TYPE: COMMITTEE HEARING

LENGTH: 33464 words

COMMITTEE: WATER RESOURCES AND THE ENVIRONMENT SUBCOMMITTEE, HOUSE

HEADLINE: U.S. REPRESENTATIVE JOHN DUNCAN (R-TN) HOLDS HEARING ON 2002 BUDGET REQUESTS FOR THE ARMY CORPS OF ENGINEERS AND THE ENVIRONMENTAL PROTECTION AGENCY

SPEAKER:
U.S. REPRESENTATIVE JOHN DUNCAN (R-TN)

LOCATION: WASHINGTON, D.C.

WITNESSES:

CLAUDIA TORNBLOM DEPUTY ASSISTANT SECRETARY OF THE ARMY
LIEUTENANT GENERAL ROBERT FLOWERS CHIEF OF ENGINEERS
CHRISTINE TODD WHITMAN ADMINISTRATOR ENVIRONMENTAL PROTECTION AGENCY

BODY:
HOUSE COMMITTEE ON TRANSPORTATION SUBCOMMITTEE ON WATER

RESOURCES AND THE ENVIRONMENT HOLDS HEARING ON THE ARMY CORPS

OF ENGINEERS' BUDGET AND PRIORITIES FOR FISCAL 2002; AND THE

ENVIRONMENTAL PROTECTION AGENCY'S BUDGET AND PRIORITIES FOR

FISCAL 2002


MAY 2, 2001


SPEAKERS:

U.S. REPRESENTATIVE JOHN L. DUNCAN (R-TN), CHAIRMAN

U.S. REPRESENTATIVE SHERWOOD L. BOEHLERT (R-NY)

U.S. REPRESENTATIVE WAYNE T. GILCHREST (R-MD)

U.S. REPRESENTATIVE STEPHEN HORN (R-CA)

U.S. REPRESENTATIVE VERNON J. EHLERS (R-MI)

U.S. REPRESENTATIVE STEVEN C. LATOURETTE (R-OH)

U.S. REPRESENTATIVE SUE W. KELLY (R-NY)

U.S. REPRESENTATIVE RICHARD H. BAKER (R-LA)

U.S. REPRESENTATIVE ASA HUTCHINSON (R-AR)

U.S. REPRESENTATIVE DON SHERWOOD (R-PA)

U.S. REPRESENTATIVE DOUG BEREUTER (R-NE)

U.S. REPRESENTATIVE MIKE SIMPSON (R-ID)

U.S. REPRESENTATIVE HENRY E. BROWN JR. (R-SC)

U.S. REPRESENTATIVE BRIAN KERNS (R-IN)

U.S. REPRESENTATIVE DENNIS REHBERG (R-MT)

U.S. REPRESENTATIVE C.L. "BUTCH" OTTER (R-ID)

U.S. REPRESENTATIVE DON YOUNG (R-AK) (EX OFFICIO)


U.S. REPRESENTATIVE PETER A. DEFAZIO (D-OR),

RANKING MEMBER

U.S. REPRESENTATIVE ROBERT MENENDEZ (D-NJ)

U.S. REPRESENTATIVE GENE TAYLOR (D-MS)

U.S. REPRESENTATIVE EARL BLUMENAUER (D-OR)

U.S. REPRESENTATIVE JAMES MCGOVERN (D-MA)

U.S. REPRESENTATIVE NICHOLAS LAMPSON (D-TX)

U.S. REPRESENTATIVE BRIAN BAIRD (D-WA)

U.S. REPRESENTATIVE FRANK MASCARA (D-PA)

U.S. REPRESENTATIVE MARION BERRY (D-AR)

U.S. REPRESENTATIVE ROBERT BORSKI (D-PA)

U.S. REPRESENTATIVE BOB FILNER (D-CA)

U.S. REPRESENTATIVE EDDIE BERNICE JOHNSON (D-TX)

U.S. REPRESENTATIVE JUANITA MILLENDER-MCDONALD (D-CA)

U.S. REPRESENTATIVE WILLIAM PASCRELL (D-NJ)

U.S. REPRESENTATIVE MICHAEL HONDA (D-CA)

U.S. REPRESENTATIVE JAMES OBERSTAR (D-MN) (EX OFFICIO)

*

DUNCAN: I want to welcome everyone to the Water Resources and Environment Subcommittee. And the subcommittee meets today to receive testimony on the fiscal year 2002 budget and to hear about the priorities of the Army Corps of Engineers and the Environmental Protection Agency.


Members will have the opportunity to examine the administration's fiscal and program priorities and raise matters of concern to their districts. To accommodate everyone's schedule, we'll begin with the Army Corps of Engineers. EPA Administrator Whitman will join us at about 11 o'clock.


The Army Corps is represented here today by Deputy Assistant Tornblom and Lieutenant General Flowers. They're accompanied by Major General Van Winkle, director of civil works, and Mr. Vining, chief of the Programs Management Division.


As veterans of three budget hearings already in the last few days, I don't suppose that they will hear any question today that will surprise them. And of course this will give some of our members a chance to raise some concerns that they have in particular.


The fiscal year 2002 budget request for the Corps is 15 percent less than the fiscal year 2001 enacted levels. This has raised some real concern on the part of many people. We know that fiscal year 2001 was a very good year for the Corps, with an increase in funding over prior years. But increased funding is necessary if the Corps is going to fulfill its traditional missions navigation and flood protection and take on new missions such as environmental restoration.


Currently, the Corps claims to have a construction backlog of $40 billion, but the budget requested for the fiscal 2002 is only $20.9 billion. At this rate, it would take a decade to complete just those Corps projects that have already been started without meeting any emerging needs or taking on any new large environmental restorations.


In the meantime, the balances in the Harbor Maintenance Trust Fund and the Inland Waterways Trust Fund are increasing, because we are collecting more in taxes from the shipping industry than we are spending on navigation projects. Under the president's budget request in fiscal year 2002, the balance of the Harbor Maintenance Trust Fund is projected to build by almost $200 million, to $1.89 billion. And the Inland Waterways Trust Fund is projected to build by approximately $50 million, to $409 million -- a total of close to $2.5 billion in these two funds.


Although the balances are somewhat lower, the same principle should apply to these trust funds as applies to the Highway Trust Fund and the Airport and Airway Trust Fund. We should not collect taxes for a specific purpose and then use those revenues to offset other federal spending almost the size of the federal debt. (inaudible) that waterways infrastructure moves in this country. We rely on our ports and waterways to move goods to and from and around our country. Congestion in our ports and waterways decreases our competitiveness in the growing marketplace and increases the cost, which hit home.


My goal, and I think the goal of the subcommittee and the staff, is to address these issues by increasing investment in our nation's ports and waterways and decreasing congestion in water transportation. I hope that the Corps of Engineers will be our partner in meeting this goal.


Turning to the EPA budget, I believe that our hearing today is Administrator Whitman's first opportunity to explain the fiscal year 2002 budget of the Environmental Protection Agency. Although EPA's overall budget is 6.4 percent less than fiscal year 2001 funding levels, it is the same as the fiscal year 2001 budget request. Like the Corps, I expect that Administrator Whitman will hear concerns over EPA's funding levels, particularly the funding levels for our waste water infrastructure.


Once again, the subcommittee is concerned about the administration's budget request for clean water state revolving funds. Although the fiscal year 2002 request is an increase over the request of the past two fiscal years, when compared to the fiscal year 2001 enacted levels, the administration has proposed a $500 million cut in water state revolving funds. We've already heard some testimony about that at one of our prior hearings, and we need to look into that.


To the credit of the administration, the administration's proposing $450 million for grants to municipalities to address the combined sewer overflows and sanitary sewer overflows, bringing total wastewater infrastructure funding up to $1.3 billion. This subcommittee hopes to see funding for the clean water state revolving funds restored by keeping the funding for sewer dams.


We also would like to ensure that those grants are directed to communities where the needs are greatest. The administration proposal to allow $450 million in grant funding to all 50 states in accordance with the SRA funding formula does not focus this funding on combined sewer and sanitary sewer overflow infrastructure needs. Instead the funding is so thin that it becomes almost irrelevant.


Looking forward to fiscal year 2002 and beyond, I hope that the Administrator Whitman will work with this subcommittee to develop a plan for addressing our nation's water infrastructure needs and make a renewed federal commitment to help states and communities meet those needs.


I have some other -- of course, several questions on things that I am concerned about with both the Corps and the EPA. We'll get into those later.


And I will now go to Mr. Blumenauer for any statement that he wishes to make.


BLUMENAUER. Thank you very much, Mr. Chairman. I appreciate your having this hearing, and I appreciate the Corps being here. I do have a formal opening statement that I'll submit for the record. I would just make a few references, if I could.


One, I was privileged to be able to share the dais with General Flowers a few weeks ago in Portland. He made what I thought was a forceful and compelling statement about his vision of the future of the Corps of Engineers in terms of his commitment to sustainability, to a broad concept of environmental protection and being a full partner for local communities. And I wanted to say that I deeply appreciated the statement. I said then and I will reiterate now that my commitment over the next two years is work with you to make sure this Congress is a full partner with you in realizing that vision for our environmentally sensitive long-term perspective of the Corps of Engineers. And I've been sharing your speech and referencing it on the Web repeatedly.


Second, Mr. Chairman, I would hope that we could explore some areas that I think Congress really hasn't done quite enough and perhaps in the context of this budget, looking at things like unexploded ordnance and cleaning up some of the waste from military activities, this is something that I think is important to keep the commitment with our communities. Every state in the Union has a problem that's related to this, and Congress, sadly, has sort of been missing in action. It hasn't given the resources to the Corps and the Department of Defense to help restore the health of our communities. And I'm hopeful that in the course of our work we can do something in that regard.


Last but no least, I am hopeful that we can continue to focus on ways that the Corps of Engineers, FEMA, the federal agencies and Congress can be a partner in preventing these disasters before they occur, things like Project Impact, I think there are approaches like that to help before the fact that have saved a lot of time in the future. I appreciate the statements we've heard from the administration looking at a broader view of some of these issues, and I look forward, under your leadership, Mr. Chairman, and that of my colleague, Mr. DeFazio, that this committee can help the Corps realize that vision.


I appreciate your courtesy.


DUNCAN: All right. Thank you very much, Mr. Blumenauer.


We'll go next to Chairman Boehlert, the former chairman of this subcommittee, now chairman of the full Science Committee, for any statement. We are pleased to have you here with us.


BOEHLERT: Well, thank you very much, Mr. Chairman.


I want to welcome General Flowers. We had a good conversation in our office, and I look forward to working constructively and cooperatively with you.


I don't want to mix Transportation Committee metaphors too much but when it comes to water, our nation is at the crossroads. We face enormous water and water transportation infrastructure needs. And there's also a growing recognition we need to improve environmental decision-making so that it's more integrated and science based. And it won't surprise you to learn that I'm for science-based decision- making. So is everybody else in this town except when the science base leads to a politically inconvenient conclusion. Then they look for some other approach. We need leadership, I think, that's big and innovative. I could go on with a long statement; I will not.


One seed I would like to plant, General: I would like the Corps to continue to consider and review merit-based decision-making on projects. Some people are afraid of that; I am not. I welcome that. We use it very effectively with the National Science Foundation, and I think we could use if very effectively with the Corps. (inaudible), in pilot projects, work it out together, but I think it would insulate you from some potential problems and would give you a greater degree of assurance that we're doing the right thing for the right reasons.


So I want to welcome you all, look forward to working with you.


And, Mr. Chairman, thank you for your indulgence.


DUNCAN: Thank you very much, Chairman Boehlert.

We'll turn now to the ranking member of the subcommittee, Mr. DeFazio.


DEFAZIO: Thank you, Mr. Chairman. I got here a few minutes late and missed some of the other opening statements, but just reflecting on Mr. Blumenauer's and Mr. Boehlert's statements, I think certainly we can always do better, and I submit we work with numerous representatives of the Corps to discuss the possibility of some reforms and new efficiencies and taking a second look at some of the parts of the mission and some of the statements they made.


But more general, I'd like to comment both on this budget and the one we will hear later. Now, there's a point at which we have got to question pursuing one political goal to the detriment of a whole lot of things that are important to the American people, and I think that's what we're going to hear in both these hearings today, that we do not have a budget which is adequate to fully meet the mission of the Corps, I think a mission that would be widely agreed upon by divergent members of the committee despite concerns they might have with some aspect of past Corps operations. And the same with the Environmental Protection Agency budget, which we'll get into a little bit later.


The Corps budget will be down 6.5 percent from 2001 levels. I just don't think that can be justified. We just had massive floods, and I find it ironic that I believe it was the head of the Federal -- FEMA who was chastising Davenport, Iowa for not having a permanent dike system in place, which would, of course, cost hundreds of millions, if not billions, of dollars. Yet at the same time, projects important to my district and many other districts are being slowed down to the point of where if it wasn't (inaudible), but secondly, I have one particular project in my district which is a tremendous environmental benefit (inaudible). And this year I think the budget will allow for one guy to go out there with a bucket and mix his own cement and pour cement on a daily basis.


It's not adequate, and no one can make the argument that this is a good way to do the agreed upon priorities of the Corps of Engineers. We are having a drought in the Northwest. That means a heck of a lot more (inaudible) or cutting the dredging process. These things make sense or they might make sense in the single-minded pursuit of maximizing the particular (inaudible) in order to maximize the tax cuts which would slow most of the few people at the top. And anything can happen.


My fishermen (inaudible). Their $47 in tax cut is not going to help get the boat over the (inaudible). And the few dollars that my people -- fishers and environmentalists and others -- who are concerned about water temperatures and salmon recovery in the (inaudible) Basin, with their $50 or $100 they're not going to be able to do anything to help speed up the construction of the cooling tower, which is going to help the salmon recovery.


So at some point we are doing things to the detriment of the society, things that can only be done collectively as a society, where all our small contributions add up to major improvements in our quality of life, and we walked away from those things. And I have tremendous concern about that, and I will be pressing the Corps a bit on those issues this morning.


Thank you, Mr. Chairman.


DUNCAN: Thank you very much, Mr. DeFazio.


Mr. Brown? Do you have any opening statement?


BROWN: Thank you, Mr. Chairman. Being from the coast of South Carolina where 150 miles of oceanfront comes in, I know one of the concerns that we have down there is beach erosion. I know that there's a new report to try change the ratio between what the federal government contributes and what the locals contribute. Now the max match is some 65 percent for the federal and 35 percent local.



BROWN: And, Mr. Chairman, I certainly would like to see (inaudible). It's an undue hardship on the coastal region already with the added construction of these new highways and water and sewer and police protection for those (inaudible) come down. I would hope that the committee will rethink the procedures that's required by the locals and hope we can maintain the 65. At one time, it was 75-25, so (inaudible), and I know we'll get good response back from that.


Another area that we are concerned with is in the (inaudible) region where the -- after Hurricane Floyd we had a tremendous amount of flooding in that area, and we set a study to determine what alternatives we might have to divert the water in a 100-year flood plain in some other direction so that we would prevent the flood from occurring.


But, General, thank you for being with us today.


DUNCAN: All right. And thank you very much, Mr. Brown.


Mr. Pascrell said he didn't have any opening statement.


Mr. Berry, do you have any statement at this time?


BERRY: Just to welcome the delegation from the Corps of Engineers. And I've always been a great fan of what you do considering that I live in a place that does have (inaudible). I don't like flooding either, and that baby keeps me from getting flooded, so we appreciate what you're doing with (inaudible).


DUNCAN: Thank you very much.


Mr. Kerns, do you have a statement?


KERNS: Thank you, Mr. Chairman. I just want to thank the Corps also for being here. I've had a good working relationship. In my prior role as chief of staff for Congressman Pease.


And, General Flowers, I last saw you down at the Lower Mississippi Valley Flood Control Association meeting, and what a great team you have and participate in that every year. And thank you for being here, and I look forward to working with you.


That's all, Mr. Chairman.


DUNCAN: Thank you very much.


Mr. Mascara?


MASCARA: Thank you, Mr. Chairman.


I'd like to thank the ranking member, Mr. DeFazio, for holding this very important hearing.


I would like to welcome the delegation from the Corps. The Corps has been good to my district, and I appreciate the fine work that you do for the American people.


The region of Pennsylvania that I represent relies heavily on its waterways. Due to the geography of the area there is no other way to move commodities in my district than down the Monongahela River. In 1998, about 25 and a half (ph) million tons of commodities passed through my district, the value of which was approximately $1.6 billion. Without the Corps, we would have a serious logistic and economic problem. The Corps has for years been the backbone of that river, which is the backbone of our local economy, and for that I thank you.


I am certain there are regions all across this nation that will the same thing about what the Corps does for them. That is why I find it especially disturbing to see this budget. I have trouble understanding why an agency that has been so successful would go to the chopping block. I would like to know if this shortfall in funding will have an adverse effect on projects throughout the country generally and in my congressional district specifically and will address those when I get an opportunity to ask you some questions.


Thank you again, gentlemen, for coming today.


DUNCAN: Thank you very much.


Mr. Latourette?


LATOURETTE: Thank you, Mr. Chairman and (inaudible). Welcome; it's nice to see you again and everyone else.


I'd just left the (inaudible) breakfast, and the level of O&M funding for the Corps was the subject of great discussion at that breakfast. And the steel industry in the entire United States is suffering badly, and that means the iron ore industry is on the line too in the mines of Minnesota and other parts of the country. And the observation was made by one of my colleagues on the other side of the aisle at this breakfast in concerning about the administration's funding request for the O&M account. Pointed out that under the previous administration there was a reduction of $700 million and further proposed reduction this year.


And I would be most interested in hearing from the Corps today, similar to what Mr. Mascara was just talking about, and that is how that's going to impact the viability of the very important programs that the Corps conducts all around the country. It was interesting, I can remember when the previous administration zeroed out the O&M account in one budget submission, saying that these were somehow pork projects for members of Congress.

Well, I've never met a member of Congress who represents a constituency that has been flooded or that can't move commerce or has boaters where their props are stuck in the mud and considers that to be a poor (inaudible). I can't think of a bad water project in the seven years that I've been here in the United States Congress. And so I would very much appreciate the Corps' observations on the budget submission as well as from the administration's point of view.


And then just on a personal note, I would tell the other members of the subcommittee the general was in my office about a month ago making his annual pilgrimage to the Hill, and I brought up the fact that we have a small town in northeastern Ohio that has a creek that needs to be dredged, and they're running into some difficulties as to -- I said, "Well, you can't dredge it, because there's wetlands on either side, and if you take the dredge material and put it on the bank, you're going to impact the wetlands. But you can't take a truck and haul it out either, because you'd be driving a truck through the wetlands. Within the 48 hours the general had made sure that that town was contacted, and the problem's been taken care of. And I just want to thank you on behalf of my constituents and thank you for all you do.


And I thank you, Mr. Chairman.


DUNCAN: All right. Thank you very much.


Ms. Millender-McDonald has joined us. Do you have a statement at this time?


MILLENDER-MCDONALD: Mr. Chairman, thank you so much. Just sitting down, I am here to listen and to learn and to take notes. Thank you so much.


DUNCAN: Fine. Thank you.


We'll go ahead and start then with the first panel. And the first panel consists of Mrs. Claudia Tornblom who is deputy assistant secretary of the Army for Management and Budget, from the Office of the Assistant Secretary of the Army for Civil Works. And also we have Lieutenant General Robert B. Flowers, chief of Engineers of the Army Corps of Engineers. And he is accompanied by Major General Hans A. Van Winkle, director of Civil Works, and Mr. Robert F. Vining, chief of Programs for the Management Division, Directorate of Civil Works.


