The Forest Service's catch 22; it's hard to see the forest when you've cut down all the trees.

THE FOREST SERVICE'S CATCH - 22

At the end of a Forest Service road in the middle of California's Sequoia National Forest, I found ground zero. Nearly all the trees on a 30-acre hillside had been "clear-cut" and dragged away. Stumps as large as dinner tables littered the landscape; soil eroded into a stream, which, newly exposed to the sun, was filling with thick green algae that smothered other aquatic life. Though the trees had been cut two years before my visit, almost no new plants were growing in the parched dirt.

But not all the trees were gone. Scattered among the stumps stood a few lonely giants, some larger at the base than an average-size living room and taller than a 20-story building. Many of these sequoia trees were over 2,000 years old. They looked strangely vulnerable in that scarred brown wasteland.

That was the environmental impact of the "Longsaddle" timber sale. Its financial impact? It cost the taxpayers $101,000. The Forest Service supervisor in charge of the sale told me he was "particularly proud" of it. Why? Under the laws governing the Forest Service budget, losing money by destroying the landscape is the surest way to earn money to improve the landscape. A bias in the law toward timber sales encourages managers to sell off acres of their trees to bring in revenue for other forest programs. Simply put, the supervisor felt that he had to destroy Longsaddle in order to save it.

Although the most famous giant sequoia trees stand in Sequoia National Park, the Forest Service actually has more acres of sequoia groves in the Sequoia National Forest. There, 2,000 trees meet the Forest Service's definition of "museum-quality" - more than eight feet in diameter near the base. It is a longstanding forest policy to preserve those trees.

But in the 1980s "preservation" took on new meaning - as did some other words. In a practice called "sequoia grove enhancement," forest managers began selling off all non-museum-quality trees in the giant sequoia groves. When the Sierra Club objected to enhancement, the Forest Service pointed out that in a natural setting, sequoias "are virtually hidden from sight by other trees." The Service argued that Sierra Club members were "simply imposing their values on others" in objecting to turning sequoias groves into moonscapes.

Though a 1988 court injunction has temporarily barred them from doing so, Forest Service officials say they want eventually to "enhance" 70 percent of the groves in the Sequoia National Forest. They argue that the procedure protects old giant sequoia trees from fire and promotes growth of new ones. It just so happens that it will also bolster the forest budget.

Nathan Stephenson, a National Park Service ecologist who received his Ph.D. studying giant sequoias, says there's no reason we should be missing whole forests for a handful of trees. He argues that protection from fire "is almost certainly unnecessary." In fact, fire is vital to the life cycle of sequoias and actually promotes reforestation. The thick bark of the sequoia protects it from fire, enabling it to live for thousands of years. And most sequoia cones release their seeds only after a blaze.

In 1987, a year after the Longsaddle timber sale, Stephenson compared the sale's enhanced groves with a grove burned by a wildfire at about the same time. Seedlings in the burned region were "so dense in areas that I could not avoid trampling several with each step." By comparison, he says, "I observed only a single sequoia seedling" in the Longsaddle cutover zone. Lonely sequoias - like the enhanced trees left standing at Longsaddle - are also more vulnerable to wind: though a single tree may weigh as much as a long freight train, its roots reach only about three feet into the ground.

To add economic insult to ecologic injury, all of the sequoia grove timber sales to date have drained far more from the U.S. Treasury than they have returned; many have cost even more than Longsaddle. The Peyrone sequoia grove timber sale in California, which decimated one of the largest sequoia groves in the forest, will probably lose the Treasury almost $500,000.

Sops for saps

Giants sequoia trees are unique, but the Forest Service's treatment of them is not. The Forest Service manages millions of acres of national forest in 40 states. It actively sells timber from nearly all of them, allowing the clear-cutting of 40-to 80-acre blocks and losing money to boot. Despite Forest Service figures that show recreation is worth far more than logging, the agency pumps much more money into timber sales than into recreation or any other activity.

