EXPLANATION OF PROGRAM

The appropriation "Salaries and Expenses" of the Rural Electrification Administration funds the activities authorized by the Rural Electrification Act, as amended. The Act, as amended, authorizes REA to provide to qualified electric and telephone organizations capital through insured loans and

loan guarantees for the purpose of providing rural areas electric and telephone service comparable in reliability and quality to the service provided the rest of the Nation. Also, through authorities transferred to REA from Farmers Home Administration REA provides financing for Community Antenna Television facilities. In support of these programs, the REA staff furnishes management and technical assistance to borrowers for the purpose of protecting the Government's loan security, to assure that construction and operation of borrowers' systems conform to approved standards, and that the electric, telephone, and CATV systems continue providing reliable service on an area coverage basis.

a/ Processing applications and advances to "new" borrowers requires more processing

time than loans to "existing" borrowers.

JUSTIFICATION OF INCREASE

(1) An increase of $949,000 for administration of rural electrification, rural telephone and community antenna television loan programs consisting of:

(a) An increase of $499,000 for fiscal year 1981 pay increases.

(b)

An increase of $450,000 for increased operating costs.

Need for Change. This increase is necessary to cover the increased operating costs associated with efficiently carrying out the loan programs of the Rural Electrification Administration.

Nature of Change. The budget increase will permit the agency to continue the efficient operation of the rural electric, telephone, and community antenna television programs. Sufficient funds would be available to furnish the management and technical assistance to borrowers to protect the Government's loan security, to assure that borrowers conform to approved construction and operations standards (with particular emphasis on new CATV borrowers) and that all borrowers continue to provide reliable service on an area coverage basis.

WEDNESDAY, MARCH 25, 1981.

SOIL CONSERVATION SERVICE

WITNESSES

NORMAN A. BERG, CHIEF, SOIL CONSERVATION SERVICE

DAVID G. UNGER, ASSOCIATE CHIEF

WILLIAM E. GARDNER, JR., DIRECTOR, BUDGET FORMULATION

STEPHEN B. DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE

INTRODUCTIONS

Mr. WHITTEN. The Committee will come to order.

We have with us today the Soil Conservation Service. Mr. Norman A. Berg, who has been with us many years as the Chief of the Soil Conservation Service, is here with his associates. Not all of them have been with us before, and you might present them to us, Mr. Berg. Biographical sketches will go into the record. We are glad to have you with us.

Mr. BERG. We are happy to introduce to the Committee, John Crowell, Jr., who is presently Assistant Secretary Designate for Natural Resources and Environment. Mr. Crowell comes to this position from being the General Counsel for the Louisiana Pacific Corporation headquartered in Portland. He is a lawyer. He brings valuable experience to our area of conservation and natural re

sources.

He is going to have to leave about 3 o'clock for another meeting. Mr. WHITTEN. We will ask him some hard questions before 3 o'clock.

Mr. BERG. He has been advised that he is an observer at this stage. He is going to watch how I answer the questions.

Mr. WHITTEN. I am sure you will be careful.

Mr. BERG. I would like to also introduce as we did last year, Dave Unger, my Associate Chief; Bill Gardner is new to my staff. He is the Director of Budget Formulation. He came to us from Steve Dewhurst's staff. We are pleased to have Bill with us. [The biographical sketch of Mr. Gardner follows:]

BIOGRAPHICAL SKETCH, WILLIAM E. GARDNER, JR.

William Gardner was born in Rocky Mount, North Carolina, on January 10, 1947. He attended the University of Mississippi and graduated with a Bachelor of Arts degree in June, 1969.

Mr. Gardner began his career in October, 1969, as a management intern-budget analyst with the USDA Office of Budget and Finance, which was the predecessor to the Office of Budget, Planning and Evaluation (OBPE). His work included the review of the budget and program proposals of the Soil Conservation Service and other natural resource programs of the Department of Agriculture.

In May, 1971, Mr. Gardner transferred to the U.S. Forest Service in Columbia, South Carolina, in order to gain experience at the field operations level. He worked primarily in the contract administration and budget areas. In August 1972, he

returned to the OBPE in Washington, D.C. as a budget analyst. In August, 1976, he was promoted to staff chief in the Budget Division of OBPE and had the responsibility for budget review and analysis related to natural resource programs, rural development, and science and education.

In June, 1980, Mr. Gardner transferred to the Soil Conservation Service to become the Director of the Budget Formulation Staff. He resides in the rural county of Spotsylvania, Virginia, with his wife Eleanor and three children.

Mr. WHITTEN. We are glad to welcome you before the Committee and look forward to working with you.

IMPORTANCE OF CONSERVATION

As I have frequently said, it is fortunate that the recommendations of this subcommittee regarding conservation have been followed to a great degree by the Committee and by the Congress. In the early 1930's, we had wasted about 60 percent of our soil and used up about 80 percent of our timber. We had the Dust Bowl. The Soil Conservation Service was set up, consisting of districts. organized in the various states. The Agricultural Conservation Program was initiated whereby projects and practices were made available with government funding of about one third of the actual monetary cost in most cases. Those practices were selected at the local levels since the landowner or farmer put up a big part of the cost.

We worked for years on this Committee trying to pull the two together. At one time those who were administering the ACP criticized the Soil Conservation Service because they said you worked out such detailed plans that, if you were working on 100 plans, before you finished 5 the other 95 would change. The Soil Conservation Service people said the Agricultural Conservation Program was scattered so far and wide you could not tell where they had been and where they had not been.

We are proud to have worked with the Service and we are proud of you for your part in the arrangement we worked out where 5 percent of the ACP funds are made available to you for your technical assistance. It has enabled you to steer the practices toward good systems consistent with your plans.

In addition we had another problem where the Soil Conservation Service and the ACP handled the hillsides and the Corps of Engineers handled the creek or the drainage stream and in between they both said, you handle it. In this Committee we said where one laid the shovel down, that is where the other responsibility started, so there would be no argument.

With all of our serious financial problems today-inflation, high interest rates, and all of those things having to do with our financial system-luckily we have maintained the productive capacity of our land.

Twenty-eight times this Committee's recommendations have been followed over the recommendations of Presidents so that the Soil Conservation Service was able to continue its work in restoring the land. In my area of northern Mississippi you can see grass growing and how green it is compared with the way it was some years ago. We have done a good job of keeping our country rich in real wealth. I am disturbed by the recommendations coming down now to cut back the attention you give to protecting the soil and the