And we're pleased to have each of you here with us. And we do proceed in the order of witnesses as their listed in the file of the hearing.


And that means, Ms. Tornblom, we'll start with you. You may begin your statement, please.


TORNBLOM: Good morning, Mr. Chairman, members of the subcommittee. I am here before you today (inaudible). I am (inaudible). I'm the official responsible for the Civil Works Program. I appreciate the opportunity to testify today on the president's budget for the Civil Works Program of the Army Corps of Engineers for fiscal year 2002.


I will summarize my complete statement, and with your permission, Mr. Chairman, I ask that the complete statement be entered into the record.


The 2002 Civil Works budget reflects the president's overall goals to slow the growth of federal spending, provide for a tax cut and reduce the national debt, while providing greater emphasis on education and protecting social security. The budget requires appropriations of $3.9 billion. In addition to the $3.9 billion appropriations, about $514 million will be contributed by Bonneville Power Administration, non-federal cost sharing sponsors, and other additional sources. In combination, these funding sources will support total Civil Works programs for 2002 of $4.4 billion.


The budget emphasizes principal Civil Works missions of commercial navigation, flood damage reduction and environmental restoration. The program currently has an construction backlog of about $40 billion,. Of this amount, $26 billion represents the requirements to complete projects clearly budgeted for construction or preconstruction engineering and design. In order to address this backlog, available funding in 2002 is directed toward construction of continuing projects. As a result, no construction or project study starts are budgeted.


The study does propose two new national studies that will provide information needed by the Army and the Chief of Engineers to assess potential changes in the Civil Works Program, its policies and procedures.


The first of these two studies, which was authorized in Section 223 of the Water Resources Development Act of 2000, is a 12-year program to monitor the economic and environmental results of up to five projects constructed by the Corps.


The second new national study was authorized by Section 215 of the Water Resources Development Act of 1999. This study will assess the extent, causes and impacts of shoreline erosion on the coastal shores of the United States.


As Congressman Brown mentioned, the 2002 budget presents a new administration policy to its shore protection projects that involve beach nourishment. For the initial sand placement of these projects, the administration proposes no change in the current 65 percent federal, 35 percent non-federal cost sharing. However, for subsequent periodic re-nourishment of such projects, the administration will seek 65 percent non-federal sharing, reducing the federal share to 35 percent. This policy applies to all nourishment work funded in 2002 and beyond.


Until now, beach nourishment projects started since 1995 have not received budgetary support. Now, due to this policy change, the budget includes funding for projects of 2002 requirements regardless of when they were started. All together, about $82 million of this budget is for beach nourishment projects.

For the Mississippi River and Tributaries projects, the budget targets funds to high priority flood damage reduction projects, which are on the mainstem of the Mississippi River and in the Atchafalaya River Basin in Louisiana. In the Operation and Maintenance Program, the budget gives priority, among port and harbor and inland waterway activities, to those that support higher commercial navigation use.


Funds for operation and maintenance of shallow-draft harbors are limited to $47 million. Among shallow-draft harbors, subsistence harbors for isolated communities and harbors that involve relatively greater use for commercial cargo and fishing are given a higher priority, while the harbors that are essentially recreational in nature are de-emphasized.


The budget includes $42 million for operation of low commercial- use inland waterways; that is, waterways with less than one billion ton-miles of traffic per year. Funds for maintenance of low commercial-use inland waterways are limited to $25 million for maintenance dredging. Again, these funds are targeted at the waterway segments with relatively greater commercial use.


Recreation user fees will be increased in order to raise 2002 receipts by about $10 million to an estimated total of $44 million. This is the first step of a four-year effort to increase recreation user fee receipts by a total of $25 million per year. About $4 million of this amount will be realized by increasing fees under existing authority.


In addition, we plan to transmit proposed legislation to Congress to authorize certain changes in fee collection authority. All of the increase in fees will be available without further appropriation under this proposal for operation, maintenance and improvement of Corps recreation facilities of areas where they were collected.


We are working closely with the chief of Engineers to identify opportunities to strengthen the Civil Works planning process. In addition, as indicated in the president's Budget Blueprint, the Army is reviewing options for strengthening the ability of the Office of the Assistant Secretary for Civil Works to ensure proper policy oversight of project planning.


Already General Flowers and I have agreed to restore the past practice of concurrent, vertical involvement of all organizational levels, including the Office of the Assistant Secretary at critical steps in project formulation.


Mr. Chairman, the Army Corps of Engineers is the premier government agency for water resources project planning, construction and operation for protection of the nation's waters and wetlands and for emergency response. As a decentralized watershed-based organization with strong engineering, environmental and research capabilities, the Corps is very well positioned to continue developing integrated solutions to modern, complex water resources problems.


With the Corps strong emphasis on technical and analytical approaches to these problems, the Army's Civil Works Program is, we believe, a wise investment in the nation's future. Thank you, Mr. Chairman. This completes my statement.


DUNCAN: Thank you very much, Ms. Tornblom.


General Flowers?


FLOWERS: Mr. Chairman, members of the subcommittee, thanks very much for inviting me testify about the president's fiscal year 2002 budget for the Civil Works Program. I've got a prepared statement that will be furnished, and I ask that it be made part of the record.


Before we delve into the budget, let me address the flood situation in the upper Midwest. Flood waters from the snow melts and heavy spring rains have begun to subside. Homeowners, farmers, business owners and community leaders have begun to assess the damage. They've taken part in many flood fights along the Red, the Minnesota and the Upper Mississippi Rivers.



FLOWERS: And their collective efforts have represented a true affirmation of community spirit.


When I was in Davenport, Iowa, a week ago, I met local officials, together with residents and volunteers, as they engaged in a heroic effort to keep flood damages at a minimum. Their homegrown levy held back the flood waters, and I am proud to say that our Army Corps of Engineers provided support and assistance for the flood fighting effort there and elsewhere.


As the cleanup begins, the public dialogue about how best to protect against flood damages resumes. This debate is appropriate, and as it goes on, let me assure you of one thing: When your Corps of Engineers was needed, we were there.


I'd like to speak of some of our Corps heroes. Laurie Taylor (ph) of our St. Paul District began her first day ever of flood duty. She discovered that the small village of Glen Haven, Wisconsin was at risk. Her research indicated that the community would be inundated because the flood would crest one foot higher than the levy that had been built three decades ago. She was on-site the next day and seconded construction of a 600-foot long rise in the levy. Her actions helped save the village.


Meanwhile, Kent Peterson (ph) and Terry Vene (ph), from St. Paul, spotted severe erosion at Marsh Lake Dam near Appleton, Minnesota. Wind gusts had driven ice and waves into the dam embankment to create the problem. Later, they found erosion at a difficult to reach overflow spillway. The situation called for urgent repairs. A team of park rangers, engineers and contractors assembled, and their quick action to repair the damages protected Montevideo, Granite Falls and other downstream communities from additional flood waters.


You can be proud of these public servants. They are 150 strong, and their efforts and expertise have paid big dividends for our citizens and the citizens of our hometowns.


While we stayed on course in carrying out missions such as these, we've been surrounded by controversy. When I became chief last October, I found an organization that was on solid ground. Our very capable men and women have soldiered on to provide sound solutions to our nation's water resources problems, though our credibility has been assailed and our integrity has been challenged.


When I testified before the Senate in March, I offered my reactions to the investigation by our Army inspector general and the review of the National Academy of Science of our Upper (inaudible) study. I commented that it was unfortunate that the inspector general did not have the benefit of the National Academy of Science's review available when his report was published. I believe he would have taken an entirely different view of the proceedings.


My view is this: If the inspector general had that report, he would have found good, decent and honorable people trying to come to grips with both a flawed economic model and insufficient data. Since then I've met with a wide spectrum of Americans with different interests and viewpoints, all to thank me for speaking up for the quality and integrity of the scientific and engineering services that we offer our nation.


And let me assure you again, the Corps has sound systematic processes that consistently provide decision makers -- the Congress, the administration and the American people -- with solid recommendations based on sound engineering, scientific fact and objectivity. Our intent is to achieve a synergy from the economic objectives and environmental values.


I submit that the Corps program is subject to more executive branch and congressional oversight than any federal activity. Corps projects are separately authorized by and signed into law. Every project is reviewed annually by both the administration and the Congress during the appropriations process. Each is also subjected to a benefit-cost ratio that is unique among federal agencies.


We receive this scrutiny because of our profound impact on the nation's well-being. For example, U.S. deep water ports, coastal and inland harbors and waterways move 3.3 billion tons of domestic and foreign commerce annually. Flood and shore protection projects prevents $22 billion in damages each year. Over 120,000 acres of aquatic wetland and flood plain ecosystems have been added to the natural habitat since 1998.


The nation's investment in the Army Corps of Engineers produces a 26 percent annual rate of return and has put $30 billion in tax revenues and savings into the Treasury. These statistics confirm my belief that the American people have invested wisely in our nation's investment and water resources infrastructure.


Your Corps of Engineers has responded to our nation's call for over two centuries. From the time when we first explored and mapped the Western Frontier to this day, we are helping to save lives and protect property. We sought to improve the quality of life for our citizens. Today, however, as our population has increased and our infrastructure has aged, our investment in water resources has decreased. The Corps today has a $40 billion backlog of authorized, unfunded new capital investments that when implemented would provide benefits to the American people. Our critical maintenance backlog amounts to over $800 million a year. As the infrastructure ages, those costs escalate.


Have we, as a society and as a nation, paid enough attention to the future? I say no. In a report card recently issued by the American Society of Civil Engineers, the nation's navigable waterway infrastructure received a D-plus. We also heard that same answer from 1,300 people, a cross-section of concerned stakeholders from all walks of life and all areas of the country when we went out and listened to their concerns last year.


These listening sessions raised important issues. Examples include the need to make improvements to our water transportation system, the need to manage our flood plains better and the need to restore and protect the environment.


In closing, I am firmly convinced that our Army Corps of Engineers has a critical contribution to make in solving our country's problems, today and in the future. Ours is an organization that has built flexibility into its structure, to seek out the best economic, environmental and social solutions to our nation's tough jobs. We strive to bring synergy to problem solving. I am proud that our nation looks to us when it needs the best.


Mr. Chairman, that concludes my remarks. I'm prepared to respond to your questions.


DUNCAN: Thank you very much, General Flowers. And I was particularly interested in the -- I wondered what the attendance was at the 16 open meetings, but you said you had 1,300 people at those 16 sessions. Is that correct?


FLOWERS: Yes, sir.


DUNCAN: Well, that was good attendance. I hope they were more than just feel-good sessions. I'm curious as to what you -- did you learn something that -- are you going to or have you made any changes in the way the Corps operates from those sessions? I mean what good did they do? I mean are you able to make some improvements in the way the Corps has operated from those sessions?


FLOWERS: The answer to that is, yes, sir. We put the results of the listening sessions on our web site, so they're there for all to see if they'd like to see the raw data. We've also created an executive summary in a pamphlet form that's available. And we incorporated what we heard in the listening sessions into a new strategic plan for our Civil Works Program. Now, that plan is a draft plan, which is now being submitted through the administration. So, yes, sir, we are making use of it.


DUNCAN: Well, without (inaudible) and we can't go to that web site right now, would you tell us about some of those changes?


FLOWERS: Sir, we are looking at -- we made some changes in our procedures for considering early on and opening the dialogue early on as we work our study process. What we heard them say is also we need to emphasize and work on fixing the infrastructure that's there. And part of what we are emphasizing in our statement, I think, is the fact that we do have a critical maintenance backlog.


And I think I made a speech reference by Mr. Blumenauer where we are working very hard within the organization at developing a set of principles that we'll operate by as we move to the future, in both our military and our civil program to work at creating a true synergy between development and the environment. And I think we can do that because we're good enough. And so as we work to the future, those are some of the things that we'll be working to change.


DUNCAN: I understand that the average time to process an individual permit has gone up to 150 days now from 100 days not too long ago, and I'm wondering, do you see that time going up or are you going to be able to do something to bring that time down or what's the current status of that?


FLOWERS: Well, we're working very hard to bring down the time it takes to process permit applications. We're doing it through obtaining a greater visibility over where we have to apply effort and search it where we can to decrease backlogs when we have a large number of permit requests come in. I have yet to tell you that our funding for our regulatory program has pretty much been flatlined for the last few years. And with permit requests increasing, it gets tougher and tougher to achieve.


DUNCAN: Let me ask you this: The Corps has received some criticism over the past year about the way its studies are conducted, and you're very familiar with that. Are you considering some changes? And I understand that you're at least considering having independent reviews. And if you set up a process of independent reviews, are we going to read at some point that some independent consultants are receiving whopping fees for conducting those reviews? What are you thinking about in that regard?


FLOWERS: Sir, I testified that I am in favor of establishing a peer review process. And I would like to establish a process that would not add any time or expense onto an already very lengthy and very public study process. And I think we can do that. And so I've developed a recommendation that I will extend to the administration just as soon as we have a new secretary appointed. And in that recommendation, I will urge that we set up a peer review panel that will work concurrently as the study progresses.
DUNCAN: Another concern I have: ABC National News recently reported that the escalation of the Everglades -- and this was based on a GAO report that says that the estimates a short time ago were that the total cost of that restoration would cost about $8 billion, but now GAO says it's going to cost $11 billion. And according to a report by John Martin on ABC News, he says that nobody's really in charge, and that that's endanger of becoming one of the most wasteful projects in the history of the Congress.


Now I can tell you that I'm in favor of doing projects, but I'm also charged with the responsibility of making sure that the patch holes are not ripped off in some way or that they get the most bang for their buck, so to speak. But it's been a Washington shell game for many years to low ball the cost on estimates on all kinds of projects, and then they just blow up.


And what I'm wondering about is this: Was ABC News just totally off base in saying that nobody's in charge of that project? Is the Army Corps in charge of that project, and have you looked at it enough to know whether it's going to cost $8 billion, as was estimated just a few months ago, or $11 billion, as the GAO is now saying? And what I'm really concerned about is I don't want to read in a few years that the project has cost $20 billion or $25 billion.


FLOWERS: Sir, I have not seen the ABC News report, so I don't know where those figures come from. I can tell you this: We are in charge. We will work very hard to make sure that every taxpayer dollar that's invested in that restoration is wisely spent. We've got a management plan in place, and we will be prepared to report whenever necessary on the progress, what its costs are and what the projections are. As far as I know, sir, the estimates that we have turned in still stand.


DUNCAN: The $11 billion comes from a GAO report that apparently has just come out. So have you not seen that GAO report?


FLOWERS: No, sir; I have not.


DUNCAN: Would you look at that and get me some type of response as to whether you think they're off base or...


FLOWERS: Yes, sir. We'll respond for the record.


DUNCAN: All right. Thank you very much.


Mr. DeFazio?


DEFAZIO: Thank you, Mr. Chairman. Mr. Chairman, I have a whole number of questions, but at this point I'm going to defer the first round to Mr. Blumenauer (inaudible), and at least one of us can get to the meeting if he just asks his questions.


So, Mr. Blumenauer?


BLUMENAUER: Thank you, Mr. DeFazio and Mr. Chairman.



BLUMENAUER: I would just footnote that Congressman Kind and I have some legislation on (inaudible) and some activities of the Corps, Mr. Chairman. At some point, it might be possible for this subcommittee to look at that and some other legislation that we might be able to add our voices.


I appreciate the flexibility, as indicated by the budget submission and the statements of new ways of doing business -- partnerships, prevention, environmental protection. I think that's important in light of some of the new challenges you're going to face. I'm one of the people who actually takes seriously the threat of global warming.


And I spent a weekend with -- a portion of the weekend with one of the chairs of one of the monitoring committees. And I was issued a challenge, more important and more challenging in a hurry if we have ocean levels increasing, if we have a wild increase in intense weather incidents. It raises real questions in my mind about what changes we need to do in terms of standards to which we're constructing.


And I guess I would put three questions on the table for your consideration now, General, or at some point in the future in the interest of time. One, I guess I'm encouraged by your looking again at the match ratio for beach nourishment, and I wonder if there is a way that we could look at a uniform match provision that actually puts more responsibility on local governments as well as state governments so that they don't try and back the Corps into doing something that may be risky in terms of land use, in terms of if it's such a good idea, we probably should have some influence locally in terms of people being full partners. I'm very interested in exploring what the administration has.


But I wonder if that principle can be expanded broadly so that it's always at least as cheap to restore a wetlands, say, as to pave it, and that local governments are going to be full partners in these activities.


My second question deals with the unexploded ordnance in military toxics. I'm curious if you have any thoughts about what sort of expenditure would be required so we would at least know the nature of the problem that is 20 million acres or 50 million acres in some semblance of a time frame, because we've heard hundreds of years up to something that may last more than a millennium to clean up these problems in every state. And if you could give us some guidance about what may be a realistic number to at least inventory the problem so that the Congress and the American public knows how serious it is.

And, finally, I wonder if there might be an opportunity to pursue the important lines of communication that you have put forth in this conversation with the testimony today in a more informal fashion where people might be able to roll up their sleeves and have a little bit of give and take to explore what the chairman has already identified, some of these questions that occur to people, so that we might be able to do it in a perhaps more informal fashion when we're not heading off for votes and you're not heading off for your next meeting.


Those are two questions that I would appreciate your thoughts and observations now or at some point in the near future.


FLOWERS: Sir, I'd prefer to put a little more thought into these and respond to them in the future.


BLUMENAUER: Thank you. I yield back my time to Mr. DeFazio.


DUNCAN: All right. Thank you very much. Chairman Boehlert.


BOEHLERT: General Flowers, you talked about the construction backlog of about $40 billion, and that's a startling number. Can you give me some more detailed information on that and the estimated benefits that we'd derive from those construction activities if we were to proceed with them? Some investments pay bigger dividends than others, and ...


FLOWERS: We're producing that list.


BOEHLERT: Pardon me?


FLOWERS: Sir, we are -- at our last testimony that list was the same list we've had for -- and we are putting that list together. And I would be very happy to provide the list...


BOEHLERT: Excuse the interruption.


FLOWERS: Sir, I understand. But we are putting a list together of what constitutes the $40 billion backlog, and we will make that available, sir. What it essentially is are projects that are authorized and the money has not yet been appropriated. Or in some cases, they're projects that have been begun, and we're looking for the year-to-year funding to keep them going.


BOEHLERT: Well, that would be very helpful to the committee if we could get more details on that.


FLOWERS: Sure.


BOEHLERT: As (inaudible) from our conversations, I'm very interested in peer review. I think the National Science Foundation model is a very good model. I hope that you're taking a look at that in terms of setting up something within the Corps. Can you share with us anything right now other than the fact that you are committed to the basic proposition that we should go ahead with the program? Are you talking about a pilot program? Are you talking about something more comprehensive? I mean I've had a very difficult time, and quite frankly, the last committee chairman of the full committee said, "Over my dead body." That was his response to my suggestion that we examine peer review.


FLOWERS: Well, I think, at least in my thinking -- and I have not yet sent my recommendation to the administration; it will go up in June. Hopefully, we'll have a secretary by then. But a key, and everyone's hit upon it, the average length of time it takes for a Corps study to be completed now is probably approaching five years. Adding peer review on the end of a five-year, very expensive and in most cases cost-shared program...


