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

August 03, 1995

STATEMENT OF ADMINISTRATION POLICY

(Senate Floor)
(Sponsors: Hatfield (R), Oregon; Shelby (R), Alabama)

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, as reported by the Senate 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 does not support the level of funding assumed by the House or Senate Committee 602(b) allocations. The Administration must evaluate each bill both ln terms of funding levels provided and the share of total resources available for remaining priorities. The Committee bill is $1.8 billion below the President's request.

The Administration is pleased that the Committee has made substantial improvements to the bill as passed by the House. Notably, the Administration commends the Committee for removing the objectionable abortion prohibition in the Federal Employees' Health Benefits Program; for restoring the President's Council of Economic Advisers; and for continuing support for the Exchange Stabilization Fund, without the objectionable restrictions added by the House.

Regrettably, the Senate Committee bill would eliminate the Office of National Drug Control Policy. Because of this, the President has stated that he would not sign the bill in its current form. The Secretary of the Treasury has indicated that he would recommend to the President that he veto the bill based on the issues discussed below.

Executive Office of the President/Office of National Drug Control Policy

Based on the principle of comity between co-equal branches, the Executive Branch traditionally does not comment on Legislative Branch funding requests, and the Congress traditionally pays appropriate regard to the President's requests for the agencies within the Executive Office of the President. This comity permits each branch to organize its own policy offices as it believes will best serve the country. The Administration is concerned, therefore, that the Senate Committee bill recommends termination of the Office of National Drug Control Policy (ONDCP) and makes reductions to the President's requests for certain offices of the Executive Office of the President.

The Administration regrets the Committee's action in proposing to eliminate the ONDCP. This action is unacceptable because it comes at a time when the Administration has achieved major successes in streamlining interdiction efforts and pursuing the dismantling of large drug trafficking organizations.

In addition, it would be highly undesirable to eliminate funding for ONDCP after it has established a successful track record in improving Federal programs in the areas of drug treatment and prevention. The Administration urges the Senate to support an amendment to restore funding for this office, which is so critical to our battle against drugs.

Internal Revenue Service

The Administration strongly opposes the Committee's reduction in funding for the Internal Revenue Service, which is an overall $805 million below the President's request and $203 million below the House. The cuts proposed in the Committee bill would severely damage the ability of the IRS to function, degrade service to taxpayers, encourage disrespect for law and order, and reduce the collection of revenues needed to finance the operation of the Government, thereby adding to the deficit.

The Administration strongly objects to the Senate's $430 million reduction for the Tax Law Enforcement account. Eliminating last year's compliance initiative, while cutting base funding, would create serious risks to the levels of tax compliance in this country. At the very least, this action could be expected to result in the loss of $10 to $15 billion in additional revenue over the next five years, thwarting efforts to reduce the Federal deficit. Major compliance cuts would send a signal that ensuring voluntary compliance is no longer a priority and would reward tax cheats. Each percentage point change in tax compliance is worth an estimated $7 billion to $10 billion annually in additional revenue. The Committee's approach is not consistent with the efforts of the Administration and the Congress to balance the Federal budget.

The Administration is also concerned with the Committee's reductions to the IRS Information Systems account. While funding Tax Systems Modernization at the House mark of $720 million would be a manageable level for FY 1996, the Committee mark implies a $150 million reduction for the systems needed to maintain and operate the existing tax administration structure until the modernized systems are operational. The reductions to Tax Systems Modernization to date will necessitate keeping these systems operational longer than was originally envisioned, increasing maintenance and repair costs with no corresponding improvement in burden reduction or system capability.

Federal Employees' Health Benefits Program

The Administration strongly supports the Senate Committee's deletion of Section 524 of the House-passed bill. The Administration would strongly oppose an amendment to restore this provision of the House bill. The House provision purports to prohibit OPM from incurring administrative costs 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 Administration is pleased that the Committee has recommended retaining current practice in this regard. The objectionable House provision is clearly 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, the Administration strongly opposes provisions that are designed to restrict Federal employees and their dependents from choosing a health plan that includes coverage for abortion services.

Exchange Stabilization Fund

The Administration strongly supports Senate committee action that removes a provision of the House-passed bill that would restrict the operations of the Exchange Stabilization Fund (ESF). The ESF has been a vital tool of international economic and monetary policy since 1934, and it has enjoyed bipartisan support for 60 years. The ESF has enabled financial authorities to defend the dollar to avoid excess fluctuations in currency markets, and to protect the vital economic and security interests of the United States. The ESF has been used, most often by the last three administrations — and more than fifty times in the last sixty years — when such actions were deemed to be in the economic or security interest of the United States.

The provision of the House bill would restrict the ability of the Executive Branch to coordinate interventions with other nations to resist unwarranted appreciation of the dollar, to curb destructive fluctuations in currency markets, and to provide support to the reserves of countries that are borrowing from the International Monetary Fund. Misguided efforts that arbitrarily limit the use of the ESF by this or any other administration pose a threat to the United States economy, and to our ability to maintain a stable dollar — with all of the benefits that affords us.

