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In the summer of 2011, Congress sent the President a bill that acknowledged failure. Instead of swallowing hard and coming up with trillions of dollars in deficit reductions, they punted the effort to a “Super Committee” of Republican and Democratic lawmakers from the House and Senate to figure it out. The specter of sequestration – across the board budget cuts hitting defense and non-defense equally – was supposed to be enough of a threat to force action.

It wasn’t.  The Super Committee flopped.

For seventeen years, Taxpayers for Common Sense (TCS) has mined the budget to highlight wasteful spending, exposing, naming, and killing earmarks like the “Bridge to Nowhere” as well as relentlessly going after wasteful spending in the tax code like the duplicative ethanol tax credit subsidy. Building on our earlier submissions to the Simpson-Bowles deficit commission, TCS offered $1.5 trillion worth of deficit reduction in our “Super Cuts for the Super Committee,” $300 billion more than needed to avoid sequestration. But rather than making the hard choices, the Super Committee did nothing and failed to propose even a single dollar of deficit reduction.

With the January 2, 2013 start of sequestration looming, Taxpayers for Common Sense is back on the job. We believe the programs listed here – whether funded through appropriations or the tax code – can be safely eliminated from the budget because they are an inefficient, ineffective, or wasteful use of taxpayer dollars. We have gathered more than $2.0 trillion in deficit reduction that reflect the values of effectiveness and efficiency in managing taxpayer dollars. By simply adopting these common sense recommendations, Washington will be $800 billion beyond its statutory requirement.

Instead of being fiscal cliff jumpers, Congress can dive into the hard work of cutting spending, finding revenue, and reforming entitlements to turn the country’s fiscal situation around. All these common sense cuts are possible if Congress and the President choose to put the country ahead of partisanship or parochial pandering.

Sequestration is bad. It would cut the good along with the bad, the effective and the wasteful. It is irresponsible. But it is clear who is responsible for it – Congress and the President. Not one, not the other, but both. And that’s who is going to have to be responsible for defusing the ticking budget time bomb that would cut $1.2 trillion indiscriminately.

Under sequestration, $109.3 billion would be cut in the first year (2013), half from defense and nondefense each. In an effort to help forestall sequestration and give Congress the time to pursue a “grand bargain” of spending, entitlement, and tax reform, TCS has also calculated the one year savings associated with the cuts, in addition to the ten-year score normally used. Congress should take this time of great public interest and attention to not only put the budget on sounder fiscal footing going forward, but to also reform the tax code so that it is simpler, flatter, and fairer.

Methodology

In most cases the calculations are based on savings over a ten-year window. Based on knowledge and previous history, TCS determined the likelihood that a discretionary appropriation or expiring tax expenditure would continue through the ten-year period. Tax expenditures and programmatic spending estimates were taken from the Joint Committee on Taxation (JCT), Congressional Budget Office (CBO), or federal budget documents. In the Appendix, TCS lists references next to each recommended cut. If ten-year estimates were not available, TCS extrapolated the ten-year estimate from an average of available years. In the case of discrete project spending, TCS used the stated remaining construction costs to calculate savings. When estimating the 10-year cost of some tax credits or other supports that are tied to production levels, we multiplied U.S. Energy Information Administration (EIA) projections by the effective subsidy rate. For instance, the taxpayer cost of the cellulosic ethanol tax credit is based on future production levels, as estimated by EIA.

Using the same sources as the ten year numbers, TCS also estimated the first year deficit reduction from each of the cuts. In some cases the proposal would be phased in, or would only have an impact in the outlying years and no deficit reduction was calculated in the first year numbers. In others the impact was more immediate.

In all cases TCS erred on the conservative side and limited the value of deficit reduction measures.

Baseline: In order to calculate the deficit and deficit reduction, TCS considered what would be in the ten-year budget baseline, which is the predicted amount of spending and revenue for the next ten years and the resulting deficit. This assumes that what is current law will come to pass. Under current law, many tax cuts and programs are going to expire in the next ten years and others are subject to annual appropriations. Realistically, some of the spending will continue as certain programs are going to be funded each year, Medicare payment cuts to physicians aren’t going to materialize, certain expiring tax cuts are going to be extended, and legislated savings from efficiency and targeting waste, fraud, and abuse are more vapor than substance.  The CBO recognizes this and often comes up with alternative budget scenarios that take these various outcomes into effect. TCS measured the deficit reduction predictions against this likely baseline.

Section I: Sliding Past Sequestration Savings contains spending and tax expenditures that TCS believes would result in deficit reduction according to a likely CBO baseline.

