Bingaman speech

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Remarks to the Legislature

January 20, 2011Senator Bingaman

IntroductionSpeaker Lujan, Lt. Governor

Sanchez President Pro-Tem Jennings:Thank you for the invitation to address

you in this first week of your session.

Many of the challenges you face thisyear mirror the challenges thatCongress faces. In Congress ourgreatest challenge is to accelerate job

creation across the country and at the

same time enact a credible plan toreduce the federal deficit. Neither


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challenge is easy to address in the short

run.

Governor Martinez has emphasized

the need to focus on creating jobs in

New Mexico, closing the states budgetdeficit, and maintaining support for our

schools. And she has pointed outcorrectly that the state will have to meetthese challenges without the hundredsof millions of federal dollars that New

Mexico received from the Recovery Act.

Over the past two years, the NewMexico budget has received over $1.1

billion of extra federal support because

of increases in Medicaid funding andeducation funding, that Congress

enacted in the Recovery Act. And this isin addition to the nearly $3 billion of


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Recovery Act grants and awards that

our state government and local

governments will have received whenthe Recovery Act funds are fullydispersed. The University of New

Mexicos Bureau of Business andEconomic Research reported in

December that the Recovery Act helpedcreate or retain about 24,000 jobs in ourstate.

Since the recession began, therehas been a national debate aboutwhether the government can create jobsor whether only the private sector can

create jobs. I think the data shows that

here in New Mexico, we depend on boththe government and the private sector to

create jobs. And, in fact, in the public


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sector we depend most heavily on the

federal government.

In fact, let me give you a statisticthat is a great irritant to many of my

fellow senators who represent Easternurban states. According to the

Congressional Research Service, in2009, for each dollar that we sent toWashington in federal taxes, NewMexico received $3.34 of federal funds

in return. We were the third highest ofany state (behind West Virginia andMississippi). I can recall many speechesby my friend and former colleague

Senator Pat Moynihan from New York

complaining about the unfairness of itall. His complaints were understandable

because New York received only 89cents for each dollar it paid in federal


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taxes. But Delaware had the most

legitimate complaint because they

received 33 cents for each dollar offederal taxes paid.

Its true that we are unlikely to seethe same level of federal support for

state budgets in the years ahead. And itis also true that federal spending inmany areas will be continued as itshould be.

But the good news is that in my view

New Mexico will continue to receiverobust federal funding in several key

areas. Let me point out five: Research

and Development, Healthcare,Infrastructure, Education and Military

Bases. Our challenge is, of course, totake advantage of these federal funding


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streams, at whatever level they are set,

to create good private sector jobs that

are self-sustaining. We would all like tosee New Mexico with more privatesector jobs and with less dependence

on federal funding. But as we work toachieve that desired result we need to

be aware of the federal dollars we doreceive.1. R&D

First, I will talk about research and

development. New Mexico benefitstremendously from the federal funds that

come to our state for research and

development. New Mexico has for along time been the recipient of federal

funding for R&D through the nationallabs, Kirtland Air Force Base, and our


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research universities. This will

continue. Our universities usually

receive about $300 million of federalresearch dollars each year, primarilythrough discretionary grants.

Sandia and Los Alamos National

Labs have long enjoyed large R&Dbudgets. On top of this, these labs willsee a substantial increase in R&Dfunding related to the modernization of

our countrys nuclear stockpile. In 2009,President Obama and Congresscommitted to an increase of $14 billionover the next 10 years for modernization

efforts. That was on top of the $70

billion scheduled to be spent onmaintaining the weapons complex in the

next 10 years. It is fair to say that goingforward a sizable portion of the $14


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billion increase will go to these

laboratories in our state.

All told, the Department of Energys

expenditures in New Mexico increased

this year from $4.0 billion to $4.6 billion,an increase of 15 percent. In the

coming years, our labs will receiveadditional billions of dollars in newfederal funding related to modernizationeffort.

There are other Federal investments

in high growth technology in our state.At the Air Force Research Laboratory at

Kirtland we are seeing major

investments in small plug and playsatellites that can rapidly be assembled

in days instead of months or years. Thisinvestment is spawning a new cluster of


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small satellite businesses in New

Mexico.

