Water:

Water Resources Development Act moves toward passage after years of debate

After three years of debate, Congress is poised to pass the Water Resources Development Act, with the House prepared to act as soon as this week. Is there enough support to move WRDA this time around? Or will criticism of a costly lock expansion project on the Upper Mississippi River derail the legislation? Can WRDA get through the Senate? And how does the legislation play into the broader question of reforming the Army Corps of Engineers? Steve Ellis, vice president for programs at Taxpayers for Common Sense, and Lisa Kelley, a lobbyist with the National Corn Growers Association, weigh in on the legislation's chances.

Transcript

Colin Sullivan: Welcome to OnPoint. I'm Colin Sullivan. Our topic today is the Water Resources Development Act as it heads to the House floor. Our guests here are Steve Ellis, vice president of programs for Taxpayers for Common Sense, and Lisa Kelley, director of public policy for the National Corn Growers Association. Thank you both for being here.

Steve Ellis: Thank you very much.

Lisa Kelley: Thank you.

Colin Sullivan: Now Lisa, you're for the bill on the House floor. Steve, you're against the bill on the House floor, I'm going to give you both one minute to say why you're for or against. Steve, let's start with you.

Steve Ellis: Sure. Well essentially we're talking about $10 billion worth of project authorizations for an agency that's been mired in controversy for the last several years. Starting in 2000 there was a huge scandal dealing with one project that's already in the bill, $1.8 billion for new locks on the Upper Mississippi River. This project was criticized by the Army inspector general, the National Academy of Sciences, the Congressional Research Service, pretty much everybody under the sun, and they've called for ways that taxpayers can be assured that corps projects are actually going to return the predicted benefits. That's what we're really looking for, a strong independent peer review, modern planning principles, no rollbacks on cost sharing between the federal and the private sector and essentially, also, some constraints on this $1.8 billion project, which is about 20 percent of the spending in the bill.

Colin Sullivan: Lisa, what's your perspective?

Lisa Kelley: As you know, the Water Resources Development Act authorizes projects from San Francisco Bay to Portland, Maine. One of those projects is along the Upper Mississippi River and it impacts corn growers all over the Midwest as well as nationally. The Lawson dam system was built in the 1920s and '30s with a life span of about 50 years, so we're looking at some very crumbling infrastructure. And if our growers are going to be able to export to our opportunities that we have yet captured globally, we've got to have the infrastructure improvements to deliver it.

Colin Sullivan: Now you're both aware of a lot of criticism of the bill for the last four years, it hasn't been able to get through Congress because of a fight over Army Corps reform. Saying Army Corps has mismanaged funds, fiscally irresponsible. What's your take on what they should do with Army Corps reform and whether or not the bill is strong enough on that subject?

Lisa Kelley: Well, since the 2000 water bill the corps has done a number of things to update their programmatic processes. Starting in 2003 the House of Representatives, along with the Senate, developed a bipartisan corps reform measure that was maintained in the last Congress bill and is also in this bill. We believe those provisions take you in the direction that the corps needs to go. There was a promise made through the Transportation and Infrastructure Committee to continue to study what may need to be done in the future for the corps, but we believe the provisions, as is, do address many of these situations.

Colin Sullivan: Steve, is that good enough, that study?

Steve Ellis: No, it's not even close to good enough. I mean essentially you also have the -- the Bush administration has significant concerns with the Army Corps of Engineers and has called for changes in their previous budgets. You also have the fact that yes, the corps has made some inkling or small amounts of change, but really you're talking about the fox guarding the hen house here, and they're controlling the whole process. We need to have strong independent peer review for costly or controversial projects. There need to be firm objective triggers so that everybody knows, going in, what projects are going to be reviewed and what aren't and so that we can be sure that when we look at the project that we're going to actually be getting a return on our investment. The General Accounting Office has criticized corps projects in the past, National Academy of Sciences and others. So I think the time has come that we need to have some real measures to make sure that we're getting a worthy return on our investment.

Colin Sullivan: And what should the trigger be for that threshold? There's a $25 million threshold proposed at this point. A lot of people, environmentalists especially, say it should be $50 million. What's your take on what the trigger should be?

Steve Ellis: Well no, I think most people are agreeing, at least from the environmental and the taxpayer communities, that $25 million is a good trigger for that. It's been proposed at $50 million or, in some cases, no trigger whatsoever. We're concerned that if you don't have some objective number, like $25 million, which would only catch about a dozen projects each year, that you would essentially never have it enacted and that's the way it is right now in the current bill. It's totally under control of the chief of engineers, the head of the corps, to decide whether or not to review projects. Let's face it, most of us would not want to have our projects reviewed and so putting that power in his control, or her control, in the future is just not -- doesn't make any sense.

Colin Sullivan: Lisa, what is wrong with independent peer review? Why should the Army Corps of Engineers chief be allowed to go ahead reject any project out of hand if he wants to or go forward with any project out of hand? Why should he have that decision and not some sort of independent body?

