‘Welfare’ Reform To Cut Log Roads Craig In Middle As Taxpayer Group Assails Subsidized Building Of Logging Roads

An attack on federal logging road construction as a corporate subsidy may put U.S. Sen. Larry Craig at odds with his reputation as a fiscal conservative.

Two weeks ago the Stop Corporate Welfare Coalition unveiled a 15-point hit list of federal expenditures, from water projects to federal highway demonstration projects. The group also wants to stop Forest Service spending on logging roads.

The group estimates taxpayers would save $100 million over the next five years if people who benefit the most by the roads - logging companies and recreational users - pay for them up front. As it stands, timber companies build the roads and, in exchange, are given enough public timber to cover the estimated cost of construction.

That means all taxpayers, not just road users, pay the bill, the coalition argues.

“We’ve reformed welfare for those who don’t have money or powerful Washington lobbyists,” Rep. John Kasich, R-Ohio, said. “Now it’s time we did the same for those corporate welfare programs that aid the rich and powerful at the expense of taxpaying families.”

Kasich’s group unveiled its list as Craig’s career-long quest to pass a balanced budget amendment seems to gather its most serious momentum.

The seeming contradiction won’t lower Craig’s rating with the National Taxpayers Union, which is a member of the Stop Corporate Welfare Coalition. “We look at so many votes and he casts so many good votes, my guess is he will come out pretty high,” said David Keating of the taxpayers group.

Craig’s support for national forest roads doesn’t necessarily put him at odds with his otherwise conservative reputation, Keating said. “We will have to wait and see” how Congress resolves the question and how Craig votes.

Neither Craig nor other conservatives see supporting the balanced budget amendment as being at odds with the national forest road program.

“The roads component is not really a corporate subsidy,” said Chuck Kellschulte, spokesman for Alaska Sen. Frank Murkowski, who chairs the Senate Energy and Natural Resources Committee and oversees the Forest Service. “If you removed purchaser credits, people would bid less for the timber. It would be a wash.”

Craig also said it’s false to call logging road construction a corporate subsidy. Timber companies are providing a road that is used by a wide variety of people, from loggers to berry pickers, and are compensated for the work.

“The environmental community is trying to stop roads being built,” said Mike Tracy, Craig’s press secretary.

This is not an attempt to save money, it’s an attempt to stop timber sales, he said. “They have tried to recruit fiscally conservative groups by trying to convince them this is corporate welfare.”

If the roads aren’t built and the timber sales are not made, it means less revenue for the federal treasury, Tracy added.

Craig’s stance is popular with Idaho’s timber industry, which dropped campaign dollars like pine needles during the 1996 elections.

Bret Bennett, with Bennett Lumber Products in Princeton, said his family gave money to candidates he believed would protect workers’ jobs. His father and uncle were top contributors to Craig’s campaign, in part because he pushes to allow more logging in national forests.

Environmental groups are encouraged that logging roads were included on the “Corporate Welfare” hit list. Fiscal responsibility will lead to environmental responsibility, they say.

“Areas of marginal timber or timber that is expensive to get to may not be as attractive,” said Marty Hayden of the Sierra Club Legal Defense Fund. These areas also tend to be the most environmentally sensitive.

They probably won’t be roaded or logged once one considers the basic test of “Is the free market going to dump as much money into roads as Uncle Sucker does?” Hayden said.

There are an estimated 370,000 miles of Forest Service roads nation-wide - eight times the interstate highway system and plenty to serve recreation and timber interests, Hayden says.

Bob Wolf, a forester and retired analyst for the Congressional Research Service, said he believes Stop Corporate Welfare is on the wrong track.

“If I were in the timber industry, I would be delighted because I could argue there’s no subsidy in roads,” Wolf said. That’s because no money changes hands. Instead, public timber is traded for road construction under a program called “Purchaser Credits.”

“The real loss is selling timber below its cost overall,” Wolf said.

The Forest Service’s current accounting system doesn’t tally the cost of running the Washington, D.C., office or the regional offices. It also doesn’t count payments to counties for 25 percent of the value of national forest timber cut within the county.

Over the past nine years, the Forest Service has omitted $3.6 billion of spending from its balance sheets, Wolf said.

“The real subsidy is the Forest Service doesn’t recoup its costs,” he said. “If you and I ran a corporation like this, the (Securities and Exchange Commission) would have us in jail.”

Going after roads as a means of slowing down logging or saving money is a mistake for other reasons, Wolf argues. It could lead to more helicopter logging, which would cost taxpayers more. That’s because the Forest Service would lower the asking price in timber because the cost of removing it by helicopter is more expensive.

Eliminating road building could lead to overlogging those areas that already have roads.

Considering that Forest Service roads are substantial contributors to stream damage, “I would argue for a rational program of dealing with the problem” instead of taking the broad corporate welfare swipe at the program, Wolf said. “But that wouldn’t make the timber industry happy and it might not make some of the environmental community happy.”

Jonathan Adler, of the Competitive Enterprise Institute - a member of the anti-corporate welfare group - said he also doesn’t believe singling out roads will solve Forest Service fiscal problems. “There are bigger fish that have to be gone after,” Adler said. “Below-cost (timber) sales are symptomatic of a larger problem.”

Kasich’s group is having a bit of trouble sorting out some of the numbers. It recently asked the General Accounting Office to evaluate whether the Forest Service is getting the best price for the timber it sells.

The GAO cannot, it wrote Kasich, because the computer tapes with the essential information “were accidentally erased.”

Earlier GAO studies, however, estimate the Forest Service lost between $200 million and $400 million a year on its timber sale program between 1992 and 1994. Not a single Idaho national forest was profitable under that study.

But the Taxpayers Union and other conservative members of the Stop Corporate Welfare Coalition say that doesn’t mean it’s time to quit cutting federal timber. “Part of the problem is that the bureaucracy is so expensive,” Keating said.

, DataTimes ILLUSTRATION: Graphic: Building roads into the forest

MEMO: This sidebar appeared with the story: AT ISSUE The Idaho Panhandle National Forest is home to 8,300 miles of federal roads. By contrast, Idaho has 4,952 miles of state and federal highways.