Statement of Administration Policy: H.R. 5019 - Energy and Water Development Appropriations Bill, FY 1991

(House Floor)
(Sponsors: Whitten (D), Mississippi; Bevill (D). Alabama)

The Administration opposes H.Res. 413, and opposes passage of the Energy and Water Development Appropriations Bill under H. Res. 413.

H. Res. 413 establishes a 302 allocation for all FY 1991 appropriations bills based on the House-passed budget resolution. The total allocation in the House budget resolution is $26. 7 billion in budget authority and $14. 3 billion in outlays above the current level for domestic discretionary spending. Reporting bills at the levels specified in the 302 allocation could unnecessarily and harmfully complicate implementation of a final budget resolution that reflects a budget summit agreement.

The levels established in the House resolution for the Energy and Water Bill alone exceed the FY 1990 enacted levels for domestic discretionary spending by $1. 2 billion in budget authority and $0. 6 billion in outlays. Pending the outcome of the budget summit, more appropriate levels for this bill would be the current funding levels, which are consistent with the Senate- passed budget resolution and with the proposal made by Representative Frenzel before the Committee on Rules.

The Administration is deeply concerned about the excessive amount of unjustified spending for new construction starts and other unrequested items in the bill. Specifically, the Administration objects to the inclusion of approximately 25 new construction starts not requested by the Corps of Engineers. These construction starts alone will increase the deficit by nearly $1.5 Billion in the next few years. These projects, many of which have not been studied and will not generate benefits commensurate with their costs, come on the heels of a bill that included 31 new construction starts in FY 1990 (22 of them unrequested). Not only is this spending irresponsible at a time when budget negotiators are meeting to find ways to reduce the current deficit, if would lock the nation into several billion dollars of unwarranted deficit spending for many years to come. Inclusion of such unnecessary new projects and this new level of spending will threaten the President's approval of the bill.

The Administration strongly objects to several other features of the bill:

• Full funding for the Garrison Diversion Unit in North Dakota. The project as currently structured is uneconomical and will cost $1 billion to complete. The Inspector General has found that its irrigation beneficiaries will be unable to repay the annual operation and maintenance expenses, which they are required by law to do. Accordingly, the Administration must oppose full funding pending the development of an approach that is re-scoped to address these problems.
• Language intended to prevent the transfer of technical responsibility for dam safety from the Bureau of Indian Affairs (BIA) to the Bureau of Reclamation. Lives are at stake in correcting serious safety deficiencies at various BIA dams. BIA has failed to correct these deficiencies, so the Administration must be permitted to take steps to do so, before a tragedy occurs.
• Language that would require the Corps of Engineers to assume full responsibility for oversight at DOE cleanup activities at the Hanford Site in Richland, Washington. This language will significantly delay the pace of the cleanup, which the Administration has been attempting to speed up.

Advancing this Energy and Water Appropriations bill under H. Res. 413 is simply not consistent with expressions of concern about the need for serious attention to the deficit through bipartisan negotiations at the "summit."

These and other concerns with the bill are discussed in more detail in the attachment.

Attachment

House Floor

H.R. 5019 - ENERGY AND WATER DEVELOPMENT APPROPRIATIONS BILL. FY 1991

MAJOR HOUSE PROVISIONS OPPOSED BY THE ADMINISTRATION

A. FUNDING LEVELS

Department of Defense — Civil: Army Corps of Engineers:

—  The Administration objects to over 30 unbudgeted Corps of Engineers construction starts and other unrequested projects. (approximatedly 25 of which are new starts) that will require nearly $1. 5 billion in Federal funding over the next few years. Many of these unrequested projects are uneconomical, are not the responsibility of the Federal Government to undertake, are not a budget priority, or are not in accordance with the beneficiary-pay cost-sharing principles of the Water Resources Development Act of 1986. Particularly objectionable is funding for O'Hare Reservoir (IL), a local-drainage project for Chicago, and the Wallisville Lake (TX) and Red River Chloride (OK, TX) water supply projects. It should not be the Federal Government's responsibility to undertake these projects.

