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.)
June 13, 2000
H.R. 4635 - DEPARTMENT OF VETERANS AFFAIRS AND
HOUSING AND URBAN DEVELOPMENT, AND
INDEPENDENT AGENCIES APPROPRIATIONS BILL, FY 2001
(Sponsors: Young (R), Florida; Walsh (R), New York)
This Statement of Administration Policy provides the Administration's views on the Veterans, Housing and Urban Development, and Independent Agencies Appropriations Bill, FY 2001, as approved by the House Committee. Your consideration of the Administration's views would be appreciated.
The President's FY 2001 Budget is based on a balanced approach that maintains fiscal discipline, eliminates the national debt, extends the solvency of Social Security and Medicare, provides for an appropriately sized tax cut, establishes a new voluntary Medicare prescription drug benefit in the context of broader reforms, expands health care coverage to more families, and funds critical investments for our future. An essential element of this approach is ensuring adequate funding for discretionary programs. To this end, the President has proposed discretionary spending limits at levels that we believe are necessary to serve the American people.
Unfortunately, the FY 2001 congressional budget resolution provides inadequate resources for discretionary investments. We need realistic levels of funding for critical government functions that the American people expect their government to perform well, including education, national security, law enforcement, environmental protection, preservation of our global leadership, air safety, food safety, economic assistance for the less fortunate, research and technology, and the administration of Social Security and Medicare. Based on the inadequate budget resolution, this bill fails to address critical needs of the American people.
The Committee allocation is $6 billion below the President's program level request. In order to approve a bill at the level of this allocation, the Committee has eliminated the Corporation for National and Community Service, and has severely reduced funding from the requests for the Department of Housing and Urban Development, the National Science Foundation, the National Aeronautics and Space Administration, the Environmental Protection Agency's basic environmental and public health programs, the Federal Emergency Management Agency, and other Administration priorities.
The Administration strongly opposes the Committee's action to terminate the Corporation for National and Community Service, including the AmeriCorps program. Eliminating funding for the Corporation would deny over one million young Americans the opportunity to provide vital community services and become better citizens as participants in the Corporation's AmeriCorps (62,000 participants) and Learn and Serve (1 million participants) programs. If the final bill presented to the President were to provide inadequate funding for the Corporation for National and Community Service, his senior advisers would recommend that the President veto the bill.
The Committee bill would also limit our ability to address poverty and the shortage of affordable housing, undermine investments in our future through space research and science and technology, reduce our ability to pursue critical opportunities in basic research through the National Science Foundation, adversely affect the environment and public health, and adversely affect our ability to respond quickly and fully to unforeseen disasters. Further, the Committee bill includes objectionable language provisions, such as anti-environmental riders, efforts to hamper the Department of Veterans Affairs ability to support the tobacco litigation using current statutory authority, and language limiting HUD's efforts to deliver vital services to the American people. For these reasons, if the bill were presented to the President in its current form, the President's senior advisers would recommend that he veto the bill.
Detailed discussions of certain of these issues, as well as additional Administration concerns with the Committee bill, are provided in the attachment. We look forward to working with the Committee to address our mutual concerns.
DEPARTMENT OF VETERANS AFFAIRS AND
HOUSING AND URBAN DEVELOPMENT, AND
INDEPENDENT AGENCIES APPROPRIATIONS BILL, FY 2001
(AS APPROVED BY THE HOUSE COMMITTEE)
Corporation for National Community Service
The Administration is deeply concerned that the House Committee bill terminates the Corporation for National and Community Service, including the AmeriCorps program. In FY 2001, the Committee bill would deny 62,000 Americans the opportunity to meet pressing education, public safety, and human and environmental needs in exchange for help with college costs through participation in AmeriCorps. This action would eliminate the President's goal of reaching 100,000 AmeriCorps participants a year by FY 2004. In addition, in FY 2001, the bill would prevent more than one million students from participating in service-learning programs that provide substantial academic and social benefits, including the opportunity to learn responsible citizenship. The Administration strongly urges the House to fully fund the Corporation at the requested level of $534 million.
