The Essential Air Service (EAS) program was launched as a temporary program in the late 1970s to ease the transition to airline deregulation by subsidizing commercial flights to the nation’s rural airports. Many of the cities served by this program can be found within reasonable driving distance from airports with unsubsidized flights. For example, the 50 minute flight from Lebanon, New Hampshire to Boston, Massachusetts receives a subsidy of $287 per passenger when it’s only a little over an hour drive to another large airport, Manchester-Boston Regional Airport. Other EAS flight subsidies can amount up to $1,000 per passenger. Eliminating this program from the FAA’s budget has the potential to save $1.86 billion over a 10-year period.
SECTION II: MORE COMMON SENSE CUTS
There are billions of additional dollars taxpayers can save if Congress implements cuts that may not technically qualify as cuts under Congressional budget rules. For example, liabilities for taxpayers that could add to the debt in catastrophic scenarios, projects authorized by Congress but that may or may not receive funding in the future, and other cuts whose costs against the baseline are uncertain. In addition, some budget options will not produce scorable savings in the first year of implementation. Despite these baseline considerations, we recommend that Congress protect the fiscal health of the nation by adopting these reforms as well.
Biorefinery Assistance Cut: ??
Biorefinery Assistance is a loan guarantee program the helps develop new and emerging advanced biofuel technologies. The maximum loan guarantee for a single entity is $250 million and can go towards development, construction, or retrofitting of refineries. The total taxpayer liability for this program is calculated at $6.7 billion over the next decade.
End Title XVII Loan Guarantee Program Cut: ??
The Department of Energy (DOE) Loan Guarantee Program was created to provide loan guarantees for innovative emerging energy technologies, yet mature industries like coal and nuclear are eligible as well. More than $30 billion in taxpayer backed loan guarantee authority is available. There are several major taxpayer problems with the program: the massive scope and uncertain costs; high default rates and low recovery rates on capital intensive projects, like nuclear reactors; the weakening of taxpayer rights in the event of default; and the unclear administration of loans. In addition to the loan guarantee authority, the DOE also received $4 billion in appropriated funds to pay the credit subsidy costs for renewable energy, energy efficiency, and electric power transmission projects in the 2009 Stimulus.
Price-Anderson Act Cut: ???
Originally enacted by Congress in 1957 as a temporary shield to the nuclear industry as it struggled to get off the ground, the Price-Anderson Act has become a near-permanent fixture of the federal government’s support of nuclear power. The Act requires nuclear operators to maintain only roughly $300 million in insurance and then requires taxpayers to bear any additional costs from a nuclear accident. If there were to be any problems at a nuclear reactor, taxpayers could be forced to pay tens of billions to cover cleanup and health impacts.
Liability Limitations for Offshore Drilling Cut: ???
Under the Oil Pollution Act of 1990, oil companies are responsible for all direct costs of containment and clean-up in case of an oil spill but are legally responsible for only $75 million in federal damages from the oil spill. Any additional costs would be borne by the injured parties, or by taxpayers. This liability limit significantly limits the need for oil producers to purchase insurance or otherwise guard against damages resulting from oil spills. The economic damages, including the loss of fishing and tourism dollars, could be tens of billions of dollars, as was demonstrated in the BP oil spill.
Production Tax Credit for Cellulosic Ethanol Cut: $4.1 billion
Cellulosic ethanol is a well‐known advanced biofuel. The federal renewable fuels mandate requires 16 billion gallons of cellulosic ethanol to be produced by 2022. To qualify for the mandate, each gallon must reduce greenhouse gases by 60 percent. Cellulosic ethanol is produced from cellulosic matter in plants, including corn stover (the leaves and stalks of corn plants), switchgrass, wood chips, and other plant wastes. Companies receive $1.01 for every gallon of cellulosic ethanol produced. Though this tax credit expires at the end of 2012, the Senate Finance Committee has already voted to extend it through 2013, and Congress will likely extend it for future years. Taxpayers should not subsidize a technology that the Congressional Budget Office and National Academy of Sciences say isn’t yet viable at a commercial scale and won’t meet its production mandate by 2022. This cost assumes that the $1.01 credit continues through FY2022 and is tied to production estimates from the U.S. Energy Information Administration.
Congressional Pensions Cut: ???
