Statement of Administration Policy: H.R. 2519 - VA/HUD and Independent Agencies Appropriations Bill, FY 1992

(House Floor)
(Whitten (D), Mississippi; Traxler (D), Michigan)

This Statement of Administration Policy expresses the Administration's views on the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Bill, as reported by the Committee. The Administration objects in the strongest terms to the termination of the Space Station and the funding of excessive public housing subsidies instead of HOPE. If these objections are not addressed in the bill presented to the President, his senior advisers would recommend that the bill be vetoed.

Space Station

The Administration strongly urges the House to adopt an amendment to be offered by Congressmen Chapman and Lowery to fund Space Station Freedom, with appropriate offsets.

The Administration strongly objects to the Committee's proposed termination of Space Station Freedom. It is particularly disturbing that such an action should be proposed immediately following the completion by NASA of a comprehensive restructuring of the program, performed at the specific request of the Subcommittee. The restructuring met all of the criteria imposed by the Subcommittee, including limits on annual budgetary growth.

Space Station Freedom is a critical element in planned future space science and technology programs; it is a major contributor to long-term U.S. economic growth; and it is an important element in international cooperation in science and technology. It is a visible manifestation of the nation's commitment to investment in the future.

The United States has already invested over $4 billion in the Space Station program. Our international partners have already invested over $1 billion. If a program that has been supported by a bipartisan national consensus for the last seven years were now canceled, it would call into question our ability to execute any large, complex science and technology program. Other nations would rightly question our reliability as a partner in such ventures, which would have serious implications for cooperation on important projects in a number of other fields.

The Committee's action is tantamount to an abandonment of America's manned space program. The House is urged in the strongest terms to restore funding for Space Station Freedom.

HOPE and Housing Programs

The Administration strongly urges the House to adopt an amendment to be offered by Congressmen Kolbe and Espy that would reallocate housing funds for HOPE homeownership grants for public housing tenants.

The Administration strongly opposes the Committee's severe reduction in the President's requested funding for new housing programs, authorized in the Cranston-Gonzalez National Affordable Housing Act — especially HOPE homeownership grants. Instead of supporting these new and innovative housing programs that give tenants a stake in their future, the Committee added $1.4 billion above the President's request for the costly and ineffective housing construction programs that have been tried in the past. The 76 percent reduction in the President's request for HOPE grant funding, from $865 million to $210 million, would deny thousands of low-income families the opportunity to become homeowners.

The Administration objects to the Committee's funding level of $2.4 billion for public housing operating subsidies, a $250 million increase over the President's request. The President's $2.2 billion request will more than adequately cover the operating subsidy needs in FY 1992 for two reasons. First, utility costs are now projected to be substantially less than those assumed in the FY 1992 Budget. Second, HUD estimates that a significant portion of the FY 1991 supplemental appropriation will be available for obligation in FY 1992.

Chief Financial Officers Act

The Administration strongly opposes section 519, which would bar the use of funds appropriated in the VA, HUD and Independent Agencies Appropriations Bill for the implementation of Public Law 101-576, the Chief Financial Officers Act of 1990. This law addresses long-standing Congressional and Administration concerns about financial management deficiencies in the Federal Government. These are deficiencies that must be corrected.

In passing the Chief Financial Officers Act (CFOs Act), the Congress found that "[b]illions of dollars...lost each year through fraud, waste, abuse, and mismanagement...could be significantly decreased by improved management." As a remedy, the CFOs Act (passed by voice vote without dissent): (1) strengthens management capabilities; (2) provides for improved accounting systems, financial management, and internal controls to assure reliable information and deterrence of fraud, waste, and abuse; and (3) provides for reliable financial information — useful to Congress and the Executive Branch — in financing, managing, and evaluating Federal programs. Implementation of the CFOs Act is essential to good government.

The House is respectfully urged to support Space Station Freedom and provide additional funding for HOPE homeownership grants. The Administration's other concerns with the Committee-reported bill are outlined in the attachment.

