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.)
May 15, 1997
H.R. 1469 -- MAKING EMERGENCY SUPPLEMENTAL APPROPRIATIONS FOR RECOVERY FROM
NATURAL DISASTERS, AND FOR OVERSEAS PEACEKEEPING EFFORTS,
INCLUDING THOSE IN BOSNIA
(Sponsor: Livingston (R), Louisiana)
This Statement of Administration Policy provides the Administration's views on H.R. 1469, as reported by the House Appropriations Committee. The Administration appreciates the prompt action of the House Appropriations Committee on the President's supplemental requests. The bill contains $5.5 billion in urgently needed disaster assistance. To ensure an expeditious response to the tragic natural disasters that continue to afflict hundreds of thousands of citizens in 33 States, and for the efficient operation of our troops abroad, it is essential that this bill remain free of extraneous issues that could slow its progress.
The Administration continues to believe that the requested supplemental funding is for matters truly emergency in nature and, therefore, that the requested funding should not be offset with rescissions. However, recognizing that the House Committee has determined that offsets are to be included in the bill, the Administration has concerns with several of the specific offsets identified in the House Committee bill, which are discussed below. In addition, the Administration objects to certain language provisions, described below.
In the April 23, 1997 letter to the House Appropriations Committee providing the Administration's views on the draft Committee bill, OMB Director Raines described the Administration's concerns with a number of provisions in the Committee bill and urged that the bill be kept free of extraneous provisions. While the Committee bill continues to include a number of objectionable provisions, the Committee addressed several of the Administration's concerns and is free of provisions that would threaten approval of the bill. Regrettably, the rule makes in order an amendment, that if approved, would result in the President vetoing the bill.
"Automatic" Continuing Resolution
It is the Administration's understanding that an amendment will be offered that would create an automatic continuing resolution for FY 1998 based on the McCain-Hutchison language. While the goal of ensuring that the Government does not shut down again in the absence of enacted appropriations is a worthy one, such a provision is clearly extraneous to this emergency disaster relief legislation. The President has indicated that he would veto the bill if such a provision were included in it.
The President's budget requests a $100 million FY 1997 supplemental for WIC to maintain the FY 1996 year-end participation level of 7.4 million. Our most recent information from States suggests that a minimum of $76 million in new budget authority is necessary to maintain the FY 1996 year-end participation level. The funding level proposed by the House Committee would result in State agencies having to cut participation by 150,000 to 200,000 low-income women, infants, and children by year's end. The Administration remains firmly committed to fully funding the WIC program at a participation level of 7.5 million persons in FY 1998 and strongly supports the bipartisan amendment to provide the full $76 million this year.
Reductions to FEMA Disaster Relief and Other Non-Defense Programs
The Administration would oppose the amendment made in order in the rule which would eliminate $2.4 billion of FEMA Disaster Relief funds and require the President to reduce non-defense discretionary spending by $3.6 billion (-1.5%). Enactment of such a reduction two-thirds of the way through the fiscal year would result in reductions of nearly 5% in the final four months of the fiscal year.
Contingent Emergency Fund
On April 23rd, the President requested $300 million for funding additional emergency expenses arising from the consequences of the devastating flooding in North Dakota, South Dakota, and Minnesota. The President requested that $200 million of this amount be provided to the Unanticipated Needs account within Funds Appropriated to the President. The Administration appreciates the quick action of the House Committee in providing funding. However, in rejecting the Administration's proposal to provide the $200 million as a contingency fund in the Unanticipated Needs account, the Committee has failed to provide the flexibility that is essential for the President to respond appropriately to a variety of funding requirements that continue to emerge from the unfolding disaster. We urge the House to adopt the Administration's proposal, which recognizes the substantial uncertainty surrounding the Upper Midwest's enormous needs.
Community Development Block Grant Program
The Administration encourages the House to provide requested supplemental funding for the Community Development Block Grant (CDBG) program. These funds would enable CDBG to repeat its past successes of working in concert with FEMA and other agencies to help victims of disasters rebuild their lives and their homes. The complementary programs of CDBG, FEMA, and SBA hastened the recovery from the 1993 Midwest floods and many other disasters. CDBG programs serve different purposes than SBA and FEMA programs.
The Department of Housing and Urban Development and OMB will work together to establish administrative procedures ensuring that CDBG funds are used to redevelop the affected communities to be viable and disaster-resistant, in a manner that complements other relief and recovery spending. For example, the additional funds could be used to buy out properties as part of a relocation effort and/or elevate structures out of the flood hazard; to relocate lower-income families from flood plains; and, to provide grants or loans to businesses and families who lack the income, savings, or credit history to qualify for an SBA loan.
Endangered Species Act
The Administration opposes the inclusion in the bill of a waiver of the Endangered Species Act (ESA). Current law already allows Federal agencies to implement effective emergency procedures in order to accommodate the ESA during emergency responses to floods, and these procedures are routinely used and have been used during the recent flood events. While the Administration believes that the February 1997 policy statement issued by the Fish and Wildlife Service adequately addresses emergency situations affected by flooding and that additional legislation is unnecessary, we conclude that the language in the House Bill, as revised in the version of the bill reported by the House Appropriations Committee, is acceptable because it is consistent with that polic y and will provide essential flood protection to the American people while maintaining the capability to protect endangered species.
