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Office of the Press Secretary

                         BACKGROUND BRIEFING

July 1, 1993

                              Room 450
                   Old Executive Office Building 

12:05 P.M. EDT

MS. ROMASH: I'm going to start. I just want to put down some ground rules and then give you a sense, for the folks not from the region or who haven't been covering this issue as closely as the people who have been covering it every day. My name is Marla Romash. I'm the Vice President's Communications Director. For the folks who are listening to this via a phone bridge -- and obviously the people in the room -- this is going to be a BACKGROUND briefing, which means these people can be quoted but not -- but identified only as senior administration officials. The people who will be speaking here are all people who were directly and daily involved in the crafting of this policy. They're from the Agriculture Department, the Interior Department, the Office on Environmental Policy, and the National Economic Council.

Just to give you a sense of how we got where we are today, most of you are aware -- are familiar with the Forest Conference that occurred in Portland on April 2nd. Immediately after that Forest Conference, we created three working groups. You'll see information on those working groups in the packages you received in the appendix. One was the ecosystem management assessment group, one was the labor and community assistance group, and one was the agency coordination group. The names of those people are in there -- in your packages. As well, you should have in your package in the appendix a copy of the mission statement that those three working groups received to guide their work in these areas.

It is from the work of those three groups that this policy was crafted, along with intensive conversations with a broad range of people from across the region representing a wide variety of views.

In the past several weeks, there have been a number of leaks and stories about option this and option that. It's important to recognize that each of these three working groups in this process were very important. That is, those dealing with the forest management issues, those dealing with the economic issues, and those dealing with the agency coordination issues.

And with that, I'll turn it over and open it up to questions and invite our briefers here up to the microphone.

Q Can you close off foreign sales corporations administratively or do you have to go through the Hill on that?

SENIOR ADMINISTRATION OFFICIAL: We have to go to the Hill for that.

Q And the other quick question is, are these adaptive management areas in the reserves or not? Are they above and beyond the reserves?

SENIOR ADMINISTRATION OFFICIAL: No, they're not in the reserves; they're designed in the matrix between reserve areas.

Q Say that again.

SENIOR ADMINISTRATION OFFICIAL: They're designed -- they're laid out within the matrix -- the areas outside the reserve. So they're not within the reserve.

SENIOR ADMINISTRATION OFFICIAL: Why don't you walk through what the different areas are so the people have an understanding of the language.

SENIOR ADMINISTRATION OFFICIAL: I can do that. The President's plan has three different elements. It has a system of reserve areas, as you all know. It also has additional protections for riparian areas that consist of buffer strips for second, third, and fourth order streams. That is, permanent streams that are fishbearing down to intermittent streams. And the width of the buffer differs with the size of the stream.

And thirdly, the President's plan includes these adaptive management areas. There are 10 adaptive management areas ranging in size from about 80,000 to 380,000 acres. They're in the matrix. They are intended to serve a couple of purposes. One is to provide an opportunity for communities that have been working to try to resolve this issue an opportunity to continue to work with guidance and assistance from technical people and scientific teams, to try and achieve the protections that are called for in the President's plan, but using their own best will and some innovation on their part.

The other purpose that it serves is essentially to serve as large ecological laboratories, if you will, where we can try and test different management strategies, different approaches to ecosystem management, and so we can develop a better understanding of the tools we have to work with in the future in trying to manage these forests.

Q Do you have total acreage figures -- how much acreage you've dealt with; how much is in the reserves; and how much is in the buffer strip, et cetera?

SENIOR ADMINISTRATION OFFICIAL: I'll have to get those for you. We do have acreage figures. I think the most important thing you need to know is, of the remaining old-growth in the Northwest, 80 percent would be incorporated in the reserve system. But I can get you the numbers.

Q So it wouldn't be blocked at all?


Q Right.

SENIOR ADMINISTRATION OFFICIAL: The 80 percent that is in the reserve system would only be subject to limited entry solely for salvage sales where it would provide for improvement in the area.

Q How do you define that?


Q Under what guidelines?

SENIOR ADMINISTRATION OFFICIAL: That would be determined by an interagency scientific team, so there would be a panel review to make those determinations. It would not be left to either of the agencies to decide unto themselves.

Q Would the administration support sufficiency language if that comes up on the Hill?