Department of Housing and Urban Development
The Committee bill provides $29.9 billion for the Department of Housing and Urban Development (HUD), an overall programmatic reduction of $2.5 billion from the President's request, excluding proposed offsets. This reduction would eliminate most of the increases that the President has requested to help HUD address poverty and the shortage of affordable housing.
Housing Assistance. The bill provides no net new housing assistance. The Committee bill also fails to address the shortage of affordable housing to help homeless and low-income families, low-income elderly, the disabled, and people with HIV/AIDS.
- The Committee bill fails to fund the Administration's request for 120,000 incremental rental assistance vouchers at a time when a record 5.4 million unassisted low-income households have "worst-case" housing needs and spend over 50 percent of their income on rent. This would add to the growing backlog of families who cannot afford decent, safe, and sanitary housing. In fact, the bill calls for a rescission of $275 million -- endangering funding for either renewals of existing vouchers or tenant protections.
- The Committee bill would cut the request for housing for the elderly and disabled by $78 million and would cut requested assistance for people with HIV/AIDS by $28 million. The Administration encourages the Committee to restore requested funding to meet the needs of low-income elderly, the disabled, and people with HIV/AIDS. The bill also cuts the request for the HOME program by $65 million, which would mean 2,425 fewer households would receive critical assistance.
- Reductions of $155 million in public housing programs, including some cuts below enacted levels, would reduce capital improvements, resulting in tens of thousands of additional public housing units developing moderate to severe physical problems. Such a large decrease in funding would only increase the rate of deterioration and accumulation of needs over time. This would be compounded by the failure to fund $54 million in operating subsidies for housing authorities and $60 million in HOPE VI funds to replace distressed housing projects.
- The Administration is very concerned about the Committee bill's authorization of a new program to permit local housing authorities to spend reserve funds to increase rents and provide additional services in selected areas where the lease-up rates for housing vouchers may be experiencing problems. This costly new provision is overly permissive and has few controls. When fully implemented, it would increase costs as much as $500 million per year if local housing authorities opted to use it for only 10 to 15 percent of all housing vouchers. While more flexibility is needed to make housing vouchers work better, the Administration believes its more limited proposal for a $50 million Voucher Success Fund would accomplish the same goal more efficiently and without the risk of rapid cost increases.
- The Committee bill does not provide sufficient funds for housing counseling and does not include provisions to create a new hybrid adjustable rate mortgage and increase the loan limit for FHA single family guarantees. The Administration urges the adoption of these measures to increase homeownership opportunities and reduce costs.
Community and Economic Development. The Committee bill fails to provide requisite funding to carry out the recent bipartisan agreement between the President, the Speaker of the House, and other congressional leaders to implement bold and innovative programs -- including the New Markets Initiative and America's Private Investment Companies -- to help those places in America our booming economy has left behind.
- To help communities and people most in need, the Administration urges the Committee to fund the following specific initiatives as part of the bipartisan effort to help distressed communities and make investments in the untapped markets of America's inner cities, rural areas, and Native American reservations: America's Private Investment Companies (APIC), Regional Connections, funding for the Mississippi Delta, Community and Interfaith Partnerships, and the New Markets University Partnerships.
- The Committee bill would cut the Community Development Block Grant program (CDBG) and other housing and economic activity by $295 million relative to the enacted level. As a result, about 36,000 fewer people would receive housing rehabilitation, construction, and homebuyer assistance. About 12,000 fewer jobs would be created by CDBG.
- The Committee bill would cut requested homeless assistance by $180 million, including $105 million for rental assistance vouchers. The President's request would provide critical assistance to help homeless families who would otherwise have the greatest difficulty finding housing move to permanent housing with supportive services.
- The bill also cuts the President's request for funds to provide new jobs and affordable housing for American Indians and Native Alaskans by $30 million. This request is part of the Administration's Native American Initiative.
Community Builders. The Committee bill terminates the Community Builder program, cuts $90 million from HUD's operating budget request, and delays expenditures for training, technical assistance, and management improvement funds (Section 421). These actions would hamstring the Department's efforts to deliver vital services to the American people. HUD's streamlining efforts over the past few years have already achieved significant staff reductions. The Committee bill's Community Builder provision is inconsistent with an agreement reached with the Committee during the FY 2000 appropriations process and could eliminate up to 800 existing positions. Instead of focusing on improving services and responsiveness, HUD would now be forced to manage a large personnel reduction and redefine roles throughout the Department.
- Report language accompanying the Committee bill would undercut the Department's discretion to manage its own budget by lowering staffing agency-wide and making HUD operate without the ability to travel, purchase supplies, and perform other basic agency functions. The Administration objects to these actions and strongly urges the Committee to provide an adequate operating budget -- free of micro-management -- that will permit proper stewardship of these important programs and prompt delivery of services to needy families.
The Committee provides only a $2.5 million increase for the Office of Federal Housing Enterprise Oversight (OFHEO). The Administration supports an increase of at least $4 million over the Committee level to ensure that OFHEO has the necessary capacity to provide effective oversight of enterprises that are growing and becoming more complex.
- The Committee bill does not increase funding for the Lead Hazard Control program. The Administration's requested increase is vital to supporting a strategy to virtually eradicate lead poisoning in children by 2010.
- The bill ignores the urgent need to address the problems of crime and drugs in public housing. The Committee bill fails to fund the President's $35 million request for the Public Housing Drug Elimination Program, including $30 million for gun safety and violence reduction.
- The Administration encourages the Committee to fully fund the Office of Policy Development and Research, which contributes directly to improving the quality of HUD's policy decisions and programs, as well as the Department's Partnership for the Advancement of Technology in Housing (PATH) program to accelerate technologies that will improve the performance, energy efficiency, and affordability of America's housing.
National Science Foundation
The Administration strongly opposes the Committee's funding recommendations for the National Science Foundation (NSF). The Committee's bill would jeopardize our investment in the future by cutting NSF investments in science, engineering, and education by $508 million, 11 percent below the requested level. This reduction would seriously undermine priority investments in cutting-edge research and eliminate funding for almost 18,000 researchers and science and mathematics educators -- slowing innovation and reducing the number of well-trained students needed by the Nation's high tech industries. This reduction would also skew the balance among the different sciences within our R&D portfolio, eliminating physical science, mathematics, and engineering research that are needed, for example, to make our biomedical research investments much more productive.
- Research Priorities. The Committee reduction would seriously undermine priority investments in Information Technology, Nanotechnology, and Biocomplexity. External advisory committees have emphasized the vital importance of sustained and adequate Federal investments for long-term, fundamental research in these key areas. By failing to provide the Administration's request in these priority areas, the Committee would severely undercut support for the basic research that serves as the foundation for breakthroughs in health care, environmental protection, energy, food production, communications, and a host of technology dependent industries.
- Research Facilities. The Committee's deletion of funding for Earthscope and the National Ecological Observatory Network (NEON) would delay the development of large-scale research equipment to enable us to understand better and predict earthquakes and threats to sensitive ecological regions. The Committee's refusal to fund a second terascale computer would significantly hamper the burgeoning demand from researchers across the country for high speed computer applications. The Administration is concerned by the Committee's decision to provide unrequested funding for the lower-priority High-Performance Instrumented Airborne Platform for Environmental Research aircraft instead of funding the second terascale computer, NEON, and Earthscope, all of which went through significant review prior to approval and endorsement by the National Science Board.
- Education. The Administration is troubled by the Committee bill's inadequate funding for undergraduate education, which is $30 million, or 21 percent, below the Administration's request, and five percent below the FY 2000 enacted level. The Committee bill would provide no funds for the Scholarships for Service initiative, which is intended to educate the next generation of Federal information technology managers by awarding scholarships for the study of information assurance and computer security in exchange for federal service.
- Opportunity Fund. The Committee bill would eliminate the Opportunity Fund, hindering NSF's ability to react to a rapidly changing research environment. The Fund allows NSF to fund innovative research that could lead to significant discoveries in new and emerging fields of science and engineering.
National Aeronautics and Space Administration (NASA)
The Administration appreciates the Committee's effort to fund the International Space Station program, Space Shuttle safety upgrades, and Space and Earth Science research. Likewise, we appreciate that the Committee has included no earmarks for projects that have not been subject to competitive selection and encourage the Committee to maintain this standard as it develops its bill.
