80 



1985 and 1986, taxpayer losses were maximized at more than 99 cents on the 

 dollar. 



Unfortunately, even the USFS's reports to Congress affirm the sad fact 

 that the annual dollar amount of these losses is bound to grow over time. 

 Because of chronically weak markets for southeast Alaska's timber products and 

 the fact that future harvests will have to rely on less accessible, less 

 valuable stands, the worst losses loom ahead for the taxpayer. 



The USPS continues to commit the best portions of the Tongass' rare 

 old-growth forest to logging, stating a need to maintain timber industry Jobs. 

 However, in spite of increasing timber program expenditues, regional timber 

 industry employment has fallen sharply — from more than 3,000 in 1980 to less 

 than 1,800 in 1986. Although a recent boom in the market due to the strong 

 Japanese yen has increased employment, the boom and bust cycle of the pulp 

 mill industry is sure to continue. In the long term, community stability is 

 best enhanced by a competitive industry producing value-added products. 



Finally, the federal timber program places at risk a large number of Jobs 

 in southeast Alaska that ultimately depend on the preservation of more forest 

 areas on the Tongass. This is particularly true for Jobs in the fishing and 

 tourism sectors of the economy. These sectors, which provide more than twice 

 as many Jobs as the timber industry, depend on natural resources that can be 

 sustained in perpetuity. The southeast Alaska timber industry, on the other 

 hand, is dependent on the one-time harvest of high-volume, old-growth timber 

 that, for practical purposes, is non-renewable. This fact makes a continued 

 decline of timber industry Jobs inevitable. (In 1987, as much as 40 percent 

 of the Tongass timber jobs were filled by seasonal employment from the 

 lower-i^S states.) Presently, federal timber program losses translate into an 

 annual cost of more than $24,000 per Job in logging and mill work. 



The unique qualities that make the Tongass an important resource for the 

 nation are threatened by the federal timber program and, particularly, by the 

 USFS's interpretation of ANILCA. Section 705, included as part of a broad 

 amendment package prior to Senate passage of the act, contains three 

 provisions that are environmentally and economically unsound. 



First, Section 705 sets a goal of supplying 4.5-blllion board feet of 

 timber per decade from the Tongass to "dependent industry." Second, it 

 provides an open-ended appropriation of "at least $40-million annually or as 

 much as the Secretary of Agriculture finds is necessary" to enable the USFS to 

 achieve the timber supply goal. Unlike virtually all other federal 

 expenditures, including expenditures for national defense, these funds are not 

 subject to deferral or rescission by the administration, nor are they subject 

 to the annual appropriations process in Congress. Finally, the section 

 exempts the Tongass from an important reform of the National Forest Management 

 Act of 1976 that requires the Secretary of Agriculture to identify national 

 forest lands that are economically and physically unsuited for timber 

 production. 



Section 705 is an anomaly in national forest management, designed 

 expecially for the Tongass. In essence, it ratified a series of unproven 

 economic assumptions in the USFS's 1979 Tongass Land Management Plan (TLMP) 

 aimed at preserving the regional timber industry. The existing pulp and 

 sawmills in southeast Alaska were built as a direct result of efforts by the 



