE TODAY, A BIG ROLE. THE PRESIDENT RECOGNIZED THAT IN HIS STATE OF THE UNION. YOU GO TO OUR COMMUNITIES AND THEY'RE RIGHT OUT THERE KIND OF WORKING HAND IN GLOVE. I ALSO THINK WE WOULD BE REMISS, AND NO ONE HAS TALKED ABOUT, BUT THE FAITH COMMUNITY PLAYS A ROLE TOO. THE FAITH COMMUNITY IS ONE THOSE ANCHORS THAT WE HAVEN'T TALKED ABOUT, BUT IT'S CERTAINLY ALIVE AND WELL AND ACTIVE IN RURAL COMMUNITIES. AND THAT'S -- AGAIN, IF YOU'RE LOOKING FOR LEADERS, THAT'S CERTAINLY ONE OF THE PLACES THAT YOU'D LOOK.

Miller: WELL, CERTAINLY YOUR PART OF THE COUNTRY HAS GREAT TRADITION OF LAND GRANT AND AGRICULTURAL INSTITUTIONS. IS IT TIME FOR THEM TO START THINKING ABOUT CHANGING THEIR JOB DESCRIPTION, OF ASSUMING THIS ROLE OF EDUCATOR TO THE COMMUNITY? AFTER ALL, SENATOR THUNE, YOU TALKED ABOUT TECHNOLOGY. IF YOU TAKE THE TECHNOLOGY, YOU CAN DELIVER ANYTHING THAT IS BEING GENERATED AT ANY ONE OF THESE LAND GRANT SCHOOLS AND DISSEMINATE IT INTO THE SMALLEST COMMUNITY. I MEAN TIME AND DISTANCE BECOMES IRRELEVANT. NOW, WHO'S GOING TO CREATE THE INCENTIVES TO DO THAT?

Johanns: YOU KNOW, ARTHUR, IF I MIGHT JUST JUMP IN HERE BECAUSE YOU TALKED ABOUT CHANGING THE JOB DESCRIPTION. IT IS HAPPENING. YOU CAN GO TO UNIVERSITY SYSTEMS THROUGHOUT ANY OF THE STATES INVOLVED HERE, AND THEY WILL BE INVOLVED IN RURAL DEVELOPMENT PROGRAMS. THEY WILL BE INVOLVED IN DISTANCE LEARNING. THEY MAY BE OFFERING CLASSES TO THE SMALLEST COMMUNITIES IN THE STATE THROUGH THAT TELECOMMUNICATIONS PROCESS, THAT DISTANCE LEARNING PROCESS. SO THERE IS A LOT OF GOOD WORK THAT IS BEING DONE BY THE LAND GRANT UNIVERSITIES. THE OBSERVATION IS VERY CORRECT. THERE IS SOMETHING ABOUT LEADERSHIP AT THE LOCAL LEVEL THAT MAKES ALL THE DIFFERENCE. HERE'S A VERY IMPORTANT POINT TO KEEP IN MIND. MOST OF THE GOVERNMENT IN OUR RURAL STATES IS VOLUNTEER. WE'RE USED TO A VERY STRUCTURED GOVERNMENT HERE WITH STAFF AND ALL OF THAT. THESE FOLKS ARE VOLUNTEERING. THEY MAY BE GETTING $20 TO SHOW UP AT A COUNCIL MEETING OR A SCHOOL BOARD MEETING, TYPICALLY NOT THOUGH. THEY ARE JUST A HUNDRED PERCENT VOLUNTEER. SO WE HAVE THE ABILITY AND WE DO THROUGH OUR RURAL DEVELOPMENT PROGRAMS TO START BRINGING PEOPLE TOGETHER AND DEVELOPING THAT LEADERSHIP, GOOD THINGS WILL HAPPEN. I WOULD ALWAYS SAY IF I GO INTO A COMMUNITY AND I SIT DOWN WITH THE SCHOOL BOARD AND THE SCHOOL BOARD IS FIGHTING WITH THE MAYOR AND THE MAYOR IS FIGHTING WITH THE COUNCIL AND THE COUNCIL IS FIGHTING WITH THE COUNTY BOARD, IT'S GOING TO BE REALLY TOUGH FOR THAT COMMUNITY TO BE SUCCESSFUL. THEY'RE BURNING THEIR ENERGY UP DISAGREEING AND NOT FOCUSING ON WHERE TO MOVE THE COMMUNITY.