Not only trees and taxpayers are getting hurt. New Mexico's Santa Fe National Forest contains one of the richest concentrations of ancient Indian artifacts in North America. The Forest Service is required by law to protect such antiquities. But it has clear-cut over these sites and then used a plow with disks 18" deep to plant trees. And for what purpose? Most sales in the Santa Fe Forest lose money.

Similarly, the managers of the Gallatin National Forest, just north of Yellowstone National Park, plan to build roads and clear-cut 124,000 acres inhabited by grizzy bears - a species classified as "threatened" by the Fish and Wildlife Service - as well as by elk, moose, and bighorn sheep. Sales in the Gallatin cost the taxpayers between one and two million dollars each year.

Many environmentalists believe Forest Service officials are simply biased toward logging. But the real villains are the paper lumberjacks in Congress, who have skewed the Forest Service budget process to encourage logging. Managers who throw money away on timber sales get a bigger budget than managers who emphasize wildlife or other resources.

Congressmen representing districts that include National Forest usually promote logging, because it provides more jobs for their constituents than any other forest activity. Recreation may create a lot of jobs, but they generally are in the urban congressional districts: Vacationers buy their equipment and food in their cities, not at their campsites. As a result, the Forest Service historically gets over 95 percent of the money it requests for timber sales. But it receives less than 70 percent of its requests for managing recreation, wildlife, or watershed.

Congress has institutionalized this bias with a series of laws that allow forest managers to keep a virtually unlimited share of receipts from timber sales. Foremost among these laws is the Knutson-Vandenberg (K-V) Act. Passed in 1930, it was designed to ensure that the Forest Service would have enough money for reforestation after timber cutting even if Congress failed to appropriate the funds. In 1976, the law was amended to allow managers to spend timber sale receipts on protecting wildlife and other activities near the timber sale.

The Forest Service identifies the trees to be cut, estimates their value and offers them for sale at an oral auction, at a minimum bid price. The agency also sometimes builds roads to the sale area. These activities, including administration of the sale, are paid for by congressional appropriations averaging more than $40 for every thousand feet of board sold. The trees are cut and removed at the purchaser's expense in two to three years.

Forest Service appraisers make no effort to ensure that the minimum sale price covers the congressional appropriation. But they do make sure that the price is high enough to pay for those activities - including reforestation, prescribed burning, and road maintenance - that the Forest Service is allowed to fund from timber receipts. The Treasury recovers its costs only if timber is valuable and bidding is spirited, but low timber values on many national forests guarantee that most sales will lose money.

For example, the Treasury put up $500,000 to finance road-building and other preparations for the Peyrone sale. The winning bidder got the timber for only $330,000 in cash. Since the Forest Service appraisals guarantee the Treasury only 50 cents for every thousand feet of board sold, it would get back a total of $8,500. All the rest of the money would go to the Forest Service budget, which means a half-million-dollar investment by taxpayers would bring the budget more than $800,000. (These are the official projected figures for the sale, part of which a court injunction has stopped - but only after some of the most important sequoia groves were cut.) Not a bad bang for the buck - except that all of the $500,000 and most of the sale proceeds go to cut down the trees and plant new ones. In the Sequoia National Forest, as in many other national forests, the high cost of reforestation to replace the trees done in by the sale gobbles up almost all the receipts.

Boobs in the woods 

Planners of the Peyrone sale argued that 80 years of fire suppression have left a lot of dead wood in the sequoia groves, increasing chances for a wildfire. They admitted a prescribed fire would clear the dead wood away, but noted that Congress wouldn't appropriate enough money to fund controlled burning. Ironically, the residue from a timber sale actually increases fire hazards; the Forest Service is allowed to spend some of the money collected from timber purchasers on a controlled fire. The rest goes for reforestation. In other words: to get rid of the wood on the ground, the forest managers chopped down most of the trees.

