During the 1970s, at the peak of environmental awareness, the federal government grew—a lot. New laws and increased budgets expanded the size and scope of federal agencies. Administrative reformers organized new agencies and tightened regulation. Trends in federalism favored national solutions.
In the 1980s, the national mood seems to reflect a philosophy of limits. With major environmental laws of the 1970s—the Endangered Species Act, the Clean Air Act, the Clean Water Act, and the Safe Drinking Water Act—up for reauthorization in 1982, environmentalists find themselves in the unaccustomed position of resisting innovations proposed by others. Budgeting has become a battle over which programs to cut back most. Administrative reform usually now means curtailing regulation and bureaucracy. And the tide in federalism favors efforts to limit the federal government and turn more power back to the states and localities.
The budget squeeze
Items of government spending traditionally have been decided individually, but recent efforts to limit the seemingly uncontrollable growth of the federal budget have pitted environmental and natural resources programs against one another and against those in other fields.
Early in his presidency, Ronald Reagan successfully persuaded Congress to cut many programs below Jimmy Carter's proposed budget for the 1982 fiscal year (which began in October 1981). After the president in February 1982 presented budget proposals for the 1983 fiscal year (see table 1), a coalition of eleven national environmental groups presented their "Alternative Budget Proposals for the Environment," at a cost 7.5 percent higher than the administration's.
Many environmental and natural resources programs are in the 26 percent of the federal budget considered "relatively controllable"—so that, unlike, say, Social Security, their appropriations can be cut without a change in law. But perhaps in part because of their political popularity, these programs did not suffer actual cuts in 1981 or proposed ones in 1982 as deep as those sustained by programs specifically intended for the poor.
Saving dollars and the environment
Not that budget cuts necessarily are bad for environmental quality. In the view of many environmentalists, some past federal spending on natural resources has been environmentally harmful. In 1981 they joined with budget cutters to obtain funding reductions for water projects by the Army Corps of Engineers, the Bureau of Reclamation, and the Soil Conservation Service, and are now backing the FY 1983 proposal to increase charges to the users. Similar alliances in 1981 helped to end the federal practices of funding sewage treatment plants large enough to accommodate—and thus encourage—decades of future growth, and subsidizing flood insurance for construction on undeveloped coastal barrier islands, which often hastened their erosion. Environmental and budgetary arguments narrowly failed in 1981 to stop the funding of the Tennessee-Tombigbee waterway and the Clinch River breeder reactor, two projects that the administration supported. The requested increase for the Bureau of Reclamation may be an issue this year.
Intensifying land management
Among nondefense activities, the public lands have been among those least touched by budget cuts. Congress resisted 1982 cuts proposed by the administration in the National Park System and the National Wildlife Refuge System, and the administration now seeks increases for 1983.
Although spending for the Bureau of Land Management (BLM) and the Forest Service fell in 1982, the administration proposes an increase in 1983 and Congress is likely to expand on that. The new budget proposes significant increases in certain functions within these agencies (energy and minerals in BLM, timber sales in the Forest Service), but also includes cuts in other areas such as wildlife, recreation, and research. Again, the administration proposes to all but end the acquisition of land by federal agencies, diverting the funds to managing the national parks, although Congress rejected this proposal the first time around in 1981.
"Revenue enhancement"
In an effort to keep the proposed deficit under $100 billion without raising taxes, the 1983 budget proposals project that, through offering more offshore oil and gas leases, revenues will more than double to $18 billion in 1983 from an estimated $7.9 billion in 1982. They also project that in the same period the volume of National Forest timber sales would increase by 12 percent, yielding $225 million more. These projections may be overly optimistic in light of weakening demand and prices for petroleum and timber, and any acceleration in sales carries with it added environmental cost.
Cutting grants
The heaviest budget cuts have been made in grants to states and localities. Grants eliminated in the 1982 fiscal year included those for land acquisition; planning for water quality, solid waste, and land use; endangered species, and anadromous fish. Significant 1982 cuts that the administration proposes to widen in 1983 include grants for pollution regulation; coastal zone management; state and private forestry; energy conservation; and mass transit. The administration again is trying to eliminate the Historic Preservation Fund and the Urban Park and Recreation Fund despite congressional rebuffs in 1981. In part because Congress often restores funds for popular grants, agencies generally are more willing to have the president's budget proposed cuts in the grants they administer rather than in their own personnel and operations, cuts which Congress is more likely to accept.
Table 1. Spending Authority for Selected Purposes (millions of dollars)
Spending more effectively
The continuing budget crunch has begun to reveal that some long standing conservation programs do not distribute funds effectively. The Agricultural Conservation Program (ACP) over the years since 1936 has spent $8.6 billion to share with farmers the cost of conservation practices, but each county receives a similar amount of money, and the proportions received by different states have changed little in decades—even though the distribution of the soil erosion problem is not even and has shifted over the years. President Reagan is proposing an even greater cut in ACP than he did in 1981 when, refusing any cut, Congress did nothing to see that these conservation dollars would be spent more effectively.
