Forest Service chief Mike Dombeck says a national forest system that meets increasing demand for recreation and protection of fish and wildlife cannot be expected to generate regular profits.

"The fact is, the way we are doing business is changing and will continue to change," said Mike Dombeck, nearing his first anniversary as chief of the U.S. Forest Service."Forests live a long, long time. To assume you are going to run a profit on an annual basis for everything you do is a false assumption," he said in a recent interview with The Associated Press.

For the first time since its founding more than a century ago, the Forest Service has acknowledged a loss by its commercial logging operations - a $15 million shortfall last year.

That figure does not include the $240 million that went to rural counties containing those forests - their federally mandated 25 percent share of the money private industry pays for U.S. timber.

Environmentalists say those payments should be counted as additional losses because the money went to the individual counties, not the U.S. Treasury.

Long critical of the ecological impact of federal logging, the Sierra Club and others say the net loss to taxpayers is yet another reason to halt commercial timber harvests on national forests.

The fiscal impact has gotten the attention of some members of Congress who otherwise had no dog in the fight, including some influential Republicans.

Rep. John Kasich, R-Ohio, chairman of the House Budget Committee, helped lead an unsuccessful attack this year on subsidies for construction of logging roads in national forests.

Rep. James Leach, R-Iowa, chairman of the House Banking Committee, has co-sponsored a bill with Rep. Cynthia McKinney, D-Ga., to end commercial logging on national forests.

"The U.S. government is the only property owner that I know of that pays private parties to deplete its own resources," Leach said last month.

But loggers, sawmill workers and other timber industry dependents draw a different conclusion from the Forest Service's red ink.

They say it proves there must be changes in environmental laws they consider overly burdensome - changes that would allow for additional harvests to help bolster timber sale receipts.

"The system prevents land managers from doing their jobs, denies them financial and human resources and forces them to spend time cutting through red tape and an enormous bureaucracy instead of managing the land," said Bob Powers of the United Brotherhood of Carpenters and Joiners of America, based in Washington, D.C.

Powers and Bob Watrous, president of the Association of Western Pulp and Paper Workers Local No. 5 in Camas, Wash., told a Senate panel this past week that federal logging decisions are subject to too many levels of citizen appeals.

"Many of our Pacific Northwest communities have become hostage to a specific brand of professional agitators, who function under the guise of environmentalist but who repeatedly cause waste and disturbance without ever coming to the table or ever offering solutions or cooperation," Watrous said.

Dombeck makes it clear he supports continued logging on national forests.

"I am not at all a proponent of zero cut," he said. "I think there are lots of areas we have to go into to actively manage."

He balks at projecting whether federal logging levels - now about one-fourth the annual averages of the 1980s - will increase or drop further in the near future.

"I'm not sure we know that," Dombeck said, noting that agency policies have been evolving for several years.

"If anything, we need to increase the . . . focus on what we leave on the land," he said.

"We need to change the paradigm and be looking at investments in the land, making long-term investments in the land. The land will produce good things for us over time," he said.

The debate over money-losing timber sales "shouldn't even be occurring," Dombeck said.

"We should be talking about the health of the forest, quality of water, vegetative composition and not necessarily focus on dollars and cents every time we turn around," he said.

Dombeck concedes that part of the problem is the agency's accounting system.

Critics say that while the system produces a ballpark figure for the value of the cut timber, it completely ignores the costs of future environmental degradation, including soil erosion and landslides that harm fish and water quality.

And while experts try to gauge values of recreation and tourism through estimates of visitor days and related spending, it is much more difficult to guess the values of aesthetics like view sheds and experiences in nature.

"Some things are easier to measure than others. We've probably measured the easiest," Dombeck said.

"We are accustomed to an accounting structure that puts the cost on the back of timber. . . . I think we need to take a close look at the whole system."

Dombeck said that includes the possibility of separating timber receipts from the county payments. He said he's very sensitive to national-forest impacts on counties, which typically spend the money on schools and roads.

Such counties across the nation "have been put through a fair amount of stress. Timber volumes that were 10, 11, 12 billion board feet a year are now down to about 3.8 billion," Dombeck said.

A recent court order in Texas blocked a $26 million logging project on a national forest there, he said.

"That's $5 million that won't be going to counties . . . that use that money to educate their kids and take care of roads," Dombeck said.