Attachment

June 6, 1991
(House Floor)

ADDITIONAL CONCERNS
H.R. 2519 — VA/HUD AND INDEPENDENT AGENCIES APPROPRIATIONS BILL, FY 1992

MAJOR PROVISIONS OPPOSED BY THE ADMINISTRATION

A. Funding Levels

Department of Housing and Urban Development (HUD)

HOPE. The House Committee provides $1.1 billion for HOPE, $1 billion less than the President's request of $2.1 billion. The largest share of the decrease is in the HOPE Homeownership Grants program, where only $210 million of the $865 million requested was provided. Moreover, the Committee mark provides no funds at all for the Secretary's highest HOPE priority — public housing tenant ownership. The 76 percent reduction in HOPE grants funding will deny thousands of low-income families the opportunity to become homeowners. This opportunity, endorsed by the Congress last year in the Cranston-Gonzalez National Affordable Housing Act, should be given a chance to become reality with adequate funding.

HOME. The House Committee provides $500 million for HOME grants, $500 million less than the President's request of $1 billion. HOME grants provide States and localities greater flexibility in meeting the housing needs of their low-income residents. Funding HOME at $1 billion in FY 1992 would serve up to 70,000 families, and most of the assistance would be available within two years. These same funds in public housing new construction would create only about one-fifth as many new units some five years after the commitment of funds.

Subsidized Housing—Public Housing Modernization. The House Committee provides $2.5 billion for public housing modernization, $233 million more than the President's request. The President's request of $2.3 billion represents a 28 percent increase over the average modernization funding level for the years 1988 through 1990. The 1991 level of $2.5 billion has increased the substantial backlog of available but unspent modernization funds to around $5 billion. Funding this program at $2.5 billion in FY 1992 will only exacerbate an already excessive backlog.

Subsidized Housing—Public and Indian Housing New Construction. The Administration objects to providing $732.3 million for Public and Indian housing development. Public housing new construction costs twice as much as rental assistance (rental certificates, housing vouchers) with less choice. The President's Budget funds Indian housing units through a set-aside of $125 million in the new HOME grant program. The HOME set-aside will provide more flexibility to Indian tribes to develop housing programs that they believe are most effective. Tenant-based housing vouchers, which utilize existing private housing, can provide housing at less cost and with more choice to tenants.

Subsidized Housing--Elderly and Handicapped New Construction. The Committee provides nearly $797 million, $542 million more than requested by the Administration. The Committee level does not assume any funding for these units through the less expensive and more flexible options of leasing of existing housing. The Administration proposed to fund approximately 3,000 units through leasing, for a total of 5,000 units.

Subsidized Housing. The earmarkings for various programs under the account, Annual Contributions for Assisted Housing, exceed the amount appropriated. The Committee covers the excess earmarking by assuming the reservation of $216 million in previously appropriated funds, which would be carried over into FY 1992. Such carryovers have never been assumed in the past and are inappropriate. To the extent that the carryovers do not occur, the Administration would be required to make appropriate reductions below the specific funding earmarks included in bill language. Accordingly, the number of additional subsidized units and the size of the subsidized programs may turn out to be lower than the Committee forecasts in the bill.

Community Development Block Grants. The House Committee provides $345 million above the President's 1992 Budget request for this program. The President's request should be more than sufficient, given the start up of the new HOME program.

Salaries and Expenses. The Committee has abandoned the traditional practice of funding all of HUD's staff costs, excluding the Inspector General, in a single large appropriation, totaling $879 million. In lieu thereof, the Committee has straight jacketed HUD with separate appropriations for seven headquarters staff offices for personnel services and travel only, and a separate large appropriation of $750 million for HUD's remaining expenses. These seven appropriations for headquarters staff offices (five of the seven are less than $15 million) will severely limit the Secretary's ability to efficiently manage staff and to quickly reallocate staff to respond to unexpected demands. For example, the recent HUD scandals demanded quick action including reallocation of staff. Under the Committee appropriation structure, the Secretary could not have responded in a timely manner to the unfolding events. The Administration asks the House to return to the traditional single appropriation for HUD staff that has worked effectively and efficiently in the past.

