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transportation systems contribute to meeting air quality health standards in regions where these standards are not now being met. In an effort to solidify further the Federal/State partnership in improving the Nation's environment, the administration supports the 49% increase in budget authority for grants to support States and localities in operating their environmental programs enacted for 1978, and recommends an additional 3% increase in 1979. In addition, a proposal to consolidate grants for air, water quality, drinking water, and solid waste programs will be submitted separately. This initiative will provide States and local governments with increased flexibility to respond to local pollution problems and to initiate and develop abatement and control strategies. This budget also proposes a major emphasis on the control of toxic substances. Personnel increases of 82% and budget authority increases of 96% over 1978 are recommended. The increases reflect the priority placed on the effective control of toxic substances as an important part of the Environmental Protection Agency's preventive health mission. The administration continues to seek passage of its comprehensive oil pollution liability and compensation legislation to assure adequate and timely compensation for damages and cleanup costs resulting from oil spill pollution. Budget resources in support of the mission of pollution control and abatement are included in agencies other than the Environmental Protection Agency, and, where their primary purpose is the support of other national needs, are classified in other functional categories. For example, the Environmental Protection Agency has identified over 140 major violations of pollution standards by Federal facilities and has notified the agencies affected that they must comply with pollution standards. In response, the administration has ensured that each agency's proposed budget includes sufficient funding for pollution control projects to halt these violations in line with compliance schedules approved by the Environmental Protection Agency. Several agencies also are proposing funding a number of projects for facilities that will reduce pollution to avoid future violations. The following table summarizes the financing of pollution control and abatement activities that are classified as meeting these as well as other national needs. For further details see Special Analysis O, “Environment.” Tax expenditures for pollution control result from the exclusion of interest on pollution control bonds from income subject to tax. The facilities financed by these bonds are privately owned, even though the bonds are nominally issued by State or local governments. Under current law the resulting tax expenditure would be $385 million in 1979. The tax reform proposals would eliminate the tax-exempt

POLLUTION CONTROL AND ABATEMENT—INCLUDING PROGRAMS ASSIGNED TO OTHER MISSIONS

[In millions of dollars)

Outlays Obligations # actual 1977 1978 1979 actual estimate estimate Environmental Protection Agency (largely subfunction 304):

Water:

Construction grants or loans------------------- 3,530 7,501 4,000 5,000

Other water---------------------------------- 307 256 386 372

Air------------------------------------------- 177 165 190 224

Other'---------------------------------------- 352 386 488 463

Subtotal----------------------------------- 4,366 8,308 5,064 6,059

Other programs:

Water:

Construction grants or loans------------------- 178 442 117 152

Other--------------------------------------- 500 534 587 654

Air------------------------------------------- 303 345 333 324

Land------------------------------------------ 136 114 135 133

Other'---------------------------------------- 346 471 416 511

Subtotal---------------------------------- 1, 463 1,906 1,588 1,774

Total------------------------------------ 5,829 10,214 6,652 7,833

* Includes toxic substances control, waste management, noise, radiation, and pesticides.

status of newly issued bonds because tax exemption is an inefficient subsidy. The tax code would be amended, however, to permit the full 10% investment tax credit to be claimed for such facilities in cases where the facilities are amortized over 5 years.

Water resources.—The mission of water resources development is to manage and control our water resources in order to attain the benefits of water resource projects while preserving the quality of the environment. The Federal Government carries out its responsibilities with a careful regard for the role of State and local governments. The Federal Government is involved in a wide range of activities in support of this mission: flood control; • irrigation and water conservation; • development and maintenance of inland waterways and harbors; -> o

hydroelectric power development; -
municipal and industrial water supply development;

