Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, August 8, 1994 TAG: 9408090038
SECTION: NATIONAL/INTERNATIONAL PAGE: C4 EDITION: METRO
SOURCE: Associated Press
DATELINE: LENGTH: Medium
The subsidies come in the form of cheap water, under-priced timber and help to private interests ranging from mining companies to ranchers and farmers, the report says.
While these subsidies may at one time have been needed to spur growth in the West, they now are largely unnecessary and siphon badly needed revenue from the federal treasury, said the study released Sunday by the House Natural Resources Committee.
The report, developed by the panel's Democratic staff, said that while the need for government to promote settlement of the West has long passed, ``the practice of paying the private sector to develop public resources continues unabated.''
And the study said the subsidies, ranging from selling mining claims for a few dollars to providing cheap electricity from government dams, are so widespread that no one can say what the total cost is to the taxpayer.
``We simply don't know. It runs into the hundreds of millions, sometimes billions of dollars. And on a cumulative basis it's off the charts,'' Rep. George Miller, D-Calif., the committee's chairman, told reporters.
Many of these subsidies have been discussed in Congress for years. The debate has intensified since the Clinton administration began pushing for higher grazing fees, royalty payments on hardrock minerals and higher prices for timber taken from federal forests.
But Miller said the government giveaway of its natural resources is even broader than that, with no clear way to determine, in many cases, who reaps the benefits.
While some subsidies should be eliminated, others should be curtailed or subjected to ``means testing'' to ensure that wealthy individuals or corporations are not given taxpayer-funded support, the report said.
The report lists dozens of cases in which private individuals or corporations are benefiting from government resources, ranging from cheap access to federal land, water or mineral rights to beneficial tax benefits.
Among the examples cited were:
nMining companies that purchase through a ``patenting'' process the rights to federal land and then reap billions of dollars from hardrock minerals such as gold and platinum without paying royalties to the government.
nCheap electricity from federal power suppliers in the Northwest and in the Missouri River Basin. While in some cases the gap has narrowed, federal power still is much cheaper than other sources, the report said.
It cited the case of the Pick-Sloan Project in the Missouri River Basin, where subsidized federal power costs as little 1.2 cents per kilowatt-hour compared with 3 cents for wholesale electricity from other sources.
nThe sale of timber from federal forests at prices that do not cover the costs of administration or the construction of miles of roadway - at taxpayer expense - needed for harvesting.
nFinancially prosperous farmers in California's central valley and other parts of the West have been provided billions of dollars worth of cheap water over the years from federal irrigation projects.
Some subsidies work at cross purposes, the study said. Some farmers, for example, have been found to use subsidized water to grow surplus crops on land they lease from the government at lower-than-market rates, the study said.
by CNB