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Making only technical changes, the House Committee on Agriculture today passed by voice vote Chairman Bob Smith's (R-OR) Forest Service Cost Reduction and Fiscal Accountability Act of 1998 (H.R. 4149), legislation bringing financial and performance reforms to the U.S. Forest Service (USFS).

A General Accounting Office (GAO) study found that overhead charges to five off-budget fund have increased 80 percent from $65.9 million in 1993 to $118.7 million in 1997, while total expenditures have remained relatively constant during the same period. In addition, as a percentage of total expenditures, overhead expenses have increased from 15.9 percent in 1993 to 27.1 percent in 1997.

"With this track record and the fact that self-imposed change within the Forest Service has proceeded at a glacial pace, the reasons for my bill become clear," Smith said. "Congress cannot sit idly by and allow taxpayer dollars that should be spent preserving our natural heritage to be squandered on excessive overhead and other forms of financial mismanagement within the Forest Service."

To remedy this situation, Smith introduced H.R. 4149 on June 26, 1998. Specifically, the bill would:

Require the USFS to account for the costs associated with all of the programs it administers by moving to an "all resources" financial reporting system. Impose limitations on overhead the agency may charge to off-budget funds.
Require the USFS to fully disclose in each year's budget request the amount of overhead implicit in each budget line item. Require the USFS, in cooperation with the GAO and USDA Inspector General, to develop a five-year strategic plan for identifying and reducing overhead and unnecessary costs.

Require periodic GAO audits of the implementation of the strategic plan and corresponding reports to Congress. Require fiscal reforms structured and implemented to improve outputs of goods and services to the taxpaying public.

"The central policy issue at play here is whether $100 million per year in overhead should be taken out of off-budget trust funds established to fund critical on-the-ground management or whether that overhead should be subject to the appropriations process. Congress has already opted for the latter. It's that simple," Smith said.

"If we do not act prudently today, then Congress will act punitively tomorrow. My intent is to improve the Forest Service, not punish it. H.R. 4149 will go a long way toward accomplishing that objective," Smith added.

Smith's bill has gained broad support from taxpayer groups, professional associations, labor and national forest constituents. Supporters of the bill include the Society of American Foresters, Citizens Against Government Waste, the National Association of Counties, Citizens for a Sound Economy, the United Brotherhood of Carpenters and Joiners, the National Taxpayers' Union and the Forest Products Industry.

Smith represents Oregon's Second Congressional District — which includes most of eastern, central, and southern Oregon — in the U.S. House of Representatives. The district is home to ten national forests.

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