Conclusions and Recommendations
Although the Bureau of Land Management was created more
than forty years after the Forest Service, it is cast from the same Progressive
mold. In the Progressive model of government, Congress sets policy and
appropriates funds while agency officials manage public lands in the public
interest. No one is assumed to have an incentive to do anything other than what
is best for the nation.
Reality is far different. In timber, grazing, minerals, and recreation, we find
the same pattern: Congress wants pork. Agency officials want bigger budgets.
BLM budgets grow when Congress decides that a particular program makes good
pork or lets managers keep their own receipts. This means:
Under the Progressive model, the environment and taxpayers
both lose when Congress and agencies follow their natural tendencies to produce
pork and maximum budgets. A new model is needed, one that only Congress can
- BLM managers are rewarded for leasing oil & gas by getting bigger
budgets for range improvements to support more grazing--from which they also
get to keep half the fees.
- Other managers sell salvage sales to raise funds for "ecosystem
health"--which usually means more timber sales.
- Even before the salvage sale rider, many BLM districts regularly sold more
than their allowable sale quantities because timber makes such good pork.
- Now that Congress lets the BLM keep recreation fees, many managers are
eagerly charging fees that they will use to fund recreation, which they hope
will become attractive pork.
- Until recently, the best-funded BLM districts have been those in western
Oregon, whose timber made top-notch pork and provided BLM managers with so much
revenue--a fourth of the total--that they built fancy office buildings with
high-security features to defend themselves (unsuccessfully, as it turned out)
from environmentalist onslaughts.
- The fact that the vast majority of BLM districts lose money on all of the
resources they manage is ignored by Congress and the agency, neither of which
bother to ever compare receipts and costs by resource on a district or even a
One possible alternative to the Progressive model is the micromanagement
solution. This would call, for example, for detailed legislation describing how
much profit BLM sales should make and when and if the BLM could be allowed to
sell timber at a loss, as well as specific laws defining how much timber the
BLM can cut from each district and how it should calculate its allowable sale
This is the solution advocated by many environmental groups. Other than the
fact that environmentalists have been unable to convince Congress to pass such
detailed laws for any federal resource agency, the micromanagement solution
suffers from two critical flaws.
A second strategy might be termed the
regulatory-plus-oversight solution. Congress sets a few basic standards and
guidelines and expects the agency to write detailed rules to meet those
standards. Congress follows up with regular oversight activities to make sure
that the rules are being followed.
- Micromanagement requires an omniscient Congress with infinite amounts of
time to examine and solve every problem in the federal domain. In fact,
Congress is far from omniscient. Even if it had time to review the BLM in
detail, people in Washington, DC, are hardly qualified or capable of
prescribing on-the-ground management for lands thousands of miles away.
- More important, micromanagement on behalf of one interest group can easily
be twisted into micromanagement on behalf of any other interest group. A
Congress that can set timber sale ceilings can also set timber sale floors. A
Congress that can outlaw below-cost timber sales can also define such sales
away by restricting the definition of "below-cost" to only a few of the most
flagrant money-losing sales.
This is basically Congress' policy today, though some might argue that
Congressional standards for such things as below-cost sales are too vague. But
this alternative suffers from the same problems as micromanagement: Congress
has neither the time nor expertise to provide oversight, so it ends up writing
standards in vague language so that all sides think they have one--when in fact
the only winners are the lawyers who endlessly test those standards in court.
So new micromanagement, new standards, new accounting systems, and new
oversight practices are not likely to significantly change the BLM. Take, for
example, below-cost sales. Does the BLM lose money on timber because it fails
to get market value for its timber? Or because its costs are higher than they
ought to be? The real answer is that it loses money because it doesn't have to
face the discipline of the market place that private timber producers face. As
a result, its costs may be too high, its prices too low, and it may be selling
timber that isn't worth selling in the first place.
The micromanagement solution requires that Congress scrutinize every dollar of
the BLM budget to insure that costs are low and waste is minimal, even as
Congress specifies the exact procedures for appraising and selling timber. The
standards-and-oversight solution is for Congress to outlaw below-cost sales and
then hold frequent hearings to make sure that the BLM obeys the law.
A third solution that Congress can try is to focus not on the outcomes but on
the incentives that motivate agency managers. Incentives, particularly
budgetary incentives, can have a significant and predictable influence on
federal resource managers. For example:
have the best of intentions for the public's land. But when Congress almost
automatically gives them a billion dollars each year, considerations other than
efficiency become paramount. In many cases, this means that the BLM sells
resources simply because it has the funds to do so.
- Funding an agency out of Congressional appropriations gives managers little
incentive to control costs or to worry about whether resource sales make money.
- Funding an agency out of gross receipts gives managers an incentive to sell
some resources that lose money.
- Funding an agency solely out of net receipts gives managers an incentive to
control costs and to sell resources only when they make money.
