Statement of Administration Policy: H.R. 5679 - Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Bill, FY 1993

(Senate Floor)
(Sponsors: Byrd (D), West Virginia; Mikulski (D), Maryland)

This Statement of Administration Policy provides the Administration's views on H.R. 5679, the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Bill, FY 1993, as reported by the Senate Appropriations Committee.

In his FY 1993 Budget, the President proposed to freeze domestic and international discretionary 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. 5679 is within the President's request for both domestic and defense discretionary budget authority. If the bill presented to the President were to exceed his request for discretionary budget authority of $66,070 million, the President would veto the bill. Attached is a table that provides OMB's preliminary scoring of the bill.

The remainder of this letter discusses other Administration concerns with the Senate Committee version of H.R. 5679. The discussion addresses the Administration's priorities for program funding and provides suggestions that would lead to a fiscally responsible bill that funds programs of national significance.

The Senate Committee version of the bill is preferable to the House-passed bill. It includes more funds for Space Station Freedom, eliminates a House provision that would roll back Federal housing program reforms, and reduces the House's reduction in Superfund cleanup funds. However, the Administration has a number of major concerns that are discussed in more detail below. These concerns could be addressed satisfactorily through a reallocation of funding from lower- priority programs. Reductions from the Committee recommendations for Subsidized Housing, Community Development Grants, various construction accounts, and other programs would allow resources to be allocated to initiatives that would more effectively meet national needs.

Space Station

The Space Station Freedom program is the centerpiece of the U.S. space program. It is essential for advancing manned spaceflight, conducting world-class research, and developing new technologies. It continues to meet all design, schedule, and budget criteria previously imposed by the Congress.

The Administration understands that amendments may be offered that would further reduce or terminate the Space Station Freedom program. The Administration strongly urges the Senate to oppose any amendment that would reduce or terminate funding for Space Station Freedom.

HOPE

The Administration objects to the funding of HOPE grants (HOPE I, II, III, and Elderly Independence) at $440 million, a reduction of 56 percent from the President's request. HOPE is an essential part of the Administration's urban assistance program. It would provide low-income people with access to private property and help them to realize the dream of homeownership. The rejection of most of the requested funding of $1 billion would eliminate the opportunity to own a home for as many as 70,000 low-income families.

The Administration also objects to the Committee's funding of two new unauthorized "HOPE" programs, especially "HOPE VI," which is funded at $500 million. The President's Perestroika for Public Housing initiative, which has not been funded by the Committee, represents a more comprehensive and targeted response to the problems facing public housing residents.

The Administration objects to making available up to $100 million (23 percent of the total appropriated) of HOPE I, II, and III funds to meet any shortfall in Section 8 contract renewals in FY 1993. The President's HOPE initiative is a top Administration priority. It should not be viewed as a reserve fund for an insufficiently funded Section 8 contract renewals program.

The Administration's HOPE initiative is one of the six urban initiatives the President announced in the wake of the Los Angeles riots as essential to fighting poverty in America's inner cities. Demand for the program is strong. The Department of Housing and Urban Development (HUD) has already received 1,167 applications this year, and more than 3,600 people have attended HOPE Training Workshops across the country. Requests for planning grants show that demand for the program will be even greater in the future. The demonstrated need for HOPE is far beyond what can be met by the current funding level. The Administration strongly urges the Senate to fund this initiative at the requested level.

Federal Housing Administration (FHA) Mortgage Limitations

The Administration opposes provisions to raise the maximum single-family FHA mortgage from $125 thousand to $151 thousand. The $125 thousand limit was agreed upon by the Congress and the Administration during negotiation on the National Affordable Housing Act of 1990. The increase in the mortgage limitation would move FHA away from its traditional role as a financial resource for middle- and lower-income buyers, particularly those within the inner cities.

Subsidized Housing -- Housing Vouchers

The Administration objects to the Committee's mix of programs, which relies on high-cost new construction projects. Although the Committee has added over $150 million to the overall funding level, actual new housing assistance for those most in need would be lowered dramatically. Fewer than 28,000 new households would be assisted under the Committee's mix of programs. In contrast, the Administration would assist 87,000 new households. A more cost-effective program mix would place more emphasis on housing vouchers. This would provide more households with assistance and a choice-in-where-to reside.