BOEHLERT: As I understand it, you want to go forward simultaneously.


FLOWERS: Yes, sir.


BOEHLERT: And you don't want to add any time. You want to minimize the time.


FLOWERS: What I would propose will be similar to the peer review that begins at the beginning of a project, and we intend to open the process up as much as we can. And as milestones of the project progresses, this peer review board would view what's happened and make their recommendations so that at the conclusion of the study this board, and my recommendation would be that we bring in on the board people from outside the Corps.


Up until 1993, we had the Board of Engineers for Rivers and Harbors, which was an in-house peer review of all projects. When projects of a certain criteria were completed and had gone through the study process, they had to appear before this Board of Engineers for Rivers and Harbors before the chief would sign the chief's report. And it was a pretty tough grading system that had added time on the end. And I think that's why it was done away with after the advent of cost sharing, because (inaudible) got tired of paying for that.


So what I propose is using an organization like the National Science Foundation, National Academy of Sciences, having members appointed from that group, or nominated from that group, combined with some Corps division commanders who are not associated with the project and have them conduct this in-progress peer review. And I think then the review that comes out, which is done concurrently with the study, would hopefully meet the mark of satisfying everyone that we have had peer review and external review prior to the chief signing a chief's report that would then go to the administration. That wouldn't add on any time and hopefully not much...


BOEHLERT: Our objective is to get to merit-based decision- making...


FLOWERS: Yes, sir.


BOEHLERT: ... and to -- this is not a popular theme among some up here -- but to get away from having the guy with the biggest muscles flex them and get what he or she wants and everybody else gets (inaudible).

TORNBLOM: Excuse me.


BOEHLERT: Yes.


TORNBLOM: If I might add, Mr. Boehlert, as I mentioned in my opening statement, General Flowers and I have already discussed and are implementing with the concurrent, vertical involvement that was tried a few years ago quite successfully to accomplish just what he described so that when there are questions about policy, interpretation and application or analytical assumptions, they can be dealt with early on in the process so time isn't wasted if they head in the wrong direction.


This will also help the Assistant Secretary's Office expedite studies while still fulfilling the secretary of the Army's responsibilities under Title 10 of the Goldwater-Nichols Act. And, of course, it will help us jointly in answering any questions from the review that OMB does in the executive order. And if we put all of these efforts together and start early in the process, our hope is to make it both efficient and something that we can all put forward and be proud of when this thing is done.


BOEHLERT: Thank you very much. (inaudible) is deeply interested and anxious to work cooperatively with you.


Thank you, Mr. Chairman.


DUNCAN: Thank you, Chairman Boehlert.


We're going to proceed in order the members arrived, and that means we'll go to Mr. Mascara at this point for any questions he might have.


MASCARA: Thank you very much, Mr. Chairman. As I indicated in my opening remarks, I have some concerns about some projects in my congressional district, more parochial about the efforts that are being made to do the project on the Lower Monongahela River, which was originally a $705 million project. In my request, along with another member's from my area, we requested $75 million in fiscal year 2002. And it's indicated to me that the president's budget request was granted at $34 billion, a sizable $40 million cut.


And I was just wondering whether or not -- what impact that would have on that project, because the dam at (inaudible), that is so old there's a wooden structure under there, and we can't even get down there with a ladder and take a look at it. If that should fail, the problems with shipping will be degrade to that part of southwestern Pennsylvania.


And the other is that in our letter to Senator Callahan, the chairman of the subcommittee, for an additional $8 million to study the stem system on the Ohio River. There's no money in the president's budget for that, and I just wonder whether you wanted to comment on how that will affect those projects?


FLOWERS: Well, sir, the conscious decision was made to try and continue all projects that were currently underway but at a reduced funding level just in order to keep all the projects going. And across the board for the Corps, that's about a 57 percent funding from what would be optimum for most sufficient conduct of the construction or the work. So the average delay on a project will be about 10 months -- that's across the Corps. And if you would like a specific answer on Monongahela, I'm going to ask -- well, he already answered the question for me. It's about a two-year delay at the current funding levels.


MASCARA: Is anybody aware of the problems there with the dam at Braddock? Because I think that project (inaudible) and then removing the one in Elizabeth, Pennsylvania and just a stone's way throw from where I live in Charleroi, Pennsylvania at the (inaudible) Dam they're going to upgrade that. Any concern that we might have a failure down there that would cause problems? And do we give more consideration to a project if it causes interruption in flow of goods on the Monongahela River?


FLOWERS: Mr. Mascara, I was a former division commander in Cincinnati and had charge of that project. As a former division commander, I worked (inaudible) with a (inaudible). I share your concern about a very old rotten dam system. It's one of our older ones, and it very much needs repair. I think it's important that we proceed in making those repairs. I think we've got an innovative approach in the Braddock Dam. We're using a new technique for construction, and we'll be able to save a considerable amount of money.


There's always a concern for failures as a safety consideration that occurs -- the disruption to traffic and the consequences on the cost factors and moving certain (inaudible). We will do all we can to seclude that. We have very competent engineers and people on site that are doing the best they can. I can't guarantee that there will be no failure. There's always that possibility, but we're working very hard to make sure that doesn't occur. In the meantime, we'll use the monies allocated in the most successful manner. That's a very, very important project.



TORNBLOM: Our difficulty, Mr. Congressman, is that the available resources, in large part, had to be allocated to projects that had construction contracts awarded prior to the beginning of fiscal year 2002. So those projects that already had major contracts underway received perhaps a relatively more generous portion of the limited funding available. On some of the others projects, even though we are in full agreement with you on their critical importance, there was not sufficient funding available within our budget to keep those moving on a more efficient schedule.


MASCARA: In all fairness to President Bush, we had the same problem with President Clinton and his administration which related to funding of this project. I'm just glad to see that you're well aware that there is a problem there and that we could have a major problem on the Monongahela if (inaudible) fails. But you're on top of it. I have faith in the Corps and hope we can get that project underway and complete it. Now, I hear 2008. I would imagine since we're not budgeting the amounts that have been requested that that, again, would be pushed back. Thank you.


Thank you, Mr. Chairman.


DUNCAN: Thank you, Mr. Mascara.


Mr. Brown?


BROWN: Ms. Tornblom, I listened intently about the beach renourishment facing the nation, but I wasn't quite sure exactly how the projects were going to be prioritized and which would be funded at 65-35, but let me see if I can reflect your statement that you said today. The initial renourishment would be 65-35, but any continuing renourishment would be 35 government and 65 state? Is that correct? Could you clarify that for me, please?


TORNBLOM: Certainly. This project over a 50 or 70-year period, the normal project life, is that there's an initial placement of sand, and then at periods of time, intervals over the 50 years, that beach is renourished as the natural processes and storms erode it. The tradition of cost sharing, which was a subsequent periodic renourishment, not for the initial phase of the project, which we call the initial placement.


BROWN: Why is it more important to do it the first time rather than the second or third time?


TORNBLOM: It's not a matter of importance. Sir, I believe, I could best characterize it as the administration's concern about the long-term obligation of federal resources to these projects, which limit our ability to commit future resources to other types of projects. This is one of the types of projects that never goes into an O&M phase, operation and maintenance. It continues throughout its life in the construction phase while the federal government is responsible for that.


Since 1986, most projects have been turned over to non-federal sponsors to be operated and maintained, but the beach nourishment projects always stay in this category, and therefore the administration thought it was appropriate to make some adjustments in a periodic renourishment cost sharing.


BROWN: And who would make the determination whether it would be qualified for renourishment?


TORNBLOM: That's based on an engineering judgment as whether the beach needs to be restored for it to meet its initial purposes, provide the protection that it was designed for, and of course that's subject to availability of funds.


BROWN: Let me ask another question. (inaudible) your standards then for value of protections (inaudible)?


TORNBLOM: This has nothing to do with engineering standards, sir.


BROWN: (inaudible). We must protect our beaches. And if we felt like the most environmental friendly thing to do was to just continue to renourish, (inaudible) or whatever resources out there to (inaudible). So I was just kind of concerned.


I really am concerned about shifting the responsibility of the federal government back to the locals (inaudible) South Carolina, a relatively small state, and we have a tremendous amount of influence (inaudible) coming in. That's an undue burden on our local municipalities to have to juggle that kind of an additional cost. We have storms every so often, about every year, and they're a tremendous impact on the beaches when they come in. And the locals, it's just tremendous cost for them to have to continue to absorb. I just (inaudible) 75-25 like it was in prior years. I'm disappointed (inaudible) relinquish that responsibility back to those locals.


TORNBLOM: I understand your concern, sir.


BROWN: You can't change that?


TORNBLOM: No, sir.


BROWN: Could you do it legislatively?


TORNBLOM: We put in a proposal for voluntary cost sharing above the statutorily required 35 percent for periodic renourishment.


BROWN: Thank you.


TORNBLOM: You're welcome.


DUNCAN: All right.


The next in order then is Mrs. Millender-McDonald.


MILLENDER-MCDONALD: Thank you, Mr. Chairman, and I appreciate this hearing brought about to look at our water resources and environmental issues that are facing a lot of us in urban and even suburban areas.


I have a couple of questions or at least they're comments. But, one, (inaudible), I would like to direct you specifically in my area, the Los Angeles River project that's an ongoing project right now and the ability to work to conclude that given the fact we're trying to build this levy to circumvent this 100-year plug that could very well wipe out our community, and specifically to perhaps finish that so that we can remove the flood insurance that is related to that area of my district. With the cutback, would there be a possibility of continuing that project and I suppose any project but specifically I'm concerned about that project?


FLOWERS: Yes. The project was underway, I believe it was.


MILLENDER-MCDONALD: Yes.


FLOWERS: And, yes, it will be continued, but it will be continued at a reduced funding, which means it will take longer to complete the project. And we do that so that we can keep all of the projects that we have going continually.


MILLENDER-MCDONALD: Do you have an estimation at this point, sir, as to how long that will take given the constraints you're now under?


FLOWERS: It looks like, based on the contracts that had already been in place and awarded, that we are going to complete the project this year.


MILLENDER-MCDONALD: Oh. And that is specifically the Los Angeles River Flood project that is downstream and is part of my district.


FLOWERS: (inaudible).


MILLENDER-MCDONALD: (inaudible).


FLOWERS: Yes, ma'am.


MILLENDER-MCDONALD: Very well. Thank you.


With other cutbacks, I'm interested in really (inaudible) your concern that -- the concerns that were raised and the observations that were raised during your 14 regional meetings and others about the national water and related land management infrastructure (inaudible) and that (inaudible) will be hampered by cutbacks, it appears to me. How soon can the Army Corps of Engineers go into that rehabilitation modernization while modifying or removing any infrastructure that needs to be done or rehabilitated?


FLOWERS: Well, we would love to begin addressing that just as quickly as we can. At the end of 2001, our critical maintenance backlog for infrastructure will be about $415 million. At the end of 2002, with this budget, it will be about $830 million.


MILLENDER-MCDONALD: Right.


FLOWERS: And so that, I think, gives you a feel for how tough it is to maintain this infrastructure. Our population has increased dramatically in the last few years, particularly in a number of locations, and our investment in our infrastructure, the aging infrastructure has increased, not decreased.


MILLENDER-MCDONALD: That is unfortunate given the fact that Los Angeles -- well, I should say California has gone from 31.2 million in the early '90s to now 34 million. And so, indeed, that is a population growth, and with that comes aging of infrastructure and a critical need for the rehabilitation of it. I would certainly be interested as we go through this year and into next year some comments that you can make as to how we can project how soon we can begin to look at the rehabilitation of aging infrastructure, especially in the state of California, and more specifically in the southern California area where the growth is.


FLOWERS: Yes, ma'am. I would prefer to respond to that for the record, if I could.


MILLENDER-MCDONALD: All right. Fine.


Thank you, Mr. Chairman.


DUNCAN: Thank you, Mrs. Millender-McDonald.


Mr. Gilchrest?


GILCHREST: Thank you, Mr. Chairman. I ask unanimous consent that I have a series of questions here that I probably won't get to and I can submit for the record and then the Corps can respond.


DUNCAN: Without objection, so ordered.


GILCHREST: Thank you very much -- at their convenience.


General Flowers and Ms. Tornblom, Ms. Whitman, Major Van Winkle and Mr. Vining, welcome to Washington and the U.S. Congress.


And General Flowers, you and I talked periodically about a number of different issues, and I want state on the record that our relationship has been one of integrity and very professional. And we also work very closely with people from the Philadelphia District and the Baltimore District, and our communication with them has also been sometimes rocky, but that's the nature of a democratic society where people sometimes have fundamental differences in philosophy. But it has always been on a professional level, and I appreciate that.

Just a couple of questions. The Corps of Engineers has, I assume, certain statutes and standards that they go by of particular criteria in order to pursue a project that has federal interest. Does the Corps of Engineers ever come under political pressure from members of Congress?


TORNBLOM: I can't imagine that happening, sir.


(LAUGHTER)


GILCHREST: So you're saying the Corps of Engineers does not come under political pressure?


FLOWERS: Let me have a shot at this one. Douglas MacArthur, whose tassels I wear on my uniform -- he was commissioned into the Corps of Engineers when he graduated from West Point and his mother gave him these tassels...


GILCHREST: (inaudible) of the beach replenishment in the (inaudible).


FLOWERS: Sir, I'm not sure if he did or not, but I can tell you this: He addressed one of my predecessors, the 38th chief of Engineers, General Sam Sturgis, and he told General Sturgis, he said, "Sam, the greatness of the Corps of Engineers is not in the Panama Canal or the Washington Monument, the flood control structures, the dams, the air bases that's built around the world and the like, the protection of wetlands." He said, "The greatness of the Corps is in its ability to say no when no is the right thing to be said." And that talks about our credibility. So if it's a question of is pressure put on, that's one question. If the question is does the Corps yield to that pressure, the answer is, no. We stand on the best engineering and science.


GILCHREST: Thank you. Has the Corps of Engineers ever undertaken a project that their own analysis showed that there was no federal interest?


TORNBLOM: Yes, definitely, Congressman, and it's a very democratic process, which has been so eloquently described here, envisioned that Congress will make the final decision in the allocation of funds. There are many reasons for those decisions. They are sometimes decisions based on things that don't show up in the analysis.


GILCHREST: So there are projects that do not meet the benefit- to-cost ratio that's put into an authorizing piece of legislation or write into an appropriation bill, that the Congress says, "None of this meets the taxpayers' needs, but we'll go through it anyway." So those things happen.


TORNBLOM: Yes, sir, they do.


GILCHREST: When they happen, does the Corps say in public that "This did not meet our federal criteria. There is no federal interest in this project, but certain influential members of the House and the Senate want to pursue this." Is there any -- does the Corps of Engineers have an assigned person or a particular way of telling Congress, "This doesn't meet the criteria. If you want it done, you've got the last word."


TORNBLOM: Congressman, every year the president's budget recommends whether or not to provide funds to continue projects, and this has always been considered a means of requesting that the Congress take a second look on some projects. We've seen many times in the past where funding has been added one year to initiate a project, and the following year's budget will not provide continuation of funds. That is an example of the process we use in the Army and the executive branch to address those questions.


I'd also like to say that I think these are policy questions you're asking, and it would be the place of the Army Secretariat or the Executive Office of the President to make those (inaudible), not professionals in the Corps of Engineers.


GILCHREST: So we protect the professionals here. So those are questions I should direct to somebody else.



TORNBLOM: I will be happy to bring it to the attention of the assistant secretary (inaudible).


GILCHREST: OK.


FLOWERS: What we do, sir, is I render a chief's report anytime we complete a study. And that chief's report, when it's signed by the chief of Engineers, has the full weight of the Corps behind it. That report then stands on the best engineering and science that's available. That may or may not recommend that something -- it may recommend that something be done; it may recommend that there is no federal interest here and not go forward. It then goes to the administration, and the administration then has the opportunity to review the chief's report, comment it before it's sent to Congress for any kind of action.


GILCHREST: But for the most part, that process works pretty well. I understand the nature of federal agencies under the watchful, political, influential eye of Congress.


In our discussions yesterday about peer review and as a project moves forward in a feasibility study, before it gets to the PED study, in existence right now, who peer reviews the math other than the district engineer? Does someone initially peer review that math?


FLOWERS: All of the work that's done at the district level until 1993 when a project was finished with the review process went before the Board of Engineers for Rivers and Harbors if it was sizable project or controversial. When legislation did away with the Board of Engineers for Rivers and Harbors because it was lengthening the study process, that ended that type of review. So right now when the district sends the study forward -- now bear in mind it has had public review...


GILCHREST: Well, just, if I could make a comment about public review, which is generally 30 days, and it's a book about 700 to 800 to 900 pages, which is extremely technical, and clearly most people in the public are not going to be able to review that and find math errors.


The reason I bring that up is because we had a project that was peer reviewed in 1996, and some men in my district found mathematical errors. And I guess based on the decision in Congress in 1993 not to have that math reviewed, since that math wasn't reviewed, there was a series of errors in there, which eventually led to the deferment of a particular project. So in the process of peer review, would you recommend going back to the way it was prior to 1993?


FLOWERS: Sir, that's an option, but, again, that would add time and potentially expense onto the study.


GILCHREST: If I could just say, General -- and this will be my last comment -- obviously, I'm not sure if that would add much time to the peer review, because the gentlemen that peer reviewed that feasibility study for the (inaudible) in the C&D Canal did it in a fairly quick amount of time. And they did it in the summer of 1996, confirmed it in November of 1996, and then in December 1996 the headquarters in Washington, D.C. reviewed their analysis and found it to be correct, as opposed to the analysis for the feasibility study of Philadelphia District. So that was a fairly quick mathematical review.


FLOWERS: The chief's report for the report you mentioned earlier, the C&D, found that there were errors and more work needed to be done.


GILCHREST: I think my question, though, if we hadn't had -- it's my understanding going through that process that if there was no meeting in (inaudible), Maryland with these four men that did that analysis with the headquarters that reviewed their analysis, there would have been no analysis on the feasibility study, and the project wouldn't have gone forward.


DUNCAN: We'll have to move on to other questions at this time, because Mr. Gilchrest has gone way over, and I apologize to him, but we're going on to Mr. Taylor.


FLOWERS: Sir, we'll respond for the record.


DUNCAN: Mr. Taylor?


TAYLOR: Thank you, gentlemen, for being here. Thank you, Ms. Tornblom.


Ms. Tornblom, I've got to tell you I really respect your honesty in your statement. I happen to have a brother who's a big shot in the offshore supply boat business and boating business, and he's always asking me for a tax cut, and I explained to him, you know, when the nation's only breaking even, something's got to give in order to get a tax cut. And when I look at the money that's coming out of the operation and maintenance and dredging, the little bit of money that's going to be available to maintain the channels under 14 feet, I guess every time one of his boats runs aground he can think about that tax cut he got. So it's been pretty interesting.


And as someone who really doesn't want to be part of the last generation of Americans, though, who thinks that the true wealth of the nation is in its infrastructure, I've got to tell you I'm distressed, because I don't see investments in our infrastructure. I see a 14 percent cut in doing those things that really are important.


I went to school in New Orleans. I understand that if that levy wasn't there, that town would flood almost every year. I represent a waterfront community. If we didn't have that channel dredged in Basketville (ph), Mississippi, we could not build ships for the Navy. If we didn't have a channel that goes to Gulfport, Mississippi, and we could not unload all those bananas that Americans eat.


