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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual
collections.
Collection: Deaver, Michael
Folder Title: Environment-National
Wildlife-National Marine Fisheries (2)
Box: 38
To see more digitized collections
visit: https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories
visit: https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives
Catalogue: https://catalog.archives.gov/
THE WHITE HOUSE
WASHINGTON
CABINET COUNCIL ON ECONOMIC AFFAIRS
November 3, 1983
8:45 a.m.
Roosevelt Room
AGENDA
1. Conservation & Renewable Energy Tax Credits (CM#390)
2. Report of the Working Group on Pension Policy (CM#112)
CABINET COUNCIL ON ECONOMIC AFFAIRS
November 3, 1983
PARTICIPANTS
The Vice President
Secretary Regan, Chairman Pro Tempore
Secretary Baldrige
Secretary Donovan
Secretary Hodel
Chairman Feldstein
Jack Svahn
Deputy Secretary Lyng
(Representing Secretary Block)
Ambassador Lighthizer
(Representing Ambassador Brock)
Roger B. Porter, Executive Secretary
Thomas Gibson, Associate Director, Office of Cabinet Affairs
For Presentation:
John Chapoton, Assistant Secretary, Department of the Treasury
William Niskanen, Member, Council of Economic Advisers
Additional Attendees:
Michael Baroody, Deputy Assistant to the President and Director of
Public Affairs
Rick Neal, Deputy Assistant to the President for Intergovernmental
Affairs
Jim Cicconi, Special Assistant to the President and to the
Chief of Staff
David Platt, Assistant Domestic Advisor to the Vice President
Allen Wallis, Under Secretary, Department of State
Thomas Healey, Assistant Secretary of Treasury for Domestic
Affairs
Ronald Pearlman, Deputy Assistant Secretary of Treasury for Tax
Policy
Daniel Benjamin, Assistant Secretary for Policy, Department of
Labor
THE WHITE HOUSE
WASHINGTON
November 1, 1983
MEMORANDUM FOR THE CABINET COUNCIL ON ECONOMIC AFFAIRS
FROM:
ROGER B. PORTER RBP
SUBJECT:
Agenda and Papers for the November 3 Meeting
The agenda and papers for the November 3 meeting of the
Cabinet Council on Economic Affairs are attached. The meeting
is scheduled for 8:45 a.m. in the Roosevelt Room.
The first agenda item is conservation and renewable energy
tax credits. The Cabinet Council considered this issue at its
July 28 meeting and asked the Office of Policy Development to
work with the Department of the Treasury, the Department of
Energy, and the Office of Management and Budget and other
interested members in developing a catalog of all conservation
and renewable energy related tax credits, and developing a
series of options, based on all the various types of energy
related credits, ranging from allowing the credits to expire
under current law to supporting a five year extension of the
existing credits. An issue paper outlining these options is
attached.
The second agenda item is a report of the Working Group
on Pension Policy regarding recent legislative developments
with respect to single employer pension plans. A memorandum
from the Working Group is attached.
Attachments
November 1, 1983
CABINET COUNCIL ON ECONOMIC AFFAIRS
Issue Paper
Conservation and Renewable Energy Tax Credits
At its July 28 meeting the Cabinet Council on Economic
Affairs considered the question of whether to permit existing
business energy tax credits to expire on December 31, 1985 as
scheduled or seek a five year extension of the credits through
1990. Rather than make a decision at that time regarding only
the business energy tax credits, the Cabinet Council asked for:
(1) a catalog of all conservation and renewable energy related
tax credits, according to purpose and use (Appendix A); and (2)
several decision options based on all of the various types of
energy-related credits (excluding synfuels).
An Admininistration position is needed to either encourage
or discourage impending Congressional action on this issue. S. 1939,
which would extend most of the renewable energy tax credits has
been introduced and cosponsored by key members of the Senate
(Senators Wallop, Baker, Domenici, Durenberger, Hatfield,
McClure, Byrd, Ford, and Matsunaga). There is a possibility that
this bill will be attached to tax legislation currently pending
before the Senate Finance Committee. Similar legislation has
been introduced in the House.
Background
In the Energy Tax Act of 1978 and the Crude Oil Windfall
Profit Tax Act of 1980, a series of energy tax credits were
enacted or modified to encourage investment in conservation and
renewable energy technologies. The expiration date of the
residential conservation and renewable tax credits and most of
the business energy supply investment tax credits was set as
December 31, 1985. The excise tax exemption for alcohol fuels
was set as December 31, 1992. The business energy conservation
tax credits and parts of the business energy supply investment
tax credits expired December 31, 1982.
As part of the Fiscal Year 1983 Budget, the Administration
proposed to repeal all business energy tax subsidies and to
repeal special provisions allowing States and localities to issue
tax-exempt industrial development bonds to finance certain energy
property, effective January 1, 1983. In response to this
proposal, both Houses of Congress adopted resolutions supporting
the energy tax credits, with 265 Representatives and 63 Senators
supporting the respective resolutions.
-2-
Summary of the Options
This paper presents four options for the Cabinet Council's
consideration:
(1) Oppose all legislation that would modify or extend in any
fashion existing tax credits;
(2) Propose to extend for five years all existing energy tax
credits that are currently due to expire on December 31, 1985;
(3) Selectively modify or extend some of the existing energy and
conservation credits by:
(a) extending for five years the renewable business energy
tax credits (15 percent) for solar, wind, geothermal and
ocean thermal properties and providing affirmative
commitments for projects which begin before December 31,
1990;
(b) opposing extending the remaining business energy tax
credits that do not involve innovative or new
technologies, e.g. hydro, biomass and intercity buses.
(c) extending for five years the renewable residential supply
(renewable) credits (currently 40 percent credit) at a 15
percent rate;
(d) opposing extending the 15 percent residential
conservation credits;
(4) Selectively modify or extend most of the existing energy and
conservation credits by:
(a) (i) extending the renewable business energy supply
credits for solar, wind, geothermal, and ocean thermal
properties for a period of five years; (ii) increasing
the tax credits for solar, wind, and geothermal
(currently 15%) to 20% effective January 1, 1984; and
(iii) providing affirmative commitments for projects
which begin before December 31, 1990.
