EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503

STATEMENT OF ADMINISTRATION POLICY
(THIS STATEMENT HAS BEEN COORDINATED BY OMB WITH THE CONCERNED AGENCIES.)

April 27, 1999 (House Rules)

H.R. 1480 - Water Resources Development Act of 1999 (Shuster (R) PA)

The Administration is committed to a fiscally responsible Water Resources Development Act (WRDA), which authorizes those projects that are both ready for authorization and vital to the water and environmental infrastructure needs of communities across the Nation and which adopts other needed policy and program reforms. The Administration, however, strongly opposes H.R. 1480 in its current form. In particular, this legislation would authorize the Secretary of the Army to construct local water projects that would overturn the existing balance among environmental, agricultural, and municipal water users in the Department of the Interior's Central Valley Project (CA); would undermine the State and Federal partnership plans to restore California's Bay-Delta; and would not be fair to taxpayers. For these reasons, the Secretary of the Interior and the Administrator of the Environmental Protection Agency would recommend that the President veto the bill. In addition, the Administration seeks modification to a number of other highly objectionable provisions in the bill. Overall Cost The Administration urges the House to limit the amount of new construction spending authorized in H.R. 1480 by authorizing only those projects that Federal budget constraints will allow the Corps to complete within a reasonable time frame. With an existing construction backlog of more than $27 billion of Army Corps of Engineers water projects, it would require close to 20 years to complete all of the ongoing projects at current funding levels. That estimate excludes all other congressionally authorized projects not yet under construction, including over a hundred from the 1996 WRDA. The Administration hopes to work with the Congress as the legislation proceeds on how best to align the overall cost of the authorizations with a reasonable expectation of future available Federal resources. Project Authorizations The Administration strongly objects to the many provisions in H.R. 1480 that would authorize projects before they complete an orderly Executive Branch study and review process that is designed to determine their economic and technical feasibility, environmental acceptability, and the ability of local sponsors to provide the required local cost-share. Each of the many authorizations in H.R. 1480 that bypass this planning and review process by authorizing projects based solely upon a Chief of Engineers' report weakens the review and approval responsibilities of the Secretary of the Army and the Executive Branch. Those project authorizations that are contingent upon a future Chief's report also seriously undermine the ongoing study and review responsibilities of the Army Corps of Engineers. Completion of the review process would not delay those projects that are found to be justified because they could be authorized next year in a WRDA 2000. The Administration strongly objects to the many provisions in H.R. 1480 that would authorize projects before they have favorably completed a full administrative review process. In addition, some of the projects not ready for authorization also raise serious policy concerns. For example, Savannah Harbor (GA) and other projects have critical environmental issues, which should be resolved before authorization. The Administration also opposes the provisions of H.R. 1480 that would: (1) authorize economically unjustified projects or those that fall outside the missions of the Army Corps of Engineers; (2) grant unwarranted special exemptions from cost-sharing or other requirements; or (3) authorize projects and project modifications without studies or based upon outdated planning reports. The Administration urges the House to reduce the costs of H.R. 1480 substantially by deleting such provisions, along with the project authorizations referenced above. For example, this Administration opposes the Memphis Harbor land development project (TN), as have previous Administrations, because it is an inappropriate activity for the Corps. American River The Administration is committed to increasing flood protection for the City of Sacramento, California, and included provisions in its WRDA 98 proposal to authorize substantial protection. While the Administration would prefer its proposal, we would be willing to accept an alternative approach -- if it is acceptable to the City of Sacramento. However, the Administration strongly objects to the many unrelated water supply projects that have been included in H.R. 1480. H.R. 1480 would authorize the Secretary of the Army to construct over $270 million in new water supply projects, which previous studies by the Department of the Interior have shown are unnecessary or not in the national interest. The bill ties flood protection funding for Sacramento to the construction of these objectionable projects, and requires inappropriate Federal funding of a $94 million bridge. If constructed, these projects would: (1) take water away from existing Central Valley Project (CVP) users; (2) further delay implementation of key provisions of the landmark 1992 CVP Improvement Act; and (3) disrupt efforts to restore the San Francisco Bay/Sacramento-San Joaquin Delta. Hearings have not been held on any of these important provisions, many of which authorize projects prior to completion of a feasibility report and without the analysis required under the National Environmental Policy Act. Further, there are inadequate repayment terms for many of the proposed projects -- local cost sharing should be 100 percent, which is applicable to water supply, rather than 35 percent, which is applicable to flood protection. Commercial Harbors The Administration objects strongly to a proposed major increase in the Federal cost-share of the construction of harbors deeper than 45 feet, and of their operation and maintenance. The change would shift costs from ports to the Federal Government, reducing the funding available for other Army Corps of Engineers' water resources projects. The Administration believes that any such authorization in this WRDA would be premature, at best. There has been no demonstrated need for such cost-sharing relief. Moreover, granting such relief would erode the important cost-sharing reforms that Congress enacted in the 1986 and subsequent WRDAs. In addition, this proposal could increase substantially the amount of dredged spoil material requiring disposal, along with the associated costs and environmental impacts. The impacts of any such a change require careful analysis, which has not yet occurred. "Challenge 21" Flood Hazard Mitigation and Riverine Ecosystem Restoration The Administration strongly supports the Challenge 21 program, an innovative program to restore watersheds while providing non-structural flood protection for communities. This program, which would provide a new, more effective framework for solving flooding problems, has been endorsed by many community leaders and national groups, such as the Association of State Floodplain Managers and the National Association of Flood and Stormwater Management Agencies. H.R. 1480 includes a Challenge 21 program, but at funding levels and with program time limits that are insufficient to allow the Corps to work effectively with communities to reduce flood damages. In this regard, we strongly recommend that the House authorize the Challenge 21 program as requested in our WRDA 98 legislative proposal. Pay-As-You-Go-Scoring H.R. 1480 would affect direct spending and receipts, therefore, it is subject to the pay-as-you-go (PAYGO) requirement of the Omnibus Budget Reconciliation Act of 1990. OMB is currently developing its PAYGO estimate.