Office of the Inspector General. The House Committee cuts by $1 million the President's request for the HUD Inspector General. This reduction will impede audits and investigations to identify and correct management and administrative deficiencies.

Department of Veterans Affairs (VA)

Medical Care. The bill includes an unnecessary $265 million increase above the President's request for Department of Veterans Affairs (VA) medical care. Most of this increase is attributable to medical equipment, personnel costs, such as physician pay, and unrequested program enhancements, such as increased nursing staff. Any increases in personnel costs in VA medical care could be accommodated within the 7.5 percent increase over the FY 1991 level that was requested by the Administration for FY 1992.

Construction. The Administration strongly objects to the addition of $72 million for three unrequested VA construction projects: $16.8 million for design of a $187.8 million clinical addition in Ann Arbor, Michigan; $48.8 million for an ambulatory care facility in El Paso, Texas; and $6.4 million for renovations in Tuscaloosa, Alabama. Funding these low-priority projects circumvents VA's orderly construction planning process. The Ann Arbor project, the second costly replacement project in southern Michigan in two years, would be constructed within 40 miles of the $247 million replacement hospital in Detroit.

Parking Garages. The Administration objects to the addition of $10.7 million for parking garages in Nashville, Tennessee, and Miami, Florida. The Committee's rejection of the budget proposal to reallocate FY 1990 funds from a 1,500-space garage in Detroit, Michigan to partially fund the Nashville parking garage disregards VA's current planning projections, which support a 1,250-space garage in Detroit. The 1,500-space parking garage in Detroit, MI, is not supported by VA's current planning projections. Moreover, funding unrequested, low-priority projects such as the Miami parking garage further circumvents VA's orderly construction planning process.

Inspector General. The Committee provides $1.9 million less for VA's Inspector General than proposed in the President's FY 1992 budget. The Inspector General is required by statute to maintain an employment level of at least 417 FTE. In addition, the Inspector General's office has been given the responsibility of overseeing the audit of VA's financial statements as required by the recently enacted Chief Financial Officers Act. The funding decrease jeopardizes the Inspector General's ability to carry out these and other responsibilities.

Environmental Protection Agency (EPA)

Superfund. The Administration objects to the Committee's reduction of $100 million in the Superfund program and to the reallocation of an additional $36 million from critical-site cleanup work to fund low- priority activities. These actions would undermine the Administration's efforts to accelerate cleanup of the nation's worst hazardous waste sites and would unnecessarily extend the risks posed by these sites to public health and the environment.

Construction Grants/Wastewater Treatment Grants. The Administration opposes the $295 million increase for wastewater treatment grants because it exceeds the authorized level of funding. The President's request of $1.8 billion to construct facilities to treat domestic sewage is consistent with the overall level authorized by the Water Quality Act of 1987, and would target $300 million to cities with the largest remaining need. These targeted amounts are vital to the achievement of the Nation's water quality goals.

The Administration objects to the removal of $51 million from the President's request to construct a plant to treat sewage discharges from Tijuana. The Administration is committed to addressing serious pollution problems along the U.S.-Mexican border. Tijuana's sewage is causing adverse public health affects in southern California that must be addressed on a priority basis.

Operating Program. The President's request included a $191 million (8 percent) increase over FY 1991 for EPA's Operating programs (Salaries and expenses, Abatement, control and compliance, Research and development, and Buildings and facilities) to fund Clean Air Act implementation and initiatives such as Great Lakes cleanup. The additional $162 million above the request is not necessary to carry out EPA's statutory mandates and would fund activities that are primarily state and local responsibilities (e.g., implementation of the nonpoint source program, and asbestos loans and grants). Particularly objectionable are the increases that would fund numerous low-priority and special-interest projects, such as expensive unwanted laboratories, at a time when the Committee is reducing funds for Superfund cleanups. The Administration opposes the funding of special interests at the expense of the health and safety of Americans.

