The House Agriculture Committee began a series of hearings in advance of writing legislation to reauthorize the Commodity Futures Trading Commission (CFTC). The agency's statutory authorization expires at the end of the fiscal year.
Smith Fights Kennedy Amendment on Forest Roads, Says Schools, Not Politics, Must Be First Priority
FOR IMMEDIATE RELEASE
July 10, 1997
SMITH FIGHTS KENNEDY AMENDMENT ON FOREST ROADS, SAYS SCHOOLS, NOT POLITICS, MUST BE FIRST PRIORITY
WASHINGTON, D.C. - OREGON CONGRESSMAN BOB SMITH, CHAIRMAN OF THE HOUSE COMMITTEE ON AGRICULTURE, TODAY PLEDGED TO FIGHT AN AMENDMENT, OFFERED BY MASSACHUSETTS REP. JOE KENNEDY (D), TO ELIMINATE THE TIMBER PURCHASER ROAD CREDIT PROGRAM, SAYING THE AMENDMENT WOULD HURT RURAL COUNTIES AND SCHOOLS, CITING A RECENT PRICE WATERHOUSE REPORT WHICH CONCLUDES THAT THE CREDIT IS NOT A SUBSIDY AND THAT IT'S ELIMINATION WOULD HURT RURAL COUNTIES.
Most National Forest road construction funding is provided by timber purchasers as part of timber sales contracts. In exchange, the timber purchaser receives a credit for the estimated value of the road construction work they have performed, which the purchaser can then use to pay for the timber being harvested.
"I have spent a career working to balance our nation's budget, and will continue to fight wasteful government spending when I find it, but the timber road credit program is demonstrably not an industry subsidy. The Price Waterhouse report is very clear on that question," said Smith.
According to the report, prepared by Price Waterhouse and The Federal Budget Consulting Group, timber purchaser road credits are not a subsidy to the timber industry. Without the program, timber purchasers would submit lower timber bid prices, reflecting their anticipated road construction costs. Indeed, according to the report, the major consequence of eliminating the purchaser credit program would be quite negative -- reduced payments to states and counties, payments generally used for schools and local infrastructure, that are based on gross timber receipts, and greater strain on smaller mills, for which reduced cash flow is particularly burdensome. The purchaser road credit is entirely budget neutral, having no impact whatsoever on the federal deficit, the report says.
"Forest Service roads actually provide a number of benefits, including access to fire-threatened areas, allowing land managers to reduce fuel loads. Forest Service Chief Mike Dombeck has testified that 40 million acres of national forests in America are at extreme risk of destruction by catastrophic wildfire and that, under present policies, only 1 million acres per year are being treated. We can't afford to limit our future ability to combat catastrophic fire, as the Kennedy amendment would do," Smith said.
"In Grant County, Oregon, where two-thirds of the land is federally owned, local officials have already been forced to shorten the school week to four days because of declining timber revenue, and the Kennedy Amendment would only hurt more. Are our children somehow less of a priority than those in Boston and Cambridge?" Smith said.
"I recently visited some of the most heavily timber dependent communities in California and I can attest to the concern these folks feel. Attacking the road credit, as unfounded as this report says that is, is just one more way of attacking the industry and ultimately those communities. We ought to recognize the reality here and let some common sense creep into this debate," said Larry Combest, the Committee's Vice Chairman and Chairman of the Subcommittee on Forestry, Resource Conservation, and Research.
Smith has made forestry one of the Agriculture Committee's highest priorities in the 105th Congress, and is drafting additional legislation to improve forest health and federal lands management nationwide. Smith represents Oregon's Second Congressional District, which includes most of eastern, southern, and central Oregon, in the U.S. House of Representatives. The district is home to ten national forests.