—  The Administration objects to proposed funding for approximately 25 new construction starts. The Corps of Engineers has made a commitment to the Administration, Congress, and project cost-sharing sponsors to deliver sound projects on time and within budget. Because the Administration recognizes the follow-on requirements for the large number of unbudgeted projects funded in the FY 1990 appropriations, no new starts were recommended in the President's Budget. The interest of program credibility requires that the Federal Government not mislead non-Federal cost-sharing sponsors by asking them to commit to a project construction schedule that the Corps of Engineers cannot possibly meet. And, the interest of deficit reduction requires the Congress to exercise a more prudent application of scarce Federal resources. Inclusion of these projects would threaten Presidential approval of the bill.

—  The Administration objects to including about 80 unbudgeted planning starts and other unrequested studies. Many of these studies involve planning projects that are a low priority or should be the responsibility of non-Federal interests. Neither the taxpayers nor the Army Corps of Engineers program benefits by funding studies that detract from the Corps? ability to plan and implement high-priority flood control and navigation projects.

Department of the Interior: Bureau of Reclamation:

—  The Administration objects to including $30 million for the Garrison Diversion Unit (ND). The President's Budget proposed terminating this uneconomical project, which would require in excess of $1 billion to complete. Also, the Department of the Interior's Inspector General recently found that farmers would be unable to repay the annual operation and maintenance expenses, which they are required by law to do.

—  The Administration objects to the Committee's efforts to prevent the Administration from transferring technical responsibility for oversight of the Bureau of Indian Affairs (BIA) dam safety program to the Bureau of Reclamation. The Department of the Interior's Inspector General found that BIA has not effectively managed this program, either from an engineering or financial standpoint. The Administration should be permitted to carry out this important program in the most effective way possible. The Administration proposes to use the technical and management expertise of the Bureau of Reclamation to ensure that timely correction of serious safety deficiencies takes place at a number of high- hazard BIA dams, but provides for participation by the affected Indian tribes in implementing corrective actions on reservation dams, including provision for contracting with tribes.

—  The Administration objects to the addition of funds for several projects in the Construction program that are a low priority, a non-Federal responsibility, or an inconsistency with Administration cost-sharing policy. Most objectionable are provisions for the Atmospheric Water Resource Management Program, the increase of Central Arizona Project funds to prevent flood and erosion damages, and the Umatilla (OR) and Mni Wiconi (SD) projects.

Department of Energy (DOE):

—  Power Marketing Administrations (PMA). The House proposal increases the Bonneville Power Administration's (BPA) use of borrowing authority by $60.5 million to ensure funding availability for the Third A.C. Intertie and for conservation activities. The increase in borrowing authority for the Third A.C. Intertie is not needed. Bonneville already has been apportioned $126 million, of which only about $5 million has been obligated. When added to the $22 million in the FY 1991 request, DOE has sufficient funds through FY 1991 to initiate this project. Under the current schedule, actual construction could not start until after the environmental impact statement is completed in FY 1991. The $15 million increase in borrowing for conservation is also inappropriate. BPA should fund these activities from normal operating revenues as is the convention with the majority of utilities in the industry. The Federal Government should not be using funds to subsidize conservation in BPA while simultaneously charging below-cost power rates which have the effect of subsidizing and encouraging electricity use.

—  The Administration objects to language that would place the total burden of salmon protection on taxpayers rather than ratepayers. The cost of water spilled from Shasta Dam to protect salmon runs should not be borne by Federal taxpayers. Other utilities across the country require beneficiaries of hydroelectric projects to pay for similar environmental mitigation measures (e.g., fish ladders, recreation, etc.).

