Statement of Administration Policy: H.R. 4775 - Treasury/Postal Appropriations Bill, Fiscal Year 1989

(House)
(Sponsors: Whitten (D), Mississippi, Roybal (California)

The Treasury/Postal Service Appropriations Bill for FY 1989 provides funding levels that are generally consistent with the President's request. The Committee, however, failed to recognize the Administration's proposal to eliminate inappropriate postal subsidies resulting in budget authority that exceeds the President's request by $458 million.

The bill also includes many objectionable language provisions as well as other provisions restricting the Administration from exercising necessary managerial discretion in fulfilling its executive responsibilities. If this bill were presented to the President in its present form, I would recommend that he veto the bill.

The language provision most objectionable to the Administration and which alone would be grounds for vetoing this bill, requires that the Office of Management and Budget make appropriated funds available for use in strict accordance with otherwise non-binding directives and earmarks included in committee reports. This provision constitutes a totally unacceptable restriction on the Executive Branch's ability to execute appropriations statutes.

The Administration objects to the provision that provides a 4 percent pay raise for Federal civilian personnel and that allows additional appropriations to fund up to 50 percent of the cost of the increase in total pay. We believe that this provision can be interpreted to violate the Bipartisan Budget Agreement by necessitating pay supplementals. The Bipartisan Budget Agreement explicitly prohibited all supplemental appropriations except in "dire emergency". It is, therefore, the Administration's position that all costs of pay increases must be fully absorbed. No supplementals will be transmitted.

Several other language provisions are unacceptable. Of particular concern to the Administration is the language the House has included which waives the budgetary constraints established by the Anti-deficiency Act and directs the lease/purchase of four buildings to be constructed. The Anti-deficiency Act requires that the current Administration and the Congress not commit future Administrations and Congresses to payments without recognizing the full cost of such projects by properly obligating funds to cover these payments. Together, these four projects commit the government to future obligations of over $800 million in construction costs which are not properly reflected in the bill due to the waiver of the Anti-deficiency Act. The Administration opposes the hiding of budget costs in this manner.

A similar objection exists for the provision which authorizes the lease/purchase of a building for the Internal Revenue Service in Memphis, Tennessee, a new building for the Center for Disease Control, Atlanta, Georgia as well as the provision authorizing the Archivist to acquire a new facility in Maryland.

Additional language provisions attempt to remove the flexibility necessary to the Administration to perform its executive responsibilities. Most objectionable are:

—    Failure to adopt a limitation on program expenses for the Federal Retirement Thrift Investment Board.

—    Prohibition against closure or consolidation of executive, seminar centers in the OPM appropriation.

—    Imposition of an FTE floor limiting management's ability to adjust staffing to workload and productivity shifts in the Customs and Alcohol, Tobacco and Firearms appropriations.

This bill also excludes language to ensure that all blue-collar workers including those under negotiated agreements receive the same pay raise as white-collar employees in the Federal Government.

While the funding provisions in the bill are generally consistent with the President's request, the House Committee on Appropriations did not anticipate the enactment of the proposal submitted to Congress that would reduce the level of subsidies provided to the Postal Service. The bill provides for a "revenue foregone" appropriation that is $417 million in budget authority above the President's budget proposal. The Committee did not support the Administration's proposal to reduce this subsidy to $19 million. Failure to approve this proposal will continue the use of inappropriate subsidies for certain classes of mailers (e.g., prestigious professional trade organizations, profitable business seminar companies, "piggy back" advertisers, political advocacy groups, etc.).

If during subsequent consideration of this bill the Administration's "revenue foregone" proposal is not adopted, we urge you to oppose any increase in the level of subsidy beyond that provided in the FY 1987 "revenue foregone" appropriations. This would provide 80 percent of the current law level ($350 million) or $86.4 million less than the level provided by the House Committee on Appropriations.

