THE GOOD, BAD, AND UGLY

[gkripke@igc.org]

From: Gawain Kripke <gkripke@foe.org>

 Economics for the Earth
 A Friends of the Earth Publication
 On Issues Linking People, Prosperity and the Planet
 May 20, 1996

 The Good, the Bad, & the Ugly

 Evaluating the House Budget Resolution

On Thursday May 16, the House of Representatives voted along party lines
to pass the Fiscal Year 1997 Budget Resolution. The House Budget
Resolution kicks off the annual budget cycle, a complicated process that
sets revenues, entitlements, and allocates federal funding. The Budget
Resolution is only the first of many steps in the process, however, it
sets the overall direction and delivers instructions on implementation. 
Most of the Budget Resolution is not a legally binding piece of
legislation but rather a suggestive roadmap. In many respects, the Budget
Resolution is a political document presenting messages for the party in
power. 

So what does this year's House Budget Resolution say? Unfortunately,
much of it sets the stage for a repeat of last year's "war on the
environment." There is a peppering of interesting rhetoric and some
budget cuts that environmentalists would support. We've divided it up
into the "good," the "bad," and the "ugly." Ugly first: 

The Ugly

The ugliest items in the House Budget Resolution largely reside in the
assumptions that underlie the revenue and spending recommendations. These
assumptions are described in the report accompanying the House Budget
Resolution. The assumptions are not law, but they indicate the priorities
of the budget-writers. The Budget Resolution would: 

 * Open the Arctic National Wildlife Refuge for oil drilling. This is
last year's dismal battle all over again. 

 * Permanently repeal the 4.3 cent gas tax passed in 1993. This is one of
the few tax measures on the books that help to reduce greenhouse gases. 
This gas tax was passed to reduce the federal budget deficit and repealing
it would cut federal revenues by more than $30 billion over 6 years. 

 * Eliminate federal operating support for mass transit and other cleaner
transportation programs. 

 * Phase out federal funding for energy conservation research and slash
funding for solar and renewable energy programs. 

 * Specifically fund the Department of Energy's Advanced Light Water
Reactor nuclear program -- an egregious corporate subsidy for Westinghouse
and General Electric to design and license nuclear reactors. 

The Bad

The House Budget Resolution cuts funding for the critical "function 300",
the Natural Resources and the Environment budget account. While the
Administration's budget plan would increase spending for this account to
$21.9 billion in FY97, the House Budget Resolution would cut this account
to $20.5 billion, a cut of about $800 million from this year. 

Even more significant is what happens under the budget plans in the
"outyears" until Fiscal Year 2002. The Administration budget would
ratchet up this account by $2.2 billion from this year's budget. The
House Budget Resolution will slash funding levels by $2 billion in FY02. 
Over the next six years, the House Budget Resolution provides $15 billion
less than the Administration would for "function 300". (As a side note,
the House Budget Resolution provides $25 billion more than the
Administration for defense spending, "function 050.")

To meet the House budget projections by FY02, federal environmental
agencies such as the National Park Service, the Environmental Protection
Agency, and the Fish & Wildlife Service will take deep cuts. 

These cuts are even more distasteful because the House Budget Resolution
apparently provides an additional $700 million a year to Superfund,
apparently dedicating new taxpayer funding for cleanups while letting
polluters off the hook. 

The Good

The report accompanying the House Budget Resolution has an interesting
paragraph: 

 "First, Do No Harm. There are many government programs that
encourage or directly cause environmental harm.... It makes no sense for 
the Federal Government to subsidize environmental destruction on one hand 
while establishing laws, regulations, and bureaucracy to mitigate damage on the 
other." 

This is a good idea, and Friends of the Earth and many other
environmental and taxpayer organizations have provided recommendations on
how to "do no harm" in the Green Scissors '96 report. The House Budget
Resolution proposes budget cuts similar to a few of our recommendations,
including: 

 * Clean Coal Technology Program. The House Budget Resolution would
terminate future funding for this Department of Energy subsidy to the coal
industry. 

 * Flood Insurance Reform. The House Budget Resolution proposes reducing
federal subsidies for flood insurance for certain buildings by 50 percent. 

 * Fossil Energy Research and Development. The budget would wean the oil,
gas, and utility industries from federal subsidies for research and
development. 

 * Army Corps of Engineers. The House Budget Resolution includes a general
statement calling for a reduced Federal role in civil works. 

 * Rural Utilities Service. The budget endorses reductions in this agency
and identifies the electric and telecommunications portion of the RUS
program as troubled areas. 

 * Intelligent Highway System. The House Budget Resolution would eliminate
the futuristic automated highway and telecommunications system
development. 

 * Recreation Fees. The budget report calls for increasing recreation fees
at national parks and allowing these fees to be retained by the parks. 
The budget report actually quotes Green Scissors '96, although our
recommendation would apply this concept to all federal lands. It was not
our intention that recreation fees replace existing funding. 

The House Budget Resolution also calls for "concerned parties to identify
ways to restore salmon runs to the Elwha River." However, this is a bit
faint since the way has already been identified by concerned parties: 
removal of the dams on the river. President Clinton requested funding for
this purpose. 

For more information, contact: 

Courtney Cuff, ccuff@foe.org, (202/783-7400 ext.207) 
or 
Gawain Kripke, gkripke@foe.org, (202/783-7400 ext.212) 
or 
visit the Friends of the Earth web page at http://www.foe.org/