Statement of Administration Policy: H.R. 5677 - Departments of Labor, Health and Human Services, Education, and Related Agencies Appropriations Bill, 1993

(Senate Floor)
(Sponsors: Byrd (D), West Virginia; Harkin (D), Iowa)

The purpose of this Statement of Administration Policy is to express the Administration's views on H.R. 5677, the FY 1993 Departments of Labor, Health and Human Services, Education, and Related Agencies Appropriations Bill, as reported by the Senate Appropriations Committee.

In his FY 1993 Budget, the President proposed to freeze domestic spending at FY 1992 levels, and to cut defense discretionary spending below the FY 1992 level. The President has stated that he will veto any bill that exceeds his request. On the basis of OMB's preliminary scoring, the Senate Committee version of H.R. 5677 exceeds the President's request. A table is attached that provides OMB's preliminary scoring of the bill.

The remainder of this statement discusses other Administration concerns with H.R. 5677 as reported by the Committee. The discussion addresses the Administration's priorities for program funding and provides suggestions that would lead to the development of a bill that the President could sign. The Administration urges the Senate to consider these views.

Provisions Subject to Veto Threats

The Senate Committee bill would permit the use of Title X funds for counseling and referral for abortion. The President's intention is to assure that no Federal funds are used to support abortion. The President is not in any respect seeking to impose a so-called "gag rule." He is committed to the protection of free speech.

Title X funds are intended only for family planning. Under current regulations, pregnant women who seek services from Title X funded projects are now appropriately referred for such counseling to qualified providers. The President seeks to ensure the integrity of Title X as a pre-pregnancy family planning program and to ensure that women who are pregnant are referred to providers who can ensure continuity of care. If the Title X provision were included in the final version of the bill presented to the President, his senior advisers would recommend veto of the bill.

The Administration supports the House bill language that restricts the use of Federal funds for abortions to those circumstances in which the life of the mother would be endangered if the fetus were carried to term. The Senate is urged to adopt this limitation, which is identical to the one included in every Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Bill enacted since FY 1981. The President would veto this bill if it were presented to him with section 203 in the form approved by the Senate Appropriations Committee.

The Senate Committee bill also contains a provision that jeopardizes the executive order that implements the Supreme Court's decision in Communications Workers of America v. Beck. That executive order ensures that non-union employees working for Federal contractors are not forced, through mandatory union dues, to support political causes with which they disagree. If such a provision were contained in the final version of the bill, the President's senior advisers would recommend that the bill be vetoed.

The Administration is aware that an amendment may be offered on the Senate Floor that would shift $4.1 billion in defense funds to domestic programs contained in this bill. Such a provision would violate the firewalls established in the Budget Enforcement Act of 1990 (BEA). If Congress were to abandon the mutually agreed-upon discipline of the BEA, it could trouble financial markets and cause interest rates to rise, thereby slowing economic growth and threatening job creation. If the President were presented a bill that violates the firewalls, his senior advisers would recommend a veto.

Funding for High Priority Programs

The Senate has not approved recommended program terminations that were proposed in the President's budget. These include the Community Services Block Grant, Refugee and Entrant Assistance, Untargeted Health Professions Curriculum Assistance Grants, and Job Training Partnership Act set-asides. Instead of reducing or eliminating such programs, the Senate has reduced many other programs, including high priority programs of proven value.

These include Healthy Start, community and migrant health centers, and homeless health care grants. The Senate is urged to consider funding for high priority programs included in the President's budget so that these programs and others discussed below and in the attachment can be funded.

Social Security Administration (SSA)

The Administration is deeply concerned with the Senate's treatment of SSA's administrative funding. In response to the continued surge in disability applications, the Administration released the entire $100 million SSA contingency earlier this year. This action was taken to accelerate and increase the SSA's capability to process applications for Disability Insurance (DI) and Supplemental Security Income (SSI). The Senate Committee's action would reduce the President's request for SSA by $140 million.