Unauthorized Special Purpose Grants

The Administration strongly opposes the $126.3 million in new grants for 110 separate, community-based projects that are listed in the Committee report. These projects are inconsistent with the intent of the Housing and Urban Development Reform Act to provide open and fair competition among jurisdictions for scarce housing and urban development funds.

Waiver of HUD Vacancy Rule

The Administration strongly objects to the provision that would prevent HUD from implementing a proposed vacancy rule to reform the public housing program. The proposed rule would reduce operating subsidies paid by HUD for vacant public housing units. Under the existing rule, HUD pays full operating subsidies on vacant units without regard to whether such units incur full operating costs. This provides a powerful disincentive to local housing authorities to fill vacant units despite a high demand for these units by low-income persons.

Environmental Quality Along the Mexican Border

The Administration strongly objects to previsions of the bill that would impede efforts to improve environmental quality along the Mexican Border in support of the North American Free Trade Agreement. The Committee eliminates funding for the international sewage treatment project to treat Tijuana sewage. This project was authorized by section 510 of the Water Quality Act of 1987 and is needed to fulfill U.S. commitments to Mexico. Also, no funding is provided to remedy major water quality sewage problems in Nogales, Arizona, and Calexico, California. The Administration is pleased, however, by the Committee's support for addressing sewage problems in the colonias.

Implementation of Environmental Statutes

The Administration has consistently increased support for the Environmental Protection Agency's (EPA's) efforts to implement and enforce EPA's environmental statutes aggressively. For the second year in a row, however, the Committee has chosen to reduce substantially funding for EPA programs in order to fund special interest projects.

The Committee's $94 million reduction for salaries would eliminate up to 1,200 workyears and hamper implementation of programs addressing high environmental risks, such as Clean Air Act implementation. Instead, the Committee has funded projects that are unneeded, duplicate other projects, bypass competitive funding procedures, or are not appropriate for Federal funding. The Senate is urged to demonstrate its commitment to the environment by restoring funding for these workyears.

Coastal Water Quality - Construction Grants

The Administration strongly objects to the deletion of $340 million requested for Boston Harbor and other high priority coastal secondary or advanced treatment facilities. These projects are targeted to cities that are located in coastal areas with significant recreational and ecological resources. In these areas, expedited construction can have a significant impact on coastal water quality.

Superfund

The Administration supports the Committee's restoration of much of the deep reduction in funding for Superfund included in the House-passed bill. The Administration urges the Senate to restore the Committee's $134 million reduction to the request for Superfund and to delete earmarking of $64 million for activities unrelated to site cleanup. The Committee's funding level would result in delays in actual cleanup of sites and extend the risk posed by these sites to public health and the environment.

Hazardous Waste Regulatory Reform

The Administration strongly opposes any amendments that would hamper or delay EPA's regulatory reform effort to revise the existing hazardous waste "mixture and derived-from" rule. Reform of the hazardous waste program is long overdue and badly needed. Without reform, up to $1.8 billion annually in unnecessary costs would continue to be imposed on the regulated community. Undermining the ongoing regulatory development process for this rule would be an inappropriate use of the appropriations process. If Congress wishes to address the issue legislatively, the issue should be subject to public hearing and debate as part of the normal Congressional authorization process.

Interagency Council on the Homeless (ICH)

The bill provides no funding for the ICH despite the Council's critical role in Federal efforts to address the problems of homelessness. The ICH also provides vital technical assistance to the private sector as well as State and local governments.

Scoring Issues

OMB has preliminarily determined that $55 million included in the bill for "Defense conversion engineering traineeship activities" would not be classified as defense spending. Accordingly, no budget authority or outlays are scored for this program since bill language prohibits the use of the funds unless they are classified in the defense category.

Additional Administration concerns with the bill as reported by the Committee are contained in the attachment.

