At today's Senate Appropriations Committee hearing, Sen. John Kennedy (R-LA) questioned witnesses about the proposed budget for the Army Corps of Engineers and the Bureau of Reclamation.
00:00I've got a few questions, gentlemen. Let me start with you, Mr. Secretary. I'm trying to understand how you and all of you in OMB are thinking here. Where does the money come from for the Inland Waterways Trust Fund?
00:21Senator, it's principally raised by a tax on the diesel fuel used in the tug and barge industry.
00:27Yeah. Do you know the balance in that account off the top of your head?
00:30I don't know off the top of my head. I'll be happy to provide that to you for the record. Exactly. But it is not insignificant.
00:37I'm sorry?
00:37The balance is not insignificant.
00:40Okay. The proposed budget proposes not to spend it. Why would we... It can't be used for anything else. Why would we not spend it?
00:55Sir, the... Well, first of all, most of the needs that with... I hate... I'm going to kind of back up with the core's capabilities.
01:04Most of the needs were that we were currently capable of using that trust fund for were moved forward into the 25 spending plan.
01:14So a lot of that were taken care... A lot of those projects were funded in 25 to the... Pretty close to their full capabilities for the... In the interim future.
01:27And also the advantage of the trust funds and... Is that they... They're designed to be... For monies to be raised to use, including out years, you know, and over a longer period of time.
01:40So, you know, the... We moved the funds forward into 25 for most of the projects that were currently ongoing.
01:48And then the projects... You know, the money... There were balances left that will be used in future years to fund projects as they come up and the core's capabilities come available.
01:59So, Mr. Secretary, you're saying you don't need the money right now?
02:03No, sir. We're going to need the money very soon.
02:06I'm talking about right now. It's a timing issue?
02:10I would say largely, sir, yes.
02:13That there... Could we always use some... You know, what we don't want to do is get into a situation where we're trying to spend money just because it's about to expire.
02:24Agreed.
02:25We'd rather find that, you know, fund it as the projects need it as they go forward.
02:31Where's the money come from for the Harbor Maintenance Trust Fund?
02:36Sir, it's a value-based user fee that is charged against cargo... All cargoes entering or exiting the United States.
02:50Okay. It's got some money in it, does it?
02:52It does. And again, to be used over time.
02:56Right. This proposed budget only proposes using $1.7 billion. Is that right?
03:04Yes, sir.
03:05That's below the mark that we set, is it not?
03:11Yes, sir.
03:12How come?
03:12Again, more of a timing issue. Some things were moved forward. Others... The president did put a focus on what were principal federal responsibilities, which is the maintenance and dredging of federal channels.
03:29And so, again, the Harbor Maintenance Trust Fund is to be used over time for those projects.
03:36Okay. Well, nobody's thinking about using this money for something else.
03:41No, sir.
03:43Okay.
03:43General, I want to ask you a question about bringing these projects in on budget and on time.
03:58I know you said it was engineering. We've got to get the engineering right, project management right, team right.
04:07Let me give you an example. I'm not going to beat this to death, but...
04:11And I'm just picking a project. We've got a lot of projects in Louisiana.
04:15Just like Alaska has a lot of projects.
04:17Everybody has a lot of projects.
04:19But the Inland Harbor Navigation Canal in New Orleans.
04:25Ten years ago, we projected it would cost about $951 million.
04:32Now, the cost is up to about $4.7 billion.
04:38And the course is, it will take 14 years.
04:41So, Senator, the Inland Harbor Navigation Canal down there where the intercoastal waterway bisects and gets across and up onto the Mississippi River is absolutely key.
05:06And you know the history that we've had on multiple lawsuits and injunctions over the years.
05:12A lot of it built from the lack of trust from the local communities, particularly the lower Ninth Ward.
05:17Oh, no.
05:18So, that cost estimate, and for everybody listening, that IHNC is also part of the flood protection for the greater New Orleans area, the river-facing gates.
05:31So, it's imperative that we get this right.
05:33And what I told the district to do is to make sure that they have put in their cost estimates the risks associated.
05:41And most of those risks are the fact that, not the fact, most of those risks are elements of not having local support to build this.
05:53We want to get a team together.
05:55How do you quantify that?
05:57So, that's what we owe you.
05:58We, you take a risk that it's going to get delayed, and then you try your best to put money associated with that would get delayed.
06:07So, we would have loved to have built this thing for less than a billion dollars ten years ago.
06:12But, the court cases have prevented us from doing that.
06:18The lack of trust from the citizens of the lower Ninth Ward have prevented us from doing that.