(b) opposing extending the remaining business energy tax
credits that do not involve innovative or new
technologies, e.g. hydro, biomass, and intercity buses.
(c) extending the renewable residential energy supply credits
for a period of five years but at a reduced percentage
(currently 40%): 30% in 1986; and 20% in 1987-1990.
-3-
(d) (i) extending the residential energy conservation credit
for a period of five years; (ii) increasing the tax
credit (currently 15%) to 20% effective January 1, 1984;
(iii) increasing the tax credit ceiling (currently $300)
to $400; and (iv) allowing homes that were completed
before January 1, 1983 (currently April 20, 1977) to be
eligible.
Discussion of the Options
Option 1: Opposing all legislation which would modify or extend
in any fashion existing tax credits.
This option would not result in any reduction in
Federal receipts compared to current law.
Advantages:
Eliminating subsidies is consistent with the
Administration's philosophy (underlying the enactment of
ERTA and the decontrol of oil and gas prices) that the
free market promotes the most efficient use of resources
and thus maximizes productivity. When fuel prices
increase, such as from increases in the world price of
oil, the market will allocate the increased investments in
conservation and energy technologies.
In general, targeted tax credits such as the current
energy credits create market distortions. To the extent
they encourage investments that would not be economic
absent the subsidy, the productivity of the capital stock
is lowered by diverting investments away from more
productive uses in the economy.
Extending the conservation and renewable energy tax
credits would result in an estimated reduction of Federal
revenues losses of up to $1.3 billion in a single year and
could result in much larger losses if credits are
increased. Further, tax credit programs typically receive
less scrutiny than on-budget direct outlay programs.
Failure to oppose all energy credits may encourage
Congress to seek more and larger tax subsidies by
weakening the Administration's principal criticism of such
credits: they are unnecessary because the market responds
to price signals.
Tax incentives to encourage conservation and renewable
energy often involve as much government interference in
the marketplace as do spending programs. In order to
control the costs of the program, and to assure that
tax-favored investments are limited to those with the
primary purpose and effect of reducing consumption of
fossil fuels, it is necessary to have detailed and often
arbitrary rules to determine eligibility for the credits.
-4-
Credits are an inferior means of reducing oil imports. If
reducing oil imports below free market levels were a
policy goal, a more cost effective way of achieving this
objective would be a tax on oil imports or oil
consumption.
Option 2: Propose extending for five years all existing energy
tax credits that are currently due to expire on
December 31, 1985.
This option would lead to a reduction in Federal tax
receipts compared to current law of $2.5 billion over
1984-88 and $5.3 billion over 1984-90.
Advantages:
The energy policy goal of this Administration is to foster
an adequate supply of energy at reasonable costs by
promoting a balanced and mixed energy resource system and
by minimizing Federal control and involvement in energy
markets while maintaining public health and safety and
environmental quality.
Energy tax credits to stimulate increased conservation and
renewable energy support this goal by diversifying our
sources of energy and by providing additional incentives
to the private sector to reduce overall energy demand and
imported oil, thereby further reducing the Nation's
vulnerability to an oil supply disruption.
The existing energy tax credits represent less intrusion
into the private sector decisionmaking process than most
Federal energy regulatory or expenditure programs designed
to achieve the same goals.
The recent decline in energy prices, and energy prices
anticipated through the late 1980's, have discouraged
investment in conservation and alternative energy
technologies. Many businesses in these emerging energy
industries argue that they will fold unless conservation
and renewable energy tax credits are extended. Tax
credits provide investors in relatively high risk projects
the potential for reasonable rates of return.
There has not been a predictable climate for investment in
conservation and renewable energy projects: (1) the
December 31, 1985 expiration date is too proximate to
permit the credits for multi-year renewable energy
investments to be effective; (2) some credits were
proposed for repeal in FY 1983; and (3) important
provisions of the Public Utility Regulatory Policies Act
-5-
of 1978 (PURPA), dealing with congeneration and small
power producer interconnection with utilities, were
resolved only recently by the Supreme Court.
Extending the tax credits would maintain the growing but
fragile renewable energy industry, thereby increasing
export potential in this industry during a period in which
conventional energy prices are likely to remain relatively
low, while other countries are supporting their similar
industries.
These credits have strong Congressional support. By
supporting extension of the credits, the Administration
would be better able to shape the legislation.
Option 3: Selectively modify or extend some of the existing
energy and conservation credits by continuing to
provide incentives for the development of newer and
more innovative technologies, treating business and
residential credits in a consistent manner, but
minimizing the general subsidy to nonfossil fuel
energy sectors.
a) Extend the renewable business energy tax credits (15
percent) for solar, wind, geothermal, and ocean thermal
property.
b) Oppose extending the remaining business energy tax credits
that do not involve innovative or new technologies, e.g.,
hydro, biomass and intercity buses.
c) Extend the renewable residential supply credits (currently
a 40 percent credit) at a 15 percent rate.
d) Oppose extending the 15 percent residential conservation
credit, which is for home insulation and store windows.
This option would lead to a reduction in Federal tax
receipts compared to current law of $442 million over
1984-88 and $988 million over 1984-90.
Advantages
This option would signal some Administration support for
renewable energy investments.
Residential and business investment in renewable energy
property would be treated in a similar manner; investment
in more innovative measures such as solar, wind, and
geothermal technologies would be eligible for a 15 percent
tax credit; more conventional investments such as
insulation or small hydro would not receive a credit.
This option would be less costly than extending all energy
tax credits for five years.
-6-
Disadvantages
This option would not provide as great an incentive for
residential investment in renewable energy as current law.
In addition, tax credits for home insulation and storm
windows would be eliminated.
Biomass and small hydro projects would no longer be
eligible for tax credits, yet they are two renewable
sources that could make a significant energy contribution
in the next five years.
