The Obama administration yesterday said it strongly opposes a proposal from House Republicans that requires the Interior Department sell some 3.3 million acres of lands to the highest bidder to help reduce the federal deficit.

Bureau of Land Management Deputy Director Mike Pool said the bill by Rep. Jason Chaffetz (R-Utah) would be too costly, could hamper domestic energy production and could harm the local communities it is intended to protect.

In addition, the proposal comes at a time of sagging real estate prices and is unlikely to make a meaningful impact on federal coffers, he said.

"Many of the lands that BLM has identified for potential disposal through the land-use planning process are isolated, rural parcels with minimal market value," Pool told the National Parks, Forests and Public Lands Subcommittee during a hearing on the bill and six separate wilderness proposals. "Others are in or adjacent to communities that have seen a dramatic erosion of land values. Flooding those markets with additional land could further undermine the economic health of those communities."

Chaffetz's H.R. 1126 would task Interior with selling 3.3 million acres of lands identified as unnecessary by a Clinton administration report.

The report identified Bureau of Land Management holdings in 10 Western states, including nearly 1 million acres each in New Mexico and Nevada, worth an estimated $1 billion in federal revenue, the lawmakers said. Benefits to local communities would include new sources of property taxes, business opportunities and growth, they said.

Pool warned that the lands identified had not yet been appraised for their value and would need to undergo a National Environmental Policy Act review. Some may contain mineral claims, threatened species or historical values that restrict their sale.

Chaffetz argued that the lands mean much more to the surrounding communities that are not allowed to tax them as if they were private property.

"I have counties in my state where more than 80 percent of the land is owned by the federal government," he said after the hearing. "They can't tax the land. There isn't the revenue we need to educate our children and pay for services."

While Pool said the agency does not know what the lands are worth, Chaffetz estimated they could generate more than $10 billion.

Pool urged members to reauthorize the Federal Land Transaction Facilitation Act, which allows BLM to sell lands and use the revenue to cover administrative costs and purchase environmentally valuable lands for Interior agencies. The act, which expired this summer, has allowed the sale of about 26,000 acres and the purchase of 18,000 for the National Park Service, Fish and Wildlife Service, Forest Service and BLM, he said.

Revenues from land sales under other authorities goes to the U.S. Treasury, siphoning resources from other BLM activities including oil and gas and renewable energy development.

Rep. Rob Bishop (R-Utah), chairman of the subcommittee, said that while the House may extend the program, he would like to see some of the act's priorities change. "It's not an efficient way of doing things," he said.

Erica Rosenberg, board president for the Western Lands Project, a group that scrutinizes federal land sales, said the Chaffetz bill treats public lands as "liquid assets" and that selling them is a common knee-jerk reaction by policymakers to tough economic times.

"Proposals to use our public lands as a bank account increase during economic downturns when demand is low and their sale would have the least effect on the deficit," she said.