The House Committee on Appropriations also failed to recognize the importance of the Administration's request for funds for a significant management improvement initiative when it did not provide any of the $5.9 million which was to be used for the development of a comprehensive planning, budgeting, and financial management system. Although none of the funds will be made available before January, 1989, this system is badly needed and will serve as a management information system for key decisionmakers in Congress and the Executive Branch for years to come. The Congressional Budget Office and the General Accounting Office have endorsed this modernization effort because of its government-wide application in facilitating the exchange of information between the Congress, OMB, and the agencies.

Attachment

TREASURY/POSTAL APPROPRIATIONS BILL, 1989
OBJECTIONABLE PROVISIONS

I. FUNDING LEVELS

Payment to the Postal Service Fund. The bill provides for a revenue foregone subsidy that is $417 million above the President's budget proposal. The bill does not reflect the Administration's proposal that reduced the budget request to $19 million by eliminating inappropriate use of these subsidies (e.g. political advocacy mail, prestigious professional trade organizations, profitable business seminar companies, etc.) while continuing federal support for free-for-the-blind and overseas voter mail and shifting most residual costs to unsubsidized mailers.

Bureau of Alcohol, Tobacco, and Firearms, Salaries and Expenses. The House Committee on Appropriation's bill provided $12,500,000 and 216 FTE more than the President's request. The FTE level proposed in the President's budget is sufficient to enable ATF to carry out all of its assigned missions and still increase the number of trained enforcement personnel in operational units.

Federal Law Enforcement Training Center. The House Committee on Appropriations provided an additional $4,493,000 which was not requested by the President and conflicts with the Administration's policy of financing discretionary services from user charges.

U.S. Secret Service, Salaries and Expenses. The bill provides $10 million more than the President's request including $2.5 million for continued construction at the Rowley Training Center which was not requested by Treasury. This increased funding is not needed to maintain Secret Service operations in light of the reduced activity level following completion of the 1988 Presidential campaign.

Executive Office of the President, Expenses of Management Improvement. The bill does not include $5.9 million to support a comprehensive planning, budgeting, and financial management system. The proposed improvements are badly needed. The new system will aid key decisionmakers in both the Congress and the Executive Branch as well as assist in exchanging information between Congress, OMB and the agencies for years to come. The Congressional Budget Office and General Accounting Office have endorsed this modernization effort.

U.S Customs Service. The House Committee on Appropriations provides $37,918,000 and 500 FTE more than the President's request for wage and price inflation and for an additional 500 FTE for commercial services. Automation of Customs' operations has enhanced productivity and supplanted the need for additional FTE to meet workload growth.

National Defense Stockpile Transaction Fund. The House Committee on Appropriations recommended an appropriation of $18 million in grants for the University of Hawaii and the University of Texas at El Paso. These monies are for non-competitive research grants that were not requested by the President and do not directly benefit the purposes of national defense stockpile. These funds are not essential and would be more appropriately provided by private financing.

National Archives and Records Administration. The Administration opposes the provision of $4 million for grants for historic publications and records and $4.1 million for additional construction of the Kennedy Library. Neither of these funding levels were included in the President's budget and would be more appropriately provided by the private sector.

II. LANGUAGE PROVISIONS

Office of Management and Budget. The bill provides that no funds may be used by OMB to prevent or delay the obligation or expenditure of funds identified in either an appropriations bill or in accompanying reports, with the sole exception of rescission proposals permitted by law. This provision restricts the President's ability to execute appropriations statutes and is apparently intended to make report language accompanying this and other appropriations bills — even if written after this provision is enacted — binding on the Executive Branch as if enacted into law. Thus, committee reports reflecting less than full legislative actions (consideration and passage by both Houses and presentment for Presidential signature) could restrict the President's execution of appropriations statutes. These concerns clearly raise fundamental constitutional issues under the "take care" and "presentment" clauses.