Miller: I WAS WONDERING WHAT THE INHIBITIONS ARE. WHAT ARE THE BLOCKING POINTS? IS IT TERRITORIALITY, EVERYBODY WANTING TO BE KING OR QUEEN WITHIN A PARTICULAR DOMAIN?

Johanns: WE DEVELOPED A CONCEPT OF REGIONAL ECONOMIC DEVELOPMENT, AND EVERY COMMUNITY WOULD LIKE THAT JOB CREATED RIGHT THERE IN THEIR COMMUNITY. BUT IF YOU'RE GOING TO BUILD CAPACITY, YOU HAVE TO LOOK IN A 50- TO 75-MILE RADIUS. IN MANY AREAS WE'RE DOING THAT VERY SUCCESSFULLY. THEIR ATTITUDE WAS, LOOK, IF THE JOB GETS CREATED IN THE NEXT TOWN, SO BE IT. IT MAY BE MY CITIZENS THAT ARE DRIVING TO THAT TOWN AND BRINGING THAT PAYCHECK BACK TO OUR MAIN STREET. AND THAT'S WHERE YOU REALLY HAVE TO WORK THIS IS LOOK AT YOUR COMMUNITY AS AN EXTENSION OF MANY COMMUNITIES. AND POOL YOUR RESOURCES. DEVELOP THAT LEADERSHIP TALENT ON A BROAD BASE. THOSE KINDS OF THINGS CAN MAKE A BIG DIFFERENCE. THEY CAN.

Miller: YOU KNOW, MANY, MANY YEARS AGO, PROBABLY WHEN SENATOR COLEMAN WAS GROWING UP IN BROOKLYN, I WAS LIVING IN MINNESOTA. AND I REMEMBER THAT MAJOR LEAGUE BASEBALL DECIDED TO PUT A BASEBALL TEAM INTO THE TWIN CITIES. AND FOR MONTHS AND MONTHS AND MONTHS AND MONTHS, THEY COULDN'T FIGURE OUT WHAT TO CALL THE TEAM. IT COULDN'T BE THE MINNEAPOLIS. IT COULDN'T BE THE ST. PAUL. AND THE STADIUM COULDN'T BE IN MINNEAPOLIS, AND IT COULDN'T BE IN ST. PAUL. SO IT HAD TO BE --

Grassley: IN BLOOMINGTON.

Miller: IN BLOOMINGTON, RIGHT? WHERE NOBODY WAS! NOW, SO I LISTEN TO YOU, MR. SECRETARY, AND IT SOUNDS LIKE -- IT SOUNDS SO IDEALISTIC. AND THEN I SAY, WITH ALL OF THESE PETTY HANGUPS, HOW ARE WE EVER GOING TO OVERCOME HUMAN NATURE, THIS ANAL RETENTIVENESS THAT PEOPLE HAVE FOR THEIR OWN COMMUNITY?

