Budget Supplement - 9. Protecting the Environment

[Budget Supplement]
[Creating Opportunity and Encouraging Responsibility]
[9. Protecting the Environment]
[From the U.S. Government Printing Office, www.gpo.gov]

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[P]rotecting our environment is a fundamental community value for all Americans, and it can't be sacrificed to
balance the budget. Because we cherish our children, we want to be sure the water they drink and the food they
eat won't make them sick. Because we honor our parents, we want the air they breathe to be clean so they can
live long and healthy lives and not be housebound by smog. Because we believe that what God created, we must not
destroy, each of us has a sacred obligation to pass on a clean planet to future generations.

President Clinton
November 1995

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The modern era of environmental protection began over 25 years ago
with passage of landmark legislation and creation of the Environmental
Protection Agency (EPA). Thanks to a generation of bipartisan effort,
the environment is a great American success story. The air is cleaner,
the water safer, and the land less polluted with toxic chemicals.
Despite these gains, we have much more to do. A third of Americans
still live in areas that do not meet air quality standards, and too many
communities have drinking water whose safety is threatened. While the
solutions of 25 years ago are not necessarily the best suited for
tomorrow's challenges, we should not discard the gains, or forget the
lessons learned, by rolling back environmental safeguards that Americans
find so important.
Americans want a Government that helps protect the environment and our
natural resources without burdening business, choking innovation, or
wasting taxpayer dollars. To meet these objectives, the Administration
has been reinventing the regulatory process to cut excessive regulation,
and targeting investments in programs that will have the biggest impact
on improving the environment, protecting public health, providing more
opportunities for outdoor recreation, and enhancing natural resources.
In his 1996 State of the Union address, the President's fifth
challenge for the Nation was to leave our environment safe and clean for
the next generation. This budget and ongoing Administration policies
reflect the President's strong commitment to meet that challenge.

MEETING THE CHALLENGE

The Administration has pioneered various ways to protect the
environment and conserve natural resources that are cleaner, cheaper,
and smarter.

Regulatory Reinvention: The President has challenged businesses to
take more initiative to protect the environment, and pledged to make it
easier for them to do so. In this regard, the Administration's
regulatory reinvention efforts have been broad and far-reaching. In
March 1995, the President announced a comprehensive set of 25 high-
priority actions to substantially improve the regulatory system and move
significantly toward a new and better environmental management system
for the 21st Century.
One of the most fundamental reforms is Project XL (for excellence and
leadership), a pilot program for 50 companies or communities. Under it,
companies will get the opportunity to set aside EPA rules if they can
design an alternative system that will be both cheaper for the company
and cleaner for the environment.
The Emergency Planning and Community Right-To-Know Act has been among
the most successful, cost-effective laws ever enacted--under it, toxic
releases of reported chemicals
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have fallen over 40 percent. The law
succeeds because it recognizes that knowledge is power and that, often,
the most effective way to achieve environmental protection is to give
the power back to the community.
To build on this success, the President strongly supports expanding
the requirements for industry to disclose releases, because the public
has a right to know that its air and water are safe. But, because the
law is most effective when communities and citizen groups actively use
the information, the President has challenged communities to take the
initiative and work with business to cut pollution.
The President is committed to cutting the paperwork tied to meeting
environmental standards by 25 percent, which will save businesses and
communities 20 million hours of work. For small businesses, the
President has pledged to create centers to help them comply with
environmental standards, and to give them a six-month grace period for
correcting infractions before penalizing them when they act in good
faith. In addition, EPA is eliminating over 1,400 pages of regulations.