Attachment

Attachment
(Senate Floor)

ADDITIONAL CONCERNS
H.R. 5679 — DEPARTMENT OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND INDEPENDENT AGENCIES APPROPRIATIONS BILL, FY 1993

MAJOR PROVISIONS OPPOSED BY THE ADMINISTRATION

A. Funding Levels

Inspectors General (IG):

General Reductions in Funding for IG. The Committee reduces by 50 percent the President's requested increases for each of the IGs of the Departments of Veterans Affairs (VA) and Housing and Urban Development (HUD), the Environmental Protection Agency (EPA), the National Aeronautics and Space Administration (NASA), and the National Science Foundation (NSF).

These reductions would affect seriously the performance of legislatively-mandated audits of financial statements as well as audits or investigations of high risk programs or other priority issues. Audits of the VA's health care inspection program, contracts with NASA suppliers, and EPA procurement and contract management could be curtailed, and essential oversight over high risk areas could be reduced significantly.

The high risk list included in the President's budget shows $17 billion at risk in HUD, inadequate systems to manage $158 billion in outstanding loan guarantees in VA, and inadequate financial management at NASA. The Administration strongly urges the Senate to fund each of these IGs at the requested level.

Federal Emergency Management Agency (FEMA) Inspector General (IG). The bill would reduce funding for the FEMA IG's Office by 50 percent below the President's request and by 42 percent below the FY 1992 enacted level. The $3 million funding level provided by the bill would cause the IG to reduce staff to less than 20 FTE from the current level of 65 FTE. A reduction-inforce would be required, and FEMA might have to close field offices in Atlanta, San Francisco, and San Juan, Puerto Rico.

The committee's recommendation could result in only about half of the anticipated audit activities being performed, and almost half of FEMA's budget would be at risk (not subject to any IG oversight). At a time when agencies are being asked to correct situations involving fraud, waste, abuse, or management shortcomings, the Administration believes that a 50- percent reduction in funding would be shortsighted and counterproductive. The Senate is strongly urged to restore funding to the requested level. At a minimum, the Senate is urged to provide funding sufficient not to require a reduction-in-force in the Office of the IG.

Resolution Trust Corporation (RTC) Office of Inspector General (OIG). The Committee reduces the Administration's request for OIG by $6 million, to $37 million. This reduction would not allow the OIG to monitor adequately the RTC, which currently holds $80 billion in assets from failed thrifts. The management and sale of these assets remains highly susceptible to waste, fraud, and abuse. The Committee's mark would freeze the OIG at the current level of 315 FTE and would reduce the resources available for contracting by 20 percent. -The OIG had planned to contract out the audits of the 1988 FSLIC arrangements as required in last year's appropriations bill. The OIG has also been asked by the RTC to undertake receivership and other audits.

Department of Housing and Urban Development (HUD):

Perestroika for Public Housing. The bill would provide no funding for the Administration's new "Perestroika for Public Housing" initiative. This initiative represents a radical and critical restructuring of the public housing program as it relates to the most distressed public housing authorities in the country. The principle underlying the initiative is choice: namely, affording residents of troubled public housing the right to choose either alternative management or ownership. Offering residents a greater range of choice for the control, modernization, and operation of their public housing communities will increase management's incentives to improve efficiency. Perestroika will force public housing authorities to be accountable to the people who live in public housing.

Community Development Block Grants (CDBG). The Committee recommends $4.1 billion for Community Development Block Grants, an increase of nearly 21 percent from the FY 1992 enacted level. While CDBG is considered an important tool for communities in economic development activities, States and communities have not spent nearly $6 billion of previous appropriations for CDBG. Given this backlog, the Administration believes that it would be very unlikely that the dramatic increase in funding recommended by the Committee would assist in the current economic recovery.

Public and Indian Housing New Construction. The bill would provide $507 million for Public and Indian housing new construction. This program is one of the Federal government's least cost-effective housing programs. With the same amount of dollars used for direct rental assistance (vouchers and certificates), the Federal government would help twice as many low- income persons find decent housing.- Moreover, vouchers and certificates allow individuals freedom in deciding where to live. In the Administration's view, the existence of over 104,000 vacant public housing units makes the Committee's funding level for the construction-of-new public housing units even more difficult to justify as an appropriate use of scarce resources.