And even the small channels, quite frankly, in order to pay for that tax cut, it may be great work for the people who can repair the shafts and propellers and rudders that get bent, but it's going to be mighty tough on our shrimpers trying to get their boats back in when the wind is blowing out of the North, during the wintertime when it gets (inaudible). So there is a tradeoff, and I think you've been very honest to explain that tradeoff in your statement. I do want to compliment you for that. Honesty is the best policy.


On the flip side, I must say I think you're wrong. I think it is important that we invest in those dredging projects. I think it is important that we maintain our channels. I think it is important that we maintain our flood control projects. I'm not an advocate of huge government, but there are things that only our government can do, and the Corps provides that mission. And so I'm going to hopefully, politely disagree with you on your budget priorities.


I do want to compliment you as the acting director on what I have seen in the past year as a huge turnaround in the attitude of the Corps of Engineers in particular in respect I have asked them to give serious concern to trying to do beneficial things with dredging material and to enhance nature whenever possible in the course of their work. And I really do want to compliment them, particularly the Mobile District, on trying to work with me on that.


But the bottom line is it costs money. And as you pointed out in your statement, if we're going to have tax cuts, if we're going to have to emphasize social security and education, that means we're not emphasizing defense and transportation. It's one or the other. So thank you for being here. You've got a very tough job.


I want to thank the generals for being here. They have an extremely tough job. I'm sure every springtime they're sitting there wondering not if but where the Mississippi River is going to try to come over its banks. And, again, it cost to do all these things, and I do think that investing in our infrastructure is more important than tax cuts right now.


DUNCAN: Thank you very much, Mr. Taylor.


Mr. Latourette is next.


Mr. Horn?


HORN: I thank the chairman.


Good to see you, General Flowers, with your team. You do a great job, and the Corps has done a great job throughout its history. Let me ask you about a few situations that happen to be, as others are asking, in our district. The LACDA Program, the Los Angeles County Drainage Area, which is mostly the Los Angeles River but it's also the Rio Grande and it's also the San Gabriele on the East, eight congressional districts line the West and the East, and there are 500,000 low-income people that make a living on that. That isn't the rich, fancy who have mansions or anything like that. And we have been very fortunate over the last three years to have our colleagues in the Senate and the House put up $50 million a year because they know the impact it is has on people who are flooded out of very small, minimal housing.


I'd like to ask, my understanding is that the work will be completed by December 2001. It could be ready earlier, I think. We've had the money there, and we've had nothing but cooperation from the various district engineers and their staffs that have been on this project. And where we had one really problem is a lot of constituents say, "Well, those beautiful levies have already blown off. Why do we still have to pay flood insurance for that, because it seems to me it won't flood in that area."


And so people are very upset about that, and I wondered if you could enlighten us as to -- with your partner, which is the County Public Works of Los Angeles, they have been very helpful also. So I'd just like to get a fix on that levy insurance when the levies are there. And I wonder if you could enlighten me on that.


FLOWERS: Sir, the LACDA project will be finished this year.


HORN: Do you know about when this year?


TORNBLOM: End of the calendar year.


FLOWERS: Calendar year, yes. So December's a good date.


HORN: I didn't quite hear you. What?


FLOWERS: December of 2001 is a good date.


HORN: September?


FLOWERS: December, sir.


HORN: December.


FLOWERS: December, sorry.


HORN: December 1 or December 31?


(LAUGHTER)


I don't want to press you, General, but...


FLOWERS: That's OK. We'll go out on a limb here. The 1st of December, December 1.


HORN: Well, I would wish that...


FLOWERS: It should result in the lowering of the...


HORN: Yes. I would hope that we could do that earlier on this flood insurance, because it's -- I realize you don't have anything to do with the floor insurance, but it seems to me that it's pretty much done, and there's eight districts involved, that we would have them get reimbursements, of course. That can happen, but right now they're still collecting.


FLOWERS: Sir, we'll press to do everything we can to expedite this. As you're aware, FEMA is the one that adjusts the flood rates annually. But we'll work with them.


HORN: Well, I thank you very much on that.


I'd like to know in the overall strategy of the Corps, in general, nationwide, to what extent are wetlands and the improvement of wetlands in the Corps' litany of things to do? Where would that rank?


FLOWERS: Sir, it ranks very, very high. Right now, about 26 percent of our Civil Works budget is spent on environmental restoration, environmental enhancement. And that is growing every year. In my opening statement, we talked about the creation since 1998 of 120,000 acres of the park wetlands and flood plain natural habitat that's been restored.


HORN: Well, I'm glad to hear that, because we just happen to have a little 400-acre wetlands, known as Las Solicitos (ph) Wetlands, and there's very few wetlands left in the state of California. I think they're almost all going. And along the Los Angeles coast there's 10 million people in the County of Los Angeles. We could certainly use help on that. We'll be asking Ms. Whitman the same thing. And we also appreciate the dredge that you do for the Port of Los Angeles and the Port of Long Beach, both of which are in my district and a few others on the wharves.


But that is very important, because those are the major entries of commerce from Asia, Latin America that go through 48 states. Just Alaska and Hawaii they do not do unless they stop from Asia in Hawaii. But the dredging is all very important, because these ships are getting longer, wider and higher. And those containers keep going. And when you put those two ports together, they rank with Singapore and Hong Kong in world commerce.


So we appreciate it when you get some of those dredges down there to keep going at a 55-foot dredging. And I just wonder how often -- I know you've been very good at not having to take it away but trying to build on it when it's in the area. Do you think we can finish that project?


FLOWERS: Sir, we'll work.


HORN: OK. Glad to hear it. Thank you. I yield back.


DUNCAN: Thank you very much, Mr. Horn.


Mr. Honda?


HONDA: Thank you very much. First, I'd like to thank the chairman and Ranking Member DeFazio for calling this meeting.



HONDA: It's a very important meeting, and for me, as a freshman, it's a very enlightening meeting. I have a greater understanding what the Army Corps of Engineers does, not only (inaudible). I'm glad to be here as part of this process.


One of the things I'd like to share with you, as has been already said, is the deep concern over the budget cuts that's being proposed for the next budget. I'm concerned about that, because I'm concerned about the Corps being able to accomplish their mission and fulfill the projects that are already online and to fully plan the future also.


One of my questions is will you be able to fulfill the mission as originally conceived under the budget cuts? The other question I have is regarding the local project we have in San Jose. It's the Upper Guadalupe River Flood Control project. And that project indicated that the local preferred plan may also be the national economic development plan based on the considerations of all economic and environmental benefits and impacts on our endangered species there. And this plan further provides more natural hydraulic conditions as well as the opportunity for better land and water conditions, a significant increase in the riparian habitat that are developing there.


I understand that additional studies have to be done during the design phase to confirm that the NED plan, that it was recommended by the Corps headquarters that the locally preferred plan be considered for full federal participation subject to a positive report. And the question relative to that is do we know how the study's proceeding, and do you know when you think this report will be ready for us to look at? And I believe that there's a choice between a 50- and 100- year plan. What the position of the Corps is on that and whether the Corps is in a position to fully participate in this actually very superior, environmentally sound and sensitive flood control project.


Those are the questions, and let me close the questions out by really thanking the Corps for working cooperatively with local agencies to come up with some of the obvious alternatives and solutions that they came up with in that area.


FLOWERS: Sir, thank you. Your first question I think was, you know, is the budget and the funding going to affect the Corps' ability to accomplish the mission? And my response, sir, is we will take everything that we're given and use it the best way we can, the most effective way to return benefit to the taxpayer. In short, that means a yes answer; it does affect us. Any time you're looking at the scratching out of project times, funding at something under your most efficient use of the -- the most efficient way to complete projects and construction, it does affect you.


The other thing that hasn't been talked about but each year, and another member mentioned it, there are congressional adds that go on to be funded. And none of those are funded, or few of those are funded as you move forward. So if those don't get funded in 2002, they will have to be terminated, and there will probably be costs associated with those terminations. So, yes, it does affect it.


And as far as the very important Guadalupe project goes, what I'd like to do is defer that to the director of Civil Works and ask him to answer that question.


VAN WINKLE: Sir, we're familiar with your comments. We are reviewing that at this point, looking into alternatives. Our expectation is that within the next 12 months we'll have an answer for you.


TORNBLOM: Sir, I agree with everything General Flowers said about the impact. And also I'd like to point out that because of the constrained resources, the budget focuses the limited funds available on the three highest priority missions. In the view of the administration, that would be in commercial navigation, flood damage objections and environmental restoration.


And many of the projects and programs which didn't receive follow-on funding in the budget are ones that we have expanded the Corps' mission into new areas. We fully recognize (inaudible) that there are needs out there that are not being met, but there are concerns within the administration about to what extent that should be a federal responsibility and even if it is a federal responsibility, which agencies' mission does it fit best with?


HONDA: From your comment to the chair, I suspect that the three items that you mentioned, that we fit two of three. And I'm assuming also that there is the expectation that we will continue to complete this project in a timely manner.


TORNBLOM: The Guadalupe project, definitely.


HONDA: OK. I yield the rest of my time...


DUNCAN: You have no other time, Mr. Honda, I apologize.


(LAUGHTER)


Mr. Latourette?


LATOURETTE: Thank you very much, Mr. Chairman. As I indicated in my introductory remarks, I spent the morning with the Great Lakes Maritime folks, and not surprisingly the award winners as legislator of the year this year were, on the Democratic side was Pete Visclosky, and on the Republican side, Jack Quinn. They were recognized because of their work today in the nation's steel crisis. And got up on the dais the ranking member of our full committee, Mr. Oberstar, deserves all of that credit.

Congratulations in the Great Lakes for joining with Bart Stupak and us and the new administration to work under Section 232 jurisdiction to determine whether or not the ailing and failing steel industry in this country has a national security angle to it, which it certainly does. And I was at a meeting last week with Mr. Oberstar where he was pushing the secretary of Commerce to look at the Section 201 case that sadly the previous administration neglected to pursue since 1997.


But all of that brings to mind the Great Lakes and the Great Lakes shipping industry and (inaudible) ships as the R&R pilots come in through Cleveland to go to the (inaudible) stay open for a very long time and has to be offloaded in (inaudible) so it can then go down to a (inaudible) to Cuyahoga. And so the dredging of those waterways is paramount.


And I'm just wondering, General Flowers or General Van Winkle, if you have, based upon this budget projection, a forecast for those of us that are fond of the Great Lakes and Great Lakes shipping as to what we can expect the Corps' activities to be in the coming fiscal year?


VAN WINKLE: Mr. Latourette, we can provide you the specific number is port by port, channel by channel, for the record. In general, though, I think that the maintenance budget for dredging those areas is diminished. Ms. Tornblom, in her statement, indicated the reasons why and what the policy is in that regard. And in the Great Lake area we have many low-use harbors in that environment, so they do receive diminished funding.


What we will try to do is for those harbors and waterways where we do not have sufficient funding we will, as (inaudible) occurs or problems occur, try to move money and move those products as quickly and as efficiently as we can. But there will be some challenges for us in the Great Lakes area.


LATOURETTE: And I know, General Van Winkle, that you're all over this situation. At this same breakfast last year the chaplain prayed for higher water levels and the water level at Lake Superior went down another two inches.


(LAUGHTER)


So perhaps divine inspiration is the way we should pursue it at this moment in time.


I wanted to touch upon a few of the upsides in the short time that I have a minute to. We all know that the Corps had that responsibility. It transferred in 1998 from DOE. And I think (inaudible) in my district the Corps has discovered that they got some bad data from the Department of Energy and actually found that they had more work to do than was previously anticipated, and that led to going back and not only reexamining but the need for additional money. Is that a common occurrence or is that the exception? Did the Corps receive the (inaudible) Program in pretty good shape from DOE or am I just unlucky in my history on that?

VAN WINKLE: Mr. Latourette, it's not unusual that when you do these projects -- I don't want to (inaudible) anybody's research -- but initial site surveys that are done are a best guess at that point. And as one gets into the actual construction or removal of the materials, they'll often find that those materials have expanded and it's actually (inaudible) run deeper somewhat. So it's not unusual in a restoration type of project such as (inaudible) out there. We do find additional areas.


So it's unfortunately our best guess in the initial characterization of the site, but we can't be accurate until we actually get into the ground and find out what the material is. And obviously we have to do that in the interest of safety.


FLOWERS: The other piece here, sir, is that the science gets better and better as time goes on. And in this area the science has grown enormously in the last few years, and will probably do so into the future. So as we're able to find a resolution on what's there, it could create a new set of solutions or issues we've got to deal with.


LATOURETTE: Thank you. And (inaudible) is that we have (inaudible). I was very critical of the last administration when we they did things like zero out the O&M account and consider these projects and these vital areas of concern as pork projects for members of Congress. And I think those of us on the Republican side will be likewise critical of this administration if the resources aren't provided to the Corps and other agencies to get this job done.


There's nothing more important to the few folks where I live in making sure that the boats can come in and out and deliver the goods and services necessary to the Port of Cleveland, the Port of Toledo, the Port of Ashtabula so that people can continue to work. And so I hope that -- I understand the other stuff is sort of a blueprint in pencil. I hope that people have an eraser on that pencil, as well, as we get forward into the appropriations cycle (inaudible) some of these funds.


Thank you, Mr. Chairman.


DUNCAN: Thank you, Mr. Latourette.


Mr. DeFazio.


DEFAZIO: Thank you, Mr. Chairman. Going back to, I believe, introductory remarks by Ms. Tornblom, the issue of dredging and the emphasis, the sort of prioritization -- that was you, wasn't it, I believe? Yes. And I have an overall concern here, which is as I look at the budget, I noticed that we do collect a tax for harbor maintenance and dredging. And I see under the proposed Corps budget that, actually, that fund, while we're cutting back on dredging, the fund is going to increase.


Why do we have to have this triage where we're cutting some ports off? And you can say, "Well, it's only recreational fishing." We haven't had a recreational salmon fishing season in 10 years on the west coast of any significance. We're going to have one this year, but we also have another drought, which means all of my recreation ports are going to be (inaudible) in, because we're not getting the natural flush. We have money for which we can achieve -- I mean, obviously, this is next year's budget, and we don't know what's going to happen next year. I mean we're choosing year-in, year-out not to spend money.


Now, I know it's not your choice, but we can say this is (inaudible)? What are we going to do with the increasing balance in the Harbor Maintenance Trust Fund? It's going to go from $1.6 billion last year, to $1.7 billion this year, to $1.9 billion if we (inaudible) two years out. What are we going to do with that money?


TORNBLOM: I appreciate the opportunity to address that issue. The collection of the harbor maintenance tax was deemed to be unconstitutional with regard to exports.


DEFAZIO: I'm aware of that. I don't have much time, so get to the bottom line quick. This fund is in the president's budget increasing. (inaudible)


TORNBLOM: This fund is entirely 100 percent subject to appropriations, sir. Every dollar spent out of it counts for scorekeeping purposes.


DEFAZIO: OK. So we're talking about the people, the trolls that live under the bridge with the green eyeshades. Even though they're collecting a tax from shippers and ultimately the public is paying part of that tax with higher cost of goods and we have dredging needs, which we recognize, all the around the United States. We're going to cut back on dredging with the current (inaudible) increasing the funds, because the trolls who live under the bridge and the people over in the Appropriations Committee don't want to commit money of the tax they're collecting from the people.


TORNBLOM: I'm hopeful that the new administration will shortly address the question of some kind of replacement proposal.


DEFAZIO: That means we're adding even more money. I mean if they keep collecting -- we don't export much anymore really. I mean we import a heck of a lot more than we're exporting. We're making -- the fund is showing an increase. If we just spent the money coming into the fund, we would increase dredging by $200 million this year instead of cutting it.


Thank you. And I know (inaudible), but I just had to express that concern.


To, I guess, General Flowers and General Van Winkle, I'm concerned to see that we seemed to be stretching out a lot of projects; that is, we're not doing new starts, we're cutting back on Corps funding, and that means projects are going take longer to accomplish. I assume that this means that it will cost more, ultimately.


As I said in my somewhat protracted introductory remarks about the project I've been trying to get funded for 12 years that's just started. We're going to have one guy up there hand mixing cement and pouring this summer, because the funds aren't adequate to move ahead on a regular basis.



DEFAZIO: Can you comment, either of you, on the additional cost and what the total cost (inaudible) things are?


FLOWERS: Yes, sir. We estimate that as a result of the budget we will forego about $5.8 billion in benefits on projects and...


DEFAZIO: Over what time period, General?


FLOWERS: It's over the -- it's per year.


DEFAZIO: Per year.


TORNBLOM: That's the Corps' estimate of just their benefit of the -- assuming a fairly similar level of funding for the future.


FLOWERS: And that's $0.5 billion in additional costs, mostly from interest. Average delay of the project is about 10 months. So the answer is, yes, sir, it has a fairly significant effect.


DEFAZIO: (inaudible) pointed out, there's an additional $500 million a year in a $1.3 billion budget. That's a pretty big percentage of your budget.


FLOWERS: Yes, sir.


DEFAZIO: (inaudible) the potential benefit.


FLOWERS: Right.


DEFAZIO: Again, (inaudible), and you did the best you can with them, but it goes back to the initial point I made in my introductory remark: I don't think there's enough money in your budget overall, and I know that's not something that I can put you on the spot and ask you about. But I think these things that we're pointing to, concerns about the delays in permitting, that the permitting staff has been underfunded by the last administration and by the current administration.


And I (inaudible) we criticized the last administration on these issues -- I have too -- and I will criticize this one. I mean this is not a partisan issue. This is a are we going to meet the legitimate needs of the infrastructure of this country, and this is one aspect of it, and we're not. We're underspending to create (inaudible) new somewhere else in the budget to do something else, whatever that is -- tax cuts or something else.

One other question on the issue of the floods, and I referred to this earlier too. I did note that the head of FEMA was quite critical of Davenport for not building a levy. Obviously, that would exceed your current budgetary capabilities rather dramatically if the Corps were involved even on a significant cost share basis. But you also had a program which would have been very effective in the West with our 90-year floods, which we had two of them within three years. Now we're having a drought, but who knows what the future knows. Looking at the (inaudible) Program, the non-structural, and I believe that the funding is eliminated in this budget or...


TORNBLOM: Mr. DeFazio, that would have been a new start. It was proposed twice in the past but never funded. So if we fund this year, it would have been a new start to receive funding, and because of the funding constraints overall, the decision was made that we would not propose any new starts but will just focus the resources on continuing work.


DEFAZIO: Even if we could demonstrate -- I mean it's not -- I mean I don't look at non-structural (inaudible) in this one little tiny area. I mean I would assume we would ultimately sort of assess a number of river basins with flood potential, and so it would be a very broadly capped...


TORNBLOM: Within the program; yes, sir. (inaudible).


DEFAZIO: (inaudible) new start (inaudible) but given your budgetary constraints you can't get there.


TORNBLOM: I'm afraid that's correct, sir.


DEFAZIO: Now, Davenport has -- and I've been taken some, as I understand it, mitigation or planning where I thought all the planning was in areas where they hadn't constructed things. I mean have they, in part, sort of gone down this path and -- I mean is anyone really familiar with what's gone on in Davenport? I'm just curious.


FLOWERS: Sir, there have been proposals in the past for flood control structures along the waterfront. And these are pretty tough, almost personal, decisions that communities have to make. And Davenport made the decision to keep their waterfront the way it was and except the risks of having some flooding. And that's about where we're at right now.


