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

(Senate Floor)
(Sponsor: Byrd (D), West Virginia)

This Statement of Administration Policy expresses the Administration's views on the Dire Emergency Supplemental Appropriations Act, 1991, as reported by the Senate Appropriations Committee. While the Administration has several serious concerns with this bill, it commends the Senate Appropriations Committee for producing a generally responsible bill in a timely fashion.

The Administration is most concerned about the following items:

• The Administration opposes the overall level of funding in this bill because OMB's preliminary scoring indicates that, using the President's determination of what constitutes an emergency, the domestic discretionary proposals would result in a sequester of an estimated $17 million (not including $100 million for the HHS Vaccine Compensation Program discussed below).
  
  
• The Administration opposes the exclusion of FY 1991 funds for the HOPE, HOME, and Shelter Plus Care programs requested by the President.
  
  
• The Administration strongly opposes a prohibition on regulations concerning the use of helpers on Federal construction projects.
  
  
• The Administration objects to the Committee's designation as "emergencies" funding for certain Veterans Administration and Commerce accounts.
  
  
• The Administration strongly opposes language that would prevent the President from implementing a portion of his Enterprise for the Americas Initiative, thus delaying gains in economic reform and environmental improvement in Latin America.
  
  
• The Administration strongly opposes language that requires the Department of Defense to proceed with certain procurement activities.
  
  
• According to a preliminary legal opinion, the Committee's addition of $100 million for the HHS Vaccine Compensation Program will be scored against the domestic discretionary cap and thus would require an even larger sequester. The Administration will work with CBO and the Budget Committees to resolve this issue before the bill goes to Conference.
  
  
• The Administration supports enactment of up to $500 million for certain military personnel and veterans benefits based on S- 578, the Senate-passed authorization bill. The Administration opposes funding any additional programs from the Defense Cooperation Account.

These and a number of other objections and comments are discussed below.

DOMESTIC DISCRETIONARY PROGRAMS

Prohibition of Helper Rules on Federal Construction Projects

The Administration would support Senator Nickles' amendment to strike the general provision prohibiting the use of helpers on Federal construction projects. The Administration strongly opposes the general provision that prohibits the increased use of helpers on Federal construction projects and bars implementation of revised apprenticeship regulations. The issue of expanding the allowable duties of helpers has been fully examined in the regulatory review process, in which over 2,000 public comments were considered, and in the courts. If this prohibition were continued in FY 1992, the amount of Federal construction that could be completed with available funds would be reduced by about $623 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 even bar changes in apprenticeship programs that all interested parties agree are warranted. These prohibitions would seem to be extraneous, and should be deleted.

The FY.1992 budget assumes savings from the application of the DOL regulation governing the use of helpers. The prohibition of this regulation would reduce the estimated program level for construction programs across the government. Examples include construction programs funded by: the Department of Housing and Urban Development ($44 million); the Energy Department's research and development programs, atomic energy activities, and regional power administrations ($42 million); Army Corps of Engineers civil projects ($25 million); Environmental Protection Agency ($28 million); Department of Defense family housing, military construction, and operations and maintenance accounts ($111 million); Department of Interior ($5 million); NASA ($5 million); Department of Veterans Affairs medical care facilities ($12 million); Department of Agriculture waste and disposal programs ($3.4 million); and Department of Transportation programs such as mass transit, Federal-aid-to-highways, formula grants and airport grants ($290 million).

HOPE, HOME, and Shelter Plus Care

The Administration strongly objects to the Committee decision not to fund the HOPE, HOME, and Shelter Plus Care programs. These programs, newly authorized in the Cranston- Gonzalez National Affordable Housing Act (which was enacted with bipartisan support), represent innovative approaches — in conjunction with State, local and non-profit sectors — to address the affordable housing needs of low-income residents and the deep and persistent problems of the homeless. The Department of Housing and Urban Development has moved expeditiously to develop regulations implementing these programs in FY 1991. Lack of funding would unnecessarily delay progress on these important initiatives. The Administration would strongly support an amendment that may be offered by Senator D'Amato that fully funds these initiatives (with appropriate and necessary offsets).

National Board for Professional Teaching Standards

The supplemental would eliminate the requirement that there must be authorizing legislation before a grant of $4.9 million is made to the National Board for Professional Teaching Standards. If this is done, there would be no opportunity for Congress and the Administration to consider the form which authorizing legislation should take. In addition, this grant would be noncompetitive; the Government could not select from among the most qualified bidders.

