STATEMENT OF ROBERT W. PAGE, ASSISTANT SECRETARY OF THE ARMY (CIVIL WORKS)

MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:

INTRODUCTION

I am delighted to appear before your subcommittee today to meet all of you and present the Fiscal Year 1989 budget recommendations for the Civil Works Program of the Army Corps of Engineers. The Chief of Engineers, Lieutenant General E. R. Heiberg III, the Director of Civil Works, Major General Henry J. Hatch, and the Corps Programs Chief, Mr. Don Cluff, are with me and will assist in the presentation of today's testimony. Also present is the Principal Deputy Assistant Secretary, John Doyle, who distinguished himself as Acting Assistant Secretary when my predecessor, Bob Dawson, new responsibilities at the Office of Management and Budget.

assumed

Since being sworn in last December, I have had the opportunity of seeing first hand how the Army Corps of Engineers carries out its responsibilities, both here at Headquarters and in the field where the real work gets done. I also have learned of the deep interest which members of this subcommittee have I am counting on that interest not

in all aspects of the Civil Works Program.

only to sustain but to further strengthen

The Water

the program.

Resources Development Act of 1986, the product of a joint

effort by Congress and the Administration, provides a new framework by which water resources projects are formulated and financed. The cost sharing reforms in that Act already are yiel g dividends in allowing scarce Federal funds to reach a greater number of projects than otherwise would be possible. Public Law 99-662 is an accomplished fact. In order to more completely respond to project sponsor expectations created by the Act's new planning, engineering, and construction framework, especially in this time of high deficits, we have an obligation to look at every available resource and make it stretch. Therefore, the Army Corps of Engineers must develop new efficiencies in using the funds both Congress and its project partners provide. This is the challenge as I see it.

Our goal over the next several months will be to improve the efficiency with which we do our business. This will be done by:

> Acceleration of the planning, design, and construction process and

reducing its cost, including:

Streamlining project planning and approval procedures, and

Reducing the direct and indirect costs of project planning and implementation;

> Adoption of the project manager concept to carry a project from the feasibility study phase through completion of project construction; > Monitoring and controlling performance to assure that projects are completed within the costs and schedules agreed to with sponsors; and > Instituting a construction productivity advancement research program to reduce future project construction costs and, in the process, improve the competitive posture of this Nation's construction industry not only in this country but overseas as well.

My previous experience in private sector

construction engineering

management should prove useful as the Corps modifies its overall approach to project implementation as a consequence of the sponsor's enhanced role in project planning and implementation. We have already begun to take the

Later in this

necessary steps to meet the future. Some of these steps have been initiated by the Chief of Engineers, and together we will do more. statement I will address our plan to achieve greater efficiency.

My complete statement addresses these topics:

> Fiscal Year 1988 Appropriations,

> Fiscal Year 1989 Budget Request,

> Efficiency Improvements,

> Proposed Legislation,

> Manpower,

> Management of Foreign Travel, and

> Ownership and Operation of Corps Aircraft.

FISCAL YEAR 1988 APPROPRIATIONS

order.

I think we can all agree that we must get the Nation's economic house in fiscal constraint - responsible budgeting and program execution in the Executive Branch and responsible

That means responsible Federal

legislation and appropriations from Congress.

are to achieve our cammon goal.

We must all work together if we

Energy and Water

Development

In enacting the Fiscal Year 1988 Appropriation Bill, Congress added significantly to the number of studies and projects in the Corps program and increased the level of funding requested by the President for many others. In the spirit of cooperation I mentioned a mament ago, we have distributed those funds to the field activities generally along the lines you proposed. these projects.

Frankly, we have reservations over some of

To keep the Civil Works program moving forward, Congress and the Administration must work together to preserve the cost sharing reforms of the Water Resources Development Act and to avoid using Federal funds to construct projects that are uneconomic or more appropriately undertaken by non-Federal interests.

It is my hope that a spirit of cooperation will prevail when the Congress marks-up the Fiscal Year 1989 bill and that you will be successful both at holding the level of spending to that proposed by the President and that you will avoid making cost sharing exceptions and avoid supporting unproductive or inappropriate projects.

FISCAL YEAR 1989 CIVIL WORKS BUDGET REQUEST

The Fiscal Year 1989 budget that I am presenting to you today continues the President's commitment to support responsible national water resources Although the program is constrained because of the Fiscal Year 1988 Bipartisan Budget Agreement, I think you will agree it is an extremely

development.

good request and fiscally responsible--responsible in the context of balance in the overall Federal program, responsible in the selection of studies, projects and activities funded, and responsible in the level of funding each item receives. I would emphasize that, despite restraint necessary to meet deficit reduction targets, this request includes funding to initiate construction on six projects, including the major commitment of the $1.3 billion Santa Ana, California, flood control project. Let me point out that this budget, while reflecting some internal adjustments, is consistent with the 102 percent cap agreed to last year by Congress and the President.

This budget request marks the first time that the newly established Inland Waterways Users Board has had input into the inland waterways program. Our request for the inland waterways navigation system was formulated taking into consideration the recommendations of the Inland Waterways Users Board. The Board's recomendations were contained in its first annual report entitled Inland Waterways Users Board, First Annual Report to the Secretary of the Army and the United States Congress, dated December 1987.

Inland Waterways Users Board

Section 302 of the Water Resources Development Act of 1986 created an eleven-member advisory board of inland waterway users and shippers to make recommendations to the Secretary of the Army regarding construction and rehabilitation priorities and spending levels for commercial waterway

improvements. The Board's overview of the inland waterways system crosses several appropriation accounts General Investigations; Construction, General; Flood Control, Mississippi River and Tributaries; and Operation and Maintenance, General.

The Board members were appointed in late spring of 1987 and in 1987 held two meetings. The first meeting was on July 15-16, 1987, and the second on September 28, 1987.

The Inland Waterways Users Board should be congratulated for accomplishing so much in such a short time. The Board's recommendations for inland waterways improvements reflect considerable deliberations and insight, on the and the members, in determining national study, construction,

part

of

rehabilitation priorities from the perspective of a user or shipper utilizing

these waterways.

In general, with the exception of one feasibility study, the Board agreed with the projects presently in the Army Corps of Engineers inland waterways navigation program. As stated in its report, and discussed at its last meeting, the Board expressed concern about continuing the construction of the Red River Waterway project and has asked for a full briefing at its next meeting. We have tried to the maximum extent possible to accelerate those studies and projects which the Board recommended. Also, we have deferred one navigation study, as recommended in the Board's report. The other study recommended for termination in the report is not in our current program.

The Board's recommendations are a valuable addition to our program development and budget formulation process. We appreciate the contributions of the Board's chairman and members to efficient management and modernization of our inland waterways.

Budget Request Summary

The Fiscal Year 1989 program totals $3.56 billion and is financed principally by a combination of general treasury funds, trust funds, and non-Federal contributions. General funds amount to some $3.1 billion, trust funds to some $0.23 billion, and associated non-Federal contributions to some $0.24 billion. The Federal budget request, summarized by appropriation account, is shown on Table A, attached. Also financing the program are offsetting receipts of some $19 million collected under existing law. Net Federal appropriations would amount to some $3.3 billion.

With the addition of increased non-Federal cost sharing requirements of the Water Resources Development Act of 1986 and the establishment of the two

trust funds

Inland Waterways and Harbor Maintenance

approximately

14 percent of our program will be financed by other than general treasury funds. This is remarkable since just two years ago only two percent of our financing came from non-Federal sources. The beneficiary-pay concept, which is the heart of our program, is working well.