WASHINGTON - The Bush administration may support a law that has pumped billions of dollars into rural counties hurt by logging cutbacks on federal land, a top official said Tuesday.

Mark Rey, the administration's point man on forest policy, said officials would support reauthorization of the so-called "county payments" law if the $350 million annual cost can be covered in the federal budget with equivalent cuts elsewhere.

Rey, undersecretary of agriculture for environment and natural resources, declined to endorse the county payments law at a Senate hearing last month, setting off widespread concern in the West, where the payments have been concentrated.

The law, adopted five years ago, has helped offset sharp declines in timber sales since the late 1980s, due in part to changes in federal forest policy that restricted logging to protect endangered species such as the spotted owl. The measure is set to expire next year.

Rey, in testimony Tuesday before the Senate Energy and Natural Resources Committee, said the administration could support reauthorization of the law if Congress finds offsetting cutbacks elsewhere in the budget year that begins in October 2006.

Western lawmakers celebrated Rey's comments - as qualified as they were.

"This legislation has a proven track record of giving local residents a voice in forest management, completing projects on the ground and helping to fund schools and roads," said Sen. Larry Craig, R-Idaho. "I am pleased the Bush administration recognizes this and will work with Congress to reauthorize it."

Sen. Ron Wyden, D-Ore., called the county payments crucial for Oregon and other resource-dependent states, and said it was "critical for the administration to recognize its success and importance to the region."

The county payments law has pumped nearly $2 billion into Oregon and other states for schools, roads and other purposes.

Oregon received $273 million last year, far surpassing the $67 million given to No. 2 California. Washington state was next with $45 million, followed by Idaho with nearly $24 million and Montana with $14 million.

A bill before the Senate panel would authorize up to $350 million a year in direct aid to nearly 700 counties in 40 states, or $2.5 billion over seven years.

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