SENIOR ADMINISTRATION OFFICIAL: Well, this package doesn't deal with sufficiency language, as you know, because this is the package that we'll go to the court with. We're going to discuss all issues with all interested parties. And certainly the President is interested and has directed his Cabinet members to move as quickly as possible to implement the strategy and we're going to try and do that as quickly as we can.

Q How soon do you think you're going to get the timber moving in large volumes?

SENIOR ADMINISTRATION OFFICIAL: Well, it would help if we could get the injunctions lifted, and that's certainly something we're going to try to work to do as quickly as possible. But as Secretary Babbitt indicated, there is about 2.2 billion board feet of timber we think we can get moving fairly quickly.

And just to clarify -- I know there's a lot of interest in the numbers -- let me just kind of run down the breakdown and maybe that will help a little bit where the 2.2 billion comes from.

With regard to forest service lands -- and I should clarify that the base we're working with is west side forests, the owl forests in Oregon, Washington and northern California. So for the Forest Service, there are 709 million board feet in sales that have been prepared. There are 1.1 billion board feet in volume that's under contract. From the BLM, there's 217 million board feet in sales prepared and 193 million under contract. That adds up to the 2.2 billion.

Q What was that last figure again?

SENIOR ADMINISTRATION OFFICIAL: From BLM was 217 million in sales that have been prepared and 193 million under contract.

Q And the Forest Service figures again.

SENIOR ADMINISTRATION OFFICIAL: Sure. I should have handed these out. Forest Service is 709 million board feet prepared, 1.1 billion board feet under contract.

Now, I should point out that we also hope and feel we can move aggressively to try and prepared upwards of 1 billion board feet over the next year or so. And that will come from new green sales as well as attempts to try and implement a more aggressive salvage program.

Q In addition to the 2.2 billion?


Q That's all west side?


Q All those figures.

SENIOR ADMINISTRATION OFFICIAL: Yes, Scott, they're west side.

Q And the 1 billion new is all west side?


Q Are you looking at a total of 3 billion over the next year possibly or --

SENIOR ADMINISTRATION OFFICIAL: I think what you have to take into account and what you're going to hear is part of that is under contract. Now, you can count that however you want to count it. But it's not moving, and our objective is to get timber moving.

Q How does that translate into acreage -- 2.2 billion board feet?

SENIOR ADMINISTRATION OFFICIAL: I don't know if I can make a translation. You mean in how many acres would be cut?

Q Right.

SENIOR ADMINISTRATION OFFICIAL: I can't give you that off the top of my head. Because -- well, one reason is because we're going to be cutting in different ways now. We're going to be managing in accordance with the President's plan. It will require green tree retention, certain other protections. So it's not like the old days where you could go out and plot clear-cuts between here and there, which makes it easy to figure out what the acreages are. It's a little more difficult to generate that figure. It's a different approach.

Q When do you expect to have that done?

SENIOR ADMINISTRATION OFFICIAL: Well, as you know, our responsibility, if you will -- our legal obligation was to prepare the plan or respond to the west side. We're working on the east side to try and develop a program that is scientifically sound and ecologically based. We have a report the Forest Service recently completed, the Everett report, as well as other work that's going on by other sources, and we hope to use all that information to put together a program as soon as we can on the east side. And the Forest Service is working on the east side with plaintiffs in a number of lawsuits to try and reach resolution on some concerns there and move timber as quickly as they can.

Q Will these sales have to meet the standards of Option Nine -- these ones that are in the pipeline right now of the new management plan or can they exist the way they've been designed right now?

SENIOR ADMINISTRATION OFFICIAL: The sales will be run through the management guidelines of the President's plan, and we're going to try and do that as quickly as we can. We're putting together teams to do that review immediately.

Q That's one of the first priorities you've got then?

SENIOR ADMINISTRATION OFFICIAL: Yes. In fact, it's a phone call I'll make when I leave here.

Q I just want to be sure I understand. Are you saying you think as much as 3 billion board feet could move in the first year? And, secondly, if you're saying that or if you're saying 2, does that or does that not mean that the number would have to ratchet down over the subsequent years to get to your 1.2 billion average?

SENIOR ADMINISTRATION OFFICIAL: Let me clarify. First of all, the 2.2 reflects volume under contract, 1.1 billion, so half of it's under contract. And I think the timber companies would say to you, well, we certainly expect to get at that. Then we're talking about additional sales that have been prepared, that are in the pipeline, that are subject to injunctions; that's the other half.