The president's budget proposes an actual increase in spending on technical assistance offered to farmers by the Soil Conservation Service (SCS), as well as a new state grant program administered by the agency, but again, too little progress is being made to allocate the funds where they will do the most good.
Keeping programs in perspective
Priorities must be set not only within programs, but also among them. For example, although a big program like mass transit may improve environmental quality, by lessening reliance on the automobile, more environmental "bang for the the buck" almost certainly could be achieved in other ways. But this sort of cross-departmental comparison is not yet part of the budgetary process. It is even less common to ponder the fairness of fighting the moderate cuts in environmental programs when poverty programs are being cut more deeply.
Reform and reorganization
Whereas environmental groups once were the major advocates of administrative reform, now they find themselves opposing many changes. In contrast to such procedural reforms of the 1970s as the National Environmental Policy Act, today's movement toward regulatory relief seeks to cut red tape and to streamline, or entirely abolish, various regulations (see Portney article on page 17).
Lowering profiles
Administrative reorganization of the 1970s produced such new agencies as the Council on Environmental Quality (CEO), the Environmental Protection Agency (EPA), Interior's Office of Surface Mining (OSM), and the Department of Energy (DOE). Charging that the bureaucracy had become inefficient and intrusive, the Reagan administration undertook reorganizations, backed up by budget cuts, that sought a lower profile for many agencies, and no profile at all for DOE. CEQ was deemphasized, with greater responsibilities going to a Cabinet Council on Natural Resources and Environment and to the Office of Management and Budget (OMB). In addition to its strengthened duties in budgeting and regulatory review, OMB administers governmentwide personnel limitations, under which the president is pledged to reduce the number of federal employees by 75,000 between 1981 and 1984. Nearly all nondefense agencies are experiencing some decline in personnel under this initiative.
Relatively little controversy met the modest reorganizations begun in 1981 in the National Park Service, the Bureau of Land Management, and the Fish and Wildlife Service. But a continuing effort to eliminate more than a quarter of the personnel in OSM between 1981 and 1983 and to make it more responsive to state governments has led to complaints from three committees of the House of Representatives that the law was being weakened. Also running into some political flak is the president's attempt to fulfill his campaign promise to abolish DOE and transfer its functions to the Departments of Commerce and the Interior. Like President Carter's short-lived 1979 effort to create a Department of Natural Resources, Reagan's proposal requires legislation, and it is far from clear that Congress will agree even in part.
Controversy at EPA
The most debated reorganization effort of 1981—and possibly also of 1982—was that affecting the EPA. EPA's public affairs functions were sharply curtailed, and its planning and management division was split up. The enforcement office was eliminated, with some duties going to the agency's legal counsel, and others being placed at low levels within the program offices for air, water, toxics, and so on. Decision making became centralized in the administrator's office and, more than a year after the administration entered office, many key positions were vacant. The administration's 1983 budget proposal represented a decline of 29 percent below EPA's 1981 appropriations. In addition to budget cuts, the agency was scheduled to sustain a large drop in authorized personnel of 17 percent by 1983 from a high of 12,700 in 1981. Meanwhile, many discouraged employees were leaving voluntarily, and they and others took the unusual step of forming a group—"Save EPA"—to defend the organization. They argue that the agency is being cut at the very time its workload is increasing because of new duties to regulate toxic and hazardous substances, drinking water, groundwater, and so on.
Amid the charges, some undoubtedly correct, that the reorganizations at the OSM or EPA would weaken the agencies, it is easy to forget that after years of growth and confrontation, such agencies do suffer from some inefficiency and unresponsiveness. Still, the administration is vulnerable to the charge that it has singled out regulatory programs while leaving relatively untouched many others, including most water projects and defense programs. In any case, the strong rhetoric on both sides suggests that environmental and natural resources questions will be important in the 1982 congressional elections and perhaps in 1984 as well.
The New Federalism
In January 1982, President Reagan devoted his first State of the Union message to proposals to "make our system of federalism work again" by turning greater responsibility over to the states and localities. Increasingly in the past two decades, the federal government has used the states and localities as conduits for regulation and spending. Between 1960 and 1980, Congress adopted thirty major statutes (fifteen of them in the environmental and natural resources fields) that imposed regulatory requirements on the states and localities. By the end of 1980, federal grant programs numbered 538 (about fifty of them in the environmental and natural resources field), representing more than one-fifth of all federal domestic spending. Growing state and local dependence on federal aid became a powerful lever for enforcing the proliferating regulations. Aside from the many requirements specific to certain programs, fifty-nine requirements were cross-cutting (that is, applying to activities funded by any federal grant program), fifteen of which involved some kind of environmental assessment (endangered species, clean air, NEPA, and so on).