Option 4: Selectively modify or extend most of the existing
energy and conservation credits by continuing to
provide incentives for business to invest in new and
innovative technologies; treating business and
residential credits in a consistent manner; and
providing increased subsidies for conventional energy
saving investment by the residential sector.
a) Extend the renewable business energy supply credits for
solar, wind, geothermal, and ocean thermal properties for
a period of five years (allowing credits for biomass and
hydro to expire); increasing the tax credits for solar,
wind, and geothermal (currently 15%) to 20% effective
January 1, 1984; and providing affirmative commitments
for projects which begin before December 31, 1990.
b) Oppose extending the remaining business energy tax
credits that do not involve innovative or new
technologies, e.g. hydro, biomass, and intercity buses.
c) Extend the renewable residential energy supply credits
for a period of five years but at a reduced percentage
(currently 40%) : 30% in 1986 and 20% in 1987-1990.
d) Extend the residential energy conservation credit for a
period of five years; increasing the tax credit
(currently 15%) to 20% effective January 1, 1984;
increasing the tax credit ceiling (currently $300) to
$400; and allowing homes that were completed before
January 1, 1983 (currently April 20, 1977) to be
eligible.
This option would lead to a reduction in Federal tax
receipts compared to current law of $2.5 billion over
1984-88 and $4.1 billion over 1984-90.
Advantages
This option would signal some support for conservation and
renewable energy investments.
-7-
The phasedown of residential supply credits would limit
revenue losses for that category and would provide an
additional incentive to the industry to accelerate product
improvements.
O The residential conservation tax credit rate would provide
some increased incentives to homeowners to invest in
conventional technologies having a relatively high cost
effectiveness.
Disadvantages
Biomass and small hydro projects would no longer be eligible
for tax credits, yet these are two renewable sources which
could make a significant energy contribution in the next five
years.
Effect on Receipts of Several Residential and Investment Energy Credit Options
Fiscal Years 1984-1990
Compared to Current Law
($ millions)
Fiscal Years
: Total
:
:
1984 : 1985 : 1986 : 1987 : 1988 : 1989 : 1990 : 1984-1990
Oction 1: Current law
-
-
I
I
-
1
-
1
Total
Option 2: Extend (at current rates) renewable
business credits and residential credits:
Business:
-
1
!
1
-
--
-
-
Conservation
Supply:
Solar, wind, ocean and geothermal*
I
!
-50
-90
-94
-95
-100
-429
....
Other renewable:
Biomass
-108
-177
-173
-174
-183
-815
-
I
Qualified hydroelectric
-
-3
-8
-11
-11
-14
-21
-68
Subcotal, other supply
-
-3
-116
-188
-184
-188
-204
-883
Subtotal, supply
-
-3
-166
-278
-278
-283
-304
-1,312
Total, business
-
-3
-166
-278
-278
-283
-304
-1,312
Residential:
Conservation
-
-
-46
-288
-274
-261
-248
-1,117
Supply
3
35
24
-525
-718
-783
-859
-2,823
Total, residential
35
-22
-813
-992
-1,044
-1,107
-3,940
Grand total, Option 2
wf
32
-188
-1,091
-1,270
-1,327
-1,411
-5,252
Option 3: Extend business solar, vind, ocean
and geochermal ac 15 percent; extend
residential renewable at 15 percent:
Business:
Conservation
-
-
-
I
I
1
-
-
Supply:
Solar, wind, ocean and geothermal*
-
-
....
-50
-90
-94
-95
-100
-429
Total, business
-
-
-50
-90
-94
-95
-100
-429
Residential:
Conservation
1
1
1
I
-
-
-
-
Supply
½
15
32
-113
-143
-166
-185
-559
Total, residential
15
32
-113
-143
-166
-185
-559
Grand total, Option 3
I
15
-18
-203
-237
-261
-285
-988
Option 4: Zitend business solar, wind, ocean
and geothermal at 20 percent; extend
residential conservation at 20 percent
($400 cap); extend residential supply
to 30 percent in 1986 and 20 percent for
1987-1990:
Business:
Conservation
-
-
-
-
-
-
-
1
Supply:
Solar, wind, ocean and geothermal*
....
-10
-29
-70
-122
-127
-130
-137
-625
Total, business
-10
-29
-70
-122
-127
-130
-137
-625
Residential:
Conservation
-32
-211
-235
-473
-430
-401
-372
-2,154
Supply
1
20
20
-309
-45
-315
-281
-1,309
Total, residential
-31
-191
-215
-782
-375
-716
-653
-3,463
Grand total, Option 4
-41
-220
-285
-904
-1,002
-846
-790
-4,088
Office of the Secretary of the Treasury
Office of Tax Analysis
November 1, 1983
Increases are effective January 1, 1984. Affirmative committment rule is
provided for business projects which begin before January 1, 1991.
Note: Assumes current energy price scanario. Plausible projections of higher
of the 1980s.
oil prices would level to substantially higher losses in the later part
*Assumescertain currently planned pilot projects which are not price effective
under current oil prices; go forward for conprice reasons.
Appendix A
EXISTING TAX CREDITS
Under current law, there are special tax credits available to
households and business firms to encourage investments in
conservation and renewable energy technologies. These credits
can be grouped into three major categories:
o Business Energy Credits: Renewable Energy. Under present
law, solar, wind, or geothermal property and ocean thermal
property qualify for a 15 percent energy investment tax
credit. In addition, certain hydroelectric generating
property qualifies for an 11 percent credit and qualified
intercity buses, and biomass property qualify for an 10
percent energy investment tax credit. Biomass gnerally
includes animal waste, wood, sewage, sludge, oceanic and
terrestial crops, and municipal and industrial waste.
Biomass property is generally defined as equipment used to
burn biomass as well as equipment used to convert biomass
into a synthetic solid fuel. Equipment used to convert
biomass into alcohol fuel also constitutes biomass
property, but only where the primary source of energy for
this equipment is neither oil, natural gas nor one of
their by-products. The energy credits for all of the
above mentioned categories of property are scheduled to
terminate on December 31, 1985.
Business Energy Credits: Conservation and other
Alternative Energy Sources. In addition to the renewable
energy credits, the Congress in 1978 and 1980 provided 10
percent energy investment tax credits to a wide range of
investments in property used to produce energy from
alternative sources (other than conventional oil or
natural gas), boilers or burners that use fuel other than
oil or natural gas, and investments believed to increase
the energy efficiency of existing agricultural,
commercial, and industrial processes. The credits for
alternative energy include credits for equipment to
produce synthetic fuel from alternate substances and coal
conversion and related equipment.
