Statement of Administration Policy: H.R. 1281 - Dire Emergency Supplemental Appropriations for Consequences of Operation Desert Storm/Desert Shield, Food Stamps, Unemployment Compensation Administration, Veterans Compensation and Pensions, and Other Urgent Needs Act of 1991

(House Floor)
(Sponsor: Whitten (D), Mississippi)

This Statement of Administration Policy expresses the Administration's views on the Dire Emergency Supplemental Appropriations Act, 1991, as reported by the House Appropriations Committee. The Administration is appreciative of the Committee's prompt action in response to the President's request for emergency funding resulting from the Persian Gulf conflict. While the Committee has shown reasonable restraint in most areas, the Administration has a number of concerns with the bill as reported.

Emergency Funding

The Administration requested emergency FY 1991 supplemental funding totaling nearly $90 million for civilian agencies. The House Appropriations Committee has provided over $150 million in funding for programs that they have designated as emergencies. OMB's preliminary scoring indicates that, using the President's determination of what constitutes an emergency, the domestic discretionary proposals contained in the Dire Emergency bill as reported by the Committee would exceed the FY 1991 domestic discretionary budget authority spending limit established by the Omnibus Budget Reconciliation Act of 1990 and would, therefore, result in a sequester of $53 million.

NOTE: All scoring estimates contained in this Statement of Administration Policy are preliminary and unofficial. ¹

While the Administration commends the Committee for providing funding for emergency requirements resulting from the conflict in the Persian Gulf, such as funding for the FBI and the Secret Service, the Administration objects to a number of items that have been designated as emergencies by the Committee. The Administration objects to the Committee's addition of $8.3 million for Commerce and USIA. These proposals are not directly related to Operation Desert Shield/Desert Storm and are not emergencies. They should be scored as domestic discretionary expenses that are subject to the FY 1991 statutory caps. In several eases, the costs relate to programs not yet initiated or for which costs have not yet been incurred. Moreover, rather than resorting to funding increases, these costs either could be reimbursed by other agencies or accommodated within existing budgets.

The Administration has reviewed the VA General Operating Expenses provision that has been designated by the Committee as an emergency and concurs with the Committee's designation of this provision as an emergency because of the need to provide information and process the claims of returning reserve and active duty military personnel. However, both the Department of Veterans Affairs and OMB have examined the Committee's proposal to provide $46 million for VA Medical Care and cannot justify designating this proposal as an emergency. Fortunately, the Persian Gulf conflict will not create an unmanageable burden for the VA Medical Care system.

Non-Emergency Discretionary Funding

Domestic

The Committee bill would increase domestic discretionary spending by $263 million in budget authority and $405 million in outlays above the President's request. The Administration opposes a number of these items, including the $100 million increase above the President's request for the Department of Labor. This added funding for the Unemployment Insurance contingency fund is more than can be justified by higher-than- anticipated unemployment. Although current economic conditions may warrant some increase above the President's request, it should be at a level justified by the forecasted workload.

The Administration believes that it is premature to provide a $100 million increase in the Federal payment to the District of Columbia. The District has not yet fully implemented the Mayor's plan to reduce agency spending and increase user charges to close $216 million of the estimated $316 million FY 1991 deficit gap. In addition, the District has not formulated a long-range plan to restructure local revenues and spending to solve its fiscal crisis. Without such plans to resolve the city's fiscal problems, even larger payments may be requested beyond FY 1991. The Federal Government, which is facing its own severe deficit, cannot be expected to solve the District's deficit gap before the District has made every reasonable effort to resolve its own fiscal problems.

The Administration appreciates the Committee's endorsement of the proposed targeted approach for combating infant mortality. In financing this new approach, the Administration would prefer reprogramming existing FY 1991 funds, but would not object to the Committee's approach if it could be kept within the domestic discretionary caps.

The Commerce/Justice/State Subcommittee provided an estimated $64 million above the President's FY 1992 request for transfers from the Assets Forfeiture Fund. The Administration will score the $64 million against the FY 1992 Commerce/Justice/ State appropriations bill. The Administration believes that there are higher priority programs within the jurisdiction of this Subcommittee than those targeted by this provision.