And in energy related research and

development our laboratories receive

and should continue to receivesubstantial federal funds. In fact, one

challenge is to be sure our laboratoriesdo not give a lesser priority to theirenergy research activities as theyincrease their work on nuclear weapons

modernization.

One very good development whichdoes not depend on federal funds is the

establishment by Intel of its Energy

Research Center in Rio Rancho.

2. Health Care


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Second, health care. As I noted

before, New Mexico received about$650 million of additional Medicaidfunding over the past two years because

of the Recovery Act. We received thismoney because the law increased the

share of federal support to about 80percent of New Mexicos Medicaidcosts. And as you know, beginning July1st of this year, that federal share will

return to its traditional level of around 70percent as the Recovery Act provisionswind down. At that traditional level, NewMexico will receive about $2.6 billion of

federal funding for Medicaid each year.

However, beginning in 2014, New

Mexico will receive substantial increasesabove the traditional level in federal


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Medicaid dollars because of the health

care reform legislation enacted last

year. Between 2014 and 2019, this newfunding is expected to total between$3.1 billion and $5.6 billion. This will

help to cover the cost of expansions inMedicaid and childrens healthcare.

In addition, the healthcare reform

law will provide new federal fundingdirectly to New Mexico families and

businesses. New Mexico families withfinancial need will be eligible to receiveover $4 billion in federal support to helppay for private health insurance

between 2014 and 2019. Over 25,000

small businesses in New Mexico areeligible for new federal tax credits to

offset the cost of health insurance fortheir employees if they choose to help


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their employees obtain insurance

coverage. The IRS estimates the net

benefit to New Mexicos smallbusinesses will be $243 million between2010 and 2019.

Our state will also receive new

federal funding to expand our healthcare workforce and expand coverage.For example, even before the end of thefirst year of implementation of the

Affordable Care Act, New Mexico hasreceived a $37.5 million contract withthe U.S. Department of Health andHuman Services (July, 2010 until

2014), to provide affordable insurance to

residents who have been deniedcoverage by an insurance company due

to a pre-existing condition. In addition,the state has received $27.9 Million to


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increase access to quality health care

by attending to construction and

renovation needs of community healthcenters and developing an expandedworkforce.

In my view the increased funding

coming to New Mexico under the newhealthcare law provides us with theopportunity to strengthen our healthcaredelivery system, improve healthcare

services for many New Mexico citizensand create thousands of good payingjobs in the process.

3. Infrastructure

For Transportation:Third, infrastructure. New Mexico

received $383 million in regular federalfunding last year for transportation,


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mainly for highway construction. The

bulk of this amount is determined by a

formula in statute, so does not changevery much from year to year.

For Water Needs:New Mexico usually receives

another $68 million or so for water andwastewater projects. On top of this, Iam pleased that Congress provided asubstantial downpayment on three long

needed water projects in our state. TheClaims Resolution Act of 2010 approvedthe Aamodt and Taos Indian WaterRights Settlements and appropriated

$150 million for those settlements.

Another $180 million was appropriatedfor the Navajo Nations water rights

settlement and will fund newinfrastructure that will provide water to


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Navajo and non-Indian communities in

Northwest New Mexico, particularly near

Gallup. The funding will createthousands of jobs and the projects willprovide a sustainable water supply to

tens of thousands of New Mexicans.

For Broadband Access:Also as part of the Recovery Act,

New Mexico benefits from $180 millionfrom USDA and the Department of

Commerce to expand broadbandaccess to rural areas in our state, acritical investment that will help spureconomic development in these

communities.

4. Education


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Fourth subject is education. As with

Medicaid funding, New Mexico received

a substantial increase in educationfunding through the Recovery Act --$537 million above our regular funding --

that will not be available in the comingyears. These funds helped prevent

teacher layoffs, supported the educationof disadvantaged students and studentswith disabilities, and paid for Pell Grantsfor low-income college students.

Congress provided an additional $65million last summer that is estimated tohave saved approximately 1,000teachers jobs across New Mexico in the

current academic year.