DUNCAN: Let me...


DEFAZIO: Thank you. Thank you, Generals.


Thank you, Ms. Tornblom.


DUNCAN: Let me go very quickly to Mr. Oberstar.


OBERSTAR: Mr. Chairman, is it possible that we could just simply vote and come back?


DUNCAN: I think we can do that. I was just going to leave that up to you. We'll break then. We've got two votes, so we will be in recess for several minutes, and we'll come back as soon as we can.


(RECESS)


DUNCAN: I would like to call this hearing back to order.



DUNCAN: We're always honored to have the ranking member of the full committee, Mr. Oberstar, with us. And he very graciously agreed to go last, even though we had a very large number of members here.


So I'm going to turn it over to Mr. Oberstar now and let him take whatever time he needs.


OBERSTAR: Thank you, very much, Mr. Chairman. And again, congratulations on your leadership of this subcommittee and these issues.


I do think (inaudible) Aviation where you chaired for the last several years, are vitally important to America, the issues we deal with today, that is building America, of the oldest and the most important transportation system that -- which is water-borne. And the oldest of American institutions, the Corps of Engineers, which preceded the new nation, established by the Continental Congress, in fact, to undertake the necessary works in building the new nation.


General Flowers, congratulations on your position and coming into the fray in a very critical time, for the Corps, a transitional time, if you will.


I (inaudible) to understand the Corps of Engineers and learned early on in my service here as a legislative assistant, as what you would call then a clerk of the Subcommittee on Rivers and Harbors in the old days -- the oldest committee in the Congress, by the way. The Rivers and Harbors Committee precedes the Ways and Means, although that they say that they are the oldest committee. But it's really not true. And then later as administrator of the committee staff. And now lo these many years, a member.


And I'm very honored to have been awarded the de Fleury Medal of the Corps, which is something very, very special and very touching and very important to me.


So it is with that background that I just want to make an observation or two. We had two budgets submitted by the Corps to our committee. The first one said, quote, "To ensure an appropriate level of funding for program (ph) evaluation, enforcement and compliance activities will be reduced." And the staff consulted with me on this and raised questions.


Later from the Corps, we got our second budget, which at the time deleted (inaudible). Now will the real budget stand up? And what underlies the initial statement and what was the cause of the deletion in the second budget?


TORNBLOM: I will be happy to answer that question. Mr. Oberstar. The two versions of the justification sheets you have for the Lago (ph) program are the result of when the justifications were transmitted to Congress and the comments that have been made during the administration review process were inadvertently left out. As you have pointed out, those changes were essentially to delete some statements that were rather negative in the presentation.


So I think it was...


OBERSTAR: Things that were left out?


TORNBLOM: Yes.


OBERSTAR: It was left in.


TORNBLOM: Well, that was the initial one -- that was the incorrect one. The second one was (inaudible) was issued correctly, the one that was cleared by the administration.


But I think the important thing is that in both versions the allocation of the total among the program activities is the same.


The statement was wrong (ph), but there is change in the allocation of the activities, the funding for the activities.


OBERSTAR: All right. Is there a policy switch here and going to be more of permanent (ph) evaluation and less enforcement? Or does the deletion mean that there is not a policy change here?


TORNBLOM: The important thing, I believe, to look at is the numbers and the proposed allocation of funds does allocate less to enforcement than in the prior year.


OBERSTAR: And...


TORNBLOM: And (inaudible)...


OBERSTAR: I don't recall the specific number. What is the number reduction?


TORNBLOM: For enforcement, the reduction is from $24 million in 2001 to $19 million in 2002.


I am told that that entire $24 million, which was allocated in 2001, may not be needed. And if it is not, then that also in 2001 would be reallocated to permitting to try to reduce the time it takes to process permit applications.


OBERSTAR: And that means shifting more manpower, resources to...


TORNBLOM: That's right. It's a very manpower-intensive program and the majority of resources go for salaries and expenses.


OBERSTAR: Well, I know in the St. Paul district, they process something like 8,000 permit applications. And in the Detroit district, that's around 25,000 permit applications. The numbers stick in my mind because I have these annual meetings with the district engineers and one of them happened to be yesterday. So that is a considerable workload.


But I'm just -- I think we would need to pray a little bit together on how enforcement is conducted, because I don't want to see that practice disappear in favor of just doing more permitting, however important that is.


General Flowers, at the outset you confronted the issue surrounding the nav (ph) study on the upper Mississippi and the Illinois Rivers. Your testimony suggests that a good deal of responsibility should rest with the, quote, "failed economic model," close quote. Define model.


At the outset of this issue I didn't think too much about, but as it persisted I looked into this a little more extensively and that model has been around for 10 years. And the Corps, not under your direct leadership, or General Van Pelt.


FLOWERS: Van Winkle.


OBERSTAR: Why I had Van Pelt on my mind, I don't know.


You know, under his watch -- but it's been there for 10 years. And $55 million or so in (inaudible) funds were spent on this model. Something escaped somebody in this process.


What is it in the management at the Corps that could allow a sizable investment of money and time on really what's been (inaudible) at least since the last glacier, about which the Corps knows more than anyone else? And this marvelous waterways station in Dixville (ph), Mississippi, it models the Mississippi River.


How is that $55 million (inaudible) to belong with study after and review after review and won't pick up those flaws?


FLOWERS: Sir, this is the first time that the Corps has undertaken a study of this magnitude. At the direction of Congress, we were told to predict 50 years in advance what was going to happen on the Upper Miss and the Illinois Waterway -- 37 locks and dams, over 1,000 miles of river in an environmentally sensitive area.


And so the model that we were using, a variation of a model, as you pointed out, that we've always used, which was a micro-economic model, when you apply it -- and this is what the National Academy told us in their report -- when you try and apply it on a system, you can't get there from here. You don't have enough data to feed that model so it's flawed to start off with.


Now, of the $55 million, almost $30 million has been spent for environmental studies on the Upper Miss. And we know more now about the environment on the Upper Miss than we ever have before. And one of the challenges is how to use that as you built forward with the study.

We haven't lost anything in the economics that we've done. And we will apply it as we resilt (ph) and restart the study.


So we've learned a lot from the experience. This was the first time that this was done. And I think a lot of the difficulty came from results coming out of the economic model that were counter- intuitive; a struggle to try and work or rework the model to where you were going to get some results that seemed to make sense.


And that's what caused a lot of the high stress that resulted in the whistleblower allegations et cetera.


OBERSTAR: While we don't have time to go into all of this issues of environment, I would invite you to my office for a discussion in greater detail...


FLOWERS: Yes, sir.


OBERSTAR: ... and spend a couple hours on that subject.


But on the point of environmental (inaudible), former Congressman Al Quie, a Republican from southeastern Minnesota, and I joined efforts in 1978 on an amendment on which we prevailed, to require the Corps to conduct its mitigation concurrently with construction works in the Upper Mississippi. Because we found that the need of mitigation to preserve wetlands for migratory waterfowl -- and that's a central fly-way in the United States in which 100 million migratory birds flew it every year -- the wetlands were their resting places and also for their nesting and breeding grounds, were discouraged because people would say, "Well, we're good for (ph) construction, but sorry we just run out of money to do the mitigation."


So we're saying put it in at the same time; let the appropriations do it at the same time. And for a while that worked. But that model, if you will, has degenerated over time. And I'd like you to think about visiting with me and perhaps others in the Mississippi watershed about that particular concern.


Maybe you have a comment now to make about it.


FLOWERS: Sir, I'd look forward to coming in and spending the time with you. And I'd really like to do it and discuss this in that forum if I could.


OBERSTAR: Now the deferred maintenance that our colleague Mr. LaTourette referred to, now for 15 years we had unusual weather condition, climate condition in the Upper Great Lakes Basin, where we had below normal temperatures, above average precipitation, below normal transpiration because of above average cloudy days, and above average water levels.


Now we're in another 15-year cycle of seemingly lower precipitation, more transformation and low water levels.



OBERSTAR: The point is that during that period of time, even though we continued to ask for funding for dredging, the dredging was deferred because the water levels were high enough. They didn't need to take silt out of the channels, the inter-connecting channels on the Great Lakes and in the harbors. Now you have to. And now we're seeing maintenance deferred in this budget.


As the maintenance is deferred, the cost goes -- the cost of government goes up in the long run. And in the short run, the cost goes up, as Mr. Latourette pointed out and others, the cost goes up to insurers and the operators, as my colleague from Mississippi, Mr. Taylor, pointed out. How do you justify this deferred maintenance?


TORNBLOM: Mr. Oberstar, I think...


OBERSTAR: Because you were told by OMB that this was all you were going to get?


TORNBLOM: I think the limited funds and the allocation of them can best be understood in the light of President Bush's overall budget priorities.


OBERSTAR: Well, that's a matter we're going to have to address on a considered basis. And I invite my colleague from Mississippi and colleague from Ohio to join with us when the appropriation bill comes to secure the necessary funding increases.


I understand, General, that you have to catch a plane. I wanted to spend a little time talking about the increase, you know, from $5 billion a year to $30 billion a year in disaster assistance payments we are paying for tragedies resulting from increased flooding, tornadoes, earthquakes and other disasters. And to suggest that there is a long-term change in climate that is having an effect on the federal government, consequence of outlays from FEMA and from private insurance companies, that goes up to $64 to $100 billion total. And I want to know -- I want you to think about what the Corps is doing to deal with long-term climate change and the consequences for the Corps' great work.


Thank you, Mr. Chairman.


DUNCAN: Thank you, Mr. Oberstar. And I apologize to -- I do understand that the general has to catch a plane and Administrator Whitman has to be at the White House in about an hour or so. And so we need to end with this panel.


Thank you very much for being with us. You've been an outstanding panel. And we'll be talking to you more later.


And also, any members that have additional questions that can be submitted in writing -- and the Army Corps has indicated a willingness to answer any of those questions that were not allowed to be asked orally.


But we will thank the first panel...


(UNKNOWN): Mr. Chairman? Mr. Chairman?


DUNCAN: Yes.


(UNKNOWN): I just wanted to submit my statement for the record. I want that to be a part of this.


DUNCAN: Any formal statements can be submitted for the record.


And we will then go ahead and excuse the first panel. And I understand that Administrator Whitman is coming. We do want to welcome Administrator Whitman.


We're very pleased and honored at this time to have as a second panel, the administrator of the U.S. Environmental Protection Agency, the Honorable Christine Todd Whitman.


We do apologize to Administrator Whitman. We had about 20 members here earlier and that delayed things. And so we're sorry that we didn't get to you before now. We have lost some members due to votes and other meetings, but that may move things a little quicker.


And so, we are pleased to have you. And we do understand you have to be at the White House shortly, so we'll proceed right into your -- members you had a chance to give opening statements when we started at 9:30 this morning. And so we will let you go ahead and begin your testimony at this time. And thank you very much for being with us.


WHITMAN: Thank you very much, Mr. Chairman. I appreciate being here. And I thank the members of the committee are here.


I am, of course, very pleased to be able to give this presentation on the president's budget for the Environmental Protection Agency, as well as our views on other issues of interest to this committee on water infrastructure needs, Superfund and brownfields programs and brownfields legislation.


With your permission, Mr. Chairman, I'd like to give a brief opening statement then submit a more lengthy one, more complete...


DUNCAN: Your formal statement will be placed in the record. And you can make any comments at this time that you wish to make.


WHITMAN: Thank you.


I'm pleased to report that the president's budget provides funding for the Environmental Protection Agency to carry out its mission effectively and efficiently in the next fiscal year. Your FY 2002 request for $7.3 billion was $56 million more than last year's request. The president's budget request for EPA reflects the commitment to building and strengthening partnerships across America to achieve our goal of making America's air cleaner, water purer and land better protected.


It encourages the development of innovate environmental programs and embraces the expertise and experience of state and local government and tribal governments while providing them with greater flexibility with which to pursue our shared goals. America's states and tribes receive $3.3 billion in this proposed budget, $500 million more than was requested by the previous administration.


Included in these funds is a $25 million grant program for state enforcement. Each year, the states perform about 95 percent of the nation's enforcement compliance inspections and take about 90 percent of the enforcement action. This new program will allow the states to enhance their enforcement efforts in ways that will increase accountability for results and will provide flexibility to address their individual and unique needs.


The president's proposed budget also includes $25 billion to help improve the state's environmental information systems. By helping states and EPA exchange information electronically, we will improve accuracy for better decision-making. And I believe we all understand the importance of timely and accurate information for the best decision-making.


I'm pleased to report that the proposed budget increases funding for the brownfields program by $5 million above last year's enacted budget to $98 million. This program will provide additional support for the state voluntary clean up programs and brownfield assessment demonstration pilot program. It's an excellent illustration that a successful partnership between the federal government and the states.


I should also add that the administration looks forward to working with the committee to make this an even more effective partnership by reforming current brownfields law. Consistent with the principle that the president has enunciated, we hope to include such important reforms as liability protection, providing states and global authority and resources while maintaining high standards, streamlining the grant process and encouraging research and development into new clean up technologies and techniques.


For the continued clean up of toxic waste sites, the president's budget requests $1.3 billion for Superfund. This would allow us to continue to work to address the clean up of the 1,200 sites that remain on the federal national priority list, while also supporting the Department of Defense's efforts to clean up sites that were part of the Base Realignment and Closure process.


With respect to America's water infrastructure, the president's budget proposal includes $2.1 billion in grants to states to ensure that every community enjoys safe and clean drinking water. The administration's proposal of $1.3 billion in waste water infrastructure grants to the states includes $450 million in a new program to help communities address combined sewer overflow and sanitary sewer overflow. Also included is $850 million for continuous capitalization of the Clean Water State Revolving Fund.


Overall, the president's request for water infrastructure is $500 million greater than last year's request.


Through the hard work of a number of members of this committee, we've advance the combined sewer overflow and sanitary sewer overflows were authorized by language in the omnibus appropriations act. The act stipulated that funding for CSOs and SSOs grants be available and the funding for the Clean Water SRF reach at least $1.35 billion.


In this budget proposal, we have sought to strike an appropriate balance between the need for infrastructure funding, both for the Clean Water SRF and for the new grant programs and the exercise of judicial fiscal restraint. Our proposal of $850 million for the Clean Water SRF and $450 million for the Wet Weather Act achieves these goals. Important goals which the administration certainly shares with the committee.


I understand that this proposal does not meet Congress' goal of funding the Clean Water SRF at $1.35 billion before initiating this new grant program. However, the administration believes that it is important to begin providing funds for the combined sewer and sanitary sewer overflow grants now, even though the need for fiscal restraint does not allow us to bring the Clean Water SRF to $1.35 billion in the next year.


We are, of course, ready to work with you and your colleagues in the Congress to achieve consensus around this issue.


The president's budget also fully maintains support for EPA's core water quality programs, programs that help states manage water quality programs and addresses non-point source solutions. We will be working with the states to develop TMDL standards for the most impaired waters, as well as to provide technical assistance in the adoption and implementation of new drinking water standards.


We also maintain support for the development of fish monitoring and notification programs by state and local governments.


With respect to drinking water, the president's budget proposes to maintain capitalization of the Drinking Water State Revolving Fund at the current level of $823 million. The president's budget will continue to provide states with the flexibility to transfer funds between their Clean Water and Drinking Water State Revolving Funds, helping them to address their most critical needs as they see fit.


Taken together, the president's budget helps communities across America address their most pressing clean water and drinking water priorities. It also provides the financial foundation needed to help communities address their long-term water infrastructure needs, which, as you know, can be significant over the next several decades.


I'm proud of the budget that the president has submitted for the Environmental Protection Agency. I believe that it provides the funds and sets the priorities that my agency needs to meet its mission of protecting our environment and safeguarding the public health.


And I'd be happy, Mr. Chairman, to take any questions you might have.


DUNCAN: Thank you. Thank you very much, Administrator Whitman.


We always are honored to have the chairman of the full committee with us, and I would like to call on Chairman Young at this time for any statement, comments or questions that he may have.


YOUNG: Governor, I appreciate your showing up today. I just met with you briefly. I tried to call you secretary, but you said you're an administrator, so I'll call you governor.


One of my highest priorities in this committee is (inaudible) infrastructure and streamlining the process. And we have found out the average length of time now to achieve a permitting process for an airfield is 16 years, highway is 12 years and it goes down the line.


And I have noticed the president's talked about streamlining. And the other day, I talked to Secretary Mineta and asked him the same question: Would he work with us to help us to streamline the environmental regulations so we can get these projects on-line so we can relieve the congestion? And frankly, I'd like to hear it from you now on what you're position in streamlining the process of issuing permits.


WHITMAN: Mr. Chairman, I'd be happy to work with you on that. I certainly agree that we need to ensure that we're doing everything we can to streamline projects while still ensuring that we are protecting the public health and safety and protecting the environment. But I believe we can do a whole lot better than the kinds of time frames that you have outlined. And so, I'd be happy to work with you on that.


YOUNG: Along those lines, as I mentioned here earlier, you can have all good thoughts and good ideas. Are you going to be able to convey this to the agency workers themselves that they have a responsibility to meet deadlines on time? And what do you, for instance, the Corps and the Coast Guard and the Fish and Wildlife and all the other agencies, do they understand that they can't be part of the process of bottling up a permit process?


WHITMAN: Yes. I've put one of my counselors, Jessica Fury (ph), appointed her as the liaison with the White House and the other agencies to ensure that everyone understands the importance of working together and not providing road blocks -- unnecessary road blocks.



YOUNG: OK. And the other question is on January 9, 2001, just recently, the Supreme Court issued an opinion on the Solid Waste Agency at North Cook County. We brought in some cases in (ph) federal jurisdiction with isolated (inaudible). (inaudible) obviously been issued by (inaudible), including this case, was issued under the prior administration, which issue (ph) is very important (inaudible) career staff. (inaudible) new values were placed on the (inaudible) input of your new assistant administrator of water and the input from the Crops' new assistant secretary (inaudible) when they're in place.


WHITMAN: Yes. And we have been charged (ph) as again, put in place some of the (inaudible) and (inaudible) has also been given that one. And she will act as the liaison there. So we are very aware of these (ph) issues.


YOUNG: And along those same lines, there's a perception among state and local transportation names that the EPA and the Corps have been increasing inflexible and uncooperative in moving projects from the environmental reviews and committee (ph) process. I believe (inaudible) should be trying to help citizens. Reaching environmental goals (inaudible) punish and frustrate them. What will you do to change the tune at our regional offices to encourage (inaudible) flexibility and establish trust?


WHITMAN: As you know, (inaudible) associate with high (inaudible) projects. And several of (inaudible) regional offices have gone forward to develop procedures for (inaudible) streamline, meet (ph) a process, (inaudible) the Army Corps of Engineers Clean Water Act, Section 404, (inaudible) process for discharge and (inaudible) material. And So we are, right now, trying to work together in a way that will make some sense of these issues and ensure that we can move ahead and still protect what we all agree is very precious to us (inaudible) wet lands.


YOUNG: Repetitive as these may sound, (inaudible) member (ph) (inaudible). And I know this (inaudible). This has not occurred. I'm hoping that you're listening to me very carefully because that's my main goal is to (inaudible). And as we mandated that, it has not occurred in the past administrations. So you have a tremendous responsibility, not only upon yourself, but (inaudible), based on the (inaudible). And that was not excitement.


