[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]






                    REVIEW OF THE FY 2012 BUDGET AND
                    PRIORITIES OF THE ARMY CORPS OF
                 ENGINEERS, TENNESSEE VALLEY AUTHORITY,
                 AND THE NATURAL RESOURCES CONSERVATION
                      SERVICE: FINDING WAYS TO DO
                             MORE WITH LESS

=======================================================================

                                (112-13)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                    WATER RESOURCES AND ENVIRONMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 8, 2011

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure







               Available online at: http://www.fdsys.gov/



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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                    JOHN L. MICA, Florida, Chairman

DON YOUNG, Alaska                    NICK J. RAHALL II, West Virginia
THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
FRANK A. LoBIONDO, New Jersey        Columbia
GARY G. MILLER, California           JERROLD NADLER, New York
TIMOTHY V. JOHNSON, Illinois         CORRINE BROWN, Florida
SAM GRAVES, Missouri                 BOB FILNER, California
BILL SHUSTER, Pennsylvania           EDDIE BERNICE JOHNSON, Texas
SHELLEY MOORE CAPITO, West Virginia  ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio                   LEONARD L. BOSWELL, Iowa
CANDICE S. MILLER, Michigan          TIM HOLDEN, Pennsylvania
DUNCAN HUNTER, California            RICK LARSEN, Washington
TOM REED, New York                   MICHAEL E. CAPUANO, Massachusetts
ANDY HARRIS, Maryland                TIMOTHY H. BISHOP, New York
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHAEL H. MICHAUD, Maine
JAIME HERRERA BEUTLER, Washington    RUSS CARNAHAN, Missouri
FRANK C. GUINTA, New Hampshire       GRACE F. NAPOLITANO, California
RANDY HULTGREN, Illinois             DANIEL LIPINSKI, Illinois
LOU BARLETTA, Pennsylvania           MAZIE K. HIRONO, Hawaii
CHIP CRAVAACK, Minnesota             JASON ALTMIRE, Pennsylvania
BLAKE FARENTHOLD, Texas              TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana               HEATH SHULER, North Carolina
BILLY LONG, Missouri                 STEVE COHEN, Tennessee
BOB GIBBS, Ohio                      LAURA RICHARDSON, California
PATRICK MEEHAN, Pennsylvania         ALBIO SIRES, New Jersey
RICHARD L. HANNA, New York           DONNA F. EDWARDS, Maryland
STEPHEN LEE FINCHER, Tennessee
JEFFREY M. LANDRY, Louisiana
STEVE SOUTHERLAND II, Florida
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma

                                  (ii)





            Subcommittee on Water Resources and Environment

                       BOB GIBBS, Ohio, Chairman

DON YOUNG, Alaska                    TIMOTHY H. BISHOP, New York
JOHN J. DUNCAN, Jr., Tennessee       JERRY F. COSTELLO, Illinois
GARY G. MILLER, California           ELEANOR HOLMES NORTON, District of 
TIMOTHY V. JOHNSON, Illinois         Columbia
BILL SHUSTER, Pennsylvania           RUSS CARNAHAN, Missouri
SHELLEY MOORE CAPITO, West Virginia  DONNA F. EDWARDS, Maryland
CANDICE S. MILLER, Michigan          CORRINE BROWN, Florida
DUNCAN HUNTER, California            BOB FILNER, California
TOM REED, New York                   EDDIE BERNICE JOHNSON, Texas
ANDY HARRIS, Maryland                MICHAEL E. CAPUANO, Massachusetts
ERIC A. ``RICK'' CRAWFORD, Arkansas  GRACE F. NAPOLITANO, California
JAIME HERRERA BEUTLER, Washington,   JASON ALTMIRE, Pennsylvania
Vice Chair                           STEVE COHEN, Tennessee
CHIP CRAVAACK, Minnesota             LAURA RICHARDSON, California
LARRY BUCSHON, Indiana               MAZIE K. HIRONO, Hawaii
JEFFREY M. LANDRY, Louisiana         NICK J. RAHALL II, West Virginia
JEFF DENHAM, California                (Ex Officio)
JAMES LANKFORD, Oklahoma
JOHN L. MICA, Florida (Ex Officio)

                                 (iii)









                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               TESTIMONY

Christensen, Thomas, Regional Conservationist, Central Region, 
  United States Department of Agriculture, Natural Resources 
  Conservation Service...........................................     9
Darcy, Jo-Ellen, Assistant Secretary of the Army for Civil Works, 
  United States Army.............................................     9
Thomas, John M., III, Chief Financial Officer, Tennessee Valley 
  Authority......................................................     9
Van Antwerp, Lieutenant General Robert, Chief of Engineers, 
  United States Army Corps of Engineers..........................     9

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Johnson, Hon. Eddie Bernice, of Texas............................    71
Reed, Hon. Tom, of New York......................................    76

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Christensen, Thomas..............................................    77
Darcy, Jo-Ellen..................................................    87
Thomas, John M., III.............................................    97
Van Antwerp, Lieutenant General Robert...........................   106

                       SUBMISSIONS FOR THE RECORD

Landry, Hon. Jeffrey M., a Representative in Congress from the 
  State of Louisiana, letter and exhibits to Lieutenant General 
  Robert Van Antwerp stating that the sunken vessel, Rig HERCULES 
  61, poses a hazard to navigation of the Charenton Canal........    41
Thomas, John M., III, Chief Financial Officer, Tennessee Valley 
  Authority, responses to questions..............................   113

                        ADDITIONS TO THE RECORD

American Society of Civil Engineers, statement...................   123
Association of State Dam Safety Officials, statement.............   129




 
                      REVIEW OF THE FY 2012 BUDGET
                       AND PRIORITIES OF THE ARMY
                     CORPS OF ENGINEERS, TENNESSEE
                       VALLEY AUTHORITY, AND THE
                     NATURAL RESOURCES CONSERVATION
                    SERVICE: FINDING WAYS TO DO MORE
                               WITH LESS