Block grants and turnbacks
The hotly debated Omnibus Budget Reconciliation Act of 1981 and other legislation reduced the number of federal grant programs in 1982 to about 400, including nine block grants, mostly in the social policy field. Block grants carry with them few federal restrictions and generally do not require a state to match federal aid from its own funds. In 1982 President Reagan further proposed to turn back to the states another forty-three federal programs, this time with revenue sources that he said would be enough to pay for them.
Making exceptions
Most existing environmental and natural resources grant programs have not been included in proposals for block grants or turnbacks to the states, partly because the states already have significant freedom in spending their grants. Also, most of these programs are less costly than other grant programs (and are being cut back further); two of the biggest—mass transit and sewage treatment—were the only ones included among the forty-three that the president proposes to turn back to the states.
Reagan's new federalism has left untouched the water projects field, where the states share almost none of the cost of the upfront financing of federal construction. Senators Pete V. Domenici (R-New Mexico) and Daniel P. Moynihan (D-New York) propose a block grant for "water projects, under which the states would share 25 percent of the cost, and the three federal water project agencies essentially would act as their advisors and contractors. The greater flexibility in spending would, for the first time, make the federal money available for eastern municipal water distribution systems, which in many cases are badly in need of repair.
However, it also would cut back the currently free benefits going to southern and western areas, the president's strongest political base. The administration has not yet endorsed the Domenici-Moynihan proposal, but its desire to reduce subsidies and turn more responsibilities over to the states could lead it to a similar position.
The Sagebrush Rebellion
The sagebrush rebels propose that some western federal lands be given to the states. However, few of the governors of the states concerned have been willing to follow through on this issue. They realize that currently the federal government is spending hundreds of millions of dollars to manage the lands while giving the states payments-in-lieu-of taxes, half of the mineral receipts, one-quarter or more of the timber receipts, many other subsidies, and significant control over the land (including the unlimited ability to tax its energy, mineral, and timber production)—more benefits than would come with ownership, with few of its accompanying costs. The Reagan administration has emphasized that it's "good neighbor policy" in the West reduces the need for much outright turnover of federal land, but several piecemeal exchanges have gone forward and, early in 1982, proposals emerged to sell land to the private sector, in part to reduce the impending budget deficit.
New duties, few dollars
An irony of the effort to turn federal responsibilities over to the states is that, except for about a dozen that are gaining large revenues from the energy boom, most states are in their worst financial shape in years. With state tax collections falling because of depressed economic conditions and the effects of the tax limitation movement, federal aid cutbacks are adding to the pressures on state-level programs of all kinds. Since even deeper cuts are being made in federal aid to state social programs, state environmental programs may find it hard to compete for ever scarcer budget dollars. The extremity to which this can lead was suggested in 1981 when the state of Idaho entirely eliminated its Air Quality Bureau and turned over all its responsibilities under the Clean Air Act to the federal EPA.
Throughout 1982, pitched battles will be fought in many state legislatures over whether and how much to cut environmental and natural resources programs.
The states take the lead?
Nevertheless, in the coming decade the states rather than the federal government may be the new centers of environmental reform. While federal debates increasingly have been dominated by struggles over whether to cut back existing programs, many innovations have emerged at the state level. The state of Oregon alone has pioneered with a bottle bill, the prohibition of fluorocarbon sprays, land use controls, and tax incentives for the protection of riparian areas. Taxpayers in fifteen states now can earmark funds for endangered or nongame species—an option not allowed at the federal level.
The traditional view that the states are development-oriented and the federal government more concerned about the environment is harder to justify today. Environmentalists are turning away from the federal government to the states to plead their case, as in the questions of how much coal to lease in Montana and Wyoming, whether to lease more oil and gas off the shores of California and Massachusetts, and whether to begin to store nuclear wastes in New Mexico—all issues where the federal government is on the side of development. The long standing federal presence in addressing environmental spillovers across state boundaries certainly will continue, but added to it may be a new role, that of ensuring that in their accelerating quest for environmental protection the states do not impose unfair economic costs on one another.
In any case, we may be seeing a change—perhaps even a reversal—in the historic pattern of federal leadership stretching back eighty years to when President Theodore Roosevelt first placed conservation on the political agenda.
Author Christopher K. Leman is assistant professor of politics at Brandeis University, Waltham, Massachusetts. He is spending the 1981-82 academic year as a Gilbert F. White Fellow in RFF's Quality of the Environment Division.
A version of this article appeared in print in the March 1982 issue of Resources magazine.