This 10 percent energy investment tax credit for the above
mentioned types of energy property expired on December 31,
1982, except for certain categories of expenditures that
qualified under the "affirmative commitment rules." In
general, under the affirmative commitment rules, such
property that is a part of a project with a normal
construction period of two years or more qualifies for an
energy credit until December 31, 1990 if (i) before
January 1, 1983, all engineering studies in connection
with construction of the project have been completed and
-2-
all environmental and construction projects have been
applied for; and, (ii) before January 1, 1986, the
taxpayer has entered into binding contracts for the
acquisition, construction or erection of equipment for the
project that represents at least 50 percent of the
estimated cost of the project.
O Residential Energy Credits: Renewable Energy. Households
are allowed a 40 percent credit on the first $10,000 of
expenses for renewable energy property, for a maximum
credit of $4,000. Renewable energy property includes
solar, wind, and geothermal investments used in heating,
cooling, and providing hot water for use in a taxpayer's
principal residence. The residential credits for
renewable energy are also scheduled to expire on December
31, 1985.
Residential Energy Credits: Conservation. For
households, a 15 percent tax credit is available on the
first $2,000 of expenses for qualifying energy
conservation property, for a maximum credit of $300.
Energy conservation property includes items such as
insulation, storm windows, caulking, and clock thermostats
installed for use in a taxpayer's principal residence.
The residential conservation credits are scheduled to
expire on December 31, 1985.
THE WHITE HOUSE
WASHINGTON
November 2, 1983
MEMORANDUM FOR THE CABINET COUNCIL ON ECONOMIC AFFAIRS
FROM:
ROGER B. PORTER
RBP
SUBJECT:
Supplemental Paper for the November 3 Meeting
Several key Senators have introduced legislation that
would extend most of the renewable energy tax credits. The
Treasury Department has just completed an analysis of
the bill, which would be very helpful in tomorrow's Cabinet
Council discussion of conservation and renewable energy
tax credits. Treasury's description of the bill, and its
effect on Federal receipts, is attached.
November 2, 1983
CABINET COUNCIL ON ECONOMIC AFFAIRS
SUPPLEMENTAL PAPER - S. 1939
S. 1939, which may be attached to tax legislation currently
pending before the Senate Finance Committee, contains the
following significant provisions:
1. Residential Renewable Energy Credits
The 40 percent renewable energy credit is extended from
12/31/85 to 12/31/90. the credit is phased down to 30 percent on
1/1/86 and 20 percent on 1/1/89.
2. Business Energy Tax Credits
(a) Increase in credit rates
Solar (except for photovoltaics), wind, geothermal
and ocean thermal credits are increased from 15
percent to 20 percent.
Photovoltaic property credit is increased from 15
percent to 30 percent.
(b) Changes in expiration dates
Solar, wind, geothermal, ocean thermal, hydroelectric
and biomass credits which terminate on 12/31/85 are
extended to 12/31/90.
Cogeneration property credit which expired on
12/31/82 is reinstated and extended to 12/31/90.
(c) Long-term projects and affirmative commitments
Credits which expired on 12/31/82 but which are
available until 12/31/90 if part of long-term (two
year construction) project and if certain
prerequisites are met by 12/31/82, will now qualify
if prerequisites are met before 1/1/88. Effect is to
reinstate all of terminated credits (alternative
energy property, specially defined energy property,
- 2 -
recycling equipment, shale oil equipment, equipment
for producing natural gas from geopressured brine) if
they are for long-term projects.
Renewable, biomass, etc. , credits which expire on
12/31/85 (extended by S. 1939 to 12/31/90) may be
extended to 12/31/95 if certain commitments for
construction are made before 12/31/90. There is no
requirement that property be part of a long-term
project.
(d) Changes in definition of eligible property
Cogeneration equipment qualifies even if fueled by
oil or natural gas.
Biomass property includes methane for fuel or
electricity produced by aerobic digestion of
agricultural matter.
Shale oil property includes equipment used for
hydrogeneration and similar processes.
Tar sands property, currently not eligible, added to
the list of qualified property.
(e) Special rules for photovoltaic property
Limitations applicable to other credits (use by
exempt organizations and governmental units, basis of
property leased by related parties, reduction in
credit for IDB-financed property, and basis reduction
for investment credit) will not be applicable to
photovoltaic property.
Credit for photovoltaic property not available if of
foreign manufacture or if less than 75 percent of
basis in property is attributable to value added in
the U.S.
3. Revenue Estimates
Revenue estimates are shown in the attached table.
The Effect on Fiscal Year Receipts of S. 1939
(Energy Credit Extension and Revision)
(Estimates Assume Current Oil Price Scenario)
($ millions)
:
Fiscal Years
: Total
: 1984 : 1985 : 1986 : 1987 : 1988 : 1989 : 1990 : 1984-
Investment credits:
Business:
Conservation:
Cogeneration
-42
-34
-38
-42
-46
-52
-62
-31
Total, business conservation
-42
-34
-38
-42
-46
-52
-62
-31
Supply:
Renewable (including geothermal):
Solar, wind, ocean and geothermal
except photovoltaic
-18
-17
-56
-84
-89
-91
-97
-45
Photovoltaic
-1
-9
-38
-68
-77
-82
-85
-36
Low temperature geothermal
-2
-1
-1
-1
-2
-2
-2
-1
Subtotal, business, solar,
wind, ocean and geothermal
:
-21
-27
-95
-153
-168
-175
-184
-82
Other renewable:
Biomass
--
--
-49
-82
-83
-86
-94
-39
Hydro
-
-3
-8
-11
-11
-14
-21
-6
Subtotal, other renewable
--
-3
-57
-93
-94
-100
-114
-46
Other supply:
Affirmative committments and
expansion of credits for
synthetic fuel
Synthetic Fuel Corporation
:
-1
-22
-76
-113
-113
-90
-33
-44
North Dakota
-18
1
1
*
*
---
--
-1
Other
*
*
*
*
*
*
*
*
Subtotal, other supply
: .
-19
-21
-75
-113
-113
-90
-33
-46
Total, business supply.
