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for the water supply, economy, and quality of life for South Florida's population of over six million people. As with South Florida, the lack of enough clean water in the San Francisco Bay-San Joaquin Delta ecosystem has reduced the quality and quantity of wildlife habitat, endangered several species, and reduced the estuary's reliability as a source of high quality water.

The Interior Department's Fish and Wildlife Service (FWS) and Commerce Department's National Marine Fisheries Service (NMFS) protect species under the Endangered Species Act (ESA) while allowing economic development to continue. To protect species on non-Federal lands, these agencies work with States and local governments, private groups, and landowners to develop Habitat Conservation Plans (HCPs), which provide the flexibility and certainty that everyone needs to plan for, and use, their land. From 1983 to 1992, such parties devised only 14 HCPs but, from 1993 to 1997, the number issued or under development soared to 300-covering 8.4 million acres in the Pacific Northwest alone. To protect species on Federal lands, Federal agencies consult with State and local governments, groups, and others before allowing private parties to use the land.

Another important land conservation program is the Land and Water Conservation Fund (LWCF), which uses the royalties of offshore oil and gas leases to help Federal, State, and local governments acquire land for conservation and outdoor recreation. From its inception in 1964, the program has helped Federal, State, and local governments to acquire about seven million acres of parks and other lands. The program, for instance, is funding the acquisition of Sterling Forest in New York and New Jersey, the largest undeveloped tract of forest and open lands within 45 miles of downtown New York City, thus creating vast new recreational opportunities for the whole area.

Half of the continental United States is cropland, pastureland, and rangeland owned and managed by two percent of Americans— farmers and ranchers. The Agriculture Department's (USDA) Natural Resources Conservation Service provides these private interests with technical assistance to ensure the health

and sound management of this land. Other USDA programs mainly provide financial conservation assistance, the largest of which is the Conservation Reserve Program (CRP) through which USDA can maintain up to 36 million acres under land retirement contracts, reducing soil erosion by over 600 million tons a year. The 1996 Farm Bill should greatly enhance CRP's conservation benefits. Under it, for instance, producers may enroll partial fields into the CRP (e.g., filterstrips, riparian buffer areas, and grassed waterways) to gain the maximum conservation for the least cost.

Pollution Control and Abatement

The Federal Government helps achieve the Nation's pollution control goals in three ways. It (1) takes direct action, (2) funds action by State, local, and Tribal governments, and the private sector, and (3) imposes mandates on these parties. The Environmental Protection Agency's (EPA) $7 billion discretionary budget and the Coast Guard's $100 million Oil Spill Liability Trust Fund (which funds oil spill clean-ups in U.S. waters) finance the first two activities. EPA's discretionary budget, in turn, has three major parts— the operating program, Superfund, and water infrastructure financing.

• EPA's $3 billion operating program is the main Federal funding source to implement most Federal pollution control laws, including the Clean Air, Clean Water, Solid Waste Disposal, Safe Drinking Water, and the Toxic Substance Control Acts. EPA protects public health and the environment by developing national pollution control standards, which States largely implement and enforce under the authority that EPA delegates. These standards have led to major environmental improvements. EPA's pollution abatement efforts since 1970 also have generated major environmental improvements (see Chart 16-1). Superfund's $2 billion program pays for cleaning up hazardous substance spills and abandoned hazardous waste sites, and for compelling responsible parties to clean up inactive sites-with a goal of 900 completed cleanups by the year 2000 of the roughly 1,400 sites on EPA's high-priority

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*Note: A PSI level greater than 100 is the level which denotes that residents are breathing unhealthy air.

list. Private parties subject to Superfund's enforcement spend another $2 billion a year, and Federal agencies (largely DOD and the Energy Department) spend about $5 billion a year on hazardous waste cleanup. Superfund also supports the Federal brownfields program, designed to assess, clean up, and re-use former contaminated sites.

• Federal water infrastructure funds go primarily for capitalization grants to State revolving funds, which make low-interest loans to help municipalities pay for wastewater treatment and drinking water treatment systems, as Federal law requires. The more than $67 billion in Federal assistance since the 1972 Clean Water Act has dramatically increased the percentage of Americans served by secondary treatment (as shown in Chart 16-2) and better water quality. State and local governments (and private companies) also benefit from a tax break (costing $700 million in 1998) allowing State and local gov

ernments to issue tax-exempt bonds to construct private waste disposal facilities.

Water Resources

The Army Corps of Engineers and Interior's Bureau of Reclamation are the main Federal agencies that build and operate multi-purpose water projects. The Corps operates Nationwide, while the Bureau operates in the 17 western States. They both seek to develop or manage water resources to meet changing needs. The budget proposes $4.6 billion for the agencies in 1998-$3.7 billion for the Corps, $0.9 billion for the Bureau.

• While navigation and flood damage reduction remain the Corps' major focus, its projects, programs, and regulatory responsibilities increasingly address environmental objectives, including wetlands protection. The Administration will work with Congress to develop a consensus on priorities for the Corps Civil Works program in an era of stable or falling budgets.

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Early in our history, the Federal Government helped improve food production. Today, it aims to do much more for agriculture and its related activities, which account for 16 percent of the Gross Domestic Product. The Government helps our bountiful human, natural, and capital resources work together to produce the highest possible benefit at the lowest cost for Americans and others. Federal programs disseminate economic and agronomic information, ensure the integrity of crops and safety of meat and poultry, and help farmers face risks from weather and unfamiliar export conditions. The results are found in the public welfare that Americans enjoy, free of severe dislocations that can occur when commodity markets are left to take their natural time to correct themselves.

The Federal Government spends about $10 billion a year for agriculture, but the Agriculture Department's (USDA) $50 billion a year in other spending includes investments that support farms and farmers' income (noted below and in other chapters). The tax code also offers $500 million a year in incentives for farmers.

Conditions on the Farm

In the 1980s, record-high Federal price supports, global recession, and the strong dollar led to steep declines in farm exports, market prices, and cropland values, creating the most severe financial crisis in the farm sector since the 1930s. The Government responded with the largest-ever Federal acreage idling program, more market-oriented and lower price supports, and export subsidies to counteract unfair foreign trade practices. At the same time, the demand for food increased around the world.

U.S. agriculture has now now recovered. In 1995 and 1996, short supplies of corn and wheat lifted the sector's economic indicators, and agricultural exports hit a record $60 billion in 1996. Market prices for major crops such as corn and wheat reached their highest levels in recent history; farmer debtto-asset ratios are low; farm land prices are high; and net farm income rose to record levels in 1996, despite the cyclical downturn in livestock.

Exports are key to future farm incomes. The Nation now exports 30 percent of U.S. farm production, and agriculture produces the greatest balance of payments surplus,

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