Dock Facilities in Bay City Michigan. The Administration strongly objects to the inclusion of $20 million for dock facilities and other items in Bay City, Michigan. This hardly seems consistent with the mission of a regulatory agency charged with protecting human health and the environment.

National Aeronautics and Space Administration (NASA)

Earth Observation System. The Administration objects to earmarking $25 million from Research and Development and $3.4 million from Construction of Facilities for the Consortium for International Earth Science Information Network for work on the Earth Observing System (EOS) data and information system (EOSDIS). The amount earmarked from Research and development is 30 percent of the total funding available for the EOS data and information system — the most critical element of the EOS program. Earmarking funding for this Consortium, based in Michigan, will have serious adverse effects on the current EOSDIS schedule and thereby delay achievement of the objectives of the broader U.S. Global Change Research Program.

Landsat. The Committee provides $5 million for Landsat long lead parts. This would initiate a new, unrequested program in NASA at a time when other on-going programs, including Space Station, have few resources. No funds are required in FY 1992 for additional satellites, consistent with the expected lifetime of Landsat 6. The Administration is committed to maintaining the continuity of Landsat-type data, and is considering options for continuing Landsat-type data after Landsat 6, including how Landsat should be funded. Traditionally, Landsat has been funded by NOAA.

National Science Foundation (NSF)

Academic Research Instrumentation Program. The Administration objects to the deletion of funding proposed for the National Science Foundation's new Academic Research Instrumentation program. The Administration requested $50 million for high cost scientific instruments. There is an enormous need for this high cost equipment in order to make continued progress in research in fields such as surface chemistry, materials synthesis and processing, and molecular biology. Breakthroughs in basic research in all of these fields have the potential to make long- lasting contributions to U.S. economic growth. The need of researchers for access to state-of-the art instrumentation far outstrips the additional funding provided by the Committee for facilities renovation funds or for graduate traineeships.

Research Facilities Modernization. The Administration objects to the $20 million provided by the Committee for a program to modernize academic research facilities. The Federal government is providing over $1 billion per year to universities for facilities through use charges and operations and maintenance expenses included in indirect cost recovery payments. This is the proper way to fund academic research facilities. The Administration understands that universities have not always invested these payments for renovation and modernization of buildings and equipment, and has proposed changes in the rules governing indirect costs to address this situation.

Traineeships. The Administration opposes $25 million included for a new program of graduate traineeships. The traineeship programs apparently are justified by concerns over possible "shortages"; however, serious questions have recently been raised about the validity of these alleged "shortages". The House is urged to delete funding for this low-priority program.

Salaries and Expenses. The Administration objects to the deletion of funds for NSF's relocation. NSF requested relocation from the General Services Administration (GSA) because its current location is inadequate both in terms of total space and support for NSF's activities (e.g., computer and electrical capability). GSA conducted a full and open competition and has executed a lease on a new facility for occupancy in 1993. Abrogating this lease will be extremely costly to the taxpayer.

The Points of Light Foundation. The Committee provides no funding for the Points of Light Foundation. The Foundation, a Presidential initiative, makes direct and consequential voluntary service aimed at serious social problems central to the life and work of every American. The House is urged to fund this program at the requested level of $7.5 million.

National Institute of Building Sciences. The Administration opposes funding for this Institute. Consistent with the Institute's original authorizing legislation, it should continue to be self-supporting as it was in FY 1991.

