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Wednesday, January 4, 2012

Army Corps Fiscal Challenges: Frequently Asked Questions

Nicole T. Carter
Specialist in Natural Resources Policy

Charles V. Stern
Analyst in Natural Resources Policy

The Army Corps of Engineers is responsible for much of the federal water resources infrastructure in the United States. The Corps is faced with more demands for building and maintaining its projects than available federal funding allows. This situation is raising basic questions about how the Corps functions, including the efficacy, efficiency, and equity of Corps planning and implementation.

Corps fiscal challenges have multiple underlying causes. The Corps and its infrastructure is expected to help meet the nation’s increasing demands on water resources and the services they provide; however, what the agency can accomplish given the level of federal funding provided is declining. At the same time, Corps asset management costs are increasing as facilities age. Nonfederal projects sponsors that pay a portion of the cost for most Corps projects can become frustrated as Corps studies and projects are authorized, but remain unfunded or are slowed by lower levels of appropriated funding than anticipated. The Administration and appropriators make choices about what to fund out of an increasing pool of authorized activities. For example, the agency now faces a construction backlog of more than $62 billion, while receiving roughly $2 billion a year in construction funding. As Corps fiscal challenges become more apparent, frequently asked questions about the Corps fall into four broad categories: 

         backlog of project delivery, 
         authorizations and missions, and 
         navigation expenditures and trust funds. 
At issue for Congress is deciding how to tackle challenges facing the Corps in the context of a tight fiscal climate and other constraints (e.g., earmark moratoriums). In the past, Congress generally has increased the agency’s budget above the Administration’s request and expanded the list of projects and types of projects funded. At present, fundamental questions about what the agency does and how it operates are being asked by some observers. The perspectives on how to proceed among Members of Congress, project sponsors, fiscal conservatives, environmental interests, and other stakeholders vary widely. These perspectives often diverge based on views of the appropriate federal role in water resources management and infrastructure and the priorities for the limited federal water resources funding. Some stakeholders see the Corps backlog as a justification to direct more funds to Corps activities. Others see a need to reduce the level and types of Corps activities authorized, while still others want to make gains through efficiency improvements to reduce the expense and time needed to complete a Corps project. Some also are interested in pursuing private sector involvement in and alternative federal financing (e.g., infrastructure banks) for water resources infrastructure in order to reduce the demands on the agency. Some of these perspectives are apparent in proposed legislation in the 112th Congress, including H.R. 104, H.R. 235, H.R. 1861, H.R. 2354, S. 475, and S. 573.

This report addresses many of the basic questions regarding Corps of Engineers activities under a constrained fiscal climate. It also includes limited discussion of larger trends and proposals that may be of interest to Congress as it considers Corps activities going forward.

Date of Report: December 15, 2011
Number of Pages: 29
Order Number: R41961
Price: $29.95

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