[Congressional Record Volume 144, Number 86 (Friday, June 26, 1998)]
[Extensions of Remarks]
[Page E1273]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   INTRODUCTION OF H.R. 4149 ``THE FOREST SERVICE COST REDUCTION AND 
                  FISCAL ACCOUNTABILITY ACT OF 1998''

                                 ______
                                 

                           HON. ROBERT SMITH

                               of oregon

                    in the house of representatives

                        Thursday, June 25, 1998

  Mr. SMITH of Oregon. Mr. Speaker, a year-and-a-half ago the Committee 
on Agriculture convened a hearing in Sunriver, Oregon to discuss 
deteriorating conditions in the Eastside forests of Oregon. That 
meeting marked the beginning of what has since become an intensive 
national inquiry into the way the Forest Service is managing our 
National Forest System.
  Since the meeting in Sunriver, the Committee on Agriculture has held 
ten hearings to examine the performance of the Forest Service. From the 
first six of these the Committee learned that forest health and 
productivity throughout the country is deteriorating due to a decline 
in active forest management--management that is necessary to provide 
high quality recreation experiences, maintain a well-functioning rural 
transportation system, sustain the integrity of watersheds, improve 
fish and wildlife habitat, protect timber stands from the devastating 
effects of unnatural fire, insect and disease activity, and provide an 
adequate supply of forest products to the American public. 
Recreationists, wildlife advocacy groups, environmentalists and forest 
products companies from every quarter have testified that the agency is 
achieving fewer outputs per dollar spend now that in any other time in 
its history.
  This information has prompted the Committee to take a more detailed 
look at how the Forest Service manages its annual appropriations, trust 
funds and off-budget accounts to determine the correlation between 
fiscal management and resource management. This inquiry has revealed 
some rather troubling findings, including the following:
  In 1995, the USDA Inspector General gave the Forest Service a failing 
grade on its annual financial report saying that it could not certify 
that the data contained in the report was accurate. The Forest Service 
has failed to produce an acceptable financial statement since then.
  A total of at least 10 separate General Accounting Office reports 
have been published in recent years documenting the mismanagement of 
taxpayer dollars by the Forest Service.
  The Forest Service claims to have a $10.5 billion road reconstruction 
backlog. Yet, thirty-two percent of the agency's road construction and 
reconstruction program costs are overhead. The FY99 budget request 
asked for $26.5 million for road reconstruction while requesting $31 
million for overhead.
  The Forest Service presently charges over 27% overhead to the off-
budget accounts it uses for reforestation, brush disposal, and other 
site restoration associated with federal timber sales. Overhead charged 
to these funds has increased by 80% over the last five years.
  Presently 31% of the total costs of the federal timber sale program 
is overhead. These costs are in addition to the cost of project 
planning and implementation, environmental documentation, litigation, 
and other costs. By way of comparison, in 1996 the Forest Service 
reports that it spent $5 million on timber sales litigation, $54 
million on environmental documentation, $123 million on timber sales 
preparation and over $200 million on overhead.
  The Forest Service does not currently have a system in place to 
adequately track the costs associated with the programs it administers. 
Consequently, inefficiency and escalating overhead is the rule within 
the agency rather than the exception.
  Inevitably, each dollar spent on overhead or lost to inefficiency is 
a dollar not spent on active forest management. In short, rather than 
spending more money to deliver quality goods and services to the 
American taxpayer, the Forest Service is spending more money to support 
wasteful management and line the pockets of bureaucrats.
  Some in Congress argue incorrectly that the solution to the problems 
I have outlined is to simply eliminate those programs the agency does 
not efficiently administer. This is the position, for example, of those 
who advocate eliminating the federal timber program.
  This approach, however, ignores rather than solves the problem and is 
ultimately unfair to national forest constituents. If Congress were to 
eliminate every Forest Service program plagued by waste and 
inefficiency then, in the end, we would be forced to eliminate all of 
them. The big losers under this way of thinking are the millions of tax 
paying Americans who use our forests for a variety of purposes every 
day.
  When government misbehaves, Congress' objective should be to 
discipline the government, not punish the people it is supposed to 
serve. That is why I have introduced the Forest Service Cost Reduction 
and Fiscal Accountability Act of 1998.
  This legislation will require the agency to reduce costs, limit 
overhead, and be more accountable to Congress and the taxpayer. 
Specifically, the bill will do five things:
  1. Require the Forest Service to account annually for the costs 
associated with all of the programs it administers by moving to an 
``all resources'' financial reporting system.
  2. Impose limitations on the overhead the agency may charge to off-
budget funds.
  3. Require the Forest Service to fully disclose in each year's budget 
request the amount of overhead implicit in each budget line item.
  4. Require the Forest Service, in cooperation with the General 
Accounting Office and USDA Office of Inspector General, to develop a 
five-year strategic plan for identifying and reducing overhead and 
unnecessary costs.
  5. Require periodic GAO audits of the implementation of the strategic 
plan and corresponding reports to Congress.
  I invite my colleagues in the House of Representatives to join me in 
quickly moving this bill toward final passage on the House floor.
  The Forest Service Cost Reduction and Fiscal Accountability Act of 
1998 will produce less waste, greater efficiency, and make more dollars 
available for active on-the-ground management. It is a good government 
solution for what ails the Forest Service without unfairly penalizing 
forest constituents. In sum, it is a win for the good forest 
management, a win for the Forest Service and, most importantly, a win 
for the millions of Americans who live, work and recreate in our 
national forests every day.

                          ____________________