Statement of Administration Policy: H.R. 2493 - Department of Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, FY 1994

(Senate Floor)
(Sponsors: Byrd (D), West Virginia; Bumpers (D), Arkansas)

This Statement of Administration Policy expresses the Administration's views on H.R. 2493, the Department of Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, FY 1994, as reported by the Senate Appropriations Committee. The Administration supports Senate passage of H.R. 2493 and will work with Congress to address the concerns described below and in the attachment.

President's Investment Program

The Administration is pleased that the Committee has agreed with the House and has fully funded the food safety and Food and Drug Administration proposals. The Committee bill also would fund the President's other investment proposals above the levels provided by the House. The Administration commends the Committee for its support of the Special Supplemental Food Program for Women, Infants, and Children (WIC) and for adopting the President's goal to fund the WIC program fully by the end of FY 1996. We urge the Senate to approve the Administration's FY 1994 proposal.

Wetlands Reserve Program

The Administration urges the Senate not to alter current law by again restricting sign-ups for the Wetlands Reserve Program (WRP). The 1990 farm bill establishes a target of one million acres to be enrolled in the WRP by the end of FY 1995. The Administration has proposed to fund 450,000 acres in FY 1994 toward this target, but the Committee bill would allow only 25,000 acres to be enrolled. This restriction is particularly troublesome Since FY 1993 sign-ups were blocked by the FY 1993 appropriations act.

The WRP is a crucial part of the Administration's wetlands restoration and preservation plans, and the Administration believes that full funding for this mandatory program should be restored. At a minimum, appropriations action should be consistent with both the House and Senate versions of the 1993 reconciliation bill, which prescribe that a minimum of 330,000 wetlands acres be enrolled by the end of calendar year 1995. The Administration is aware of the Committee's concern with WRP's high per-acre costs, and will work with the Committee to contain per-acre costs.

Research Grants

The Committee has chosen to fund earmarked special research grants at the expense of Agriculture's National Research Initiative, a competitively awarded grant program. These earmarked special grants would address primarily local and parochial research issues, rather than problems of national significance facing the nation's food, agricultural, and environmental sectors. The Administration believes that the most appropriate way to allocate scarce research funds is through a competitive process based on merit in which any research institution can apply.

FTE Floors

The President has established a goal of reducing Federal employment (FTE) cumulatively from the FY 1993 enacted levels by 2.5 percent in FY 1994 and four percent in FY 1995 (a total of 100,000 FTE). Reducing Federal employment, combined with other initiatives to reinvent and streamline the Federal government, should not be constrained by restrictions such as section 712 of the Committee bill. This section would impose employment floors for the Food and Drug Administration, the Farmers Home Administration, the Agricultural Stabilization and Conservation Service, the Rural Electrification Administration, and the Soil Conservation Service. The Administration urges the Senate to delete this provision.

FDA User Fees

The Committee bill includes a provision that would permit the Food and Drug Administration to collect and use $175 million in user fees requested in the President's budget, as well as $54 million in prescription drug user fees authorized by the Prescription Drug User Fee Act. The Administration strongly supports this action by the Committee and urges the Senate to approve it.

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

Attachment

Attachment
(Senate Floor)

ADDITIONAL CONCERNS

H.R. 2493 — AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS BILL. FY 1994

(AS REPORTED BY THE SENATE APPROPRIATIONS COMMITTEE)

The Administration looks forward to working with the Senate to address the following concerns:

FUNDING ISSUES

• Rural Development Administration (RDA). The Administration is pleased that the Committee has funded the RDA. The Administration is also pleased that the Committee has deleted section 722 of the House bill, which would prohibit funding the operation of the seven regional offices of the RDA after April 1, 1994. The Secretary is currently reviewing the structure of the RDA, and it would be premature to limit his options for restructuring.
  
  
• Rural Electrification Administration (REA). The Administration commends the Committee for reducing REA subsidies and hardship telephone loans., relative to the House-passed level. However, the Committee bill would continue to provide excessive levels of hardship telephone loans made at five-percent interest to telephone borrowers, even though there are far fewer telephone borrowers deserving of this deep subsidy. The Administration believes that the level of telephone loans made at hardship interest rates should be reduced to $50 million, and the current pro-rata allocation of hardship loans between electric and telephone borrowers should be retained.
  