Lisa Kelley: I can give you a good example. On the Upper Mississippi River there was over a decade of study by the Corps of Engineers, $75 million put into the study, to establish whether or not the lock upgrades were needed. I would think a decade, more than a decade-long study is long enough to establish those facts. I know you referenced the National Academy of Sciences study, they actually didn't come out and say that the lock and dam modernization wasn't needed. They were simply looking for more data from the corps, which I think has since been provided.

Colin Sullivan: But there was a whistleblower who came out, an economist, who said he was asked to manipulate the data in order to favor the barge industry. What's your response to that?

Lisa Kelley: My response to that would be that we've waited a long time to see these budgets go forward. Our corn growers need these projects to go forward. Barge transportation, everybody recognizes from the EPA through the Department of Transportation to the Department of Commerce, but they are the most environmentally friendly and efficient method of transportation. We're always going to have whistleblowers and it's important to address their concerns and I believe this bill does.

Colin Sullivan: Steve, what about the whistleblower issue, going back to 2000?

Steve Ellis: Well Dr. Sweeney was right on point and he had a lot of severe criticism saying when you look at the Army inspector general report that came out of that, they found that there was pressure to manipulate the study and pressure to go forward with recommending the locks. And yes, we have been studying this, there's been $75 million, but I can tell you any economics textbook you look in doesn't say that a $75 million expenditure on a study justifies spending $1.8 billion if the answer isn't yes, if it is not an economically justified study. So really, we're looking at a waterway where traffic has been stagnant or declining for the last 20 years, basically since Devo last had a hit we haven't had increasing traffic levels on the upper Mississippi River and you're essentially dealing with, you know, there's been concerns about crumbling infrastructure. The infrastructure is not crumbling. In the corps own analysis of this project they said with regular rehabilitation these locks will stay in use, perfectly well, for 50 years, 50 years from today. The fact is, the corps has done major rehabilitation on these locks that are being considered for being extended, or having new 1,200-foot locks, in the last 15 years, each one of them. One of them, locker dam 24, where they're planning on doing this, it's going through major rehabilitation right now.

Colin Sullivan: Lisa, what's your response to that? I know your association did its own study in response to the NES study.

Lisa Kelley: Right.

Colin Sullivan: What did you find?

Lisa Kelley: We found that if these locks and dams are not upgraded the cost to farmers alone would be about $562 million in lost income. The cost to jobs in the region would be incredible. Right now there are over 400,000 jobs directly tied to the river and with this lock construction you'd see an additional 48 million man hours of work. The corn growers and the Carpenters Union have been hand-in-hand in pushing for this because we both recognize what is needed. The calls that barge traffic is declining, in my opinion, that's a very creative way to skew statistical data for political purposes. In fact, the numbers that we've seen our loyal opposition using is a comparison between 1983 and 2003. Well in 2003, like many farm commodities, it's cyclical. We had a very bad bean crop. We had a 50 percent soybean crop. We also had very bad corn prices and corn growers decided to store their corn and wait for better prices on the export market. So you had a dip and these are market blips, but by and large, you look at last year's corn crop. It was almost 12 billion bushels, that is a record bumper crop and our corn growers were struggling to get barge movement on the Mississippi River because of lock closures.

Colin Sullivan: But what Earl Blumenauer wants to do is say, OK, let's do an analysis and decide whether or not the Upper Mississippi Project, the expansion, is justified. What's wrong with that? He's going to bring up an amendment on the House floor, I believe today, what's wrong with that amendment, in saying that?

Lisa Kelley: Well, I think we had a 14-year-long study that justified it, but as far as his amendment goes, I haven't seen the text yet, but it's my understanding that it would be a trigger based on some kind of data over a three year period. And my question to Mr. Blumenauer, and this question is coming from myself, the corn growers, MARK 2000, a group of business owners and agriculture entities and labor unions wondering what is this trigger based on? Is it based on a certain point in time? Is it based on a certain area of the river? If you have a lock closure that area is certainly going to see a decline because folks are going to have to go to other areas to ship their goods. Responding to the fact that the locks aren't crumbling and their receiving lots of operation and maintenance money, those are on a very severe needed basis. It's either fail, the locks fail, or we repair them and we're repairing them like you would repair on farm. On farm we use bailing wire and duct tape, that doesn't work for locks.

Steve Ellis: That's simply not the case and the corps' documents prove that. I mean these are scheduled major rehabilitation projects that are being done on these locks that would be done in the future. The other thing to remember is building a new lock doesn't rehabilitate the full structure. The existing lock will still be there, will still have to be maintained. The existing dam, which makes the whole system work, also has a lot of moving parts that will still have to be maintained. If the locks are crumbling, then whole structure's crumbling and we have a much bigger problem than dealing with this $1.8 billion on just these few lock expansions. We need to be looking at the infrastructure as a whole and we should totally scrap the project to make sure that we're maintaining the system, because it is an important system for the country's commerce. I've never denied that and I don't think anybody else has. And on the point of the amount of bushels of corn grown, absolutely, our corn production last year has gone up. Our traffic on the Mississippi has gone down. Why? Because a lot of that corn has gone to the Pacific Northwest because its destination has been to China. Another reason, ethanol, you know tying in a whole another issue. We're having a mandate for more ethanol production, something I can tell you that Taxpayers for Common Sense does not support, but it's there. It's happening and that's where a lot of these commodities are going. And finally, a lot of it's going to feedlots, to actually produce more animals, which either get shipped overseas as meat or are being used at home. So even though the grain production is going up, the amount of traffic on the Upper Mississippi isn't and that gets to the last sort of common sense point about this. Look at roads, when was the last time that we talked about how we had to expand a road because traffic is declining? There isn't enough congestion, so therefore we're going to build more lanes. That's essentially the argument that's happening on the upper Mississippi River. There isn't as much traffic and so it must be people aren't shipping on any more, because there isn't as much traffic, so we need to build more capacity.