Section II: More Common Sense Cuts contains cuts that may not be in the likely baseline budget, meaning CBO may not count them toward the deficit reduction target.  For example, other items include liabilities for taxpayers that could add to the debt in catastrophic scenarios, projects authorized by Congress but that may or may not receive funding in the future, and other cuts whose costs against the baseline are uncertain.  Despite that baseline consideration, we recommend that Congress protect the fiscal health of the nation by adopting these reforms as well.

In addition, some budget options will not produce scorable savings in the first year of implementation and so no figures are provided in those cases.

The following report is not an exhaustive list of deficit reduction measures. Absence from this list does not imply TCS support of a particular policy or program.

Section I. Sliding Past Sequestration Savings  

                                                                              Cut: 10-Year

In 2013

Agriculture (jump to)                                        $ 126.6 billion

$11.8 billion

Energy (jump to)                                                $ 129.9 billion

$12.8 billion

General Government (jump to)                       $ 0.6 billion

$0.06 billion

Infrastructure (jump to)                                      $ 5.3 billion

$ 0.5 billion

National Security (jump to)                          $ 672.5 billion

$64.2 billion

Public Lands (jump to)                                       $  18.3 billion

$ 1.7 billion

Tax Expenditures (jump to)                        $ 946.0 billion

$60.2 billion

Transportation (jump to)                               $ 187.5 billion

$11.4 billion

Savings total                                  $ 2.09 trillion

$ 162 billion

Section II.  More Common Sense Cuts  

Energy (jump to)                                               $ 4.1  billion

Infrastructure (jump to)                                $ 4.2  billion

National Security (jump to)                          $ 3.7  billion

Public Lands (jump to)                                   $ 2.6  billion

Transportation (jump to)                             $ 13.2  billion

More cuts total                                  $ 27.8 billion

 Agriculture                             Ten-Year Cut:$126.6 billion
                                                   One-Year Cut:$  11.8 billion  

                                                                                                                  Cut: 10-Year

In  2013

In  2013

Election to expense 50 percent of qualified property used to         Cut: $6.0 billion

$600 million
refine liquid fuels (oil shale and tar sands refineries)

In  2013

In  2013

  In 2013

In  2013

$130 million

The Army Corps of Engineers’ Environmental Infrastructure program duplicates and undermines other more cost-effective and accountable governmental programs.  Under this program, Congress designates a state, city, or county for environmental infrastructure funding, which includes municipal water supply, drinking water treatment, and wastewater treatment projects. Congress then earmarks grants for 65-75 percent of the costs for unspecified water projects in these areas with no strings attached.  The necessity, value, and effectiveness of these projects is difficult to determine because the program is fully earmarked and the projects are not subject to standard economic analyses.  The water projects funded under this program are not the legislated primary mission areas for the Corps (navigation, flood and storm damage reduction, and environmental restoration), but instead directly compete with those missions for limited funding. This program has never been included in any president’s budget and it should not be included in any Congressional budget either.

$ N/A

The V-22 Osprey is a tilt-rotor aircraft that can take off and land like a helicopter, but can fly like a plane. Unfortunately, its cost has more than doubled since initial estimates and, according to the GAO, it had a full mission capability (FMC) rate of just 6 percent while operating in Iraq between October 2007 and June 2008. The V-22 is simply neither cost- nor operationally effective. The Sustainable Defense Task Force (SDTF) has noted that the overpriced, underperforming V-22 Osprey can be replaced by helicopters. Specifically, the SDTF recommends a high/low lift combination of MH-60 and CH-53 helicopters. Based on the latest DoD figures for the procurement and operating costs of these aircraft, replacing the Ospreys scheduled to be built between FY 2013 and FY 2019 with MH-60 and CH-53 helicopters would save more than $17.1 billion from FY 2013 to FY 2022.

$134 million

Another wasteful DOE project, the mixed oxide fuel (MOX) facility at the Savannah River Site, has gradually grown more expensive and less justifiable since its inception. The cost is now estimated to be $4.9 billion for the main and feedstock facilities, but is on the rise because of the high turnover of personnel. The facility is designed to recycle excess plutonium from dismantled weapons and turn it into MOX, which can be sold to fuel nuclear power plants. Unfortunately, the materials required to create MOX (disassembled plutonium pits) aren’t readily available and the only current buyer for MOX dropped the contract. The crisis at the Fukushima Dai-ichi power plant (which used MOX in one of its reactors) looks to be scaring potential buyers, possibly making the half-built Savannah River facility the manufacturer of a useless product. There’s also a possible proliferation hazard, because recycling the plutonium could indicate to other nations that the U.S. approves of separated plutonium fuel programs, or could even lead to a reversal of the MOX process, allowing MOX fuel to be turned into weapons-grade material. As of January, nearly $650 million had been spent on the facility. Eliminating further funding for this facility—which cannot make a product anyone will buy—could save taxpayers approximately $4 billion.

