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OMB Director Should End Federal Land and Water Rip-Offs

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OMB Director Should End Federal Land and Water Rip-Offs

Start Collecting Fair Market Rents and Stop Leaving Taxpayers Holding the Bag

Washington, DC — Besides watchdogging expenditures, the next Director of the Office of Management and Budget should also start collecting fair market rates for resource extraction from the federal estate that now costs taxpayers billions of dollars, according to Public Employees for Environmental Responsibility (PEER). The group is urging Trump’s OMB to apply business principles to end the gushers of red ink run up each year by money-losing federal timber sales, grazing, mining, drilling, and irrigation programs.

In a letter sent today to the Senate Budget Committee which this week considers the nomination of U.S. Representative Mick Mulvaney (R–S.C.) as OMB Director, PEER asks the nominee be put on the record as to whether he will fix unprofitable land and water practices in trying to cut the federal deficit, such as:

  • Many federal timber sales cost more for preparing the area for loggers than they receive in receipts from the sale of the timber;
  • Royalty-free hard rock mining carries a substantial cost to taxpayers, including the cleanup of the estimated tens of thousands of abandoned hard rock mines;
  • Below-market federal grazing fees mean that ranchers pay only a tiny fraction of the direct costs of grazing, with taxpayers subsidizing the remainder;
  • The U.S. receives one of the lowest government takes in the world from oil and gas leases, royalties, and fees; and
  • The U.S. Bureau of Reclamation does not require most of the largest irrigators to pay the true cost of infrastructure, delivery, and fees associated with providing federally subsidized water.

“Businesses do not sell their products below cost, why should the federal government?” asked PEER Executive Director Jeff Ruch, noting that candidate Donald Trump often touted his business experience as a key qualification for improving government operations. “The next OMB Director should commit to ensuring the taxpayer is receiving a fair share of the profits from exploitation of the public’s resources.”

The extent of losses to the public treasury from its federal resource management practices is huge, representing hundreds of billions of dollars each year, according to some estimates. Moreover if as promised, the Trump administration pushes for greater energy and other resource extraction from public lands, taxpayer losses could multiply unless a much better rate-of-return is struck.

“We could sure use some ‘Art of the Deal’ to renegotiate these public resource giveaways,” added Ruch, pointing out that President Trump is calling for a massive investment in infrastructure but has not identified a funding source. “Collecting fair rents, royalties and fees should be eyed not only as a way to reduce deficits but also as a potential major revenue source.”

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Read the PEER letter

View Resource Renewal Institute report “Recovering $600 Billion by Collecting the Rent”

Look at depth of illegal irrigator subsidies