Employee Training

The Administration supports the Senate Committee's decision to remove the restrictions on the use of funds for employee training specified in section 628 of the House-passed bill. The Administration would strongly oppose an amendment to reinstate those restrictions.

The Administration believes that the provision could have the unintended consequence of preventing a broad range of useful training such as outplacement assistance and retraining for individuals who are being moved as part of an agency restructuring.

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

Attachment


Attachment (Senate Floor)

ADDITIONAL CONCERNS

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

(AS REPORTED BY THE SENATE APPROPRIATIONS COMMITTEE)

The Administration looks forward to working with the Congress to address the following concerns.

Council of Economic Advisers

The Administration is pleased that the Senate Committee has recommended retaining the Council of Economic Advisers (CEA). Eliminating this small group of professional economists, as the House bill would do, 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 the Office of Management and Budget (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 as 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.

Information Security Oversight Office (ISOO)

The Administration is pleased that the Committee has recognized the importance of the function performed by ISOO and has restored its funding. The Administration would appreciate working with the Congress to reconsider the Administration's proposal to place ISOO and its functions in the National Archives and Records Administration.

Advisory Commission on Intergovernmental Relations

The Committee has not provided funding for the Advisory Commission on Intergovernmental Relations (ACIR). The Administration urges the Senate 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."

Administrative Conference of the United States

The Administration urges the Senate to restore funding for the Administrative Conference of the United States (ACUS). The Conference is a non-partisan advisory agency that advises Congress and the Executive Branch on improving the fairness and efficiency of Federal programs.

Special Forfeiture Fund

The Committee has provided none of the President's $37 million request for the Special Forfeiture Fund. In the past, resources of the Fund have been used to augment drug treatment, border interdiction, and drug research initiatives. By providing no funding for the Special Forfeiture Fund, the Senate would eliminate an important tool for directing resources to critically important counter-drug initiatives and the ability to address emerging problems.

FLSA Section 640 Pay

The Administration urges the Senate 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 investigating.

Federal Labor Relations Authority/Merit Systems Protection Board

The Administration appreciates the Committee's action in restoring resources to the Federal Labor Relations Authority and the Merit Systems Protection Board. This action will prevent unacceptable backlogs from developing.

Office of Personnel Management (OPM)

The Administration endorses the Committee's action of deleting language from the House bill that would have delayed the privatization of the investigations program.

The Administration is concerned by the Committee's action to delete language from the House bill that would permit OPM's Employment Service to accept reimbursements from agencies for providing them with services such as job listings and examinations. Reductions in Employment Service funding without such reimbursable authority would leave agencies without the help they need, particularly to provide information about potential jobs.to their employees who have been adversely affected by Federal downsizing.

The Administration also objects to the Committee's reduction in the limitation on transfers from trust funds for the administration of the Federal civilian retirement and health and life insurance programs. These resources are needed to assure that retirement benefits are paid accurately and on time.

General Services Administration (GSA): Policy and Oversight

The Committee has not accepted the Administration's proposal, passed by the House, to create a separate appropriation account for GSA's policy and oversight activities. The establishment of this separate account is an important part of the Administration's effort to reduce government-wide administrative costs by strengthening GSA's policy and oversight role. Most of GSA's policy activities are currently distributed among the three Services and have traditionally received less attention and support than the operational functions of those Services. Creation of the separate appropriation for GSA's policy activities, coupled with the organizational separation of these activities from operational functions, is deemed essential to provide these activities with the resources and management attention necessary to increase their effectiveness. The Administration urges the Senate to concur with the House position on creating separate appropriation accounts for policy and operations.

GSA - Federal Buildings Fund

The Committee has reduced funding for the Building Operations account by $50 million. This account funds security activities and will need to fund enhanced security measures in FY 1996. Therefore, full funding of the requested level will be necessary to fund these efforts.

Internal Revenue Service - Private Legal Counsel

The Administration believes that the highly sensitive issue of the use of private legal counsel should not be addressed in this bill. Recognizing the sensitivity of changes to the Tax System, particularly considerations involving privacy and the Taxpayer Bill of Rights, the Administration would recommend that the use of private legal counsel activities be removed from the bill language.

U.S. Mint Personnel and Procurement Exemptions

The Committee's proposal to exempt the Mint from all government personnel regulations, ceilings, and full-time-equivalent controls is excessive and incompatible with the Administration's reinvention and workforce restructuring efforts.

Bureau of the Mint Revolving Fund

The Administration supports establishment of a Mint revolving fund. However, the 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.

William J. Clinton, Statement of Administration Policy: H.R. 2020 - Treasury Postal Service, and General Government Appropriations Bill, FY 1996 Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/329747

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