The President's budget funds Indian housing units through a set-aside of $125 million in the HOME program. Funding Indian housing through the HOME program would provide greater flexibility to Indian tribes to develop housing programs that they believe are most effective.

Subsidized Housing -- Annual Contributions. The Committee proposes $600 million to fund incentive payments to prevent the prepayment of eligible assisted housing mortgages and to fund vouchers for tenants who would otherwise lose their assisted housing due to such prepayments. The Committee has provided only one-half of the President's request. Moreover, the Committee has failed to adopt the President's recommendation to reduce the level of incentives to 100 percent of the fair market rent. Without this reduction in incentives, the program would achieve only a fraction of the estimated $283 million in recaptures from Section 236. Since the $600 million in funding is contingent on the full $283 million in recaptures, the probable net effect would be to reduce the program level to below $400 million. This would be less than one-third of what the President has requested.

Chief Financial Officers Act. The Senate is strongly urged to provide funds to implement the Chief Financial Officers Act (CFOs Act). The bill would eliminate $1 million for CFOs Act implementation. This reduction could affect seriously the ability of the Chief Financial Officer to conduct legislatively-mandated responsibilities for financial management at the Department. Work on high risk areas such as those listed in the President's Budget for HUD, including improvements to accounting systems, could be curtailed and essential oversight of the high risk areas could be reduced significantly.

Public Housing Modernization. The Committee recommends over $1.2 billion in excess of the President's request for Public Housing Modernization. Funding this program at this level would only exacerbate a backlog of over $6.8 billion in available but unspent modernization funds. The Senate is urged to lower funding to the requested level.

Public Housing Operating Subsidies. The Administration objects to the Committee's funding level of $2.45 billion for public housing operating subsidies, a $168 million increase over the President's request. The President's request of $2.28 billion would more than adequately cover public housing operating needs in FY 1993.

Subsidized Housing — Section 8 Amendments. The bill would fund Section 8 certificate amendments at $1.3 billion, a reduction of $618.8 million from the request. The reduction is based primarily upon a finding in the April 21st Report of the Inspector General that HUD may have overstated funding needs for Section 8 certificate amendments by $312.5 million. The Inspector General's finding is a lower bound on the amount of funding for certificate amendments. The finding specifically cautions that no funding is provided for amendments that cannot be accurately estimated through the accounting system.

Because of HUD's systems problems, which continue to make accurate estimates difficult to achieve, and to avoid a subsequent supplemental, language providing flexibility to move funds among HDD's housing programs should be added to the bill.

Subsidized Housing — Leasing for Housing for the Elderly. The Committee does not implement the Administration's proposal to complement new housing construction with the added flexibility of permitting non-profit organizations to lease existing housing units for the elderly. Leasing is not only less expensive than new construction, but also provides more choice in housing and provides for housing more quickly where housing stock is available. The Senate is urged to adopt the Administration's proposal as an alternative to higher-cost approaches to meeting the unique housing needs of the elderly and disabled.

General and Special Risk Insurance Fund (GI/SRI). The bill would enact section 312 of S. 3031, which authorizes a new multi-family finance demonstration. The Administration opposes this demonstration as it would create a program that costs twice as much in credit subsidy than existing rental housing finance programs at HUD. The bill earmarks within the GI/SRI program account $79 million for credit subsidy costs and $21 million for administrative costs of this demonstration. Rather than expanding multi-family lending, this demonstration would reduce multi-family lending because of the higher subsidy cost.

Restore. The bill does not fund the Administration's program for Restore grants and loans. This program is a comprehensive approach to solving the problems of troubled, HUD-assisted and insured multi-family housing projects. Restore would base all assistance on an assessment of the total physical and financial needs of each project. Restore would also encourage greater tenant participation by giving tenants a financial stake in their projects. Further, it would encourage greater tenant choice by replacing long-term, project- based rental assistance with project stabilization vouchers portable after two years.