                              ----------                              


                         TUESDAY, MARCH 8, 2011

                  House of Representatives,
                    Subcommittee on Water Resources
                                   and Environment,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:02 p.m. in 
room 2167, Rayburn House Office Building, Hon. Bob Gibbs 
(chairman of the subcommittee) presiding.
    Mr. Gibbs. The Subcommittee of Water Resources and the 
Environment will come to order. Good afternoon. Good to see 
everybody here. I will start with an opening statement.
    This is a hearing today to ``Review the FY 2012 Budget and 
Priorities of the Army Corps of Engineers, the Tennessee Valley 
Authority, and the Natural Resources Conservation Service: 
Finding Ways to do More with Less.''
    I am a strong supporter of efforts by Congress and the 
President to control Federal spending. Many of these agency 
programs that we are examining today are true investments in 
America. While I believe we must be diligent in our oversight 
of these agencies to be sure that programs run effectively, I 
believe we must also be supportive of programs that have a 
proven record of providing economic benefits.
    For nearly two centuries, the civil works missions of the 
Corps have contributed to the economic vitality of the Nation, 
and have improved our quality of life. At the same time, the 
civil works side of the Corps represents an experienced 
engineering workforce that can be quickly mobilized to address 
a national defense threat or a natural disaster.
    The fiscal year 2012 budget request by the administration 
for the Corps of Engineers is $4.6 billion. This request is six 
percent less than what Congress enacted in fiscal year 2011, 
and is the lowest request since fiscal year 2006. Given the 
fact that the navigation projects and the flood damage 
reduction projects provided economic benefits to the Nation, I 
would like to see the administration place a higher priority in 
water resources investment.
    All of the Corps' projects put people to work, which is 
another reason to put these investments high on the priority 
list.
    In May 2010, the President proposed an export initiative 
that aims to double the Nation's exports over the next 5 years. 
However, with the Corps of Engineers navigation budget slashed 
by 22 percent over the previous 5 years, and the President only 
requesting $691 million from the harbor maintenance trust fund, 
the export initiative will not be a success. Only if our ports 
and waterways are at their authorized depths and widths will 
products be able to move to their overseas destinations in an 
efficient and economical manner.
    Since only 2 of the Nation's 10 largest ports are at their 
authorized depths and widths, the President's budget does 
nothing to ensure our competitiveness in world markets. I share 
the frustration of many of my constituents who find the Corps 
to be too slow and too expensive to work with. It will be a 
huge loss to the Nation if this agency collapses under its own 
weight of burdensome process. We need to streamline feasibility 
studies, and focus the funding on areas that provide an 
economic return on investment.
    The Tennessee Valley Authority does not rely on 
appropriations, since it is self-financing. TVA derives all of 
its funding from the revenues from the eight million people and 
the seven States that it supplies with electricity. I, like 
many others in Congress, am concerned about TVA's long-term 
financial health, and I am looking to the board to provide some 
assurances that they can reduce the Authority's debt while 
continuing to strengthen the economy in the Tennessee Valley. 
Again, it is estimated that their revenues will exceed their 
expenses, yet their debt continues to rise.
    The small watershed program in the Natural Resources 
Conservation Service provides small, cost-efficient projects 
that protect our water and our land in rural America. These 
projects also provide an economic return on investment. Sadly, 
under this President's budget, this program will receive no 
funding.
    I look forward to the testimony from the witnesses, and I 
recognize Ranking Member Mr. Bishop for any statements that you 
would like to make.
    Mr. Bishop. Thank you, Mr. Chairman, and thank you very 
much for holding this hearing. And I thank in advance the 
witnesses who are appearing before us.
    This hearing is important, because we are assessing the 
President's fiscal year 2012 budget request for three agencies: 
the Army Corps of Engineers; the Tennessee Valley Authority; 
and the Natural Resources Conservation Services. Each of these 
three agencies before us today is responsible for supporting 
and maintaining our national and regional economies in a 
variety of ways.
    These agencies literally allow our ports to stay open for 
shipping, allow commercial navigation to continue to utilize 
our waterways, protect countless families and property from the 
threat of flooding, provide energy to small and large 
communities, assist our small family farmers, and restore and 
protect our environmental resources. If nothing else, I hope we 
can all agree that the services that these agencies provide are 
critical to the well-being of this country.
    Mr. Chairman, a running theme of the new Majority is that 
Federal agencies need to do more with less. Unfortunately, this 
sound byte is not always grounded in reality. And, in realty, 
it puts many people in this country at great risk. When it 
comes to constructing, operating, and maintaining the critical 
navigation, flood control, power supply, and water supply 
programs that our Nation relies upon, the bottom line is that, 
with reduced funding, Federal agencies will be forced to do 
less with less.
    As we look at the proposed 2012 budget of the Corps of 
Engineers, they are being forced to make tough choices and 
prioritize between priority tasks, tasks that may mean the 
difference between keeping our economy moving forward, and 
falling backward again.
    For example, as noted in the Corps' 2012 fiscal year 
budget, the reality for operation and maintenance projects is 
that they are only being allocated 75 percent of what is 
necessary for day-to-day activities. Collectively, for the 
hundreds of Corps of Engineer projects around the country, 
reductions in budget will result in a growing deficiency and 
maintenance that will continue to expand until it becomes an 
emergency, or fails at a critical moment. The risk of failure 
increases each and every day, and ultimately, the breaking 
point will be reached.
    As we conduct this ongoing budget debate, let us be clear 
that, at least for the agencies here today, less funding means 
that fewer projects are constructed, fewer jobs will be 
maintained and created, more critical maintenance is deferred 
to another day, and more American families are placed in harm's 
way, due to the risk of flooding and infrastructure failure. 
Cutting back on funding these agencies may seem the easiest way 
to address budget concerns.
    But leave no doubt. We are placing the American public 
increasingly at risk. In my view, this is antithetical to why 
we were elected to Congress. Our job is to be good stewards and 
leaders of the Nation, and to make the policy and funding 
choices that get our country back on the path of prosperity for 
today and for the future. In my view, reckless cuts to 
infrastructure investment programs such as the civil works 
mission of the Corps of Engineers simply passes the buck on our 
responsibilities to maintain and provide a workable water 
infrastructure for future generations.
    We have all seen the statistics that much of our Nation's 
water infrastructure is inadequate or failing. Pick up any 
newspaper and you will find a reference to flooding, failing 
levees, or loss of land, due to erosion. The statistics are 
staggering, and yet we continue to put off until tomorrow 
addressing the needs of our Nation. With most of our water 
infrastructure in this Nation at 50 years and older, we cannot 
afford to keep kicking this can down the road. I am very 
concerned that we are setting up a potential failure of 
infrastructure through incomplete maintenance and delay in 
critical oversight and safety responsibilities.
    If this is the path that we are now on, then let's be 
honest with the American people, and let's tell them the real 
risks that they are facing. I believe that we should be asking 
all three of the agencies in front of us today what the reduced 
funds will mean in real terms to the safety and well-being of 
our citizens. We need to know who is going to be at risk, and 
to what level. We need to know what projects are going to have 
to be cut or delayed, as a result of the short-term continuing 
resolution.
    Let's stop trying to convince the Nation that, for agencies 
like the Corps of Engineers, that they can somehow adequately 
maintain the inventory and safety of critical projects with 
reduced funding. The real question is: how badly are we adding 
to the problem by cutting these agencies even further?
    Shouldn't businesses that depend on the free-flow of goods 
through our Nation's ports have a clear understanding with 
respect to exactly which ports will be silting up and reducing 
commerce and transportation?
    Furthermore, I'm sure communities located below dams or 
behind levees have an acute interest in knowing which among 
them are most at risk of an impending infrastructure failure. 
We need to be honest with the American people, and tell them 
about the true story of the potential impacts and costs they 
are facing. It is my hope that this hearing will address these 
concerns. I yield back the balance of my time.
    Mr. Gibbs. Thank you. Any Members on our side that would 
like to be recognized for any statements? Representative 
Cravaack?
    Mr. Cravaack. Thank you, Chairman Gibbs, and Ranking Member 
Bishop, for holding this important meeting. And I would like to 
welcome the witnesses on our panel today, and I look forward to 
hearing your testimony regarding the President's fiscal year 
2012 budget request.
    Given the aging state of our Nation's infrastructure and 
the current fiscal troubles, I will be very interested to hear 
how the administration intends to do more with less. I look 
forward to hearing the efforts to reduce the waste and improve 
government efficiency.
    As a representative from the Great Lakes State, I would be 
particularly interested in how the President's budget request 
will impact the Great Lakes' commerce and prosperity. Annually, 
173 tons of commodities are transported between the Great Lakes 
ports and waterways. Great Lakes transportation directly 
impacts hundreds of thousands of American jobs. And I look 
forward to discussing how the President's budget reflects on 
this reality.
    Make no mistake. Proper maintenance of our locks, 
breakwaters, channels, and dams is imperative to our Nation's 
ability to grow ourselves out of a difficult recessionary 
fiscal time.
    Thank you again. I look forward to hearing your 
testimonies.
    Mr. Gibbs. Go ahead.
    Ms. Hirono. Thank you, Chairman Gibbs and Ranking Member 
Bishop, for calling this hearing today. And I want to thank all 
of our witnesses, in particular the people from the Army Corps 
and the National Resources Conservation Service, NRCS, for the 
good work that you do in all of our communities and, in 
particular, of course, in Hawaii.
    And while we are asking all of the agencies to do more with 
less, from my experience and my meetings with the Army Corps 
and NRCS in my community, you are already doing more with less. 
And as the Ranking Member Bishop said, at some point with these 
kinds of cuts that we are contemplating, you can only do less 
with less. And that would be a real tragedy for all of our 
communities, particularly in the rural areas of our country, in 
Hawaii.
    Given the fiscal challenges we face, we must work to ensure 
that, yes, every Federal dollar is being used effectively to 
the benefit of the people. And this will require difficult 
choices. But we must view these choices through the prism of 
the most severe economic crisis since the Great Depression, 
which means that we must focus our energies and dollars on 
preserving programs that create jobs and protect public health 
and safety.
    In Hawaii, both the Army Corps and NRCS have played a vital 
role in helping to protect the health and safety of our people, 
while also helping to build infrastructure that has helped to 
foment economic growth.
    For example, the NRCS's watershed and flood prevention 
operation program have been instrumental in helping the small, 
rural communities in Hawaii. That's most of my district. One of 
the best examples of where this program has been a success is 
on the Big Island, on a project known as a Lower Hamakua Ditch 
Watershed.
    The Lower Hamakua Ditch was originally built in 1910 to 
help sugar plantations transport cane to the mill sites for 
processing. And, as most of you know--or some of you know--
sugar cane and the sugar plantations and pineapple plantations 
were a major part of Hawaii's economic life. This ditch was 
later converted into an irrigation system, which carried water 
to the seasonally dry fields of the lower elevations, the only 
source of potable water for the communities along its route.
    And the last sugar plantation on Hawaii Island closed in 
1994. And the economic and social displacement that ensued was 
something to behold. I was a Member of the State legislature 
when that happened. And the communities that were dependent 
upon the plantations to help maintain this vital lifeline 
called the Hamakua Ditch were left with very little, and a 
tremendous challenge.
    But with strong community support and assistance from the 
National Resources Conservation Service, today small family 
farmers, many of whom were former sugar plantation workers, 
have access to the necessary water resources that have allowed 
them to rebound from the loss of a key industry.
    And, as some of you probably know, Hawaii is also the most 
food-dependent State in the country, where over 90 percent of 
the food that we need is imported from outside of Hawaii. So 
it's even more important for our small farmers to be able to 
produce more of the goods that we use. And small farmers in our 
area produce a wide variety of products: papaya, the famous 
coffee, lettuce, tomatoes, orchids, and grass-fed beef and 
dairy products.
    And this is just one example of how the resources made 
available through this program is being put to use by people 
and communities throughout the islands. And this is a type of 
community revitalization that we should be working to support, 
nationwide. And I have to say that the money that goes into 
these programs through the efforts of NCRS are really minimal, 
compared to the benefits that we are garnering from these 
programs.
    So, to recognize that we are zeroing out NRCS's watershed 
and flood prevention and operations program is dire news, 
indeed. And I hope that, as we continue to review our budget 
priorities for this year, that we will preserve assistance to 
small rural communities like the ones along the Lower Hamakua 
Ditch, where Federal funds truly, truly makes a difference in 
the lives of our people.
    I look forward to hearing from you, and once again I thank 
you so much for the commitment that you have to the rural 
communities and to the people of Hawaii and to our country. 
Mahalo. I yield back.
    Mr. Gibbs. Representative Herrera Beutler?
    Ms. Herrera Beutler. Thank you, Mr. Chairman. I appreciate 
you allowing me to make a brief statement.
    It's a pleasure to have you here. I represent southwest 
Washington State, so it's basically the seven southwest 
counties. We abut the Columbia River, and we go out to the 
Pacific Ocean with many streams and rivers and lakes and flood 
plains in between--wetlands and flood plains. It's like a 
perfect storm.
    In every community that I visit, I ask them their important 
issues. And, without fail, the U.S. Army Corps of Engineers 
comes up. You play a very critical role throughout my entire 
region. And so, my message to you today is I am here to work 
with you. You have earned and deserve praise for a tremendous 
amount of work you have done throughout the region, whether 
it's channel deepening, whether it's dredging at the mouth, you 
know, projects that span in between. And it's made a big 
difference in our ability, as the region, economically, to 
transport goods and services, to build, and to grow, and to 
develop.
    I have also heard some really important concerns. And some 
of those I'm going to just do a brief outline on them. The cost 
of projects, the cost of projects and what local communities or 
cities are asked to pay for. And I would like to explore some 
ways with you--I would like to learn what your cost drivers are 
with some of these, and see if there is things that we can do 
to help ease some of that cost.
    Secondly, the timeliness of permits. In many cases I have 
heard that permits take much longer than are expected. And I 
want to work with you to see what causes these permitting 
delays, and hopefully find solutions that speed up the process. 
A caveat there is it's not in every region that these 
challenges happen, it's in certain regions. And in my mind, we 
should have a standardized process. It shouldn't take 
substantially long in certain regions, and a more reasonable 
timeframe in other regions. So I'd like to work on that.
    And most importantly is predictability and certainty. The 
overarching theme around what residents and small businesses 
and municipalities and counties communicate to me is 
unpredictability.
    Just last week I had a gentleman in my office who was 
looking to develop a piece of land that his family has owned in 
our community for decades. We have double-digit unemployment in 
six of my seven counties, and we have been there for multiple 
years. So it was music to my ears when one of these land owners 
said, ``We've got an idea. We know what we can develop. The 
city is involved, the city has already gone out for the bonds, 
it is done. They are excited, they are ready.''
    And he comes to me and he said, ``You know, the only reason 
I almost didn't put this money up, and that the city didn't, 
was because we weren't sure we could get a permit from the U.S. 
Army Corps of Engineers in 2 years.'' And he said it was so 
highly unlikely that it literally almost stayed what could be 
an 800-job development in a perfect location. I mean they've 
even got the State DoT to work with them on the whole deal.
    And their big concern--it was more a big question mark--was 
whether or not the Army Corps would tell them yes or no. And 
that's what he said to me. He said, ``You know, I can handle a 
no. What I cannot handle is getting into the process and the 
rules change, the goal post changes on me. And it's almost as 
if, you know, I'm fighting an ideological, rather than a 
process, an ideological barrier that I can't move.'' And that 
is something that I think we need to address, especially 
considering our economic situation throughout the country.
    So those are some of the things that I have heard, and I 
would like to work on. So you will probably hear more from me. 
I look forward to working with you and your staff as we move 
forward on specific issues and projects in the region.
    But, overall, this is something we hear across the board. 
We hear it from business all the time: predictability and 
certainty. I am hearing from people who want to play by the 
rules, who want to do it right, who want their applications to 
have every possible bit of information that you could ever 
imagine, and that was one of the things that he expressed to me 
was, ``They wouldn't tell me if they didn't get the right 
amount of information. We just check in every so often, you 
know, six months into the process, and they say, `Oh, we didn't 
have this bit of information,' '' and he is going, ``I will get 
it to you,'' but it elongates the timeframe.
    So, those are some of the challenges we hear, and we look 
forward to fixing those. Thank you. I yield back.
    Mr. Gibbs. Thank you. Representative Napolitano, do you 
have an opening statement?
    Mrs. Napolitano. Thank you, Chairman Gibbs, and thank you, 
Mr. Bishop, for holding this hearing. Before I start, I would 
like to recognize Steve Stockton, director of civil works. We 
have had an opportunity to meet in my office in regard to 
foreign assistance, which the subcommittee on water and power 
deals with, also.
    So, just to let you know that your gentlemen represent the 
Corps excellently in my area. Colonel Magnus, now Colonel Toy, 
we work with them extensively. We are working, hopefully, to be 
able to increase the number of catch basins in the LA area to 
be able to take care of the floods. And, as you well know, 
that's an endangerment of life, limb, and property in 
California.
    With the State of California working with the Bay Delta, 
it's critical for us. It's a $58 million Army Corps budget for 
the restoration. If those levees ever give way, we lose 
billions of dollars in property, and probably a life in the 
mix. Many of those levees are private, and so it's a big deal 
to be able to sort through and find out how we get it done. 
Certainly support the Corps' involvement with the Bay Delta 
conservation plan.
    Then we look at the replenishment of ground water aquifers. 
And hopefully we will be able to identify in the future how to 
increase the conservation pools for storage of water run-off, 
recycled, et cetera. It's going to be critical if Mother Nature 
continues to throw drought curves at us, which will happen. And 
how do we prepare our communities? And not only in the west, 
but the rest of the country.
    Moving on to Whittier Narrows Dam, we have been working on 
that one now for years to increase the water capacity for 1,100 
acre feet annually. We have been able to get the funding, and 
now we're waiting for certain other--how would I say--stumbling 
blocks. We're waiting for that. Hopefully it will be put 
together, because we don't want to lose all that water to the 
ocean; we need to be able to store it and put it into the 
settling ponds.
    With the county, we support the Army Corps' Great Outdoors 
initiative. That is key for a lot of us. Pico Rivera and La 
Puente, both my cities, use Whittier Narrows for recreation 
purposes, including the LA County supporting and being able to 
put funding--not matching, but more than enough funding--in 
that.
    We were very supportive, and will continue to be 
supportive, of putting more park space for residential use. In 
LA--I think none of the California cities meet the mandate of 
park land.
    Thank you again, Chairman Gibbs and Ranking Member Bishop, 
for this hearing. It is critical to let people know that the 
Corps does great work, but they can't continue to do the great 
work they do if we continue to cut their budgets. There is many 
backlogs that we have, not only in our communities but in other 
communities, and we trust that while they're making do more 
with less, that we don't continue to cut them so that they are 
handicapped in being able to deliver the great work they do. 
And with that, I yield back.
    Mr. Gibbs. Thank you. Any other Members on this side that 
want to be recognized?
    [No response.]
    Mr. Gibbs. Go ahead, Representative.
    Ms. Brown. Thank you very much, Mr. Chairman. And let me 
congratulate you and the ranking member for being new in this 
capacity. I had the pleasure of chairing this subcommittee the 
last 4 years.
    It's very difficult for me to talk about this, the 
President's fiscal year 2012 budget. But for the priorities of 
the U.S. Corps of Engineers, Natural Resources Conservation 
Service, and the Tennessee Valley Authority, I am committed to 
continued oversight of the budget request for the agencies 
under the jurisdiction of this subcommittee.
    I thank Chairman Gibbs and Ranking Member Bishop for 
calling the hearing. I am pleased that we will hear testimony 
from these Federal programs that service important public 
services, ranging from restoration of our Nation's water 
resources, flood protection, to electricity production. The 
administration should be commended for producing an adequate 
budget in difficult but improving economic times.
    However, there are certain budget areas that could undergo 
improvement. For one, I have concerns regarding the $56 million 
reduction from the appropriated amount of fiscal year 2010, an 
investigation fund for the U.S. Corps of Engineers. This 
funding goes toward studying the national need, engineering 
feasibility, as well as economic and environmental return on 
Federal investment and water resource problems across the 
country.
    I have similar concerns with the 551 reduction in 
investigations fiscal year 2010, as well as the $86 million 
reduction from fiscal year 2010 in operations and maintenance 
programs under the U.S. Corps of Engineers. I fear that at the 
present requested amount, the Corps of Engineers will be unable 
to plan and design the next generation of projects within its 
core mission of environmental restoration, flood damage 
reduction, and navigation. Now is not the time to reduce the 
Corps' capability to maintain and improve our Nation's ports, 
harbors, and inland waterways that are crucial to job creation, 
interstate commerce, international trade, and improving our 
economy.
    I welcome each of the witnesses here today, and thank you 
for your testimony. I look forward to you telling me exactly 
what you can do at the level of the appropriations that you are 
requesting in your budget. Thank you.
    Mr. Gibbs. Thank you. At this time I would like to welcome 
our distinguished panel, and we will start off with The 
Honorable Darcy, who is the Assistant Secretary of the Army of 
Civil Works. Welcome. Good to see you.

 TESTIMONY OF JO-ELLEN DARCY, ASSISTANT SECRETARY OF THE ARMY 
FOR CIVIL WORKS, UNITED STATES ARMY; LIEUTENANT GENERAL ROBERT 
 VAN ANTWERP, CHIEF OF ENGINEERS, UNITED STATES ARMY CORPS OF 
    ENGINEERS; JOHN M. THOMAS III, CHIEF FINANCIAL OFFICER, 
 TENNESSEE VALLEY AUTHORITY; AND THOMAS CHRISTENSEN, REGIONAL 
   CONSERVATIONIST, UNITED STATES DEPARTMENT OF AGRICULTURE, 
             NATURAL RESOURCES CONSERVATION SERVICE