If these reductions are enacted, SSA will take actions to minimize the negative effect on disability claims processing by seeking additional economies in its operation. However, these funding cuts may lead to a serious deterioration in service to individuals with disabilities. In addition, the agency's ability to process continuing disability reviews, which has been restricted due to the continuing surge in applications, would further deteriorate. This may result in unnecessary Disability Insurance and Medicare expenditures.

State Survey and Certification

The Senate Committee did not adopt the user fee proposal for the survey and certification of health care facilities, as requested in the President's budget. The Committee bill provides $151 million for this program. This reduced funding level would result in fewer health care facilities being inspected, an activity that helps to ensure compliance with HCFA patient health and safety requirements. The Senate is urged to adopt the President's proposal, which would permit the funding of the activities necessary to ensure patient health and safety through user fees.

Emergency Funding: Social Security Administration. Low-Income Home Energy Assistance Program (LIHEAP). and Tuberculosis Control

The Administration does not support language in the Committee bill concerning emergency funding for SSA, LIHEAP, and Tuberculosis control. This language would make $500 million available to SSA, $600 million available to LIHEAP, and $40 million available for Tuberculosis control. The funds would become available only after submission to Congress of a formal budget request designating the entire amount of the request as an emergency requirement.

Annual appropriations for programs such as SSA, LIHEAP, and Tuberculosis control whose requirements can be — and have been for many years — reasonably estimated in advance, should not be designated as "emergency" requirements. Therefore, the President's senior advisers would not recommend to the President that he designate any of these funds as an emergency requirement. If Congressional priorities include higher funding for these programs, Congress should provide larger regular appropriations for them.

Healthy Start Program

The Committee bill contains $84 million for the Healthy Start program, an increase of $22.8 million over the House-passed version of the bill. However/ the Administration is concerned that the Committee's recommendation is still $59 million below the President's request of $143 million. Healthy Start is an important step toward significantly reducing infant mortality. The Administration urges the Senate to realign its priorities and to fund fully the President's request.

Education Provisions

The Committee bill does not include any FY 1993 funding for the President's AMERICA 2000 initiative or for State and local "GI Bills for Children" scholarship demonstration grants. The Senate is urged to shift funding from lower-priority programs to these important education initiatives.

The Administration is concerned that the Committee has not provided adequate funding for priority programs for the disadvantaged, such as compensatory education and drug-free schools. Nor has the Committee provided adequate funding for essential research and statistics activities.

No funding is provided to finance the State role in determining school eligibility for Federal student aid. This new authority — authorized by the Higher Education Act — is essential to the protection of millions of students and the reduction of Federal default costs. Since the House deferred action on all Higher Education Act authorizations, it is imperative that the Senate include at least the $50 million that the Administration requested for this purpose.

Scoring Issues

The Senate Committee bill designates $500 million in budget authority ($403 million in outlays) for Impact Aid funding as defense discretionary funding. The scoring of this provision is currently under review. OMB has preliminarily scored these funds as domestic discretionary.

The Committee has increased the LIHEAP funding level to $2.8 billion, $1.7 billion over the President's request. Approximately $1.4 billion would be available in FY 1993 for FY 1994 costs, as the language is currently drafted. OMB has preliminarily scored these funds in FY 1993. The scoring of this provision is also currently under review.

The Administration is concerned with the potential impact of the provision on Mercado v. Department of Income Maintenance. Although the provision seems to be intended for a specific case, it appears to preclude penalties or collection of funds for any instance in which AFDC eligible families violate the AFDC resource limits at issue in Mercado. If the provision exempts all AFDC eligible families from the violations that took place in Mercado, costs would be significant. The Administration urges the Senate to limit the provision to the single family for whom relief seems to be intended. If the current language were retained, the Administration would estimate the larger costs.

Additional Administration concerns regarding the Senate Committee bill are contained in the attachment.

Attachments

Attachment
(Senate Floor)

ADDITIONAL CONCERNS
H.R. 5677 — DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND RELATED AGENCIES APPROPRIATIONS BILL, FY 1993

MAJOR PROVISIONS OPPOSED BY THE ADMINISTRATION

A. Funding Levels

Department of Health and Human Services:

Administration for Children and Families. The Administration objects to the Committee's funding for the Community Services Block Grant (CSBG). The Committee bill provides $451 million for the CSBG, $14 million above the FY 1992 enacted level and $446 million above the President's request. Community Action Agencies are now mature and no longer require this special administrative funding. CSBG administrative costs are also duplicative of the administrative costs available to Community Action Agencies from other Federal programs. The Administration urges the Senate to reduce these grants.

