Statement of Administration Policy: H.R. 3543 - Dire Emergency Supplemental Appropriations and Transfers for Relief from the Effects of Natural Disasters, for Other Urgent Needs, and for Incremental Costs of "Operation Desert Shield/Desert Storm" Act of 1992

(House Rules)
(Sponsor: Whitten (D) Mississippi)

This Statement of Administration Policy expresses the Administration's views on the Dire Emergency Supplemental Appropriations Act, 1992, as reported by the House Committee on Appropriations.

The President's senior advisers would recommend that the bill be vetoed if it were to contain the language adopted by the Committee in sections 203 and 204 concerning the Federal Election Commissions Presidential Election Campaign Fund. Changing the rules only months before the election cycle is to begin is inappropriate. Any modification to existing law should be made effective with fair lead time, hence not before January, 1993.

The President's senior advisers would also recommend a veto of the bill based on excessive funding and inappropriate use of the emergency designation for all of the funding contained in the Act.

The Administration believes that the amount of funding provided in the bill for agricultural disasters is excessive and that the designation of this amount as an "emergency requirement" is inappropriate.

Although national yields for many crops are at or above average levels, there have been adverse weather conditions in certain areas. For this reason, the Administration offered to support a bipartisan proposal in September which would have provided immediate assistance to farmers who had suffered substantial losses, and which was offset under the terms of the Budget Enforcement Act. Unfortunately, the House took no action on this proposal, and now that fiscal year 199l has concluded, the offsets contained in that proposal are no longer available.

Moreover, several existing Federal programs, such as crop insurance, the FmHA disaster loan program, and various programs of the SCS and the ASCS are designed and available to farmers to deal with these localized agricultural disasters. The Administration has taken steps throughout 1991 to expand eligibility for these programs.

The Committee bill goes far beyond what is necessary to address severely affected areas. It attempts to address, retroactively, certain 1990 problems for which verifiable crop loss information is no longer available. For major 1991 crops, all forecasts now predict a normal or above normal fall harvest. Indeed, corn and soybean yields are forecast to be above the historical average for these crops and cotton production will be the largest since 1937. Nonetheless, the Committee bill seeks to provide broadly distributed supplementary 1992 funds for both 1990 and 1991 crops. It is clear that the Committee's action will signal to farmers that "disaster" assistance is a regular and predictable supplement to existing farm subsidies. This further reduces the incentive for prudent farmers to purchase crop insurance.

The Committee bill would provide $693 million for the Federal Emergency Management Agency (FEMA). This is the amount originally requested by the Administration in its FY 1991 supplemental request. However, the President's budget requests for FEMA for FYs 1989, 1990, and 1991 anticipated the need for $542 million of the $693 million that would be provided by the bill. Unfortunately, the Congress did not fully fund the President's requests. Because the need for this funding was known in advance, this amount should not be designated as an emergency. Indeed, it should be considered domestic discretionary spending subject to the spending limits of the BEA. The President has appropriately designated the remaining amount of supplemental funds ($151 million) as an "emergency requirement" under the BEA, and provided the necessary offsets for the remaining $542 million.

Moreover, neither this bill nor the VA/HUD appropriations bill for FY 1992 includes the requested $90 million budget amendment for FY 1992. Nor does this bill include proposed appropriations language that would reduce FY 1992 funding requirements.

In response to the Committee's request in P.L. 102-55, OMB published on June 27th a Report on the Cost of Domestic and International Emergencies and on the Threats Posed by the Kuwaiti Oil Fires. This Report specified that the President's definition of an "emergency requirement" for purposes of Section 251(b)(2)(D)(i) of the BEA is that such a requirement be "a necessary expenditure that is sudden, urgent, and unforeseen...."

Under the Budget Enforcement Act (BEA), both the President and Congress must designate appropriations as "emergency requirements" in order to exempt them from the BEA spending limits. If the President were to determine that a portion of the funding in this bill should not be designated as an emergency, then this non-emergency funding would be added to the regular discretionary appropriations for FY 1992. Despite the 6 percent increase in domestic discretionary funding between FY 1991 and FY 1992 provided for in the BEA, Congress failed to set aside resources for these programs. Preliminary scoring indicates that all of the budget authority and outlays available under the caps, including virtually all of the special allowances, have been used in the regular appropriations process.

It is the Administration's view that those portions of the bill that are inappropriately designated as emergencies should be fully offset, as was the non-emergency portion of the Administration's supplemental funding request for FEMA and the Administration-endorsed proposal for agricultural disaster assistance. The Administration strongly urges the Congress to offset the non-emergency funding in this bill. If this bill were to become law, it would result in implementation of a sequester, based on current estimates of FV 1992 action.

The Administration supports the provision of Department of Defense appropriations for FYs 1991-92 for additional costs of Operation Desert Shield/Desert Storm, and appreciates the Committee's consideration of the President's request in this area.