Sen. Phil Gramm, chairman of the Senate Committee on Banking, Housing and Urban Affairs, made the following statement today at the opening of a second hearing on loan guarantees for rural television service:

"We are in the process of putting together a loan guarantee program that will do everything economically feasible to encourage investment in a system that will bring local television signals to every household, every farm and every village in rural America.

"We believe that it is important, in putting this proposal together, that it be financially prudent and that it protect the taxpayers' interest.

"The best check that we have to assure that we actually get the signals to rural America is a check that requires that those who are making the investment be investing their own money, that they commit their assets and that we blend together a loan guarantee with private capital.

"There's nothing that so brings the mind to focus on the task in front of you than having your capital – your assets, your money at stake.

"I have worked on this issue on a consistent basis with Senator Conrad Burns. Senator Burns is the author of this bill. Without his leadership, we wouldn't be here. He and I will put together a bill that we can move forward together.

"Senator Richard Lugar said it, and I will repeat it here: It is exciting to think about rural America having access to local television. Whatever we can do, consistent with protecting the taxpayers' interest, we're going to do.

"If the process fails, if loans are defaulted, we end up with the worst of both worlds. We end up with no transmission of local television signals, and we end up with the taxpayer losing potentially $1.25 billion."