In addition, once we have a plan in place we can move to prepare additional green volume and salvage volume. And that's where that additional figure comes from. We figure we can prepare between 400 million and a billion board feet through the next year for sale. Now, whether or not that's all sold this next year is not clear. It depends on how quickly we can move. And it also depends on at what point in time the President's plan formally and legally takes effect. We're presenting an EIS to the judge on July 16, but the whole process has to be run through before we get to the point of final resolution on that.

Q And does that mean that the harvest level would ramp down over the next nine years after this?

SENIOR ADMINISTRATION OFFICIAL: Well, we haven't attempted to address in this plan the ramp-down issue. The President's plan assumes, based on an assessment that we actually had the agencies do with instructions from the planning team, that a sustainable level of harvest of 1.2 billion board feet annually could be sustained from those west side owl forests.

The timber that we're talking about here in the first year, much of that is already prepared. So the additional volume we're talking about is the 400 million to 1 million board feet. That would fall into the category of what we consider for the sustained yield estimates. So, actually, we would actually be preparing under that amount in the first year. In fact, we have some physical limitations in terms of our ability to prepare a great deal more up front.

Q So it may ramp down, or not? I'm not clear.


SENIOR ADMINISTRATION OFFICIAL: Well, we haven't attempted --

SENIOR ADMINISTRATION OFFICIAL: Let me translate. I think I'll play translator here.

Let me see if I've got it right. What I think he's saying is that we are looking most immediately at moving as much timber as possible as quickly as possible, knowing that in the outyears 1.2 billion is a sustainable level that we've been told we have under this management plan.

We will continue through the out-years to do everything we can to move as much timber as possible. In addition, the numbers will be higher, correct me if I'm wrong, in part because we provide more protection on federal lands that will allow possibly more to come from private lands, in addition because of things we're going to do to try and move timber off Indian lands in a faster way.

So it's difficult to say whether you'll see that rampdown you're talking about or what the numbers will be far out. All the administration is saying today is that we are going to a consistent commitment to move as much timber as possible under the President's management plan.

Q So the 1.2 billion may include private land, not just federal land?

SENIOR ADMINISTRATION OFFICIAL: No, no, that's not correct.

SENIOR ADMINISTRATION OFFICIAL: When you talk about the out-years and you talk about the drop in timber, you know, it's difficult to predict beyond those out-years. One, because you don't know the size it's going to be beyond there and this is an ongoing process where you're continually reviewing what you're doing. And, two, because of I think of the commitment you're hearing from the Agriculture Department and the Interior Department to move as quickly as possible on sales.

SENIOR ADMINISTRATION OFFICIAL: Do you understand? Are you okay?

Q The confusing part is that the question centers on if the sustainable level is 1.2 billion board feet a year, then how can you be talking about up to 3 billion board feet in a year without exceeding the sustainable level? And how would the judge approve that?

SENIOR ADMINISTRATION OFFICIAL: Very easy. The 2.2 billion that we're talking about that the Secretary mentioned earlier, is not counted toward that sustained yield level. That's volume that's already been prepared, so that doesn't count towards your sustainable level. The new green sales that I've talked about, the 400 million to 1 billion, would start to count toward that sustainable level. That's the distinction.

Q When you say prepared, do you mean cut? What form is this stuff in?

SENIOR ADMINISTRATION OFFICIAL: Laid out and ready to be sold.

Q Is everything that's prepared and under contract right now, is that going to meet these new management guidelines or is there a chance you're not going to be able to get all that timber?

SENIOR ADMINISTRATION OFFICIAL: Some of it most likely will be impacted by consultation from -- it may be impacted by some of the other protections. We're trying to run that screen now to make a determination.

SENIOR ADMINISTRATION OFFICIAL: Most of the estimate that he gave you, though, is our best estimate of what would meet the management guidelines of the option that the President has identified. And, of course, at this point until we look a little more carefully at every one of these individual sales we can't tell you for sure. But the numbers, the 2.2 billion number is based on at this point our best estimate of what we think we can move through the management guidelines of the President's plan. Half of that can move immediately as soon as we do a little more careful review of the plan because it's already been sold and it's ready to get out there.

