Statement of Administration Policy: H.R. 2020 - Treasury Postal Service, and General Government Appropriations Bill, FY 1996

(House Floor)
(Sponsors: Livingston (R), Louisiana; Lightfoot (R), Iowa)

This Statement of Administration Policy provides the Administration's views on H.R. 2020, the Treasury, Postal Service, and General Government Appropriations Bill, FY 1996, am reported by the House Appropriations Committee.

The Administration is committed to balancing the Federal budget by FY 2005. The President's budget proposes to reduce discretionary spending for FY 1996 by $5 billion in outlays below the FY 1995 enacted level. The Administration supports reducing spending but does not share the priorities reflected in the Committee's mark or support the level of funding assumed by the Committee's 602(b) allocations.

For the reasons discussed below, the Director of the Office of Management and Budget, other senior White House officials, and the Director of the Office of Personnel Management would recommend that the President veto the bill if it were presented to him in its current form.

Executive Office of the President

Based on the principle of comity between co-equal branches, the Executive Branch traditionally does not comment on the Legislative Branch appropriations bill, and the congress traditionally pays appropriate regard to the President's request for the agencies within the Executive Office of the President. This comity permits each branch to organize its own leadership offices as it believes will best serve the country.

The Committee bill clearly and inappropriately breaks with this longstanding practice consistently observed by both branches over many years. The Administration strongly objects and urges the House to revise the bill to return to previous practices.

The Administration objects particularly to the Committee's elimination of the Council of Economic Advisers (CEA). Eliminating this small group of professional economists would deny Presidents their dedicated source of analysis of policy issues, based on the best available economic information. Neither the National Economic Council, which coordinates economic policy-making among Executive Branch agencies, nor OMB, which is responsible for supporting the President on budget and management matters, would fill the unique role of the CEA.

Presidents have turned to the CEA for rigorous, objective, professional economic analysis and advice for almost fifty years. The CEA's mission within the Executive Office of the President is unique: it serves am a credible and tenacious voice for policies that facilitate the workings of the market and policies that emphasize the importance of incentives, efficiency, productivity, and long-term growth. Because the CEA, unlike other agencies, does not represent any particular constituent or industry interest group, it presents to the President more directly and clearly the general economic interests of the American people.

Federal Employees' Health Benefits Program

The Administration strongly opposes the provision of the Committee bill that purports to prohibit OPM from incurring administrative cost# in connection with any health plan under the Federal Employees' Health Benefits Program (FEHBP) that provides any benefits or coverage for abortions, except in cases where the life of the mother would be endangered if the fetus were carried to term. Currently, the decision to cover abortion is left up to each health plan participating in the FEHBP. Federal employees who wish to purchase health coverage that does not include abortion services have that choice.

The Committee provision appears to be designed to preclude Federal employees and their families from purchasing health insurance coverage that covers abortions. While the President believes that abortion should be safe, legal, and rare, we strongly oppose provisions that are designed to restrict Federal employees and their dependents from choosing a health plan that includes coverage for abortion services.

Advisory Commission on Intergovernmental Relations

The Committee has not provided funding for the Advisory Commission on Intergovernmental Relations (ACIR). The Administration urges the House to restore funding at the President's requested level of $1.4 million. This level of funding would allow ACIR to continue to play a vital role in conducting analyses of intergovernmental issues and fulfill its responsibilities under the "Unfunded Mandate Reform Act." It is noted that the House, in action on the FY 1996 Legislative Branch Appropriations Bill, has approved $1.1 million for the Congressional Budget Office to carry out its new unfunded mandates responsibility while the Office of Management and Budget is directed to carry out its new responsibilities and those of the ACIR within existing resources.

Information Security Oversight Office

The Administration objects to the Committee's failure to provide funding for the Information Security Oversight Office (ISOO). ISOO oversees the security classification program for Government and industry. The Administration believes that ISOO Performs important functions in the area of security classification, including directing and instructing agencies and industry in classifying, safeguarding, and declassifying national security information. Continued funding for ISOO is particularly critical given the recent issuance of Executive Order 12958, which impose specific responsibilities on ISOO. On May 2, 1995, the President transmitted a budget amendment to the Congress establishing ISOO as a separate entity within the National Archives and Records Administration. The House is urged to retain ISOO and to restore the requested $1.5 million for the Office in the budget of the National Archives and Records Administration.

Internal Revenue Service

The Administration objects to the Committee's $130 million reduction to the request for IRS Returns Processing. Such a reduction would severely impair the statutory mandate to process all returns. Reductions in processing, administration, and management would severely hamper IRS's ability to improve taxpayer service, including taxpayer phone contact. The Administration is also concerned with the committee's recommendation for the Tax Law Enforcement compliance initiative. By stretching out implementation of this program while cutting base funding, there is a serious risk that the Revenue Initiative would not be maintained and that the tracking procedure designed to measure it would be seriously compromised.

The committee's overall reduction to these programs totals $400 million and would not only eliminate the increases requested ln the FY 1996 Budget but would also cut deeply into the programs' base funding. These are productive, deficit-reducing programs that generate additional revenue without raising taxes, and they are a high priority for this Administration.

Employee Training

The Administration objects to the restrictions on the use of funds for employee training specified in section 528 of the Subcommittee bill. While the language appears to be intended to prevent inappropriate training activities, the Administration believes that the provision could have the unintended consequence of preventing a broad range of useful training. Particularly during this period of downsizing and reinvention, agencies need flexibility in training their employees for changes in the way their jobs need to be performed or for new job responsibilities in a rapidly changing work environment.