Congress benefits from an elaborate and lucrative pension system that is more generous than is available to government employees. While most Americans have a defined contribution system that they pay into like a 401(k) retirement plan, simply remaining in office is key to increasing the annual pension for lawmakers. Aside from the savings, shifting Congress from a defined benefit to defined contribution plan would more readily align lawmakers’ interests with their working constituents.
Upper Mississippi River Navigation Locks Project Cut: $ 2.4 billion
Despite continued decreases in barge traffic, cost-overruns, and a history of wildly exaggerated economic assumptions, the Army Corps of Engineers seeks to spend billions constructing new and enlarged navigation locks on the Upper Mississippi River-Illinois Waterway. The Mississippi River-Illinois Waterway Navigation Expansion Project is mainly just a fix for occasional barge transportation delays that occur at river locks during high traffic times. The Corps claims that seven brand new longer locks, at the low, low price of more than $2 billion, will solve our rush hour problem and also prepare for a ridiculously optimistic increase in barge transportation on these waterways. In 2000, the U.S. Army Inspector General found that Corps economists were ordered to exaggerate the demand for future barge traffic, and several Corps officials were slapped on the wrist. In addition, the National Academy of Sciences has consistently criticized the Corps’ plans to build the new locks, saying that the Corps should pursue cheaper measures like scheduling, tradable lockage fees, and helper boats, before even contemplating spending money on new or expanded locks. By implementing these alternative solutions taxpayers could get improved efficiency of the Upper Mississippi River-Illinois Waterway at a fraction of the cost.
Inner Harbor Navigation Canal (Industrial Canal)
Lock Replacement Project – New Orleans Cut: $ 1.1 billion
The Industrial Canal is a manmade waterway running through New Orleans that connects the Mississippi River and the Gulf Intracoastal Waterway. For years Congressional representatives from Louisiana have earmarked federal funds to continue the Army Corps of Engineers’ efforts to replace the existing lock with a longer, deeper lock suitable for ocean-going vessels. This in spite of the fact that increased barge traffic and traffic delays predicted by the Corps have not only failed to materialize, but traffic has actually decreased. In addition the original Corps economic analysis found the deep draft lock was not the most economically beneficial project for the lock, but recommended it be constructed because of the willingness of the Port of New Orleans to shoulder a higher share of the costs. The Port has since pulled out of this agreement, leaving federal taxpayers holding the bill. And recently a federal court ordered the Corps of Engineers to halt construction because the Corps failed to adequately consider whether a deep-draft lock would be viable.
Delaware River Deepening Project
New Jersey and Delaware Cut: $173 million
Despite opposition from the states of Delaware and New Jersey, the Army Corps of Engineers continues to pursue the uneconomical deepening of the Delaware River’s main channel. The project, which would increase the River’s depth to 45 feet from 40 feet for 105 miles, is intended to attract deeper draft cargo ships. In reality the ships aren’t going to come and the reduced transportation costs for a handful of oil refineries does not offset the heavy price tag of the project. The Government Accountability Office (GAO) has repeatedly criticized the Corps’ economic assumptions underlying this project.
Dallas Floodway Extension Cut: $160 million
Neighboring the Fort-Worth Central City project (below), the Dallas Floodway Extension, Trinity River Project is a Corps flood control project on the Trinity River. Under this project the Corps seeks to extend existing levees while cutting a 600-foot wide swath (swale) through the Great Trinity Forest. The project’s principal economic justification is increased flood control for downtown Dallas. Yet, most of these benefits could be obtained for a fraction of the project cost by simply raising one of the existing Dallas levees and conducting a voluntary buyout in flood prone neighborhoods. This would provide the most effective flood protection for the area, with dramatically less impact to the floodplain.
St. Johns Bayou/New Madrid Floodway Project – Missouri Cut: $ 123 million
Any notion that the St. Johns Bayou/New Madrid Floodway project was a good idea was washed away when the Corps responded to record flood heights threatening Cairo, Illinois by blasting the Birds Point levee on May 2, 2011, sending the Mississippi River cascading down the 130,000 acre natural floodway. The New Madrid Floodway is one of the last remaining natural floodways on the river, yet for years the Corps has sought to build levees and pumping stations to cut it off from the river. This flood protection project would actually increase flooding risks while inducing development in the floodway, costing taxpayers millions more in damages the next time the floodway is operated.
