Statement of Administration Policy: H.R. 5241 - Department of the Treasury, Postal Service, and General Government Appropriations Bill, FY 1991

(Senate Floor)
(Sponsors: Byrd (D), West Virginia; DeConcini (D), Arizona)

The Administration continues to oppose Congressional action on appropriations bills in advance of a budget summit agreement. Such action could unnecessarily and perhaps harmfully complicate implementation of a final budget resolution that reflects the agreement. However, inasmuch as the Senate is apparently going to take action, the Administration will express its views on these bills. The purpose of this Statement is to express views on the Department of the Treasury, Postal Service, and General Government Appropriations Bill, FY 1991, as reported by the Committee.

Consistent with the Administration?s concern that appropriations action could complicate implementation of a budget summit agreement, the President's senior advisors would recommend that he veto any appropriations bill that exceeds the President's request for either budget authority or outlays if that bill is presented to him before the completion of the Summit. Upon careful review of the Committee bill, we find that the bill is slightly below the President's request in both budget authority and outlays.

However, the Administration has strong concerns about several specific provisions in the bill.

The Senate bill includes language that would prohibit the use of funds appropriated, or made available in any Act, for issuing accounting standards that are inconsistent with standards issued under section 3511 of title 31, United States Code. The Administration strongly objects to this language. Negotiations are under way between the Office of Management and Budget and the General Accounting Office to resolve the matter, which is one that should be resolved through the authorization process. The Administration hopes that these discussions will result in the Committee deleting the provision. In the event that the provision remains in the bill, the President's senior advisors would have no alternative but to recommend that he veto the bill.

The Committee funded the Internal Revenue Service (IRS) at $250 million below the President's request for the Tax law enforcement account. The Senate Committee's action would require the IRS to curtail and delay crucial revenue-producing activities, such as the revenue initiative proposed in the President's Budget. This would result in a loss of $537 million in receipts. About 1,300 staff years in base enforcement programs would also have to be cut, resulting in further revenue loss.

In order to fund the IRS at the level requested by the President, the Senate is urged to consider the Postal Service Revenue Foregone reforms identified in a Postal Rate Commission study and included in the President's request. Taxpayers are unknowingly subsidizing the mailings of prestigious professional trade organizations, very profitable business seminar companies, and advertisers (travel agents, insurance companies, etc.) who "piggy back" onto reduced rate mail sent by universities and other non-profit organizations. The Senate is urged to pass a bill consistent with the Postal Rate Commission's proposals.

These and other Administration concerns about this bill are outlined in the attachment.

Attachment

H.R. - 5241 DEPARTMENT OF THE TREASURY, POSTAL SERVICE, AND GENERAL GOVERNMENT APPROPRIATIONS BILL, FY 1991

MAJOR PROVISIONS OPPOSED BY THE ADMINISTRATION

A. Funding Levels

Department of the Treasury:

Internal Revenue Service (IRS). The Senate Committee has funded the IRS at $250 million below the President's Budget request for the Tax law enforcement account. The Senate Committee action will require the IRS to curtail crucial revenue-producing activities, such as the revenue initiative proposed in the President's Budget. This would result in a loss of $537 million in receipts. About 1,300 staff years in base enforcement programs would have to be cut, resulting in further revenue loss.

The Administration supports the deletion of House language that would postpone the IRS Systems Modernization Project. However, the Senate Committee has reduced the President's Budget for Information Systems by $61 million. This would adversely affect the ability of IRS to provide automation support to programs such as taxpayer service and collection of accounts receivable.

The Senate is urged to restore the IRS accounts to levels proposed in the President's Budget to permit the realization of important revenues and a proper balance among appropriations.

Federal Law Enforcement Training Center. The President's request of $18.7 million for the construction account is a measured approach to Master Plan construction. The request addresses the sixteen highest priority projects. Additional projects beyond those proposed for funding in FY 1991 should be considered in future budget requests as the Agency progresses through the Master Plan and assesses workload demands.

Bureau of Alcohol. Tobacco and Firearms (BATF). The Committee provided $30.4 million to the BATF Salaries and expenses account above the President's request, a 16 percent increase over FY 1990 enacted levels. The Administration requested adequate funding for BATF initiatives in the FY 1991 budget, and additional funding above those levels would not be prudent at this time.

U.S. Customs Service — Salaries and Expenses. The Committee provided a $21.6 million increase over the President's request for the Customs Service Salaries and expenses account and provided a separate appropriation for the Financial Crimes Enforcement Network (FinCEN) of $16.7 million. FinCEN was previously funded in the S&E account. By removing FinCEN funding from the Customs budget without concurrently reducing the President's request by the same amount, the Committee's appropriation for the Customs Salaries and expenses account is effectively $38.3 million above the President's request. This additional funding is unnecessary and undesirable in a time of fiscal constraint.

U.S. Customs Service — Operations and Maintenance. The Administration opposes the transfer of the U.S. Customs aerostat program to the Department of Defense and the use of Department of Defense funds to operate the program. The Secretary of Defense believes that the U.S. Customs Service should continue to have operating and funding responsibility for the aerostat program. The Senate is urged to delete this provision.

The Committee includes $8 million to initiate the procurement of a fourth P-3 Airborne Early Warning (AEW) airplace in FY 1991. The report indicates that this action is necessary to implement fully the National Drug Air Interdiction Strategy. This document was prepared by Customs in 1987-88 and has since been superseded by the existing National Drug Strategy prepared by the Office of National Drug Control Policy (ONDCP). The current National Drug Strategy does not call for a fourth P-3 AEW.