$181 million

In 2011, in an effort to keep the Abrams M1A2 SEP (System Enhancement Package) tank line “hot,” the House appropriated $272 million beyond the DoD’s request for these new tanks. Now, for the FY 2013 budget, Congress is yet again forcing the Army to procure more tanks than the Army says it needs. The tanks, 33 in total, will cost taxpayers approximately $230 million. The Army already has more than 500 of the tanks and has not indicated a need for increased production. This pork should be cut from the budget.

$400 million

Forest Products (Within Integrated Resource Restoration)             Cut: $3.4 billion

$336 million

$60 million

  Tax Expenditures               Ten-Year Cut: $946.0 billion
                                                 One-Year Cut: $  60.2 billion

Mortgage Interest Deduction (Modification)                              Cut: $645 billion

$39.4 billion

The mortgage interest deduction enables homeowners to effectively deduct interest from up to $1.1 million in debt used to buy, build, or improve their primary or second home. The purported goal of this policy is to make home ownership more affordable. Yet, because it is available for million-dollar mortgages and second-homes, the deduction has done more to promote over investment in housing as opposed to other sectors of the economy and to inflate the purchase price of homes, including vacation homes. At an estimated cost of $93 billion in 2012, it is one of the largest tax expenditures. Congress should modify the mortgage interest deduction to save taxpayers billions, while better helping achieve Congress’ stated goal of making homeownership more affordable. The Congressional Budget Office has detailed a number of options including converting the deduction to a tax credit and applying it only to interest on mortgages below a more reasonable limit (for example $500,000). Congress should enact these common sense reforms with a goal of reducing the annual cost of the mortgage interest deduction by at least one-third.

Foreign Tax Credit (FTC)                                                                  Cut: $116.9 billion

$5.22 billion

The Foreign Tax Credit was established to prevent U.S. businesses—and U.S. citizens living abroad—from being double‐taxed on income earned in foreign countries. The FTC allows U.S. companies and individuals to count foreign income taxes as a credit on taxes owed in the U.S. Unfortunately, the FTC contains a loophole that allows companies to shift income abroad to maximize the break. Companies have also obtained credits on “income taxes” that appear to be de facto royalty payments to foreign governments which would not be eligible for dollar‐for‐dollar credit against U.S. tax payments. Requiring companies to pool and report on all of their foreign income would provide more transparency for what is being counted as income tax that is eligible for a tax credit. Reform would reclaim an estimated $59.8 billion in lost tax revenue from 2013‐2022. Also, ending the practice of splitting foreign income and foreign taxes for accounting clarity would lead to $57.1 billion in taxpayer savings over the same period.

Credit for Increasing Research Activities                                     Cut: $87.6 billion

$8.76 billion

Companies doing research and experimentation in the United States receive a lucrative tax credit from this provision in the tax code. Companies that have benefited from this provision include Microsoft Corp., Boeing Co., United Technologies Corp., Electronic Data Systems Corp., and Harley-Davidson Motor Co. Taxpayers should not be responsible for covering ordinary business costs.

Last In First Out Accounting (LIFO)                                               Cut: $66.9 billion

$4 billion

Last‐in, first‐out (LIFO) accounting enables companies to move the most expensive inventory off of their balance sheets, thereby reducing their taxable income, even though the actual movement of inventory occurs on a first‐in, first‐out (FIFO) basis in many industries. LIFO is already prohibited by International Financial Reporting Standards. The repeal of LIFO if applied to all industries would save $66.9 billion from FY2014-22, as estimated by the Joint Committee on Taxation’s analysis of the President’s FY2013 Budget. If implemented sooner, taxpayers could save billions more in FY2013. Oil and gas companies account for roughly half of the cost of LIFO.

Deduction of State and Local General Sales Taxes                    Cut: $23.38 billion

$2.34 billion

This provision was eliminated from the tax code in the 1986 reforms, but was brought back to life in recent years. It enables taxpayers the option of deducting itemized state and local sales taxes from federal income tax, but only if they do not deduct state income tax. Therefore, the major beneficiaries are the residents of states that don’t have state income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.