Emergency Designation

The Administration commends the Senate Appropriations Committee for providing funding for domestic emergency requirements resulting from the conflict in the Persian Gulf, such as funding for the FBI and the Secret Service. However, the Administration objects to the Committee's designation as "emergencies" of $25 million for VA Medical Care and $942 thousand for Commerce. The funding for these programs must be scored against the FY 1991 discretionary caps.

While the Administration prefers the $25 million provided by the Committee to the $46 million provided by the House for VA Medical Care, the Administration cannot justify the additional funding or the designation of this proposal as an emergency. Fortunately, the Persian Gulf conflict resulted in far fewer casualties than many had anticipated. The estimates of additional requirements for contract and other services are overstated. The Persian Gulf conflict has not created, and will not create, an unmanageable burden for the VA Medical Care system.

The Commerce proposals are not directly related to Operation Desert Shield/Desert Storm and are not emergencies. In several cases, the Commerce proposals relate to programs not yet initiated or for which costs have not yet been incurred.

Export Enhancement Program

The Administration appreciates the inclusion of the provision requested by the President that would eliminate the limitation on the amount of the Department of Agriculture's Export Enhancement Program (EEP) bonuses that can be awarded in FY 1991. The Administration scores the EEP proposal as being budget neutral because it is managed under administrative guidelines that specifically require budget-neutrality as a condition of project approval. Whether or not this program is scored as an emergency is, from the Administration's perspective, a moot point. The Administration could deem it to be an emergency for scoring purposes without meaningful effect, because under Administration scoring such designation for this particular program would have no impact on discretionary spending. (This is not the case for any program which the Administration would administer and score as costing money.)

Dairy Amendment

The Administration would oppose an amendment to be offered by Senator Leahy to alter dairy price support provisions of the farm bill for several reasons:

• The Administration opposes re-opening of the 1990 farm bill;
  
  
• According to USDA, the amendment would cause any increase of $1.36 billion in prices to consumers for fluid milk. This increase falls disproportionately on the poor. Further, the department estimated that, under this amendment, 1.4 billion fewer glasses of milk will be consumed. This represents 37 glasses of milk per year for each school-aged child;
  
  
• The amendment will increase CCC dairy program budget outlays by $67 million in FY 1991 and only reduce outlays by $31 million in FY 1992, for, a 2-year CCC budget cost of $36 million. Beyond that, the amendment would cause the cost of food assistance programs (Food Stamps, WIC, and others) to rise by an estimated $110 million in FY 1992.

The contemplated changes to the dairy program are not subject to the administrative guidelines of EEP that specifically require budget neutrality. Thus, an amendment that raises milk prices would result in increased CCC purchases of milk byproducts and/or in higher costs of nutrition assistance. The budgetary difference between its emergency and non-emergency treatment would not be moot, as in the case of EEP. Indeed, if it were adopted without offsets, it would trigger a sequester.

Unemployment Insurance

The Administration is able to support the level of funding provided by the Committee for Unemployment Insurance administrative contingencies, but no higher amount. The $150 million provided is 100 percent of the incremental administrative costs resulting from changes in the Administration's official forecast adjusted for the fact that the current fiscal year is already almost half over. On this basis, the Administration approves of $150 million as the appropriate emergency amount.

District of Columbia

The Administration has argued that it is premature to provide a $100 million increase in the Federal payment. Recognizing the Committee's interest in providing this $100 million request, we commend the Committee for approving language to insure that local spending reductions and/or revenue increases totaling $216 million are achieved before the Federal funds are provided to the city. This is important because the City Council has not yet approved the Mayor's revised 1991 budget, or implemented comparable savings. However, the bill, as currently drafted, raises constitutional concerns that a governmental action (release of funds) would be authorized based on a determination of an official (the Mayor) not appointed in conformity with the Appointments Clause of the Constitution. The Administration urges the adoption of an amendment to correct this problem.

Public Housing Operating Subsidies

The Administration objects to the unrequested $75 million provided for public housing operating subsidies included in the bill. 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. Such unnecessary funding would have to be charged against the domestic discretionary cap.