However, the Administration strongly opposes the Committee bill's elimination of the $290 million requested for NASA's Space Launch Initiative, a program that is critical to the long-term future of NASA. The initiative promises to dramatically lower the cost of future space launch vehicles while significantly increasing safety and reliability. This program will enable new opportunities in space exploration as well as enhance the international competitiveness of the U.S. commercial launch industry. The Committee's action would also terminate two experimental launch vehicles, the X-34 and X-37, in which NASA has already invested more than $200 million in preparation for launches over the next three years. The Administration urges full restoration of funding for this critical initiative.
The Administration has several other concerns regarding NASA. First, the Administration opposes the elimination of the $20 million funding request for the "Living with a Star" initiative. This initiative would enhance our understanding of the sun and its impact on Earth and the environment, and would also help provide early warning against solar flares and mass ejections that can damage critical infrastructure such as civil, national security, and commercial satellites. Second, the Administration objects to the $55 million reduction to NASA's aeronautical research efforts that promise new technologies to reduce air traffic congestion. Third, the Administration requests removal of bill and report language preventing NASA from funding joint research projects with the U.S. Air Force. This limitation would greatly impair NASA and U.S. Air Force research efforts in aeronautics and space technology, forcing unnecessary duplication of efforts between both agencies.
Environmental Protection Agency
The Administration appreciates the Committee's decision not to include earmarked, special interest projects within the Environmental Protection Agency's (EPA's) budget. In previous years, the funding of this type of unauthorized, unrequested projects has severely squeezed funding for core environmental and statutorily required programs. The Administration hopes to work with the Congress to maintain restraint throughout the appropriations process. Despite the Committee's restraint on special interest projects, we have several major concerns with the funding provided for EPA in the Committee bill.
In particular, the Administration strongly opposes the $199 million or nearly ten-percent reduction to the Administration's request for EPA's basic environmental and public health programs, which are the backbone of the Agency's work. Unless reversed, a cut of this magnitude would seriously affect EPA's ability to provide American communities with cleaner water, cleaner air, and an improved quality of life. Major cuts are targeted at:
- Environmental Enforcement. The Committee's reduction would deprive EPA of critically needed funding and undermining enforcement of environmental laws by capping specific expenditures for criminal and civil enforcement and compliance inspections. As a result, serious pollution problems caused by noncompliance would go unaddressed;
- Climate Change Technology Initiative (CCTI). A cut of this magnitude would damage EPA's common sense voluntary programs designed to mitigate global climate change, improve the Nation's energy efficiency, reduce U.S. dependence on foreign oil, and save consumers money. The Committee bill also has made reductions that would set back efforts to develop fuel efficient automobiles, sport utility vehicles, and trucks;
- Information Integration Initiative. The Committee bill would eliminate funding for a major effort to integrate environmental data bases, which is designed to give EPA and the States the tools to use environmental data more efficiently and cost-effectively in cleaning up the environment.
While the Administration appreciates the increases provided for the Clean Water Action Plan, we strongly urge restoration of funding for the Great Lakes Initiative. This funding is critically needed to address contaminated "areas of concern" in the Great Lakes. The Administration likewise urges restoration of funding for section 319 non-point source pollution control grants, to provide needed assistance in combating polluted runoff -- the largest remaining source of water pollution today -- and for State grant funding for the specific purpose of protecting water quality through Total Maximum Daily Load (TMDL) allocations. In addition, the Administration urges that all of the increased State grant funding in the bill be accompanied by increases in State matching funds, a requirement that the current Committee language does not ensure.
The Administration opposes the $67 million reduction to the request for Superfund funding available to the EPA, which under this Administration has operated at a record pace to clean up hazardous waste sites. This reduction would needlessly jeopardize the public health for citizens living near affected sites by eliminating virtually all new cleanup starts and making it difficult to meet the President's 900-site construction completion goal by FY 2002. Further, the Administration objects to the Committee's proposal to finance half of the appropriation from general revenue. Such financing is contrary to the "polluter pays" principle and would be unfair to the general public, who would be forced to pay for the irresponsible actions of polluters.