-40
-51
-227
-359
-375
-365
-331
-1,74
Total, business
credits
-82
-85
-265
-401
-421
-417
-393
-2,064
Residential:
Renewable:
Extend credit at rates of 30, 30,
30, 20, 20
2
20
20
-308
-444
-492
-324
Add low temperature geothermal
-1,526
-2
-2
-2
-2
-2
-1
-1
Total, residential
-12
0
18
18
-310
-446
-443
-325
-1,538
Total credits
-82
-67
-247
-711
-867
-910
-718
-3,602
Depletion for tar sands
-
-
*.
*
*
*
*
*
Grand total
-82
-67
-247
-711
-867
-910
-718
-3,602
Office of the Secretary of the Treasury
Office of
November 2 198
ENERGY TAX CREDITS
CONTRIBUTE TO
Balanced and Mixed Energy
Resource System
Growing Conservation and
Renewable Energy Industries
A Better Environment
Reducing Oil Imports
ENERGY TAX CREDIT OPTIONS
Cabinet Council Paper
Senate
Option 1 Option 3 Option 4 Option 2
S. 1939
Orig. DOE Industry
00
Terminated
Terminated
20%/$400
15%/$300
40%/$400 50%/$500
'77 TO '83
'77 TO '83 '77 TO '83
Conservation
Terminated
15%
22%
40%
24%
24%
/ 40%
Renewables
Terminated
15%
20%
15%+
20%+
20%+
30%+
Renewables
00
0
0
0
0
0
0
25%
Conservation
Annual Revenue
Loss (Millions $)
0
200
700
1100
600
1800
3900
THE WHITE HOUSE
WASHINGTON
September 24, 1983
MEMORANDUM FOR MIKE MCMANUS
FROM:
MIKE DEAVER
SUBJECT:
Environmental Out-Reach
JAB, RD, CF, and DG joined me for lunch on Friday to discuss the
Environmental Out-Reach program.
The general guidelines that came for the discussion were:
1)
Don't make it a concentrated campaign like the education
issue.
2)
Work it into the schedule on a regular basis.
3)
Utilize the SOU for a list of accomplishments in the area
and future programs.
Some specific ideas discussed were:
1)
Inviting out-door editors to the ranch for a working
lunch.
2)
Honor TR as a theme to visit National Parks.
3)
When we announce ACID RAIN program -- visit a poluted lake
to show concern.
4)
Visit Aransas National Wildlife Refuge in Texas -- Home of
the Endangered Whooping Crane.
@Schederding
THE WHITE HOUSE
OR
washington
my meviourartment W 9
of the Interior
September 12, 1983
THE SECRETARY
TO:
TON, D.C. 20240
MICHAEL K. DEAVER
AUG 29 1983
FROM:
CRAIG L. FULLER
FYI
Action THISIS
Comment
ATTACH
EIF
This could be a good
IDENT FOR CABINET AFFAIRS
&
Daman
opportunity. Put toy There the has
dorse the attached
ife Management Institute to
us
e keynote, opening address at
ife and Natural Resources
in Boston, Massachusetts. We
ion in your scheduling
action on this request.
additional information.
Im SECRETARY Watt
Attachment
9/12 be
The could apportune oppor ty
a good Cary
@Schederding
OF
THE INTERIOR
United States Department of the Interior
OFFICE OF THE SECRETARY
March
3,
1849
WASHINGTON, D.C. 20240
AUG 29 1983
NOTE TO CRAIG FULLER
ASSISTANT TO THE PRESIDENT FOR CABINET AFFAIRS
Craig, we enthusiastically endorse the attached
recommendation from The Wildlife Management Institute to
have the President deliver the keynote, opening address at
the 49th North American Wildlife and Natural Resources
Conference on March 26, 1984, in Boston, Massachusetts. We
have prepared our recommendation in your scheduling
proposal format to facilitate action on this request.
We'd be happy to provide any additional information.
Jim Watt SECRETARY
Attachment
9/12 MikeDeam
a The good Cary could apportunet ty
SCHEDULE PROPOSAL
TO:
Fred Ryan, Director
Presidential Appointments and Scheduling
FROM:
Secretary of the Interior
REQUEST:
To deliver the keynote address at the 49th North American
Wildlife and Natural Resources Conference, March 26, 1984,
Boston, Massachusetts.
PURPOSE:
To discuss the Administration's numerous accomplishments in
the wildlife and natural resources conservation area.
BACKGROUND:
The North American Wildlife and Natural Resources Conference
is America's oldest and most respected conservation meeting.
The conference is attended by resource administrators from
federal and State agencies as well as officers and members of
prominent national conservation and environmental
organizations.
DATE AND TIME:
March 26, 1984 (opening general program session in the
morning); the conference runs from March 23-28, 1984.
LOCATION:
Park Plaza Hotel
Boston, Massachusetts
PREVIOUS
Secretary Watt's first speaking engagement was the keynote
ADMINISTRATION
address at the North American on March 23, 1981, here in
PARTICIPATION:
Washington. His remarks were extremely well received.
The President sent a brief message to the 1982 North American
(copy attached). Although no former Presidents have
personally participated, President Theodore Roosevelt sent a
message to open the first meeting.
PARTICIPANTS:
1000-1500 federal, State and private conservation officials.
ENN Month
THE WHITE HOUSE
WASHINGTON
March 12, 1982
nt Institute
.C. 20005
202/371-1808
I am delighted to send my warm greetings to
all those gathered for the 47th North American
Wildlife and National Resources Conference.
This event provides a welcome opportunity to
express my high regard for your work as pro-
fessional resource managers, adminstrators,
researchers, and conservationists. Your
knowledge and experience are a valuable source
of information in our efforts to manage re-
sources thoughtfully and productively for all
Americans.
My Administration is committed to balancing
intelligently the competing needs of economic
growth and natural resource conservation in
the 1980's. We gratefully acknowledge the
major role natural resources have played not
g thought to an
only as part of our nation's strength but also
servation/environmental
as a significant contribution to the quality
of our lives. It is our goal to manage these
resources in a manner that reflects the best
Resources Conference,
in the American character.
Hotel, may offer an
ning general program
You have my best wishes for a successful and
productive conference and my hope that it may
contribute to improved management of our
many resource
nation's natural resources and wildlife.
as officers and members
zations. The
rvation meeting.
a, Mexico and other
Ronald Reaga
Daniel A. Poole
President
DAP: lbb
ENN Month
WILDLIFE MANAGEMENT INSTITUTE
Wildlife Management Institute
D.C.