Flexible Subsidy Fund. The bill would deny the Administration's request to transfer $87.6 million in offsetting collections to the general fund of the Treasury and $24 million in unobligated balances to the Annual Contributions account. Since it is a direct loan program, the Flexible Subsidy Fund should be set up consistent with the requirements for such programs under the Credit Reform Act. The Administration urges the Senate to adopt its requested appropriations language.

Congregate Services. The Committee mark would provide $27 million for the Congregate Services program, which provides support services directly to the elderly and disabled. An evaluation of this program has shown it to be less effective than alternative programs, specifically, the HOPE Elderly Independence initiative and Service Coordinators for the elderly and disabled. The Administration urges the Senate to delete funding for Congregate Services in favor of funding for more effective programs.

Lead-Based Paint. The Administration objects to the Committee's funding level of $127 million for abatement of lead-based paint. The Committee's mark fails to consider the fact that very few States have the capacity to certify contractors and train workers to perform this level of work safely. The Administration believes that its request for abatement is the correct scale for safely performing abatement work without exposing children to additional risks.

Weed and Seed Funding. The Administration strongly objects to the deletion of $90 million in funding through the Department of Housing and Urban Development for the Weed and Seed program. Weed and Seed is a comprehensive, community-based strategy designed to fight violent crime and drug abuse and provide the resources for neighborhood revitalization. As part of a government-wide $500 million expansion of this anticrime neighborhood revitalization initiative, the Administration has requested $20 million for public housing modernization, $20 million for housing vouchers, $44 million through Community Development Block Grants, and $6 million in Public Housing Drug Elimination Grants.

The Committee's action to deny "seed" funds for these critical housing components of the program would adversely affect the 20 projects in operation around the country and would, in-effect, prohibit the addition of new Weed and Seed sites in FY 1993. The Administration urges the Senate to restore funding for these critical "seed" programs.

Fair Housing. The Administration objects to the Committee's funding level for fair housing initiatives activities. The Committee's mark would more than double the Administration's request for initiatives activities at a time when fewer substantially equivalent agencies will remain eligible to receive such funding.

Department of Veterans Affairs (VA):

Construction. The Administration supports the Committee's action to delete three unrequested projects that were added by the House. These three projects would cost $199.5 million in FY 1993. The Administration objects, however, to the Committee's deletion of $108.8 million for the Dallas, Texas hospital and the addition of $8 million for the Honolulu, Hawaii project. The Dallas project was included in the President's request. The increase for the Honolulu project is not needed because preliminary planning is not expected to be completed in FY 1993.

The Administration objects to the Committee's $29.3 million reduction to the request for VA's minor construction program. This reduction would hamper VA's efforts to maintain and upgrade its aging medical facilities because it would delay vital patient environment and life safety projects by at least one year.

The Administration objects to the Committee's $40 million addition to the request for VA's grant program for constructing State extended care facilities. The Administration is committed to providing cost-effective nursing home care to eligible veterans in community, State, and VA-owned facilities. The Department's request for this grant program supports this goal by fully funding the expected number of State applications in FY 1993. The additional funds are unwarranted and should be deleted from this bill.

Medical Care. The Administration objects to the significant increase in staff for Medical Care as proposed by the Committee. Redirecting over $63 million to increased staffing levels would generate roughly 1,250 FTE over the budget request. The request already includes an FTE increase over FY 1992 of 2,053 for opening new facilities, meeting new residency standards, and other activities. In the Administration's view, if the committee wants to improve the veterans' Medical care system with this $63 million, it should allow the VA to spend these funds as VA deems necessary. For example, such funds could be used to decrease the equipment backlog.

National Aeronautics and Space Administration (NASA):

National Aerospace Plane. The Administration strongly objects to the deletion of the President's request ($80 million) for NASA's portion of the joint NASA/DOD National Aerospace Plane program. This program represents the cutting edge of research and technology in materials, propulsion, and computing applications. Further, it bolsters America's preeminence in the aerospace industry during a time of severe industry cutbacks.

