THE VIRGINIAN-PILOT 
              Copyright (c) 1996, Landmark Communications, Inc.

DATE: Thursday, January 4, 1996              TAG: 9601040002
SECTION: FRONT                    PAGE: A12  EDITION: FINAL 
TYPE: Editorial 
                                             LENGTH: Short :   47 lines

BOATBUILDING SCHEME BACKFIRED TRYING TO HELP

In arguing that the federal government must be shrunk, Republicans often note its genius for making bad situations worse.

Take commercial fishing.

In the '70s, foreign fishing fleets were gobbling up fish stocks close to the American coast. In response, Congress passed in 1976 the Magnuson Fishery Conservation and Management Act, which pushed Russian, Japanese and European fleets 200 miles from American shores.

So far so good. But as staff writers Scott Harper and Lane DeGregory noted in last month's series on fishing titled ``Dividing the Waters,'' there were too few U.S. vessels to harvest the fish.

Not to worry. Government subsidies, in the form of tax breaks and loan guarantees on boats, created a boatbuilding frenzy. Wealthy landlubbers - people who might get seasick on a pond - suddenly were buying shares in fishing boats for leasing to fishermen.

``A lot of doctors and lawyers looking for the tax credit bought boats,'' said Barbara Stevenson, an Exmore native and member of the New England Fisheries Management Council.

Due in part to the generosity of Congress, the number of fishing vessels in the United States doubled between 1975 and 1985. In 1993, 34,000 U.S. fishing vessels weighed more than 5 tons - 20,000 more than in 1970.

And part of Congress' generosity went toward equipping the boats with the latest fish-finding and -catching equipment.

The tax credit was repealed in 1986, but too late to save the New England fishing grounds. In existence for more than 300 years, it collapsed after two decades of overfishing.

Whoops!

But not to worry. The government now has a program to buy back some of the boats. It has agreed to pay 13 New England fishermen $2 million to scrap their boats and surrender their fishing permits. It is poised to retire another $25 million worth of boats from the New England region. The buy-back program has received 114 applications that would total $52 million if approved.

All along, the federal government meant well. That's when, a conservative will assure you, it's most dangerous. by CNB