    Ms. Darcy. Thank you. Thank you, Mr. Chairman, and 
distinguished members of the subcommittee. Thank you for the 
opportunity to present the President's Fiscal Year 2012 Budget 
for the Civil Works Program of the Army Corps of Engineers. I 
will summarize my statement and ask that my complete statement 
be part of the hearing record.
    The 2012 budget reflects the administration's priorities 
through targeted investments that help restore the environment 
and revitalize the economy. The budget requires new 
appropriations of $4.631 billion. In keeping with the 
administration's program to put the Nation on a sustainable 
fiscal path, this is $836 million, or about 15 percent below 
the 2010-enacted amount of $5.445 billion. It is about 6 
percent below the 2011 budget for Civil Works.
    The 2012 funding level reflects effective and sound use of 
available resources, focusing on those investments that are in 
the best interests of the Nation. The budget concentrates 
funding primarily in the three main Civil Works program areas: 
commercial navigation, flood and coastal storm damage 
reduction, and aquatic ecosystem restoration.
    The 2012 budget continues the Army's commitment to a 
performance-based approach to budgeting in order to provide the 
best overall return from available funds and achieving 
economic, environmental, and public safety objectives. 
Competing investment opportunities were evaluated using 
multiple metrics, and objective performance criteria guided the 
allocation of the funds. The budget focuses on continuing and 
completing ongoing projects and studies. The budget also 
includes funding for two new construction starts and four new 
studies.
    The budget provides $50 million for a comprehensive levee 
safety initiative. The initiative includes $46 million to help 
insure that the Federal levees are safe, and to assist non-
Federal entities as they address safety issues with their own 
levees. The levee safety initiative also includes $4 million 
for Corps participation in the expansion of interagency teams, 
known as Silver Jackets, to include every State, and to provide 
unified Federal assistance in implementing flood risk 
management solutions.
    The Operation and Maintenance Program also includes a new 
environmental and energy sustainability program to reduce 
energy consumption at Corps projects and buildings. The 2012 
budget places priority on collaboration with other Federal 
agencies in the development of funding allocations for aquatic 
ecosystem restoration.
    For 2012, this collaboration is reflected in five major 
ecosystems: the California Bay-Delta, Chesapeake Bay, the 
Everglades, the Great Lakes, and the Gulf Coast. The 
administration plans to work with Congress and stakeholders to 
explore ways to support recapitalization of the Corps' aging 
infrastructure, modification of its operations, or 
deauthorization as appropriate, consistent with modern-day 
water resources principles and priorities.
    Direct beneficiaries would be asked to pay a significant 
share of the cost to rehabilitate, expand, or replace projects, 
just as they would for a new project, commensurate with the 
benefits that they receive. Options such as direct financing 
will be considered as part of this effort, where appropriate.
    The budget provides for use of $758 million from the Harbor 
Maintenance Trust Fund to maintain coastal commercial 
navigation channels in harbors. Despite the overall Civil Works 
reduction of 15 percent below the enacted 2010 level, the 
amount recommended in the 2012 budget for harbor maintenance 
and related work is essentially unchanged from 2 years ago.
    The administration also plans to develop legislation to 
expand the authorized uses of the Harbor Maintenance Trust Fund 
so that its receipts are available to finance the Federal share 
of other efforts in support of commercial navigation through 
the Nation's ports. No decisions have been made yet on what 
additional costs would be proposed to be paid from the Harbor 
Maintenance Trust Fund. Development of proposed legislation 
will proceed in the coming months.
    Inland waterways capital investments are funded in the 
budget at $166 million, of which $77 million is financed from 
the Inland Waterways Trust Fund. This is the total amount that 
is affordable in 2012 with the current level of revenue coming 
into the Inland Waterways Trust Fund. The administration will 
work with Congress and stakeholders to authorize a new 
mechanism to increase the revenue paid by commercial navigation 
users on the inland waterways.
    Last year, President Obama established the America's Great 
Outdoors initiative to promote innovative community-level 
efforts to conserve outdoor spaces and to reconnect Americans 
to the outdoors. This initiative was celebrated at several 
events around the country, including a public hearing event, or 
listening event, that the Secretary of the Interior and I held 
in August at a Civil Works project near St. Louis, Missouri. 
The Civil Works Recreation Program is closely aligned with the 
goals of the America's Great Outdoors initiative and includes a 
variety of activities to reconnect Americans, especially our 
young people, with the Nation's outdoor resources.
    We continue to strengthen the Corps' planning expertise, 
including through greater support for planning centers of 
expertise, and continued support for the development of revised 
water project planning Principles and Guidelines. Also, the 
Army has initiated a pilot program to identify means of 
enabling studies to reach decisions more efficiently.
    A number of low-priority programs and activities receive 
reduced or no funding in our 2012 budget. For example, funding 
for maintenance of navigation harbors and waterways segments 
that support little or no commercial use is reduced by about 
half. Also, no funding is provided for small projects in 
several of the Continuing Authorities Programs.
    The budget proposes to reprogram $23 million of prior-year 
funds from these lower priority programs to finance ongoing 
phases of projects and higher priority Continuing Authority 
Programs that mitigate shoreline damages caused by navigation 
projects. Also, to carry out beneficial uses of dredged 
materials and to restore the environment. Development of small 
flood damage reduction projects also will continue with funds 
carried over from prior years.
    The Corps continues the work funded by the 2009-era 
program, which provided $4.6 billion for the Civil Works 
Program. As of last month, more than $3.1 billion of the total 
had been spent, primarily in payments to contractors for work 
already completed, and 400 projects have been completed, and 
about 400 more remain to be completed. These investments create 
jobs and carry out important infrastructure work.
    Small business awards account for about 51 percent of the 
funds obligated. The budget includes funding to continue the 
veteran project, which provides vocational rehabilitation and 
innovative training for wounded and disabled veterans, while 
achieving historical preservation responsibilities for 
archeological collections administered by the Corps. The 
project supports work by veterans at curation laboratories in 
Georgia, St. Louis, Missouri, and here in Washington, DC.
    In summary, the President's 2012 Budget for the Army Civil 
Works Program is a performance-based budget. It supports water 
resources investments that will yield long-term returns for the 
Nation.
    Mr. Chairman and members of the subcommittee, I look 
forward to working with you in support of the President's 
budget. And, in closing, before General Van Antwerp talks, I 
want to make one point about the Army Corps of Engineers. 
Recently the Chief and I--and I think he is going to talk about 
this--had the opportunity to travel to Afghanistan to visit 
with over 1,000 volunteers from the Army Civil Works Program 
who are helping with the war effort in Afghanistan. And it was 
truly a privilege for me to visit with them. Thank you very 
much.
    Mr. Gibbs. Thank you.
    I would like to next welcome Lieutenant General Robert Van 
Antwerp. He is the chief of engineers, the U.S. Army Corps of 
Engineers.
    Welcome.
    General Van Antwerp. Well, thank you, Mr. Chairman, Mr. 
Bishop, distinguished members of the subcommittee. I am honored 
to testify before your subcommittee, along with Ms. Darcy 
today.
    The fiscal year 2012 Civil Works budget is a performance-
based budget focusing on projects and activities that provide 
the highest net economic and environmental returns, or address 
significant risk to human safety. The budget funds 92 
construction projects, including 55 flood and storm damage 
reduction projects--3 of which, by the way, are budgeted for 
completion--16 commercial navigation projects, and 19 aquatic 
ecosystem restoration projects. Two of these construction 
projects, as Ms. Darcy mentioned, are new starts. The budget 
supports restoration of nationally and regionally significant 
aquatic ecosystems with emphasis on the Florida Everglades, 
Gulf Coast, California Bay-Delta, Great Lakes, and Chesapeake 
Bay.
    The budget includes $104 million for activities in the 
Investigations account. It funds 58 continuing studies and 4 
new studies. Funding is also included for the Water Resource 
Priority study, which is an evaluation of the Nation's 
vulnerability to inland and coastal flooding.
    The budget supports our continuing stewardship of water-
related infrastructure. The Operation and Maintenance Program 
for the fiscal year 2012 budget includes $2.314 billion, and an 
additional $131 million under the Mississippi Rivers and 
Tributaries Program. The focus is on the maintenance of key 
commercial navigation, flood and storm damage reduction, and 
hydropower facilities.
    Corps teammates continue to respond wherever needed, and 
whenever needed, to help during major floods and other national 
emergencies. This budget provides $27 million for preparedness 
for floods, hurricanes, and other natural disasters, including 
$4 million in support of the levee safety initiative in States 
known as the Silver Jackets.
    A quick update on the Corps' preparation as we move toward 
the spring flood events, of which there will be flood events. 
We are working with FEMA and the National Weather Service to 
monitor the high probability of spring flooding in the great 
northwest, the north central U.S., specifically the Red River 
of the north, the upper Mississippi River, and the Minnesota 
River.
    Based on these projections, our commanders have already 
requested advance planning funds, and are taking advanced 
measures. They verified availability of key flood-fighting 
materials. They are also encouraging State, local, and Federal 
authorities to discuss and review preparations for flood 
response. In a few words, we are ready for this year. But we 
know it's going to be high adventure.
    On the international front, I am proud of our work on 
missions in Afghanistan and Iraq. Men and women from across the 
Corps, all volunteers, and many of whom who have served 
multiple tours, continue to provide critical support to our 
military and humanitarian missions. Currently, 1,168 Corps 
employees, both civilian and military, are deployed in Iraq and 
Afghanistan, where they have completed over 6,000 
infrastructure and water-related projects.
    As Ms. Darcy mentioned, we did have the opportunity last 
month to travel over to Afghanistan and witness not only the 
amazing employees, but the amazing work that they are doing. In 
Afghanistan, the Corps is spearheading a comprehensive 
infrastructure program for the Afghan National Army, the Afghan 
National Police, and is also aiding in critical public 
infrastructure projects.
    The Corps of Engineers is committed to staying at the 
leading edge of service to our Nation. We welcome comments from 
you in areas we might improve. We are committed to changing all 
that we do to ensure an open, transparent, and performance-
based Civil Works program.
    So, thank you, Mr. Chairman, for this opportunity to 
testify. I look forward to your questions.
    Mr. Gibbs. Thank you, and thank you for your service to our 
country.
    Next panelist is Mr. John Thomas III. He is chief financial 
officer for the Tennessee Valley Authority.
    Welcome.
    Mr. Thomas. Thank you, Chairman Gibbs, Ranking Member 
Bishop, and distinguished Members. It is an honor to be with 
you this afternoon to discuss the Tennessee Valley Authority's 
budget for fiscal year 2012. TVA appreciates the oversight this 
committee provides, and we are pleased to inform you of our 
progress.
    For background, TVA is a corporation wholly owned by the 
Federal Government, and it is the Nation's largest public power 
producer. TVA provides wholesale electricity to 155 
distributors and 56 large industries and Federal installations, 
serving a population of about 8 million. TVA also has a broad 
stewardship role, which includes managing the Tennessee River 
for flood control, commercial navigation, water quality, and 
recreation.
    In fulfilling its mission to serve the region, TVA's power, 
environmental, economic development, and related activities are 
funded entirely by the sale of electricity. TVA funds new 
projects to keep up with electricity demand through the sale of 
bonds, which are not obligations of the United States 
Government.
    Despite receiving no Federal revenues, TVA appreciates its 
responsibility as a Federal agency and, in that spirit, has 
voluntarily applied the freeze on Federal salaries to our 
managers and specialists.
    Our preliminary budget for fiscal year 2012 reflects a 
continued modest economic recovery in the TVA region. We 
currently project revenue of $12.1 billion from the sale of 
electricity, fuel and operating expenses of $10.3 billion, and 
capital expenditures of $2.6 billion.
    Our capital expenditures include $219 million for clean air 
projects, and about $1.5 billion for new generating projects, 
including the completion of a second reactor at Watts Bar 
Nuclear Plant in Spring City, Tennessee. We also anticipate 
spending about $175 million on energy efficiency initiatives, 
and $91 million to encourage economic development.
    TVA's statutory debt is estimated to be at $26 billion by 
the end of 2012, and we expect to pay down $2.6 billion on 
existing debt.
    One of the fundamental changes the TVA board has 
established is basing financial decisions on a set of sound 
guiding principles. Those principles include issuing new debt 
strictly to finance new assets, retiring debt over the useful 
life of assets, using regulatory treatment for specific and 
unusual events, increasing rates where necessary to fund 
operational spending, and aligning rate actions with TVA's 
renewed vision and strategy. These guiding principles are 
improving TVA's decisionmaking, and will ensure continued 
financial health.
    Last August, the TVA board adopted a renewed vision to 
address many of the challenges the TVA region is facing now and 
will likely face in the future. The vision strengthens TVA's 
mission to provide low-cost electricity, economic development, 
and environmental stewardship to the region, and calls for 
cleaner energy by 2020.
    Briefly, TVA is focused on six key areas: low electricity 
rates, high reliability, responsibility to our customers in the 
region we serve, cleaner air, more nuclear generation, and 
greater energy efficiency. Our recently completed integrated 
resource plan is one example of how we are meeting our 
responsibilities to solicit a wide range of stakeholder views 
on our energy future. The integrated resource plan supports our 
vision of a balanced portfolio, and we expect to formally 
present this to our board later this spring.
    In conclusion, for fiscal year 2012, TVA's supply of 
electricity balances well with our expected demand. We are 
addressing the future needs of our region with plans to expand 
the power system in an environmentally responsible way. We 
would be pleased to invite you or members of your staffs to 
visit and see for yourselves how we are progressing.
    Thank you, Mr. Chairman. I would be happy to answer any 
questions.
    Mr. Gibbs. Thank you.
    Our next and final panelist is Mr. Thomas Christensen, who 
is the regional conservationist of the Natural Resources 
Conservation Service.
    Welcome.
    Mr. Christensen. Thank you, Mr. Chairman, and members of 
the subcommittee. I appreciate the opportunity to discuss the 
watershed program activities of the Natural Resources 
Conservation Service. In my remarks today I am pleased to 
describe both our ongoing work and the fiscal year 2012 budget 
request for NRCS's watershed programs under both Public Laws 
534 and 566.
    The NRCS watershed programs offer communities and 
landowners technical expertise and financial assistance for 
watershed projects, including planning, implementation, and the 
rehabilitation of aging dams. These programs are designed to 
help solve local natural resource problems. The watershed 
programs have given NRCS the authority to complete work on over 
2,000 watershed projects, nationwide.
    Before providing the committee a summary of the fiscal year 
2012 budget request, I would like to share a few of our 
accomplishments related to the watershed programs under funding 
from the American Recovery and Reinvestment Act. Using these 
programs, NRCS successfully entered into 1,400 contracts, 
grants, and agreements, awarding $340 million in Recovery Act 
funding to rebuild America's infrastructure and improve its 
natural resources. This represents 100 percent of the Recovery 
Act funding the Agency received.
    The Agency's Recovery Act projects are being implemented 
through flood plain easements, watershed structures, land 
treatment, and the rehabilitation of aging dams. To date we 
have expended almost 60 percent of the Recovery Act funds. By 
the end of this fiscal year, these funds will have been used to 
install over 300 flood prevention measures, restore more than 
38,000 acres of flood plain lands, and rehabilitate or remove 
16 unsafe dams.
    The President's 2012 budget was developed after closely 
examining all of NRCS's programs and our operations for the 
coming years. The budget prioritizes limited resources to 
ensure NRCS's position to meet the needs of America's farmers 
and ranchers, while doing its share to help reduce the budget 
deficit.
    It also makes a number of difficult decisions that were 
necessary to support the President's goals of restoring fiscal 
responsibility, and providing efficient and effective 
conservation programs to the American people. Among those 
difficult choices was a decision in the President's fiscal year 
2012 budget to eliminate funding for NRCS's watershed programs. 
Mr. Chairman, while these programs have been tremendously 
successful for more than 50 years, we believe that sponsoring 
organizations can now assume a more active leadership role in 
identifying watershed problems and their solutions.
    Public Laws 534 and 566 authorize the Secretary of 
Agriculture to provide technical and financial assistance to 
project sponsors for planning and installing watershed 