Performance Partnerships: In last year's budget, EPA proposed to offer
States and Tribes one or more Performance Partnership grants, to combine
several categorical grants (e.g., grants that go specifically to address
air, water, or hazardous waste). The partnership grants would
consolidate funding streams, cut micromanagement, and focus programs on
results. While the proposal awaits legislative action, State officials
and others have praised it and the Administration is proposing it again
this year.
In May 1995, the Environmental Council of the States, consisting of
the State environmental commissioners, adopted a resolution of support
for the partnership grants, and agreed with EPA on a broader proposal to
create a new partnership based on performance. This partnership system
includes environmental performance agreements and less intensive EPA
oversight of States with strong performance.
In September 1995, the third report of Vice President Gore's National
Performance Review^{1 proposed to give States more flexibility to
move funds between the Clean Water and Drinking Water State Revolving
Funds. This initiative, which the budget proposes, would give States
more flexibility to address high-priority water infrastructure issues.
\1\Common Sense Government.
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Ecosystem Management: The Administration has pioneered the use of
ecosystem management--an approach to restore and maintain the health,
sustainability, and biological diversity of marine and terrestrial
ecosystems while supporting vital economies and communities.
Everglades/South Florida Ecosystem Restoration Initiative: The
South Florida Ecosystem is a unique national treasure that
includes the Everglades, Florida Bay, and other
internationally-renowned natural resources. Its long-term
viability and sustainability is critical for the tourism and
fishing industries, as well as the water supply, economy, and
quality of life for South Florida's entire population of over
six million people.
In the budget, the Administration is proposing legislation to
establish an ``Everglades Restoration Fund'' to provide a
steady source of funding, mainly for land acquisition, to
maintain a sustainable ecosystem. The budget proposes $100
million a year for four years to establish the Fund. In
addition, the budget proposes a one-cent-per-pound marketing
assessment on Florida sugar production to add about $35
million a year to the Fund. This approach divides the costs of
restoration between the public and the principal industry that
has benefited from water projects altering the South Florida
ecosystem.
In addition, the budget would continue to strongly support the
active programs of various Federal agencies involved in the
Everglades and South Florida ecosystem restoration. The budget
would increase funding for the initiative to $136 million,
compared to $104 million in 1996.
Northwest Forest Plan (Oregon, Washington, and Northern
California): The President's Forest Plan is protecting natural
resources and providing new economic
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opportunities for the
people of the Pacific Northwest. It is a balanced, science-
based blueprint to strengthen the economic and environmental
health of the three-State area. It is also the first region-
wide application of ecosystem management by Federal, State,
and local agencies; Tribes; non-governmental organizations;
and individuals.
The Administration has begun refilling the timber pipeline
with hundreds of millions of board feet of timber for the
first time in years; restored thousands of acres of key
habitat and watersheds while providing short-term employment
opportunities to displaced timber workers; spurred small
businesses through grants and job training; and strengthened
local economies.
In 1995, the region received over $350 million in grants,
loans, and other resources through the coordinated efforts of
12 Federal agencies. The Federal Government plans to spend
just $318 million in 1996 (due to congressional cuts), but the
budget proposes $391 million for 1997.
The President also is seeking major changes in the timber provisions
of the 1995 rescission law. He wants Congress to: repeal provisions that
force the Government to award environmentally unsound contracts to cut
``old-growth'' timber; let the Government replace old-growth timber with
other timber, or buy it back from contractors--before its harvesting
causes environmental problems; and work with him to allow the private
sector to harvest salvage timber in compliance with environmental laws.
Salmon Recovery Plan: Salmon runs throughout the Pacific
Northwest are a major part of the region's ecosystem and
economy. For various reasons, salmon runs originating in the
Columbia/Snake River Basin have declined so much that the
National Marine Fisheries Service lists three runs as
endangered or threatened.
The Administration supports a regional, bipartisan effort to
pay for recovery--including the preparation of a stable,
multi-year salmon budget. The Administration, in October 1995,
reached agreement with congressional and regional interests to
establish a Federal contingency fund to try to hold salmon
recovery costs to no more than $435 million for customers of
the Bonneville Power Administration.

ENVIRONMENTAL AND NATURAL RESOURCE INVESTMENTS

The budget proposes to boost funding for high-priority environmental
and natural resource programs by eight percent over the levels in place
when the President took office (see Table 9-1).