To date, over $2 billion has been invested by government and industry in the unique skills and facilities required for hypersonic research. A reduction of the magnitude recommended by the Committee would severely delay the completion of the technology development phase and eliminate NASA's contribution to a program that has civilian as well as military applications.

New Launch System. The bill would provide only $10 million of the $125 million requested for the development of a New Launch System (NLS). This joint NASA/Department of Defense (DOD) program is intended to reduce the operating cost of launch vehicles and to improve their reliability, responsiveness, and mission performance. Additional funding is required for NASA to continue its important role in this joint effort. NLS will support the launch needs of DOD and NASA. Therefore, development funding should be shared by both agencies.

Space Exploration. The bill deletes all $31 million requested in the President's budget for activities related to future exploration of the Moon and Mars. The Administration objects to the deletion of all of the funding requested to initiate two small, low-cost, unmanned exploration missions to the Moon. These missions, planned for launch in three to four years, will map the Moon's surface features, surface composition, and gravity field. The data and experience that will be provided by these missions is needed to support decisions on future exploration missions to the Moon and Mars.

High Speed Research. The Administration objects to the Committee's earmarking of $50 million for a High Speed Commercial Transport. NASA's current aeronautics program in high speed research is addressing barrier environmental issues that will provide the basis for evaluating technology for such an aircraft. It would be premature to accelerate the program until the ongoing research has determined that the environmental issues are adequately understood. The Administration believes that an orderly progression of the program will avoid a repeat of the dismal failure to develop supersonic transport in the 1970s.

National Science Foundation (NSF):

Research and Related Activities. The Committee recommends $1.9 billion for this account, a $353 million decrease below the President's request and a $20 million decrease below the FY 1992 level. This recommendation would effectively terminate the President's initiative to double NSF's budget by FY 1994 and would significantly impact NSF's contribution to the President's interagency research initiatives (e.g., global change, materials, biotechnology, and high performance computing). Report language directs NSF to revise its strategic plan, current operating plan, and future budget requests away from the current emphasis on basic research and more toward applied research.

Investments in basic research and education activities are central to the goal of creating new knowledge that can help keep our nation competitive. The Committee appears intent on changing the fundamental mission of NSF and diminishing the central role of the Federal government in supporting basic research. Report language also includes an unprecedented number of funding earmarks. In addition, the bill would eliminate NSF's transfer language. The Senate is strongly urged to restore funds for NSF's basic research support and to reject the objectionable language of the Committee report noted above.

Education and Human Resources. The Committee adds $31 million in earmarks to the President's request for activities that would have little beneficial effect in improving math and science education in America.

Salaries and Expenses. The Committee recommends $111 million for this activity, a decrease of $24 million below the President's FY 1993 request. Although not specifically mentioned in either bill or report language, this decrease would terminate NSF's relocation to the Ballston, Virginia site that has been competitively selected by GSA. NSF's current lease expires in 1995. The Senate is strongly urged to restore these funds.

U.S. Antarctic Program (USAP) Research Activities and Logistical Support Activities. The Committee reduces the Research activities account by $20 million below the request and has eliminated the Logistics account. Report language states that DOD should continue to play an important role in supporting these programs. DOD has publicly stated in writing that it has no mission in the Antarctic and that the NSF should seek private services for its logistical needs. The Senate is urged to restore funding for the USAP.

Academic Research Facilities and Instrumentation. The Committee recommends a $17 million increase above the President's request. Report language directs that $38 million be spent on modernizing academic research facilities. The President's request includes only funds for important scientific instrumentation. The President has not requested facilities funds because universities have been receiving modernization funds for decades through recovery of allocated overhead.

Federal Emergency Management Agency (FEMA):

Administrative Provisions. The Administration strongly objects to denying funds to support the Office of the Deputy Director. This provision is offensive and an inappropriate intrusion by Congress on Executive Branch functions.

The Administration also objects to bill language that would have the effect of micromanaging the agency. The bill would limit FEMA to 27 non-career positions, cap selected headquarters staff by office, and consolidate FEMA's largest directorates without a long-term vision or strategic plan. A reasoned, coordinated plan, implemented with assistance from constituent groups and experts, would result in more efficient organization streamlining than the restructuring proposed by the Committee.

