Mr. BURLESON. Our next witness is our colleague from Iowa, Mr. Bedell. STATEMENT OF HON. BERKELEY BEDELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF IOWA Mr. BURLESON. We are very glad to have you and if you wish to summarize your full statement we will place it in the record. Whatever you wish. Mr. BEDELL. Thank you very much, Mr. Chairman. I think you have copies of my statement. Mr. BURLESON. We do. Mr. BEDELL. And realizing that, I would like to just hit one or two high points of my statement which I think is important to get it through as quickly as possible. Mr. BURLESON. You may proceed. Mr. BEDELL. First of all, I should tell you that the reason I became involved in this waterway user charge was because I have open door meetings in my district where I go to every county and we have a meeting and we talk about whatever issues come up and are of interest to the people. And as a result of those discussions the people in my district brought up the fact that it seemed to them that it was wrong for the railroads to have to pay for their roadbeds, and for the trucks to have to pay for the use of the highways, and for the barge lines indeed to have their costs paid by the Federal Government. As a result of that, I sent a poll out, also, to the people of my district on this issue and we found out that 85 percent of them felt that indeed there should be a user charge and there was some, I think, 8 percent that felt there should not, and the balance were undecided. As a result of that, I put in legislation that would call for user fees, which called for two areas of user fees, one of which was a fuel tax and the second was a lockage charge for the use of the facilities. I happen to believe that the way we should go if we go about trying to bring about some revenue for the use of our rivers, is by a combination of those two. I also believe very strongly that whenever the Government is furnishing any service of any kind, that if there can be fees charged to the users for those services, then those users serve as watchdogs to try to see that the cost is held down as much as possible. Whenever the users are not paying any of the cost, then there is no one there to look after the taxpayer's money to be sure that it is indeed not wasted. And I think every place in our society that we can possibly do so we should try to move to where users pay at least part of the cost. My bill calls for the users to pay half of the operation and maintenance and half of the capital costs, phased in over a 10-year period. As I have looked at that bill further, now, I am inclined to believe that maybe we should move a little more slowly in what we should do. It would seem to me that a shorter term phase-in of the costsharing program would possibly be more reasonable. For example, the initial period could extend for 5 years, and I still believe there should be a 5-percent recovery of Federal revenues each year, which would then say that after 5 years we would be at 25 percent of the total cost. And I wouldn't argue if you want to say 4 years and 20 percent, or 6 years and 30 percent, but it seems to me that it would make some sense for us at this time to pass legislation which would move part way in terms of starting to assess those fees, give us a chance to see how it works, give us a chance to see what impact it does have if any upon our total transportation system, and start to move. I should tell you there is room for disagreement here, I have great disagreement with my colleague who says we ought to study this more. We have already had 13 studies. As I understand, it's been recommended by every President since President Roosevelt. It seems to me that is all we do around this place whenever we don't want to face a difficult decision, we say let us study it some more, let's study it some more, and the net result is to say it is a great idea, but we are going to continue to study. I think it is time it's pretty clear that there are some discrepancies that exist within our system. I think it's pretty clear somebody is going to have to pay those costs and just kid ourselves whether it is users or taxpayers, those costs have to be paid. If indeed it would improve upon the system, I think we should have the courage to go ahead at this time and do it. I think we should do it in a reasonable manner. I think we should start slowly and the reason I think it should be a combination of both a fuel tax and a user charge is that if part of it is a user charge, then I think the users are going to be anxious not to see facilities built that need not be built or not overbuilt because they will be paying part of the cost of those facilities. Likewise, if they are paying part of the operation I think they are going to be first to come and tell us if they find that there is excessive personnel involved, for example, in the maintenance of the facilities or this sort of thing, and frankly it's a pretty good chance that they will even come to us and say look, you have got these particular waterways you are keeping open we are really not using hardly at all and we question the advisability of doing it. So it seems to me we should go forward, it seems to