Health Resources and Services Administration. The Administration is pleased that the Committee bill contains reduced funding for untargeted health professions curriculum assistance grants. However, the Administration is disappointed that the Committee bill does not fund at the requested level several important health programs serving medically underserved populations. These include Healthy Start, community and migrant health centers, and homeless health care. The Administration urges the Senate to seek further reductions in health professions curriculum assistance grants and to redirect funds towards serving the medically underserved.

National Institutes of Health (NIH) and Alcohol. Drug Abuse, and Mental Health Administration (ADAMHA) Research Activities. The Administration is pleased that the Senate Committee has included more than $290 million over the FY 1992 enacted level for NIH and ADAMHA research. The Administration notes that this funding level is below the President's request. The Senate is urged to fund fully the President's request for NIH and ADAMHA research so that the maximum number of investigator-initiated research grants can be undertaken.

Medicare Administration. The Committee bill reduces funding for Medicare contractors by.$27 million. The Administration will seek to reduce the costs of claims processing and other activities. However, funding cuts for Medicare contractors may result in a reduction in service levels. The Committee would increase Federal administration by $12 million. This represents an increase of $28 million, presumably for survey and certification, and does not include $16 million requested for the Health Care Financing Administration's (HCFA) single site building. The Senate is urged to fund the HCFA administrative costs at the level requested by the President.

HCFA: Research. Demonstrations, and Evaluations. The Administration opposes the Committee's recommendation to increase appropriations for HCFA research, demonstrations, and evaluations by $24.6 million, most of which is for the Rural Health Care Transition Grants program. These "demonstrations" are not designed to create systemic improvements for rural Medicare beneficiaries. Such narrowly constructed "demonstrations" favor a few hospitals for a short period of time. The Senate is urged to delete this funding.

Department of Education:

Education Research. The Senate Committee's mark for education research activities would seriously damage efforts to improve the information dissemination system. In addition, the funding level proposed by the Committee would hamper efforts to carry out research on standards to define students' performance levels and on assessments to determine whether all children meet those performance level standards.

Statistics. The Committee's funding level is $20 million below the President's request for this program. At this funding level, the National Center for Education Statistics would be unable to maintain various statistics on education mandated by law. The Center would be forced to cut back on the collection of information relied upon by policymakers at all levels, including the Congress, in their efforts to improve American education.

National Assessment of Educational Progress (NAEP). The Senate Committee has eliminated all funds needed to continue to expand and improve NAEP, the only established national system for measuring what the nation's students know. The Committee has eliminated funds that would be used to convert NAEP to an annual (instead of biennial) cycle and to permit State-by- State assessments in three grades and three subjects, beginning in FY 1994. The Senate is urged to provide funding for these improvements.

Mathematics and Science Education. The Committee has rejected key elements in the national strategy to help States and localities improve the skills of mathematics and science teachers in schools throughout the country. The Committee bill eliminates proposed funding for a teacher training demonstration and eliminates language that would focus Federal funding resources on longer duration programs that have the greatest benefit. The Senate is urged to restore funding for this important program.

Drug-Free Schools. The Committee has not fully funded the President's request to target at-risk populations for important prevention initiatives under the Drug- Free Schools and Communities Act grant programs. The Committee action would result in approximately 100 fewer grants being awarded to help school children resist the pressures of drug dealers. In addition, the Committee has not supported the President's proposals for HHS treatment efforts that target at-risk populations. The Senate is urged to fund these important efforts.

Rehabilitation Services. The Committee would fund this account, which is classified as mandatory under the Budget Enforcement Act (BEA), at $2.2 billion, $68 million over the baseline. In accordance with BEA scorekeeping rules, the Office of Management and Budget will score the $68 million against the discretionary budget authority cap designated in the BEA.