Special Expensing Rules for
U.S. Film and Television Productions                                               Cut: $2.25 billion

$225 million

In an effort to keep film and television production in the United States, filmmakers have the option of immediately deducting significant costs for most film or television productions. Under this provision producers can elect to expense in the current year the first $15 million of production costs incurred in the U.S. ($20 million if the costs are incurred in economically depressed areas in the U.S.). This can be used if at least 75 percent of the costs are for services performed in the U.S., and is available for both blockbusters and those that go “directly to video cassette or any other format.”

Tax Credits for New Plug-in
Electric Drive Motor Vehicles                                                            Cut: $1.86 billion

$39 million

The federal government provides several incentives to buyers and producers of electrical vehicles (EV) to encourage their production and purchase. One such incentive is an up to $7,500 income tax credit for the purchase of a new EV, depending on the capacity of the vehicle’s internal battery. This tax credit was created in the American Recovery and Reinvestment Act of 2009 (stimulus). The Joint Committee on Taxation estimates the cost of this tax expenditure to be $1.86 billion between 2013 and 2019.

Enhanced Charitable Deduction for
Contributions of Food Inventory                                                        Cut: $1.82 billion

$182 million

Congress has routinely extended an enhanced deduction for the charitable contribution of food inventory. Under this provision, the food must be “apparently wholesome food.” However, “wholesome” food isn’t necessarily healthful or even edible and is defined as “food intended for human consumption that meets all quality and labeling standards imposed by Federal, State, and local laws and regulations even though the food may not be readily marketable due to appearance, age, freshness, grade, size, surplus, or other conditions.”

Seven Year Straight Line Cost Recovery Period
for Motorsports Entertainment Complexes                                  Cut: $310 million

$31 million

Undercutting IRS rulings to the contrary, owners of motorsports entertainment complexes (aka NASCAR tracks) are able to write off the cost of their facilities on their taxes over seven years—instead of the standard 39 years for nonresidential property and 15 years for “improvements” (such as fences and roads)—as long as the venue hosts an event within three years of its completion. Such an accelerated depreciation schedule increases the value of the yearly deduction for owners.  Track owners have also gotten plenty of other tax breaks over the years from states and localities eager to get speedways. The provision encompasses all facilities including grandstands, parking lots, and concession stands.

Transportation                       Ten-Year Cut: $187.5 billion
                                                   One-Year Cut: $  11.4 billion  

General Revenue Transfers to Highway Trust Fund                  Cut: $109.6 billion

N/A

In recent years, Highway Trust Fund (HTF) balances are increasingly unstable due to reduced growth in vehicle miles travelled and increased fuel economy of the nation’s cars and trucks. In a series of short-term fixes since 2008, Congress made three transfers totaling $34.5 billion from the nation’s general revenues to keep the HTF in the black, and the most recent reauthorization (MAP-21) relies on another almost $20 billion Treasury bailout. Even with these transfers, the Congressional Budget Office estimates that current spending levels will exceed gas tax revenues by $110 billion between 2014 (when MAP-21 expires) and 2022. This difference would have to be made up by additional transfers from the General Fund because federal law prohibits the HTF from incurring negative balances. Use of general revenues adds to the nation’s trillion-dollar deficits, undermines the “user-fee” basis of the trust fund, and provides no incentive for the efficient building or maintaining of the transportation network. Congress should either locate new revenue sources to shore up the HTF or downsize the federal highway program so that spending matches revenues.

General Revenue Transfers
to Airport and Airway Trust Fund                                                        Cut: $50.0 billion

$5 billion

According to the Government Accountability Office, Airport and Airway Trust Fund revenues have fallen short of Federal Aviation Administration estimates in nine of the last 11 years. To make up the difference, Congress annually transfers approximately $5 billion each year to cover the shortfall instead of cutting spending or improving how revenue estimates are done. As a result, collections will fall short of spending by $50 billion over the next decade.

Airport Improvement Program Grants
to General Aviation-Dominated Airports                                           Cut: $22.0 billion

$2.2 billion

The Federal Aviation Administration’s (FAA) Airport Improvement Program (AIP) — supported largely by airline ticket taxes — provides planning and development grants for large and small airports. The program includes general aviation airports that serve only recreational, cargo, and corporate jets, not the airline passengers or airlines that ultimately pay the taxes. This cross-subsidy shifts money away from crowded commercial airports that struggle to expand under chronic congestion and outdated infrastructure. Congress should discontinue program grants for general aviation airports.