Conservation Reserve Program (CRP)
The Administration objects to language that would restrict CRP sign-ups in FY 1997 to 14 million acres. This action would deny willing landowners the opportunity to enroll land for which the environmental benefits exceed their agricultural production value. In light of the 25 million acres recently offered for CRP enrollment, the provision would at best delay the ability to enroll the optimum number of acres. This provision is also misplaced in this bill because it would not result in any FY 1997 savings. Federal payments on FY 1997-enrolled CRP acres would not begin until FY 1998.
The President's FY 1998 Budget requests that Congress appropriate funds sufficient to renew all expiring housing assistance contracts in FY 1998 and all future years. The Administration does not object to funding FEMA's Disaster Relief program through the rescission of $3.8 billion of recaptured excess reserves in HUD's assisted housing program, provided that the Congress is committed to approving sufficient resources to renew all expiring housing assistance contracts in FY 1998 and future years.
Concerns with Certain Offsets
The Dual Use Applications Program helps to develop and incorporate technologies used and tested by the cost-conscious commercial sector into military systems. By adopting these dual-use technologies, the Department will be able to take advantage of cost savings that flow from the production efficiencies of larger-scale commercial manufacturing lines. Reducing funding for this program would result in higher costs for future defense systems. This is an Administration priority, and the Administration strongly opposes the rescission contained in the Committee bill.
The Administration strongly objects to rescinding $1 million of unobligated balances from the Ounce of Prevention Council. Rescission of these funds, which represent roughly one-third of the Council's total funding, would substantially reduce the work of the Council in coordinating crime prevention efforts at the Federal level and assisting the communities to make their neighborhoods safer. The Council is in the process of awarding $1.8 million for youth substance use prevention grants and evaluating its existing grant programs. The Council has received over 300 applications from communities and community-based organizations from all across the country for these grants.
The Administration strongly objects to the House Committee action that would limit FY 1997 spending from the Fund for Rural America to $80 million, representing a $20 million, or 20 percent, reduction. The Fund's creation in the 1996 Farm Bill was a significant factor in the President's decision to sign that legislation because of its mandate to aid farmers, ranchers, and rural residents in their transition to reliance on a market economy. This provision would likely result in an over 40 percent reduction in the agricultural research portion of the Fund's activities this year, significantly reducing programs that would enhance needed information and technological assistance to rural areas.
Restoring Benefits for Certain Legalized Aliens
The Administration has proposed legislation to restore SSI and Medicaid benefits for disabled legal immigrants and children of legal immigrants. To ensure that benefits for needy legal immigrants are not abruptly curtailed, the Administration would strongly support a simple extension of benefits through the end of the fiscal year to all legal immigrants currently receiving SSI. This approach would ensure that the Congress has sufficient time to enact the components of the Administration's legislative proposals, consistent with the recent bipartisan budget agreement, and that SSA has sufficient time to implement the legislation. The Administration supports the amendment made in order in the rule.
Federal Election Commission
The Administration appreciates the provision of $1.7 million in additional funding for the Federal Election Commission (FEC) in the House Committee version of the bill and would oppose the elimination of these funds. The Administration encourages the House to remove the restrictions on these funds that would require their expenditure on automated data processing systems (ADP). The Administration requested these funds for the express purpose of supporting additional staff and related costs for investigations and audits pursuant to the Federal Election Campaign Act. While additional ADP costs are a component of these investigations, they are not the key purpose of the request.
Supplementals Not Approved
The Administration has requested a $22.8 million emergency supplemental appropriation for NOAA to fund both hatchery repair and fishery habitat restoration. We are disappointed with the House Committee's view that NOAA's proposed fishery habitat restoration activities are not directly connected to disaster assistance and that only funding for hatchery repair is proposed. The flooding in the Northwest has resulted in direct damage to important fishery habitat. NOAA's proposed habitat restoration activities are intended to address this damage and to mitigate the impact of damage from future floods.
Supplemental funding of $6.25 million is needed to restore funding for the Nutrition, Education, and Training program of the Department of Agriculture. This funding was unintentionally eliminated when permanent mandatory funds for the program were deleted after Congress had already passed the FY 1997 appropriations act. These funds help to provide basic nutrition education to teachers, food service workers, parents, and children.
- Brookhaven National Laboratory. On April 23rd, the President proposed $19.7 million for the Department of Energy's Brookhaven National Laboratory for activities relating to remediation of groundwater contamination. Appropriate offsets were included in the proposal. The Administration encourages the House to support this proposal.
- Devils Lake. The Administration strongly urges the House to include the requested authorization language and construction funding for an emergency outlet at Devils Lake, North Dakota. With the lake at unprecedented levels and having the potential to cause high additional damages, an accelerated emergency process is necessary to reduce the risks of potential flood damages.