The second half is prepared for sale, and as soon as we can get this court injunction lifted it can go. And then the third piece are the new sales we want to prepare. That's where you start worrying about your 1.2 billion sustainable number, and we think we can get 400 million to 1 billion board feet out by the end of Fiscal Year '94 if we really put our best effort at it.

What you find is that the gridlock that's occurred in the Northwest has had a couple of impacts. And one of those impacts is that we don't have as much timber in the pipeline as we'd like to, so we're having to bring all the resources we can to get these sales prepared and get them out there. And that's why we think all we can get out in new sales is 400 million to 1 billion. But when you look at how much timber is going to move through as a result of what the President's done, don't just focus on the new cuts. Look at the sales we've got prepared that are ready to go that are held up by this injunction, and then look at those sales that have already been made that haven't been cut yet. Three pieces.

Q You haven't been selling anything lately and you're going to gear up to sell 3 billion board feet or more in a year, aren't you stimulating employment only to cut it back in the second and third years of this?

SENIOR ADMINISTRATION OFFICIAL: No. Part of that volume has been sold and there is timber that's being operated out there. We certainly hope we're going to put some people back to work and that's one of the reasons we want to move aggressively to get this moving. And we're going to prepare as much timber as we can in those first few years.

I don't anticipate that problem. I would point out in addition to what he said, there's a fourth source of timber and he alluded to that. And that's private lands. What relief can be provided on private lands as a result of the President's plan, will increase access to private land timber which heretofore has been impacted by spotted owl protections.

Q Can you give an estimate on private lands?

SENIOR ADMINISTRATION OFFICIAL: I don't know that we do right off hand.

Q What about Indian lands?

SENIOR ADMINISTRATION OFFICIAL: Well, there's been a backlog of timber that's available on Indian lands and our hope is that with additional technical assistance and some additional work with tribes we can get up to 300 million to 400 million board feet off Indian lands.

Q A year?


Q What's the value of the subsidies? How much is the government paying out now on these subsidies that were referred to earlier and how much volume is that?

SENIOR ADMINISTRATION OFFICIAL: You're talking about the FSC subsidy.

SENIOR ADMINISTRATION OFFICIAL: There are a range of estimates on the revenue implications of eliminating the FSC subsidy for raw logs. They range anywhere from between $15 million to $55 million in the first year, increasing over the five-year budget period. As you may know, Senator Baucus included revisions to the FSC provision in the Senate Finance package. There it was scored at about $393 million over five years; includes a couple of other smaller tax changes.

Q Can you review the job loss and gain? Are you saying that there's a net gain in jobs from this plan? Can you break that down for us?

SENIOR ADMINISTRATION OFFICIAL: Sure. Let me start by emphasizing something the President said that's really the unprecedented nature of the President's plan. Unlike past administrations the President clearly understands the needs of this region -- not just the environmental needs, but also the economic needs. What he's put together is a creative and innovative plan that has both short-term relief for workers and families as well as a long-term economic development plan that incorporates a watershed restoration plan, assistance to business and industries as well as a schedule of payment that will stabilize the economic environment and the fiscal conditions of the counties and local governments of each, which is very important.

Let me talk a little bit about the job loss. Our estimate of the direct job loss from the change in harvest anticipated under the revised land management plan is 6,000 jobs.

Q Over how many years, or that's total?

SENIOR ADMINISTRATION OFFICIAL: That's total. That's the one-time loss moving down to the assured level of 1.2 billion board feet a year. You'll hear lots of different numbers out there, and we can discuss the differences between some of them and some of it's laid out in the handout that you have. But let me just emphasize that the President's plan recognizes that over the last two years, from 1990 to 1992, because of both a broader secular contraction in the timber industries as well as because of the recession, more than 20,000 workers in the timber industries in that region alone have lost their jobs.

So when we talk about the 6,000 that are a direct result of the change in land management practices in order to comply with existing federal land management laws, we need to understand that there's as well, and the President does understand it, that there is as well some existing need that's left over, that has not been absorbed back into that economy from the 1990 to 1992 contraction. We estimate that need as probably between 5,000 and 10,000 workers.

So what the President has in mind for his economic plan is a package that recognizes economic needs in the range of 11,000 to 16,000 workers. His plan, which as you know from the briefing, totals $270 million in new federal money in the region in the first year and $1.2 billion over five years. It's designed to create 8,000 new jobs in Fiscal Year 1994 alone. Those are family wage jobs in a range of areas and a range of industries, as well as to provide 5,000 retraining opportunities for workers who may be dislocated and/ or, and this is one of the innovative aspects of the President's plan, spouses of workers dislocated in the timber industries.