U.S. Secret Service. The Committee provided $16.7 million above the President's request for FY 1991, taking into account a movement of $1.6 million in the request to GSA. In light of the substantial nine percent increase incorporated in the President's request, further funding increases are unwarranted.

Bureau of Public Debt — Administering the Public Debt. The Administration opposes Senate action that would require the Federal Reserve to absorb $80 million for services provided to the Bureau of Public Debt. The Senate action would distort the business-like relationship that should exist between the Bureau and the Federal Reserve to preserve quality service necessary for program operations. This action would also mask the full cost of public debt operations by forcing the Federal Reserve to absorb the cost of providing the service off-budget. The Administration favors the House treatment that provides direct reimbursement to the Federal Reserve beginning in 1992.

U.S. Postal Service:

Revenue Foregone. While the Administration supports the Committee's proposal for restricting the use of subsidized postage for affinity credit cards, the Administration continues to support adoption of all the Postal Rate Commission's Revenue Foregone proposals. These proposals would terminate special reduced rates for certain types of mailers and reduce budget authority and outlays by $112 million, based on current rates. Currently, taxpayers are unintentionally subsidizing prestigious professional trade organizations, profitable business seminar companies, political advocacy mail, and advertisers (e.g., travel agents, insurance companies, etc.), who "piggy back" onto mail sent at reduced rates by universities and other nonprofit organizations. The Senate is urged to report a bill consistent with the Commission's proposals.

Office of National Drug Control Policy (ONDCP):

ONDCP Earmarks. The Administration opposes the earmarking of the entire Special Forfeiture Fund (SFF) and the $32 million increase for the High Intensity Drug Trafficking Areas (HIDTA) program. This action would result in no resources being available for the National Drug Intelligence Center and ADP initiatives for law enforcement agencies, which are critical components of the National Drug Control Strategy.

General Services Administration:

Federal Buildings Fund. The Senate Committee bill contains grants that are not authorized and that are not appropriate expenditures from the Federal Buildings Fund. These projects would cost $39.1 million and represent unnecessary expenditures in a time of budgetary constraint. The Administration urges the Senate to eliminate these grants and stop this totally inappropriate use of the Federal Buildings Fund.

The Senate bill funds a number of unneeded Federal building construction projects, including $184 million for a Courthouse in Boston, $80 million for a Federal Building/Courthouse in Charleston, West Virginia, $87 million for a building for the Corps of Engineers, $88 million for the Southeast Federal Center, and $211 million for Southwest Border Stations, all of which would be paid for by deleting funding proposed for a headquarters building for the Department of the Navy in Northern Virginia.

National Critical Materials Council (NCMC):

NCMC Funding. The bill includes $400 thousand in funding for the NCMC. This is far in excess of the $235 thousand requested in the President's budget. The President's budget request is adequate for the NCMC to carry out its priority functions, including its coordinating role with agencies that have materials related programs. An increase over the President's budget is unnecessary and would result in the duplication of ongoing work of other agencies.

B. Language Provisions

Department of the Treasury:

Employment Floors. The Senate Committee bill mandates minimum employment floors for the Bureau of Alcohol, Tobacco and Firearms and the United States Customs Service. These agencies have not been able to meet legislatively imposed FTE floors several times in recent years due to sequester, pay raise, and other unbudgeted cost absorptions and constraints on their ability to hire and train qualified personnel. The Administration objects to these mandated minimum employment levels. FTE floors are difficult to implement and needlessly restrict an agency's ability to manage its resources.

Office of Personnel Management:

Executive Seminar Centers. Section 516 of the Senate Committee bill would prohibit the Office of Personnel Management (OPM) from closing or consolidating executive seminar centers. The Administration objects to this provision because it prevents OPM from exercising its managerial discretion over how best to use its training resources.

Blue Collar Employee Pay Raises. The Administration objects to section 612 of the Senate Committee bill which would limit the pay raises of only certain blue collar workers to no more than that received by white collar government employees. As presently written, the provision does not contain this limitation on pay raises for blue collar workers whose wages are set through negotiation rather than by wage survey. The Administration urges the Senate to amend this provision to limit the pay increases of all blue collar workers.

Restrictions on the Office of Management and Budget's (OMB) Review Authority. The Administration continues to be concerned about various restrictions on OMB's authority to study and review certain areas.

National Security Employee Non-Disclosure Agreements. The Administration strongly objects to section 617 of the bill, a provision that may be construed to restrict the President's ability to implement and enforce nondisclosure agreements, for the reasons stated by the President in signing the FY 1990 Treasury, Postal Service, and General Government Appropriations Bill, which contained an identical provision.

Section 617 raises significant constitutional concerns insofar as it may be interpreted to intrude on the President's authority to control national security information within the Executive Branch. The President possesses the constitutional authority to require Federal employees who voluntarily assume positions of high trust, and who have access to the Nation's most sensitive secrets, to agree to keep those secrets. Such non-disclosure agreements are essential safeguards in protecting the national security.

White House Staffing. The Administration is concerned about the unnecessarily burdensome certification requirement established by section 626 of the bill. Section 626 would require the head of a Federal department or agency employing a Schedule C appointee to certify that the position was not created solely or primarily in order to detail the employee to the White House. Agencies are already required to certify that each appointee to a Schedule C position is of confidential or policy determining character. The White House is also required to report on all use of detailees. Adding to these controls complicates the staffing process without any corresponding benefit.

The attached data tables can be downloaded in PDF format by clicking this link