  
• Federal Crop Insurance Corporation. The Committee bill includes a provision that would help eliminate the issuance of poor crop insurance policies. The Administration commends the Committee for its attention to the need to reform the Crop Insurance Program. As a result of the Midwest floods, the President has instructed the Secretary of Agriculture to develop a comprehensive proposal for the reform of the Crop Insurance Program. The Administration is in the process of developing this proposal and looks forward to working with all of the congressional committees with jurisdiction in the crop insurance area to develop a meaningful reform of this program. The Administration urges the Senate to approve this needed reform.
  
  
• Farm Service Agency. The Committee has not funded the Administration's proposal to create a Farm Service Agency, which would combine the Agricultural Stabilization and Conservation Service, the Farmers Home Administration, and the Soil Conservation Service. This proposal is a key element of the Administration's initiative to streamline government while improving service to clients.
  
  
• Salaries and Expense funding from mandatory accounts. The President's budget proposes to eliminate the transfers of funds for administrative equipment and computers from the mandatory Commodity Credit Corporation account, and, instead, to fund these purchases through appropriations. Because discretionary savings would be scored for eliminating the mandatory funding, no net outlays would be scored to the bill if this proposal were enacted. Continued mandatory funding does not foster the necessary careful consideration of equipment purchases, nor does it adequately reflect the true discretionary nature of these costs.
  
  
• Foreign Agricultural Service (FAS). The Administration has proposed a $10 million reduction in the Cooperator program of FAS, which the Committee bill does not include. FAS can achieve its export promotion objectives within the budget's proposed levels. FAS can increase the cost-share amount it currently requires, target funding to areas where the greatest export opportunities exist (rather than continue funding in the same established locations), and reduce the funds used to pay rent and administrative expenses of the participating private sector cooperators.
  
  
• Rental Payments to GSA. The Committee bill earmarks $65.5 million for non-rental purposes ($50.5 million to the Department of Agriculture and $15.0 million to the Food and Drug Administration) out of the amounts appropriated for the payment of rent to GSA. Reservation of these funds for other uses would result in insufficient funds being available for making rental payments to GSA. Therefore, OMB has scored the Committee bill for these additional costs.
  
  
• Special Supplemental Food Program for Women. Infants, and Children (WIC): Interest on rebate funds. A provision included in the Committee bill would exempt rebate funds received by States as part of a WIC cost containment initiative from the interest provisions of the Cash Management Improvement Act of 1990. This provision would allow States to deposit in the State general fund any interest earned on WIC formula rebates. The Administration believes that the provision is flawed because it does not require that the interest be credited as income to the State WIC program and used to expand WIC participation. The Senate is urged to modify this provision.
  
  
• Market Promotion Program. The Committee has reduced funding for the Market Promotion Program to $75 million, approximately one-half of the level proposed in the budget. This reduced funding would impair the achievement of the Administration's objectives for export promotion and growth. The Administration urges the Senate to fund the program at the requested level.

GENERAL PROVISIONS

• Collection of delinquent payments from FmHA borrowers. Section 716 of the Committee bill would prohibit the use of private debt collection agencies to collect delinquent payments from Farmers Home Administration (FmHA) borrowers. At the end of FY 1992, FmHA had nearly $50 billion in outstanding loans. Almost $14 billion of these loans represented expected losses, net of recoveries and fees.
  
  The use of debt collection agencies for seriously delinquent debt is a proven debt collection tool. Federal agencies received authority to use this tool in the Debt Collection Act of 1982. Several Federal agencies have successfully used these collection services for housing, student, and business loans. The Administration believes that there is no reason to exempt the rural sector of the country from a technique that is applied to problem debts in other Federal loan programs. The Administration urges the Senate to delete section 716.
  
  
• Evaluations, studies, and surveys: Food and Nutrition Service (FNS) and Human Nutrition Information Service (HNIS). Section 729 of the Committee bill would provide contract authority for the FNS and HNIS to commit the government to funding multi-year projects for which subsequent year appropriations would be needed to complete the projects and liquidate the obligations. The use of this authority would be permanent and not subject to limitation.
  
  The Administration opposes open-ended funding of these projects, which should be subject to the same appropriations limitations as similar projects throughout the government. The Administration urges the Senate to delete section 729 from the bill.