So, to answer your question in brief, this is not just a program of short-term relief where we're going to pay these workers off and get them out of the way. This is a long-term economic development program for the region, moving away from narrow dependency upon primary processing timber toward more productive uses in the secondary timber processing and the value-added processing sectors of timber as well as non-timber diversification.

Long answer, short question.

Q You started talking about the multiplier thing. Do you are talking about the multipliers and the added numbers?

Q Secretary Babbitt said today that some people are going to have to relocate in this plan. Can you tell me what kind of communities are most likely to be forced to relocate and what this plan offers --

SENIOR ADMINISTRATION OFFICIAL: We do not anticipate large-scale relocations. We can have a more detailed breakdown of some of this impact in the future. But let me just say that what we have outlined, what the President has outlined today, is a plan that will take these existing communities and offer them new and innovative ways for economic development. This may be the development of an industrial park on a former mill site. It may be the retooling of an old-growth mill into a mill that produces window frames or moldings. It may be the development of new industries, the shifting from timber-dependent economies to something else in the service economy or something in the manufacturing center.

So I think that when we mean relocation, we mean in part a relocation away from timber dependency into a broader-based economy that's productive and growing.

Q Can you elaborate a little on the link that's going to be made with secondary manufacturers, the obligations to funnel the timber to those mills or those plants?

SENIOR ADMINISTRATION OFFICIAL: The best thing about being a Chief of Staff is you have a huge staff and so you can always turn to somebody that really knows. (Laughter.)

SENIOR ADMINISTRATION OFFICIAL: While he walks up here, let me just say a couple of things about secondary manufacturing. Secondary manufacturing, value-added processing, requires not just supply it also requires a couple of other things. One thing it requires is a sound business environment.

What we're talking about here, what the President has proposed is stabilizing payments to counties in a way that will create a strong financial environment for not just public sector lending, but also private sector lending, providing some stability for the financial institutions that live in these regions to invest in secondary manufacturing.

Q For how long? How long will the payments --

SENIOR ADMINISTRATION OFFICIAL: The schedule of payments are currently, as proposed by the President, is for 10 years. The one thing that we have done that's been very innovative there is decouple the relationship between county payments and timber harvest. It has often been criticized, the hydraulic pressure of this linkage and the county commissioner's interest in encouraging harvest. But with that introduction, let me let my colleague speak a little bit more about the preference.

SENIOR ADMINISTRATION OFFICIAL: There's actually two things we're doing for secondary manufacturers and also small business. And the first is to expand the guaranteed loan program to provide better access to capital for small firms and secondary manufacturers in the region, which is one of the primary problems ahead out there.

The second thing we're doing is doing a -- in a priority effort, taking a look with secondary manufacturers, primary manufacturers and the appropriate agencies, which would be SBA, Forest Service and BLM how to best expand preferences or set-asides to the Small Business Administration, and we're going to be working with those folks to get that up and running as soon as possible.

Q Can we get the job loss broken down by state, and also the 2.2 billion board feet broken down by state?

SENIOR ADMINISTRATION OFFICIAL: As you might imagine, those are -- the 1.2 billion is relatively closely tracked to the distribution of job loss. But with regard to the 2.2 billion, I'm not quite sure of the allocation. The job loss is approximately 55 percent to 65 percent in the state of Oregon; 30 percent to 35 percent in the state of Washington; and the remainder, 10 percent to 15 percent in the state of California, northern California region.

Q This document is labeled "The Forest Plan." I'm wondering how much of this exercise or of this process could be applied to future impasses in environmental policy -- competing demands result in the kind of situation that we have in the Pacific Northwest. How often are we going to go through this kind of exercise, and are you set up for it?

SENIOR ADMINISTRATION OFFICIAL: I think one of the most innovative parts of this whole process has been the interagency coordination that we have seen and the collaboration we've seen among the agencies to move this plan forward. And it's been an Herculean effort among all the agencies, but we are up and running. One of the follow-throughs to this whole process will be a continued interagency process not only on the environmental side which we're focusing on, but also on the economic side to make sure that the economic programs are efficiently implemented.

We have a similar process up and running on the question of wetlands, on many different environmental issues. And I think one of the things we're really going to stress is keeping the team together, bringing all the resources of the federal agencies together so that we can work as efficiently as possible.