Further, this broad language creates ambiguities as to the President's authority to implement and enforce other laws, such as Gramm-Rudman-Hollings, which requires him to withhold and sequester funds if specified deficit targets are exceeded. This provision may inadvertently affect other substantive statutory authorities of the President.

U.S. Customs Service, Salaries and Expenses. The bill imposes a FTE floor limiting management's ability to adjust staffing to resporid to workload shifts, investments in labor-saving capital equipment and other productivity improvements.

Bureau of Alcohol, Tobacco, and Firearms, Salaries and Expenses. The House Committee on Appropriations imposes a FTE floor limiting management's ability to adjust to workload shifts and to choose the efficient mix of labor and capital resources.

Bureau of Engraving and Printing. General provision 527 provides that no funds may be used to contract out or downgrade the positions of the BEP police force. We have directed BEP to study contracting out their police force. This provision limits the President's authority to conduct- and review A-76 studies and to minimize the cost of BEP security functions.

Federal Retirement Thrift Investment Board. The House Committee on Appropriations did not adopt the proposed language limiting the program expenses of the Board. The obligation limitation language is important because it caps the amount of Thrift Saving Fund monies that the Board can use for administrative expenses. The cap is equal to the Board's own budget estimate for those expenses. The language is also important because it provides a mechanism for oversight of an agency in the Executive Branch.

General Services Administration, Federal Buildings Fund. The language exempts four construction projects from 31 U.S.C. 1341(a)(1)(B) — the requirement for full-funding of contracts or obligations. By dictating a less than full-funding approach for accounting of these projects, the effect will be to hide the true costs of obligations of the Government. These four projects obligate the government to over $800 million in total construction costs, yet the bill reflects none of those costs. The Administration opposes the hiding of budget costs in this manner. A similar objection exists for the provision which authorizes the lease/purchase of a building for the Internal Revenue Service in Memphis, Tennessee and for the provision which authorizes the lease/purchase of a new building for the Centers for Disease Control in Atlanta, Georgia.

The bill further provides for a $1 million grant to renovate the Senior Citizens' Health Center, County of Los Angeles, and a $800,000 grant to establish a Senior Citizens' Health Center at California State University at East Los Angeles. The Administration strongly opposes these grants from the Federal Building fund. The fund is not authorized to spend federal dollars on state and local facilities.

Lastly, the Administration opposes the proposed expenditures for border station improvements for those facilities cited on line 16, page 31 through line 14, page 32.

General Services Administration, General Provisions. The bill proposes to require agencies to have their long-distance telecommunications requirements, subject to P.L. 89-306, approved by the Administrator of GSA, prior to seeking alternative procurement options. This language is unnecessary as the Administrator already has adequate authority under the Brooks Act to oversee agency telecommunications procurements. If the Congress finds- that additional authority is necessary, we suggest that economic efficiency criterion contained in the bill be clarified by requiring that no services be acquired under FTS2000 separately without a net decrease in costs to the government as a whole.

National Archives and Records Administration. The Administration opposes the provision authorizing the Archivist to acquire a new facility in Maryland (beginning line 6, page 43 through line 13, page 44).

General and Administrative Provisions. The Administration objects to the omission of language that would ensure that all blue-collar workers including 9(b) employees would receive the same pay raise as their white-collar counterparts. (Section 613(b) page 67) Language should read "Notwithstanding section 9(b) of P.L. 92-393 or section 704(b) of P.L. 95-434, subsection (a) of this section shall apply in such manner as the Office of Personnel Management shall prescribe to any prevailing rate employee to whom such section 9(b) applies.

Section 510, 522, and 614. This section prohibits the GSA 0PM, and the Customs Service from closing or consolidating an information center, executive seminar centers, or other sites used to carry out programs of these agencies. The Administration objects to this provision since it prevents GSA, 0PM, or Customs Service from exercising its managerial discretion over how best to use its training and facility resources.

Section 611. The Administration objects to this provision. To the extent the resolution referred to in this section is a joint resolution, this provision would not present a constitutional issue.