House Appropriations Subcommittee Considers Cutting DOE

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.