EPA Operating Program: The budget proposes a nine percent increase
over 1996, to $3.4 billion, for EPA's operating program, which includes
most of EPA's research, regulatory, partnership grants (for States and
Tribes), and enforcement programs. The program represents the backbone
of the Nation's efforts to protect public health through standard
setting, enforcement, and other means to ensure that our water is pure,
our air clean, and our food safe.
Chart 9-1 illustrates the Nation's progress in improving air quality
but also pinpoints where we still need to go. Similarly, Chart 9-2
illustrates the progress needed in improving wastewater treatment to
help reach water quality goals.
The budget stresses environmental enforcement to ensure that polluters
find a cop on the environmental beat. It would fully fund the EPA's part
of the Climate Change Action Plan to promote voluntary, innovative
energy conservation programs to meet our international commitments to
reduce greenhouse gases. In addition, the budget would fund the
Environmental Technology Initiative to spur the development of new
technologies to protect public health, cut costs, create new jobs, and
increase exports. Finally, the budget continues to support a ``watershed
approach'' for key water systems, such as the Great Lakes and Chesapeake
Bay, in which the Government considers the system as a whole--rather
than, separately, each individual threat to the environment and public
health.
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Table 9-1. ENVIRONMENTAL/NATURAL RESOURCE INVESTMENTS AND OTHER HIGH-PRIORITY PROGRAMS
(Discretionary budget authority unless otherwise noted; dollar amounts in millions)
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Dollar Percent
1993 1995 1996 1997 Change: Change:
Actual Actual Estimate\1\ Proposed 1996 to 1996 to
1997 1997
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Environmental Protection Agency (EPA):
Operating Program......................................................................... 2,767 2,853 3,113 3,403 +290 +9%

State Revolving Funds (SRFs):
Clean Water............................................................................. 1,928 1,236 1,365 1,350 -15 -1%
Drinking Water.......................................................................... ....... -374 500 550 +50 +10%
Superfund................................................................................. 1,589 1,354 1,313 1,394 +81 +6%
Other..................................................................................... 639 900 386 330 -56 -15%
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Subtotal, EPA........................................................................... 6,923 5,969 6,677 7,027 +350 +5%

Department of the Interior (DOI):
National Park Service Operating Program................................................... 984 1,078 1,158 1,173 +15 +1%
Bureau of Land Management Operating Program............................................... 638 695 658 685 +27 +4%
Fish & Wildlife Service Operating Program................................................. 531 511 498 540 +42 +8%
Investment Non-Operating Program (Natural Resources Research and other)................... 11 192 182 290 +108 +59%
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Subtotal, DOI (Select programs)......................................................... 2,164 2,476 2,496 2,688 +192 +8%

Department of Agriculture (USDA):
Forest Service Operating Program.......................................................... 1,319 1,338 1,256 1,292 +36 +3%
Investment Non-Operating Program (NW Forest Plan, Infrastructure, and other).............. 276 234 172 199 +27 +16%
Rural Water & Wastewater.................................................................. 508 627 488 659 +171 +35%
Wetlands.................................................................................. 115 212 139 216 +77 +55%
Wetlands Reserve Program (Mandatory)...................................................... ....... 93 77 188 +111 +144%
Conservation Reserve Program (Mandatory).................................................. 1,579 1,743 1,782 1,925 +143 +8%
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Subtotal, USDA (Select programs)........................................................ 3,797 4,247 3,914 4,479 +565 +14%

Land Acquisition: LWCF (DOI/USDA) and Everglades Restoration Fund (DOI)..................... 285 217 140 262 +122 +87%
Other Everglades Restoration (DOI, Corps, USDA, NOAA, EPA).................................. 82 103 104 136 +32 +31%

Department of Energy (DOE):
Energy Conservation and Efficiency........................................................ 592 715 613 715 +102 +17%
Solar and Renewable Energy R&D............................................................ 257 363 275 363 +88 +32%
Federal Facilities Cleanup (Environmental Management Program)............................. 6,396 5,804 6,084 6,059 -25 -*
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Subtotal, DOE (Select programs)......................................................... 7,245 6,882 6,972 7,137 +165 +2%

Department of Defense (DOD):
Cleanup................................................................................... 1,604 2,086 2,093 2,108 +15 +1%
Environmental Compliance/Pollution Prevention/Conservation................................ 2,227 2,504 2,654 2,406 -248 -9%
Environmental Technology.................................................................. 393 281 223 204 -19 -9%
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Subtotal, DOD (Select programs)......................................................... 4,224 4,871 4,970 4,718 -252 -5%