me we should go forward in a sensible manner; seems to me that should be over a reasonably short period of time phasing in 5 percent a year, and I think it should be a combination. [The prepared statement follows:] STATEMENT OF HON. BERKLEY BEDELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF IOWA Mr. Chairman, I appreciate the opportunity to appear before this committee to discuss the question of waterway user fees. It is indeed a privilege to appear before this distinquished panel, and I will attempt to keep my comments brief and to the point. The history of the debate on user fees is well-known. The Federal Government currently builds, maintains and operates a network of inland waterways that are used by barge operators to carry about 11 percent of our domestic freight. This policy of providing inland waterways free of user charges dates back to the early days of the Republic when it was the intent of the Government to create a viable water transportation system by protecting canal operators against other forms of competition. This Federal policy has proven quite successful. Today, the Federal Government maintains more than 15,000 miles of inland waterways which are deep enough to accommodate commercial traffic. In many cases, these waterways are navigable only because the Federal Government has invested billions of dollars over the years in locks and dams and dredging operations. These waterways have greatly facilitated commercial water transport. Intercity transportation of bulk commodities on rivers and canals increased from 8.7 billion ton-miles in 1929 to 230 billion ton-miles in 1972, and waterborne traffic increased from 2 to 11 percent of the total intercity freight traffic during that period. The success of this federal effort was documented in a study released by the General Accounting Office in the fall of 1975. This study reported that since 1950 the barge industry "has enjoyed rapid growth and profit. Cargo tonnage has doubled and ton-miles have increased almost five-fold. Since 1960, the industry's investment and percentage of return on total investment nearly doubled and carriers' revenues have gone up more than 120 percent." The question today is whether the operation of the inland waterways network should continue to be financed out of general revenues or whether the users of our waterway system should be required to pay all or part of that cost. It is important to understand that, at present, the users of our Nation's waterways enjoy the use of a government built and maintained river system without having to pay anything for the privilege. At the same time, competing forms of transportation do pay charges. Trucks pay fuel taxes, permit fees and tolls to operate the nations's highways. Aircraft pay fuel and ticket taxes plus landing fees. And railroads pay substantial property taxes and provide their own railbeds. This situation has given the barge industry a competitive advantage over other forms of transportation in movement of bulk commodities -and not an insignificant advantage at that. Earlier this month, the Congressional Budget Office released its study on the user fee debate which reported that "Federal subsidies are equal to about 42 percent of all barge revenues, compared with 3 percent for railroads, 1 percent for trucking companies, and no subsidy at all for pipelines." Also, the cost to the government has been substantial. Over the history of its involvement with domestic water transportation, the federal government has spent more than $14 billion to subsidize the barge companies. The inland waterway system of our country is currently prospering, and there is no longer any justification for such expansive Federal subsidies for waterway traffic. In my judgement, the original purpose of the Federal policy of total subsidization of commercial waterway traffic has clearly been served, and it is time to reassess this policy. It is time to insure that the Federal Government is implementing balanced and responsive national transportation policy which is equitable for all forms of commercial transportation and which is fair to the American taxpayer. I believe that this policy should include a well-conceived user fee program. Such a program would lower the cost of construction and maintenance to the taxpayer by shifting some of that cost to users. And, by requiring that users pay part of the cost, it would also provide users with a direct incentive to advocate and carry out cost-effective proposals for riverway improvements. The executive branch of the Federal Government has been advocating waterway user charges since 1940. Every administration since that of Franklin Roosevelt has recommended user fees. The Ford administration introduced a user fee proposal in 1974 and supported and amendment to the 1976 tax reform bill which would have levied a fuel tax on commercial vessels on inland waterways. Both President Carter and Secretary of Transportation Brock Adams have endorsed the concept, and it is my understanding that administration spokesmen have indicated that the President will veto any locks and dam No. 26 legislation unless it contains a user fee provision. I think that it is