202/371-1808
WASHINGTON
Suite 725, 1101 14th Street, N.W., Washington, D.C. 20005
DANIEL A. POOLE
President
L.R. JAHN
Vice-President
L.L. WILLIAMSON
Secretary
WESLEY M. DIXON, Jr.
Board Chairman
June 14, 1983
Honorable James G. Watt
Secretary of the Interior
c/o Ms. Emily S. DeRocco
Assistant to the Secretary
Department of the Interior
Washington, D.C. 20240
Dear Jim:
I understand that the Administration is giving thought to an
appropriate forum for the President to make a major conservation/environmental
statement.
The 49th North American Wildlife and Natural Resources Conference,
scheduled for March 23-28, 1984, in Boston's Park Plaza Hotel, may offer an
appropriate setting. The best time would be at the opening general program
session on Monday morning, March 26.
The Conferences, as you know, are attended by many resource
administrators from federal and state agencies as well as officers and members
of prominent national conservation/environmental organizations. The
Conference is America's oldest and most respected conservation meeting.
The meeting regularly is attended by persons from Canada, Mexico and other
countries.
With best wishes.
Sincerely,
Dau
Daniel A. Poole
President
DAP:1bb
Bue
Decision/Making/Information
Intelligent alternatives
for today's decision makers
6803 Poplar Place, Suite 300, McLean, Virginia 22101, (703) 556-0001
on
TO:
James A. Baker, III
FROM:
Richard B. Wirthlin
DATE:
June 24, 1983
SUBJECT:
Environment
Jim, you mentioned to me yesterday the possibility of having the
President give some major speeches on the environment. I believe
this would be both premature and unwise:
We need to give Ruckelshaus some time to get his
EPA house in order and time to establish some
favorable accomplishments before we hype the issue
with the President.
There are other issues we need to address now:
- Success in reducing inflation
A strength issue we need to reinforce
Rationale for vetoing (if it comes to this)
some of the spending bills
- The good news coming with the recovery.
- Americans' optimism--contrast with Carter's
malaise emphasis of four years ago.
I'd be happy to chat with you further about this if you desire.
CC: Michael D. Deaver
Edwin Meese III
THE WHITE HOUSE
WASHINGTON
June 22, 1983
playact
MEMORANDUM FOR:
MICHAEL A. MCMANUS, JR.
FROM:
FREDERICK J. RYAN, JR.
7AR
SUBJ:
ENVIRONMENTAL EVENTS (Preliminary List)
I.
INTRODUCTION
We must recognize that any concerted effort to reach out on
environmental issues will be met with a great deal of
skepticism, if not down right opposition, from the
so-called environmental groups. This means that even
greater scrutiny than usual is necessary before we commit
ourselves to addressing a particular topic or group. I
think EPA and/or Interior will have to be included in this
decision-making process.
In general, our best bet would be to pick one or two
national forums for presidential address, and keep the rest
of our focus on created events.
Bill Ruckelshaus is the Administration spokesperson with
the most credibility in the environmental community. I
think the President should do all he can to show his
support for Ruckelshaus and to associate closely with him.
II. EVENTS
1) Present the World Wildlife Fund Prizes to the 1983
winners
The World Wildlife Fund is the principal private group
in the U.S. which finances conservation projects around
the world. It works to strengthen laws and policies
affecting threatened species and habitats, and promotes
public awareness of enrivonmental priorities. WWF is
well-respected within the environmental community.
The President could present the awards in a brief Rose
Garden ceremony or other appropriate site in the
Washington area. The winners are two men who have
established Costa Rica as the center for environmental
protection in Central America.
2) National Wildlife Federation
The Executive Vice President, Jay Hair, has offered to
work with the White House to set up a meeting or forum
for the President to discuss policy issues with members
of the environmental community. This could be done at
the White House or at an appropriate site out on the
road.
3) Attend a "Save the Condors" Fundraiser in California
The rare condor is facing extinction and a major effort
is being put together by the San Diego Zoological
Society to save this bird. They have asked the
President's assistance in helping to raise funds for a
special condor breeding program.
We could put together a great people oriented event,
such as a casual barbeque, on one of the game preserves
near San Diego. There are a few young condors that are
being raised by the Zoological Society that would
provide good visuals for the event.
This event could be put on anytime we would like. I
suggest we do it during the August trip to the Ranch.
III. SITE VISITS
1) Visit the "New E.P.A"
The President could briefly drop-by the E.P.A. and
commend Ruckleshaus and his staff on the good job they
are beginning to do.
2) Visit the Albright Training School for Forest Rangers
All U.S. Forest Rangers receive their training at the
Albright School, located on the South Rim of the Grand
Canyon in Arizona. The President could address this
group about their responsibilities as forest rangers
and commend them for choosing this profession. Such a
trip could also include a visit to the Grand Canyon.
3) Visit to Site of Endangered Species
Secretary Watt has recently been getting excellent
coverage of his program to save the American Eagles.
We should get the President involved in this or,
perhaps, another endangered species. This would
emphasize the good job that this Administration has
done in helping to save endangered species.
4) Visit a Coal Fired Plant with a Clean Scrubber System
These plants are thought to be a cause of acid rain.
If we were to go to one with a clean scrubbing system,
it would draw attention to our concern about acid rain
and the need to take steps to prevent it. Apart from
the environmental aspects, this could be a good blue
collar event involving the plant workers.
5) Visit a good Toxic Waste Disposal Site
Although this is something that we would certainly want
to consult E.P.A. about, it seems that a visit to an
exemplary site would calm the fears many people have
about waste disposal. Such a visit would show the
Presidents concern about toxic waste and demonstrate
that it can be safely disposed of.
6) Visit a National Park
There are numerous options available for the President
to visit a National Park in a key political state. He
could visit with the Park Rangers, or just make it a
site seeing trip.
Possible Options:
Florida
- Everglades National Park
Arizona
- Grand Canyon
- Petrified Forrest
Texas
- Big Bend
Wyoming
- Yellowstone Natonal Park
California
- Point Reyes National Seashore
- Kings Canyon National Park
- Big Sur
- Sequoia National Park
- Redwood National Park
(This year is
its 15th anniversary)
- Yosemite National Park
- Muir Woods (This year is its 75th
Anniversary)
Montana
- Glacier National Park
7) National Hunting and Fishing Day - September 24, 1983
This is the national day set aside for recognizing
sportsmen's role in conservation.
