"If the Federal Government is to commit itself to fostering maximum resource recovery, recycling, and reuse, it should change its present tax and purchasing policies to further that goal. Such a commitment should have a three-fold purpose: to provide economic incentives to private industry; to stop practices which needlessly intensify our solid waste problems; and to conserve natural resources.

"Markets: Unless new markets are developed, the use of recycled materials will not increase fast enough. The Federal Government could stimulate development of new markets by restructuring its procurement and construction policies.

"What the GSA is doing about paper is a good example. Under this program set up last year at the order of the President, GSA is requiring that much of the paper it buys contain some recycled content. By the end of this year GSA estimates over two-thirds of their $105 million of annual paper purchases will be meeting its specified minimum. The GSA is helping States set up similar procurement programs, and it is experimenting with a new system of separation, collection, and sale of waste paper from Federal Government offices. The Committee commends the GSA program and urges its expansion to include acquisition of other recycled products.

"Specifications set by the Congress concerning the procurement of writing, printing, and certain other types of papers for the Federal Government in effect discourage the use of recycled paper. They should be reconsidered.

"In addition, the Federal Government could require maximum feasible use of recycled materials in purchases made under Federal grants and contracts. Federal construction and procurement programs for fiscal year 1972 will total around $31.3 billion; if a reasonable percentage of

this massive purchasing power were directed
toward recycling and use of secondary ma-
terials, the effect would be substantial.
So too would be the effect if State and
local governments took similar action."

Similar reports and recommendations have been prepared

by the National Materials Advisory Board of the National Academy

of Sciences (NMAB-294, August, 1972); the National Materials Policy Commission; and the National Industrial Pollution Control Council (September, 1972).

Just recently, the National Conference of Mayors, the National League of Cities, the League of Women Voters, and the Council of State Governments added their voices to those begging the Federal Government to assist local and state governments throughout the United States to solve their mounting solid waste disposal problems and costs by passing without further delay legislation to eliminate all federally-sponsored discriminations against recycled materials. In their Joint Report, the National Conference of Mayors and the National League of Cities put it this way in their report dated March 15, 1973:

"The national problems of waste disposal and resource conservation are as crucial as any this nation faces in the latter third of the twentieth century.

"Resource recovery is attractive theoretically; but recovery and recycling are not

viable because they are not economically
profitable. Recycling markets are severely
limited for cities due to Federal policies
which favor virgin materials use and dis-
courage, even penalize, utilization of
recycled materials. Cities interested in
recycling have no market incentives working
for them comparable to Federally established
depletion allowances and capital gains tax
credits for virgin materials.

"The Federal government should adjust
its discriminatory freight rates, its de-
pletion allowances for virgin materials,
and its procurement practices to provide
positive incentives for increased utili-
zation of recycled materials.

The Urgent Need For Elimination
Of Discriminatory Rail And Ocean
Freight Rates.

Historically, transporta

One of the most significant cost factors involved in the recovery and utilization of recyclable materials is the rate paid to transport those materials on our nation's railroads and in our steamships in the export trade. tion rates established by the railroads and the steamship conference have grossly and unfairly discriminated against recyclable materials and in favor of their virgin counterparts and while the recycling

industry, NARI, the Department of Commerce, the Environmental

Protection Agency and the President's Council on Environmental

Quality have continuously urged the Interstate Commerce Commission,

for example, to take effective action to eliminate this baseless discrimination and to hold down the ever-increasing rates charged for transporting recyclable materials, nothing of any substance has been done. In fact, during the period from 1967 through 1973, the ICC has licensed or attempted to license the following increases in rates for the transportation of recyclable commodities without first taking any action whatsoever to eliminate the basic rate discrimination upon which these annual percentage increases are based:

The effect of these actions by the Commission has been,

of course, to widen the rate discrimination against recyclables which already exists in the basic rate structure, and these annual

rituals have served to worsen the competitive position of recyclables each year. Finally, the legality of the Commission's actions was tested in a court action known as the S.C.R.A.P. case. Just recently, the United States District Court for the District of Columbia rendered a decision in that case which held that the Commission violated the National Environmental Policy Act whenever it approved an across-the-board percentage rate increase for the transportation of recyclables without first determining, in a properly-prepared environmental impact statement, how the base rate structure discriminated against recyclable commodities in particular instances, and how that discrimination can be eliminated. A copy of that decision, which is so pertinent to the proceedings now before this Committee, is tendered for filing in the record at this juncture.

Regarding the discriminatory base rate structure just referred to, evidence developed during hearings before the Subcommittee on Fiscal Policy of the Joint Economic Committee on "The Economics of Recycling Waste Materials" in November, 1971, showed the following at pages 37, 38 of the hearing record: