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.)

July 26, 1999 (House Rules)

H.R. 2605 - ENERGY AND WATER DEVELOPMENT APPROPRIATIONS BILL, FY 2000 (Sponsors: Young (R), FL; Packard (R), CA)

This Statement of Administration Policy provides the Administration's views on the Energy and Water Development Appropriations Bill, FY 2000, as reported by the House Committee. As the House develops its version of the bill, your consideration of the Administration's views would be appreciated. The allocation of discretionary resources available to the House under the Congressional Budget Resolution is simply inadequate to make the necessary investments that our citizens need and expect. The President's FY 2000 Budget proposes levels of discretionary spending that meet such needs while conforming to the Bipartisan Budget Agreement by making savings proposals in mandatory and other programs available to help finance this spending. Congress has approved and the President has signed into law nearly $29 billion of such offsets in appropriations legislation since 1995. The Administration urges the Congress to consider such proposals as the FY 2000 appropriations process moves forward. The Administration appreciates efforts by the Committee to accommodate certain of the President's priorities within its 302(b) allocation. However, the Committee bill is over $1.3 billion below the program level requested by the President and includes significant reductions in a number of high priority programs. In addition, the Committee has included anti-environmental riders concerning wetlands. These provisions have never been subject to appropriate public review and debate before the authorizing committees with jurisdiction over the Clean Water Act. As discussed below, these riders undermine the President's initiative to strengthen protection of wetlands and reduce risks of flood to our communities. The Administration would strongly support efforts to strike the riders. Therefore, the Administration strongly opposes the bill in its current form. Objectionable Wetlands Riders The Administration strongly objects to a provision that would short-circuit the review process for wetlands permits by making the review of initial jurisdictional determinations appealable to the Federal courts prior to a final permit decision. Although the Administration supports the creation of an administrative review process for these initial determinations, the bill would generate unnecessary and premature litigation, set back efforts to ensure a fair and amicable resolution of potential disputes, involve the Federal courts prior to the availability of a full administrative record, and undermine the ability of citizens and communities to participate on an equal footing in the permit process. In addition, the bill threatens excessive wetlands losses by delaying the termination and replacement of Nationwide Permit 26. The bill would require an unnecessary study of the workload and cost effects of the proposed replacements for the current Nationwide Permit 26 and would substantially delay promulgation and implementation of the replacements until such a study is completed. Implementation of the new nationwide permits is a high priority for the Administration because these permits will put into effect the special protections for flood plains, impaired waters, and pristine waters announced by President Clinton on October 7, 1998. These changes are essential to meeting the goals Congress established in the Clean Water Act for restoring water quality and reducing the loss of the Nation's wetlands. Delays in the implementation of the replacement permits would place the regulatory program at substantial risk of litigation and would result in increased flooding, degradation of water quality, and the loss of fish and wildlife habitat. The workload increases that result from improving the nationwide permit program will be manageable. Department of Energy The Committee mark includes detrimental reductions to a number of programs in the Department of Energy (DOE). Specific cuts include: Weapons Activities. The Committee provides $4.0 billion for Weapons Activities, a reduction of $525 million, or 12 percent, from the request. Within this overall reduction, the Administration strongly objects to the $147 million cut to the $1.635 billion request for Core Stockpile Stewardship at the nuclear weapons laboratories. This reduction would most heavily affect the Advanced Strategic Computing Initiative (ASCI) and related computing activities. ASCI is the key element to achieving the goal of replacing reliance on underground testing with computer simulations as a means for assuring the safety and reliability of the nuclear weapons stockpile. In addition, the Administration strongly objects to the $38 million, or 73 percent, reduction to the $52 million request for technology transfer and education activities, and the $303 million in across-the-board reductions to this account (described later) through the use of prior-year balances, cuts in Laboratory Directed Research and Development (LDRD) funds, and additional reductions to contractor travel expenses. Solar and Renewable Energy. The severe cuts made by the Committee to the Solar and Renewable Energy budget represent reductions