Another Foolish Move By Congress

A new Government Accountability Office details billions in potential cuts Congress can make to the budget just by streamlining the federal government.

The 345-page GAO report released Tuesday identified nearly two score areas in which federal programs duplicate one another’s functions, are spread across several departments and agencies – making them candidates for consolidation – or are simply wasteful when it comes to the efficient use of taxpayer dollars.

In it’s zeal to find ways to cut federal spending the U.S. House of Representatives has focused instead on some things that are actually worthwhile rather than the waste. For example, while putting together the continuing resolution to fund the federal government through the end of the current fiscal year, the House voted to block federal funds from being used to expand “catch shares” -- the free market fisheries management system first established during the Bush Administration in 2008.

Contrary to what some claim, the ban won’t save the taxpayers any money; in fact it’s likely to put them on the hook for billions more in subsides for fisheries management.

Traditional U.S. fisheries management has been a failure. Over the last decade the federal government has spent nearly a billion dollars bailing out failed federally managed fisheries -- all without improving economic, environmental or biological conditions.

The result hasn’t just been bad for the taxpayer. Because of the way the subsidies work, they’ve been bad for the fishermen and bad for the fish. The traditional approach to fisheries management forces everyone to compete against one another in a race to “catch” as much of the fishing supply as possible –leading to dwindling resources and contributing to inefficiencies and distortions in the marketplace.

The better approach is to rely on the free-market and on property rights.

The Bush administration – which sought to grow the number of fisheries managed under a program known as “catch shares” said in its FY 2008 budget submission to Congress that “[M]arket-based approaches … move fisheries management away from cumbersome and inefficient regulatory practices and have been shown to lead to lengthened fishing seasons, improved product quality, and safer conditions for fishermen.”

Catch share systems change the existing dynamic, giving fishermen a more secure stake in the resources they use, improving the economics for their personal and business lives while encouraging conservation of a national resource that too often languishes in the tragedy of the commons.

What the “catch share” system does is provide fishermen and other fishery participants with a license to harvest a specific amount of fish. Those shares can be redeemed through fishing or they can be sold or leased to other concerns. The utilization of a property-rights based licensing system gives fisherman more freedom to fish – or not to fish should they choose or should circumstances require – and ultimately gives them greater control over their lives while providing a more reliable revenue stream and notably allowing for better management of resources without the need for onerous or excessive government regulation.

This isn’t just theory – where “catch shares” has been implemented fishermen have seen an increase in profitability and wages. In New England fleet-wide profits are up 10 percent over the same time last year. Wages have increased more than 100 percent for crew fishing in the Alaska crab catch share program. The implementation of the Alaska halibut “catch share” increased the price received by fishermen and improved the competitiveness of Alaska caught halibut in international markets. In the Gulf of Mexico, since the implementation of the red snapper catch share program in 2007, the value of the fishery (based on quota prices) has increased by 82 percent and the inflation adjusted ex-vessel price of red snapper has increased by 17 percent.

The program is also popular within the industry. In the Gulf of Mexico, fishermen have voted overwhelmingly to approve catch shares (by at least 80 percent for both red snapper and grouper catch share programs. In an Oregon Trawl Commission poll, twice as many fishermen responded to move forward with catch shares in the Pacific ground fish trawl fishery than to delay.

Catch share is not only a better deal for the fishing industry, its good for the U.S. taxpayer. A recent study published in the December 2010 Journal of Sustainable Development finds that Limited Access Privilege Programs – one form of catch share program -- would help reduce the federal deficit by over a billion dollars if broadly implemented in the U.S. The study reports that the government’s costs of administering these programs are exceeded by the revenues to the government from more profitable fisheries.

The benefits of catch shares, relative to tradition fisheries management programs, should be obvious. Taxpayers save. Fishermen profit. And the stability it encourages in the industry inevitably leads to a stronger, more stable fishing economy that broadens the tax base at the local, state and federal level.

While taxpayers of all stripes support efforts to reduce spending and control waste in government, attacking the catch shares program is pennywise and pound foolish. Given all the evidence that it is a success on most every level, Congress would be wise to continue and expand the catch shares program. As the GAO report makes clear, there are plenty of places where smart cuts can be made that actually will save the taxpayers money; this just isn’t one of them.

Peter Roff is a senior fellow at the non-partisan Institute for Liberty as well as a contributing editor at U.S. News & World Report.