time for Congress to act on this issue. Earlier this year, I introduced legislation which would require user fees for the use of our inland waterways. My bill would impose a 2-cents-per-gallon fuel tax plus additional charges for the use of government provided facilities and would require the users of these facilities to pay approximately 50 percent of both the cost of the construction and maintenance of our inland waterways. These fees would be phased in over a 10-year period and the charges would be set by the Secretary of the Army only after he had had a 10-month period to study the situation and promulgate regulations. The underlying purpose of my bill, and indeed that of most of the other user fee proposals which this committee is considering, is for the first time to give a measure of reasonable financial responsibility for the state of our Nation's waterways to those who continue to reap the most substantial direct benefits from them—the inland water transportation industry. And to do it in an equitable and responsible manner. I believe that this approach of combining a fuel tax and a user fee has strong support. Just last month, the Senate adopted a similar provision as an amendment to an omnibus rivers and harbors bill by a vote of 71 to 20. The Carter administration, as I have already mentioned, also strongly supports the fee and fuel tax approach. At this point, the main problem seems to be reaching agreement on the fairest and most efficient means by which to implement a system of sharing costs with users. Since the introduction of my bill, new data has come to light which has led me to alter my position on the specifics of a user fee plan. As a result of this subsequent information, I now feel that, rather than establish a 10-year program for recovery of 50 percent operation and maintenace costs as well as 50 percent of construction costs, it would be far wiser, and fairer, to tackle the implementation of a user fee and fuel tax program in two graduated steps. First, I would recommend a shorter term phase-in of a cost-sharing program. For example, the initial period could extend for 5 years, beginning with a 5-percent recovery of Federal revenue the first year and increasing by 5 percent annual increments thereafter, so that by the fifth year, users would be contributing a 25-percent share of total operation, maintenance and construction costs. This recoupment would be achieved by combining a user charge and a fuel tax. An initial 2 cents per gallon fuel tax would be levied which would increase by 1 cent per gallon each year until the fifth year when the tax would be 6 cents per gallon. In addition, the legislation implementing such a recoupment program should include a requirement that, at an appropriate date prior to the last year of the phase-in, the administration present recommendations as to what future charges users could reasonably be expected to pay. This would allow the Congress to review the experience of phase one and implement a recovery schedule for the second phase of the user fee program. This approach, in my view, would initiate a change in our national transportation policy which should be delayed no longer, while allowing time for the Congress to determine what portion of the cost of our inland waterway system commercial users can reasonably be expected to bear in the long run. I believe that we have a responsibility to see that our inland waterways are maintained in a manner which will enable us to move our freight efficiently We also have an obligation to the taxpayers of our country to reduce Federal spending by eliminating unjustifiable government subsidies which benefit one form of transportation over another. The original objective of our policy of total Federal subsidization of inland waterways has been realized, and its continuation is unfair to competitive modes of transportation and to the American taxpayer. It is time to impose user fees. In so doing, however, we must fully assess the impact which such charges would have on the waterway transportation industry and take care not to go too far the other way in compensating for past inequities in Federal subsidization. In testimony before the House Public Works Committee last Monday, Secretary Adams stated, "The major point here is that commercial waterway users receive major benefits from Federal expenditures, while the full burden of those expenditures falls on the shoulders of the taxpayer. It is simply not equitable, not just, that profit-making businesses should have this much of their costs met by the American taxpayer . . it is no longer in the national interest to continue direct taxpayer support of commercial water transportation without some form of cost-sharing. Water transportation should join the air and highway modes in paying user charges for federally-provided rights of way." I think that the Secretary has hit the nail on the head when he recommends equitable cost sharing, and I hope that the Committee will draft a proposal which works toward that objective by phasing-in a just program of user fees and fuel tax. Thank you. Mr. BURLESON. Thank you very much, Mr. Bedell. Mr. Cotter. Mr. BURLESON. Mr. Frenzel. |