Statement of Administration Policy: H.R. 3666 - Departments of Veterans Affairs, Housing and Urban Development, and Independent Agencies Appropriations Bill, FY 1997

(Senate Floor)
(Sponsors: Hatfield (R), Oregon, Bond (R), Missouri)

This Statement of Administration Policy provides the Administration's views on H.R. 3666, the Veterans Affairs, Housing and Urban Development, and Independent Agencies Appropriations Bill, FY 1997, as reported by the Senate Appropriations Committee. The Administration strongly opposes reductions from the President's request contained in the Committee bill, for vital environmental housing, community development, science, and spate programs.

The Administration has previously communicated its strong objection to the overall inadequate discretionary funding levels assumed in the House and Senate-passed Budget Resolutions. The Senate Committee bill has made a number of significant improvements compared to the House-passed bill especially in providing funds for the Corporation for National and Community Service, Mission to Planet Earth, the Council on Environmental Quality, and other important programs. However, the Committee bill would still reduce discretionary budget authority by $2.8 billion from the President's request, including reductions to programs for the environment, veterans, National Service, housing, Community Development Financial Institutions, NASA and the National Science Foundation.

Corporation for National and Community Service

The Administration appreciates the level of funding in the Committee bill for the Corporation for National and Community Service, a highly successful Administration initiative. However, the Administration urges the Senate to provide funding at the requested level of $546 million, $144 million more than the Committee bill would provide. Without the additional funding, approximately 6,000 young people would not have the opportunity to serve their communities through AmeriCorps to address vital local needs such as health care, crime prevention, and education, while earning a monetary award to help pay for college or other post-secondary education or training. In addition, almost 135,000 school-age youth would lose the opportunity to serve their communities through the Learn and Serve program.

Environmental Protection Agency (EPA)

The Administration appreciates the Committee's efforts to keep the bill free of the contentious legislative riders that were included in last year's bill. However, the Administration strongly objects to the Committee's overall $428 million, or 6.1-percent, reduction to the President's request for EPA This reduction would significantly reduce key activities and impair the Agency's ability to protect human health and the environment adequately.

In particular, the Administration is gravely concerned about the Committee's $400 million, or 11.8-percent, reduction in EPA's vital operating program that could undermine Agency efforts to set pollution standards and enforce environmental laws. The most troubling reductions in the operating program are to the Environmental Technology Initiative (ETI) and the Climate Change Action Plan. The 86-percent reduction in ETI would cripple EPA's efforts to spur development of new technologies to protect public health, reduce pollution control costs, and create new jobs. The $58 million reduction to the Climate Change Action Plan would seriously hamper U.S. progress toward achieving the goal of reducing greenhouse gas emissions to 1990 levels by the year 2000. The Administration urges the Senate to restore funding for these two critical programs.

In addition, the Administration urges the Senate to restore funding to: complete the needed construction of the consolidated research lab that was begun with funding in last year's bill; implement the innovative GLOBE program; fully fund the STAR academic fellowships program; and, fully fund the U.S. contribution to the Montreal Protocol facilitation fond to help prevent depletion of the ozone layer.

Finally, the Senate is strongly urged to restore $100 million to help improve the water quality in Boston Harbor and reduce the number of beach closings. This funding request continues to fulfill the long-term, bipartisan Federal commitment to Boston due to the city's special needs and high user charges.

Department of Veterans Affairs

The Administration is pleased with the funding levels provided in the Committee bill for most VA programs and with the adoption of the budget amendment for Compensation and Pensions and Readjustment Benefits. However, the Administration regrets the Committee's change in direction from the House-passed bill with respect to Major Construction and General Operating Expenses. In particular, the Administration is disappointed that the Committee bill would drop the House provision for a replacement hospital at Travis Air Force Base in California; would not provide funding for the Administration's request for a new hospital in Brevard County, Florida; and would fund less urgent projects instead of the Administration's hospital improvement proposals that were adopted in the House-passed bill. The Administration urges the Senate to restore the cuts in administrative and other expenses.

Department of Housing and Urban Development (HUD)

Since FY 1995, HUD appropriations have been cut more deeply than those of other cabinet agencies. HUD's discretionary budget authority was reduced by 24 percent in the FY 1995 rescission bill, from $26.3 billion (the FY 1994 enacted level) to $20.1 billion (the FY 1995 post-rescission level). In FY 1996, HDD's budget authority was reduced again to $19.5 billion. The Committee would once again reduce HUD program levels, after adjusting for one-time savings.