FEMA Chief Financial Officers Act Implementation. The Committee reduces the President's request for financial management activities at FEMA by $1 million. This reduction would seriously affect the performance of the Chief Financial Officer to implement provisions of the CFO Act. Financial system weaknesses at FEMA are included on the OMB high risk list and the requested funding is critical to FEMA's ability to correct financial system deficiencies.

Civil Defense. The Administration objects to the Committee's funding of Civil Defense activities at a level 20 percent higher than the Administration's request. For example, the Committee would increase funding for Emergency Management Assistance grants by $7 million, and for the repair of underground storage tanks at Emergency Broadcast System (EBS) stations and State and local Emergency Operating Centers (EOCs) by $8 million.

Special Projects. The Administration objects to the $3 million in funding provided by the committee for several special projects not supported by the Administration and not subject to the normal administrative review process.

Hazardous Materials Training Grants. The bill would provide $3 million for Hazardous Materials Training Grants, which are authorized in the Superfund Amendments Reauthorization Act (SARA) but not requested in the President's budget. The Administration expects that funding for this program would be made available in FY 1993 by the Department of Transportation through programs authorized in the Hazardous Materials Transportation Uniform Safety Act.

Other Agencies:

Points of Light Foundation. The Administration urges the Senate to finance the Points of Light Foundation at the President's requested level of $10 million. The Points of Light Foundation should be funded at the requested level to enable it to achieve its goal of making direct and consequential service aimed at serious social problems central to the life and work of every American.

Chemical Safety and Hazard Investigation Board. The Administration opposes the elimination of funding for the Chemical Safety and Hazard Investigation Board. This funding is needed for the Board to carry out its statutory mandates under the Clean Air Act to investigate accidental releases of hazardous substances into the environment.

Commission on National and Community Service. The Administration urges the Senate to finance the Commission at the President's requested level. The $75 million request would continue the Commission's operations at the FY 1992 level and allow multi-year projects to-be-extended. Given the difficult budget situation and other higher priorities in this appropriation, additional funding for this agency is not warranted.

B. Language Provisions

Department of Housing and Urban Development:

Assistance for the Renewal of Expiring Section 8 Subsidy Contracts. The Senate is urged to provide the full amount of requested transfer authority ($363 million). This would provide a needed contingency in case the initial budget estimates prove to be too low. HUD has worked to improve the budget estimates for these contract renewals. However, they still rest on a survey of voluminous paper records in HUD's field offices that have been subject to error in the past. To assure adequate funding, some flexibility through transfer authority is necessary in order to assure that all expiring contracts are renewed.

Limitation on Amendment Funding for New HUD Rental Assistance Contracts. The Senate is urged to restore requested language that would end the practice of budgeting an initial amount for rental assistance contracts and then seeking additional appropriations to cover "shortfalls" in such funding. Such amendment shortfalls recently reached over $2 billion annually, which is a substantial portion of HUD's total appropriation. The requested language would prohibit such amendments on new contracts funded in FY 1993 but would not affect existing contracts. The use of shorter-term, five-year contracts and central reserve accounts should permit implementation of this prohibition without adversely affecting program recipients or contract administrators.

Section 8 Fees for Rental Assistance. The Administration opposes language recommended by the Committee that would raise administrative fees paid to local housing authorities from the proposed 7.25 percent to 8.2 percent. Research by the General Accounting Office and HUD has determined that a fee in the range of 7.2 percent is sufficient to cover the costs of local housing authorities.

Environmental Protection Agency:

Personnel Ceilings. The Administration opposes inclusion of specific staff levels for various EPA headquarter offices. Congressional micromanagement of this nature eliminates the necessary flexibility to allocate staff resources to the most pressing needs. The Senate is urged to delete these provisions.