Urban Development Action Grants/Community Development Grants

The Senate Appropriations Committee included a provision that would make available until expended all previously obligated funds for Urban Development Action Grants and Community Development Grants. The Administration opposes this open-ended exemption because it is contrary to the intent of Public Law 101- 510 to close out expired accounts, and it would set an undesirable precedent.

Lawrence Welk Historic Site

The Administration commends the Committee for deleting the earmark that provides funds for the restoration of the birthplace of Lawrence Welk in North Dakota.

Treasury/Postal Technical Change

During consideration of the FY 1991 Treasury/Postal bill, the Administration objected to a number of provisions that purported to restrict the use of funds unless approval is granted by Congressional Committees. Such provisions are unconstitutional (see INS v. Chadha. 462 U.S. 919 (1983)). The Administration continues to object to the provision in Title IV that purports to restrict the use of funds for GSA unless approval is granted by Congressional committees. In any event, the Executive Branch will continue to provide the Committee notification and consultation that inter-branch comity requires in matters in which Congress has indicated such a special interest.

SBA Disaster Loan Program

The Administration opposes expanding the scope of the Small Business Administration's disaster loan program to include agricultural greenhouses and nurseries that suffered damage as the result of adverse weather conditions in the State of Washington in November 1990. All Federal loans to agricultural enterprises should be made by the U.S. Department of Agriculture through its emergency disaster loan program. Although the USDA program was established to assist family farmers, loans can be made to other agricultural entities—such as greenhouses and nurseries—if conditions warrant such assistance.

EPA Stormwater Regulations

The Administration commends the Committee for including the general provision on EPA stormwater discharges.

White House Conference on Indian Education

The Administration strongly objects to the general provisions language added by the Senate Appropriations Committee regarding the Advisory Committee for the proposed White House Conference on Indian Education. The proposed language requires that the Conference, now scheduled for FY 1991, be held not sooner than nine months after the initial meeting of the Advisory Committee, which has yet to be formed. The language would therefore cause unnecessary delay in holding the Conference and addressing the important question of how to improve Indian education programs and best organize these programs at the Federal level.

INTERNATIONAL DISCRETIONARY PROGRAMS

Emergency Aid to Israel and Turkey

The Administration appreciates the Committee's concurrence in providing $650 million in emergency assistance as reimbursement for the incremental Israeli defense costs of the Gulf War and $200 million for direct Turkish incremental defense operating costs. The Israeli funding reflects the agreement reached between the Administration and the Government of Israel with regard to the Israeli supplemental request. The United States is, of course, deeply appreciative of the role and conduct of Turkey in the Gulf War and supports emergency funding of $200 million for incremental defense costs. The Administration does not support funding for Israel and Turkey in excess of these amounts.

Enterprise for the Americas Initiative

The Administration strongly opposes the language in the Senate Committee version of the bill that would prevent the President from using the debt reduction authority of the Enterprise for the Americas Initiative provided in Section 604 of Title VI of the Agricultural Trade Development and Assistance Act of 1954. The Administration wishes to work with Congress on mutually agreeable appropriations language for FY 1991 and has proposed language to the appropriations committees. The Senate Committee version would seriously delay gains in economic reform and environmental improvement that are now possible in Latin America.

U.S. Information Agency

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.

DEFENSE DISCRETIONARY PROGRAMS

Defense Procurement Requirements

The Administration strongly opposes the Department of Defense general provisions contained in Title II, chapter 2, of the bill. These provisions are extraneous, will force spending for unrequested and unnecessary purposes, and should not be included in dire emergency legislation.

Military Construction Moratorium

The provision that disapproves deferrals of military construction and family housing should be deleted since it unnecessarily restricts the authorities of the Secretary of Defense.

MANDATORY

The Senate has approved $2.5 billion in additional funding for mandatory programs such as Food Stamps, Veterans compensation, pensions, burial and readjustment benefits, and Coast Guard retirement pay. Although the Administration would prefer "such sums" language for the Food Stamp program, we have no fundamental objection to the provision of this mandatory funding authority. We currently estimate that up to $350 million in new spending authority is required for Food Stamp benefits.

Vaccine Compensation Program

The Committee added $100 million for the HHS Vaccine Compensation Program. According to a preliminary legal opinion, this funding would be scored against the domestic discretionary cap and would trigger a sequester of domestic discretionary programs even though the program is classified as a "mandatory" program. The Administration will work with CBO and the Budget Committees to resolve this issue before the bill goes to Conference.