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• recreation and wildlife preservation; and • erosion control. Outlays for this mission are estimated to decrease from $3.7 billion in 1978 to $3.4 billion in 1979. The involvement of the Federal Government in water resources development has grown in piecemeal fashion over the years without a unified and consistent policy. A major policy study is now underway in an effort to evaluate the state of our water resources and to develop policies and programs consistent with that evaluation. The administration wants to improve the efficiency, consistency, and contribution to environmental quality and to water conservation of Federal water programs. Presidential recommendations on water resources policy are expected to be transmitted to the Congress early in the calendar year 1978. Although no new water resource construction projects are proposed in this budget, the administration may recommend some new project starts in conjunction with the water resources policy recommendations. In addition, other program and project recommendations in this budget may be amended at that time. The 1979 budget includes outlays of $16 million for the Corps of Engineers to continue a non-Federal dam safety inspection program initiated by the President in 1978. Under this program, the Federal Government will finance the one-time inspection of approximately 9,000 high-hazard dams and assist the States in training personnel to establish adequate State dam safety programs to continue this activity in the future. The recommended outlay levels in the 1979 budget for projects now being constructed by the Corps of Engineers and Bureau of Reclamation are expected to result in slightly reduced work levels and completion delays for some projects as compared to the schedules in the 1978 budget. High-priority projects, such as hydroelectric power, urban flood damage reduction, and municipal and industrial water supply, will be kept on schedule. Delays are anticipated in the construction of the Auburn Dam in California, pending a current review of geologic conditions, and the Garrison diversion project in North Dakota, pending a resolution of legal and international questions. Should these problems be resolved satisfactorily, any additional funds that may be required will be requested. Estimated 1979 outlays for the planning of future water projects in the Corps and Bureau of Reclamation are slightly below 1978. Two kinds of Corps of Engineers studies are proposed for termination: those for which it is unlikely that a worthwhile project will ever result, and those whose primary purpose is not a high-priority Federal water resources mission. The following table shows construction projects that have been funded with year-to-year appropriations and that need future budget

authority for their completion. Because the total budget authority does not appear in any one budget year, the full costs of these projects are often not clearly displayed. For example, the proposed 1979 budget authority of $2.1 billion for water resources projects will have to be supplemented by an additional $19.0 billion in budget authority in future years to complete the projects. The total cost of these projects is estimated at over $41 billion.

Other Corps and Bureau of Reclamation activities, such as the operation and maintenance of completed projects, are expected to continue at approximately the same level as in 1978, as are the water resource activities of the Soil Conservation Service.

Federal water resources activities supplement and complement other national needs and missions. For instance, canals and rivers provide a transportation service; flood control investments reduce disaster assistance; irrigation and drainage projects increase farm production; Federal hydroelectric power meets part of the Nation's energy needs; and Federal water resources planning constitutes an integral part of the Nation's environmental protection activities.

Conservation and land management.-Federal lands total about 760 million acres, or 33% of the country's area, of which nearly 300 million acres are in Alaska. The conservation and land management mission is carried out through a program of Federal land management that strives for an optimal balance among various uses. Federal lands are managed to conserve and develop natural resources, including timber and wildlife habitats; to provide recreation opportunities on

WATER RESOURCES CONSTRUCTION PROJECTS IN THE 1979 BUDGET THAT

REQUIRE FUTURE BUDGET AUTHORITY

[In millions of dollars]

national forests and other public lands; and to encourage conservation efforts, including watershed protection and development, on private lands. Total outlays are estimated to increase from $1.3 billion in 1977 to $2.1 billion in 1978 but decrease to $1.6 billion in 1979.

Management of national forests and forestry research.—

The Forest Service administers the National Forest System, conducts a comprehensive forest and rangeresearch program, and carries out cooperative forestry programs with States and private landowners. Proposed 1979 budget authority for these activities totals $1,570 million, a decrease of $68 million from 1978 ($54 million of this decrease is due to lower estimates of budget authority required for firefighting). Reductions from the large increases approved for 1978 also are proposed in national forest management, cooperative forestry, and construction programs. These decreases are partially offset by increases for road construction and other forestry programs.

The proposed budget for the Forest Service is considerably less than that suggested by the reports prepared pursuant to the Resources Planning Act. This act requires the Secretary of Agriculture to recommend to the Congress his preferred level of funding for the Forest Service. However, the proposed budget, together with the assistance provided by the Young Adult Conservation Corps (financed by the Department of Labor and discussed in the education, training, employment, and social services function), provides sufficient resources for managing an aggressive program. Management of the national forests will continue to emphasize both the need for timber and the need to protect the environment. Planned timber sales total 11.5 billion board feet in 1979, the same as planned for 1978. The budget anticipates over 213 million visitor-days of recreation use. Possible additions to the national wilderness preservation system are currently under review. Programs of monitoring and enforcing standards of water quality, managing habitats for the preservation of endangered and threatened species of wildlife and plants, and restoring rangeland will continue.

Management of public lands.—The Bureau of Land Management administers the public lands that embrace 470 million acres or 20% of the country of which 276 million acres are in Alaska, as well as 840 million acres of subsurface rights vested in Federal ownership. In addition, it has jurisdiction over the 1.1 billion acres of the Outer Continental Shelf. In managing these areas the Bureau strives for an optimal balance among timber, grazing, mineral development, and other uses. Revenues collected from mineral leasing, grazing fees, timber sales, land and materials sales, and rights-of-way leases are estimated at $707 million in 1978 and $790 million in 1979. Outer