Q You mentioned wetlands. What are the topics, or what other issues are taking --

SENIOR ADMINISTRATION OFFICIAL: Climate change we're working on right now. We had a group looking at biodiversity. We have clean water group that is working on that statute. We have a Superfund group. We have a group that's working on federal facilities and base closures and how we can improve the environmental cleanup of federal facilities there and help to move those properties back into being productive properties for the communities.

So, across the board, the name of this game is, let's pool our resources together, let's be effective, let's be efficient and let's get the job done. And that's what we've been doing.

SENIOR ADMINISTRATION OFFICIAL: Let me come at that from a little different direction. I think you've heard my boss, Secretary Babbitt, talk about avoiding train wrecks a lot. And it's really important as we work with my colleague in her office to work together on things like the gnat catcher plan that we've done down in San Diego, or the red cockaded woodpecker in the Southeast. And I know that over Interior, as we work with the other agencies, we're really looking for ways we can get out ahead of these things so that we don't have to have this kind of interagency effort in order to dig ourselves out of a hole, we don't want to get in the hole. A lot of our effort is really aimed at a way to find some kind of balanced answer much earlier in the process than this one. We were really constrained here in our options because of what's happened over the last 12 years.

SENIOR ADMINISTRATION OFFICIAL: I'd like to -- just one other element of this whole kind of coordination effort. One thing that has also characterized this process, it's characterizing the other issues that I just mentioned is we're also reaching out. I mean, we want to hear what the communities have to say. Whatever the relevant interest groups are that are involved in a particular issue, what we have tried to do is really bring their perspectives to bear. In the front end, as we're formulating our ideas, rather than either having no input or only input after the train has already more than left the station, so we've really tried to reach out beyond our own internal walls, too.

Q Do you expect to get sued over this plan by somebody? (Laughter.)



SENIOR ADMINISTRATION OFFICIAL: Listen, we're confident, and we've got a plan that will stand any court challenge. And when you've got one that you're that confident in, there's no expectation to be sued over. This is one that's going to run through the existing court process and come out the other end and stand up to any challenge anybody might bring. And I think as a result of that, you won't see very many challenges.

Q I have two questions. The 2.2 billion board feet that's in the pipeline, how much of that is old growth -- and the 1 billion you're going to look at, how much of that might be old growth, and what impact would this have on the existing spotted owl population? Have you projected out that?

SENIOR ADMINISTRATION OFFICIAL: The plan, overall, will actually provide more benefit for the spotted owl than any previous efforts, including the interagency scientific team's recommendations and the recovery plan recommendations.

A portion of that 2.2 billion we talked about is old growth. Remember I said that 80 percent of the remaining old growth, most significant old growth in the region is going to be incorporated in the reserves for long-term protection. That means that 20 percent of scattered stands, stands of less significance in terms of maintaining the integrity of that ecosystem will remain in the harvestable base, subject to the restrictions that we put in place to ensure maintenance between those reserves.

Q Will that 20 percent be cut sooner rather than later, because old timber sales really went to the old growth?

SENIOR ADMINISTRATION OFFICIAL: That's part of the sustained yield calculation. We're going to harvest that over time. I mean, what's critically different here is -- not to beat a dead horse -- but we're trying to provide the communities with some certainly with regard to what the harvest level is. There are some questions about employment impacts, et cetera. The employment levels went from an incredible high during the decade of the '80s when we were in a timber binge, down to ground zero. And we've got to get back to something that's sustainable. I think that's one of the biggest benefits we can afford is some idea of what's certain in long-term.

Q Do you have numbers on the owl population, whether it would go up or down?

SENIOR ADMINISTRATION OFFICIAL: I don't have the specific numbers on that. If you want, we can certainly generate some information on that. But I think the key is that this provides a greater assurity of protection for the owl than previous plans.

Q A similar question just to clarify. What percentage, then, of the timber that's going to be cut overall will be old growth versus second growth?

SENIOR ADMINISTRATION OFFICIAL: About 50 percent of the 20 percent that's not in the reserve will be part of the timber harvest over time.

Q Fifty percent of the 20 percent?

SENIOR ADMINISTRATION OFFICIAL: In other words, 50 percent of what is outside the reserves will be in the scheduled timber base and will be harvested on the sustained yield basis.