-3-
The President could visit a local fishing site and
talk with the fishermen.
8) Participate in 75th Anniversary Commemoration at
Theodore Roosevelt Dam
This summer marks the 75th Annivesary of Theodore
Roosevelt Dam, located just outside of Phoenix,
Arizona. (It's not far from Mrs. Reagan's mother's
home).
III. THEODORE ROOSEVELT EVENTS
Theodore Roosevelt has the reputation as a strong
conservationist and aligning with him could improve the
President's image with respect to conservation. His 125th
birthday will be October 27 of this year. We could mark
this event with a visit to Theodore Roosevelt National Park
in North Dakota. Or, if you prefer a local event, we could
arrange a visit to Theodore Roosevelt Island off the
Potomac River.
IV. PRIVATE SECTOR INITIATIVES
There are numerous examples across the country of private
sector activities to clean-up or maintain the environmental
quality of our communities. Examples are:
Tan Oak Whole Access Nature Trail, La Honda, CA
The idea began in 1979 with a student who was doing a
senior thesis on this concept of providing access to a
natural environmental area for the disabled. A special
limited trail has been constructed so the blind and
handicapped can take a nature walk through an area of
Redwoods.
Children's Park, Los Angeles, CA
Elementary school children raised $96,000 to buy and
convert a dump in their neighborhood into a children's
park. Many people, in addition, contributed time and laor
to the project.
Natural Beauty Program of San Bernardino, CA
This program was organized 24 years ago by a man who is now
65 years old and is still the President of the program. It
is designed to provide the citizens of the community with a
program through which they can volunteer their time to
preserve and protect the environmental quality of their
community.
Sea Urchins Program, Stamford, Connecticut
This is a summer environmental awareness day program
designed especially for elementary school children.
-4-
Children are provided with a recreational program in
addition to an optional tutorial program in basic skills of
elementary education. The goal of the program is to make
children more aware of their environment while involving
them in various activities which include marine science
environmental crafts and shore projects. The local senior
citizens are included in some outdoor recreation such as
picnics and entertainment.
Future Farmers of America, Building Our American Community
Project, Bunnell, Florida
This project began in 1980 and is aimed at preserving the
beach dunes along Flagler Beach. The most significant
accomplishment during the past year was the reduction of
erosion in a 2.5 mile area of beach dunes by an estimated
95 percent. This FFA chapter has raised and transplanted
more than 1200 dune plants on the beach, planted more than
one million seeds, and monitored the progress of the
revegetation project. They also collected and transported
more than 100 trees donated by local citizens for use in
the dunes stabilization program.
The Community Environmental Council in Santa Barbara, CA
The prime objective of the group is environmental education
and sponsorship of public service projects. Current
projects are: two recycling centers; community gardens; a
prototype residential complex emphasizing appropriate
technologies and offering agriculture training courses and
workshops on solar energy. (We have not been able to gain
details about the funding, etc., of this group.)
V.
OTHER ENVIRONMENTAL FORUMS
The following environmentally oriented conferences and
meetings will be taking place in the near future. We
should consult with E.P.A. and the Department of the
Interior for recommendations as to their legislative agenda
and compatibility with Administration goals.
1) Isaak Walton League of America
July 12-16, 1983 -- Harrisburg, Pennsylvania
2) World Conference on Smoking and Health
July 10-15, 1983 -- Winnipeg, Manitoba, Canada
3) Soil Conservation Society of America
July 31 - August 3, 1983 -- Hartford, Connecticut
4) American Fisheries Society
August 1983 -- Milwaukee, Wisconsin
5) National Audubon Society
August 20 - September 2, 1983 -- Estes Park, Colorado
-5-
6) Water Pollution Control Federation
October 2-7, 1983 -- Atlanta, Georgia
7) 50th Anniversary of the Civilian Conservation Corps
Convention
September 20-23, 1983 -- Eagle River, Wisconsin
8) Florida Pollution Control Association
October 25-29, 1983 -- Miami Beach
9) Oklahoma Water & Pollution Control Association
October 31 - November 4, 1983 -- Oklahoma City
10) Future Farmers of America
November 10-12, 1983 -- Kansas City
-6-
NATION
FEDERATION
TM
WILDLIFE
NATIONAL WILDLIFE FEDERATION, 1412 Sixteenth Street, N.W., Washington, D.C. 20036 (202) 797-6842
Office of the Executive Vice President
ct
June 15, 1983
Mr. Michael Deaver
WS, 7414 Their hold
The White House
Washington, D. C. 20500
for
Dear Mike:
We were disappointed that the President gave such short shrift to environmental
concerns in his radio message last Saturday. The message seemed to be that
the entire controversy over Administration policies is just a tempest in a
teapot, altogether lacking in merit. Because we believe there are serious
substantive issues underlying the admittedly overheated debate, we felt we
had to respond. Accordingly, the enclosed statement was released to the media
today.
I want to stress our continuing desire to find some common ground on the issues
we have previously raised with you. And we still believe a comprehensive
Environmental Message and a meeting with the President are needed. But we
are frankly troubled by the lack of any substantive response thus far. I hope
you are in a position to advance the dialogue toward some meaningful outcome.
Thank you and I look forward to hearing from you at your earliest convenience.
Sincerely,
day
JAY D. HAIR
NATIONAL WILDLIFE FEDERATION
NATIONAL WILDLIFE FEDERATION TM
1412 Sixteenth Street, N.W., Washington, D.C. 20036
202-797-6800
STATEMENT OF PATRICK A. PARENTEAU
VICE PRESIDENT FOR RESOURCES CONSERVATION
NATIONAL WILDLIFE FEDERATION
June 15, 1983
Several weeks ago, when word of an impending Presidential
Message on the Environment first leaked out of the White House,
the National Wildlife Federation developed a list of twelve
priority issues and urged the President to address them in
detail. Copies of this document are available here today.
As you will see, the topics cover a wide spectrum of complex
and pervasive environmental problems, as well as recommended
changes in the Administration's current approach to them.