Student Financial Assistance. The Committee has rejected a new program, requested by the Administration and authorized in the Higher Education Act of 1992, that would greatly strengthen State review of postsecondary schools for eligibility in Federal student aid programs. Under this program, States would take a more active role in reviewing certain schools, such as those with high default rates, unfavorable audit findings, large fluctuations in student aid funding, and changes in ownership. However, without appropriations, the States would be required to perform these reviews, leaving eligible for Federal funding schools with questionable educational quality and potentially fraudulent practices. The Senate is urged to provide $50 million for this vitally important new program.

Department of Labor:

State Unemployment Insurance and Employment Service Operations. The Committee has increased the amount of funds to be provided if workload (measured by Average Weekly Insured Unemployment, AWIU) exceeds a specified level. The contingency reserve fund would provide $30 million for every 100,000 increase in AWIU instead of $26 million as requested in the budget. Based on this increase, OMB's preliminary scoring of the contingency fund, as included in the Senate Committee bill, is $10.1 million in budget authority over the request.

The Committee has specified that the contingency reserve fund be made available when AWIU exceeds 3.54 million compared to 3.11 million in the President's budget. The Administration objects to the Committee's adjustment of the AWIU. Workload is difficult to predict, and an overestimate of the AWIU attributable to the Unemployment Compensation Amendments of 1992 could impede the availability of contingency reserve funds to the States.

Community Service Employment for Older Americans/Training and Employment Services. The Committee has added $52 million to the Administration's request of $343 million for the Community Service Employment for Older Americans (CSEOA) program. The Administration's request for CSEOA reflects the severe budget constraints facing domestic discretionary programs. The Administration urges the Senate to adopt the funding level contained in the President's budget for this program.

Job Training Partnership Act (JTPA). The Committee is commended for financing programs consistent with the new JTPA program structure in the recently enacted program amendments. However, in aggregate, the Committee has provided $159 million more for the JTPA programs than was included in the President's request. These increases include $95 million above the $683 million request for summer youth jobs; $60 million in new budget authority above the request for Job Corps construction and renovation; and $24 million above the $57 million request for training migrant workers. The Senate is urged to finance these programs at the requested level.

The Committee has reduced the Administration's $17 million request for the McKinney Act Job Training for the Homeless demonstration program by over $4 million. The Administration urges the Senate to adopt the Administration's request for the homeless and to fund fully job training services for this very needy population.

Bureau of Labor Statistics. The Committee's across- the-board reduction in salaries and expenses funding for the Department of Labor may jeopardize the timely implementation of locality pay required by the Federal Employees Pay Comparability Act of 1990. The Senate is urged to adopt the President's request for the Bureau of Labor Statistics.

Other Independent Agencies:

Federal Mediation and Conciliation Service (FMCS). The Administration urges the Senate to finance the FMCS at the level requested in the President's budget. The Committee's addition of $1 million for an unrequested labor-management cooperative grant program, which Congress chose not to finance in FY 1992, is unnecessary. Especially when continuing programs are being reduced below the President's request or below the FY 1992 level, this increase is inappropriate.

B. Language Provisions

Department of Labor:

Mine Safety and Health Administration (MSHA). The Administration objects to the inclusion by the Senate Committee of the provision in MSHA's appropriations language that would exclude sand, surface limestone, and similar mine operations from coverage under section 115 of the Mine Act. The hazards faced by these mining operations are similar to and, in many cases, identical to the hazards faced in other mining operations. Statistics show that these mines are no safer than other metal and non-metal mines.

Department of Education:

Student Financial Assistance. The Committee would restrict access to Pell grants for students who are studying for a degree on a less than half-time basis. Prior to the Higher Education Act of 1992 (HEA of 1992), only very needy persons studying one course at a time were eligible for Pell grants. However, appropriations language in the past few years has made even these students ineligible for Pell awards.

The Administration successfully worked closely with the Congress during the deliberations on the HEA of 1992 to ensure that all needy persons pursuing a degree, even if they were studying only one course at a time, could be eligible for Pell grants. The Senate is urged to delete the language that would make less than half-time students ineligible for Pell awards.