projects. The Public Law 566 program has been available 
nationwide to protect and improve watersheds up to 250,000 
acres in size. Public Law 535 authorized a program that is 
available only in areas designated by Congress, which 
encompasses about 38 million acres in 11 States.
    The fiscal year 2012 budget request does not include 
funding for the Public Laws 534 and 566 watershed programs. 
This reduction is in keeping with the administration's efforts 
to reduce spending. In addition, recent funding for these 
programs has not been fully prioritized, based on anticipated 
project outcomes or measurable impacts.
    Also authorized under Public Law 566, the watershed 
rehabilitation program serves to extend the life of dams and 
bring them into compliance with applicable safety and 
performance standards, or to decommission dams so they do not 
pose a threat to life or property. NRCS may provide technical 
and financial assistance for the planning, design, and 
implementation of rehabilitation projects.
    However, the continuing operation and maintenance of dams 
built under NRCS watershed programs is the responsibility of 
local project sponsors; 11 dam rehabilitations were completed 
in fiscal year 2010, and there are 23 dam rehabilitation 
projects currently under construction.
    Additionally, there were 650 assessments of high-hazard 
dams that provided communities with technical assistance about 
the condition of their dams and alternatives for rehabilitation 
of dams that do not meet Federal dam safety standards.
    The fiscal year 2012 budget does not include funding for 
the watershed rehabilitation program, again reflecting the many 
difficult choices that were made in order to ensure fiscal 
responsibility with our current economic climate.
    In summary, NRCS has accomplished much through the 
watershed programs over the past 50 years. However, because the 
benefits from these programs primarily accrue to local 
communities, and the projects are owned and operated by the 
local sponsors, we recommend that local communities take a 
larger role in funding such projects.
    I thank the committee, and we would be happy to respond to 
any questions.
    Mr. Gibbs. Thank you. I'll start off the questions to 
Secretary Darcy.
    In the President's State of the Union Address back in 
January, he shared a vision for winning the future, and he 
said, ``To help businesses sell more products abroad, we set a 
goal of doubling our exports by 2014, because the more we 
export, the more jobs we create at home.''
    Ninety-nine percent of our world trade is oceanborne and 
must pass through one of our U.S. ports. It is fairly obvious 
that lowering ocean transportation costs makes our exports more 
competitive. Yet the administration's budget would invest less 
than five percent of the Corps' construction budget on 
modernizing, deepening, or widening two ports.
    The budget also dramatically reduces the use of the Harbor 
Maintenance Trust Funds to maintain our ports to keep them 
efficient and keep costs for exporting goods low. Increasing 
exports is a key element of the President's vision for winning 
the future. Can you please explain how the goal of doubling the 
exports has been reflected in your budget for port 
modernization and maintenance?
    Ms. Darcy. Mr. Chairman, doubling the exports is a goal we 
believel that, under this budget, we will be able to meet. In 
looking at the Harbor Maintenance Trust Fund and funding our 
ports for the future, we are looking at taking the monies from 
the Harbor Maintenance Trust Fund and looking at more national 
investment in ports beyond just the original purposes of 
navigation. So we are looking at being able to fund the ports 
using that Federal investment on a larger scale.
    And as I said earlier in my opening statement, we are 
looking forward to working with this committee and others to 
try to develop how that Harbor Maintenance Trust Fund should be 
allocated.
    Mr. Gibbs. So are you saying that widening and deepening 
the ports is not a top priority? You're maybe siphoning some of 
the money off to do other things? I am a little confused by 
your answer.
    Ms. Darcy. No, sir. It is a priority. But within the funds 
in the Harbor Maintenance Trust Fund, in the $783 million, I 
think it is, that we're using this year to maintain the ports, 
there is also a balance in the trust fund that--we are going to 
develop a proposal on how we can use that to improve and pay 
the Federal share in port development.
    Mr. Gibbs. OK. It's also my understanding in this budget 
that it's really targeted toward two ports. Is that correct? 
And can you tell the committee which widening and deepening 
projects were excluded in this construction budget, which ports 
were excluded?
    Ms. Darcy. We currently have widening and deepening ongoing 
at the Port of New York, New Jersey, and I'm going to have to 
defer to the Chief for the second one. The deepening of New 
York/New Jersey is ongoing. And the second port is Sacramento 
in California.
    Mr. Gibbs. OK. Also for you, Secretary--on January 18th the 
President signed an Executive order improving regulation and 
regulatory review. This order got some very favorable reviews 
for being balanced and rationale. For example, the major 
principle in developing water resources projects is that 
Federal agencies select, in choosing among alternative 
regulatory approaches, those approaches that maximum net 
benefits, including potential economic, environmental, public 
health and safety, and other advantages--impacts in equity.
    It is immediately compelling to apply the same idea to 
selecting among alternative plans for water project 
investments. Decisions would be balanced, and all the 
alternatives would be laid out. Yet for over 2 years the 
administration has been trying to do something completely 
different with the Principles and Guidelines.
    The National Academy of Sciences says the proposed 
revisions are incoherent. How will the administration ensure 
development of the new Principles and Guidelines be consistent 
with the President's Executive order?
    Ms. Darcy. Mr. Chairman, we are currently working within 
the Federal family under the direction of the Council on 
Environmental Quality to propose the revisions to the 
Principles and Guidelines that were required in 2007.
    We are balancing all of the demands and considerations for 
national economic development, as well as environment and 
social impacts for all of those water resources programs. We 
have taken to heart the recommendations by the National Academy 
of Sciences, as well as all the public comments that were 
received on our initial draft, and we're hoping that the 
Principles and Guidelines--the Principles and Standards portion 
of that revision--will be hopefully implemented and finalized 
in June of this year.
    Mr. Gibbs. I want to go to the Chief now, the general. 
Undoubtedly, the reduction in funding for the Corps will 
require contract cancellations. Can you supply the Committee 
with a list of project terminations proposed by the 
administration's budget and their associated remaining--benefit 
to remaining cost ratios and their associated termination 
costs?
    Does the President's budget just assume Congress will 
continue funding these projects?
    General Van Antwerp. Are you speaking as if the Continuing 
Resolution continues as it is right now?
    Mr. Gibbs. No, no, the----
    General Van Antwerp. Or--no?
    Mr. Gibbs. I think the President's budget that he 
submitted--you know, obviously with the cuts that he submitted 
from previous expenditures by the Corps, he will have to cancel 
some projects. And I was wondering the rationale of how you're 
going to move out the benefit, cost ratios, and how you're 
going to analyze that, and--or do you just assume that Congress 
is just going to fund them anyway?
    General Van Antwerp. We have a very strict prioritization 
scheme for the projects that are in the budget. So those 
projects that are in the fiscal year 2012 budget were done on a 
very concerted effort to follow priorities. There are about 168 
projects that were in the fiscal year 2010 budget that are not 
in subsequent budgets. So they were funded in the Fiscal Year 
2010 Act. So, those were projects that were additional adds 
from the Congress.
    So, our first intent is to, in this budget, fund those 
projects that met our criteria. One of those criteria was the 
benefit cost ratio. As Ms. Darcy said, we also have 
environmental considerations and social considerations. So we 
can lay those priorities out, if you would like to go to that 
next step.
    Mr. Gibbs. Well, and also I would assume economic----
    General Van Antwerp. Economic is a big part of it. Life, 
health, safety--if it's a dam, safety, for instance. If it's a 
biological opinion that, by law, states that we will do it, 
then we have to work those priorities. But those are the 
priorities that we go through to arrive at the budget.
    Mr. Gibbs. OK. I am going to turn it over to Ranking Member 
Bishop for his questions.
    Mr. Bishop. Thank you very much, Mr. Chairman, and I am 
going to pick up on where you left off, because I think it's a 
very, very important area. And let me thank all of the 
panelists for your testimony. And let me particularly thank the 
Army Corps for the service that you provide to my district. I 
am very grateful.
    The issue that the chairman is raising is one that I think 
all of us either are concerned about or ought to be concerned 
about. We have two sets of numbers. We have what was passed in 
H.R. 1, the continuing resolution, the fate of which is 
unknown, that, as I understand it, cuts funding for fiscal year 
2011, cuts it by about $500 million from fiscal year 2010, and 
then the President's budget, round numbers cuts by an 
additional $300 million. Am I about right on those numbers? OK.
    Now, as we sit here, the Army Corps has a set of projects: 
A, that have already started; and B, that are authorized but 
have not yet been started. And I believe the chairman asked, 
``Can you submit to us a list of those projects that have 
already been started, if any, that will now lie incomplete for 
some period of time?'' Are there any projects that fall into 
that category?
    General Van Antwerp. Yes, there are projects that fall in 
that category, and we can provide that.
    Mr. Bishop. Thank you. And can you also provide us with a 
list of those projects that are authorized, but for which 
construction has not yet started?
    General Van Antwerp. Yes, we can do that.
    Mr. Bishop. OK. And can I further ask, with the chairman's 
indulgence, can you provide us with some assessment of the 
health and safety impact of not going forward with those 
projects, and the economic impact to the communities affected 
by not going forward with those projects?
    General Van Antwerp. Absolutely.
    Mr. Bishop. Thank you. I think that's very important 
information for all of us to have.
    And what I would like to--here is a point that I just think 
is so important. I want to read from a report prepared by the 
Republican staff of this committee in October of 2010 that was 
signed off on by now-Chairman Mica. I am quoting now from page 
54 of the report.
    ``The Corps of Engineers budget remains relatively constant 
from year to year. Projects are rarely funded at their full 
capability, resulting in drawn-out construction schedules. This 
leads to an inefficient schedule and higher costs, with 
taxpayers footing the bill. In addition, further economic loss 
is experienced when this slower pace of project construction 
causes a delay in realizing the economic benefits the project 
can achieve only once it is constructed and operational. 
Projects are rarely completed on time and, due to the inflated 
schedule, regularly cost more than initially estimated.''
    Now, this, as I say, is a report entitled, ``Sitting on our 
Assets: the Federal Government's Misuse of Taxpayer-Owned 
Assets,'' prepared for then-Ranking Member Mica October 2010, 
signed off on by then-Ranking Member Mica and the ranking 
members of each of the six subcommittees of this full 
committee.
    Aren't we right at that point? Aren't we now at the point 
where we are going to not undertake projects because of a 
short-term budgetary constraint, but we will be buying for 
ourselves a much greater expense, in terms of going forward, 
once we ultimately complete those projects? Are we not at that 
point right now? Secretary Darcy? General Van Antwerp?
    General Van Antwerp. I would say we are at that point now. 
There is a time factor involved as you look at the cost of 
projects as they are extended over a longer period of time, and 
that's part of what that report indicated.
    We are at the point now that it's very possible that some 
of the projects that have been started--that we'll have to 
conclude those projects, or button those projects up, depending 
on the funding levels.
    We did, in this budget, though, try to look at those 
projects that could be completed, and we do have three that are 
budgeted for completion. So that is also a factor. If we can 
complete them and budget them and close them out, we would like 
to do that.
    Mr. Bishop. Right now--I'm sorry, Secretary Darcy, did you 
want to----
    Ms. Darcy. No, I concur with what the Chief said.
    Mr. Bishop. OK. Historically, the Army Corps budget has 
been comprised of approximately three-quarters of projects that 
result from an internal review of the Army--through the Army 
Corps process, makes recommendations that then find their way 
into the executive budget. And about a quarter of the projects 
that the Army Corps undertakes are congressional adds. Is that 
about right? OK.
    The projects that we are going to leave on the table and 
not complete, what proportion of them represent congressional 
adds, and what proportion of them represent projects that, in 
the view of Army Corps professional staff, have emerged from 
this very careful process that you undertake, in terms of the 
cost benefit of undertaking a project?
    Ms. Darcy. I don't know what that would be, but I think we 
can provide that information to you, because I would be 
guessing at what the number would be.
    Mr. Bishop. OK. If I could ask that you provide that, in 
addition to the information that Chairman Gibbs and I have 
asked, that would be very helpful.
    Ms. Darcy. Yes.
    Mr. Bishop. Thank you very much. I yield back.
    Mr. Gibbs. Thank you. Representative Landry, do you have a 
question?
    Mr. Landry. General, you would agree that a group is only 
as good as its leader. And I am sure they don't give you those 
stars without being a good leader.
    And everyone comes before Congress in these budget 
committees to tell us how they have cut and how they have made 
tough decisions which justify their budget. But at the end of 
the day, we have got to satisfy the taxpayers. And I've got a 
problem with the way the Corps--of course, you know, we've got 
problems getting the Mississippi dredged, moving our commerce--
but particularly in my district, what I believe is a microcosm 
of the problem and some dysfunctionality with the Corps.
    Are you aware that I have a--that there is a 2,000-ton 
barge that sunk in a navigational canal in my district?
    General Van Antwerp. Yes, Representative, I am aware of it.
    Mr. Landry. OK. And it's been there for almost a year now. 
And I made some suggestions to your legal department, because 
they filed suit. And there is specific legislation--33 U.S.C.--
that allows you all to seize and remove that vessel. And as 
long as that vessel sits in that canal, the asset deteriorates. 
And the cost of removing it increases. And at the end of the 
day, the taxpayer pays more.
    Any idea how we're going to get that thing out?
    General Van Antwerp. Well, first of all, I would say it's 
not the taxpayers' responsibility, it's the owner of the 
vessel's responsibility. It is not a Federal project or a 
Federal----
    Mr. Landry. Oh, hold on. Hold on, sir. See, the problem----
    General Van Antwerp. We have thousands of vessels----
    Mr. Landry. But, sir, the problem is that when the Corps 
wants to use its authority over navigational waters, it does 
so. But this is a navigational canal. I have letters from my 
sugar refineries that it's impeding commerce. In fact, we're 
trying to create jobs in this country, and I have a shipyard 
who is spending millions of dollars refitting this piece of 
property north of this structure. And if we don't get it out, 
they won't be able to open their shop.
    And I hate to disagree with you, but I can show you very 
clearly where the law certainly gives you the right and the 
responsibility to remove that, sir.
    General Van Antwerp. I would agree that we are authorized 
to remove it. But it doesn't say that we are responsible to 
move it. The first responsibility is--and the law requires--the 
owner and operators of the vessel. It is their responsibility 
to remove it. So the Department of Justice right now is 
pressing that with the owners and operators.
    Mr. Landry. Well, but I hate to beg to differ with you 
again. It certainly says that it is our responsibility, that 
there is a provision within the statute after 30 days--which 
you all have done--which is a presumption that it's been 
abandoned, and it is your responsibility to remove it.
    General Van Antwerp. Well, I would say the estimates that 
we got, that it would be in the neighborhood of $1.5 million or 
more to remove it, now the constrained budget that we're 
talking about here, it's not a Federal channel----
    Mr. Landry. I'm certainly glad you brought that up. Because 
I have contractors. In fact, our local and State agencies have 
been negotiating with salvage companies who would remove it for 
the salvage of the vessel and $100,000. You see, that's the 
problem we have here. That's why I say this is a microcosm. 
We've got to kind of think outside the box. Every time there is 
a problem, you say, ``Well, just throw me a million here and a 
million there, and we will get rid of the problem.'' But it 
doesn't solve the problem.
    We can actually save the taxpayers millions of dollars, if 
you would simply use the tools that are available to you all. 
Can we agree that maybe we can look into that?
    General Van Antwerp. We will agree to look into it, but 
we've looked into the issue to quite an extent here. And at 
this point it is with the Department of Justice, and they are 
going after the owner and operators to remove the vessel.
    Mr. Landry. Well, but the law clearly allows you to seize 
the vessel. I don't understand why you are involving DoJ. Why 
are we spending thousands upon thousands--maybe tens of 
thousands of dollars of taxpayer money in litigation? I am not 
a big fan of spending the money with the lawyers. I would like 
to create jobs.
    General Van Antwerp. We will commit to further looking into 
it with you. We will.
    Mr. Landry. OK, thank you.
    Mr. Gibbs. Thank you. Representative Hirono to question.
    Ms. Hirono. Thank you, Mr. Chairman. While I focused my 
initial remarks on the work of the NRCS in my district, I do 
want to thank the Army Corps for all the tremendous support and 