The Administration appreciates the Committee's adoption of Administration priorities, including welfare-to-work certificates; funding for Youthbuild and HUD Salaries and Expenses; and, the Committee's inclusion of an FY 1996 supplemental that would extend the Government National Mortgage Association's (GNMA's) commitments on loan guarantees. However, the Committee would still: provide no funding for the Economic Development Initiative program, which leverages private investment to create and retain jobs in distressed communities; reduce critical funding to States and communities for Homeless Assistance by $297 million; cut funding for the demolition of the worst public housing projects — a successful effort with bipartisan support — by $100 million; and, reduce by almost half the President's request for multi-family credit subsidy, leaving HUD unable to insure as many multi-family mortgages.

The Committee would also strike House language permitting minimum rents "up to $25" per month for public and assisted housing residents. The Senate would, instead, require a minimum of $25 to $50 rent per month, imposing significant hardships for the poorest families.

In addition, if Congress fails to provide comprehensive authority for necessary restructuring of FHA multi-family properties and to address the massive over-subsidization of section 8 contracts, the funding provided in the Committee bill for rental assistance contract renewals would be short of the request in FY 1997.

The Administration urges the Senate to include buyout authority in the bill, which is necessary for HUD to achieve its reinvention goals. The Administration would also appreciate the Senate's consideration of several HUD-related budget amendments that were sent to Congress on July 10th, particularly the amendment related to Housing Opportunities for Persons with AIDS (HOPWA). The HOPWA program is the core of the federal housing response for people living with HTV/AIDS, a disproportionate number of whom are either homeless or in imminent danger of losing their homes.

Community Development Financial Institutions (CDFI)

The Administration strongly urges the Senate to fund the Community Development Financial Institutions Fund at the requested level of $125 million. In response to the initial competition, the CDFI program received applications from 270 financial institutions for nearly 10 times the amount of funds available. The Committee's decision to reduce the $125 million request by $80 million would reduce the Fund's ability to leverage additional private sector investments, loans, and financial services in the country's most distressed communities.

Secretary Rubin, has announced the selection of 31 community development organizations :o receive $35.5 million in financial and technical assistance from the CDFI Fund. These funds will be leveraged with significant private funds and are expected to result in over $350 million of lending and investing in distressed urban and rural communities in 46 States and the District of Columbia.

National Aeronautics and Space Administration (NASA)

The Administration appreciates the overall funding levels contained in the Committee bill for NASA and is pleased that the Committee did not target reductions to the Mission' to Planet Earth program as was done in the House-passed bill. However, the Administration urges the Senate to provide the up-front funding requested for the New Millennium Initiative and for the Tracking and Data Relay Satellite Replenishment program.

The Administration would oppose any amendment that may be offered that would seek to terminate or significantly reduce funding for the space station. Such action would jeopardize over 30, 000 space station-related jobs located in Florida, Texas, California and Alabama. It would also significantly undermine the critical partnerships that the U.S. has developed with Russia, Canada, Europe and Japan on this important, cooperative effort.

The Administration supports the use of buyouts of up to $25,000 to increase voluntary turnover — whether by retirement or resignation — for NASA and other agencies.

National Science Foundation (NSF)

The Administration appreciates the Committee's increases over the House-passed bill for N$F. However, the bill would still cut the President's request for NSF by $50 million. The Administration urges the Senate to restore requested funding that supports critical basic research and education activities at our Nation's universities.

Other Concerns

The Administration understands that an amendment may be offered to waive the application of the Davis-Bacon Act for repair and construction projects related to the Oklahoma City bombing. Federal agencies have been working closely with Oklahoma City to help the community rebuild in the aftermath of last year's tragedy. To help accelerate the economic recovery, the Departments of Labor and Housing and Urban Development have already taken a number of actions to facilitate the city's ability to meet Davis-Bacon requirements and expedite the process for issuing Davis-Bacon wage decisions. The Administration is also proposing additional efforts, including reviewing CDBG work requirements, providing pre-bid and pre-construction training/workshops and additional technical assistance. The Departments of Labor and Housing and Urban Development can continue to help accelerate the economic recovery of Oklahoma City within the existing framework of the law without having to waive Davis-Bacon requirements. For this reason, the Administration opposes a waiver of the Davis- Bacon requirements.