Emails show confusion over timber payments, sequestration

House Natural Resources Committee expresses frustration

The Bulletin
By Andrew Clevenger
Published Jan 15, 2014 at 12:01AM

WASHINGTON — Although U.S. Forest Service and Department of Agriculture officials initially decided the mandatory cuts of sequestration would not apply to 2012 timber payments, the White House’s Office of Management and Budget later changed its determination after $323 million in payments had been dispersed, according to emails released Tuesday by the House Natural Resources Committee.

In a hearing Tuesday, the committee heard testimony and presented a report showing the confusion faced by federal agencies surrounding mandatory spending cuts called sequestration that went into effect on March 1, 2013.

On Jan. 15, 2013, the Forest Service dispersed $323 million in 2012 payments under the Secure Rural Schools program, including $63 million for Oregon. Since the money represented funds committed before sequestration went into effect on March 1, the Office of Management and Budget at first believed the cuts did not apply, although a lack of clarity seems to have surrounded the issue.

“The main question now is: Are these payments from 2012 (budget authority)? I think they are but can you please confirm that. If it is 2012 (budget authority), then the money is not sequesterable but the 2013 (budget authority) is sequesterable in these accounts,” wrote an OMB official in an internal email on Jan. 18, three days after the funds had been released.

The internal debate between OMB officials continued, according to documents, made even more confusing by the Bureau of Land Management’s decision to withhold 10 percent from its own timber payments due to sequestration. In emails in February, a different OMB official wrote that the Forest Service “took our guidance to act as normal and ran with it.”

“The Forest Service did not make an error. That is not the appropriate word,” a later OMB email states. “They opted to pay in full, knowing sequestration could happen. That is not an error.”

Subsequently, the Forest Service asked states to return $17.9 million in timber payments.

First enacted in 2000 to ease the loss of revenue from decreased timber harvests on federal land, Secure Rural Schools payments are authorized under three sections. Title I payments are for schools and roads, while Title III funds are dedicated for local fire prevention efforts. Title II funds are allocated for special restoration projects, and the Forest Service holds onto those funds until specific projects are approved.

Initially, the Forest Service sought to recover the funds exclusively from Title II funds. This plan was rejected by OMB as inequitable because not all counties had Title II projects planned, meaning some counties would have to give up funds and some would not.

Ultimately, 19 states and Puerto Rico still owe $888,000 out of the $17.9 million the Forest Service was required to demand returned. Oregon is not among the states that owes the Forest Service money over sequestration.

Last year, Oregon received almost $100 million in timber payments, including $36 million from the BLM for the 18 counties of Western Oregon. Deschutes County received $1.8 million, Crook County $1.7 million and Jefferson County $570,000. Last year, Congress passed a one-year extension of the SRS program at the same funding level as the previous year.

Even though the Forest Service has determined that sequestration will not apply to fiscal year 2014 payments, which will be released within a few weeks, it is considering withholding the $888,000 from new payments, Robert Bonnie, Department of Agriculture undersecretary for natural resources and environment, told members of the House Natural Resources Committee on Tuesday.

This possibility angered committee chairman Doc Hastings, R-Wash., who snapped that the administration is continuing to punish rural counties struggling to pay for basic services, including schools and law enforcement.

“Sequestration is bad policy. We regret the impacts to the counties and local governments,” Bonnie replied.

Rep. Peter DeFazio, D-Springfield, the committee’s ranking member, decried the indiscriminate way that sequestration’s cuts are applied.

“Cutting every program of the government across the board by the same percent was an incredibly stupid idea, and I opposed it from day one,” he said.

Because of the cuts, the Forest Service was not as prepared as it ordinarily would have been going into last year’s fire season, he said.

“It cost a hell of a lot more money in the end to fight those fires that we might have suppressed earlier had we had those crews trained and ready to go,” Bonnie said. “We spent more on suppression than we would have otherwise because of the impacts of sequestration on preparedness.”

After the hearing, DeFazio told The Bulletin he is concerned that sequestration will continue to impair the Forest Service’s ability to fight fires.

“Every year, the Forest Service overspends its fire budget,” he said. “This summer is looking absolutely catastrophic with drought across the West (already happening).”

Last year, in the face of a very challenging fire year, the Forest Service was not able to respond to fires as quickly, which led to bigger fires, he said.

“They had to cut back on the crews they could pre-train and deploy and equip,” he said.

A report released Tuesday by the GOP-controlled Natural Resources Committee concluded that the Obama administration made a political decision to apply sequestration as broadly as possible.

“It is clear that Congress, states, and rural communities were right to question whether these decisions were correct and made for any reason other than to make sequestration as visible and painful as possible in rural communities across the country,” the report states.

— Reporter: 202-662-7456, aclevenger@bendbulletin.com