I am very resentful of any agency or any bureaucracy or any bureaucrat that says they know better than what this Congress does and decides not to do what we tell them to do. We have $3 billion or $4 billion (inaudible) that amount in (inaudible) mandate in spending and they have not done so.


Now, I'm not going to shoot the (inaudible), but you just came on the verge. And I'm watching you very carefully. And you're not my favorite agency, right up front. It's not because we're (inaudible) in the past. The absolute arrogance of the agency, trying not to help people and establish good environmentally sound policy, but by being policemen and (inaudible). It does not excite me.


So again, I am charging (ph) (inaudible) to try to get the process moving and make sure those people who work under you understand (inaudible). We are going to make this system work or we're going to move (ph) somewhere else and (inaudible). I've got committee experience in (inaudible) small villages. And we think we've established a few little (inaudible) up there and (inaudible) and then, we get things done.


WHITMAN: Mr. Chairman, I will take it upon myself to ensure that we make you like the Environmental Protection agency.


YOUNG: Thank you. I appreciate it. And that would be a great step forward, believe me.


DUNCAN: Thank you, Mr. Chairman.


Mr. Defazio (ph)?


DEFAZIO (?): Thank you, Mr. Chairman.


(inaudible) ought to (inaudible) this after the chairman, even though I'm on the other (inaudible). But I do have a few questions.


In particular, I'm concerned that last year, when Congress authorized (inaudible) project (inaudible), which I didn't vote for, the (inaudible) program, for those in (inaudible) - I didn't know what (ph) - the landlord said that we couldn't steal the money or take the money from the SRS, the clean water program to fund (inaudible) program that was very, very specific. And (inaudible) in the portfolio (inaudible) that we're proposing to undo that language and actually take most of the money - all the money that's under that (inaudible) program from the SRS and then, move another $50 million somewhere else or attribute that to the general budget for so-called surpluses.


And I guess, you know, I've been hearing for years that there's, at least $2 billion in (inaudible) restaurants. And now, I find that we're going to cut that back to less than a billion. We're going to put $406 (ph) million in the wet water (ph) funds, which language (inaudible). And I'd like you to comment on that language (inaudible). I want to make this (inaudible).


To further concern me, you're using the 1970 data to allocate the wet water (ph) grant and would also (inaudible) those (inaudible) my choice (ph). That means (inaudible) combined (inaudible) $61,000 (ph). But I (inaudible) combined (inaudible) overflow with funding too (ph), that means $1.45 million for - where some other state, they'd be all over the map. But it doesn't really seem to follow (inaudible). It's a very problematic map (ph).


So can you comment on those (inaudible)?


WHITMAN: I'd be happy to. You were right in we are seeking a change in the language from the Congress. And we recognize that and put that up front. The $850 million in the SRS program is, in fact, a few million dollars more than was requested last year. And we'll maintain this year, we expect the revolving loan fund to be at about $3 billion. And it will maintain a $2 billion ...


DEFAZIO (?): (inaudible) that they were funded higher. And I'm not necessarily supporting the levels at which the prior administration made this request. I ...


WHITMAN: Right. No. I'm just (inaudible) examples and comparison here from (inaudible) how the request went out and what it will do. We did feel, however, that it was important to get started with the wet weather (ph) appropriations and wet weather (ph) language and program.


And So we put the $450 million into that in order to be able to begin that problem. Usually, the criteria that we have used for the SRS program because that's there - next year we will take another look at that and make sure we're doing it in the right way. But we are sending it.


The other change we're making is anticipating - the wet weather (ph) program had actually anticipated the first year, going directly to municipalities, then, the second year, moving on to the states, which was a (inaudible) made better decisions (inaudible). And So we anticipated that and will be providing that money directly to the states this year.


Again, the $1.3 billion that is now appropriated for water infrastructure is what we believe to be a substantial commitment and will, in fact, help move forward on these very serious projects that we know we need to address.


DEFAZIO (?): That administrator, with 9,258 committed CSOs (ph) in the country, respectively I would (a), we're not targeting the money to the problem. That is states that have some of the largest numbers of committed CSOs (ph) are not getting under the 1970 formula, which wasn't intended for this purpose, but the waters (ph) exist, they're getting funds that (inaudible).


Some states who have no CSOs (ph) are getting money. Other states who have huge numbers are getting very little money. You know, my state (inaudible), we're spending a billion dollars on this. We're (ph) going to get (inaudible) $5 million (inaudible).


Are you trying to say we're really meeting a need here or is this, kind of, like making a (inaudible)? Well, we're going to send a little money down in, kind of, a random way to make sure all the states gets some, whether they have CSOs (ph) or not. It's really not addressing the CSO (ph) problem. It's just, sort of, addressing that sending a little bit of money down to the states kind of problem.

WHITMAN: No. It's really an effort to get this program started because (inaudible) CSOs (ph) and SSOs (ph), most of the states do have problems in one part of that program or another and can use this money well. (inaudible) our imposition (ph) to be able to prioritize. They issue (inaudible) have the needs.


And I will tell you that the overall issue is one that I think we're going to be having many more discussions on. As you know, there are several (inaudible) Congressional Budget Office, who's doing a study, looking at what the overall infrastructure needs are going to be. And that is something that we need some gauge in for the future because the needs are going to be much, much greater than what anyone has anticipated to date.


DEFAZIO (?): When do we expect to have that number (inaudible)?


(UNKNOWN): (inaudible)


WHITMAN: The Congressional Budget Office is doing a study. We are also looking at a gap analysis because, as you know, some of the - we're constrained at what we can look at, at the agency, what we can count towards (ph) these means (ph). Programmatically (ph), we're constrained. And the industry has put forward some numbers. There's a big gap here.


So we're trying to do an analysis of what our legitimate costs to be directed, to be counted, as we look at what the overall news (ph) are. And I would expect that we will have that done by this summer. So that analysis will be done by this summer.


DEFAZIO (?): (inaudible) street.


WHITMAN: It'll be on the street. You will have it and be able to look at it. So we can start to engage in that discussion because, as you know, the numbers range from $480 billion to a trillion dollars in (inaudible). And that is just so - those numbers are huge. Those numbers demand that we think of smart ways to partner with state and local governments and figure out other ways to finance this.


DEFAZIO: I hope I will (inaudible) to that code.


Thank you, Mr. Chairman.


DUNCAN: Thank you, Mr. Defazio.


Administrator, (inaudible) you've gone from one very difficult job and one in New Jersey to one that I think may be an even more difficult job, probably one of the toughest jobs in the entire federal government. And by that, I mean, you have to somehow try to keep - try to satisfy environmental groups, some of which can't ever admit being satisfied.


However, their contributions would drop way off if they stop telling people how bad everything is. And yet, we can't go to such extremes on the environmental regulations that would double or triple utility bills, while we go, as the man telling me last week, expert told me he thought we would see $3 a gallon gas prices by the end of the summer. And So you (inaudible) that heard in a lot of (inaudible) rear (ph) end (inaudible) market (ph) deals.


So somehow, you have to achieve a little (inaudible) balance there. And what I'm wondering about is how you see yourself achieving that balance?


WHITMAN: Well, you have touched exactly on the issues (inaudible) the problems and the challenges faced by the agency. Many times, when we talk about balance, people see that as a tradeoff, meaning you're trading one side off against the other, that it (inaudible) some gain. And what our challenge is, is to ensure that we use all of modern technology, all of the science that we have available, all of the best thinking that we have to ensure that we can protect the environment, while not stopping the kind of economic growth that we have seen in the past.


In fact, the United States is the - I would say and I think I'd risk the contraction that (ph) follows. But I think I'm pretty safe on this stand. That we are the fifth industrialized nation that has actually been able to see a decoupling between economic growth and increased (inaudible) gas emissions and increased use of energy.


We are starting to see, when we had a GDP growth of 7 percent, our increase in energy use was at 1 percent, but it's still an increase. And we still are huge consumers. So we need to constantly be watching how we approach these issues.


But I believe very firmly (inaudible) New Jersey that, when we bring people together, all of the stakeholders together, they agree upon goals. And then, have (ph) the agency get out of the way and not micromanage how those goals are achieved. American industry is incredibly resourceful in their ability to reach standards in ways that have kept them economically competitive. And that is certainly something that I believe is very important.


I look toward getting to a place where what we can do is enter into partnerships where we agree on standards on what gets put into the air and what gets put into the water. The water is going to be put into the land (ph). We've set parameters there and then, we allow the states, the local governments or the businesses to determine how they can best meet those goals without having (inaudible) to look over their shoulder every step of the way.


DUNCAN: This subcommittee gets into a lot of claims, like water infrastructure needs, which we've been discussing this morning. And (inaudible) all kinds of things. The wet lands issues, even some claims, though, that I've didn't know about.


And for example, then (ph) (inaudible) that I just mentioned, I had the mayor of Los Angeles come to see me because he said that he had 10,000 restaurants in his city and that most of them were mom-and- pop operations. And he said that (inaudible) was attempting to require the installation of expensive (inaudible) technology. I know there's not anybody that'd come to me and talk about priests (ph). So when he talked about running several thousand mom-and-pop small businesses out of operation, then you can see the concern.


And our next hearing in a couple of weeks is going to be about an issue that's becoming more and more important, which had two governors who are already talking to us about run offs from animal freedom operations. And what we're trying to figure out is a way to not run all the small farmers out of business.


So let's hope that, when you go into all these issues, you'll keep in mind that we don't want to run all the small business people off or all the small farmers out and just turn everything over to the big giants. And unfortunately, there's rules and regulations. Do you understand where I'm coming from.


WHITMAN: Absolutely. And (inaudible) issues (ph) are businesses that you've brought up. And you mentioned the night you had met with the mayor to talk about this and a few other things.



WHITMAN: And I am very sympathetic to the concerns that have been raised.


As you may know, in that particular instance, we did bring some action on a much broader set of noncompliance issues for the city. And then, the environmental groups joined in and we are in settlement talks now. We are talking to them. And I believe that we can hear (inaudible) right through this so that we (ph) really do protect the environment, but we don't put the mom-and-pops under.


And of course, the same thing, as we look at the (inaudible) and those regulations, we again, may be sensitive to the impact on the environment from activities as they had changed over the years. But the object here is not to make it so expensive to comply that small businesses or small farms just cannot stay in operation.


And one of the charges that I have made and one of the things we're doing to capitulate (ph) as far as the farm community is concerned is reinstating the position of an ag (ph) liaison so that we are constantly taking into account the real impact of decisions on real people.


And we're doing that in every instance to ensure that we do meet our statutory obligations to protect the public health and to protect the environment.


That is number one in our responsibility as an agency, but with the understanding that it's counterproductive if we do that at the expense of small business, that we do that at the expense of people's ability to earn a livelihood or to enable them to enjoy that and to provide the tax dollars that help support some of the work that we need to do to protect the environment.


DUNCAN: Yeah. Let me ask -- I want to ask a quick question. Where is the Super Fund Program headed?


WHITMAN: I believe ...


DUNCAN: Up and down or is (inaudible) ...


WHITMAN: Well, what we're doing ...


DUNCAN: (inaudible) some mention of that group facing a number of, I guess, (inaudible) to the site completions.


WHITMAN: The number of site completions is down this year, anticipated down from 85 this year. And that started back in fiscal year 2000 when the funds began to be cut for the Super Fund Program. It's a combination of that, but also is indicative of the fact that we are now getting to some of the more complicated and difficulty (ph) centered (ph) Super Fund remediation efforts.


And So just the scientific ability to clean those sites. What it's going to take technical to clean those sites means that we're going to be able to complete fewer of them.


And the money that is in the budget is what we feel is appropriate. We'll be able to get the 65 sites done and keep us on track to addressing the overall issues that we face. But it is also a recognition that those funds have been cut over the last few years and budget sites (inaudible) clean ups are getting to be more complicated, more technically demanding.


DUNCAN: I (inaudible) to Mr. Oberstar.


OBERSTAR: Thank you very much, Mr. Chairman.


Welcome, Madam Administrator. We're glad to have you here before the committee. I'm sure this will be one of many get-togethers.


WHITMAN: I'm sure it will be.


OBERSTAR: Last year, we celebrated the 20th anniversary of the Superfunds. Next year will be the 30th anniversary of the anniversary of the Clean Water Act (inaudible). A good bit of time (inaudible) number on the Clean Water Act (inaudible) two years as administrator of the committee's (inaudible) fund. I have a great fondness for that, as I should.


My predecessor, John (ph) (inaudible) is up there looking over us, as the initiator in 1956 of our federal water pollution control act. It's important that we celebrate those milestones in an appropriate way.


But what I'm disappointed on Superfund is that the first time, we have a budget that does not call for reinstatement of the oil and chemical and food stock excise taxes that constitute the (inaudible) source for the Superfund trust fund. Would you enlighten us as to why that was terminated or was not mentioned, why the administration is not advocating it for reinstatement?


WHITMAN: Well, part of it is a reflection of Congress's reluctance to reinstatement in the past. And while it is getting in on every budget, it has not ...


OBERSTAR: You mean (inaudible) on the part of the administration, though.


WHITMAN: And this year, it's the (inaudible) being funded 50/50, 50 percent on the funds that are left in the account and 50 percent fund general revenues. That doesn't mean that we won't go back and take another look and not really (ph) to work with Congress in the future to see if we can actually find another source of revenues to ensure that the program is funded to adequate levels so that there's the history of the Congress not to want to see that tax reinstated.


And that's why it's (inaudible) to put it in this time so we were looking at what really was there, what really was available and so that everyone could have a very clear idea of where the program was going without any kind of additional support.


OBERSTAR: Well, by any calculation, the trust fund runs out of money next year.


WHITMAN: The trust fund is definitely going to be running out of money and we're going to be having to soak more money into it from general revenues, yes.


OBERSTAR: Well, I would hope that the administration would reconsider its position and not just say that Congress hasn't (inaudible) and we should ask them to. I think we should (inaudible) a rose and buy another steward (ph). But you know, (inaudible) for the reinstatement because after all, we all learned as kids -- at least, I did in my family -- I made a mess and my mother said you clean it up. Now, you folks make a mess and you got to clean it up.


WHITMAN: I'd be certainly happy to work with you on that, Congressman. I have no problem with seeing what we can do this year. There's adequate money in the budget to deliver on the projects that we're going to be able to do from a technological point of view, but we have the technology and ability to clean up those sites. And So we have the money to do that. And this budget is the first one. And I'd be happy to talk with you and work with you further to see if we can address the ongoing issue.


OBERSTAR: I look forward to doing that. The second item, there's a reference made by Chairman Young to environment streamlining. I was not in the room at the time. I was visiting with a group of (inaudible) students from my district. But we all have concerns about streamlining.


But after (inaudible) has -- the authority has used the authority for bringing the parties together, that is, the formal (ph) regulatory parties together and (inaudible) the environmental work concurrently, rather than sequentially and has reduced to three to four years the time it takes for an environmental park, building the new runways, actual (inaudible) for a new airport, that's still longer than many of us would like to see, but (inaudible) less than the eight or 10 years.


Are you participating in other areas of streamlining on federal highway projects, EPA? Have you participated personally and you're just new on the job? But this is a matter we did discuss briefly in the previous meeting and it's a matter that I hope you will give further attention to.


Well, remember, the memorandums of understanding that had been signed in the regions with the various other central agencies as we move forward to ensure that there is coordination? Because I would agree that it makes much more sense to have the environmental issues aired at the beginning of a process, rather than waiting until the end and have us come in, as so often has been the case. And we just need to be just a roadblock, pulling the rug out from under something when those issues probably could have been dealt with early on in the process.


OBERSTAR: I just want to make it clear, I'm for environmental streamlining. Not quite sure what streamlining really means. But in the sense of speeding up the process, so long as it does not result in an environmental responsibility of (inaudible).


WHITMAN: Absolutely.


OBERSTAR: Finally, the issue I'd like to raise is studies by numerous groups, including just most recently, the Civil Engineers Association, estimate $300 million of water infrastructure (inaudible) over the next 20 years. Yet, the administration does get (inaudible) of revolving fund capitalization grants, where is now $500 million. I don't understand how a fund of that magnitude can be justified.


WHITMAN: Actually, it's (inaudible) on the request. Put your money in the $500 million that is backed out or on congressional riders (ph) who add on to it so we're (ph) not part of the quarter (ph). No. You're not (ph).


OBERSTAR: So the optimization level is 1.35, $1,350,000,000 (ph).


WHITMAN: (inaudible) the authorization, not the appropriation, yes.


OBERSTAR: Yeah. The optimization level. And (inaudible) this committee ...


WHITMAN: Do you know what (ph)? We feel good that the $850 million on the SRS, on the state revolving loan funds for the capitalization, is where we need to be for the states to be able to meet their demands. It will be about $3 billion this year in moneys through that revolving loan fund that states will be able to utilize. And we have seen them put this program to very good use. And we believe this is now, you know, at the adequate level for them and that this (inaudible), in fact, enable us to stay at the $2 billion level.


OBERSTAR: Now, I didn't hear what (inaudible) the administration's level of funding and I don't concur with the current administration's statement (ph) on that matter. Now (ph), when we look at the (inaudible) that allayed (ph) us.


WHITMAN: Well, Congressman, let me just say that I believe that the CBO study, that the Congressional Budget Office and the GAO (ph) are both doing studies on this need. We're doing that gap study, as I indicated earlier, to take a look at the difference between the numbers that we have seen and the industry has seen. There was a serious leak (ph) that goes well beyond anything that's been anticipated in any budget.


And I believe that we are going to be seeing a lot more of one another and so (ph) we discuss this. Because when you're talking about differences in numbers between $480 billion a trillion dollars, you know you've got some extraordinary needs out there. And we're going to have to do some serious prioritizing and serious discussion of where we find money and how much money we're going to spend here.


OBERSTAR: I look forward to those future encounters.


DUNCAN: Thank you very much.


(inaudible) Taylor?


TAYLOR (?): Thank you very much, Mr. Chairman.


And Madam Secretary and I use that phrase because that's exactly what you deserve to be, secretary of Cabinet or the (ph) department officially. I've been involved with this business a long time and I personally introduced a bill to (inaudible) if you're a cabinet member. That's in 1988 and I'm tenacious and we're going to see what happens.


So let me also say that I'm encouraged, that I welcomed your appointment and I think you've got a (inaudible) and a new stature, an improved stature and even (ph) good relationship with a distinguished colleague like the gentlemen from Alaska. You're going to prove to him that the EPA, you're the good guys.


Let me ask you a couple of things. First of all, I'm happy this morning because we had a very good (inaudible) last night. And as a result of that, we're going to resist the temptation to have too high tax cuts, significant, but not too high. We're going to get some more money in non-defense discretionary, which is what you guys need. So we're going to be on the hunt for those additional dollars, if the agreement sticks.


Where will you get your top priority and some additional dollars in your budget? Now, that is a soft (inaudible) from a friend to someone who is a friend.


WHITMAN: Well, there are clearly a number of new research and development, I believe, and some (ph) sciences are going to be at the top of any list of how we move forward. We need to be able to have the resources to do the kinds of reviews that are required in order to, when we put proposals forward, to ensure that we are able to (inaudible) and to explain to people how this was going to, in fact, preserve and protect the environment and preserve and protect (inaudible).


And that's an area where we're talking about our water infrastructure needs versus huge (ph). There are a lot of very important ancillary benefits that come from that discussion and addressing those needs, not the least of which is ensuring an adequate supply of water through the country. There's just going to be a huge need, but I don't think there's any (inaudible), even with a little more money in the budget and senators (ph) provide enough money to do that.