Additional Administration concerns with the bill as reported by the Committee ate contained in the attachment.

Attachment

Attachment (House Floor)

ADDITIONAL CONCERNS

H.R. 2020 — TREASURY, POSTAL SERVICE, AND GENERAL GOVERNMENT APPROPRIATIONS BILL. FY 1996

(AS REPORTED BY THE BOUSE FULL COMMITTEE)

The Administration looks forward to working with the Congress later in the process in an effort to address the following concerns.

Violent Crime Reduction Trust Fund

The Administration objects to reductions in the level of funding from the Violent Crime Reduction Trust Fund requested for Treasury law enforcement bureaus. The Committee's $14 million reduction to the President's request would leave a number of important Treasury priorities unfunded. The Administration urges full funding of the request.

The Administration would support a $14.5 million earmark for Operation Hard Line. This amount of funding, when combined with funds made available from the ONDCP Special Forfeiture Fund in FY 1995, would be sufficient to meet the immediate concerns of agent and inspector safety at the border and allow for the purchase of license plate readers and no more than two new additional X-ray machines.

Counter-drug Technology Assessment Center

The committee has provided $10 million of the $27 million needed for the Counter-drug Technology Assessment Center (CTAC). such a severe reduction in funding would lead to a significant resource shortfall for ongoing projects. Resources would be insufficient to complete ongoing counterdrug research and development projects in FY 1996 as projected. Some of the projects that are scheduled for completion in FY 1996 include: a new generation of navigation, surveillance, and command system for use by law enforcement officers to detect and track illegal drug trafficking; a prototype system capable of detecting conversations in an urban environments and a drug treatment evaluation project.

FLSA Section 640 Pay

The Administration urges the House to consider repeal of section 640 of the FY 1995 Treasury, Postal Service, and General Government appropriations bill. This section directs the comptroller General to apply a six-year statute of limitations to claims for Fair Labor Standards Act overtime filed before June 30, 1994. This limitation period is three times longer than that applicable to claims filed by all other private and public sector employees. This provision would cost the Treasury Department hundreds of millions of dollars: (current estimates approach $400 million) in windfall overtime pay for Federal criminal investigators.

Federal Labor Relations Authority/Merit Systems Protection Board

The Committee's reductions to the requests for these agencies, which adjudicate employee and employment disputes, would result in unacceptable backlogs in a growing workload of eases stemming from Executive Branch downsizing and reorganization. The Committee bill would provide inadequate resources for this continuing work, for development of a comprehensive proposal for the Committee-directed merger of these agencies, and for other Federal employment dispute adjudication functions, including those involving allegations of discrimination.

Office of Personnel Management (OPM)

The Administration is deeply concerned by proposed actions to delay the privatization of the investigations program by requiring 0PM to perform a number of studies and prohibiting a reduction-in-force until June 30, 1996. This would seriously jeopardize OEM's ability to privatize this function and would disrupt the President's plans, developed under the National Performance Review, to reinvent the 0PM and divest it of programs that can be better performed by the private sector.

In addition while endorsing the Committee's support of the Presidential Management Intern Program, the Administration objects to the Committee's earmark for the program and would prefer to permit the OPM Director to determine the resources necessary for continued program operations.

General Services Administration (GSA): Public Buildings Service

The Committee mark would provide only partial funding for the construction of certain requested projects. As a budget policy matter, the Administration recommends that funding for projects be provided in full. GSA cannot proceed with a construction project without having full funding for the project. Partial funding would only delay the projects and is not an efficient use of the appropriation.

U.S. Customs Service - Salaries and Expenses

Under the National Performance Review, the Administration is conducting a comprehensive border process re-engineering project in consort with all Federal agencies involved in maintaining the Nation's borders. The Administration supports a pilot initiative to study the effectiveness of unified port management through the designation of a single director but does not believe statutory language is necessary. Further, the Administration believes that designation of the port director by one agency — the Customs Service — is inappropriate. All agencies represented at the pilot southern and northern ports selected should be eligible to serve. The Administration recommends that the statutory language be removed and the report language amended to reflect a cooperative, interagency, unified port management pilot.

Federal Election Commission (FEC)

The Committee mark is $2.5 million, or nine percent, below the President's request. This would reduce the agency below its FY 1995 enacted level. The Administration urges the House to restore funding to the President's requested level of $29.0 million. Funding for the FEC is crucial to the smooth operation of our Federal elections system.

Bureau of the Mint Revolving Bund

The Administration supports establishment of a Mint revolving fund. However, the Committee's proposal raises the following technical concerns and suggestions for improving the proposal:

• The proposal would change the long-standing treatment of seigniorage from being a means of financing to an offsetting collection. The Administration opposes this change because it would result in an artificial reduction in the deficit that would not change the Government's borrowing requirements. There is no substantive reason for this change, and the revolving fund should be created without it.
  
  
• The proposal would be improved by the addition of a prohibition against cross-subsidization, which is necessary to ensure that both of the Mint's major product lines are self-sustaining.
  
  
• The Administration agrees that the Mint needs to be provided with short-term borrowing authority but believes that the authority should fund start-up costs. There is no need for borrowing authority for "existing liabilities and obligations" because Congress has already appropriated funds for this purpose, and the
  bill would transfer these funds to the Mint Revolving Fund.
  
  
• The proposal does not, but should include, "purchase of coinage metal" in its definition of Mint operations and programs.
  
  
• The legislation should include budget, financial reporting, and annual audit requirements — integrated with government-wide requirements — to ensure the continued efficiency and integrity of Mint operations under a revolving fund.
  
  
• The proposal should also include the activities of the Mint's West Point facility.