It came as something of a disappointment, then, when
the President chose his weekly 5-minute radio broadcast as
the forum to defend the policies of Interior Secretary James
Watt, and to downplay the very serious errors that have been
made by this Administration in its apporach to environmental
protection and natural resource management. You have heard
Senator Mitchell and the other speakers talk about some of
these misguided policies -- the wasting of EPA, the assault
on the Wilderness System, the shirking of responsibility to
abate the acid rain hazard. I intend to focus on a set of
48th ANNUAL MEETING MARCH 15-18, 1984 Omni International Hotel, Atlanta, Georgia
100% reclaimed paper
-2-
Administration policies -- policies which in some cases have
directly involved White House staff --- that deal with the
management of our public lands and the resources they contain,
including some of the most unique fish and wildlife habitat
found anywhere in the country.
Stated simply, this Administration is pursuing a course
of action designed to reduce the size of the Federal resource
estate, and in the process divest the public, both present and
future, of a wide array of uses and benefits derived from public
ownership of and access to these resources. Proof of this is
found in three major programs initiated or expanded by this
Administration: (1) the land sales program operating under
the euphemism of the "Asset Management Program"; (2) the accelerated
mineral leasing program under the principal direction of
Secretary Watt; and, (3) the water rights transfer program
being carried out by the Bureau of Land Management. Following
is a brief description of each program.
Asset Management Program
Created by President Reagan's Executive Order 12348,
this effort is overseen by the
Property Review Board
housed in the White House. It sets land sale quotas
based on maximizing the dollar return to the Federal Treasury
regardless of resource values or public benefits from retention
of the lands in question. Federal land management agencies are
-3-
expected to meet these quotas. For example, the quota for
FY 1984 is $1 Billion (the original proposal called for
$13 billion over 5 years). The Forest Service, which needs
Congressional authority to sell large tracts, has proposed
the sale of over 6 million acres of national forests, most
of it in the eastern United States, where public recreation
lands are at a premium. The BLM proposes to sell an additional
4.2 million acres, some of which contains scarce wildlife
habitat. For example, in Montana, BLM has proposed a 16,000
acre sale in the Dillon resource area, half of which, according
to the State Department of Fish, Wildlife and Parks, has
"high public values as wildlife habitat or recreation use
in their present location."
The Administration's land sale program has generated
a firestorm of opposition from state and local officials
throughout the country. Nowhere has the opposition been
stronger than in the West, where the Administration had been
counting heavily on support from the so-called Sagebrush rebels.
It seems the President has badly misread the mandate he
thought he received from his Western constituents. Indeed,
the Asset Management Program seems to have done for President
Reagan what the "Water Projects Hit List" did for President
Carter.
-4-
Mineral Leasing Program
The Administration's mineral leasing program represents
a more subtle but no less harmful effort to shift public
resources into the hands of private speculators. Though
mineral leasing covers a variety of fuel and nonfuel
minerals, including oil and gas (both onshore and offshore),
oil shale, phosphate, and molybdenum, perhaps the most
notorious example of this Administration's approach to leasing
is Secretary Watt's giveaway policy on Federal coal reserves.
Over the next 18 months, in a soft market, the Department of
Interior has proposed to lease 20 billion tons of coal,
much of it overlain by wildlife habitat, agricultural land,
historic and archaeological sites and public recreation areas.
To meet this industry-oriented goal, the Department must leap-
frog over the land use planning and environmental analysis
requirements of Federal law. Yet, there is no need for this
pell-mell rush to sell all this coal at bargain basement prices.
There are already over 16 billion tons of Federal coal under lease.
The Office of Technology Assessment estimatee that 95% of this
is recoverable consistent with environmental safeguards. This
means that, at existing rates of use, industry already has
enough coal under lease to last us for over 100 years. The
obvious question: why not wait for environmental planning to
catch up with coal leasing so that sensitive areas (i.e., those
-5-
that cannot be reclaimed) can be excluded or given special
protection from the not-so-gentle impacts of stripmining?
The old maxim "You don't have to own it to control it,"
applies with special force to the effects of the Administration's
expanded and accelerated leasing programs. Unless it is
redirected -- and soon -- the real Watt legacy will be firmly
in place, and present and future generations will have lost
critical options for using and conserving public land resources.
Water Rights Transfers
One of the least discussed aspects of the Administration's
approach to public resource management is its Federal water
rights policies. In the West, where water is king, over
61% of the rivers, streams and springs rise on Federal land.
The semi-arid conditions make water a life or death factor
for many species of fish and wildlife as well as for human
populations. Historically, western state water laws did not
consider wildlife to be a "beneficial use" and failed
to provide any protection for instream flows. Though that
is changing, it is still true that in many western watersheds,
the only real protection for fish and wildlife habitat lies
in the exercise of various Federal claims for water. Yet this
Administration is moving in exactly the opposite direction. The
Department of Interior has all but halted the effort to quantify
-6-
and assert Federal Reserved Water Rights, and it has sought to
exclude fish and wildlife from the protection of these rights
wherever possible. It has also disavowed any authority to
assert so-called "non-reserved water rights" (despite an
Attorney General's Opinion that sanctions the exercise of some
Federal water use prerogatives over state objections). And
it has adopted a policy of transferring stockwatering rights
to holders of grazing permits on BLM land. This last change
in policy may pose the most serious long-term threat to
public lands management since he who owns the water controls
the land.
These policies are not only unfortunate from an
environmental standpoint, they are unnecessary and shortsighted
from an economic standpoint as well. Evidence is mounting
that, just as in the energy conservation field, there are
strong economic arguments to be made for making better use
of existing water supplies through pricing and technology
improvements and dedicating minimum streamflows for recreational,
fish and wildlife, and water quality benefits. In its rush
to turn over as much control over public water resources to
private interests as possible, the Administration is missing
a golden opportunity to provide leadership in an area of
public policy that is approaching crisis proportions.
- -7-
In conclusion, the Federation calls upon the President
to reconsider his blanket endorsement of the misguided policies
of James Watt, to take seriously the constructive criticisms
and suggestions that have been made for redirecting the
Administration's environmental policies, and to deliver a
comprehensive Environmental Message to the American people laying
out a positive program to address the public health and resource
conservation issues that we have been discussing today.