So I would say, as I look at the agency's budget overall, that research and development is an area where we can always ensure that we would put money to good use because there are a number of other projects. I don't think there is anything in this budget that I would say it is really of support. And I've perused (ph) probably every cabinet officer (inaudible).


But most of it not in their budgets, could always use a little bit more money. However, we are very sensitive to the fact that there is an overall budget and we need to be cognizant of the money we're spending, whose it is.


TAYLOR (?): Yes. That (inaudible) capacity, putting a head on its chair (ph) of the Science Committee. We're going to work with you in the agency to get the funding you need for research and development activities.


This is a time where everyone likes to say that the science faced (ph) decision on. I set aside (ph) to take a consensus (inaudible) inconvenient and they (inaudible).


To follow up on that comment made by Mr. Oberstar, I too am concerned, as we look to the future, the Superfund is -- trust fund is dwindling down. It has to be replenished. And I'm not anxious to buy (inaudible) concept that (inaudible). And I think it is rather essential that we have record corporate environmental income tax last (ph).


I'm not going to put you on the (inaudible) to get you to respond to this. But that corporate environmental income tax (inaudible) hundredths of a percent. It would cost the total, on all profits over $2 million (inaudible) alternative minimum tax. It would cost the entire oil industry in one year, $33 million. (inaudible).


In the first quarter of this current year, (inaudible) made $5 billion of profits. And I'm not against profits. It's not a dirty word. I want companies to make profits. That's what they're in business for. But that $33 million in the oil industry, which has been rather precipitous (ph) in its opposition to the last corporate environment income tax, that $33 million represents about 10 minutes of profits.



TAYLOR (?): I'm saying we'll talk with you on a bipartisan basis to make certain that we get the funds removed in that Superfund, trust fund, do the job that I know you want to do and that we must do for America.


But let me -- one last question and this is an easy one. But (inaudible) has been (inaudible), been very much on our (inaudible). In the 2001, you drew an appropriations bill (ph) and we recorded (ph), EPA did, through (ph) the (inaudible) implementation costs. And so, I (inaudible) and you are anxious to get that information. So I would wonder if you have ever (inaudible) when that might be forthcoming?


WHITMAN: I am very hopeful. In fact, it is our plan (ph) to be able to brief (ph) that report and brief the Congress on the results of it maybe by the end of this month.


TAYLOR (?): Thank you very much, Madam Secretary. All right. Thank you.


(UNKNOWN): And thank you very much, Mr. Taylor.


Thank you, Madam Secretary, for being with us today.


(UNKNOWN): Madam Secretary, has there been some sort of technological breakthrough that would allow us to construct sewage treatment plants that are a lot more efficient, that are a lot less efficient than in the past? Because I'm positive that, as a higher percentage of Americans move with 50 miles of the coast and I'm told it could be 80 percent of our population within the next 40 (ph) years, we would be (inaudible) money (inaudible) fund.


So are there some technological advances that would allow us to treat that additional demand for less money or why is this money being cut (ph)?


WHITMAN: Well, actually, as I indicated before, the amount being requested and this (inaudible) $50 million more than what was requested last year, ...


(UNKNOWN): The last line (ph) (inaudible) was appropriated.


WHITMAN: The last line (ph) was appropriated ...


(UNKNOWN): (inaudible) requested (inaudible) appropriated. So let's ...

WHITMAN: Absolutely. But again, ...


(UNKNOWN): (inaudible) actually spent last year.


WHITMAN: What we did was did the same thing that the previous administration did, every administration does, which is block out the congressional halt ons (ph) on those programs. That's not to say they're not good projects.


But as far as the overall program is concerned and the priorities of the administration and the agency, the (inaudible) isn't increasing this. Our recognition has been reached (ph) any more. The funds will probably be able to be at a revolving level of $3 million this year and maintaining what was anticipated to be a level revolving amount of $2 million.


But that does not -- as I indicated, that does not address the long-term needs and discussion that we're going to have to have on water infrastructure. We did feel it was very important.


And this overall program is at $1.3 billion. We do feel it is very important to start that wet weather program this year, so an SRS program, which is why $450 million is directed toward that program as something that we think is critical as we address our water needs and infrastructure needs.


(UNKNOWN): OK. So is it safe to say, there really isn't any cheaper way to construct a sewage treatment plan, that (ph) the (inaudible) goes up? I'm asking that in the form of a question.


WHITMAN: No. And I appreciate your question. I couldn't tell you definitively whether and I am sure that (inaudible), when (ph) you say, not any less expensive than last year, I don't know the technology has advanced significantly since last year. It certainly has over the years, advanced significantly.


(UNKNOWN): Ms. Whitman, what troubles me about your budget request is America has thousands of miles of coastline. I represent maybe 100 miles of that thousands of miles. Just the three coastal counties that I represent have asked for, off the top of my head, $200 million worth of water infrastructure this year.


So I cannot believe that and (ph), as we know the growth was all along every coastline in America, I simply cannot believe that what you are proposing is anywhere going to be near what they need to satisfy it. And since we've both served in local government, I think what we're basically doing is for the sake of these tax breaks is shifting that burden from the federal government to the state and local governments. It's not happening under federal mandate. It happened during the (inaudible) through federal standards.


And so, for the sake of a cash break (ph) at the federal level, we all (inaudible) that mandate (inaudible) local (inaudible) costs are going to go up. Is that a fair assessment?


WHITMAN: Well no, I'd like to believe that it's not because of any tax cut. I believe that this administration's commitment to controlling the rate of growth in spending this budget is (ph) larger for the Environmental Protection Agency than those in the past, that we will see a cut of spending overall anyway. It's just a cut in the rate of growth in spending, not a cut in spending because that rarely, if ever, happens, even within individual programs.


And so, it's not analogous to say that that's what's happen. But I would agree with you that the needs on infrastructure, water infrastructure are enormous. They're far greater than $2 million or $3 million revolving loan funds. We're talking about working around the margins there.


And we need to look at this. And once we have all the information as to what we should fairly (ph) assuming as the (inaudible) of federal role, but what is the federal responsibility as we look at these and we try to determine what are we talking about, $480 billion or a trillion dollars? That is far beyond anything that's ever been anticipated in the budget of this agency or any other individual or federal agency to meet these kinds of needs.


So we do have a great deal (ph) of discussion that needs to take place. But I would not say that we've see a (inaudible) in this program overall that's more than what's requested and the previous administration thought was necessary to deal with these (inaudible) issues and that's, in fact, what was asked for. And I only go by what was asked for. And we go into a process where there are a lot good projects. Everybody has very good and important projects.


And as those that (ph) are added on, there comes a time, from a budget perspective, we test them anymore. But on this one, these issues are going to be well beyond anything that anyone has imagined. And we need to have a very complete discussion of them in light of what we expect or suspect the news (ph) are going to be.


(UNKNOWN): Thank you for being here.


(UNKNOWN): Thanks, Mr. Chairman.


DUNCAN (?): Thank you very much. I believe -- the staff tells me that the first one here on our side was Governor Otter. And so, we will go to him at this point.


OTTER: Thank you, Mr. Chairman.


And welcome. (inaudible). I'm just (inaudible). I get a little confused around here about the authorized, requested and (inaudible). Isn't it a fact that the Bush administration is asking for $50 million (inaudible) federal administration thus far (ph)?


WHITMAN: Yes.


OTTER: And isn't it a fact that the President authorized this new bill (ph)? So the President of the United States has asked for $850 million more than Congress has authorized.


WHITMAN: Yes.

OTTER: Now that I have that clear (ph), (inaudible). And (ph) thanks very much for that. There's a couple of things that are coming down on us from the west and from Idaho and there's a couple of things that are coming down on us pretty hard in the rest of the year (ph) is (inaudible) fiscal quarter.


The governor (ph) (inaudible) discharge administration assistant (ph), violation of the Clean Water Act by an irrigation company (inaudible) we wanted to (inaudible) so that water could be delivered to irrigation systems and sort of thing. And I know, you're relatively new on your job and a lot of these things are coming at you. But we're concerned that (inaudible) and concerned with (inaudible).


The (ph) (inaudible) system of water (inaudible). There are a lot of (inaudible) and a lot of other types of other types of things to slow down that water and (inaudible) because not all (inaudible) irrigation models are concrete. And so, I am really concerned how the EPA and the (inaudible) is going to look upon that decision and it's called the County (ph) Irrigation System, if that helps you.


WHITMAN: (inaudible).


OTTER: How would you respond to that (inaudible)?


WHITMAN: We're in the process right now of analyzing the (inaudible) of that decision and what it means for the agency and what it means for our ability to ensure again that we'll protect the public health and safety and the health and safety of the drinking water and do it in a sensible way that recognizes that there are real differences in various parts of the country in both needs and climate that impact on those needs and the ability to address problems.


So we are in the process right now of doing the review of that decision. We recognize the importance of the decision relative to herbicides and pesticides and their use. And we will, hopefully, be coming to some resolution to be able to put a system (ph) very quickly.


OTTER: If the postal service does its job and administrative (ph) (inaudible), I sent you a letter relative to that yesterday, so you should expect it probably some time this month. And along with two members (ph) of my colleagues, who have also seen that letter from (inaudible), I am very concerned about that. And (inaudible) to (inaudible) why the decision in that direction, that was responsible are very responsive to our needs out there, we'd be more than happy to (inaudible).


I have co-sponsored with Mr. (inaudible), House Resolution 1431 (ph), which (inaudible) asks for a ruling stating that the EPA (inaudible). We have a disaster in Idaho. We (inaudible) down 18 years ago. Suddenly, we're going to spend $28 million in three years and we're going to (inaudible) because (inaudible) and I'm entrusted to do what's right.


My mother (ph) (inaudible) me a few years ago and (inaudible) million dollars ago (inaudible) promised to spend. We still have a problem because it's not cleaned up. The thing we're going to have to do is (inaudible). (inaudible) mistakes. She was fired. Now, we're asking, for the last few years, (inaudible). And I would hope that you would encourage (inaudible) to (inaudible) that goal (ph)?. Can I get you to respond to that?


WHITMAN: Well, I've already indicated that I would be supportive of (inaudible) independent because I know that is (inaudible) a concern that many have had relative to (inaudible). And that is something that I prefer to work with Congress funds (ph)?


OTTER: Thank you. Glad to have you (inaudible). It's great to see somebody who has -- I was lieutenant governor of Idaho for 14 years and once (inaudible) and (inaudible) to us (ph) because they could do a much better job of running our state than we could. (inaudible) them. So (inaudible) coming from a state (inaudible), from a (inaudible) veteran (ph), we've got to (inaudible) EPA that (inaudible) administration that's sensitive to the true (inaudible) state.


Thank you.


WHITMAN: Thank you.


OTTER: Thank you, Mr. Chairman.


DUNCAN (?): Thank you, very much.


Mr. Mascara?


MASCARA: I'd like to welcome you, (inaudible) Whitman.


And based on the record, I'm certain that you'll do a good job, the (inaudible). And I look forward to working with you. I wish you the best and you have my commitment to work with you to make sure that we're all sensitive to the environmental needs of this country.


From the looks of the press release (ph), though, the EPA has its work cut out for them. I come from a region that has had a long history of environmental problems. (inaudible), some say that the environmental movement started in my congressional district of Denora, Pennsylvania, you remember the smog in the 1950s, when hundreds of deaths occurred in (inaudible).


In fact, I only lived about six or seven miles from Denora and (inaudible), Pennsylvania. I'm old enough to remember the reference to the city of Pittsburgh as a smoggy (ph) city. But now, we have a wonderful, beautiful, thriving city in Pittsburgh. And a lot of that is due to the efforts by the Environmental Protection Agency.


While they have overreached on occasion and I have disagreed with the former administrator, the administrator, Carol Browner, I think we can look for one great (inaudible) to make sure that we're sensitive to the environmental needs of this country.


For the future, I am especially concerned about funding for the CSAs and the SRS (ph) grants. Those programs are important (inaudible) communities that I represent. They're older communities that have a limited tax base. (inaudible) grant program is desperately needed. The longer we wait, the worse the problem will become.


I'm fearful that, if we don't act quickly, we might have serious water quality problems. In fact, from the city of Pittsburgh and Allegheny County, they have an agency there by the name of Alcasan (ph) and we have a wet weather demonstration project going on that's estimated to cost somewhere around $3 billion to collect the (inaudible) of Allegheny county. It's mind boggling to think, you know, how are we going to come up with this money.


I know that you have first-hand experience with these problems and I will be looking forward to working with you and (inaudible) to try to rejuvenate the (inaudible) of the water treatment systems all over this country, which leads me to my next question and, sort of, a statement.


I wonder if you would be amenable to looking at a program that will be structured (inaudible) or T-21 highway bills to fund the construction and maintenance of programs throughout the country.



MASCARA: That is, to develop a program that would provide low- interest loans and grants in communities around the country who cannot afford to correct major problems with water and sewage. These communities are overwhelmed. The regulations certainly don't add to that problem. And we need to mitigate these problems.


The question (inaudible), of course, comes to mind that we, in DC, take umbrage of anybody that suggests that there might be a shoe (ph) or some pacts to fund some federal funds (ph) there. But the state and local governments are overwhelmed by the problems associated no only in my district, but the Northeast (inaudible), the series of water problems there. And our infrastructure is crumbling.


And while I'm not looking for another program, I think, if we're going to rebuild the infrastructure that relates (ph) to water and sewage in this country, then perhaps the federal government needs the cooperation of the state and local governments to find some way to fund, at least maybe the interest and some grants to communities all over this country to begin to rebuild our water and sewage.


And (inaudible) said in the 1950s we needed an interstate highway system, a lot of people said we couldn't afford that. But I think we can ill afford, as a country, more the crumbling infrastructure all over this nation generally and specifically in the Northeast. And I'm just wondering maybe we could have some dialogue sometime about creating some kind of a T-21 (inaudible) to talk about the improvements in this country?


WHITMAN: Well, Congressman, the administration obviously agrees with your concern on these issues, which is why we have divided the budget in the way we have to start the wet weather program with the $450 million for the wet weather program.


But we also are looking forward to the reviews that are being done by the Congressional Budget Office and by GAO on water infrastructure needs, in general, and what the federal government's role should be in meeting those needs because, as we have been discussing, they potentially are enormous, far bigger than anything that anyone had anticipated or what we have provided for in any budget.


The EPA is completing the (inaudible) clean water survey needs (ph), which is to be completed by 2002. We are moving forward on that. And the only thing I would reiterate is something that you touched on and mentioned, that for (inaudible) T-21, we have a users fee. That's how lots of that gets paid. There is no similar type of federal fee on order because those fees are always done at the local level, local and state level. And that's one of the challenges that, you know, talking about how to (inaudible) T-21, something very similar.


But I certainly think that we need to be engaged in a very complete discussion on what kind of a program we can put forward, what can we sustain, how do we leverage the dollars that we have to meet what is a very real (inaudible) some doubt (ph) ongoing problems, particularly in areas such as the Northeast where you have infrastructures that are well over 100 years old.


MASCARA: Well (ph) (inaudible) there, we can begin to talk about (inaudible) cooperation with state and local governments to address something in the future.


WHITMAN: (inaudible) do that (ph).


MASCARA: I realize that's no good (inaudible). But I know there's a former county commissioner who had to deal with just 67 communities in Washington County, Pennsylvania, on the amount of communities that (inaudible). We're both (ph) having to fund programs with the Pennsylvania Department of Environmental Resources that are placing (ph) on smaller communities. So I think maybe (inaudible) might be a time for (inaudible) and dialogue. And I wish you well, Madam Administrator.


WHITMAN: Thank you.


DUNCAN (?): Thank you very much. I apologize to Mr. Gilchrest and (inaudible). I understand why (inaudible) has to really (inaudible) wants to (inaudible) that (inaudible).


(UNKNOWN): Thank you, Mr. Chairman.


I, first of all, want to thank you for accepting this job. It's a rather thankless job. But I have to say (inaudible) you had taken it, I almost literally jumped for joy. It's been (inaudible). That's been a real problem for me the last several years. And I appreciate your ability and your honesty and your thoughtfulness in approaching this job.


My first question was the Super Fund. I'm very concerned about that program and about the future of the program. Obviously, we've made some changes. Congressman Boehlert (ph), who chaired this subcommittee for the past few years spent many, many hours negotiating some changes with the previous administrator who had (inaudible) work.


We thought we had an agreement, but at the last minute, the other side backed out and we just didn't get it. But I hope we can use that as a starting point for a restructuring Super Fund this year.


And I hope your under staff (ph) would take a look at that. And I'm sure that Chairman Duncan will be also interested in following up on this. In particular, really, it's important to do because the response to the Ways and Means Committee under the previous chairman is that they would not reauthorize the fee, the Super Fund fee until the law was rewritten. I don't know if the current chairman has the same stance. And I'd certainly be happy to discuss it with him.


But clearly, we should reauthorize the bill anyway and do it right this time in correct what we have learned in the past and build on what (inaudible). And I hope you would be willing to join with us in that effort and also, on the effort it's going to take to that the fee reinstituted through the Ways and Means Committee.


WHITMAN: I (inaudible). Excuse me. I look forward to working with you on Super Fund legislation. As I have indicated in previous testimony, that I am very hopeful that we would (inaudible) registrations completed and get (ph) to the President as quickly as possible.


And then, as soon as that's done, I wanted to get right to work and pledge to get to work with that Congress on what we can do with Super Fund and ensuring that that program actually, get the money out, into the field, into the projects that need to be done and that we can avoid some of the litigation that unfortunately has delayed the process, delayed the cleaning and has redirected some of those very much needed dollars.


(UNKNOWN): And we've done this (inaudible) program by (ph) a number of things. The (inaudible) exclusion, for example, has greatly simplify and then (ph), save a lot of money. But also, the (inaudible) rates. We have to do a better job of defining how that is to be done, just a host of different things.


I appreciate your interest in this. And since I have just a few seconds left, I want to comment on some of the other comments made here. How soon (ph) local governments (inaudible), not federal government.


And I have to say that some of the (inaudible) that, some of the local governments are turning to us to rebuild their infrastructure, when the original infrastructure was built at a time when their (inaudible) were much poorer than they are now and had less resources and (inaudible) sources and so (inaudible) to the federal government. I have no problem with establishing developmental (ph) funds.


But I'm very concerned about local communities somehow developing the expectation that we are going to fund their infrastructure problems from Washington.


First of all, I don't think it's most efficient. Secondly, if we (inaudible) be able to get a bond issue passed because, as I say, (inaudible) in office.


And you don't have to respond to this. But I just want to say that the opinion is divided on this committee about whether we're not (ph) (inaudible). We should do what we can to help, especially (inaudible) more on just things that (inaudible). But I think if there is good (inaudible) involved (inaudible) turned on to the biggest (inaudible) program that this Congress has ever seen. And the money would not go on the basis of needs, but rather on the basis of political fodder (ph).


Thank you very much.


WHITMAN: Thank you.


DUNCAN (?): Thank you very much.


Mr. Defazio?


DEFAZIO: Thank you, Mr. Chairman.


May I address some of the actions (inaudible) the (inaudible) statement? And I'm certain he wasn't referring to members of this committee when he talks about the other side backing out on the (inaudible), since I was one of the first Democrats to support a regional reform despite the objections of the administration and to get passed bills (inaudible) bipartisan. And I would suggest that as a potential model in spite of the point that the administration, the new administration is actually more responsive to reasonable reform.


