House Appropriations Subcommittee Considers Cutting DOE

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Publication date: 
24 January 1995
Number: 
10

The change-over of power in Congress has both ends of Pennsylvania
Avenue looking for budget cuts and places to pare back government.
Suggestions have included abolition of entire departments, with the
Department of Energy being a prime target.  Although the
Administration has backed away from such drastic action, President
Clinton has proposed cutting approximately ten percent ($10.6
billion) from DOE's projected budget over the next five years (see
FYI #172, 1994.)

In the House, the Energy and Water Development Appropriations
Subcommittee, which funds DOE,  held its first hearing on January
18 on the department's programs.  The purpose, said new chairman
John Myers (R-IN), was to "review the government functions within
the Department of Energy that we could do without," and find areas
in which to "make some recissions on funds appropriated for this
year [fiscal year 1995]."  (Recissions cancel funds already
provided by law.)

Among the witnesses, conservative think tanks were represented by
Scott Hodge, a Fellow at the Heritage Foundation; Jerry Taylor,
director of Natural Resource Studies at the CATO Institute, and
Fred Smith, president of the Competitive Enterprise Institute.  The
final witness, Vic Rezendes, is director of Energy Issues at the
General Accounting Office (GAO), which has criticized DOE's "long
history of management problems."  All the witnesses agreed on the
need for reexamining the appropriate role for the federal
government versus state and local governments and private industry.

Hodge and Taylor advocated dismantling DOE entirely.  Suggestions
included giving its research functions to an agency like NSF, its
environmental functions to EPA, its defense activities to the
Defense Department or a non-Cabinet agency, and privatizing its
energy activities and the system of national laboratories.  All
three think tank witnesses agreed that the federal government
should get out of energy policy and research.  Taylor cited the
Synfuels program, the Clinch River Breeder Reactor, and the SSC as
"fiscal fiascoes" that the department should not have been involved
in.  Although Rezendes described a recent GAO query of energy
experts which concluded that DOE should focus more on its core
missions such as energy policy and energy R&D, the other witnesses
found fault with GAO's choice of experts.

Asked whether DOE and its labs have a reason for existence,
Rezendes replied that "it depends on what you want to achieve."
Noting that most of DOE's functions would be continued elsewhere in
the public sector or by industry, he questioned, "What's the
best...configuration" to achieve them?  He added that closing or
moving programs could increase short-term costs.

Rep. Frank Riggs (R-CA), a new Member of Congress, asked whether he
could take it as a "rule of thumb" that the government should not
be in the R&D business.  Rep. Jim Chapman (D-TX), a veteran
subcommittee member, disagreed, using the SSC as an example.
Stating that he believed the intended physics research should be
performed, Chapman argued that he could "not imagine private
industry undertaking that effort."

Hodge countered that the vacuum left if government backed out of
funding research would be filled by industries eager to go into
partnerships with universities.  Rezendes reasoned that there might
more of a role for government in funding basic research, such as
high energy physics, while possibly less of a role in applied areas
such as energy R&D.  He also pointed out the need for a federal
role in the nuclear weapons research carried out at the national
labs.  Chapman charged that going to war in the Persian Gulf to
protect oil reserves "puts a different spin" on the federal role in
energy supply R&D, making it partly a national security issue.

Closing the hearing, Chairman Myers agreed that the nation would
not "get advanced physics if we relied on industry," unless the tax
structure were changed to provide incentives.  He added that the
national labs are doing some research "we absolutely have to have."
"We have to listen to everyone," he cautioned.  It is worth noting
that as the Energy Department is downsized, so is the
subcommittee's jurisdiction.

Chairman of the full House Appropriations Committee, Bob Livingston
(R-LA), announced yesterday that he expects to save $35 to $40
billion between recissions to the fiscal 1995 budget and cuts from
the projected 1996 budget.  However, he noted that cuts to the
current year budget would have to be "modest" to avoid the
President's veto.

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