The Administration objects to the unrequested $75 million provided for public housing operating subsidies. With this additional $75 million, total funding for operating subsidies would be increased by almost 17 percent over the FY 1990 funding level. The additional funds are unnecessary given the current projected surplus of $17 million over estimated subsidy needs.

Finally, the Administration objects to the decision not to fund the HOPE, HOME, and Shelter Plus Care programs. These programs, newly authorized in the Cranston-Gonzalez National Affordable Housing Act, represent innovative approaches — in conjunction with State, local and non-profit sectors — to address affordable housing needs for low-income residents and deep and persistent problems of the homeless. The Department has moved expeditiously to develop regulations implementing these programs in FY 1991. Lack of funding would unnecessarily delay progress on these critical initiatives. The Administration supports the Kolbe amendment to fund these initiatives.

Defense/International

Defense (function 050) spending provided by the Committee bill is $388 million above the President's request and is below the defense cap by $33 million in budget authority.

The Administration opposes the $528 million of additional defense funding in Title II, chapter 2, of the bill. These provisions are extraneous, have not been requested, and should not be included in dire emergency legislation.

The Administration opposes the proposed transfer of $1.4 million from the Radio Construction account of the U.S. Information Agency to the Salaries and Expenses account of that agency because the funding is not needed for emergency purposes.

The Committee has provided $140.5 million less than requested for activities at the Department of Energy's Rocky Flats plant. Without restoration of these funds in FY 1991, the Department will not be able to meet nuclear weapons stockpile requirements in FY 1992. The Committee's report states that the need for the additional funds will be reexamined during deliberations on the FY 1992 budget. Since the President's budget request for the Defense (050) function is at the statutory cap in FY 1992, it will not be possible for the Committee to provide these funds without reducing some other component of the President's request. The Administration would support an amendment or amendments that would restore the $140.5 million requested, offset by reductions in unrequested DoD depot maintenance funds.

Language Provisions

The Administration strongly opposes the general provision (section 304) prohibiting the increased use of helpers on Federal construction projects and barring implementation of revised apprenticeship regulations. Helpers are semi-skilled workers who directly assist journey-level workers to perform lower-skilled tasks of a trade. The issue of expanding the allowable duties of helpers has been fully examined in the regulatory review process, in which over 2,0DO public comments were considered, and in the courts, in which the Department of Labor's position was affirmed. If this prohibition were continued in FY 1992, it would increase Federal budget estimates by about $550 million. The apprenticeship regulations cited in the general provision are proposed regulations only. By their nature, proposed regulations anticipate continued review of public comment and discussion with interested parties by the Department of Labor. That process is underway and will continue. This prohibition is so broad that it would bar any changes in apprenticeship programs that all interested parties may agree are warranted. It should be deleted.

The Committee has added a provision that would make available until expended all previously obligated funds for Urban Development Action Grants. The Administration opposes this provision as it would be an open-ended exemption.

The Administration strongly opposes the Department of Defense general provisions contained in Title II, chapter 2, of the bill.

Mandatory

The Committee has approved $1.8 billion in additional funding for mandatory programs such as Food Stamps, Veterans pensions and coast Guard retirement pay.

Other Issues

The Administration appreciates the Committee's concurrence in providing $650 million.in assistance as reimbursement for the incremental Israeli defense costs of the Gulf War. This proposal reflects the agreement reached between the Administration and the Government of Israel with regard to the Israeli supplemental request. The Administration does not support funding in excess of the Committee-approved level.

¹ Section 251(a)(7) of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, requires OMB to transmit to Congress, within five days after the enactment of any discretionary appropriation, an OMB estimate of the amount of discretionary new budget authority and outlays resulting from that legislation. These estimates are to be used in determining the need for and amount of any categorical sequester. However, OMB is not bound to use the preliminary estimates contained in this Statement of Administration Policy. These preliminary estimates may be revised once OMB has sufficient time to review the legislation.