Such backwards logic drives most timber sales. The Santa Fe Forest can get federal money to inventory its ruins only if it is preparing for a sale, which may destroy its ruins. The Gallatin Forest managers argue that logging is good for the grizzly bear habitat because sale receipts can be used to close the roads built to reach the timber.

This bias in the Forest Service budgeting process gives environmentalists few options other than going to court. Environmentalists once hoped that Forest Service employees trained in areas other than timber would change agency attitudes. But they can't beat the funding process: the best way for Forest Service managers to get money for non-timber projects is to support a sale and then use whatever is left over. As a manager on Wyoming's Bridger-Teton National Forest pointed out, "If I dedicate an area to elk, I'll have a little wildlife money to manage the habitat. But if I dedicate it to elk and timber, I'll have both wildlife and timber money to manage the habitat." A biologist on Utah's Dixie National Forest was concerned that wildlife was being disturbed by the many roads in one part of the forest. So he supported a moneylosing timber sale in the area to get funds to close the roads - a sale that will cost taxpayers more than would direct appropriations for road closures. Disturbances from the logging will at least partly undercut the benefits of closing the roads.

Although the K-V proceeds and other funds are supposed to be spent in the forests, a lot of the money never gets there. The Forest Service bureaucracy takes a cut for "overhead." For every dollar spent planting trees, the Washington office of the Forest Service gets about five cents, while regional and local offices get between 25 and 95 cents, depending on the forest. This means every level of the bureaucracy has a stake in continued timber sales.

Regional offices calculate their budgets for a given year partly from projections of that year's amount of reforestation, which will supply the offices with their cut of overhead. Because of administrative lags, the budgets are written several years in advance, so the projections can turn out to be wildly inaccurate. In the early 1980s, the recession greatly reduced the volume of timber cut from western national forests; since fewer acres were cut, fewer acres needed reforestation, and the flow of overhead into regional offices was less than anticipated. As a result, these offices began pressuring forest managers to meet their reforestation "targets," measured in acres of trees planted.

In 1985, Cherry Dulaney, a Forest Service employee in California, surveyed reforestation staff throughout the state and found that 15 to 30 percent of the work they had done in the past five years wasn't needed - it was done only to meet targets. Herbicides were sprayed during the wrong season; trees were planted in areas that were already well stocked. Sometimes, employees falsely claimed that they had reforested areas in order to meet their targets - all so that the regional offices could get their cuts.

Dulaney estimated that between 1980 and 1985, superfluous forest projects cost $3 million. Since the Forest Service spends close to $1 on overhead for every $3 of K-V money spent in the forests, this means the bureaucracy paid nearly $1 million to support the fraud.

Only God can make trees, but only Congress can save them from this budget-powered sawmill. Forest managers are just as human as anyone else, and they respond to the incentives built into their budget process. Changing these incentives will lead them to manage the national forests in the public interest, instead of as tax-subsidized tree farms.

For starters, the Knutson-Vandenberg Act and related laws badly need "enhancing": they should be cut. Second, Congress should allow the Forest Service to explore sources of revenue besides timber sales. Right now, managers are not permitted to charge fees for most non-timber resources. One alternative means of raising revenue would be to allow managers to charge user fees for all forest resources, rewarding them with a fixed share of net receipts - instead of gross receipts, as the K-V Act does. This fundraising scheme would discourage money-losing timber sales and put a premium on protecting scenic beauty, wildlife, and water. The Forest Service says that revenues from recreation fees would greatly exceed timber receipts. And since most vacationers expect trees to block their view of the forest, under a user-fee system forest managers will be less tempted to start "enhancing" anything.

It's heartening to note that some environmental organizations have finally figured out the Forest Service's budget scam. The Wilderness Society recently joined local groups across the country in calling for the repeal of the K-V Act and backing the collection of recreation fees. How many more trees will have to fall in our national forests before Congress finally hears the noise?

Randal O'Toole is a forest economist from Portland, Oregon, and author of Reforming the Forest Service.