Johanns: PEOPLE ARE, LIKE EVERY STATE REPRESENTED HERE, AND MANY MORE CAN SHOW EXAMPLES OF THAT SPIRIT WHERE COMMUNITIES ARE PULLING TOGETHER, COUNTIES ARE PULLING TOGETHER, AND THEY ARE POOLING THEIR POPULATIONS, THEY'RE POOLING THEIR RESOURCES, AND THEY ARE CREATING ECONOMIC OPPORTUNITY. I CAN THINK OF ETHANOL PLANTS IN OUR STATE, FOR EXAMPLE, THAT ARE BUILT IN BETWEEN COMMUNITIES, BUT THEY EMPLOY PEOPLE FROM A VARIETY OF AREAS. THIS CALL CENTER, PEOPLE WERE DRIVING -- DRIVING 70 MILES ONE WAY FOR THIS JOB. IT'S REMARKABLE THE ECONOMIC IMPACT OF CREATING THESE JOBS IN OUR SMALLER COMMUNITIES IN RURAL AREAS. IT'S NOT JUST THAT COMMUNITY THAT BENEFITS. IT'S THAT WHOLE ECONOMIC REGION. AND THEN ALL OF A SUDDEN YOU BEGIN TO NOTICE THAT MAIN STREET LOOKS BETTER BECAUSE THE FLOWER SHOP IS DOING BETTER, THE RESTAURANT IS DOING BETTER BECAUSE ALL OF A SUDDEN THERE'S CASH MOVING IN THE COMMUNITY BECAUSE THOSE PAYCHECKS ARE OUT THERE. SO IT'S HAPPENING. IT IS -- IT IS, IN MY JUDGMENT, PART OF WHAT WE HAVE TO DO AS AN ECONOMIC DEVELOPMENT AGENDA FOR OUR RURAL AREAS.

Miller: SO THIS IS ALL BEING DONE -- AND I DON'T MEAN TO BE PEJORATIVE ABOUT IT. IT'S SORT OF BEING DONE IN THE DEAD OF THE NIGHT WITHOUT BENEFIT OF LEGAL AUTHORIZATION. THESE REGIONS ARE JUST SPRINGING UP EVEN ACROSS STATE LINES. FARGO-MOORHEAD?

Johanns: NO IT'S BEING -- IT'S BEING LED BY RURAL ECONOMIC DEVELOPMENT PEOPLE OUT OF THE USDA. IT'S BEING DEVELOPED BY OUR LAND GRANT SYSTEMS. IT IS BEING DEVELOPED BY CREATIVE MAYORS AND COUNTY COMMISSIONERS. I MEAN IT IS A MULTITUDE OF SOURCES COMING TOGETHER. WHEN YOU SEE SUCCESSFUL COMMUNITIES, ONE OF THE THINGS YOU WILL SEE IS THEY BUILD THE CAPACITY TO KNOW WHERE TO ACCESS THE SUPPORT, THE SERVICES, THE FUNDING, THE GRANTS, THE LOANS, THOSE KINDS OF THINGS. WE CAN DO A LOT OF DIFFERENT THINGS, BUT IN THE END, WE REALLY DO ASK FOR THAT LEADERSHIP TO HELP US BUILD THAT COMMUNITY OR THAT AREA.

Thune: I THINK YOU HAVE TO REALIZE THAT EVERYBODY HAS A STAKE IN THAT REGIONAL CONCEPT. I'M GOING TOMORROW NIGHT BECAUSE I GET TO LISTEN TO TOM HARKIN TELL JOKES AT THE SIOUXLAND STEAK FRY THAT WE HAVE EVERY YEAR. BUT NEBRASKA, SOUTH DAKOTA, AND IOWA -- I DON'T THINK MINNESOTA IS INVOLVED, NORM, BUT YOU CAN COME ANYWAY, IF YOU'D LIKE TO -- HAS DECIDED -- WE CALL IT THE SIOUXLAND -- AND WE'RE WORKING TOGETHER ON TRANSPORTATION PROJECTS AND ALL SORTS OF THINGS THAT BENEFIT NOT JUST SIOUX CITY OR SIOUX FALLS OR SOME COMMUNITY IN NEBRASKA BUT THE ENTIRE REGION. I THINK THAT'S A MIND-SET THAT DOES HAVE TO CHANGE, BECAUSE SOMETIMES WE TEND TO BE PROVINCIAL, PAROCHIAL IN OUR MIND-SET IN THE WAY WE LOOK AT THINGS. WE NEED TO GET PAST THAT AND REALIZE THAT THIS IS A BIG WORLD. WE'VE GOT TO HAVE A VISION THAT IS BIGGER THAN MAYBE JUST MY LITTLE NARROW PIECE OF IT IF WE WANT TO SEE OUR COMMUNITIES PROSPER AND SUCCEED.