National Oceanic and Atmospheric Administration (NOAA):
Fisheries and Protected Species........................................................... 232 269 282 306 +24 +9%
Ocean and Coastal Management.............................................................. 121 130 119 132 +13 +11%
Ocean and Atmospheric Research............................................................ 138 160 156 160 +4 +3%
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Subtotal, NOAA (Select programs)........................................................ 491 559 557 598 +41 +7%

Pacific Northwest Forest Plan (USDA, DOI, EPA, DOC, DOL).................................... ....... 359 318 391 +73 +23%
Army Corps of Engineers Regulatory Program (wetlands)....................................... 86 102 101 112 +11 +11%
Partnership for a New Generation of Vehicles (DOE, DOC, NSF, EPA, DOT)...................... ....... 223 241 288 +47 +20%
U.S. Global Change Research (NASA, DOE, NSF, DOC, others)................................... 1,319 1,785 1,712 1,852 +140 +8%
Climate Change Action Plan (EPA, DOE, USDA, Corps).......................................... ....... 218 224 305 +81 +36%
GLOBE--Global Environmental Education (NOAA, NASA, EPA, NSF)................................ ....... 15 14 15 +1 +7%
Montreal Protocol (State/EPA)............................................................... 25 38 34 47 +13 +38%
Global Environment Facility (Treasury)...................................................... ....... 90 35 100 +65 +186%
Multilateral & Bilateral Assistance (Funds Appropriated to the President/AID)............... 272 355 310 343 +33 +11%
Border Environmental Activities (State/Treasury)............................................ 30 81 81 87 +6 +7%
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Total\2\.............................................................................. 25,190 25,803 26,204 27,309 +1,105 +4%
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*Less than $500 thousand or 0.5 percent.
\1\Includes Administration's proposed adjustments to 1996 continuing resolution levels.
\2\Total adjusted to eliminate double counts and mandatory spending.
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Natural Resource Protection: The budget continues the President's
commitment to protect the national parks and forests, wildlife refuges,
other public lands, and marine sanctuaries. While offering natural
beauty, historical significance, and other pleasures for today's and
future generations, these areas play an important role in maintaining
ecosystem stability and protecting species that are threatened or
endangered.
The budget proposes $1.2 billion for operations in national parks, an
increase of $15 million from 1996, to protect the Nation's important
natural and cultural resources and provide a level of visitor services
that the public rightly expects. The Administration will continue to
promote entrepreneurial land management by seeking legislation to give
the National Park Service more authority to collect user fees. The
proposal would return 80 percent of new fee receipts of the National
Park Service, Bureau of Land Management, and the Forest Service for each
of them to use on visitor services. In addition, the budget proposes
about $111 million in up-front funding (to be spent over several years)
to restore the Elwha River watershed and fisheries in and around the
Olympic National Park, in the State of Washington. Chart 9-3 illustrates
the growing demand for recreational services in parks, forests, refuges,
and public lands.

Endangered Species Act: The Administration is committed to the goals
of the Endangered Species Act (ESA). Congress, however, has voted to
severely limit the ability of the Interior and Commerce Departments to
carry out the ESA by placing unwarranted moratoria on listing actions
and eliminating funding for listing new species.
Last year, the Administration unveiled a 10-point plan to better
implement the ESA. The plan shows that the Government can administer the
ESA to protect species and improve recovery rates in ways that minimize
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impacts on land owners and give greater authority to State and local
governments. The budget contains full funding to implement the
Administration's plan.