The Administration also objects to the elimination of funding for the Clean Air Partnership Fund. This Fund would provide grants to State and local governments for innovative projects that reduce multiple air pollutants, such as toxics, soot, and smog, as well as reducing greenhouse gases. This Fund would support a wide range of projects that would mean cleaner air and savings for consumers.
The Administration strongly objects to several anti-environmental riders:
- Total Maximum Daily Load (TMDL) Water Pollution Rule. The Administration strongly objects to language blocking implementation of a pending revision to EPA's TMDL water pollution rule, which is intended to provide an effective, common-sense framework for cleaning up remaining polluted waters. This legislative rider would significantly slow efforts to clean up the almost 20,000 bodies of water nationwide that States have identified as still too polluted for fishing and swimming. Stronger TMDL regulations are critical to delivering on the promise of the original Clean Water Act.
- Kyoto Protocol. The Administration opposes Committee bill and report language relating to the Kyoto Protocol. This language is unnecessary as the Administration has no intent of implementing the Protocol prior to congressional ratification. To the extent that this provision could be read to prevent EPA from assisting the President in carrying out his Constitutional authority to conduct international negotiations, it would be disruptive to those efforts and may well be unconstitutional.
- Pesticide Tolerance Fees. The Administration strongly opposes Committee bill language preventing implementation of a statutorily required rule to charge pesticide tolerance fees. This language would cripple efforts to protect the public from dangerous pesticides by preventing collection of user fees intended to fund a major portion of the tolerance reassessment program in FY 2001. Further, the language would let pesticide manufacturers, who currently pay only one-tenth of the cost of issuing pesticide tolerances, off the hook for paying to protect the public from their products. It is also contrary to last year's conference report, which indicated that this rule would not be blocked in FY 2001.
- Title VI Interim Guidance. The Administration is concerned that the Committee bill has retained the language regarding EPA's Title VI interim guidance. As a matter of principle, the language is a problem because it restricts our ability to effectively process and resolve complaints. The Administration continues to object to this language and notes that revised draft guidance is expected to be available shortly for public review and comment.
- Protective Standards for Radon In Drinking Water. The Committee should delete Committee report language intended to prevent EPA from fulfilling its obligations under the bipartisan Safe Drinking Water Act Amendments of 1996 to develop protective standards for radon in drinking water, which the National Academy of Sciences has confirmed poses a cancer risk. The Committee language attempts to thwart EPA's efforts to protect public health, while providing the States with statutorily authorized flexibility to use a multi-media approach in limiting the public's exposure to radon.
- Contaminated Sediments. In addition, the Committee should delete Committee report language intended to restrict EPA's ability to cleanup contaminated sediment sites that pose a threat to public health and the environment. The report language is broader in scope and more restrictive than previous report language. The Administration is very concerned that this language could stop or delay the cleanup of Superfund sites and other contaminated sediment sites across the country.
Council on Environmental Quality
The Administration appreciates the additional $95,000 for FY 2001 provided in the Committee bill, but believes full funding of the requested increase of $204,000 is needed for the Council on Environmental Quality (CEQ) to fulfill its statutory responsibilities. The Administration opposes the limit included in Committee report language of 22 FTEs for CEQ, instead of the 26 estimated FTEs that were requested. This limitation would hamper CEQ's ability to provide for the optimal level of staff to run the agency efficiently.
Federal Emergency Management Agency
The Administration appreciates the efforts of the Committee to provide funds needed for the operation of the Federal Emergency Management Agency (FEMA). However, the Administration strongly urges the Committee to provide the $300 million requested in regular appropriations for disaster relief, as well as the full $2.6 billion in contingent emergency funding requested. These funds are needed to ensure FEMA's ability to respond quickly and fully to disasters in FY 2001.
With 600,000 Americans homeless, the Administration strongly urges the Committee to provide the full request of $140 million for the Emergency Food and Shelter Program. Failure to provide the full request would lead to 25 million fewer meals served and more than one million nights of temporary lodging that would not be provided. The Administration appreciates the Committee's support for FEMA's mitigation programs. However, rather than providing the full request for pre-disaster mitigation (Project Impact) and repetitive loss buyouts, the Committee has elected to pursue an "either-or" strategy that will lead to reductions in pre-disaster mitigation, or fewer buyouts of repetitively flooded homes, or both. This strategy would only lead to increased long-term disaster costs. In addition, the Administration urges the Committee to fund the $23.6 million requested for FEMA's headquarters building requirements.
