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<br />,-,:..:("'~~.~~.J. <br />.--.~"-'~'I,I, <br />,. -. "' <br /> <br />c. Q <br />.', , <br /> <br />- ~;.. \, <br />;. .r,:. <br />. ~ ;::.1. ~'..' . <br />effects on those projects which the fe~eral ~~efnment does <br /> <br />take. Federal engineers and economists will ~jencouraged <br /> <br />under- <br /> <br />to <br /> <br />trade off construction costs for operation and maintenance costs <br /> <br />to an extent that will be less economical in the long pull than a <br />project formulated under a more appropriate discount rate. There <br /> <br />will also be incentive to under-utilize reservoir sites and water <br /> <br />supplies with consequent long run diseconomies. <br /> <br />The Water Resources Council proposal appropriately would <br /> <br />provide elaborate and sophisticated techniques for evaluation of <br /> <br />environmental and social impacts of federal water resources pro- <br /> <br />jects. However, if the discount rate for project evaluation is <br /> <br />to be raised to preclude federal participation, these procedures <br /> <br />will be moot. <br /> <br />The increased discount rate proposed will certainly <br /> <br />diminish but cannot preclude water resources development. A <br /> <br />significant fraction of the current federal function in water <br /> <br />resources development will be shifted to state, local and private <br /> <br />enterprise; and the careful evaluation of all environmental and <br /> <br />social impacts that would be made under the proposed principles <br />and standards at a lower aiscount rate may be neglected with <br /> <br />detrimental results for society. <br /> <br />In his first message on the State of the Union, President <br /> <br />Nixon said: <br /> <br />"Vast areas of rural America have been emptied <br />of people and promise, while our central cities <br />have become the most conspicious area of failure <br />in American life." <br /> <br />On this problem the president's Task Force on Rural Development has <br />said: <br /> <br />-4- <br />