Colin Sullivan: So what's the alternative though? A reauthorization bill hasn't passed since 2000, there's all these projects backing up. Army Corps reform, there's nothing going on, environmental restoration in the Everglades, Louisiana coastal restoration. A lot of these projects are on hold while you wait for Congress and the political reality is that in the house they got over 400 votes for this bill last year. Aren't you facing that reality? Isn't this bill likely to pass this year?

Steve Ellis: Well, I mean obviously they're getting to it a lot earlier in the congressional cycle, so I mean yeah, it seems to me very likely that there is going to be a water bill this Congress. It's a question of what is the bill going to look like? But the fact is the Corps has $858 billion backlog of authorized projects. They get about less than $2 billion in construction funding every year. They've got plenty of work to do. They've got a huge "to-do" list and so essentially the idea that we shouldn't try to get this right, that we should just pass it so we can get these $10 billion of projects added on to the $58 billion that we already have doesn't make any sense. We need to get this right. The president needs to step into this debate, more than they have, and they need to be calling for some other reforms that he has pushed for in his budgets over the past several years and Congress needs to get it right. We need to have some reforms so that we can be sure that this money is going to be spent wisely.

Colin Sullivan: On the backlog issue, I'm not really sure why it matters. I mean isn't that the result of it being your typical pork barrel authorizing legislation? I mean if you have all these backlogs, the reality is they're just not funded. You authorize the projects, but then you don't fund them through the appropriations process. What's the big deal?

Steve Ellis: Well, the big deal is that it actually extends the time that it takes to complete a project, which increases costs and delays benefits. So therefore, we're losing again on these projects. We're having more expensive projects, and we're not getting the predicted benefits for awhile coming out of it, you know down the pike. So essentially, there's billions of dollars in that backlog that are moribund projects, maybe even authorized a century ago, that are never going to get constructed. I fully admit that, but there is a pretty sizable portion of that backlog that keeps on straining, trying to get a little bit of funding here, a little bit of funding there and that increases the overall costs for the country and for the Corps on these projects.

Colin Sullivan: Lisa, what about the backlog issue?

Lisa Kelley: Speaking to that, I think a lot of that has been a factor of our budgetary constraints. I would agree that there are probably some projects that have been in there for a hundred years and we'll never see them get funded, but for this project it is very important that we do see it get funded. And I would point out that the authorization level is 1.8 billion for lock construction. Half of that would come out of the Inland Waterways Trust Fund, which is already paid for. Those that use the inland waterway and use the river pay a tax and that tax money will turn around and be used for construction dollars. What's even more impressive is the environmental restoration that's included, just for this provision alone, it's a 4-to-1 ratio over a 50 year time span of $5 billion for ecosystem restoration, and I don't know that we would see that in any other kind of bill moving through Congress for a long time.

Colin Sullivan: But still environmental groups are opposed to the bill, why is that?

Lisa Kelley: That's a very good question. I've been asking myself that same question. We have engaged many environmental groups to come to the table. We've gotten a lot of local support from local environmental interest groups and they see the importance in what this will do for the local economy. There is one example, a dam just outside of St. Louis has been restored and on one side of the river you have the lock and you have industry able to deliver goods and export goods from that side. On the other side of the river you have a 1,500-acre wildlife restoration area where people come from all over during winter months to see the bald eagles. The environmental restoration brings in about $1 billion per year as it is now and that's only going to increase.

Colin Sullivan: Well, we're just about out of time, but I have one last question. Steve, what happens if water is not passed this year?

Steve Ellis: Well, I guess then maybe Congress will get the message that we need to have real reform, that we need to actually have real provisions in there that will ensure that we're going to get our money's worth from these corps projects going forward.

Colin Sullivan: Lisa, same question. What happens if water is not passed this year? What are the implications of that?

Lisa Kelley: For us the implications are very severe. The longer we wait the more likely other countries will captivate the market share that we're looking to use and that's not just in the grain market. You're talking steel, cement, coal, those things that go up and down the river. The longer we wait, the more money we're going to lose, the loss of jobs and it will hurt our American farmers.

Colin Sullivan: OK. Lisa Kelley, Steve Ellis, thank you both for being here.

Lisa Kelley: Thank you.

Steve Ellis: Thank you.

Colin Sullivan: Join us tomorrow for another edition of OnPoint. Until then I'm Colin Sullivan for E&ETV.

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