While the government's need to promote settlement of the West has long passed, it continues to give away billions of dollars in natural resources to private business, a congressional report says.
The subsidies, including cheap water and timber, that are given private interests such as mining companies to ranchers and farmers are now largely unnecessary and siphon badly needed revenue from the Treasury, said the study released Sunday by the House Natural Resources Committee.The study said the government giveaways are so widespread that it is difficult to determine the cost to taxpayers and who is reaping the benefits.
"We simply don't know. It runs into the hundreds of millions, sometimes billions of dollars. And on a cumulative basis it's off the charts," said Rep. George Miller, D-Calif., the committee chairman.
Many of the subsidies have been discussed in Congress for years, and the debate has intensified since the Clinton administration began pushing for higher grazing fees, royalty payments on hardrock minerals and higher prices for timber taken from federal forests.
While some subsidies should be eliminated, others should be curtailed and still others should be subjected to "means testing" to ensure that wealthy individuals or prosperous corporations are not given taxpayer-funded support.
The report lists dozens of cases where private individuals or corporations benefit from government resources that include cheap access to federal land, water or mineral rights to beneficial tax benefits.
Among the examples cited were:
- Mining companies that buy through a "patenting" process the rights to federal land and then reap billions of dollars from hardrock minerals such as gold and platinum without paying the government a penny in royalties.
- Cheap electricity from federal power suppliers in the Northwest and in the Missouri River Basin. While in some cases the gap has narrowed, federal power is still much cheaper than other sources, the report said.
It cited the case of the Pick-Sloan Project in the Missouri River Basin where subsidized federal power costs as little 1.2 cents per kilowatt-hour compared to 3 cents for wholesale electricity from other sources.
- The sale of timber from federal forests at prices that do not cover the costs of administration or the construction of miles of roadway - at taxpayer expense - needed for harvesting.
- Financially prosperous farmers in California's Central Valley and other parts of the West, who have been provided billions of dollars worth of cheap water over the years from federal irrigation projects.
Some subsidies work at cross purposes, the study said. Some farmers, for example, have been found to use subsidized water to grow surplus crops on land they lease from the government at lower-than-market rates, it said.