—  Energy Supply R&D. The Committee added $36 million for the Fast Flux Test Facility at the Hanford Site in Richland, Washington and directed that the facility be used in support of environmental clean-up activities. An assessment by DOE has shown that this effort is neither cost effective nor environmentally beneficial, and would divert funding from clean-up activities required by compliance agreements. The President's Budget provided $48 million to begin shutdown of this facility.

—  The Committee mark cut $12. 5 million from DOE- supported research programs. The Committee then added $68 million in funds earmarked for specific institutions. Earmarking funds to colleges and universities for "pet projects" circumvents the normal research grant peer-review process and results in not funding meritorious projects.

Other Independent Agencies:

—  Appalachian Regional Commission (ARC). The Committee provides $100 million more for the ARC than the President's request. The goals of the ARC have been met substantially, and the region's remaining economic problems cannot be solved through ARC'S traditional "bricks and mortar" programs. The President's request provides sufficient funds to address the region's remaining community development, education, and infrastructure problems.

—  Tennessee Valiev Authority. The Committee recommendation would increase funding by 48 percent over the Administration's request. This increase would continue unnecessary and unproductive research activities to derive ethanol from hardwoods. The bill would maintain Federal funding for fertilizer activities, negating efforts to place the program on a self-supporting basis through user fees and cost sharing from program beneficiaries. The bill also would continue funding for economic development activities that are more appropriately conducted by State and local governments. Finally, the bill provides a 25 percent increase over the FY 1990 level for natural resource management activities that, in part, duplicate responsibilities of other Federal, State, and local jurisdictions.

B. LANGUAGE PROVISIONS

Department of Defense — Civil; Army Corps of Engineers:

—  The Administration objects to the Committee's intent to preclude the Army Corps of Engineers from carrying out its responsibility to analyze and report the most effective methods to provide Columbia River Juvenile Fish Mitigation in Washington, Oregon, and Idaho. The Administration's support for construction of bypass facilities at four Columbia and Snake River dams is contingent upon the Corps conducting this analysis in coordination and cooperation with regional interests.

—  The Administration supports the language that would enable the Army Corps of Engineers to continue research and development on magnetic levitation. Further, the Administration notes that the Committee has refrained from using savings and slippage to disguise the cost of the Corps of Engineers program.

Department of the Interior; Bureau of Reclamation:

—  The Administration objects to several general provisions for the Department of the Interior. Section 205 would provide windfall benefits to beneficiaries of the Bureau of Reclamation's McGee Creek Project (OK) by reducing repayment obligations through legislation. Section 206 attempts to micromanage complex water supply contracting issues, which are appropriately the responsibility of the Secretary of the Interior, through legislation. Particularly objectionable is subsection (b) of Section 206. Finally, Section 201 would unjustifiably expand the definition of emergencies qualifying for expenditure or transfer of appropriated funds.

Department of Energy:

—  Power Marketing Administrations. The Administration asks the Committee to reconsider the debt repayment reform proposal. It is inappropriate to continue taxpayer-subsidy of Federal electric rates for electricity consumers in certain regions of the country when other ratepayers already pay higher rates for non- subsidized supplies, particularly when there are no significant differences in their ability to pay.

—  The Administration objects to language that would continue to prohibit the Administration from studying the sale or the reform of the PMAs. Reasonable data collection and analysis is necessary to support the President's constitutional ability to prepare and submit legislative proposals to Congress.

—  Environmental Clean-up. The Administration is very concerned about the Committee's rejection of the proposed new appropriation that would consolidate all cleanup activities at DOE facilities. The Committee's failure to act on this proposal would complicate and could delay the Department's ability to achieve the requirements established in compliance agreements.

—  The Administration objects to bill language that would require the Army Corps of Engineers to assume full responsibility for oversight of DOE cleanup activities at Hanford (WA). While the Department of Energy believes that the Corps of Engineers can provide important expertise in selected tasks within the overall clean-up effort, the bill language is too broad, and, if enacted, could result in delays in the clean-up effort, without any improvement in cost effectiveness.

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