Coleman: THE LEWIS AND CLARK WATER SYSTEM IS WHEN WE'LL VISIT MINNESOTA, SOUTH DAKOTA, AND IOWA ALL WORKING TOGETHER. I ACTUALLY THINK, ARTHUR, YOU HAVE A VERY CYNICAL VIEW OF HUMAN NATURE.

Miller: ME? ME?!! [ LAUGHTER ]

Coleman: NOW, WHERE DID YOU GROW UP?

Miller: YOU KNOW WHERE I GREW UP, SMARTY SENATOR? I GREW UP IN BROOKLYN, NEW YORK.

Coleman: THERE YA' GO. [ LAUGHTER ] [ APPLAUSE ]

Coleman: IF YOU WOULD HAVE SPENT THOSE THIRTY YEARS LIKE I HAVE IN MINNESOTA, THAT ROUGH EDGE WOULD HAVE BEEN KIND OF SMOOTHED AWAY BY NOW.

Miller: I SUSPECT, SENATOR, WHEN WE'RE BOTH TIRED AND TALK, IT WILL BE AS IF WE WERE BACK IN BROOKLYN. [ LAUGHTER ]

Thune: THIRTY YEARS IN THE MIDWEST HAS MADE NORM AN OPTIMIST.

Coleman: THERE YOU GO. [ LAUGHTER ]

Miller: I'M SORRY, GO AHEAD. GO AHEAD.

Coleman: I DO WANT TO SAY THAT EACH OF US -- THE THING THAT WE'RE TALKING ABOUT, WE'VE ALL GOT A STAKE IN THIS. WE EXPERIENCE THIS ALL THE TIME. WE HAVE COMMUNITIES COME IN AND LOOK FOR HIGHWAY CONSTRUCTION -- HIGHWAY CONSTRUCTION. AND WHAT WE HAVE, IT'S NOT ONE COMMUNITY. IF YOU'VE GOT FOLKS WITHIN FOUR OR FIVE TOWNS WORK TOGETHER -- BY THE WAY, THEY MAKE THE BEST PITCH TO US WHEN THEY'RE COMING IN LOOKING FOR SOMETHING AND I'VE GOT FIVE OR SIX COUNTIES THAT HAVE COME TOGETHER WITH A SHARED VISION, THEY'VE GOT A BETTER CHANCE OF GETTING SOMETHING DONE. SO WE ACTUALLY SEE THAT ALL THE TIME.

Miller: THE FEDERAL GOVERNMENT, YOU TALKED BEFORE ABOUT INFRASTRUCTURE. THERE ARE, I GATHER, WELL OVER 1,300 PROGRAMS ACROSS THE FEDERAL GOVERNMENT, IF YOU COULD JUST FIGURE THEM OUT. AS YOU SIT HERE, WHAT WOULD YOU CHANGE? WHAT DO YOU THINK HAS TO BE CHANGED IN TERMS OF THE FEDERAL GOVERNMENT'S POLICY TOWARD RURAL AMERICA?

Grassley: WE DID THIS FOUR OR FIVE YEARS AGO WITH A VERY NARROW PROGRAM AND NOT VERY WELL FUNDED TO PROMOTE NETWORKING. I THINK IN RURAL AMERICA, ONE OF THE THINGS WE'VE GOT TO DO, PARTICULARLY TO PROMOTE VALUE-ADDED AGRICULTURE, IS DO WHAT WE CAN TO GET PEOPLE WHO ARE INDIVIDUAL, INDEPENDENT FARMERS WORKING TOGETHER TO ADD VALUE TO THEIR PRODUCT. I THINK THAT ANYTHING WE CAN DO TO SET UP AN INFRASTRUCTURE THAT ENCOURAGES NETWORKING AND COOPERATION AND PARTICULARLY AS IT BENEFITS INDIVIDUAL FARMERS DOWNSTREAM FROM THEIR OWN FARM GATE IS VERY, VERY IMPORTANT.

Miller: SO YOU TAKE A VERY WIDE VIEW OF WHAT INFRASTRUCTURE INCLUDES.