Grand Prairie Area Demonstration Project – Arkansas Cut: $110 million
The Grand Prairie Area Demonstration Project is a subsidized pump to provide subsidized water to grow subsidized crops and would be a first-step by the Corps of Engineers into the agriculture irrigation business. A century of unsustainable irrigation for rice farming in eastern Arkansas has left the area’s main irrigation aquifer severely depleted and is now threatening the region’s deeper drinking water aquifer. Rather than promoting proven efficiency and conservation techniques on the area’s farms, the Corps of Engineers proposes building a pumping station and 650-mile long canal and pipeline system to draw water from the White River.
Fort Worth Central City Project – Texas Cut: $81 million
The Central City project is just one portion of a larger project know as the Trinity River Vision, the total cost of which has increased to nearly $1 billion. The Central City Project is an Army Corps of Engineers flood control effort to reroute the Trinity River in Fort Worth, Texas through construction of a new dam, a 1.5 mile long bypass channel, and numerous flood gates in order to create an urban waterfront community. The Army Corps of Engineers is slated to pick up $110 million of the $435 million Central City tab, with other federal and local taxpayer sources making up the rest. The Corps should better utilize its flood control dollars, rather than spending millions on speculative development.
CMRR Nuclear Facility at Los Alamos Cut: $3.7 billion
The Chemistry and Metallurgical Research Replacement-Nuclear Facility (CMRR-NF) is a new palatial building the National Nuclear Security Administration (NNSA) wants to build at Los Alamos National Laboratory. The CMRR project includes both the already-built Radiological Laboratory/Utility/Office Building (RLUOB) as well as the planned CMRR-NF. The project will cost $3.7 to $5.8 billion—at least by current estimates—but the cost has increased ten-fold since the project’s inception, and final estimates are not due until 2013. There are serious questions about the risks associated with the CMRR-NF, not the least of which are that it will be storing six metric tons of plutonium in an active seismic zone. Several hundred million dollars have already been appropriated and excavation has begun, despite the fact that the design is only 50 percent complete. Congress decided to put the project on hold in 2012, but intends to restart construction in 2017.
Columbia Basin Irrigation Project Cut: $1.2 – $4.6 billion
The Department of the Interior’s Bureau of Reclamation (BuRec) was established in 1902 to bring development and irrigation water to 17 Western states. Today, the agency builds dams, powerplants, and canals to supply hydropower to local communities and bring subsidized irrigation water to one out of every five Western farmers. The Columbia Basin Irrigation Project (CBIP), one of the largest all-federal irrigation projects managed by the BuRec, is located in central Washington. Water diverted from the Columbia River is delivered to nearby farms even though taxpayers and other users pay for most of the construction costs to build the infrastructure. The BuRec and Washington Department of Ecology are proposing to expand the CBIP at a cost ranging from $1.2 to $4.6 billion. However, the BuRec’s own studies found that none of the proposals’ privatized benefits would outweigh the public costs. In the 1980s, the Government Accountability Office’s analysis of similar expansion proposals came to the same conclusion, resulting in the BuRec’s withdrawal of the proposal.
Yakima River Basin Water Enhancement Project Cut: $1.4 billion
Also located in Washington, the Yakima River Basin Water Enhancement Project would result in the construction of at least two new dams in the Yakima Basin even though sufficient alternative water resources have been identified. Construction of one dam would cost more than $400 million and the other is expected to cost at least $1 billion. The BuRec is planning to move forward with the project(s) even though the agency’s Final Planning Report and Environmental Impact Statement calculated a negative cost-benefit ratio. In other words, taxpayers should only expect to receive 7 to 31 cents back for every dollar spent on these local irrigation projects.
XpressWest (formerly DesertXpress) High Speed
Rail – Nevada and California Cut: $6.5 billion
The XpressWest project would connect Victorville, CA (approximately 85 miles from Los Angeles) with Las Vegas, NV. The $6.9 billion project has asked for a $6.5 billion direct loan through the federal Railroad Rehabilitation and Improvement Financing (RRIF) program, which would be more than ten times the amount ever awarded through the program. Questions have also been raised regarding the ridership and revenue forecasts upon which the application is based. This project has taxpayer disaster written all over it, and the loan application should be rejected.