Community Development Financial Institutions Fund
The Administration is concerned with the House Committee's decision to fund the Community Development Financial Institutions (CDFI) Fund at $105 million, $20 million below the request. This reduction would result in approximately 30 fewer organizations receiving awards than assumed in the request. We urge the Committee to fully fund CDFI at the President's request of $125 million. The requested level will enable CDFI to meet the increasing demand by financial institutions to leverage investments, make loans, and provide technical assistance and other financial services in some of the country's most distressed communities.
Department of Veterans Affairs
- Tobacco Litigation. The Administration strongly objects to this special interest provision that is intended to prohibit VA from transferring funds to the Department of Justice to support litigation against tobacco companies. VA spends more than $1 billion annually treating veterans suffering from tobacco-related conditions and is committed to helping the Federal Government recover these funds. As one of the three major client agencies in this litigation, VA would receive a share of any recoveries and would directly apply them to medical services for our Nation's veterans.
- Medical Care -- Operation and Maintenance of Facilities. The Administration has serious concerns about the $3 billion limit on Medical Care funds that may be used for the operation and maintenance of facilities. There is no clear definition of the terms "operation and maintenance," so it is impossible to know the repercussions of such a limit. The Administration will work with the Congress to develop appropriate definitions and cost methodologies.
- Medical Care -- Collections. The Committee has funded the President's Medical Care request, which includes full funding for new Millennium Bill benefits. However, the Committee has rejected the medical care collections proposal. As a result, total medical care funding comes at the expense of other critical VA programs.
- Medical Care -- Hepatitis C. The Administration understands the importance of encouraging VA medical centers to reach out to more veterans with Hepatitis C. However, the Administration is concerned
that integrating Hepatitis C patients in the current Complex Care category may significantly alter and disrupt the proper allocation of veteran medical resources across the Nation. Therefore, VA is creating a separate Complex Care allocation factor for Hepatitis C under Veterans Equitable Resource Allocation (VERA), and will calculate Veterans Integrated Service Network (VISN) resources using this new methodology.
- Construction. The Administration opposes the $62 million reduction in Minor Construction funding, which would adversely affect all VA operations, ranging from patient safety and maintenance in VA medical centers to gravesite development in some national cemeteries.
- Veterans Benefits Administration. The Committee bill reduces the President's request by $28 million, which represents a cut of almost three percent. Because the Committee would require VA to continue aggressively hiring new claims examiners, this cut would need to be taken in critical information technology initiatives, severely inhibiting the ability to modernize claims adjudication and expedite and improve processes.
- Vocational Rehabilitation and Employment. The Administration is concerned by the Committee's rejection of our proposed one-time $30 million adjustment from the Readjustment Benefits account to the General Operating Expenses account to fund administrative services correctly.
Consumer Product Safety Commission
The Administration is concerned with the Committee's $1.5 million reduction to the President's request of $52.5 million for the Consumer Product Safety Commission. This reduction could impede the Commission's efforts to protect children and families against unreasonable risks of injury and death from consumer products.
Critical Infrastructure Protection/Cyber Crime
The Administration urges the Committee to fully fund the President's request for critical infrastructure protection/cyber crime for the National Science Foundation and Federal Emergency Management Agency (FEMA). These funds are a crucial component of the national, interagency effort to protect infrastructure -- particularly information systems -- in both Government and the private sector that is essential to the functioning of our economy, national defense, and the safety of the population. Specifically, the Administration urges the Committee to fund the President's request of $43 million, including $11.2 million for Scholarships for Service, for the National Science Foundation's critical infrastructure protection activities. The Scholarships for Service effort is intended to develop the next generation of Federal information technology managers by awarding scholarships for the study of information assurance and computer security in exchange for Federal service. Additionally, we urge the Committee to provide the President's request of $673,000 for FEMA to assess current internal vulnerabilities and several cyber protection issues.