Advanced Technology
Vehicles Manufacturing Program                                                         Cut: $4 billion

$4 billion

The federal government provides several incentives to buyers and producers of electrical vehicles (EV) to encourage their production and purchase, including a $25 billion direct loan program for manufacturers of automobiles and automobile parts. According to the Congressional Budget Office, Congress appropriated $7.5 billion to cover the subsidy costs of loans made by the program, and of that amount approximately $4 billion still remains unspent. It should be noted that taxpayer savings from eliminating future loans from this program could end up being even higher, as any loan carries the risk that it will not be repaid. In that case, the taxpayer burden would be the subsidy cost plus the loan itself.

Essential Air Service (EAS) Program                                                  Cut: $1.86 billion

$186 million

The Essential Air Service (EAS) program was launched as a temporary program in the late 1970s to ease the transition to airline deregulation by subsidizing commercial flights to the nation’s rural airports. Many of the cities served by this program can be found within reasonable driving distance from airports with unsubsidized flights. For example, the 50 minute flight from Lebanon, New Hampshire to Boston, Massachusetts receives a subsidy of $287 per passenger when it’s only a little over an hour drive to another large airport, Manchester-Boston Regional Airport. Other EAS flight subsidies can amount up to $1,000 per passenger. Eliminating this program from the FAA’s budget has the potential to save $1.86 billion over a 10-year period.

SECTION II: MORE COMMON SENSE CUTS

There are billions of additional dollars taxpayers can save if Congress implements cuts that may not technically qualify as cuts under Congressional budget rules. For example, liabilities for taxpayers that could add to the debt in catastrophic scenarios, projects authorized by Congress but that may or may not receive funding in the future, and other cuts whose costs against the baseline are uncertain. In addition, some budget options will not produce scorable savings in the first year of implementation.  Despite these baseline considerations, we recommend that Congress protect the fiscal health of the nation by adopting these reforms as well.

Energy

Biorefinery Assistance                                                                                   Cut: ??

Biorefinery Assistance is a loan guarantee program the helps develop new and emerging advanced biofuel technologies. The maximum loan guarantee for a single entity is $250 million and can go towards development, construction, or retrofitting of refineries.  The total taxpayer liability for this program is calculated at $6.7 billion over the next decade.

End Title XVII Loan Guarantee Program                                             Cut: ??

The Department of Energy (DOE) Loan Guarantee Program was created to provide loan guarantees for innovative emerging energy technologies, yet mature industries like coal and nuclear are eligible as well.  More than $30 billion in taxpayer backed loan guarantee authority is available. There are several major taxpayer problems with the program: the massive scope and uncertain costs; high default rates and low recovery rates on capital intensive projects, like nuclear reactors; the weakening of taxpayer rights in the event of default; and the unclear administration of loans.  In addition to the loan guarantee authority, the DOE also received $4 billion in appropriated funds to pay the credit subsidy costs for renewable energy, energy efficiency, and electric power transmission projects in the 2009 Stimulus.

Price-Anderson Act                                                                                          Cut:  ???

Originally enacted by Congress in 1957 as a temporary shield to the nuclear industry as it struggled to get off the ground, the Price-Anderson Act has become a near-permanent fixture of the federal government’s support of nuclear power.  The Act requires nuclear operators to maintain only roughly $300 million in insurance and then requires taxpayers to bear any additional costs from a nuclear accident.  If there were to be any problems at a nuclear reactor, taxpayers could be forced to pay tens of billions to cover cleanup and health impacts.

Liability Limitations for Offshore Drilling                                             Cut:  ???

Under the Oil Pollution Act of 1990, oil companies are responsible for all direct costs of containment and clean-up in case of an oil spill but are legally responsible for only $75 million in federal damages from the oil spill.  Any additional costs would be borne by the injured parties, or by taxpayers.  This liability limit significantly limits the need for oil producers to purchase insurance or otherwise guard against damages resulting from oil spills. The economic damages, including the loss of fishing and tourism dollars, could be tens of billions of dollars, as was demonstrated in the BP oil spill.

Production Tax Credit for Cellulosic Ethanol                                       Cut: $4.1 billion

Cellulosic ethanol is a well‐known advanced biofuel. The federal renewable fuels mandate requires 16 billion gallons of cellulosic ethanol to be produced by 2022.  To qualify for the mandate, each gallon must reduce greenhouse gases by 60 percent. Cellulosic ethanol is produced from cellulosic matter in plants, including corn stover (the leaves and stalks of corn plants), switchgrass, wood chips, and other plant wastes.  Companies receive $1.01 for every gallon of cellulosic ethanol produced.  Though this tax credit expires at the end of 2012, the Senate Finance Committee has already voted to extend it through 2013, and Congress will likely extend it for future years.  Taxpayers should not subsidize a technology that the Congressional Budget Office and National Academy of Sciences say isn’t yet viable at a commercial scale and won’t meet its production mandate by 2022. This cost assumes that the $1.01 credit continues through FY2022 and is tied to production estimates from the U.S. Energy Information Administration.