Looking ahead, we will continue to

receive significant federal funding foreducation. In 2008, for example, which


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was before the Recovery Act, New

Mexico received about $497 million for

K-12 education programs. Thataccounts for about one-seventh the totalK-12 spending in our state.

New federal funds will also flow into

New Mexico higher education becauseof the reforms to the federal studentloan program that we enacted last year.Over the next ten years, our state will

receive about $240 million in increasedPell Grant funding, about $95 million forHispanic-Serving colleges anduniversities. This funding was not new

taxpayer dollars. Instead, it was money

obtained by redirecting funds previouslygoing to financial institutions, and made

them available to help students.


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In coming years, the political climate

in Congress will make additional

education increases hard to come by. Icommend Governor Martinez and all ofyou for the priority you attach to

improving the education of our children.I hope we in Washington can recognize

the importance of maintaining federalsupport for education as well.5. Military Bases

Fifth, and finally, our military bases.

While some parts of country areanticipating a reduction in funding, the

four military installations in New Mexico

are expected to actually experiencegood growth.


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Cannon, Kirtland, and Holloman,

and White Sands are all expanding.

The Air Force will invest close to $500million for new construction at Cannon,and the base will grow to over 6,000

personnel over the next 3 to 5 yearsfrom its current level of 5,000. I was

particularly pleased that the Air Forcewill build 1300 new units of muchneeded housing for the personnel atCannon.

Kirtland will receive increased

support for nuclear stockpilemaintenance in connection with the New

Start Treaty. And, like Sandia, Kirtland is

hiring engineers and scientists tosupport the Air Force Nuclear Weapons

Center that is based there.


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Holloman Air Force Base as we know is

undergoing a transition with the planned

replacement of the 2 squadrons of F-22s with 2 squadrons of F-16s. All of usin the congressional delegation worked

with the Air Force to ensure that duringthis transition there would be no large

reductions in personnel at the base and the Air Force has met thiscommitment to us. The delegation alsoworked with the Air Force to place an

Unmanned Aerial Vehicle training wingat Holloman to use the unique restrictedairspace at White Sands with about 400training personnel.

The Armys White Sands MissileRange is still completing the expansion

of the base to accommodate the 2ndEngineering Battalion at White Sands of


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400 soldiers. This battalion is now

deployed overseas in combat duty. This

is the first time the test range will host acombat ready force.

Fort Bliss directly to our south doesmuch of its training in Southern New

Mexico. It is considered part of thetriad of White Sands Missile Range,Fort Bliss and Holloman Air Force base.Fort Bliss is now bedding down the 1st

Armored Division and when fullyoperational in 2012 will have over30,000 soldiers with some 58,000 familymembers. This is over a 300 percent

increase from the 9,000 soldiers

stationed there in 2005. The Army isspending over $4 billion on building new

facilities to house and train thesesoldiers. The Corps of Engineers is


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spending over $2 million per day and on

average putting up one new building per

week to accommodate this transition.All of this activity is having and willcontinue to have a positive impact on El

Pasos economy, of course, but also onthe economy of southern New Mexico.

Conclusion

So with regard to federal funding for

New Mexico, the news is good. Federalfunding streams strongly support oureconomy today, and Federal dollars docreate jobs in New Mexico. In the future

that federal funding and that economic

support will be even greater.

I have picked out five areas offederal funding to talk about today, and


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Im sure each of you can think of

activities and projects that I have not

mentioned. Whether it is the WIPPproject, the training at FLETC in Artesia,or the work NASA does in our state, it all

supports our efforts to create andmaintain good paying jobs for New

Mexico citizens.

The challenge, as I said at theoutset, is to leverage the federal funding

that comes to our state and create theconditions that will allow that funding tospawn the creation of sustainableprivate sector jobs. I pledge to work with

you to meet that challenge.

You are at the beginning of our

states 50th Legislature; next year will


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mark the end of our first 100 years as a

State of the United States.

This is an important time in our

history, and I pledge my best efforts to

work with Governor Martinez, and withall of you in the legislature to serve the

people of New Mexico.

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Bingaman speech