- Restrictions on Navy Financial Management. The Administration strongly objects to section 2105 of the House Committee bill, which would place extreme restrictions on the conduct of the Navy's financial management. This provision takes the unprecedented step of requiring congressional approval for the hiring of civil service employees within the Department of the Navy, a clear infringement on the Executive Branch's authority to manage its employees. In addition, the provision would require the Navy to submit all reprogrammings for prior approval by the Appropriations Committees, regardless of dollar value. The length of time required to submit such documents and obtain approval would impose an undue burden on the Navy and prevent efficient management of its programs and resources. Further, this provision would condition the President's authority -- and the authority of certain agency officials -- to use funds appropriated by this Act on the approval of Congressional committees. The Administration would interpret such provisions to require notification only, since any other interpretation of such provisos would contradict the Supreme Court Ruling in INS vs. Chadha.
- River Basin Appointments. The Administration is pleased that the House Committee has included language to allow continued Federal participation on the Susquehanna and Delaware River Basin Commissions. However, the Administration opposes the requirement that the Federal representatives to these Commissions be military officers of the Corps of Engineers. This requirement is overly prescriptive. The President should have the discretion, as he does under the existing compacts, to choose the Federal representatives on these Commissions.
EXAMPLES OF PROBLEMS CONTAINED IN THE SENATE-PASSED VERSION OF THE FY 1998 AUTOMATIC CONTINUING RESOLUTION
- It is premature and is inconsistent with the funding levels contained in the bipartisan budget agreement.
- Funding would be reduced by $25 billion from the President's request and is significantly below the levels in the bipartisan budget agreement.
- It would cut such critical services and functions as Veterans Medical Care, food assistance for Women, Infants and Children (WIC), education (e.g., Head Start and Pell Grants), the environment (e.g., cleaning up Superfund sites and maintaining and improving our national parks), and research and technology (NIH).
- Specific examples of problems follow (compared to President's FY 1998 Budget):
- An average of 500,000 fewer women, infants and children per month would receive food and other services through WIC.
- College aid would be cut by $1.7 billion from the FY 1998 request, allowing a maximum Pell grant level of only $2,660 -- compared with the $3,000 proposed by the President -- and eliminating nearly 375,000 students from the program. No new aid would be available to older students.
- Educational services for over 483,000 children would be cut from grants to local educational agencies.
- GOALS 2000 would be cut $129 million from the FY 1998 request, eliminating aid to 2,000 school districts across all States.
- NIH would be cut $337 million (2.6 percent) from the proposed FY 1998 funding level of $13.1 billion. The number of NIH-funded new research projects could be cut by over 774 in FY 1998 from the proposed FY 1998 funding level.
- Ryan White AIDS Treatment Grants would be cut 4 percent from the proposed FY 1998 funding level, cutting resources to provide protease inhibitors, other drugs and medical treatment, and support services to people suffering from AIDS.
- Up to 56,000 fewer children would participate in Head Start (presuming that the quality of the program is maintained).
- 7,000 fewer Direct Single Family Rural Housing Loans (-35 percent) would be issued.
- The Federal crop insurance program would be terminated.
- New national parks and heritage areas authorized in the 1996 Omnibus Parks bill could not move forward in Kansas, Massachusetts, Oklahoma, West Virginia, Virginia, Tennessee, Georgia, Pennsylvania, Iowa, South Carolina, Ohio and New York.
- Cuts in the Indian Health Service would undermine direct health care services for Native Americans, while cuts in the Bureau of Indian Affairs would impair reservation-based programs -- e.g., elementary and secondary education, law enforcement, child welfare, general assistance, and other social services. These BIA programs are already under significant pressure due to continued three percent per year school enrollment growth and the effects of welfare reform as tribal members lose State benefits and return to their reservations.
- 40,000 economically disadvantaged adults and 26,000 dislocated workers would be denied employability services and training.
- VA Medical Care would be denied to 60,000 veterans.
- The CR would effectively preclude meeting the President's goal to clean up 900 Superfund sites by the year 2000.
- By blindly applying an across-the-board freeze, this CR would undermine our ability to respond to problems that are peculiar to 1998 -- e.g., preparing for the Decennial Census and correcting the government's computers for the year 2000 transition.
- Such an automatic CR would make it very unlikely that a Foreign Operations bill could be enacted into law. Funding at a level $1.4 billion below the request would undermine America's global leadership.
- It would undermine core functions of government.
- Many of the 1,000 new border patrol agents being hired this year would have to be RIFed, and the proposal to hire another 500 in FY 1998 would be blocked.
- The FAA would be unable to hire the additional 500 air traffic controllers, 258 aviation safety inspectors, and 173 security personnel proposed in the FY 1998 budget, and the number of existing air traffic controllers would decline to the lowest level since 1988. Aviation safety inspections also would be reduced.
- Reduced IRS tax law enforcement would result in $350-$500 million in lost revenues.
- The proposed increase of 544 FBI agents would be blocked, and planned prison activations would be curtailed.
- Social Security processing time for initial disability claims could increase by roughly 24 days (+18 percent) beyond the currently-projected 135 days -- and about 31,000 fewer appeals decisions (-5 percent) may be reached.