General

Congressional Pensions                                                                                 Cut: ???

Congress benefits from an elaborate and lucrative pension system that is more generous than is available to government employees. While most Americans have a defined contribution system that they pay into like a 401(k) retirement plan, simply remaining in office is key to increasing the annual pension for lawmakers. Aside from the savings, shifting Congress from a defined benefit to defined contribution plan would more readily align lawmakers’ interests with their working constituents.

Infrastructure

Upper Mississippi River Navigation Locks Project                           Cut: $ 2.4 billion

Despite continued decreases in barge traffic, cost-overruns, and a history of wildly exaggerated economic assumptions, the Army Corps of Engineers seeks to spend billions constructing new and enlarged navigation locks on the Upper Mississippi River-Illinois Waterway. The Mississippi River-Illinois Waterway Navigation Expansion Project is mainly just a fix for occasional barge transportation delays that occur at river locks during high traffic times. The Corps claims that seven brand new longer locks, at the low, low price of more than $2 billion, will solve our rush hour problem and also prepare for a ridiculously optimistic increase in barge transportation on these waterways. In 2000, the U.S. Army Inspector General found that Corps economists were ordered to exaggerate the demand for future barge traffic, and several Corps officials were slapped on the wrist. In addition, the National Academy of Sciences has consistently criticized the Corps’ plans to build the new locks, saying that the Corps should pursue cheaper measures like scheduling, tradable lockage fees, and helper boats, before even contemplating spending money on new or expanded locks. By implementing these alternative solutions taxpayers could get improved efficiency of the Upper Mississippi River-Illinois Waterway at a fraction of the cost.

Inner Harbor Navigation Canal (Industrial Canal)
Lock Replacement Project – New Orleans                                            Cut: $ 1.1 billion

The Industrial Canal is a manmade waterway running through New Orleans that connects the Mississippi River and the Gulf Intracoastal Waterway. For years Congressional representatives from Louisiana have earmarked federal funds to continue the Army Corps of Engineers’ efforts to replace the existing lock with a longer, deeper lock suitable for ocean-going vessels. This in spite of the fact that increased barge traffic and traffic delays predicted by the Corps have not only failed to materialize, but traffic has actually decreased. In addition the original Corps economic analysis found the deep draft lock was not the most economically beneficial project for the lock, but recommended it be constructed because of the willingness of the Port of New Orleans to shoulder a higher share of the costs. The Port has since pulled out of this agreement, leaving federal taxpayers holding the bill. And recently a federal court ordered the Corps of Engineers to halt construction because the Corps failed to adequately consider whether a deep-draft lock would be viable.

Delaware River Deepening Project
New Jersey and Delaware                                                                             Cut: $173 million

Despite opposition from the states of Delaware and New Jersey, the Army Corps of Engineers continues to pursue the uneconomical deepening of the Delaware River’s main channel. The project, which would increase the River’s depth to 45 feet from 40 feet for 105 miles, is intended to attract deeper draft cargo ships. In reality the ships aren’t going to come and the reduced transportation costs for a handful of oil refineries does not offset the heavy price tag of the project. The Government Accountability Office (GAO) has repeatedly criticized the Corps’ economic assumptions underlying this project.

Dallas Floodway Extension                                                                            Cut: $160 million

Neighboring the Fort-Worth Central City project (below), the Dallas Floodway Extension, Trinity River Project is a Corps flood control project on the Trinity River. Under this project the Corps seeks to extend existing levees while cutting a 600-foot wide swath (swale) through the Great Trinity Forest. The project’s principal economic justification is increased flood control for downtown Dallas. Yet, most of these benefits could be obtained for a fraction of the project cost by simply raising one of the existing Dallas levees and conducting a voluntary buyout in flood prone neighborhoods. This would provide the most effective flood protection for the area, with dramatically less impact to the floodplain.

St. Johns Bayou/New Madrid Floodway Project – Missouri              Cut: $ 123 million

Any notion that the St. Johns Bayou/New Madrid Floodway project was a good idea was washed away when the Corps responded to record flood heights threatening Cairo, Illinois by blasting the Birds Point levee on May 2, 2011, sending the Mississippi River cascading down the 130,000 acre natural floodway. The New Madrid Floodway is one of the last remaining natural floodways on the river, yet for years the Corps has sought to build levees and pumping stations to cut it off from the river. This flood protection project would actually increase flooding risks while inducing development in the floodway, costing taxpayers millions more in damages the next time the floodway is operated.