Healthy Coasts: Over half of Americans live in coastal areas--areas
that provide unique and critical habitat for a wide range of species.
The budget proposes to increase funds for programs that are instrumental
in sustaining healthy coasts to $132 million in 1997, a $13 million
increase over 1996, in the budget of the National Oceanic and
Atmospheric Administration (NOAA). Among these vital efforts, NOAA is
working to raise participation in the Coastal Zone Management Program,
which promotes integrated coastal stewardship, from 29 to 34 states. In
addition, NOAA's National Marine Sanctuaries Program will complete a
management plan for the Florida Keys National Marine Sanctuary.
Water Quality Infrastructure: EPA provides capitalization grants to
Clean Water State Revolving Funds (SRFs), which make low-interest loans
to municipalities to improve compliance with the Clean Water Act. The
budget proposes $1.35 billion for this program, which would help reduce
beach closures and keep our waterways safe and clean. In addition, the
budget proposes targeted wastewater funds for areas facing unique
circumstances, such as high needs or an inability to pay--including $100
million for Boston Harbor, $150 million for U.S.-Mexico border projects,
and $15 million for Alaskan Native villages.
The President also is proposing $550 million in Federal capitalization
grants for new Drinking Water SRFs to help municipalities comply with
the Safe Drinking Water Act. Such compliance will help ensure that our
citizens have a safe, clean supply of drinking water--our first line of
defense in protecting public health.

Department of Agriculture (USDA) ``Water 2000'': USDA has launched an
effort
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to bring safe drinking water to the remaining rural Americans in
very remote areas who live without running water. The budget would fund
the initiative, ``Water 2000,'' as part of the $1.4 billion in loan and
grant authority that it proposes for rural water and wastewater loans
and grants, a 75 percent increase over 1996. In 1995, ``Water 2000''
funded 217 new water-treatment systems; the Administration expects to
fund 150 new systems in 1996 and 225 in 1997.
Wetlands Reserve Program (WRP): Historically, developers obtained a
fourth of U.S. cropland, or over 100 million acres, by clearing and
draining wetlands. The WRP is a voluntary program in which willing
sellers receive the fair market value to retire wetland acres from
agricultural production. The WRP has been so popular with farmers that
the Government has only had the funds to buy a fifth of the acres that
landowners have offered. The budget proposes to purchase long-term and
perpetual conservation easements on 226,000 acres in 1997, which--along
with the ``Swampbuster'' provisions of Federal law that restrict
farmers' use of wetlands--would allow continued progress toward reaching
the President's goal of a net gain in national wetland acres (see Chart
9-4).
The retirement of cropland through the WRP will directly benefit the
recovery of threatened or endangered species--though wetlands account
for just five percent of land in the lower 48 States, almost 35 percent
of threatened or endangered species live in, or depend on, wetlands.
Also, because of other benefits of wetlands--floodwater retention and
surface water storage--the budget assumes at least $5 million for the
Emergency Wetlands Reserve Program (EWRP) in 1997 (depending on the
nature of natural disasters that year).

Conservation Reserve Program (CRP): The CRP pays farmers to
temporarily retire environmentally sensitive (mostly erosion-
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prone) lands from production. Producers receive rental payments for 10 years,
after which they can bring the lands back into production. The CRP has
36.4 million acres enrolled, with the remaining 1.6 million acres
proposed in the budget for sign-up in 1997, in order to reach the legal
target of 38 million acres. In December 1994, the Administration also
proposed that farmers have the option of extending expiring contracts.
Contracts for around 15 million acres expire in 1996.
The CRP's benefits include less erosion and better water quality. In
addition, the CRP's wildlife benefits have been overwhelming: wild duck
populations fell between 35 and 50 percent in the 1970s and 1980s, but
these populations bounced back with a 38 percent increase from the 1980s
to the mid-1990s largely due to the CRP (see Chart 9-5).

Superfund: EPA's Superfund program cleaned up another 68 sites in
1995, exceeding its 1995 target of 65 and bringing to 346 the total
number cleaned up through 1995 (see Chart 9-6). In the past four years,
the program has, on average, cleaned up more sites each year than in its
entire first decade. By the end of 1995, construction was completed or
initiated at nearly 800 National Priority List (NPL) sites, well over
half the sites on the list. With funding at the President's requested
level, EPA would remain on course to achieve its target of 650
construction completions by the year 2000.

Nevertheless, Superfund has been criticized for costing too much and
accomplishing too little. The Administration has worked to develop and
propose legislative reforms to fundamentally change the way Superfund
operates. While awaiting Congressional action on Superfund
reauthorization, EPA has redirected the program in the past two years
with ``common sense'' administrative reforms to increase fairness, cut
cleanup and transaction costs, and encourage economic
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redevelopment. The budget includes $1.4 billion,
an $81 million increase over 1996, to
continue progress in Superfund.