06:23So, we're trying to build that trust so that we don't end up in this infinite loop of litigation.
06:28I got it.
06:30All right.
06:31Senator Mikowski is here.
06:33I want to ask you one more question.
06:37And you're well aware of all this.
06:41For whatever reason, sea levels are rising.
06:43Our land in South Louisiana is sinking.
06:50Part of that is because, over time, sediment becomes more and more compacted.
07:00Where did that sediment come from?
07:02That sediment came from the Mississippi River, which used to overflow,
07:09which was a blessing and a curse.
07:12But, our Corps did an extraordinary job, at our request, of levying the Mississippi River.
07:23We weighed the cost on the benefit and said the right thing to do here is to levy the river.
07:33Well, that obviously stopped the sediment.
07:36Okay?
07:36And I'm not suggesting we take the levies down, by the way.
07:44What do we do?
07:47We're not going to take the levies down.
07:50The land's sinking.
07:53There's no new sediment coming in.
07:56The sediment's becoming more compacted.
08:00And the sea levels are rising.
08:01What would you do if you were king for a day?
08:06General, let me start with you, and then I'll ask the Secretary.
08:09Sure.
08:12Chairman Kennedy, so, some of the projects are that we have a tremendous amount of non-structural projects going on in South Louisiana.
08:20And I'm not asking you to comment on any particular project.
08:23I get all the politics and the wailing and the national gnashing of teeth.
08:28Right.
08:28And everybody's bowels are in an uproar over which one's the best one.
08:32I get that.
08:33I'm just asking you, what approach should we take?
08:35So, raising homes to deal with sea level rise coming up and the land sinking, that non-structural approach,
08:42is a tool that we're starting to execute at scale in Southern Louisiana.
08:47What we're also taking a look at is supporting the state of Louisiana in whatever settlement diversion paths that it's choosing to take.
08:54We had, they had it applied for a permit and we rented it.
08:59Do you think settlement diversion works?
09:00In some instances, I believe it does.
09:09It has to be done very carefully.
09:14And any time we move the Mississippi River off from where it's going to someplace else, that's going to have tremendous forces.
09:21And so, we have to take a look at that mindfully.
09:24But I believe we have the engineering expertise and working in conjunction with the state,
09:29I believe that we can use that tool effectively.
09:35Now, do you, on this settlement diversion, do you, are you saying we should do it in small amounts?
09:42Pilot projects.
09:42Larger amounts, or does that matter?
09:45I think pilot projects to prove that we know what we think we know, we're always wise.
09:50So, you're thinking of a pilot project.
09:52I think those.
09:53We've done some.
09:54We have done some.
09:55We don't have enough pilots.
09:56I'd owe you a better, more detailed answer on that.
10:03Okay.
10:03What do you think, Mr. Secretary?
10:06Senator, I certainly agree that the Corps' expertise in moving and doing settlement projects
10:10and doing a traditional Corps approach is, will be one of the tools that has to happen.
10:16I think we need to think about the other side of some of the stuff the Corps does,
10:20and that's using the regulatory program to create some incentives for the private sector
10:25to do positive things.
10:27For example?
10:29I'll use a perfect example in South Louisiana.
10:31Right now, in the 404 program, we cannot give a mitigation bank credit for preventing subsidence
10:39losses of wetlands.
10:41Those coastal wetlands losses are amounting to about the only losses nationally in wetlands
10:47resources.
10:48But we can't, we don't have a mechanism now between law, between, I don't think it's law,
10:53it's really regulation, that would allow someone, for example, there are several large landowners
11:00down there that at a relatively low cost, you know, a few million dollars, could, you know,
11:07barrier the breaches in the, in the, that have been, would have been in the, into the coastal
11:15wetlands for a long time.
11:17And put some, that would stop some of the saltwater incursion, which accelerates the wetlands losses
11:23and some of the subsidence.
11:24If they, but if they could sell credits in the, for, in, for 404 purposes for elsewhere
11:31in Louisiana, that would provide the economic incentive for doing that.
11:34But we don't have, we can do it, you know, so now you've got people in South Louisiana
11:38going up to North Louisiana to buy credits, you know, to do development.
11:43Gotcha.
11:43There's a mismatch.
11:44There's a mismatch.
11:45We could, we need to find more creative way, some more creative ways to use the, the regulatory
11:49system in a positive manner, uh, that to help.
11:53Okay.
11:54I want to sit down.
11:55We'll sit down and talk about that.
11:56Absolutely, Senator.
11:57Thank you for, for your creative thinking.
11:59I want to be sure to understand you, General, you think diversion works?
12:05I believe there's cases where it can be part of the solution.