Grand Prairie Area Demonstration Project – Arkansas                       Cut: $110 million

The Grand Prairie Area Demonstration Project is a subsidized pump to provide subsidized water to grow subsidized crops and would be a first-step by the Corps of Engineers into the agriculture irrigation business. A century of unsustainable irrigation for rice farming in eastern Arkansas has left the area’s main irrigation aquifer severely depleted and is now threatening the region’s deeper drinking water aquifer. Rather than promoting proven efficiency and conservation techniques on the area’s farms, the Corps of Engineers proposes building a pumping station and 650-mile long canal and pipeline system to draw water from the White River.

Fort Worth Central City Project – Texas                                                      Cut: $81 million

The Central City project is just one portion of a larger project know as the Trinity River Vision, the total cost of which has increased to nearly $1 billion. The Central City Project is an Army Corps of Engineers flood control effort to reroute the Trinity River in Fort Worth, Texas through construction of a new dam, a 1.5 mile long bypass channel, and numerous flood gates in order to create an urban waterfront community. The Army Corps of Engineers is slated to pick up $110 million of the $435 million Central City tab, with other federal and local taxpayer sources making up the rest. The Corps should better utilize its flood control dollars, rather than spending millions on speculative development.

National Security

CMRR Nuclear Facility at Los Alamos                                                          Cut: $3.7 billion

The Chemistry and Metallurgical Research Replacement-Nuclear Facility (CMRR-NF) is a new palatial building the National Nuclear Security Administration (NNSA) wants to build at Los Alamos National Laboratory. The CMRR project includes both the already-built Radiological Laboratory/Utility/Office Building (RLUOB) as well as the planned CMRR-NF. The project will cost $3.7 to $5.8 billion—at least by current estimates—but the cost has increased ten-fold since the project’s inception, and final estimates are not due until 2013. There are serious questions about the risks associated with the CMRR-NF, not the least of which are that it will be storing six metric tons of plutonium in an active seismic zone. Several hundred million dollars have already been appropriated and excavation has begun, despite the fact that the design is only 50 percent complete. Congress decided to put the project on hold in 2012, but intends to restart construction in 2017.

Public Lands

Columbia Basin Irrigation Project                                                                 Cut: $1.2 – $4.6 billion

The Department of the Interior’s Bureau of Reclamation (BuRec) was established in 1902 to bring development and irrigation water to 17 Western states. Today, the agency builds dams, powerplants, and canals to supply hydropower to local communities and bring subsidized irrigation water to one out of every five Western farmers. The Columbia Basin Irrigation Project (CBIP), one of the largest all-federal irrigation projects managed by the BuRec, is located in central Washington. Water diverted from the Columbia River is delivered to nearby farms even though taxpayers and other users pay for most of the construction costs to build the infrastructure. The BuRec and Washington Department of Ecology are proposing to expand the CBIP at a cost ranging from $1.2 to $4.6 billion. However, the BuRec’s own studies found that none of the proposals’ privatized benefits would outweigh the public costs. In the 1980s, the Government Accountability Office’s analysis of similar expansion proposals came to the same conclusion, resulting in the BuRec’s withdrawal of the proposal.

Yakima River Basin Water Enhancement Project                                    Cut: $1.4 billion

Also located in Washington, the Yakima River Basin Water Enhancement Project would result in the construction of at least two new dams in the Yakima Basin even though sufficient alternative water resources have been identified. Construction of one dam would cost more than $400 million and the other is expected to cost at least $1 billion. The BuRec is planning to move forward with the project(s) even though the agency’s Final Planning Report and Environmental Impact Statement calculated a negative cost-benefit ratio. In other words, taxpayers should only expect to receive 7 to 31 cents back for every dollar spent on these local irrigation projects.

Transportation

XpressWest (formerly DesertXpress) High Speed
Rail – Nevada and California                                                                             Cut: $6.5 billion

The XpressWest project would connect Victorville, CA (approximately 85 miles from Los Angeles) with Las Vegas, NV. The $6.9 billion project has asked for a $6.5 billion direct loan through the federal Railroad Rehabilitation and Improvement Financing (RRIF) program, which would be more than ten times the amount ever awarded through the program. Questions have also been raised regarding the ridership and revenue forecasts upon which the application is based. This project has taxpayer disaster written all over it, and the loan application should be rejected.

