Statement of Administration Policy: H.R. 1175 - National Defense Supplemental Authorization for Fiscal Year 1991

(House Rules)
(Aspin (D) WI and Dickinson (R) AL)

The Administration is actively working with the bipartisan Senate leadership on a possible compromise proposal to increase carefully selected benefits for veterans and military personnel on a basis that is fully consistent with the Budget Enforcement Act. It is hoped that a similar agreement may be reached in the House. Unfortunately, H.R. 1175 — as reported by the House Armed Services Committee — does not meet these tests and would elicit a recommendation for veto by the President's senior advisers.

H.R. 1175, as reported by the House Armed Services Committee, would authorize more than $1.2 billion in increased direct spending for military personnel and veterans benefits over 5 years without offsets. The outyear costs are even greater (preliminary net present value estimates of the pension benefit provisions start at $2.2 billion). Many of these benefits are not targeted to individuals directly involved in Operation Desert Shield/Storm. The bill contains emergency designation language that the Administration strongly opposes as well as scoring language, consistent with House Rule XXI, which would undo a key element of the Federal spending control mechanisms in the Omnibus Reconciliation Act (OBRA) of 1990. If these issues are not addressed, the President's senior advisers would recommend that he veto H.R. 1175.

Section 3 contains a scoring provision which would include as a statement of law the Congressional Budget Office cost estimate of H.R. 1175. This provision is also specified in a rule recently added by the House which would undo a key element to enforcing the controls on Federal spending contained in the Omnibus Budget Reconciliation Act (OBRA) of 1990. In a statement issued January 3, 1991, the President stated,

"I will veto any bill that contains the language specified in the rule passed by the House Democrats this afternoon."

The Administration strongly opposes the emergency designation language contained in Title III of H.R. 1175 because it has the effect of appropriating funds in authorization legislation. The Administration, however, supports the emergency designation language in Title II of the bill and urges that the same language be substituted for the emergency designation language in Title III.

In addition, H.R. 1175 is objectionable because it:

—   Does not include offsets to the increases in direct spending provided in the bill, as required under the Budget Enforcement Act. The Administration will work with Congress to identify appropriate offsets.

—   Contains provisions that are inappropriate for inclusion in emergency supplemental legislation because they are either unnecessary or not urgently needed at this time.

Specific comments on H.R. 1175 follow.

Title I - Authorization of Fiscal Year 1991 Supplemental Appropriations for Operation Desert Storm.

The Administration has no objection to the provisions contained in Title I of H.R. 1175.

Title II - Military Personnel and Compensation Matters.

The Administration either supports or has no objection to many of the provisions contained in Title II. These include (1) granting DOD end-strength flexibility to the extent necessary because of Desert Shield/Storm; (2) increasing imminent danger pay from $110 per month to $150 per month; (3) increasing family separation pay from $60 per month to $75 per month; and (4) eliminating the $10,000 savings cap for POW's and MIA's under DOD's Armed Forces savings plan.

However, Title II also contains several provisions the Administration finds objectionable. Specifically, Title II would:

—   Pay a Family Separation Allowance (FSA) to dual military couples without dependents, currently, the FSA allowance is paid to personnel with dependents to help cushion the added family expenses resulting from separation. Dual military couples without dependents do not incur such costs, and paying the FSA would be unjustified. Moreover, it is long-standing military policy to treat each servicemember as a military member in his/her own right, and not as a dependent. To extend FSA to dual military couples without dependents would be contrary to this policy.

—   Authorize continued medical Board certification pay to those who completed residency, but were not certified. Qualified personnel were given special consideration (including free transportation) to return to take Board Qualification examinations. Waiver of the certification runs counter to the purpose of the special pay and the DOD policy of upgrading and maintaining the professional quality of medical services.

—   Increase the current death gratuity from $3,000 to $6,000. This increase in unnecessary in view of Servicemen's Group Life Insurance (SGLI), in which nearly all servicemembers participate. Currently, SGLI pays $50,000. The $3,000 death gratuity is intended only to tide over survivors until SGLI is paid.

—   Increase foreign duty special pay to a flat rate of $25 per month. This raise requires further study and will be considered in the ongoing 7th Quadrennial Review of Military Compensation.

—   Authorize two months of transition medical care coverage, or less if employer sponsored health insurance is available sooner, for reservists and active duty personnel (and families) who served in connection with Operation Desert Shield/Storm. This provision would be costly and hard to administer.

Title III - Veterans' Benefits and Programs.