of $120 million below the President's FY 2000 request and $57 million below the FY 1999 enacted level. The Committee has justified these reductions by claiming that these programs do not provide value to the public, yet the Committee acknowledges that previous funding for this research has reduced costs for renewable energy sources such as wind and photovoltaics by 85 percent or more. We do not agree with the Committee that because much progress has been made in areas such as wind and geothermal energy, these technologies can be considered to be mature, and funding should therefore be reduced. Full funding at the requested level in these areas will reap significant additional benefits for the public. In addition, the Committee bill includes a rider prohibiting implementation of the Kyoto Protocol. The Administration opposes the inclusion of this unnecessary provision because we do not intend to implement the Protocol before Senate ratification and do not believe that any current activities would be encompassed by this rider. Spallation Neutron Source (SNS). The Administration strongly opposes the $146 million reduction in construction funding for the SNS. When completed, the SNS will provide a revolutionary tool for use in the materials and medical sciences. The Department has recently installed a strong management team that has produced a solid cost and schedule baseline for the project. However, the Committee funding level would require significant restructuring of the baseline, contribute to lengthy delays in construction, and ultimately increase the total project cost. Information Technology for the 21st Century and the Next Generation Internet (NGI) Initiatives. The Administration strongly objects to the Committee's shortsighted decision not to provide funding for these initiatives that seek to advance the field of information science and contribute to the strength and health of the private-sector information economy. Further, the Committee action would halt ongoing work on network testbeds begun with NGI funding provided in FY 1999. Yucca Mountain. The Administration strongly opposes the reduction of $128 million from the civilian radioactive waste management program. This reduction of nearly one-third from the request level would significantly delay the schedule for DOE's FY 2001 site-suitability determination for Yucca Mountain and the FY 2002 submission of the license application to the Nuclear Regulatory Commission. If the site is found to be suitable, the delays resulting from this reduction would significantly jeopardize the planned opening date for the repository and the long-term prospects for nuclear power in the United States. Environmental Management. The Administration opposes the severe, $340 million reduction to the Defense Environmental Restoration and Waste Management account. Of particular concern is the $105 million reduction for long-term cleanup projects within the Post 2006 Completion activity. This account funds many of DOE's most difficult cleanup challenges, including protecting the Columbia River in Washington, safeguarding the drinking water quality of the Snake River Plain Aquifer in Idaho, and stabilizing nuclear materials and high-level waste at the Savannah River site in South Carolina. The Committee's funding reduction would substantially decrease DOE's ability to make radioactive waste shipments to the Waste Isolation Pilot Plant and jeopardize DOE's cleanup commitments at all program sites, which are intended to protect the health and safety of workers, the public, and the environment. Other Defense Activities. The Administration objects to cuts of $39 million to key arms control programs and $19 million to programs to improve the safety of Soviet-designed nuclear reactors. Most objectionable is the near elimination of the Nuclear Cities Program, for which the Committee provides only $1.5 million of the $30 million request. Departmental Administration. The Administration supports some of the Committee's modifications in the Departmental Administration account, but is still concerned about steps to eliminate funding for field management activities and the funding level for other activities in the policy and international affairs offices. We are concerned about the funding delay conditioned on enacting legislation to restructure the Department's national security programs. This provision would create administrative difficulties that could lead to program delays and impose an artificial deadline that could complicate resolution of the complex issues associated with restructuring these programs. The Administration is also concerned about provisions in the bill that limit the Power Marketing Administrations' ability to do work for other utilities or Federal or State agencies. These provisions could prohibit the PMAs from carrying out interconnection mandates of FERC's open access Order Numbers 888 and 889 and limit their ability to ensure that interconnections requested by these entities meet Federal design standards and safety requirements. The discretionary allocation available to the House is clearly inadequate to fund many priority programs within the Department of Energy. To meet this target, the Committee has chosen to use several unrealistic, across-the-board