Grassley: WELL, IT GOES BEYOND, THOUGH -- OBVIOUSLY IT GOES WAY BEYOND JUST WHAT THE FEDERAL GOVERNMENT CAN DO WHEN IT COMES TO THE NECESSITY FOR NETWORKING, SEE.

Miller: HOW ABOUT JUST WIPING OUT THOSE 1,300 PLUS PROGRAMS AND SORT OF REFORMULATING THEM IN A WAY THAT, LET'S SAY, THE FARMER IN SOUTH DAKOTA CAN UNDERSTAND WHERE TO GO, JUST WHERE TO GO.

Thune: WELL, I THINK THAT THE FEDERAL GOVERNMENT NEEDS TO DO WHAT -- WHAT EVERYBODY IN THE OUTSIDE WORLD HAS TO DO, AND THAT'S TO MODERNIZE TO FIT THE TIMES THAT WE'RE IN. I THINK THAT SOMETIMES THERE IS A MODEL IN THIS TOWN AND AGENCIES AND DEPARTMENTS, AND A MIND-SET FOR THAT MATTER, THAT IS OUTDATED.

Miller: BY "THIS TOWN" YOU MEAN THIS TOWN, WASHINGTON, D.C.

Thune: AND THE EXTENSIONS OF IT, THE GOVERNMENT AGENCIES, THE FEDERAL GOVERNMENT AGENCIES AROUND THE COUNTRY. BUT IT OUGHT TO BE -- THE FEDERAL GOVERNMENT OUGHT TO BE USER FRIENDLY. IT OUGHT TO BE EASY TO WORK WITH. AND I THINK THE FRUSTRATION THAT I EXPERIENCE AS A FORMER MEMBER OF THE HOUSE AND NOW A NEW MEMBER OF THE SENATE -- AND I'M SURE ANYBODY HERE CAN PROBABLY RELATE TO THAT -- IS A LOT OF THE TRAFFIC THAT COMES THROUGH YOUR OFFICE IS FRUSTRATION THAT SOMEBODY HAS IN DEALING WITH SOME AGENCY OF GOVERNMENT OR DEPARTMENT BECAUSE THEY HAVEN'T BEEN RESPONSIVE. AND SO WE HAVE TO INTERVENE AND HELP BREAK THROUGH IT, AND I THINK THAT'S A MIND-SET THAT NEEDS TO CHANGE AND TO MODERNIZE.

Miller: SENATOR HARKIN IS BEING REMARKABLY QUIET ON THIS POINT.