Q 80 percent.

SENIOR ADMINISTRATION OFFICIAL: Yes, but 80 percent is in reserves. That's the reason I made that distinction.

Q This plan -- what level of protection does this provide the owl? How do you characterize it? What happens if, a year or two years down the road some scientist comes along and say the owl is not doing well under this plan, what happens to the plan at that point?

SENIOR ADMINISTRATION OFFICIAL: I think one of the most important things that have come out of this is, we probably know more about owls than we know about any other species in their interaction with forests. The plan anticipates, provides for a high likelihood of protection of the owl over a 100-year time frame, which is the basis for estimating the viability of these species.

Q What is that specifically -- high likelihood, what percentage of that?

SENIOR ADMINISTRATION OFFICIAL: Eighty to 100 percent assurity.

Q The 8,000 jobs created, won't they, in fact, be at a much lower wage level than the jobs that are going to be lost?

SENIOR ADMINISTRATION OFFICIAL: No, I don't believe so, and here's why. First, a number of those jobs are created in the watershed restoration work. And a lot of that is heavy industry -- I'm sorry, heavy equipment, man-moving work. Secondly, we're talking about other jobs that are more broadly in the private sector. They may be in secondary processing, they may be in other timber-related work. And they also may by in jobs that pay better than the traditional timber jobs. So we're talking about broad-based diversification here. And the core of it, the watershed restoration work will definitely be family-wage year-round jobs.

Q Any idea of how much -- what kind of money are you talking about here?

SENIOR ADMINISTRATION OFFICIAL: Well, the basis in the region talks about -- the timber workers tend to talk about wages in the area of about $11 an hour, and our understanding is that the land-moving jobs are in that region -- in that area as well.

SENIOR ADMINISTRATION OFFICIAL: Can I make one point -- it's important to me since I have to worry about the Forest Service, is percentage of those jobs come from opportunities to restore watersheds in impacted area. So we're making an investment not only in jobs, but in the resources that will ultimately sustain those economies. And one of the things that I think is important, Congress Norm Dicks secured $30 million in the interior appropriations bill on the House side, which is on the floor today, to provide for that initial investment in terms of watershed restoration work. And I think that's an important area of contribution -- it puts people who have worked in the woods back in the woods, perhaps not cutting timber but involved in other woods-related jobs.

Q What happens to them after? Five years down the road these funds are gone presumably -- there are no more of these public jobs available. What happens to these workers at that point?

SENIOR ADMINISTRATION OFFICIAL: You'll see that the economic plan is really a long-range economic plan. We're talking about capital development; we're talking about infrastructure development. And by that time we understand either there will be continued activity in watershed work, if necessary, or you'll see such significant growth over the five to ten-year period in the economy, so those workers will be absorbed into equally productive and well-paying jobs.

Let me make a point here -- I never answered Marla's question and I feel bad about that. You're going to hear jobs losses in the range of 60,000 or 70,000 or sometimes even 80,000 workers, and I want to explain -- take one minute to explain why the administration's best estimate is of a direct job loss of 6,000 workers. Looks like someone's messing with the numbers if you've got 6,000 on one hand and 80,000 on the other.

The industry estimates -- those are the primary source of the estimates in the 89,000 range -- differ from our estimates in two primary regards. The first is the inclusion by the industry of indirect and induced job losses. Those, for example, as you all know, might be the person who runs the grocery store or runs the cafe in the local timber town -- timber-dependent town. The second is the question of baseline. Where you looking at -- 80,000 jobs compared to what?

On the first issue: The administration analyzed this issue and decided not to include these indirect and induced jobs for a very important reason. What the President has outlined today is a job creation plan. He's talking about creating family-waged yearround jobs. It doesn't matter to the grocery store clerk or to the cafe worker whether her customer, or his customer has a job that's in cutting timber, or clearing streams, or driving -- bulldozing to close roads, or in family wage job in a mill producing windows or door frames. Those indirect jobs are created and supported through this job creation package the President has outlined, just as they are eliminated, as the industry would argue, under the change in the land management practices. In other words, that's why we focus exclusively on the direct job loss, because we are talking about job creation that will replace those direct jobs and support the economy the way that the timber jobs are currently supporting the economy.