Pollution Prevention Act Implementation. The Administration strongly opposes the provision related to implementation of the Pollution Prevention Act through EPA's Toxic Chemical Release Inventory Form R, as revised on May 19, 1992. This provision represents an unnecessary and inappropriate abridgement of the requirements of the Paperwork Reduction Act of 1980. That Act makes adequate provision for the extension of Agency paperwork forms; there is no justification for an indefinite extension of this specific paperwork. The Paperwork Reduction Act also provides for public consultation and a formal public record for comments from interested parties.

Department of Veterans Affairs (VA):

Construction. The Administration objects to the Committee action adding bill language to waive for one year the current State matching requirement (35 percent of construction costs) in VA's grant program for constructing State extended care facilities. The Administration does not believe that initial construction costs are limiting State participation in VA's grant program. The long-term costs associated with operating State homes are a more important factor in States' decision-making.

Medical Care. The Administration commends the Committee's deletion of House language earmarking $9.4 billion for personnel services within VA Medical Care. This provision would infringe upon VA's executive management of the veterans' health care system and preclude the Department from utilizing medical resources in the most effective and efficient manner.

Language retained by the Committee that makes equipment, land, and structures funds available for two fiscal years is not necessary. VA medical centers have adequate time to plan and obligate funds for these activities. The restriction on obligation of certain funds until the fourth quarter of the fiscal year would simply delay the obligation of funds. It would not preclude VA medical centers from taking all steps necessary before August 1st each year to ensure that obligations can be made before the end of the fiscal year. The language should be deleted.

Consumer Product Safety Commission (CPSC):

User Fees. Private industry currently receives CPSC advice, expertise, and safety "certification" free-of- charge. The President's budget proposes to recover the costs of these services through user fees. This proposal is consistent with the CPSC reauthorization bill currently pending in the House, which allows CPSC to keep any user fees it charges. In failing to adopt the proposed user fee language, the Committee has missed an opportunity to improve the operation and equity of Federal services. The Senate is urged to adopt the proposed language.

Various Agencies:

Commission on National and Community Service. The Administration strongly objects to language allowing the Executive Director of the Commission to appoint 17 staff members without regard to the provisions of title 5, U.S.C. governing appointments to the civil service. There is sufficient flexibility under title 5 to meet pay and appointment needs of the Commission. There is no unusual circumstance that warrants this uncalled for blanket exemption from civil service safeguards for the Commission.

Unenacted Legislation and Chadha Provision. Several provisions of the bill appear to incorporate by reference provisions and reports not yet in existence. Such references must be in existence before enactment of H.R. 5679 for them to be incorporated effectively as law. In addition, several provisions of the bill purport to require Committee approval before agency action may occur. These provisions constitute committee-veto devices of the kind struck down by the Supreme Court as unconstitutional in INS v. Chadha. 462 U.S. 919 (1983).

Review of United States Fire Administration Funds. The Senate report would require that certain funds "be administered solely by senior level [United States Fire Administration] officials, not subject to other oversight or review." This provision will be interpreted consistent with the President's constitutional authority to supervise and guide subordinate officials of the Executive Branch and to delegate that authority to other subordinates.

Quota Directives. The bill directs the EPA, NASA, and the RTC to "ensure that at least 8 per centum of Federal funding for prime and subcontracts awarded in support of authorized programs ... be made available to business concerns or other organizations owned or controlled by socially and economically disadvantaged individuals." Such individuals "shall be deemed to include women."

The Committee report indicates that these provisions are intended to set aside government contracts for minority- and women-owned businesses. In the report, FEMA is directed "to take all necessary steps to increase the numbers of females and racial minorities in senior positions."

A Congressional grant of Federal money or benefits solely on the basis of the recipient's race or gender is presumptively unconstitutional under the equal protection provisions of the Constitution. The Supreme Court has held that race or gender preferences violate the Constitution unless they are substantially related to the accomplishment of important goals. See Metro Broadcasting. Inc., v. FCC, 110 S. Ct. 2997 (1990) (holding that Congressionally enacted racial preferences must serve important governmental goals and be substantially related to achieving those goals); Mississippi University for Women v. Hogan, 458 U.S. 718 (1982) (prescribing similar standards for gender preferences). The provisions in the bill would withstand constitutional scrutiny only if there were sufficient evidence to meet this standard.

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