reductions, including: Use of Prior-Year Balances. The Committee has rationalized reductions of $342 million to three defense-related accounts (Weapons Activities, Defense Environmental Restoration and Waste Management, and Other Defense Activities) by directing the Department to use prior-year balances. However, the Committee does not present any analysis to indicate that such balances are uncommitted. We can only assume that these reductions are merely general reductions to these accounts. Laboratory Directed Research and Development (LDRD). The Committee has specifically reduced funding for four accounts by $190 million and claimed overall savings of $273 million by eliminating all LDRD funds. LDRD is one of the laboratories' most valuable sources of seed money used to finance the exploration of promising new technologies. The Administration believes that it would be extremely shortsighted to eliminate this source of funding for potential scientific breakthroughs. Contractor Travel. The Committee has reduced DOE contractor travel by 50 percent, or $125 million. While the Administration agrees that DOE contractor travel in recent years has been excessive, the Department has already put prudent reforms in place to reduce contractor travel cost by nearly 20 percent in FY 2000. An increase in this reduction, from 20 percent to 50 percent, would cripple the ability of the DOE labs to do their work and would impede defense-related work and scientific advances by precluding travel to scientific and other facilities. Army Corps of Engineers While the Administration is pleased that the Committee has provided the full $117 million requested for the Regulatory Program, we strongly object to several provisions in the bill. The Administration is concerned about the Committee's $283 million increase to the President's request for the Army Corps of Engineers. Despite this unrequested increase in funding, cuts in certain critical construction projects have been made that would result in significant delays. Of particular concern are reductions to the request for the Columbia River Fish Mitigation project, the Everglades restoration (FL), the Kill Van Kull and Newark Bay Channel (NY, NJ) project, and elimination of funding for Devils Lake (ND). Funds to restore these projects to the requested levels would be available from funding in the bill for unrequested new construction starts and other add-ons. In addition, the Administration opposes the Committee's prohibitions (contained in the House Committee Report) against studying drawdown of the John Day and McNary dams. These prohibitions could hamper the objective analysis necessary to formulate Columbia and Snake River salmon recovery plans. The Administration appreciates efforts by the Committee to derive funding for commercial harbor maintenance from the Harbor Maintenance Trust Fund (if funds are to be provided under the current authorization). We urge Congress to enact the Administration's Harbor Services Fund proposal, which would provide a stable source of funding for port and harbor activities and free up funds for priority projects and programs. Bureau of Reclamation The Administration appreciates the Committee mark, which provides full funding for the Central Valley Project Restoration Fund and substantial funding for the California Bay-Delta Restoration program. This funding is important to Federal and State efforts to restore the Bay-Delta ecosystem and to efforts to mitigate impacts of the Central Valley Project. However, we are disappointed that the Committee has not approved the Administration's proposal to convert the Restoration program from discretionary to permanent funding to improve its operating efficiency and effectiveness. The Administration is also concerned with the $48 million reduction to the Water and Related Resources program. This reduction would significantly affect the Bureau of Reclamation's ability to operate its water supply projects throughout the West while complying with relevant Federal laws. In particular, we are concerned about elimination of funding for Central Valley Project additions, replacements, and extraordinary maintenance, as well as reductions to the Lower Colorado River Operations Program. The eight-percent funding reduction to the Bureau's Policy and Administration activities would hinder its ability to administer important Reclamation-wide activities, such as implementation of the Government Performance and Results Act. We urge the House to restore these funds. Tennessee Valley Authority The Administration urges the House to provide the $7 million requested for the Tennessee Valley Authority (TVA) to manage the Land Between The Lakes National Recreation Area (LBL). Under provisions in P.L. 105-277, the FY 1999 Omnibus Consolidated and Emergency Supplemental Appropriations Act, management of LBL would transfer from TVA to the Forest Service if there is less than $6 million of TVA appropriations for the LBL. The Administration strongly opposes the needless, costly, and disruptive transfer of these activities. Appalachian Regional Commission The Administration believes that the $66.4 million request is the appropriate funding level to meet the needs of the Appalachian Region Commission and urges the House to restore full funding.