B. Language Provisions

Environmental Protection Agency

User Fees. The Administration objects to the Committee's deletion of language included in the President's Budget that would allow user fees deposited in the Environmental Services Fund to be used to finance the programs for which the fees are collected. This language is consistent with — and needed to fully implement — the EPA fee provisions in the Omnibus Budget Reconciliation Act of 1990. Further, it would provide an incentive for quick establishment of the fees and ensure that they are used to support the programs for which the fees are charged.

Personnel Earmarking. The Administration opposes inclusion of specific staff levels for various EPA headquarters offices. Congressional micromanagement of this nature eliminates the necessary flexibility to allocate staff resources to the most pressing needs. The House should delete this provision.

Leaking Underground Storage Tank Trust Fund (LUST). The Administration objects to report language earmarking $1 million for a demonstration project ln Iowa. The existing allocation system for LUST resources has worked well and the House should avoid the temptation to make this a pork barrel program.

Environmental Education Awards. The Administration requests the deletion of report language which would transfer from the Council on Environmental Quality (CEQ) to EPA the responsibility for the President's Awards for Excellence in Environmental Education. This transfer contradicts the National Environmental Education Act of 1990, which specifically designates CEQ as the administrator of the program.

Department of Housing and Urban Development

Administrative Provisions. The Administration objects to a number of provisions that forgive repayments and a loan to HUD. These provisions allow the cities of Malden and Newburyport, Massachusetts, Jefferson City, Missouri, Vallejo, California, and New London, Connecticut to retain land disposition proceeds, and allows Calhoun Falls, South Carolina to not repay its public facilities loan. These provisions set an undesirable precedent as other communities could seek similar exceptions to HUD program requirements.

Senior Executive Service Limits. Currently, HUD is authorized 28 noncareer positions in the Senior Executive Service. If the Department is limited to 15 noncareer positions in the Senior Executive Service, the Secretary's ability to respond to serious issues relating to HUD's mission will be severely impeded and will seriously impact HUD's management. This micromanagement of an Executive branch agency is inefficient, ineffective and inappropriate.

Department of Veterans Affairs

Medical Care. Language earmarking $8.75 billion for personnel services within VA Medical Care infringes upon VA's executive management of the veterans' health care system and precludes the Department from utilizing medical funds in the most effective and efficient manner. This provision should be deleted.

Federal Emergency Management Agency (FEMA): National Insurance Development Fund. The bill would forgive Treasury borrowing incurred by the National Insurance Development Fund (Crime Insurance). This budget adjustment would not result in any savings. The House should delete this forgiveness of debt.

Consumer Product Safety Commission (CPSC). Private industry currently receives CPSC advice, expertise and safety "certification" free-of-charge. The President's FY 1992 Budget proposes to begin to recover the costs of these services through user fees. The budget proposal follows the directive in the recent CPSC reauthorization (P.L. 101-608) that the CPSC should conduct a one-year study on the feasibility of user fees. In failing to adopt proposed user fee language, the Committee has missed an opportunity to improve the operation and equity of federal services.

C. Scoring

Scorekeeping Adjustments. Based on preliminary analysis, OMB's scoring of the bill shows that total budget authority would be $302 million above the 602(b) allocation. This results from three scorekeeping adjustments:

• $273 million of this increase is in discretionary receipts for GNMA's mortgage-backed securities program. The Committee assumes that this program makes a profit for the Government; the President's Budget assumes that the fees charged to the users of the program cover its cost;
  
  
• $14 million is for VA incremental costs of Operation Desert Shield/Desert Storm that the Committee declared an emergency. These monies would continue to fund additional staff through FY 1992 for claims processing and transition assistance that was provided in the FY 1991 emergency supplemental. The President's Budget assumes there would be an increase in the number of new veterans as a result of the planned reduction of active military strength. Therefore, additional funding is not needed and would not be designated as an emergency; and,
  
  
• $17 million for medical cost recovery that would result in an increase in spending. The Committee added a limitation that would allow VA to use collections above the level projected in the President's Budget.

The attached data tables can be downloaded in PDF format by clicking this link