the work that you do for--in Hawaii.
    I wanted to take this opportunity, Madam Secretary, to--in 
reading your testimony, to bring out to you that, as you focus 
on funding on water research and infrastructure projects that 
``produce high economic and environmental returns to the 
Nation,'' and those that address public safety needs, that's 
well and good, except that when you're in a State like Hawaii, 
which is non-contiguous, it becomes a lot tougher for us to 
show that any project that you're embarking on in Hawaii has 
economic and environmental returns to the Nation.
    So, we have had these concerns. And the language that we 
employ for what constitutes a project that the Army Corps can 
engage in, I think when applied to a State like Hawaii--and 
also Alaska, a non-contiguous State--I just wanted to bring 
that out to you. We face very special challenges, and I want to 
make sure that whatever language is being applied is fairly 
applied.
    And I know that there are provisions such as if a port is 
within 50 miles of each other, you can't do certain things, or 
you can't provide certain kinds of support. Again, sounds 
reasonable, except that if ports are on totally different 
islands in Hawaii, and there is not much you can do, right, 
except to do that which helps these ports on the islands. So I 
wanted to take this opportunity to raise those issues.
    And also, you know that, you know, providing priority 
funding to the maintenance of high-performance projects, 
that's, again, one of your core areas of emphasis. And again, 
you know, what would be the definition of high-performing 
projects? Is it those projects that have a national impact? And 
again, that would make it really tough for any Hawaii projects 
to qualify. I just raise that.
    And then, for Mr. Christensen, I am glad you noted that the 
watershed projects that NRCS engages in have been very 
successful. And yet you mention that the primary benefit of 
these have been to local communities. And I say that's what is 
supposed to be happening. And for us to take the position that 
somehow in these tough economic times the local communities, as 
you say, should now be able to step forward and do that which 
they used to do with the support of NRCS, I think is really not 
addressing the economic realities being faced by our local 
communities.
    And that is why I am so concerned, knowing firsthand, 
meeting with the farmers in my district, and the kind of 
support and work that they have done with NRCS, that I think 
that that's harsh. It's harsh. And I should think that a 
relatively small program like your watershed program that has 
that kind of, in many ways, a disproportionately beneficial 
impact on the small communities is a program that ought to be 
kept.
    So, that's why a plea to you. I hope that if we can revisit 
this situation, that we will be able to do better by these 
programs. If you want to make a comment, please feel free.
    Mr. Christensen. Well, thank you for your sentiments, 
Congresswoman. We appreciate that. And the project you mention 
certainly was a very valuable project. I think the total 
project cost was around $11 million. So very significant to 
that local community.
    I think it's a challenge for us, because we're balancing 
the need for those projects against many other competing needs. 
We also have a host of farm bill programs at our access that 
can do some of the same things--not all of the same things--
that were available under the watershed operations. And 
certainly I think we would have a long-term interest in working 
with you, working with the Army Corps, in regards to our water 
resources programs, taking a step back, looking at them more 
holistically, and seeing what the future might be.
    But right now it is a challenge, because historically, in 
the watershed operations piece, those projects in recent years 
have all been through congressional directive, and we don't get 
the opportunity to prioritize perhaps for the greatest public 
benefit. Thank you.
    Ms. Hirono. Oh, I see. The congressionally directed 
spending very much reflects the needs of a community that we 
are in a best position to identify. Thank you, Mr. Chairman.
    Mr. Gibbs. Thank you. Representative Cravaack, do you have 
a question?
    Mr. Cravaack. Thank you, Mr. Chairman. And thank you for 
the witnesses here today.
    I come from Minnesota, the northeastern portion of 
Minnesota, border of Lake Superior. And the Great Lakes 
navigation system is extremely vital for us. It brings about 
vast quantities of coal from Montana and Wyoming and Lake 
Superior ports and power generation through a lot of the 
metropolitan areas. Also, it transports over 80 percent of our 
iron ore that goes to our U.S. steel. It saves about 
approximately $3.6 billion per year than the next least 
expensive mode of transportation.
    The indirect benefits are approximately $3.4 billion in 
revenue, and approximately $1.3 billion in Federal, State, and 
local taxes, as well. It also provides a positive economic 
impact to the U.S. economy. It's a huge job provider, 
obviously. There are 44,000 jobs directly related to the 
maritime transportation of--shippers, longshoremen; 54,000 in 
the mining industry are dependant upon this great waterway, as 
well as 138,000 jobs in the steel industry, including miners, 
as well.
    My question is, in relation to all this, the President's 
budget requests $691 million of the Harbor Maintenance Trust 
Fund for harbor dredging and related disposal of dredging 
materials. It's expected the balance of--the Harbor Maintenance 
Trust Fund balance right now is $6.12 billion to increase to 
$6.93 billion. Only one-third of the Nation's Federal 
navigation projects are currently at their authorized depths 
and widths. Eight out of ten of the Nation's largest ten ports 
are not at their authorized depths or widths, as well.
    I have the Federal harbor--two harbors up in the Great 
Lakes--and it has not been dredged since 1976. My question is, 
in lieu of this great commerce that's on the Great Lakes, why 
is this--do you know why this administration has requested such 
a small amount from the Harbor Maintenance Trust Fund?
    And, General, I am basically directing that question at 
you, sir.
    General Van Antwerp. On any given year about $1.4 billion 
comes into the Harbor Maintenance Trust Fund. This year it's 
budgeted at about $750 million. The way that we do the 
programming of that is that we focus on those harbors that are 
high use. A low-use harbor, if I could define it, would be one 
that has less than a million tons of commerce within the 
harbor, or an inland waterway that has less than about a 
billion ton-miles. So, we have some criteria for how we 
allocate the dredging funds.
    As Ms. Darcy said, what the administration's proposal is, 
with the additional money that comes into the Harbor 
Maintenance Trust Fund that is not used for the dredging 
portion, is to significantly expand the use of that, and even 
by other agencies, but all to support the coastal navigation 
business. So that's kind of where we are in the prioritization 
of that--of the use of that money.
    Mr. Cravaack. Can you tell me, is the Harbor Maintenance 
Trust Fund bringing in a sufficient amount of revenue at this 
time?
    General Van Antwerp. The Harbor Maintenance Trust Fund does 
have sufficient revenue.
    Mr. Cravaack. OK. So my question would go back again. Why 
do you think the President's administration just brought out 
$691 million of the--right now--correct me if I'm wrong--isn't 
there $6.93 billion in the trust fund? Is that correct, sir?
    Ms. Darcy. I'm not sure of that exact number, but I know 
it's close to $6 billion.
    Mr. Cravaack. OK. And the President is just requesting $691 
million. Is that correct, ma'am?
    Ms. Darcy. I believe--actually, I think it's $783 million 
out of the Harbor Maintenance Trust Fund. Is that right? It's 
$783 million.
    Mr. Cravaack. Isn't that quite a small amount, compared to 
the amount of money that is actually within the Harbor Trust 
Fund?
    And, due to our recent infrastructure challenges that we 
have--for example, the Soo Locks, as well--don't you think that 
we should start allocating these funds, to make sure we have 
these vital waterways ready to go?
    We're just--you know, as I understand the Corps is 
basically a fix-it-as-it-goes kind of mentality right now, in 
regards to locks. Why are we not investing $6.93 billion into 
our vitally needed infrastructure in these areas? And I only 
have eight seconds left.
    Ms. Darcy. Well, Congressman, what we are doing is looking 
at the entire balance in the Harbor Maintenance Trust Fund for 
the harbor maintenance as a whole, including navigation, 
dredging, but in addition, other needs, Federal interests, 
investment needs in ports, in national ports, including things 
like security.
    Mr. Cravaack. I yield back, sir.
    Mr. Gibbs. OK, thank you. Representative Napolitano. A 
question?
    Mrs. Napolitano. Thank you, Mr. Chairman. Yes, certainly. I 
am going to take a different track.
    We have levees located on Indian Reservations. And how is 
the Agency handling safety and remedial activities related to 
these levees found on Indian Reservations?
    And, as a follow-up, are there any programs that the tribes 
can utilize or access that would allow them the ability to 
protect their citizens?
    General Van Antwerp. Thank you, Congresswoman. We have 
about 70 levee systems that are on tribal lands. Those are 
basically operated and maintained by the tribes there.
    First of all, we have a lot of data, because a lot of those 
were built by the Corps of Engineers at an earlier time. So we 
are providing----
    Mrs. Napolitano. A percentage of how many of them were 
built by the Corps?
    General Van Antwerp. I----
    Mrs. Napolitano. Are they still maintained by the Corps?
    General Van Antwerp. They aren't maintained by the Corps. 
They--the ones even that were built by the Corps have been 
turned over for operation and maintenance by the tribes. But we 
do have data on those, and we are providing data to the tribes 
on those levees.
    The other part is we're going to begin to reach out to the 
tribes this year to try and help them, if there is other 
information that needs to be gathered that has to do with the 
condition and that of those levees. And we have experts in that 
area.
    Mrs. Napolitano. Would that reaching out--will be able to 
identify which are the more salient, in prioritizing?
    General Van Antwerp. Absolutely. It will help them 
prioritize, and it will also really discuss the risk and life 
safety aspects of those levees.
    Mrs. Napolitano. Any of those programs going to include any 
retrofitting to be able to have some of those pumps run, 
hopefully with sunshine?
    General Van Antwerp. That's a great idea. We will try and 
throw that into the mix there, but trying to make the system 
self-reliant and not require power generation and other things.
    Mrs. Napolitano. Well, the Corps visited the electrical 
contractors in my area a couple of years back, and they were 
able to find that they are utilizing about 85 percent of their 
own created energy. And I would hope that we start looking at 
innovative ways of being able to save money, and be able to 
produce more energy with--especially if you have levees that 
can be utilized.
    Why is there a delay in the implementation of the Folsom 
Dam joint Federal project for the city of Sacramento flood 
control? Is there a funding issue, or some other impediment? 
And what is that impediment?
    [No response.]
    Mrs. Napolitano. It's not in my area, but it's a California 
issue.
    [No response.]
    Mrs. Napolitano. Sorry, I threw a curve.
    General Van Antwerp. A little bit of a curve. You didn't. 
But we need to get back with you. But it's a contractor 
congestion issue, which is causing delay in that project, as I 
understand. There is so much work that needs to be done in the 
amount of space allocated to do it.
    Mrs. Napolitano. OK. Well, it would--I would hope that, 
because of the economy, contractors are willing to do it for 
less than the original--how would I say--estimate, guesstimate. 
So I am hoping that one will--well, if you would, I would very 
much like to have an answer.
    The last one is the watershed programs. Could you explain 
the efforts the Agency is making in working with local entities 
in California to capture rainwater? I'm ranking member in the 
subcommittee of water and power. That's a great issue that we 
have been working on. Capturing of rainwater in small settling 
basins seems to be cost effective to augment local water 
supplies in reducing flood risk. And does the Agency have a 
definitive business and project task associated with developing 
these programs in the west?
    General Van Antwerp. It is a great idea, and it is 
something that needs to be done, and we do--and we are working. 
I've got a--as soon as I find it here----
    Mrs. Napolitano. You can get that info to me.
    General Van Antwerp. We've got the activities on Prado, 
Hansom, Whittier. And one of the issues that we have to look at 
is the ability to hold more water in these features.
    Mrs. Napolitano. Right.
    General Van Antwerp. And so, we have to look at the 
integrity of the dams. But the idea of the more conservation to 
help the groundwater recharge and all that is excellent.
    Mrs. Napolitano. Right. Well, talk to me about the Whittier 
Narrows, because we've been working on that for about 3, 4 
years. And we were able to get the funding, and yet this was to 
do an update of a study that was completed, and it's still not 
being done. And that would help be able to capture more water 
and help protect the communities below it from potential flood 
risk.
    So, thank you, Mr. Chairman. I will look forward to working 
with you again.
    Mr. Gibbs. Thank you. Representative Harris, you have a 
question?
    Dr. Harris. Yes, thank you very much. And thank you for the 
witnesses coming before us today. Let me just ask a question of 
the secretary and the general.
    Your prepared remarks that were handed out says that the 
administration's priorities with regards here to the matters 
before us today--I think Assistant Secretary Darcy's says that 
it is ``to help restore the environment and revitalize the 
economy, while also reflecting the need to put the country on a 
fiscally sustainable path.'' And interestingly, you say, 
``restore the environment before revitalizing the economy,'' 
which I think is very interesting, given the financial 
condition we're in.
    Whereas, the general says the priorities are ``to reduce 
the deficit, revitalize the economy, and restore the 
environment.'' Could you just very briefly--which is it? What 
do you view the purpose of the Army Corps to do? Is it to 
restore the environment? Or is it to actually create jobs and 
revitalize the economy?
    Assistant Secretary, you can have first at it.
    Ms. Darcy. It's all of those things.
    Dr. Harris. Well, Madam Secretary, you cannot have all of 
those things. Priority means one is number one and one is 
number two. Is it revitalizing the economy, or is it restoring 
the environment? That's what priorities are all about. I'm 
sorry, it's just a plain meaning of the English language.
    Ms. Darcy. I think that by restoring the environment you 
can revitalize the economy.
    Dr. Harris. Well, Madam Secretary, I'm going to disagree, 
and we are going to talk a little bit about that today.
    Now, the Harbor Maintenance Trust Fund. This seems to be a 
little secret going on here, because I know I'm new to 
Washington, but when someone puts the number $6.9 billion in 
front of my eyes when we're borrowing money from the Chinese to 
pay our debts, I wonder a little bit.
    And there was these nebulous things, ``Well, we're going to 
expand things,'' and, ``We're going to have other agencies 
involved.'' Why aren't you just using it to dredge harbors, 
like it's supposed to be used for?
    I mean I've got a shipping harbor, I've got people coming 
into my office saying, ``You know, they're taking taxes from me 
to do this, and they're not dredging harbors.'' What's the big 
secret? What is it, this $7 billion which could reduce all the 
backlogs of all the dredging?
    I've got a little commercial harbor in my district. Army 
Corps comes in in 1980, builds a breakwater that then causes 
silting into the main channel, and now can't dredge the main 
channel anymore. We got $7 billion sitting around we could--all 
the backlogs could be gone.
    What's the dirty little secret here? What is that slush 
fund going to be used for?
    Ms. Darcy. The Harbor Maintenance Trust Fund, as I had 
mentioned earlier--I want to just correct the record--what is 
in the President's budget this year for the Corps of Engineers' 
use of the Harbor Maintenance Trust Fund is $758 million. I had 
said--it's $758 million of that----
    Dr. Harris. I am interested in the $6.9 billion. What is it 
going to be used for? And be brief, I only have two more 
minutes, and I've got another couple of questions.
    Ms. Darcy. Yes, OK----
    Dr. Harris. It should be a very simple question. It's $7 
billion. I hope there is a simple answer to what it's going to 
be used for.
    Ms. Darcy. What it's going to be used for is for other 
Federal interests in the harbors----
    Dr. Harris. Why not dredging?
    Ms. Darcy. Partially it's going to be used----
    Dr. Harris. Why not use every dollar of it to maintain the 
ports? Because that's what the people paying that tax think 
it's going for.
    Ms. Darcy. Well, there are other Federal interests in those 
ports that the administration feels this money can be used for.
    Dr. Harris. I understand that. But the people who actually 
pay that tax feel they're paying for it to dredge a harbor. I 
know the administration feels that once tax money comes to 
Washington, it's theirs to keep. This is $7 billion. All the 
backlog of every dredging project in the country could be paid 
for if we spent those $7 billion on dredging.
    Ms. Darcy. Well----
    Dr. Harris. Is it the administration--does the 
administration--do they not feel that that is important enough 
to remove that backlog?
    Ms. Darcy. It is important. However, the receipts that we 
have in the Harbor Maintenance Trust Fund all need to be 
appropriated.
    Dr. Harris. General, the Davis-Bacon Act, are the Army 
Corps projects subject to Davis-Bacon Acts, if they exceed a 
certain amount of money?
    General Van Antwerp. Yes, we are.
    Dr. Harris. Could we save a great deal of money by removing 
that constraint, or--and just funding more projects?
    General Van Antwerp. If you did away with the Davis-Bacon 
Act?
    Dr. Harris. If we stipulated that funds used in the 
appropriation this year, just like we attempted to do in the 
CR, could not go for--could not be--Davis-Bacon Act constraints 
would not be utilized in those projects.
    General Van Antwerp. It would allow you to do more 
projects----
    Dr. Harris. That's what I thought. Thank you. And, finally, 
there is a half-a-billion dollars for environmental aquatic 
