transfer or capital borrowing by the present 

 generations. Principles of sustained yield, site 

 productivity, and conservation generally ex- 

 press a natural resource ethic that attempts to 

 provide some kind of parity between present 

 and future generations. Furthermore, by pre- 

 cluding certain actions today, such an ethic 

 leaves open the range of options in the future. 

 Open alternatives may be viewed as good in 

 and of themselves — they insure that "no one 

 generation becomes unduly burdened because 

 of tha mistakes or foolishness of their prede- 

 cessors." 61 



The Budget Constraint 



Constraint 3, budget restrictions, repre- 

 sents the administrative aspect of costs in the 

 Forest Service. Obviously, in the evaluation of 

 alternative projects aimed at realizing one or 

 more of the values of the FOREST, costs 

 must be weighed against benefits. Although 

 social welfare may be best achieved by carry- 

 ing out all projects where the aggregate social 

 benefits outweigh the aggregate social costs 

 (both discounted to the present, assuming the 

 relevant rate of discount can be determined), 

 agency budgets are not established in that 

 manner. Arthur Smithies (1971, p. 140) de- 

 scribes the budgeting process in the govern- 

 ment sector as follows: 



Where a goal is definitely fixed, the problem 

 then becomes one of cost minimization. In 

 many, if not most, practical situations, the 

 problem poses itself the other way around. 

 Given the need for action in an area, the deci- 

 sionmakers ask themselves how given sums can 

 most effectively be spent. By considering alter- 

 native ways of spending varying sums, they can 

 arrive at a series of optimal budgets. Hence, the 

 term "cost-effectiveness." The actual size of the 

 agency's budget will depend on competition 

 with other agencies and with the taxpayer. 

 There is an essential difference between mini- 

 mizing the cost of attaining a given objective 

 and maximizing the results of a given expendi- 

 ture. In the latter case, objectives or preferences 



61 See Green (1971, p. 2). The sustained yield con- 

 straint could properly be expressed in terms of pres- 

 ent value of the separate resources. The discount rate 

 selected may, under certain circumstances, indicate 

 the degree to which the public holds onto a con- 

 servation ethic. Assuming no other considerations 

 complicated the choice of discount rate, the greater 

 the rate the less strong would be the conservation 

 orientation, because returns coming at some distant 

 time would be given less value. 



are not necessarily fixed. The process involves 

 the discovery or revision of the preference func- 

 tion itself. 



The actual budgeting process as it applies 

 to the Forest Service will be discussed in a 

 later section. It is evident, however, that those 

 programs (and projects) must be chosen 

 which yield the greatest net progress toward 

 the specified goal, while staying within the 

 fiscal-year budget allocation. The agency can 

 spend all of its money, no more. (We can as- 

 sume that it will not spend less, although the 

 optimal solution could conceivably come at a 

 lower level of expenditure.) 



The Forest Service is further constrained in 

 its program implementation by the break- 

 down of the congressional appropriation into 

 specific allotments of funds among the vari- 

 ous resource activities and functions, includ- 

 ing timber resource management, recreation- 

 public use, wildlife habitat management, 

 range resource management, soil and water 

 management, and others. This is reflected in 

 the model, which shows the total budget as 

 the sum of its component parts (F^ + O^ + 

 + + S^ + T^). Because it is limited to 

 National Forest administration, the model 

 does not purport to include all of the line 

 items in the Forest Service appropriation 

 schedule. 



The actual level of expenditures (F a , etc.) is 

 shown as opposed to the initial amount budg- 

 eted or allotted to that function (Fu, etc.) 

 The agency is given a limited amount of dis- 

 cretion in the budget allotment procedure in 

 that it may shift up to 7 percent into or out 

 of any given line item, but it is not obligated 

 to do so. All of this is indicated in the model. 

 The limitation applies separately to each of 

 the terms, but cannot nullify the constraint 

 that the total expenditures must be no greater 

 than the total amount originally budgeted. 



An exception to the total limitation is spe- 

 cial funding as contained in sundry civil ap- 

 propriation bills. In addition to the congres- 

 sional line appropriations, the agency has ac- 

 cess to other sources of funds, such as the 

 Knutson— Vandenberg monies and the separate 

 Timber Survey appropriation under the 

 McSweeney-McNary Act. These outside funds 

 are generally very closely restricted to specific 



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