I-73 Project – South Carolina Cut: $2.4 billion
The $2.4 billion interstate — no more than 50 miles from an existing, high-capacity U.S. highway — will be the most expensive transportation project in South Carolina’s history and is estimated to shorten current travel times to the Myrtle Beach region by no more than 15 minutes. Furthermore, simply upgrading the parallel highway would meet every goal being outlined by the interstate proponents yet cost only $150 million. With only 33 percent of South Carolina’s existing roadways in “good” condition, taxpayers are left wondering why South Carolina is pushing to build this wasteful, federally funded interstate while neglecting long-needed repairs.
Knik Arm Crossing – Alaska Cut: $1.5 billion
The sister project of the now infamous “Bridge to Nowhere” would link Anchorage to the sparsely populated area around Point McKenzie in the Mat-Su Valley. The project can only be built with a public-private partnership, which would be paid for through the collection of a bridge toll, and a large loan guarantee from the federal Transportation Infrastructure Finance and Innovation Act (TIFIA) program. But traffic estimates appear overly optimistic, and therefore the expected toll revenue is almost sure to fall short of paying for the project for many years after it is built. This would likely leave federal taxpayers on the hook for untold millions of dollars to make up the shortfall.
Columbia River Crossing – Oregon and Washington Cut: $1.25 billion
This project would construct a highway-transit bridge over the Columbia River to ease Portland-bound commuter congestion. The $3.6 billion project is estimated to reduce morning commute times by only 60 seconds. Furthermore, state transportation departments are justifying the project with an estimated 45 percent increase in vehicle crossings by 2030, a percentage based on 2005 fuel prices. With substantial portions of the project to be paid for with tolling the new bridge facility, local leaders and stakeholder groups are sounding alarm over the project’s faulty traffic projections. Federal taxpayers have already footed $110 million to make these flawed analyses. Congress should deny state requests for one-third of the project’s billion dollar price tag and require more cost-effective alternatives.
Outer Bridge Portion of Ohio River Bridges Project
– Indiana and Kentucky Cut: $550 million
The outer, or eastern, bridge portion of this project would be a new interstate highway (I-265) and Ohio River bridge in the eastern suburban area of Louisville. It would connect the Gene Snyder Freeway in Kentucky (KY 841) to the Lee Hamilton Highway in Indiana (State Road 265). The project, which the Environmental Protection Agency calls “redundant”, is a developer’s dream. It would open up vast quantities of land in Indiana for development. Ground was very recently broken on this project, meaning there is still time to stop it before it devours an enormous chunk of taxpayer dollars.
Juneau Access Road – Alaska Cut: $500 million
The Juneau Access project would consist of a new 50-mile road out of Juneau connecting to a ferry terminal for the last 18-mile journey to connect to either Haines or Skagway, with driving access to the interior of the state. Due to the treacherous terrain, the road would be closed at least one month every year, and the journey would likely require several days of driving in each direction from most parts of Alaska. In addition, the challenging terrain makes construction difficult at best and raises significant questions about cost overruns and project feasibility. Most of the funding for this project has not yet been identified, but proponents assume that the vast majority will come from federal taxpayers.
Gravina Island Access – Alaska Cut: $300 million
Yes, the “Bridge to Nowhere” lives on. Though the bridge project was cancelled by then-Governor Sarah Palin in late 2007, the state completed construction of the $26 million 3-mile Gravina Access Highway, which would have served as the bridge access if the bridge was built. To avoid having to pay back to the federal government the money it spent on this “highway”, the state is conducting an assessment of the project to show how it will utilize the newly constructed road. The assessment is underway, but this charade should be stopped once and for all, and taxpayers assured that this monstrosity is killed for good.
Charlottesville Bypass (VA) Cut: $244 million
The proposed Charlottesville Bypass is a 6.2 mile, four lane limited access highway intended to act as a reliever route for the congested U.S. 29 corridor. This bypass is extremely expensive as compared to other similar projects and will cost almost $40 million per mile. Furthermore, state transportation officials found that none of the bypass alternatives would have much, if any, impact on the “F level of service” rating on the existing U.S. 29 corridor. More fiscally responsible alternatives such as overpass and design improvements to U.S. 29 have shown promise of achieving the same goals without the local opposition that has developed against the bypass. Congress should block any federal funding for this wasteful roadway.
For more information:
Ryan Alexander, President, ryan taxpayer.net
Steve Ellis, Vice President, steve taxpayer.net