ecosystem restoration. If we delayed that, and spent that money 
to creating jobs by enhancing our water-borne economy, such as 
the gentleman from Louisiana suggested--who has left--wouldn't 
that be a help to our economy right now, if instead of doing 
something which could be delayed, because these projects are 
not critical in terms of getting a ship to the harbor--and I 
understand you want to use the Harbor Maintenance Trust Fund 
for security, but I've got to tell you, if you don't dredge the 
channel, you don't have to worry about harbor security. No 
ships are coming in.
    So, why don't we move some of those monies from where it's 
not urgent, and move them into areas where we have real ongoing 
needs that would enhance the economy? General?
    General Van Antwerp. I guess, first of all, in the amount 
of money from our budget that goes into the ecosystems is about 
18 percent. In those five significant ecosystems there are 
other agencies whose budgets go to those.
    A lot of those issues have to do with our Nation's future. 
I think, that--they have to do with the Everglades, and have to 
do with the Bay-Delta, and these are huge drivers for our 
ecosystem, as a country. So I think that's why they are 
significant ecosystems, and we are putting those dollars there.
    Dr. Harris. OK, thank you.
    Mr. Gibbs. Representative Norton?
    Ms. Norton. Thank you, Mr. Chairman. And I want to thank 
you, Mr. Van Antwerp, for the work you do for the country, and 
especially here, in the District of Columbia.
    You will recall in the last water bill, 2007, included the 
Anacostia watershed initiative. This was a landmark bill, 
because it was the first bill, comprehensive bill, to clean up 
America's forgotten river, the Anacostia River. In 2010 you 
rolled out a 10-year plan for carrying out the Anacostia 
watershed initiative. And I understand that there is a Sligo 
Creek demonstration project, as well. I would like to know the 
status of the 10-year plan.
    General Van Antwerp. Congresswoman, I am going to have to 
get the staff to get back with you on the status of the plan, 
unless you have it, Ms. Secretary.
    Ms. Darcy. Yes. The plan is currently under review at the 
Office of Management and Budget.
    Ms. Norton. It's under review with specific next steps for 
the plan?
    Ms. Darcy. I believe so.
    Ms. Norton. What is the status of the Sligo Creek 
demonstration project?
    Ms. Darcy. That I don't know. I would have to get back to 
you on that.
    Ms. Norton. Thirty days, please.
    Ms. Darcy. Yes, ma'am.
    Ms. Norton. Get back to us on that. Mr. Van Antwerp, the 
levee project on the National Mall was begun a few years--a few 
months ago, and I understand was to be completed this year, 
2010. That is very important. It protects all the monuments on 
the mall from floods and that part of downtown Washington where 
all the Federal buildings are, and the like.
    What is the status of the levee building going on on the 
National Mall now?
    General Van Antwerp. On the 16th of September, a 
construction contract was awarded to build the 17th Street 
closure, and that is progressing on schedule.
    Ms. Norton. When do you expect the levee--Potomac Levee, I 
believe it is called--to be completed?
    General Van Antwerp. I believe the completion date is 
September 2011.
    Ms. Norton. And you're on time?
    General Van Antwerp. And we're on schedule.
    Ms. Norton. Finally, you are also aware that in part of the 
District of Columbia where American University is located also 
was located a chemical munitions site, perhaps the only 
chemical munitions site located in a residential neighborhood 
in the United States. We are pleased that much has been done to 
clean that site. I toured the destruction of some munitions 
only a few months ago.
    Suppose more munitions are discovered, just as those were 
accidentally discovered. Would the Corps be prepared to move 
right in? Would it have the funds to move right in to handle 
such a discovery in this residential neighborhood?
    General Van Antwerp. Those funds aren't out of Civil Works 
funds. But past history would say we would be prepared and we 
would take the appropriate action, if that was discovered.
    Ms. Norton. Yes, I understand that those funds simply come 
out of funds that are already authorized to deal with such 
things.
    General Van Antwerp. Right, for those purposes, yes.
    Ms. Norton. So you are saying today that, were we to find 
somebody to uncover in her backyard yet another mound of 
munitions, the Corps would be ready to move right back in to 
remove those munitions?
    General Van Antwerp. We would work with DoD to move back in 
and take care of those munitions.
    Ms. Norton. Thank you very much, Mr. Van Antwerp, and thank 
you, Mr. Chairman.
    Mr. Gibbs. Thank you. Representative Herrera Beutler?
    Ms. Herrera Beutler. Thank you, Mr. Chairman. I have a 
couple of specific questions, but one that's a little more 
process-driven. I'm going to start with that.
    I mentioned, you know, three main things in my opening. And 
one of the ones--more specifically, we are starting to explore, 
legislatively, ways to do this. But I wanted to get your 
feedback on timelines for permitting and the process for 
appeals. It's my understanding that if a permit is denied, 
basically, the only place that a permit seeker can go for an 
appeal is the Corps. Is that correct?
    General Van Antwerp. Through the Corps or the courts? I 
didn't----
    Ms. Herrera Beutler. Corps, excuse me, Army Corps.
    General Van Antwerp. The Corps. Yes. And basically, what we 
try and do is work with the applicant. If there are issues--and 
all along, issues are resolved, and we're looking for the least 
damaging, practicable alternative. That's what we're looking 
for. And so, most times, things can be worked out. But it is a 
give-and-take and sometimes a compromise on what they would 
originally have liked to do.
    Ms. Herrera Beutler. So, I have had a couple folks who have 
come to me, and they have been seeking funds that were--that 
are appropriated that are available, but they have 2 years to 
use them, starting January. And it had to do with two types of 
permits. And forgive me if I don't remember this right. I think 
it was the national--there is, like, a national permit and an 
individual. And the individual is a little bit easier----
    General Van Antwerp. We have a nationwide, and then we have 
an individual permit.
    Ms. Herrera Beutler. Yes.
    General Van Antwerp. So----
    Ms. Herrera Beutler. And so, when I had some folks locally 
looking to move forward on a project to receive those funds in 
concert with the community--a tremendous project, jobs, jobs, 
jobs--they communicated to me that the office that they were 
working with--and I'm a little split, anything to do with the 
Columbia River, we get--we deal with Portland, and anything 
north of that we deal with Seattle.
    Their comments to me were, ``We don't even know''--we were 
told--and they attempted to push us into an individual, but 
because of the amount of space that they're looking at, and the 
mitigation, and everything else, they're going to need a 
nationwide, national--I'm going to say that wrong, but you know 
which one I'm talking about.
    Is there a way--one of the concerns I have heard is they 
won't be told if there are problems in this whole process until 
they get to the end. And they've got 2 years. They have a 
running time clock. And the only impediment we have run up 
against so far are people dealing with that permit in this 
timeframe. Is that something you can help us with?
    General Van Antwerp. Well, I have the division commander 
sitting in the room today, and he is hearing what you're 
saying, and we're going to look into this permit. We will get 
with your staff.
    Ms. Herrera Beutler. Great.
    General Van Antwerp. And we will look at it, and we will 
get our regulatory people, and we will see where we can come 
to.
    Ms. Herrera Beutler. Great. That would be perfect.
    General Van Antwerp. OK.
    Ms. Herrera Beutler. And let me step back, too, since we 
have got the gentleman in the room. Capital Lake. In my 
district we have the State capital. There is a specific lake 
right there that the State and the localities are working on, 
how to manage that. And my concern is that the Corps may have 
begun to study this lake without any invitation from the State 
authorities managing the lake. Our governor is involved. No one 
has said, ``U.S. Army Corps, we need you here,'' yet that study 
has begun. And, as far as I know, none of the members of the 
State capital committee have put out any requests. And there is 
a lot of concern because, once you all get involved, things 
change.
    And at this time of major tightening belts, right, we were 
all talking about projects that we want, and ``Your budget is 
cut,'' and this is a nightmare. In my mind, I think that 
streamlining the permit process and then not getting involved 
where there is no request seems like a great way to manage your 
budget.
    General Van Antwerp. We will have to look into that 
particular project. But generally, we wouldn't--if we go to the 
next step in the study, the feasibility stage, we actually have 
to have a cost-sharing partner, a local sponsor, if you will. 
But if it's a life/health/safety, we may be looking at 
something that's life/health/safety-related.
    But again, we can work with your staff, we can look at that 
particular project, tell you exactly what we are doing, if we 
are doing something there.
    Ms. Herrera Beutler. Great, great. And I am just going to 
lodge this one, because I don't have time to ask--get into the 
details of it. But another area where we're looking at is the 
Twin Cities Project in Lewis County, and the flooding that 
takes place there, and what your plan is to fix it, and what 
the community is asking for. That's another area where we're 
going to need to work together.
    General Van Antwerp. OK.
    Ms. Herrera Beutler. Thank you.
    Mr. Gibbs. Thank you. Representative Capuano, do you have a 
question?
    Mr. Capuano. Thank you, Mr. Chairman. General, Davis-Bacon. 
I am just curious. How would you be able to save money if 
Davis-Bacon were gone?
    General Van Antwerp. I think it really is just from some of 
the costs that are associated with Davis-Bacon wages.
    Mr. Capuano. So wages. So you're basically----
    General Van Antwerp. It's people.
    Mr. Capuano. You would pay workers less.
    General Van Antwerp. I am not sure where the question was 
originated, what that is. I mean there is----
    Mr. Capuano. Well, if----
    General Van Antwerp. There is a reason the Corps uses 
Davis-Bacon.
    Mr. Capuano. Well, I understand that. But I mean if the 
Davis-Bacon law were gone----
    General Van Antwerp. Yes.
    Mr. Capuano [continuing]. You would basically pay people 
doing work on your projects lower wages. That's the way you 
save money if Davis-Bacon is gone, is it not?
    General Van Antwerp. I would----
    Mr. Capuano. If you would pay less wages, who would get 
those lower wages? Would it be the people who owned the 
companies, or would it be the bricklayers and the steel workers 
and the laborers on those projects? Who gets impacted by Davis-
Bacon, people who own the company, or the people who actually 
do the work?
    General Van Antwerp. I would say you're making excellent 
points. This was the first I had heard of this discussion, so--
--
    Mr. Capuano. No, I understand. But as I understand it----
    General Van Antwerp. I guess that would be the case.
    Mr. Capuano. I just want to make sure I understand the law 
correctly.
    General Van Antwerp. That would be the case.
    Mr. Capuano. As I understand the law, it requires you to 
pay the people doing the work, the bricklayers----
    General Van Antwerp. Right.
    Mr. Capuano [continuing]. The carpenters----
    General Van Antwerp. Right.
    Mr. Capuano [continuing]. Wages that are conducive to the 
area they live in.
    General Van Antwerp. Right.
    Mr. Capuano. So, by saving money, if Davis-Bacon were gone, 
you would be basically--not you, but if it were gone and we 
didn't live by that, working people would get lower wages. I 
just wanted to make sure that we were clear on that, because 
that's my understanding of it. I didn't think you were wasting 
money, I thought you were helping to maintain the middle 
class--not you; the whole county--and that's what the Davis-
Bacon law is all about.
    Just as a point of history, do you know who Mr. Davis and 
Mr. Bacon were? They were two Republican Members of this House. 
And do you know who signed that law in 1931? The noted crazy 
Leftie, President Herbert Hoover. Those are the people that 
decided to build the middle class. So it's not where I intended 
to go.
    I want to talk a little bit about the Harbor Maintenance 
tax myself. I--my problem with the Harbor Maintenance tax is 
not necessary how you use it, though, like anything else, I'm 
sure I could disagree with some things. But my problem is the 
competitive advantage that you give to neighboring ports that 
don't get hit with that tax at a later time, which is a 
different issue for a different discussion.
    And, by the way, I think the Corps does a great job keeping 
Boston Harbor open on a regular basis, and dredging.
    But what I really want to talk about was I wanted to make 
sure that I understand the Corps' desires and goals. And I'm 
sure that I know the answers, but I wanted to ask them anyway. 
When the Corps gets into a project, if you were going to, say, 
do some dredging, and widen a channel, the--you're not widening 
a channel in order to reduce the size of the vessels passing 
through that channel, are you? That's not the goal. You're 
trying to keep it open for bigger vessels, to meet modern 
requirements.
    And when we do a bridge-over that the Corps is involved in, 
if we widen the span of that bridge, again, you're not trying 
to do it so we can get smaller ships through that bridge, is 
that correct?
    And if you were to have a project that somehow 
inadvertently, after you have dredged the channel, and after 
the bridge has been built, that the result of that, because of 
some changes in the situation, were to be that smaller ships 
had to go through that, that bigger ships could not longer 
pass, that would be something I would assume the Corps would 
want to be involved in addressing and fixing. Is that a fair 
statement?
    General Van Antwerp. That's a fair statement. We have an 
authorized width and depth of our projects. And that would be 
the optimum to maintain it to that level. Very few of them are 
maintained to the optimum, or to the authorized----
    Mr. Capuano. But the purpose of that is to allow modern-
day, bigger ships----
    General Van Antwerp. To pass, absolutely.
    Mr. Capuano [continuing]. To service our commercial needs. 
Is that----
    General Van Antwerp. Absolutely.
    Mr. Capuano. So that if somehow, by widening a channel, by 
changing radiuses and the like, that something happened that 
that channel was no longer available to be used by not just 
wider ships, but the ships that are currently using it, I would 
think that the Corps would want to help address that issue. Is 
that a fair statement? Thank you. We will be talking again 
soon. Thank you very much.
    Mr. Gibbs. Representative Reed, do you have a question?
    Mr. Reed. Thank you, Chairman. And thank you to the 
witnesses for your testimony today.
    General, I want to start by saying it's refreshing to hear 
a direct response to a question from a congressional committee. 
You gave us a direct answer, and that doesn't happen all the 
time. I've been here two months, and it's amazing to me the 
number of witnesses who come in here and dance around the 
questions and don't give us their honest assessment and 
opinion. So I respect your answers, sir, and I appreciate you 
dealing with us candidly.
    Now, moving forward, I want to get into a little bit of 
some issues that I am facing back in my district, and not 
specifically on any specific projects. But one issue that came 
to my attention recently is in the areas of the flood insurance 
mapping revisions that are occurring. And we have had a lot of 
debate back in--western New York is where I'm from--about the 
maps, and who is going to certify the levees.
    And the roundabout discussion that has occurred is I'm 
getting fingers pointed all over the place. And my 
understanding, talking to my staff, is that what's happening is 
a lot of the agencies--whatever agency it may be: FEMA, the 
Corps--are saying, ``We're not going to certify the levees 
because of what happened in Hurricane Katrina, et cetera. We 
don't want to be on the hook for making those determinations.''
    So now what's happened, the proposed maps I see are being 
rolled out without those levees being designated on the maps, 
which obviously changes the flood plain, which obviously 
changes the requirements to get flood insurance for homeowners 
and people purchasing a home, which lacks common sense. I walk 
on those levees. I go down the rivers and fish on those rivers 
walking over the levees. I know they're there.
    My question to you: are you familiar with this issue, 
either one of you? And who is best to answer the question?
    General Van Antwerp. Yes.
    Mr. Reed. OK.
    General Van Antwerp. And I can answer the question.
    Mr. Reed. Please do.
    General Van Antwerp. It's the National Flood Insurance 
Program.
    Mr. Reed. Correct.
    General Van Antwerp. It is the FEMA program.
    Mr. Reed. Correct.
    General Van Antwerp. And it is the responsibility of the 
local community to provide the documentation that the levee 
meets the requirements of the National Flood Insurance Program. 
And basically, it's what we call a 100-year event, meaning that 
it's a 1 percent chance of possibility of happening. That is 
the standard for the National Flood Insurance Program.
    The Corps of Engineers, we have projects that are much 
greater than 100-year and much less. Our inspections basically 
are to determine if it meets its design criteria.
    Mr. Reed. OK.
    General Van Antwerp. And so, if it's an 800-year levee, we 
expect that it needs to meet an 800-year event.
    So, basically, it is the local community's responsibility 
for the National Flood Insurance Program, to provide that 
documentation. What documentation the Corps has--and we have it 
on a lot of levees that are now owned and operated by a local 
entity, we provide that data. And a lot of times it's most of 
the data that they might need for the FEMA piece.
    Mr. Reed. OK. Because my concern is it still doesn't 
address the practical problem we have, in that we got to get 
these levees located on these maps, so that people who are 
protected by these levees don't have to go out and buy flood 
insurance. It's a very practical problem.
    Do you see any solution to it that you could offer us here 
today----
    General Van Antwerp. Well, if----
    Mr. Reed [continuing]. In getting over that hurdle, at 
least to get these maps updated----
    General Van Antwerp. Right.
    Mr. Reed [continuing]. And make sure that people don't have 
