I believe that in order for these agencies to be rewarded with an operating budget, 

 they need to be accountable for their performance on the ground. Why does it cost 

 the Federal Government so much more to conduct a timber sale? Only about one 

 quarter of the total revenues annually spent by the U.S. Forest Service are for 

 timber sales. Other costs are attributed to "public investments" and developing an 

 "environmental infrastructure." 



What happens if this program doesn't go forth? How about roughly five times 

 more timber being lost to disease, insects, decay, fire and maturity than is being 

 harvested in the name of ecosystem management? This waste could build a lot of 

 affordable houses and provide a lot of jobs. How about 9,000 timber jobs and another 

 11,000 indirect jobs — just in Montana? 



What else is being lost? For every 10 million board feet of timber tied up in frivo- 

 lous appeal or in a status quo indecision within the Federal agencies, about $1 mil- 

 lion is lost from local county treasuries. In Montana, a conservative estimate is that 

 counties could lose as much as $42 million in the the next 10 years, just from the 

 loss of gross timber sale receipts. 



You don't have to travel very far to see the ramifications of poor forest health — 

 latent with insects, diseases and deterioration from overmaturity. The results of 

 poor forest health were clearly dramatized during the fires in the Greater Yellow- 

 stone area in 1988. 



I'm sure most of you have heard the statistics on "below-cost timber sales" but let 

 me briefly summarize the administration's proposal. The Office of Management and 

 Budget says that by eliminating below-cost timber sales from the national forests 

 that cost about $274 million and foregoing the incoming revenue of $202 million in 

 timber receipts, the net savings over a 4-year period would be about $72 million. 

 The U.S. Forest Service is working on a program to phase out below-cost timber 

 sales on approximately 60 national forest while the cost of a new home rises by as 

 much as $5,000. Believe me, I am concerned about their strategy because nine of 

 these national forests are in Montana. My concern is for what is being lost for the 

 sake of "concern." 



We have seen figures for indirect revenues generated from the timber industry as 

 high as $400 million annually. Believe me, we want to keep this renewable resource 

 industry healthy and its employees working. 



The concern is for both the environment and the agencies' administration. Iron- 

 ically, abuse of environmental regulations is the main cause of money-losing forest- 

 ry. Emotional hand wringing, a little data, some egos and a lot of "concern" for the 

 health of our forests has cost taxpayers millions of dollars. Yet, putting an end to 

 timber harvesting would stop responsible and successful forest management. 



A clear message has been sent from the people of this Nation. The public lands 

 must be managed for the benefit of the people who own them. Now, this concept is 

 admirable, but the key word is manage. Social benefits may be high on our list of 

 uses of public land. Yet, the cost of managing people, providing recreational oppor- 

 tunities, and other nontimber liabilities are allocated against the money maker — 

 timber assets. 



Using 1992 as a basis, 1.6 billion board feet of timber was harvested from public 

 lands. Timber management and manufacturing created about 20,300 taxpaying jobs 

 nationwide. Without those jobs, about $119 million in Federal income taxes would 

 be lost from the Treasury and $795 million would be lost in wages. 



We can talk about data, marketing, stumpage prices, forest health, natural condi- 

 tions, ecological soundness, biodiversity, salvage and this ecosystem management 

 concept. The bottom line is that the cost/benefit problems driving the "below-cost 

 timber sale" issue just don't add up. And, they won't add up until every dollar spent 

 for every multiple use of the forest is categorically allocated to each use which is 

 not only tough to do but also unnecessary in practical terms. 



At today's market prices, no timber sale should be losing money. If it is, it's an 

 operator problem or there's too much Government oversight and reinvention of the 

 "concern and analysis" in the administrative process without accountability or per- 

 formance. 



Since the U.S. Forest Service and Bureau of Land Management have been serious 

 about down-scaling or getting out of the timber business and into wilderness and 

 recreational management for the past few years, the consequences of the budget im- 

 pacts should be analyzed before we allow a complete shutdown. In all likelihood, the 

 losses from a reduction of the program would cost more in unemployment and re- 

 training, let alone lost personal revenues and corporate income taxes. 



Environmental laws do not have to be compromised to ensure forest health or to 

 justify higher agency budgets. More often the long-term management goals are big 

 time winners for jobs, the economy, wildlife or forest health. 



