The Crushing
Federal Handout

by Erica Olsen

his project is funded by the Federal Highway Construction Fund," reads a sign on Interstate 80.

"This exhibit was made possible because of federal funding," reads a notice on an art display funded by the National Endowment for the Arts.

"Relief was provided by federal loans," says a Federal Emergency Management Agency representative to flood victims.

Federal funding is perceived to be the saving grace for many projects and programs that would otherwise be doomed. Not only is federal money hard to get, but it rarely comes without strings attached. And these strings are forever tied to a bureaucratic monolith that crushes almost everything it touches. The federal government's abysmal track record for funding programs successfully will shed some light on the realities of this monolith and what "federal funding" really means.

The Superfund fiasco is a perfect place to start. Since its inception in 1980, this federal environmental cleanup program has cost more than $30 billion in public funds and billions more spent by the private sector. Superfund was intended to provide temporary emergency federal funding for the cleanup of chemical waste sites if responsible parties could not be found. Billions of dollars and 17 years later here are the achievements of this federal program: 97 out of 1,300 listed sites have been taken off the Superfund National Priorities List -- this includes some that were listed incorrectly in the first place. A pathetic outcome.

Environmentalists would argue that even just one restored site would be worth an unconscionable amount of money. But money must come from somewhere and in cases like these, the taxpayers should demand that it be spent wisely. Did it really take $32 million for each of the 97 sites? Well no, not really, admits the program's administration. Many embarrassing examples of waste and fraud in the form of Christmas parties, sports tickets and the like were uncovered. This is the classic syndrome of the perceived unending federal money pit. A private company which does have to stick to a budget probably could have restored the sites for substantially less money.

J. Winston Porter, who headed the Superfund program from 1985 to 1989, explains the core problem with federal funding and intervention: "The major problem with Superfund is that the federal government is ill-equipped to make local, one-of-a-kind site decisions."

Whenever increasing interests are competing for a piece of the federal pie, alternative methods of funding need to be examined, instead of immediately turning to Big Brother for help. Unfortunately, Big Brother came to the nuclear industry promising to solve the nuclear waste issue -- an unrealistic promise.

Since 1987, the nuclear industry has paid 12 billion dollars to the government for the development of a permanent nuclear waste storage facility. The federal government has promised to have a site ready to go by 1998. Yucca Mountain, the most likely site, is more than 10 years away from being ready to receive nuclear waste shipments, let alone also being approved by the scientific community and the state of Nevada. Regardless, the government promised to take the waste off the hands of nuclear power plants next year. The companies have been paying the government for a solution that will most likely not materialize for years.

Once again, if private industry had been contracted to find safe storage for nuclear waste, undoubtedly the nuclear industry would not find itself in its current dilemma. Nuclear power plants inevitably produce a by-product that must be properly disposed of in order to keep plants running. The industry demonstrated that it will pay huge sums of money to get rid of it -- no matter who will take up the charge. The federal government decided it could solve the problem best and the industry is paying the price.

The national park system was an example of a well-managed program until the federal government stepped in. Visitation is at near-record level in most national parks, yet the park service reported a $500 million mantenance backlog last year. Campgrounds are closed, buildings are falling apart, roads are full of potholes and natural resources are degraded.

At the turn of the century, national parks were created on the premise that they would be self-supporting and retain their earned revenues. Park management had direct control over park finances. By 1918 five parks were earning enough revenue to support themselves. But in 1918, Congress decided that all park revenue must be submitted to the general treasury—the end of self-sufficiency and the beginning of slow destruction. Ironically in 1991, Congress got the "novel" idea to let certain parks raise fees and keep 80 percent of the revenue, almost back to the original plan. Once again, the government should have let the park system be run as it was designed. It would have succeeded in preserving spectacular areas but instead the parks have to be rescued from the effects of federal mismanagement—the reason parks like Yellowstone are in disrepair.

Solutions to problems brought to the table by local, concerned people who understand their communities will always outlast and "out-fund" any federal handout. And private companies can be much more effective than a team of bureaucrats from Washington. Perhaps it is simply laziness on our part to look to the federal government for answers to the problems we face. Deferring problems means citizens have to get less creative in finding alternative solutions for expensive projects. But in the end we pay the price for laziness—higher taxes with no return. u

Erica Olsen is Managing Editor of Nevada Journal.


Journal front | Search | Comment | Sponsors