I-73 Project – South Carolina                                                                           Cut: $2.4 billion

The $2.4 billion interstate — no more than 50 miles from an existing, high-capacity U.S. highway — will be the most expensive transportation project in South Carolina’s history and is estimated to shorten current travel times to the Myrtle Beach region by no more than 15 minutes. Furthermore, simply upgrading the parallel highway would meet every goal being outlined by the interstate proponents yet cost only $150 million. With only 33 percent of South Carolina’s existing roadways in “good” condition, taxpayers are left wondering why South Carolina is pushing to build this wasteful, federally funded interstate while neglecting long-needed repairs.

Knik Arm Crossing – Alaska                                                                           Cut: $1.5 billion

The sister project of the now infamous “Bridge to Nowhere” would link Anchorage to the sparsely populated area around Point McKenzie in the Mat-Su Valley. The project can only be built with a public-private partnership, which would be paid for through the collection of a bridge toll, and a large loan guarantee from the federal Transportation Infrastructure Finance and Innovation Act (TIFIA) program. But traffic estimates appear overly optimistic, and therefore the expected toll revenue is almost sure to fall short of paying for the project for many years after it is built. This would likely leave federal taxpayers on the hook for untold millions of dollars to make up the shortfall.

Columbia River Crossing – Oregon and Washington                         Cut: $1.25 billion

This project would construct a highway-transit bridge over the Columbia River to ease Portland-bound commuter congestion. The $3.6 billion project is estimated to reduce morning commute times by only 60 seconds. Furthermore, state transportation departments are justifying the project with an estimated 45 percent increase in vehicle crossings by 2030, a percentage based on 2005 fuel prices. With substantial portions of the project to be paid for with tolling the new bridge facility, local leaders and stakeholder groups are sounding alarm over the project’s faulty traffic projections. Federal taxpayers have already footed $110 million to make these flawed analyses. Congress should deny state requests for one-third of the project’s billion dollar price tag and require more cost-effective alternatives.

Outer Bridge Portion of Ohio River Bridges Project 
– Indiana and Kentucky                                                                                     Cut: $550 million

The outer, or eastern, bridge portion of this project would be a new interstate highway (I-265) and Ohio River bridge in the eastern suburban area of Louisville. It would connect the Gene Snyder Freeway in Kentucky (KY 841) to the Lee Hamilton Highway in Indiana (State Road 265). The project, which the Environmental Protection Agency calls “redundant”, is a developer’s dream. It would open up vast quantities of land in Indiana for development. Ground was very recently broken on this project, meaning there is still time to stop it before it devours an enormous chunk of taxpayer dollars.

Juneau Access Road – Alaska                                                                        Cut: $500 million

The Juneau Access project would consist of a new 50-mile road out of Juneau connecting to a ferry terminal for the last 18-mile journey to connect to either Haines or Skagway, with driving access to the interior of the state. Due to the treacherous ter­rain, the road would be closed at least one month every year, and the journey would likely require sev­eral days of driving in each direction from most parts of Alaska. In addition, the challenging terrain makes construction difficult at best and raises significant questions about cost over­runs and project feasibility. Most of the funding for this project has not yet been identified, but propo­nents assume that the vast majority will come from federal taxpayers.

Gravina Island Access – Alaska                                                                    Cut: $300 million

Yes, the “Bridge to Nowhere” lives on. Though the bridge project was cancelled by then-Governor Sarah Palin in late 2007, the state completed construction of the $26 million 3-mile Gravina Access Highway, which would have served as the bridge access if the bridge was built. To avoid having to pay back to the federal government the money it spent on this “high­way”, the state is conducting an assessment of the project to show how it will utilize the newly constructed road. The assessment is underway, but this charade should be stopped once and for all, and taxpayers assured that this monstrosity is killed for good.

Charlottesville Bypass (VA)                                                                            Cut: $244 million

The proposed Charlottesville Bypass is a 6.2 mile, four lane limited access highway intended to act as a reliever route for the congested U.S. 29 corridor. This bypass is extremely expensive as compared to other similar projects and will cost almost $40 million per mile. Furthermore, state transportation officials found that none of the bypass alternatives would have much, if any, impact on the “F level of service” rating on the existing U.S. 29 corridor. More fiscally responsible alternatives such as overpass and design improvements to U.S. 29 have shown promise of achieving the same goals without the local opposition that has developed against the bypass. Congress should block any federal funding for this wasteful roadway.

For more information:

Ryan Alexander, President, ryan taxpayer.net

Steve Ellis, Vice President, steve taxpayer.net