Brownfields: The current Superfund law, which extends liability to
both past and prospective owners of contaminated sites, can depress the
market value of older industrial sites and diminish the attractiveness
of investing in these ``brownfield'' areas. The President proposes to
offer new purchasers and other businesses a targeted tax incentive to
recover the cost of a brownfield cleanup in distressed communities over
a shorter time period. This initiative would spur the private sector to
create jobs, return land to productive use, and clean up the environment
in our communities.
In addition, the budget proposes $25 million to expand and complement
EPA's Brownfields Economic Redevelopment Initiative. Of that, EPA would
use $5 million to award another 25 brownfield pilot projects to
stimulate environmental cleanup through economic redevelopment, bringing
the total number of pilots to 75. In addition, the budget includes $20
million for grants to brownfields pilot communities to help finance such
cleanups and to work with States to develop their capability to address
brownfield cleanup and redevelopment.

Federal Facilities Cleanup and Compliance: The Federal Government
faces an enormous challenge in cleaning up Federal facilities
contaminated with radioactive or hazardous waste. The Energy Department
(DOE) faces the most complex and costly problems, the result of over
four decades of research, production, and testing of nuclear weapons.
The Defense Department's (DOD) environmental problems include hazardous
wastes similar to those at industrial sites and unexploded ordnance at
test ranges.
In 1997, DOE will continue to stress risk reduction, management and
stabilization of nuclear materials, aggressive site cleanup,
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and investment in new cleanup technologies.
The budget proposes $5.9 billion
for DOE's Office of Environmental Management program--a figure that
reflects sizable savings from administrative and contracting reforms and
that would support the completion of cleanup of 260 release sites and
facilities. The budget also proposes $182 million to fund projects to
privatize the treatment of certain types of nuclear waste.
DOD continues to make significant progress in cleanup, compliance/
pollution prevention, conservation, and environmental technology. The
budget provides $4.7 billion for these activities. To date, 760 military
installations and over 2,200 formerly-used defense properties have
nearly 15,000 sites where a study or cleanup is underway, while DOD has
determined that 9,900 sites require no further cleanup.

Energy Conservation and Efficiency: The budget proposes $715 million
for DOE energy conservation and efficiency programs, 17 percent above
1996. It provides for continued implementation of the Climate Change
Action Plan to cut greenhouse gas emissions, and continues the
Partnership for a New Generation of Vehicles to triple fuel economy by
early next century. The Administration is committed to improving the
energy efficiency of federally-owned or operated buildings. DOD, DOE,
the Veterans Affairs Department, and the General Services Administration
have made significant progress in cutting energy consumption and saving
taxpayer money, and the budget proposes $289 million to continue the
progress.
Solar and Renewable Energy: The budget funds DOE solar and renewable
energy activities at $363 million, 32 percent above 1996. This funding
continues the Administration's strong support for research and
development to reduce manufacturing costs in photovoltaics and solar
thermal technologies, promote wind power, and spur a wider use of
biofuels.
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Multilateral and Bilateral Environmental Assistance: The budget
proposes a $33 million increase over 1996, to $343 million, for
bilateral and multilateral environmental assistance. Bilateral
assistance includes U.S. Agency for International Development (AID)
activities to address climate change, biodiversity, and sustainable
agriculture in developing countries. Multilateral assistance funds U.S.
voluntary contributions to the U.N. environmental system and other
international organizations to address various international
environmental activities.
Global Environment Facility: U.S. participation in the Global
Environment Facility (GEF) is a cornerstone of U.S. foreign and
environmental policy. The GEF has become the world's leading institution
for protecting the global environment and avoiding economic disruption
from climate change, massive extinction of valuable species, and
dramatic collapse of the ocean's fish population. The $100 million
budget request meets the Nation's annual pledge to the four-year (1995-
1998) funding program for the GEF--the United States pledged 20 percent
($400 million) of the GEF's resources, a lower proportion than in most
multilateral fora. Meeting this commitment is vital to maintaining U.S.
leadership of the program.}