to purchase flood insurance when they really don't need to buy 
it?
    General Van Antwerp. We--if the documentation is provided 
to FEMA, that levee will be on the map. I guess so----
    Mr. Reed. OK.
    General Van Antwerp [continuing]. What they have to do is 
they have to get that documentation.
    Now, we are trying--we're working with FEMA----
    Mr. Reed. What happens if the documentation doesn't exist? 
Because a lot of these levees have been constructed, and nobody 
has the documentation.
    General Van Antwerp. They need to hire an engineer to do 
the certification.
    Mr. Reed. OK. So the local community has to pick up that--
--
    General Van Antwerp. That's----
    Mr. Reed [continuing]. And go out and get the engineer, 
and----
    General Van Antwerp. That's right.
    Mr. Reed [continuing]. Come in and document.
    General Van Antwerp. That's right.
    Mr. Reed. OK. My local communities won't be happy with that 
answer, but I will be the messenger on that.
    One area that I wanted to talk on, Mr. Christensen, we have 
a lot of farmers in our district that are impacted by the 
Chesapeake Bay initiatives and the TMDLs that are coming down. 
What is your role in trying to help and assist the agricultural 
community comply with those implementations, if they do occur?
    Mr. Christensen. Thank you for the question, sir. We are 
very actively involved. We have a special program called the 
Chesapeake Bay Watershed Program, given to us in the 2008 farm 
bill. So we have special funding on top of our normal 
programmatic funding to help farmers with nutrient management 
plans, cover crops, all the types of practices that would be 
helpful to the nutrient management issue. So we are working 
with them on a voluntary basis, cost-sharing on those 
practices.
    At the same time, we are collaborating with EPA on the 
larger issues. But the bottom line for us is we are actively 
involved with the individual producers on the landscape with 
the conservation efforts.
    Mr. Reed. So, if those--I guess I'm out of time. I will 
have a conversation with you offline.
    All right. Thank you, Chairman. I yield back.
    Mr. Gibbs. Representative Lankford, have you got a 
question?
    Mr. Lankford. Thank you. Let me run a couple of questions 
past you, as well, and a larger context, and specific to my 
area. I'm in central Oklahoma. Let me start with that one.
    We are in one of those areas around the Port of Catoosa, 
which is the Mississippi River area, one of the tributaries. We 
have talked before already, and met, and discussed the locks 
and the dams and everything to be able to work your way up and 
down the tributaries.
    Tell me on the priority list where that seems to fall, and 
just the movement, because again, you are moving all the cargo 
in and out of the central part of the United States when you're 
moving up and down the Mississippi and through the tributaries. 
I see on your list lower priority items and such like that. 
Where do those tributaries begin to fall?
    General Van Antwerp. Well, they fit as a navigation system, 
and it's a lock. We have 241 locks in the Corps. They are about 
58.3 years old. They take a lot of operation and maintenance 
funds. We look at each lock. We have done inventories and 
inspections to know which are the ones that are of the most 
risk. We also hear from our navigation partners that are 
running bulk cargo and other things, because it's a very 
efficient way to do it. And so that's how we manage the 
priorities of what we work on in any given year, using our 
operation and maintenance funds.
    Mr. Lankford. So it's basically whichever lock is in the 
worst shape possible, then you just target from that spot?
    General Van Antwerp. A lot of it is fix the worst first, 
but it also has to do with the risk of failure and the impact 
of the failure of that lock.
    Mr. Lankford. Right. Well, you have this list of lower 
priority items. I am kind of wondering the metrics on that, how 
you get to that spot, and who makes the decision on which items 
nationally end up on lower priority and which ones rise up to 
higher priority items.
    General Van Antwerp. Again, we look for those projects that 
have large ton-miles, and carry a lot of commercial navigation 
cargo. And we prioritize those. The risk of failure is part of 
it.
    So, we can--we could come lay out how we do the priorities, 
but that's basically how we laid that out.
    Mr. Lankford. OK. Let me ask a general question, just for 
you to be able to process. And anyone can answer this, and may 
be familiar.
    With every Federal agency there is going to be a lot of 
conversation with other Federal agencies. You deal with a lot 
of agencies, just in your day-to-day operation. Is there any 
one agency you can make us aware of to say, ``Projects are 
driven up in cost and slow down in time because of our 
interaction with this agency?'' I know this is going to make 
you the favorite of that agency once you answer this, but there 
is bound to be an issue that you're dealing with several 
agencies saying, ``You know what? This tends to slow down 
projects and drive up costs when we're dealing with this agency 
and getting things done.''
    [No response.]
    Mr. Lankford. You are welcome, by the way, for this 
question.
    [Laughter.]
    Ms. Darcy. We work great with the agencies represented at 
this table, as well as our other Federal agencies. Quite 
frankly, in the year-and-a-half that I have been in this job, I 
have found the collaboration between the Federal family to be 
better than I had hoped. So I am not giving anybody up here.
    Mr. Lankford. OK.
    Ms. Darcy. Because we have had a great experience so far.
    Mr. Lankford. OK. Everybody good with that?
    [No response.]
    Mr. Lankford. Let me walk through a couple things. By the 
way, I would hope that part of our role here would be to help 
resolve issues. So if issues come up, we want to be able to 
step in and resolve, and see if we can't--for the good of the 
country. This is not a partisan issue; we've got to get things 
done. And so, as issues come up, we would like to know on 
those, so we can help engage with that.
    The President's fiscal year 2012 budget suggests 
legislation for a user fee for technical assistance cost for 
the conservation plan. Do you have any idea who is going to be 
charged that user fee, and what the service is we're going to 
be provided in exchange for that? Are you familiar with that?
    Mr. Christensen. Sir, I am not too familiar with it. I know 
it's an issue being worked on. Conservation planning is one of 
the core functions that we have historically provided. And I 
guess the view is that there is some opportunity to recoup some 
of that cost. But I am not familiar with the specifics----
    Mr. Lankford. Who is actually going to be tagged with that 
fee, and what they're going to get for it. That hasn't come 
out?
    Mr. Christensen. I would have to come back to you on that.
    Mr. Lankford. OK. That will be an interesting one to be 
able to see. They are looking to fee--as we have already 
discussed with the harbor fees and such, there is a perception 
that they get a return for that in dredging. And sometimes 
there is a frustration on that in any location.
    Let me just run one other question real quickly past you. 
In the design of any project, you have outside contractors that 
do the design on many of these, is that correct? So you will 
hire in a company to actually do that design?
    General Van Antwerp. We do it two ways, if you're referring 
to the Corps projects.
    Mr. Lankford. Yes.
    General Van Antwerp. We can do an in-house design, we do 
have our own architects.
    Mr. Lankford. Right.
    General Van Antwerp. We try and keep enough to keep the 
competency in the Corps----
    Mr. Lankford. Right.
    General Van Antwerp [continuing]. Because when you're 
writing a contract, you need that competency. Or, we contract 
those out.
    Mr. Lankford. Typically, when it's contracted out, do you 
also allow the architect that did the design work to then 
supervise the construction? Or is that then taken over by a 
Corps person, and the architect only does the design and a 
Corps person supervises?
    General Van Antwerp. Generally, the project--if it's a 
design bid build, then the contractor builds the design that 
the architect did, and the Corps of Engineers supervises the 
construction. But we always have that architect on a string 
to--for a request for information. ``Why did that go like 
that?''
    Mr. Lankford. Right.
    General Van Antwerp. And things are resolved. We also have 
a design build. We do those, which----
    Mr. Lankford. I'm out of time. I would just recommend, 
obviously, looking close at having that architect on hand. 
There is a reason--they know their plans best--to having them 
on hand during part of that construction. I think that would 
save us some value, long-term. So thank you. I yield back.
    Mr. Gibbs. Thank you. General, I have another question. I 
understand--you know, we talk about cost, and we need to 
streamline the process on--and your performance reviews, I 
think that's great, we're going to look at that.
    It's my understanding on the Ohio River there are some 
hydropower projects that--I know one at the Robert Byrd 
facility, it's getting up and running, starting in the planning 
process and the permitting process with FERC, the Federal 
Energy Regulatory Commission, and the Corps. But I also 
understand there isn't a lot of coordination between these two 
agencies regarding licensing and permitting. What can be done 
to address that issue to move this forward in a more expedited 
fashion?
    General Van Antwerp. Well, I think, Mr. Chairman, you have 
captured it. Absolutely there has got to be partnering between 
the agencies, because we are looking for such things as cooling 
water and environmental impacts of this. So, we will look into 
that specifically and make sure that that partnering is being 
done, and we are expeditiously moving that forward.
    Mr. Gibbs. OK. That would be helpful. I think, you know, 
run some of this concurrently----
    General Van Antwerp. Right, absolutely.
    Mr. Gibbs. I would appreciate it. Secretary Darcy, as you 
know, recently the EPA retroactively revoked a permit from a 
mining operation in West Virginia. And, you know, I think this 
causes problems across the whole economy, because people put 
capital together to put projects together and get the permit, 
do the environmental impact studies and everything.
    And maybe this is for the general, too, since, you know, 
the Corps approved the permit and the EPA revoked it 3 years 
after the fact, and if their investment--what kind of security 
or ``assurety'' can we give to any operation that is putting a 
project together and gets the permit that they're just not 
going to get it revoked after it is approved? Because this is 
unprecedented.
    Ms. Darcy. Well, I think, as you say, the Corps of 
Engineers did issue this permit in 2007. I think you're 
referring to the mine permit that was vetoed by the EPA. We 
were in collaboration in developing the permit. But under 404 
of the Clean Water Act, the EPA does have the veto authority to 
veto any permit that----
    Mr. Gibbs. Well, wasn't the EPA working with the Corps in 
concert during the environmental impact study and all of the 
permitting process? Weren't you guys working together?
    Ms. Darcy. We were in consultation during the development 
of the permit. Yes, sir.
    General Van Antwerp. With all of our permits we consult 
with the EPA. So it was consulted on initially, and then other 
things have changed. But they do have the authorization under 
404 to do what they did.
    Mr. Gibbs. It appears to me under 404--and I know the 
guidance that they're going to be coming out with to expand 
their jurisdiction on the Clean Water Act--they're kind of 
driving. It looks to me they're driving the train, and you guys 
are getting run over. So I have serious concerns about what's 
happening. And whatever we can do to help the Corps on this 
issue--because I think the EPA is driving the train here. Do 
you feel like you have been run over by the EPA and the 
permitting process?
    Ms. Darcy. No, sir. We are currently developing Clean Water 
Act guidance with the EPA and anything that is being reviewed 
within the administration, and that would be--it would be a 
joint guidance.
    Mr. Gibbs. So to just follow up on that, you support the 
expanded jurisdiction with the Nexus provision and everything 
that would go beyond navigable waters?
    Ms. Darcy. We are currently developing the guidance, sir.
    Mr. Gibbs. OK, OK. Well, we will probably have some 
hearings on that in the future, when you put your guidance out.
    Ms. Darcy. OK.
    Mr. Gibbs. Also, General, you know the Nation's water 
resources structure averages about 60 years old, and we have 
discussed that. What in the administration's plan is there to 
recapitalize the infrastructure, so we can continue to provide 
economical and reliable, environmentally superior inland 
navigation, and reduce the flood risks to the public? You know, 
do you have a plan to actually capitalize, so we can get these 
projects up and running, repaired, and modernized?
    General Van Antwerp. We do have a plan. It's--of course the 
flexible part of it is: how long does it take to execute that 
plan? But the first part of that plan is know what you have, 
and know its condition. We know that.
    And so, we also know the risks of failure, because we've 
got a lot of history with these different features. But on 
dams, and on our hydropower facilities, we have a good plan for 
the recapitalization of those projects. It is dependent on 
funding for how long it takes to recapitalize.
    Mr. Gibbs. I would be interested in working with you on 
that plan, help you prioritize it and work through Congress 
here to get the job done and clean up the balance sheet, so to 
speak.
    General Van Antwerp. OK.
    Mr. Gibbs. Do you----
    Ms. Darcy. Could I just add to that? In particular, we most 
particularly want to work with this committee in order to 
develop this plan because the recapitalization of all of our 
infrastructure, and particularly in the inland waterways, is 
just something that we have to look to, to be able to share the 
cost. And some kind of recapitalization and evaluation of the 
projects that we have, are they still necessary, they still 
needed to perform, you know, or are they not needed anymore?
    So, also for us to look at the assets we have, and whether 
we--they're worth another additional Federal investment, and 
how we're going to share that cost.
    Mr. Gibbs. I concur with that. We need to do that. 
Representative Bishop?
    Mr. Bishop. Thank you, Mr. Chairman. I want to pick up on 
the issue of environmental benefit versus economic benefit. And 
I made this point at our last hearing. I represent a district 
where we recognize that the environment is the economy, the 
economy is the environment. We have a resort economy that needs 
a pristine environment.
    Isn't it fair to recognize that the--two of the biggest 
projects the Corps has ever undertaken, the Everglades project 
and the Louisiana coastal project, are projects that have 
enormous economic benefit and environmental benefit?
    Ms. Darcy. I agree, sir.
    Mr. Bishop. So the two do not have to be mutually 
exclusive.
    Ms. Darcy. No.
    Mr. Bishop. OK. Thank you. I want to go to the issue of the 
Harbor Maintenance Trust Fund. I want to make sure I understand 
the issue. Harbor Maintenance Trust Fund was first created in 
1986, signed into law by President Reagan.
    Ms. Darcy. Correct.
    Mr. Bishop. My understanding is that there is a long 
bipartisan history of Presidents requesting an annual 
expenditure from the trust fund in an amount significantly 
lower than the balance in the trust fund. Is that correct?
    Ms. Darcy. Yes, sir.
    Mr. Bishop. OK. For example, in the last budget that 
President Bush submitted to the Congress, the balance in the 
trust fund was, at the time he submitted the budget, $5.4 
billion. And he requested an expenditure of $729 million.
    Ms. Darcy. I am going to trust your facts there, sir.
    Mr. Bishop. Trust them. They're right. And isn't it also 
true that the Harbor Maintenance Trust Fund operates in a 
fashion very similar to how the Social Security trust fund 
operates? That is to say that revenue comes into the trust 
fund, an amount of money less than that revenue in a given year 
is spent on the purpose of the fund. And then, whatever amount 
is not spent, in effect, reverts to the bottom line and serves 
to reduce our deficit if we do not fully expend it.
    And if we were to fully expend it, we would be increasing 
our outlays, and therefore, increasing our deficit. Is that 
correct?
    Ms. Darcy. I believe so.
    Mr. Bishop. OK. So, one of the reasons that Presidents have 
a long bipartisan history of spending less than what's in the 
trust fund has been an effort at curtailing our total 
expenditures, and therefore, reducing our total deficit. Is 
that not correct?
    Ms. Darcy. Yes, sir.
    Mr. Bishop. OK. Thank you. I think it's important that we 
all have that set of facts.
    I want to go--I have a little bit of time left--I want to 
go to an issue that is concerning to me. One of the great 
debates--that's a hyperbole, it's not a great debate--we are 
now in an earmark-free environment.
    My understanding is that there are four chiefs reports that 
were undertaken by the Corps for which the Corps has spent $34 
million to construct the report. Pardon me, to undertake the 
reports. But there is no authorization pending to allow the 
Corps to move from study to construction, and that the 
authorization of such construction would be considered an 
earmark. Is that correct, sir?
    General Van Antwerp. We have four reports with OMB. I have 
signed the chief reports.
    Mr. Bishop. Right.
    General Van Antwerp. We have another six that I have 
signed, the reports that are in the process of moving that 
direction. And probably another 16 by the end of this calendar 
year will be in the queue.
    Mr. Bishop. All of which----
    General Van Antwerp. Have projects associated----
    Mr. Bishop. But all of which lack authorization to proceed 
to construction. Is that correct?
    General Van Antwerp. Right. It's pre-authorization at this 
point.
    Mr. Bishop. OK. So we are significantly at risk of having 
made a commitment of taxpayer dollars to undertake studies of 
projects that may well never be constructed if, in fact, we 
remain in this environment in which the authorization of such 
construction would be considered an earmark. Is that correct?
    General Van Antwerp. If those projects never went to the 
next stage of being authorized and then ultimately 
appropriated, then yes.
    Mr. Bishop. OK. Thank you. I think I will yield back the 
balance of my time.
    Mr. Gibbs. Thank you. Representative Landry, do you have 
any other questions?
    Mr. Landry. General, I just want to ask unanimous consent 
to enter into the record a correspondence to you with some 
exhibits supporting that commerce is being impeded in that 
canal.
    [The information follows:]



