Representative Tom McClintock (R - CA) made the following opening statement at the House Water and Power Subcommittee hearing on the Bureau of Reclamation and the American Recovery and Reinvestment Act.  Testifying at the hearing was the Commissioner of the Bureau of Reclamation, Michael Connor.

Opening Statement
Water and Power Sub-Committee
July 15, 2010

When the American Recovery and Reinvestment Act was signed into law in February of 2009 – with the stated purpose of reducing unemployment -- the unemployment rate stood at 8.2 percent.  Seventeen months and hundreds of billions of dollars later, the unemployment rate has grown to 9.5 percent.  It would be even higher except for the millions of unemployed who have simply dropped out of the labor force and are no longer counted.

The Commissioner will note that by spending nearly a billion dollars, his Bureau has created over 10,000 jobs.  What he doesn’t note is how many jobs were lost because that billion dollars had first to be removed from the economy before his bureau could put it back into the economy. 

This is the fundamental failing of the Administration’s stimulus spending.  Government cannot inject a single dollar into the economy that it has not first taken out of the same economy.  It is true that if I take a dollar from Peter and give it to Paul – or in this case, Mike – Mike has an extra dollar to spend and he’ll come here and tell us all the good he did with it.  But what is completely ignored is that Peter now has one less dollar to spend in that very same economy.    Mike has a billion dollars more, but the taxpayers now have a billion dollars less.  On paper, this strategy nets to zero.  In practice, it nets to much less than zero, because we have transferred huge amounts of capital from investments that would have been made on economic considerations to investments that are being made on political considerations, as we are about to hear.

The fact is that the best way to stimulate the economy is to get the government out of the business of creating shortages.  For more than a year, this committee sat idly while the Central Valley of California was economically devastated by the willful diversion of over 200 billion gallons of water for the amusement of the Delta Smelt.  This year, despite precipitation 160 percent of normal, the Central Valley is receiving only 45 percent of its water allotments.  A similar story is told across the country.

But most tragic is the fact that this Administration, through the Bureau of Reclamation, is spending $11 million of stimulus money in an effort to willfully destroy four perfectly good hydroelectric dams on the Klamath River that generate 155 megawatts of the cheapest and cleanest electricity that our technology can produce. 

At a time when Californians pay the highest electricity prices in the continental United States; at a time when Californians’ per capita electricity usage is not only the lowest in the nation but is lower that Guam, Aruba and Luxemburg; at a time when we can’t guarantee enough electricity to keep people’s air conditioners running this summer, the Bureau of Reclamation is using stimulus money on a conclusion driven process to tear down four hydroelectric dams on the Klamath that generate the cheapest and cleanest electricity within our power to produce – enough electricity for more than 150,000 households – with no plans to replace that power. 

This is insane.  And it is doing enormous harm to our economy.

And it invites the question of what other extraordinarily poor judgment is being used in spending these funds.  For that reason, I am sending an official request today that asks the Bureau of Reclamation to disclose all of its grants over the past five years.  My staff has found examples from the past where the agency helped fund the World Fisheries Congress meeting in Athens, Greece and directed grants to environmental organizations that in turn sue our government.  At a time when family budgets have been cut to the bone to finance this unprecedented spending, the American people deserve to know where their money is going.

Under this administration and this Congress, the Bureau of Reclamation has become the Bureau of Water Shortage and Dam Destruction.  And that’s a shame.

We have it within our ability to produce clean, cheap and abundant water and power from our nation’s vast resources and by so doing to restore the foundation of prosperity for our nation.  All that is required is a fundamental change in the policies of this government and the political will to do so.