Department of Health and Human Services (HHS):

Vaccine Liability. The Administration objects to the provision requiring that the Federal government assume the liability of a vaccine manufacturer. The Administration is deeply committed to human immunodeficiency virus research and strongly supports research efforts to develop a vaccine. However, the implications of such broad legislation are not well known since Congress has not held hearings or formally considered this legislation.

The Administration is seeking estimates of the costs of insurance from insurers. Preliminary estimates indicate that this legislation could cost from $50 million to $100 million. The Administration believes that both the costs and the benefits of such a provision should be carefully aligned, since this provision would relieve vaccine manufacturers of liability for a product that would be marketed. On a preliminary basis, the Administration estimates that the present value of the liability judgments would be $75 million. Accordingly, OMB has preliminarily scored the $75 million against the Committee bill.

General Provisions:

Section 516: Trucking Industry Regulations. The Senate Committee has added a provision that would prohibit the Department of Labor from expending funds to enforce their new regulations that comply with the Midway Excavators court decision. The Midway Excavators decision held that the Davis-Bacon Act's prevailing wage requirements do not extend to material delivery truck drivers who come onto the site of the work merely to drop off construction materials, even if they are employed by the government contractor. The section also prohibits the Department of Labor from examining other aspects of the Act's coverage such as the meaning of the terms "construction," "site of work," and "site" as they are used in the Act.

The Administration objects to this language under which the pre-existing regulations would remain in effect even though declared invalid. The Department of Labor would be prevented from advising the public as to how the Davis-Bacon Act applies to truck drivers hauling material to and from covered construction sites. The Senate is urged to delete this provision.

Section 517: Salaries and Expenses Reductions. This section includes a provision imposing a one-for-two hiring limitation for agencies in the Departments of Labor, Health and Human Services, and Education except where Congress has specifically added full-time equivalents over the actual FY 1992 usage levels. This provision appears to be intended to prescribe the method by which reductions specified elsewhere in section 517 are to be achieved. The Administration objects to the Congress' mandating in statutory language the method by which the agencies are to achieve savings. Agencies should have the flexibility to achieve savings in a manner best suited to the programmatic needs of the Departments. The Senate is urged to delete this provision of section 517.

MAJOR PROVISIONS SUPPORTED BY THE ADMINISTRATION

A. Funding Levels

Department of Health and Human Services:

Head Start. The Administration is pleased that the Committee bill provides $2.8 billion for Head Start, an increase of $600 million over the FY 1992 enacted level of $2.2 billion. The Committee's funding level is identical to the President's request. The Administration is pleased that the Committee recognizes the importance of Head Start, which offers a wide range of comprehensive services to children from disadvantaged backgrounds and to children with disabilities.

Electronic Claims Incentive - Medicare. The Administration supports action taken by the Committee to restore the Administration's electronic claims proposal. This action will encourage providers to process claims electronically, thus shortening processing time for providers and beneficiaries and reducing administrative costs.

Inspectors General:

Offices of the Inspector General. The Administration supports the provisions of the Senate Committee bill that would fund the President's requested levels for the Offices of the Inspector General. These funds are needed to ensure the necessary program oversight and effective financial controls.

B. Language Provisions

Other Independent Agencies:

Railroad Retirement Board (RRB). The Administration commends the Committee for adopting the President's budget proposal to assign clearly the auditing of railroads to the Board. The Administration believes that the Board will conduct this function so as to protect the integrity of the railroad retirement trust funds.

Section 214: Accounting for Reimbursable Activities. The Administration commends the Committee for including this section in the bill. This provision would simplify billing procedures for accounts funded by this appropriations bill that have offsetting collections.

Section 215: Data Acquisition and Dissemination Proposal. The Administration commends the Committee for adopting the data acquisition and dissemination proposal to reduce erroneous Federal benefit payments to deceased individuals. Sharing information on deceased individuals between States and the Federal government will curb such wasteful payments and protect the integrity of the public's funds. This proposal is expected to save $5 million in FY 1993 and, if continued, more in later years.

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