Any institutional design creates incentives for managers. The decision we must
make is, which incentives do we want to give to BLM managers? The incentives
they have today are to sell resources at a loss. Those incentives will remain
so long as the BLM's budget comes from Congress and despite any amount of
monitoring by environmental groups. The only lasting solution is to untie the
BLM from Congressional appropriators.
What about cases where commodity resources can make money but other resources
are more valuable? Such resources will be protected only if BLM managers have
incentives to protect them. One way of doing this is to allow managers to
charge fees for competing resources such as recreation. Incentives for multiple
resources can then produce a true multiple-use management of the nation's
The incentive solution does not require that Congress be aware of or understand
every aspect of on-the-ground forest management. Ideally, in fact, the
incentive solution would largely remove Congress, and its predilections for
pork and extractive uses, from the picture.
The Thoreau Institute proposes to reform the Bureau of Land Management with a
combination of market incentives and institutional checks and balances. These
incentives, checks, and balances will promote sustainable land and ecosystem
management without the constant vigilance of citizen monitoring, lawsuits, and
lobbying--a vigilance that environmentalists have not particularly displayed
with regard to most BLM lands.
The Thoreau Institute's BLM reform proposals are:
This comprehensive proposal may seem radical. But Congress is in the mood for
major changes in federal land policy, and the changes proposed here should be
attractive to both Republicans--because of the proposal's fiscal
conservatism--and Democrats--because of the proposal's environmental
- Set up each BLM district as an independent land trust. Title to the land
would be held by the federal government, but the land would be managed by the
- Anyone would be allowed to join a BLM district land trust on payment of a
nominal annual fee--perhaps $20 per year. Land trust members would vote on who
is on the board of trustees. The board would hire and fire the district manager
and approve the district's annual operating plan.
- Each land trust would be allowed to charge user fees for all resources
within their care, including timber, forage, minerals, recreation, and (where
authorized by state laws) water.
- Land trusts would be funded out of the net income they earn each year. That
net would be simply calculated by a U.S.D.I. auditor at the end of each year
who would ask a) how much did the land trust receive and b) how much did it
spend. The difference--the net--would be added to the land trust's funds.
Congress might provide seed money for the first year equal to the district's
- Revenues that the land trust did not get to keep--an amount equal to its
costs--would be divided between counties, the U.S. Treasury, and a biodiversity
trust fund according to some formula. The Thoreau Institute suggests that
counties get 15 percent of gross receipts, the biodiversity trust fund 20
percent, and the Treasury the rest, a percentage that would vary from year to
- The biodiversity trust fund would be managed by a biodiversity board of
trustees appointed by, say, the Secretary of the Interior. The board would be
allowed to use the money in any way it deems fit so long as it is spent
protecting and improving biodiversity. This may include buying land, paying
federal land trust managers for conservation easements or to use or avoid
selected practices, or pay land owners or land managers "bounties" when their
land provides breeding habitat for rare or endangered species.
- Congress could revoke the charter of any land trust that significantly
abused the resources within its care. This would be Congress' only role in
federal land policy after the land trust system is set up.
- Minerals underlying BLM lands should be managed by the BLM using the same
rules as other resources. Minerals underlying other federal lands should be
transferred to the agencies managing those lands so that those agencies can
make decisions on a true multiple-use basis.
The only way to solve the basic problems identified in this report--problems of
waste, subsidies, and nonsustainable timber cutting--is to provide BLM managers
with new incentives that balance resource uses and discourage subsidies. The
Thoreau Institute's proposal is designed to meet this objective.
The checks and balances in this system are far superior to those in place today
or any possible under a system of Congressional micromanagement or standards
and oversight. The land trust system's checks and balances include:
- Funding the trusts out of the net income they earn places a check on
bureaucracy and below-cost activities. Managers are not forbidden to sell
things below cost or to swell their overhead costs. But if they do either, they
will reduce their net income and thereby have to pay for it themselves.
- Allowing land trusts to charge for a broad range of uses balances the
scales among resources. Whereas the current system favors timber and grazing,
the land trust system favors the resources that users consider to be the most
valuable. Users, not Congress or politically driven managers, make the ultimate
decisions on the mix of outputs from a particular district.
- The boards of trustees provide an additional check on major decisions, such
as the decision to build a campground, to manage a particular piece of land for
timber, or the fees charged for selected activities. Since the boards are
elected by those most interested in the district, they will have the
appropriate balance of national and local interests.
- A biodiversity trust fund provides a balance to protect values that cannot
easily be reflected in user fees.
- As an additional balance for non-market values, land trusts could sell
conservation easements to individuals or organizations that would prefer not
see, for example, a particular forest cut or a particular pasture grazed. Since
the cost of managing easements is low, the trust would have an incentive to
market easements and add to their net revenues.
- The ultimate check is maintained by Congress, which can revoke a trust's
charter for malfeasance.
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