The second difference is the baseline. As I noted before, you've seen a contraction in part because of the recession, in part because of changes in the technology in the industry of 20,000 jobs between 1990 and 1992 alone. Now, the industry is out here measuring in the average of the '80s where there's an unsustainable harvest cut both to trees and an unsustainable economy based on timber.

The President is measuring from 1992 -- that's the most recent reliable data -- and anticipates a job loss of 6,000 persons. Now, he also understands that there are some of those workers, as I mentioned before, from 1990 to 1992 who have not been reabsorbed in the economy. And our package is designed to create 8,000 jobs the first year and about 16,000 over five years because we recognize that broader need. That's my one-minute speel on that.

Q Does the President intend to address the issue of foreign countries buying raw timber from these lands? In fiscal year 1991, I believe, Japan bought something like $1 billion worth of raw timber and manufactured it on the boats or in mills in Japan. And that translates into job losses here. And I'm wondering if the President plans on addressing that at all.

SENIOR ADMINISTRATION OFFICIAL: As the Secretary mentioned, and the President also announced -- he supports the elimination of the foreign sales corporation credit, which is effectively a subsidy of the export of raw logs.

Q How much of an impact would that actually have on the export of raw logs?

SENIOR ADMINISTRATION OFFICIAL: I don't have an estimate. Do you have an estimate on that?

SENIOR ADMINISTRATION OFFICIAL: I don't know if I can give you an estimate on the exact impact on the raw logs, but some of the estimates on jobs there, in Washington state alone, we anticipate that that action could -- in addition with the bill that the President will sign today that closes the loophole for export of raw logs from state lands, that's 6,000 jobs in Washington state alone. So it is a significant -- it will have significant ramifications for jobs in the industry.

SENIOR ADMINISTRATION OFFICIAL: I just wanted to make one more point about the -- I want to make one quick point about the log export issue, which this gentleman asked about. Don't lose sight of the fact that the President signed -- or will sign a bill today to reestablish the ban on exports from public lands that Senator Murray and Congresswoman Unseold authored.

In addition, one of the things we've talked about with some of the private timber companies is the possibility of, or the potential for keeping timber harvested from areas currently where restrictions exist because of owl circles. If those circles should be lifted or restrictions reduced, they are keeping that timber here in the United States for domestic milling. So we're trying to --

Q Have you talked to them about it or are you -- you're hoping they're going to be nice people?


SENIOR ADMINISTRATION OFFICIAL: We're having discussions with the companies on that point and we're getting some very positive responses from them and I think we'll have some private agreements with some of the major companies in the Northwest where they'll express their willingness to keep the timber that's freed up from lifting owl circles on private lands in the United States for domestic production.

Q Or else maybe they won't be lifted?

SENIOR ADMINISTRATION OFFICIAL: There's no or else. We're having discussions with them telling them that the President would be very pleased with their cooperation here and we're getting some cooperative responses.

MS. ROMASH: Last question.

Q So this plan doesn't remove the circles in place, that you would negotiate to remove the circles in place, put buffers out and some things like that?

SENIOR ADMINISTRATION OFFICIAL: We're right now looking at a 4D rule which would lift the owl circles on a lot of private land, not all of it. We're also looking at the issue, as you asked before, about buffer zones on private lands. And the third thing we're looking at is the discussions we're having with some of the companies about keeping the timber that's freed up in this country for domestic production.

Right now we're having talks on all three of those. The only thing we've decided is that we are convinced that we can lift the owl circles on private lands with some kind of 4D rule. The extent of that, whether there's going to be buffer zone protections in lieu of it, and the extent to which we're going to have private agreements to keep the timber here for domestic production are all the things we're working on.

Q One more thing. Could you walk us through a little bit what happens on July 16th?

SENIOR ADMINISTRATION OFFICIAL: Sure. On July 16th the administration goes to Judge Dwyer's court with a draft environmental impact statement which concludes as a preferred alternative the President's plan. That then goes through normal NEPA process -- 90 day comment period, et cetera, et cetera. And then hopefully at some point, unless we can expedite things at the end of the year, a final plan is in place and that provides that framework for management of the national forest for this succeeding period.

Q And you're hoping the injunctions will be lifted when? Immediately?


SENIOR ADMINISTRATION OFFICIAL: We're taking a look at whether we can file quickly after the 16th a request that the injunctions could be lifted before then.

SENIOR ADMINISTRATION OFFICIAL: We want to move as quickly as we can.

END12:47 P.M. EDT