Harkin: WELL, THERE'S A NUMBER OF THINGS THE FEDERAL GOVERNMENT CAN DO. WE PUT A PROVISION IN THE LAST FARM BILL THAT MANDATED THAT THE FEDERAL GOVERNMENT MUST -- SHALL GIVE A PRIORITY TO BIO-BASED PRODUCTS IN THEIR PURCHASING, AS LONG AS THEY ARE EQUIVALENT IN PRICE PERFORMANCE AND AVAILABILITY... EVERY FEDERAL DEPARTMENT AGENCY, NOT JUST THE DEPARTMENT OF AGRICULTURE. THAT MEANS THE DEPARTMENT OF DEFENSE, THE DEPARTMENT OF INTERIOR, ALL OF THEM. WELL, THAT'S BEEN 35 MONTHS AND NOT ONE HAS BEEN APPROVED. NOT ONE HAS BEEN APPROVED. I'M NOT TRYING TO COME DOWN HARD ON SECRETARY JOHANNS. WE'VE TALKED ABOUT THIS. EIGHTY OF THEM ARE WAITING TO BE APPROVED. I ASKED PRESIDENT BUSH THIS ONCE, I SAID WHAT IF ALL OF THE HYDRAULIC FLUID THAT THE DEPARTMENT OF DEFENSE USES CAME FROM SOYBEANS, BIO-BASED, AND WE CAN DO IT AND IT'S BEEN PROVEN. ALL THE GREASE THAT'S MADE OUT OF SOY GREASE. I SAID HE WAS DRINKING OUT OF A PLASTIC CUP, AND I SAID, "JUST THINK, HOW MANY PLASTIC CUPS, KNIVES, AND FORKS DO YOU THINK THE DEPARTMENT OF DEFENSE BUYS EVERY YEAR?" I SAID, "WELL, RIGHT NOW THERE'S A PLANT IN NORTH OMAHA, NEBRASKA, THE DOW CARGILL PLANT, AND THEY MAKE THOSE OUT OF CORN STARCH AND THEY MAKE THEM FOR MCDONALDS." JUST THINK WHAT WOULD HAPPEN IF THE FEDERAL GOVERNMENT STARTED PURCHASING ALL THIS STUFF. TALK ABOUT THE DEMAND PULL. ONE OF THE THINGS WE GET CAUGHT IN IS WHY DON'T MORE PEOPLE BUY BIO-BASED PRODUCTS. THEY SAY, WELL, THE PRICE IS TOO HIGH. WELL, WHY IS THE PRICE TOO HIGH? BECAUSE NO ONE BUYS IT. WHY DOES NO ONE BUY IT? BECAUSE THE PRICE IS TOO HIGH. WHEN YOU GET THE FEDERAL GOVERNMENT IN THERE PURCHASING, WOW, THE PRICE STARTS COMING DOWN RIGHT AWAY. SO I WOULD HOPE THAT THE FEDERAL GOVERNMENT WOULD START USING THAT AUTHORITY, THAT MANDATE THAT WE GAVE THEM. "SHALL," IT DOESN'T SAY "MAY"; IT SAYS "SHALL" TO START BUYING BIO-BASED PRODUCTS. SECONDLY, BROADBAND. WE TALKED ABOUT BROADBAND. WE PUT A BROADBAND PROGRAM IN THE FARM BILL. WE PUT $2 BILLION IN IT, MANDATORY FUNDING. LOW INTEREST LOANS TO PRIVATE BUSINESSES TO GET BROADBAND TO COMMUNITIES OF LESS THAN 2,500 PEOPLE. $1.6 BILLION OF THAT IS STILL SITTING THERE. AND WE'VE GOT PEOPLE AND COMPANIES IN IOWA THAT WANT TO GET BROADBAND OUT. IN MY TOWN OF 150, I'VE GOT A GUY THAT SELLS STUFF AROUND THE WORLD, ED JONES, JUKE BOX JUNCTION. HE CANNOT GET BROADBAND IN OUR COMMUNITY. ALL HE CAN GET IS DIAL-UP, AND IT'S HURTING HIS BUSINESS. SO WHY AREN'T WE GETTING THESE LOANS OUT THERE? YEAH, THE FEDERAL GOVERNMENT INFRASTRUCTURE -- NORM COLEMAN TALKED ABOUT INFRASTRUCTURE. WE SHOULDN'T BE CUTTING COMMUNITY DEVELOPMENT BLOCK GRANTS. WE SHOULD BE GETTING MORE HOUSING MONEY OUT THERE FOR LOW INCOME HOUSING IN RURAL AREAS. WE KNOW WHAT THAT DOES. THE FEDERAL GOVERNMENT CAN'T DO EVERYTHING BUT, BY GOSH, THE FEDERAL GOVERNMENT CAN SURE STIMULATE A LOT. AND WE CAN DO IT THROUGH TAX POLICY. WE CAN DO IT THROUGH INFRASTRUCTURE. WE CAN DO IT THROUGH BROADBAND AND THROUGH THE FEDERAL GOVERNMENT BUYING THE KINDS OF MATERIALS THAT ARE MADE IN RURAL AMERICA. [ APPLAUSE ]

Miller: MY MIND IS SO BOGGLED BY THE IMAGE OF 1.6 BILLION SITTING THERE THAT I ALMOST FORGOT TO END THIS PROGRAM. SO I'LL DO THAT NOW WITH MY THANKS TO THE SECRETARY AND THE FOUR SENATORS. [ APPLAUSE ]

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