The Administration either supports or has no objection to some of the provisions contained in Title III, including extension of eligibility for readjustment counseling to veterans who served on active duty in the Persian Gulf theater of combat operations.

However, Title III also contains several objectionable provisions. Specifically, Title III would:

—   Alter the basis for payment of Dependency and Indemnity Compensation (DIC) payments to surviving spouses by establishing four DIC benefit rates based on the veteran's age at time of death. The Administration agrees that changes are needed in this program and will be submitting legislation to provide a more equitable distribution of DIC benefits. The Administration opposes this provision of Title III because the age of the veteran at the time of his or her death is not an appropriate factor to use in determining the monthly DIC payment.

—   Make all veterans serving during the Persian Gulf War period eligible for the VA pension program, even if they were not serving in the combat zone.

—   Expand the authority VA now has to contract with community facilities during a national emergency or war. The current VA contracting authority and system of priorities for care ensures that the VA can serve veterans who have service-connected disabilities, require emergency care, or are undergoing a course of inpatient or outpatient treatment by the VA. It has not been necessary to use the authority VA now has to contract with community facilities as a result of the Persian Gulf conflict, and it is not necessary to expand it.

—   Increase Chapter 30 (Montgomery GI Bill - Active Duty) payment levels by up to 43 percent. This general benefit change is not Operation Desert Storm specific. It increases benefits for servicepersons who were already recruited under the current payment levels. There is no indication that increased benefits are needed for recruitment purposes.

—   Establish a new direct home loan program for reservists unable to obtain private financing at guaranteed loan interest rates. This provision is unnecessary. There is no evidence that reservists have been or will be denied private loans or forced to pay higher interest rates because of the possibility of being called to active duty.

Title IV - Authorization of Supplemental Appropriations for Department of Energy National Security Programs for Fiscal Year 1991.

Although the Administration supports Title IV's $623 million authorization level, the Administration objects to provisions in Section 404 requiring the relocation within 10 years of operations performed at the Rocky Flats Plant in Golden, Colorado. On February 11, 1991, the Department of Energy issued a Notice of Intent to prepare a Programmatic Environmental Impact Statement (PEIS) on reconfiguration of the nuclear weapons complex. Whether and where to relocate Rocky Flats is an issue that will be considered in that PEIS.

Secretary Watkins has announced that relocation of the nuclear activities performed at Rocky Flats is a preferred option under the PEIS. A final decision on relocation, however, cannot be made until the Record of Decision on the PEIS, which is scheduled for late 1993. Given the need to satisfy National Environmental Policy Act requirements and the complexity of the operations performed at Rocky Flats, it is unlikely that a replacement facility could be in operation within 10 years. No useful purpose would be served by setting an unrealistic deadline for such relocation.

Title V - Land Conveyance. Fort A.P. Hill Military Reservation. Virginia.

Section 501 of title V would alter the terms and conditions of a land conveyance at Fort A.P. Hill, Virginia, which was authorized only four months ago by section 2839 of P.L. 101-510. It is inappropriate to alter so quickly section 2839 without the benefit of hearings or consideration of the Administration's views. Accordingly, the Administration opposes section 501.

Scoring for the Purpose of Pay-As-You-Go and the Caps

H.R. 1175 would increase direct spending; therefore, it is subject to the pay-as-you-go requirement of the Omnibus Budget Reconciliation Act (OBRA) of 1990. No offsets to the direct spending increases are provided in the bill. A budget point of order applies in the Senate against any bill that is not fully offset under CBO scoring. If, contrary to the Administration's recommendation, the Senate waives any such point of order that applies against H.R. 1175, enactment of this legislation would add to the end of year pay-as-you-go requirement, which must be met to avoid sequester.

OMB's preliminary scoring estimates of this bill are presented in the table below. Final scoring of this legislation may deviate from these estimates. If H.R. 1175 were enacted, final OMB scoring estimates would be published five days after enactment, as required by OBRA. The cumulative effect of all enacted legislation on the pay-as-you-go requirement will be issued in monthly reports transmitted to Congress.

Estimates for Pay-As-You-Go
(outlays in millions)

In addition to the above outlays from direct spending, Section 301(b) — pension benefits for veterans and surviving spouses would result in additional long term costs, with a net present value of between $2.2 and $2.9 billion. These figures represent OMB's preliminary net present value estimate of this provision.

Title II of H.R. 1175 would also authorize increases in discretionary spending for military personnel benefits totaling $227 million in FY 1991 and $28 million in each of FYs 1992 through 1995. Total authorizations for discretionary spending for the period 1991-1995 would total $339 million.