I do have a particular question and the administrator may or may not be familiar with this. And if she's not, I would like an answer (inaudible). But it wouldn't have to be at this moment.


There is a case called the (inaudible) Agency of Northern Crook County, which was a Supreme Court case decided in January. And it goes to the issue of (inaudible) interest-based (ph) waters. And it has extraordinarily broad implications for the potential regulation of (inaudible), in particular, I think, in areas like filling (ph) pot holes and areas which we (inaudible) for a (inaudible) rate and wildlife and those things.


And my understanding of this case, as decided by the Supreme Court, would basically exclude wetlands regulation by the federal government in those areas under current law. And I'm curious if you're familiar with that administration. And if you are familiar with it, do you or does the administration intend to introduce legislation to modify or return the (inaudible)?


WHITMAN: Well actually, in fact, I have been talking to a staff (ph) quite extensively on this (inaudible) decision because of the implications that it has for what is considered waters of the U.S. And that was, kind of, the defining terminology.


And we are in the process of an analysis, working with the Army Corps of Engineers to see what we can do, as well as the Department of Justice and the Council on Environmental Quality to help ensure that that (inaudible) decision is implemented in a manner that's consistent among all the field officers in the agencies in a way that really does protect the very precious wetlands that we know are critical to the health of habitat, habitat in general meaning humans, as well as animals.


But we are, right now, working at how we can -- whether we need to look for rule making or what other kind of guidance we need to have a clean water act in order to be able to meet the parameters of that judicial decision. And this is something that we have been working on for (inaudible) decision change (inaudible). So we're in the process of trying to see what we can -- how we can best implement that in a way that does protect the appropriate waters within the limits that the court sets.


DEFAZIO: Well, I'm not entirely -- I mean, I'm not entirely conversant with the decision that -- I mean, I would hope to be a little more aggressive than working towards just implementation because I think there's some extraordinary (inaudible) put (ph) at risk virtually anything that isn't a free flowing interstate river in terms of regulatory actions with regard to (inaudible) by the federal water (inaudible).


And I would advise that, you know, the previous Bush administration adopted a no net loss policy on wetlands. And you know, I have yet to see, sort of, a comprehensive statement by this administration on the issue, but would hope that there will be a strong, you know, (inaudible) message. And I would hope it isn't just the (inaudible) decision to get (inaudible). I think the rigorous implementation of (inaudible) will be devastating for our precious resources. And I (inaudible).


WHITMAN: I know. I (inaudible) with a long depression. I'm tired of (inaudible) discussion with justices (ph) that, if you want (inaudible) potential, it's the next step. So what really is involved in that petition. What does it mean and where can we reexamine what our possibility is and what's determined to be a water of the U.S. because that's how they (inaudible) their decisions. So we are not just looking at, OK, that's the decision and (inaudible) implement it. It would be (inaudible).


DEFAZIO: Yeah. I agree (ph). Constitutionally, we (inaudible) issues here or could Congress, in fact, adopt a much broader definition and resolve the problem?


WHITMAN: Congress has the ability to ...


(CROSSTALK)


DEFAZIO: Yeah. (inaudible).


WHITMAN: (inaudible) constitutional prohibition of (inaudible). Promoters of the (inaudible).


DEFAZIO: Well, you could talk about (inaudible) here. Your conclusion could be to recommend to Congress that they either reinstate the prior bill (ph) through legislation or amendment to the Clean Water Act or to take other action.


WHITMAN: That is certainly (inaudible) outcome. Yes (ph).


DEFAZIO: Do you have any timeline on when you might have a recommendation?


WHITMAN: We're moving as quickly as we can, trying to come to some kind of position where we're able to make a series of recommendations, what we could do regulatory (ph), you know, where we would need registration, where we need to go through and engage in discuss with the congress. And I would hope we would be able to do that within the next month or so. But I can't tell you a precise date.


DEFAZIO: OK. I'm going to look forward to that. Thanks a lot (ph).


DUNCAN (?): Thank you very much.


Mr. Gilchrest?


(UNKNOWN): (inaudible) back to your staff and (inaudible) with a more precise time.



GILCHREST: Ms. Whitman, (inaudible). The (inaudible) program, where the President's (inaudible) was funded at about $18-some million. But we understand from staff that there was -- there probably will be some correction up to $20-some million, which was what we were requesting. And it's my understanding that that probably won't be a problem with this committee, based on what the President (inaudible) recommends.


WHITMAN: Right. The money will be -- it will be funded at the same level as us (ph).


GILCHREST: It is a good program. What we're going to try to do is take that science that we've been looking at for 20 years now and put it on the ground and make it work for some of those dollars.


And the other question I had: A few years ago, through the Clean Water Act, the federal government decided to implement and then graduate (ph) first, the TMDL concept. And I know it's a controversial issue. But let me (inaudible) the first (inaudible), which is basically the Eastern shore on (inaudible), was to take a look at that and understand it from two different perspectives, which is either the storm water runoff control (inaudible). And it also is basically, best management practices for agriculture.


Now, the two most important or the two most profitable industries -- or not profitable -- two largest industries in my district are commercial and recreational fishing and agriculture. They have a tendency to have a conflict with each other because if there's too much unregulated agriculture runoff, you eliminate a lot of sporting areas for fishermen and then (inaudible).


So what we did was too look to (inaudible), to the county commissions, the (inaudible) Commission. Their (inaudible) people, farmers, (inaudible) and everybody that we could get into the room, we explained (ph) that TMDLs was fundamentally an improvement on standing water runoffs and best management practices for agriculture.


And we took the (inaudible) director and people from regions (ph) (inaudible) farms and we came to the conclusion that the TMDLs was not something that you had to be a rocket scientist and extreme environmentalist to understand the nature of. But if we put our brains together, we could implement this policy, have cleaner water and profitable farms.


And I just want to make the comment that that's what we do (ph). It's not easy, but we're -- you know, a little bit of vigorous mental effort, those things can become a reality.


There is, I understand, though, a study that we appropriated money for, (inaudible) implementation of and also, that's (ph) an Academy of Science study, we work on (ph). Do you have any idea when they might be ready?


WHITMAN: We specially entered (inaudible) Congress the ECA (ph) study by the end of this month. And the National Academy of Science study should be done by June. It'll (ph) be ready to be discussed then.


GILCHREST: There's also been some discussion about wetlands. And might the President have a policy of no net loss the way the former President Bush had?


WHITMAN: At this point in time, I'll tell you, very honestly, we haven't discussed that issue as being a policy issue for the President. But I know he cares very much about the environment. So I wouldn't be surprised, but he hasn't made any kind of commitment along those lines as yet.


GILCHREST: I hope so because there's a lot of congestion that has been discussed in transportation. And the more wetlands are used, the less area there'll be for wildlife and the more congestion there'll be in certain areas. So we will encourage the administration to adopt what we thought some years ago was a (inaudible) in their policy.


WHITMAN: Well, we certainly have a commitment to preserving and protecting our wetlands at the Environmental Protection Agency. I just can't speak for whether the President is ready to make that kind of ...


GILCHREST: Thank you, Ms. Whitman.


Thank you, Mr. Chairman.


DUNCAN (?): Thank you Mr. Gilchrest.


Mr. Filner?


FILNER: (inaudible) Mr. Chairman and welcome, Madam Secretary (inaudible) governor. I'm not sure which is the highest prestige.


WHITMAN: It's actually administrator. So ...


FILNER: Madam Administrator. And I know you've had a long morning (ph). So I won't ask you about arsenic (ph) and I won't ask you about global warming and I won't ask you about (inaudible) and I won't ask you about drilling in the Arctic, all the things you should be asked about. I will ...


WHITMAN: (inaudible) answer.


FILNER: I know. You already -- I'm already -- I'm going to be in San Diego (inaudible), at least the Southern half and the border area with Mexico. And I will tell you that on some very key issues that I think you have been involved in with the EPA, the last administration, good friends of mine, I would say, but were on the wrong side of good science and common sense. And I just want to make sure you may (ph) bring yourself up to speed on this issue because it's still current and I think the EPA can reverse itself and be on the good side on this.


We have an extraordinary situation in San Diego, where several million gallons of raw sewage flows through my district to the Pacific Ocean from Mexico because Tiajuana just does not have the facilities. And you may be familiar with that, as a (inaudible), a treatment plant has been built in San Diego, but rather is being (inaudible).


And we came up with a (inaudible) private (inaudible) partnership, where a new facility, using the latest technology that EPA wanted (inaudible) had to build in San Diego would be built in Mexico, would allow Mexico to recycle the water. We'd have all kinds of environmental benefits. It's win-win-win-win.


And however (ph) (inaudible) finally did pass legislation which mandated it. But there's still negotiation going on between the U.S. and Mexico to come up with an international treaty that will allow that to happen. I just hope that, you know, the EPA will wind itself up on encouraging those negotiations and helping them because it will solve a 50-year problem for our region.


WHITMAN: Well, Congressman, I look forward to working with you on that. I will also tell you that I'll be going to visit the border states prior to a bilateral meeting in (inaudible) in June, where one of the discussions will clearly be deck ((ph) and mud bank (ph) and what their role is and should be and how we ensure that the dollars anticipated (inaudible) to get out and (inaudible), through those two vehicles to (inaudible) environmental issues along the border and how we ensure that we get that money out, whether or not this project will be. That's the best way to do it.


I know that the concern is how (ph) this really state department's role here and state department's assumption of the overall authority to handle this. But I think, also, there's some potential with the mud bank (ph) in the bay (ph).


FILNER: Well, that's just (ph) -- we (inaudible).


WHITMAN: Yeah. I was (ph) (inaudible).


FILNER: (inaudible). Yes. (inaudible) the ...


WHITMAN: I wish (ph) (inaudible).


FILNER: The issue in this (inaudible) department is (inaudible) involved with (inaudible). A (inaudible) Metropolitan Sewage Treatment Plant. And after much discussion, mitigation and legislation, we (inaudible) from secondary treatment (inaudible) through legislation that is passed through the Congress. So we're going to have those registration had been passed. When I was a freshman, my first piece of legislation (inaudible) about $6 billion. I figured I could retire it (ph) after that.


So (inaudible) you (inaudible) and (inaudible) run through administrative and legal action (inaudible) San Diego now must live up to the requirements of that legislation (inaudible) in lieu of the (inaudible). Now, until the legislature comes and it would be a good source (ph) to ask the legislature, which I really do (ph). And the intent of the legislation was to get (inaudible) into the game (inaudible) and compromising the EPA and others on it who (ph) were put in there to bring them into the labor process.


It was the intent that after they got into that (inaudible) that they would be treated -- we would be treated as any other (inaudible) for a renewal of the (inaudible). The EPA tends (ph) to hold to higher standards. And ordinarily (ph) before, any higher standards was (inaudible).


We have the first and foremost oceanographic institute in the world right (inaudible) a mile or so from the (inaudible) Institute of Oceanography. They would agree with us that the intent of the legislation or the intent of the water act would be met (inaudible) labor, but absolutely no harm was being done to the ocean. And it took science (inaudible) common sense.


We're wasting time in the (inaudible) administrative process to see San Diego to go beyond what (ph) the Clean Air Act acts (ph). They're using mind over (ph) (inaudible), the Ocean Pollution Reduction Act, to say no. Well, that act (inaudible). Well, I wrote that.


That is, we did what was required to get us into the game. Now we're in the game. To keep from running afoul (ph) of the rules (ph) (inaudible) and we would hope that you would. We looked at that because I think you're wasting your resource (inaudible) trying to force us. And when I get into court (inaudible) and they ask the legislators and I think you would probably (inaudible) in any case, whether we're wasting time and money and effort here along the way.


WHITMAN: Well, Congressman, I have to admit to you, I am not familiar with that case, but I will certainly go back and take a look at it and be happy to get in touch with you.


(UNKNOWN): And I appreciate that. We have so many other things to do. You know, (inaudible) great legal talent that are now sitting (ph).


WHITMAN: I couldn't agree with you more.


DUNCAN (?): (inaudible). And I want to thank you (inaudible) and (inaudible).


(UNKNOWN): Thank you, Mr. Chairman and Madam Administrator.


I'm going to put a little light on something. In the 103rd Congress, we put legislation in the government reform group, then known as government operations, that the administrator of the EPA would be called Madam or Ms. Secretary. And we sent, however, to the floor. And the science bipartisan patriots, Democrat and Republican, John Michael (ph), Republican, state senator in Florida, Gerin Thurmond (ph), Democrat. They put in there that the EPA must make its rulings based on sound science.


And we sent that to the floor. Democratic speaker Folie (ph) and Democratic majority leader at that time, Mr. Gephardt, refused to ever let it come up. Why? Because they knew we had the votes and that we would now insist on science, not bureaucracy. So hopefully, we can get that going again and where your decisions would be made on science. And I think that's important because it hasn't been in a number of cases.


Before your panel (ph), why (ph) we had the Corps of Engineers then. And I asked the question that (inaudible) to be in the strategy of the Corps of Engineers, are wetlands. And they said basically, it would be about fourth of what they're working on. And they were very just (ph) supportive. And I just wondered, on the EPA, have you had an opportunity to take a look at wetlands and the need for them because I have a wetlands project for you? So ...


WHITMAN: I'd be happy to hear about your wetlands project ...


(CROSSTALK)


(UNKNOWN): Yeah. That's the (inaudible) wetlands in Long Beach, California.


WHITMAN: We feel very strongly about wetlands at the Environmental Protection Agency. We understand their critical importance to the colleges, to the environment overall and, of course, to cleaning our water and ensuring that we have adequate supply. So for a host of reasons, wetlands are very important to the overall health of this country.


(UNKNOWN): Well, I think that's a good statement and we'll take you up on that.


Mr. Chairman, I've got some correspondence here I want to put in the record, at this point, a letter that's from myself to the administrator, Ms. Whitman, and a letter from the Coalition of Practical Regulation, 34 cities in Southern Los Angeles County. And it is in answer to the region nine director. It's by Larry Forester (ph) (inaudible) Committee. And I might add that this 34 cities in Southern Lost Angeles County is several million people.


And next is the Alexis Strauss (ph) director, water division in the region nine San Francisco. We are unhappy with that because that should have been a little more practical, as they suggest. And I hope you'll take a look at that because I think that region nine is a little too excitable, and lifting the burden from the state to the local municipalities. And we'd like to deal with that. And if you could, we'd like to spend some time with you once you have a chance to look at it.


WHITMAN: Certainly. I'd be happy to do that.


(UNKNOWN): Thank you for coming.


DUNCAN (?): (inaudible). The letters will be made part of the record. Thank you.


Mr. (inaudible)?


(UNKNOWN): Thanks. Thank you, Mr. Chairman and Administrator. Nice to see you. Congratulations on your appointment.


I just want to go back and make an observation about something that has been asked by a number of the congressmen. I want to underscore its importance. And we've been talking about the (inaudible) here, a fund. And we've been talking to you about the (inaudible) program. However (ph), you just remind us that, in going back to the last Congress, which Jim Bochert (ph) and (inaudible). And we're working hard on this demonstration (ph).


And in the last Congress, it was very important that and included in there (inaudible) that the new administration's budget would have a legislative proposal to appeal and (inaudible). And (inaudible) involved (ph), we all recognized the (inaudible) and the billions of dollars that were going to be needed by American cities, large and small, metro (ph), rural (ph) area, to replace and upgrade the (inaudible) sanitary systems, combine the sewer systems sources (ph), the money flow (ph) problems.


But we didn't want that to come at the expense of the state revolving fund. And so, the legislation (inaudible) Congress specifically indicated that there couldn't be any money authorized in the (inaudible) and combined sewer overflow problem unless we hit the $1.35 billion, which clearly, I, anyway, do not.


And I understand the difference between asked for and appropriate (inaudible) and everything else.



(UNKNOWN): But I do have a concern that what was concentrated (ph), I think (ph), the drafters (ph) and the legislation and the last Congress was that there'd be one (inaudible) building in place from a state revolving fund and then, there's be money for the CSO problem.


When we add up here your $850 million and the $450 million, we still only get to about $1.3 billion, I guess. And so, that'd be, if I wanted to, $50 million short. I don't choose to do that.


But I hope that, as we move forward through the appropriations process and maybe some more numbers shake out, we see (inaudible) what smoke (ph) comes out of this and then may be able to reach some deal on the budget and the tax cut, then that you, as the administrator of this agency, are prepared to go to bat and acknowledge that this is a significant (inaudible) America.


And you know, people (inaudible), when they see that their sewer and water bills are all 50 or a $175 a month because they can't pay to take care of some of these degraded systems. Thank you.


WHITMAN: OK (ph).


DUNCAN: All right (ph). Every member, of course, has the right to submit additional questions in writing. And we will ask the administrator to respond in writing to those questions. Administrator Whitman, there is an advantage to start (inaudible), as long as this has been.


But let me just ask one last thing, which has been brought to my attention by the staff. In the last Congress, there was a subcommittee of this committee, called (inaudible) Investigations, which has now been -- that's now being handled or (ph) staffed at the full committee level. But they had a hearing on some of the grants that had been issued by the EPA. And this was before your watch, but apparently is over $300 million a year that's sent on discretionary grants or surveys, studies and so forth, by the EPA.


And this investigation showed that many of those grants went for questionable purposes or had conflicts of interest and so forth and went, for instance, to foreign countries. There was a grant to provide electric scooters to China. There was a grant to non- profitably develop a carpool and van pool (inaudible) to reduce congestion to a town in South Africa. There was a grant to study and develop a wetland management plan for a technical conference for China's Yellow River and Delta wetlands and I'm told many other similar grants.

And I can assure you that almost every member of this subcommittee and full committee on both sides would prefer that the money be -- that those grants were spent in this country. And in addition, I'm told that that investigation showed that those nuclear employee who apparently, after paying a grant for an organization of which that (ph) EPA (inaudible) was a member.


And so, we would appreciate it if you would take a look at those grants, at what has happened in the past and that you would try to spear (ph) those grants more toward this country and also, that you would try to make sure that no EPA employees obtain grants for organizations of which they are a member or even their families are members.


WHITMAN: Certainly. I will definitely take a look.


DUNCAN: And thank you very much for being with us today. You have held up remarkably well and we appreciate it. And we look forward to working with you, especially on these major water infrastructure needs. That's going to be the most important area, I think. Of course, we've touched on all these other things that are very important also. But we're really pleased that you're there. And we think you're doing a great job so far and we hope you keep on keeping on. And thank you very much.


WHITMAN: Thank you.


DUNCAN: And now, we'll conclude this hearing.


END


NOTES:
???? - Indicates Speaker Unkown
      - Could not make out what was being said. 
off mike - Indicates Could not make out what was being said.

PERSON:  JOHN DUNCAN JR (75%); DON SHERWOOD (71%); JOHN L DUNCAN (59%); CHRIS JOHN (57%); WAYNE T GILCHREST (56%); STEVEN C LATOURETTE (55%); WILLIAM ASA HUTCHINSON (54%); RICHARD H BAKER (54%); MIKE SIMPSON (53%); BRIAN KERNS (52%); DENNIS REHBERG (52%); DON YOUNG (51%); GENE TAYLOR (50%); PETER A DEFAZIO (50%); ROBERT MENENDEZ (50%); 

LOAD-DATE: May 6, 2001