432 



Section 705(a) of ANILO^ established the Tongass Timber Supply 

 Fund, a guaranteed subsidy of "$40 million or as much as the Secretary 

 of Agriculture deems necessary," to sv^jport timber harvesting on the 

 Tongass. "fliis expenditure is exempt from the usual appropriations 

 process and is immune from any administrative rescissions. 



A 1988 study by the General Accounting Office shows that this 

 attempt by Congress to control the econcaaics of a private industry has 

 failed. The GAO found: 



* Between 1981 and 1986, of the $257 million spent through 

 the Tongass Timber Supply Fund, $131 million went to 

 prepare timber sales vrtiich were not needed to meet current 

 demand and were not purchased. 



* Despite this lavish spending, industry eiqployment declined 

 in the same period from about 2,700 jobs to 1,420 jobs. 



These findings expose the flaw in the industry's argument that 

 the program is necessary to preserve jobs. 



The GAO report goes an to say: "... volume of timber harvested 

 and the resulting eii¥>loyment — depends primarily on the market's 

 demand for timber, not cm its availability. Maintaining employment by 

 ensuring suj^ly, as Section 705(a) . . . attempt(s) to do, will not be 

 successful \jnder all market conditions." 



The GAO report recommends that Congress revise Section 705(a) to 

 provide the Forest Service with more flexibility to supply timber 

 under varying market ccmditions. The National Taxpayers Union agrees 

 and encourages your subconmittee to report Title I of S. 346 

 unamended. 



The NTU also ertdorses terminating the two 50-year contracts, and 



