The Gold-Rush Roots of U.S. Budget Woes • Bringing the Drone War Into the Open

Today’s taxpayers are still on the hook for a 19th century mining law

Cutting the U.S. budget deficit has always been a question of politics, not math. The seemingly simple approach — spend less, raise more, or some combination of the two — has long eluded Congress.

A mining law that dates to 1872 helps explain why it’s so difficult to disrupt the dysfunctional status quo. The General Mining Act, conceived during the Ulysses S. Grant administration to encourage development of the frontier, allowed prospectors to remove gold and other minerals from U.S. public lands without paying royalties. The law has long permitted highly profitable mining companies to extract minerals for free — resources that are the property of every American.

It’s just one of many outrageous giveaways — the subsidies, tax preferences, and exclusions enjoyed largely by energy and natural-resource companies — that Congress has been loath to eliminate, despite longtime efforts by fiscal hawks and environmentalists.

Ending any one of these outdated incentives wouldn’t close the U.S. budget deficit, which the Congressional Budget Office estimates will total $845 billion in 2013. Combine them, though, and the savings would add up to tens of billions over a decade.

The 1872 mining law dictates that taxpayers continue to foot the entire bill for cleaning abandoned gold, silver, and other mineral mines across the U.S., which has cost them more than $2.6 billion since 1998, according to the Government Accountability Office. The tab could swell to as much as $54 billion, according to the Environmental Protection Agency. The White House estimates a fee could increase annual revenue by $1.8 billion over the next decade.

The U.S. could also gain by charging royalties on the roughly $1 billion worth of hard-rock minerals extracted each year from public lands, much as it does on oil, gas, and coal. Royalties from those industries generated about $10 billion in 2011.

Powerful mining-industry allies in the Senate, including Majority Leader Harry Reid (D-Nev.), have resisted attempts to change the 1872 mining law, however. Senator Dianne Feinstein (D-Calif.) failed in a 2008 legislative attempt to charge royalties and a reclamation fee, as have efforts by others. Now, Senator Ron Wyden (D-Ore.), the new chairman of the Committee on Energy and Natural Resources, has indicated he may bring it up again as part of a broader royalty-related bill.

One way to finally gain approval of such a change could be to allow states — such as Nevada — to share in any revenue generated by a fee, which Reid has indicated is a condition to changing the law. It’s an imperfect solution because the federal government would presumably still have to shoulder some of the tab, but it’s a far better outcome than continuing to forgo any royalties at all.

Obama should put the Pentagon, not the CIA, in charge of drone strikes

The leak of a 16-page “white paper” laying out the Obama administration’s legal justification for its drone war against terrorists — based on a still-unreleased memo from the Department of Justice on the September 2011 killing in Yemen of Anwar al-Awlaki, a U.S. citizen — will make for a more informed discussion of the U.S. campaign. It also helps answer some big questions about who in the government should run the program; what the scope of the attacks should be; and what alternatives President Obama might consider.

The U.S. is waging two different drone wars. One targets al-Qaeda and its allies in the Afghanistan theater, primarily in Pakistan. As estimated from news reports by the New America Foundation and the Long War Journal, there have been 350 or so of these strikes since 2004, killing about 2,500 people, including 150 to 300 civilians. They are carried out by the CIA. Although such strikes are officially covert, they are such a well-known secret that Obama felt free to discuss them last month in a Google+ “hangout.” The second drone war is being waged by the U.S. Department of Defense, which carries out strikes elsewhere, such as Yemen and Somalia. Operated by military professionals, trained in and bound by international and U.S. military law, this effort is much more appropriate.

Limiting the CIA’s role to intelligence sharing and putting the program under Title 10 of the U.S. Code, which lays out the role of the military, would increase congressional oversight and transparency while still allowing necessary secrecy.

Then there is the question of how targets are chosen. Here again there are two basic types of strikes: those against people on the government’s “kill list,” and so-called signature strikes, which target unknown individuals because ground intelligence or aerial surveillance shows they are aiding in an imminent terrorist operation. If critics of such strikes want to limit the number of mistaken attacks and civilian casualties, they should push for alternatives to drones.

If the goal is always to kill, that makes a drone strike all the more likely. The equation changes, however, if the goal is to capture and interrogate terrorists. If suspected terrorists can’t be brought into the domestic U.S., why is reopening the Guantanamo Bay prison to new detainees worse than killing them?

The U.S. must also reckon with the inevitability of rival powers and nonstate actors developing their own drones. The U.S. has an interest in leading an effort to codify the use of drones in the laws of war, as it did with nuclear weapons in the Cold War. Otherwise, reflexively anti-American international bodies such as the United Nations Human Rights Council, which announced a nine-month investigation into the drone campaign, will step into the vacuum.

To read Stephen L. Carter on the bones of Richard III and Susan Antilla on Mary Jo White, go to: Bloomberg.com/view

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