    Mr. Landry. I also, just real quickly, want to clear up a 
couple of matters. Who is your chief legal counsel, General? I 
mean who do you----
    General Van Antwerp. We have our own legal counsel. His 
name is Earl Stockdale. He is the chief legal counsel for the 
Corps.
    Mr. Landry. And I guess my only question--so that you 
understand a bit of my rub--is that as I try to work through 
the Corps' legal strategy, I ask them for correspondence 
between you all and the Department of Justice, because you 
mentioned you all are in litigation. I'm guessing the Plaintiff 
in the case is the Federal Government. Wouldn't you agree?
    [No response.]
    Mr. Landry. I mean you all are representing the Federal 
Government?
    General Van Antwerp. Well, it probably is. Department of 
Justice has the case. It was remanded to them from the New 
Orleans District, so----
    Mr. Landry. I guess--they told me I wasn't allowed to see 
the correspondence between the Corps and DoJ because it was a 
matter of client-attorney privilege, and I am trying to 
understand what exactly my position as a Congressman is in this 
litigation.
    Could you just visit with Earl on that, and see----
    General Van Antwerp. I will, I----
    Mr. Landry. OK.
    General Van Antwerp. I will do that.
    Mr. Landry. Thank you so much.
    General Van Antwerp. Thank you, Congressman. Thank you.
    Mr. Gibbs. Representative Cravaack, do you have any----
    Mr. Cravaack. Thank you. I wish Mr. Reed was here, and so I 
could explain to him that he got straight answers because you 
did come from West Point. So that's probably why he got the 
straight answers he wanted.
    Also, being in the military myself, I understand about 
doing more with less, and we always seem to never get what we 
need to accomplish the mission. And if I can, sir, give a shout 
out to Colonel Price and Tamara from the St. Louis District, 
who have been very responsive to our requests trying to get a 
mine open in the Eighth District of Minnesota.
    With that, ma'am, I would like to ask you a question. And I 
ran out of time, so I will try to be a little bit--I have a 
couple of questions that hopefully won't go into a third round 
here. But regarding the $7 billion that are in reserve--and the 
ranking member kind of gave me a segue into this--basically, 
there is no real $7 billion, is there?
    Ms. Darcy. I'm not sure what your question is.
    Mr. Cravaack. Is there $7 billion in a bank account 
somewhere for the Harbor Maintenance Trust Fund?
    Ms. Darcy. The trust fund collects the revenues and, I 
believe that there is--I think it's $6.9 billion in the Harbor 
Maintenance Trust Fund.
    Mr. Cravaack. So there is $7 billion of cash in a trust 
fund somewhere. Is that correct? Is that what you're trying to 
tell me?
    Ms. Darcy. No. I'm told no.
    Mr. Cravaack. In essence, what I am telling you is Congress 
has raided that through the years and, in essence, not being 
able to give the Army Corps the amount of money they need to 
make sure that our infrastructure is up to speed in our locks 
and our dams and our waterways.
    So, in essence, it's Congress' fault--previous Congresses' 
fault--making sure that, by raiding this fund, and depleting--
using these funds for something else. So that is the point I 
want to make. That's the dirty little secret about this, is 
that correct? There is really no $7 billion sitting in cash 
somewhere in this trust fund, is that correct?
    Ms. Darcy. I don't know that answer, sir.
    Mr. Cravaack. OK. And it has been raided. That's why you're 
only getting $690 million, when you could have $7 billion to 
get the infrastructure we need to complete making sure the 
commerce of this country is working successfully. And we hand 
this information to the Corps and say, ``Do more with less,'' 
when there is plenty that should be available to them. But, 
unfortunately, previous Congresses have raided it.
    Real quick, if I can go on, EPA. I'm very concerned about 
what's happening in a mine--especially coming from a mining 
region--where the President has basically said that he has 
refused, or basically taken back a permit for a West Virginia 
mine. Could you comment on that? And where does the President 
get that kind of authority? And are you fighting back?
    Ms. Darcy. I believe what you're referring to is the Spruce 
Mine permit that was vetoed by the Environmental Protection 
Agency. Is that correct, sir?
    Mr. Cravaack. That's correct.
    Ms. Darcy. OK. As was stated earlier, the Corps of 
Engineers issued that permit in 2007. And under 404 of the 
Clean Water Act, the Environmental Protection Agency has the 
authority to veto a Corps-issued permit. And it's not the Corps 
of Engineers' veto, it's the Environmental Protection Agency's 
veto.
    Mr. Cravaack. Have you fought back on this at all? Have 
you----
    Ms. Darcy. We don't----
    Mr. Cravaack [continuing]. Pushed back on the President and 
said, ``Mr. President, where do you get such authority? Where 
do you--what's next?'' What else is the President going to--is 
he going to take one of my mines and attack a mine in 
Minnesota's Eighth District, and decide he's going to shut that 
one down, too? Do we give the President authority?
    Ms. Darcy. The Environmental Protection Agency has the 
authority to veto a Corps-issued permit, sir.
    Mr. Cravaack. And that's very interesting about the EPA, 
the Environmental Protection Agency. I was very curious about 
what you were saying in regards to the Clean Water Act.
    Tell me. Do you think that the Clean Water Act is also 
reaching out to--for navigable waters? Obviously, this is a 
very important concept. Do you believe navigable waters would 
include a seasonal slough or a wet meadow?
    Ms. Darcy. Sir, I think you may have stepped out of the 
room earlier when we talked about the Clean Water Act guidance 
that the Corps of Engineers is jointly developing with the 
Environmental Protection Agency to look at the definition of 
navigable waters and isolated waters.
    Mr. Cravaack. Yes, ma'am. That's why I'm asking. I was 
here, and I am asking your opinion.
    Ms. Darcy. Oh, sorry. I apologize.
    Mr. Cravaack. Yes, ma'am. What is your opinion? What are 
you going to tell the EPA?
    Ms. Darcy. We are currently in discussions with EPA on 
defining what the reach of that definition would be.
    Mr. Cravaack. OK. I understand that, ma'am. And just let me 
express to you at least this Congressman from Minnesota will 
fight vehemently for the 10th Amendment to the Constitution, 
that waters remain within the States rights. If it's a great 
big lake out in the middle of Minnesota called Mille Lacs, 
those are States waters. So I just wanted to make that comment.
    And I have one second. I yield back the remainder of my 
time.
    Mr. Gibbs. I would just like to make one comment on your 
questions. Ms. Secretary, when you talk about veto of the EPA, 
its authority to veto, and I think it's pretty clear that this 
permit was issued, and it's veto versus revocation. It was 
revoked 3 years after you guys approved it. That's not a veto 
anymore, that's revoking that permit, and that sets a new, 
dangerous precedent. We are going to have hearings on that in 
the future, I can guarantee it.
    Representative Harris, you have a question?
    Dr. Harris. Yes. Thank you very much. You know, normally, 
as these go on you actually become more enlightened about an 
answer. But I am actually a little less enlightened about an 
answer.
    Assistant Secretary, where are those $7 billion? I mean the 
ranking member suggests that it's just like Social Security, 
which would mean there is actually an IOU you hold, and you 
hope that it will be repaid one day. Or, actually, for those 
young people in the audience, maybe it won't in Social 
Security. But is there an IOU, or is there actually cash 
sitting around, as is suggested by the representative here on 
my right? Or is the answer that you really don't know where $7 
billion is, which is a little disconcerting to me, but that is 
a legitimate answer, I guess.
    Ms. Darcy. My answer would have to be I don't know, and I 
am going to get back to you.
    Dr. Harris. Thank you very much. I am just getting used to 
Washington, because I guess $7 billion is not a whole lot of 
money, because we just don't know where it is.
    Let's pretend that actually it was gone to deficit 
reduction in past years, but in this year it isn't. And I think 
the testimony was that we're going to collect about $1.4 
billion in these taxes. Is that right?
    Ms. Darcy. That's----
    Dr. Harris. That's on the order. OK. So we--where is the 
$700 million budgeted for that does not--is not budgeted for in 
those funds? Where is it? I mean on paper you've got a balance 
sheet. I mean you're taking in $1.4 billion and you're only 
spending $700 million. So is it going to deficit reduction, or 
is it going to this other nebulous program, you know, security 
or something else that supports harbors? Where is it on the 
balance sheet for this year?
    Ms. Darcy. Currently, I believe it's going to deficit 
reduction. But again, I want to make certain of that before I 
answer.
    Dr. Harris. OK. And if it goes to deficit--is there just, 
like the Social Security fund, as the ranking member suggested, 
an IOU that will be there in order for a future transfer to 
occur so that, you know my little harbor might get dredged one 
day from these taxes that are charged on shippers?
    Ms. Darcy. Well, if there is a change in the Harbor 
Maintenance Trust Fund, it has to be a legislative change.
    Dr. Harris. Well, I'm just talking about the balance. So, 
in other words, if you could get back to me not only on what 
exists, but actually are IOUs--I mean is there an 
intragovernmental bonding process, which is my understanding of 
what happens with Social Security and with things like our 
retirement pay and things like that? That's just, you know, of 
great concern to me.
    The last thing I want to ask is that I think, General and 
Assistant Secretary, I think both of you used the term ``social 
considerations,'' or something like that. Now I've got to tell 
you. When it comes to taking care of a harbor, you know, I 
think about dredging, keeping things secure, things like that. 
Could you elaborate on what ``social considerations'' might be 
for the expenditure of monies that most people think about 
going to actually mechanical things, you know, keeping a port 
open? Could you just expand on that?
    General Van Antwerp. That's a great question. I will start 
off on it, at least. Under the Principles and Guidelines, and 
the Principles and Standards, which is the concept, the notion 
is that you would go beyond just the benefit cost ratio, which 
is an economic piece, and you would look at the environmental 
considerations and the social considerations. The social 
considerations can be the number of people affected, the risk 
of not doing this on the economy in a local area. What it 
means--it really expands it to take a look and say, ``What is 
this doing to the community by not doing this?''
    Whereas before, it would just be an economic and what's the 
benefit cost ratio, and if you didn't have a lot of goods and 
services being dealt with there, it didn't matter that you had 
100 people or 1,000 people that were disadvantaged. So----
    Dr. Harris. Well, General, that's pretty subjective, 
wouldn't you say?
    General Van Antwerp. I think that's what is the challenge 
of the Principles and Guidelines is when you have 
environmental, which doesn't have a number, and you have 
social, which doesn't have a number, how do you account for 
that? But that's our challenge.
    Dr. Harris. And that's exactly to my point, you see. This 
little harbor, Rock Hall here, was told they didn't have a cost 
benefit ratio that was adequate. Well, is that because maybe 
you didn't consider that the residents of Rock Hall had as much 
social importance as other residents in another location?
    I mean how am I going to get my handle on how to help this 
little jurisdiction if we have got things like, well, we've got 
someone in the agency making an environmental judgment or a 
social judgment, instead of the economic benefit of not 
dredging a harbor so that ships actually can come into a port?
    General Van Antwerp. Up to this point, it has been strictly 
on the national economic benefit. So that ratio has been while 
that project----
    Dr. Harris. So I can expect, in my dealings with the Corps, 
that they will not use that as an excuse anymore for not doing 
something, a strict economic benefit ratio?
    General Van Antwerp. Well, I think under the new Principles 
and Guidelines, there will be other factors. But up until this 
point it has been we can tell you where your project is stacked 
with its benefit cost ratio.
    Dr. Harris. Thank you very much.
    Mr. Gibbs. Representative Bishop?
    Mr. Bishop. Thank you. Just very quickly, I would say to my 
colleagues from Maryland and Minnesota I would be happy to join 
you in filing bipartisan legislation that would build a 
firewall around the Harbor Maintenance Trust Fund, and that we 
would do so with the full recognition that if we were to fully 
spend down the Harbor Maintenance Trust Fund, it would either--
if we're still in a zero deficit environment, it would either 
require an additional $6 billion worth of cuts, or we would be 
increasing our deficit by $6 billion.
    But in all sincerity, many of us on this committee have 
long felt that that Harbor Maintenance Trust Fund should be 
spent for harbor maintenance, and I would join you in filing 
this legislation to build a firewall around it, in the same way 
that we used to have a firewall around the highway trust fund.
    Mr. Gibbs. And I would concur with that, too. These are 
essentially user fees, and they ought to go for what they're 
supposed to go for.
    I wanted to ask the last question to Mr. Thomas, because I 
don't believe he had a question today. And I don't want you to 
go back to Tennessee feeling left out.
    Mr. Thomas. Thank you.
    Mr. Gibbs. We're really concerned about the debt that the 
TVA has accrued. And according to the reports I've gotten, your 
staff, the TVA staff, has said they would take action if the 
debt were to exceed $28 billion.
    According to your own budget analysis, you exceed $28 
billion by the end of fiscal year 2013. And I guess the 
question is, why isn't the TVA taking action today? Why are we 
waiting to get up to a certain level when we know it's coming?
    Mr. Thomas. Yes, thank you for that question. It is true 
that TVA does have a limit on its borrowing authority of $30 
billion. It hasn't changed since 1979. And as TVA's assets have 
grown, we have taken on debt to fund those assets. And I 
mentioned that our financial guiding principles have--we use 
that, in terms of borrowing money only for new assets. And over 
the next several years, as we meet the needs of the demand for 
electricity in Tennessee Valley, we believe that it's prudent 
to finance those assets, and that's in the best interest of the 
rate payers.
    And so, we are, as we look out in our planning horizon, 
approaching that $30 billion borrowing authority limit. And we 
are currently developing plans. We are not waiting until 2013. 
Today we are working on developing what potential options we 
could have to continue to provide low-cost electricity in the 
Tennessee Valley, and still meet the demand for electricity. So 
we are not waiting until 2013.
    Mr. Gibbs. Would any of those options include partners, 
other utilities to work with to supply power on a partnership-
type arrangement, or not?
    Mr. Thomas. As a matter of fact, we are looking at--one of 
the potential options would be that we would have a project 
financing special purpose entity to be able to have partners, 
in terms of financing assets.
    Mr. Gibbs. Because I guess my concern is--I'm on a sharp 
learning curve here on this issue, but I think a word of 
caution, and maybe to bring capital in for new asset 
development, to make sure that you can have the adequate base 
generation to meet the needs of your customers, that you might 
need some partners to be involved in that.
    If you look at your balance sheet probably--but it's a 
thought.
    Mr. Thomas. The one thing I would like to add to that is 
certainly utilizing Tennessee--the TVA's borrowing authority is 
the most economical way. And bringing in partners will require 
higher financing costs than it would if Tennessee Valley were 
to do it. But if we do not have other options, then we would 
pursue all other means.
    Mr. Gibbs. Yes. Well, I want to thank everybody for coming 
to the committee today, and to our esteemed panelists, for your 
input. And I know that we look forward to working with you in 
the challenges that we face here in the future. Thank you very 
much.
    This concludes the hearing.
    [Whereupon, at 4:19 p.m., the subcommittee was adjourned.]
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