Statement of Administration Policy: H.R. 4624 - Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Bill, FY 1995

(House Floor)
(Sponsors: Obey (D), Wisconsin; Stokes (D), Ohio)

This Statement of Administration Policy expresses the Administration's views on H.R. 4624, the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Bill, FY 1995, as reported by the House Appropriations Committee. The Administration supports House passage of H.R. 4624 and will work with the House to address the concerns described below.

NASA and the Space Station

The Administration appreciates the support that the Committee has provided for the NASA budget in general, and for the Space Station in particular. The Administration strongly opposes the Roemer-Zimmer amendment that would cancel the Space Station program.

Corporation for National and Community Service

The Committee has provided about one-half of the requested increase for the President's national service initiative. The Administration considers this program one of its top priorities and is anxious to work with the Congress to find funding to restore the initiative to its proposed level. Without the full request, the national service program will not be able to meet the President's goal of enrolling 30,000 participants in FY 1995, building to 100,000 by full implementation.

Housing and Urban Development (HUD)

The Committee is to be commended for its efforts toward funding the President's priorities for HUD within a difficult fiscal environment. The Administration is pleased with the Committee's decisions to provide resources for the President's investments, including a substantial increase in the number of housing vouchers for low-income households, with set-asides for homeless families and the disabled; the Choice in Residency initiative; as well as increased funding for homeless assistance, homeownership counseling, fair housing enforcement, and the Tenant Opportunity program. In addition, the Administration commends the Committee's commitment to consider funding for the Community Development Financial Institutions (CDFI) Fund, after enactment of authorizing legislation.

The decision to reduce credit subsidies for insurance written from the General and Special Risk Insurance funds may result in a shortfall of FY 1995 resources for these demand- driven programs and risk a repeat of the circumstances that occurred in FY 1994. The Administration is also concerned that the Committee's decision to reduce the request for salaries and expenses by $20 million could adversely affect the administration of the Department's programs.

The outlay gap that has prevented the Committee from funding these needs could be closed if the House were to adopt several Administration proposals to reform rent subsidy calculations. Adopting these proposals also could reduce outlay needs for all assisted housing by over $500 million in FY 1996 and by over $700 million in FY 1997. Given overall budget constraints, these actions to reduce future outlays may be necessary to maintain HUD's existing commitments in FY 1996 and beyond.

Veterans Affairs

The Committee has provided Medical Care with an additional $111 million, for a total increase of $611 million above the FY 1994 enacted level. While the Administration appreciates the Committee's support for the VA Medical Care program, we are concerned that the Committee's add-on equals the total savings identified in the President's budget that would result from implementing National Performance Review, Inspector General, and other cost-saving initiatives in the Medical Care program. These include reforms such as closing the supply depots and improving the way VA contracts for community nursing home space, which the Administration believes would be positive for the VA.

Further, report language would require the Secretary to maintain the FY 1994 FTE level through a combination of Federal and contract staff. This requirement would interfere with the Executive Branch's ability to manage the Medical Care program.

Finally, the Committee has restored funding to the FY 1994 level for Medical and Prosthetic Research. The Administration believes that its original funding request represents only a small decrease from the FY 1994 level, and that the request is consistent with the priority we accord to funding medical care programs providing direct care to veterans. Approximately 75 percent of the funding for VA medical and prosthetic research is provided through reimbursements and grants from the Veterans Medical care Program, National Institutes of Health, Department of Defense, and other Federal and non-Federal sources. The House DOD authorization bill includes $30 million for FY 1995 reimbursements to this account. Funding from other non-appropriated sources would increase by $19.7 million in FY 1995. Taking Into account these additional resources, total research funding would only decrease by 1.3 percent from FY 1994 to FY 1995.

Environmental Protection Agency

The Administration appreciates the efforts of the Committee to provide much of the increase requested by the President for EPA's operating programs — the most important component of Federal environmental spending. The Administration also appreciates the Committee's support for the President's initiative to convert some contractor activities to EPA work years. Nevertheless, contract funding remains important to carrying out EPA's mission. Consequently, the Administration is concerned about the size of the committee's reduction in contract funding in the Research, Prevention, and Program Activities account. This reduction has the potential to hamper EPA's ability to meet statutory deadlines and could force postponement of key environmental protection or pollution prevention activities.

The Administration appreciates the support the Committee has shown for the Drinking Water State Revolving Fund. However, the Administration is concerned that only a small increase has been provided for the Clean Water State Revolving Fund, while the Committee has provided $500 million in unauthorized funding for unspecified hardship communities. The Administration strongly recommends that $250 million of this funding instead be allocated to the Clean Water State Revolving Fund for the benefit of all 50 States.

National Science Foundation (NSF)

In the report accompanying the bill, the Committee has recommended various reductions in the Research and Related Activities account. The Committee has reduced the President's request for the Critical Technology Institute, the Global Climate Change initiative, and the High Performance Computing initiative, for a total reduction of approximately $64 million. The latter two initiatives have been identified by the National Science and Technology Council (NSTC) as important research and development priorities for FY 1996.

The Administration is concerned that these proposed reductions could undermine the progress of these two important initiatives, as well as the overall effectiveness of the NSTC interagency research and development coordination process. The Administration would appreciate the Committee's support in providing NSF with the flexibility of shifting funding to these important programs within the overall total provided for the Research and Related Activities account.