Statement of Administration Policy: H.R. 776 - Comprehensive National Energy Policy Act

(Senate)
(Sharp (D) Indiana and 5 others)

The Administration strongly supports the prompt enactment of comprehensive national energy legislation to provide for economic growth, increase energy security, and protect the environment. In this regard, the Administration strongly supports the action of the Senate Finance Committee in providing over $1 billion in alternative minimum tax relief for independent oil and gas producers and not limiting such relief to five years. The Administration also supports making the existing tax exemption for ethanol when blended with gasoline proportional for blends of less than 10% ethanol. This prorationing, will remove an artificial barrier for greater use of ethanol.

The Administration, however, strongly opposes a Senate Finance Committee provision to bail out privately negotiated health benefit plans for United Mine Workers of America (UMWA) retirees and their dependents. This bailout would primarily benefit selected large eastern coal companies by creating a new Government entity financed by an industry-wide tax. The new tax will hurt consumers and all coal workers not covered under the National Bituminous Coal Wage Agreement. This unjustified UMWA bailout is highly objectionable from both an employment and health policy perspective.

If the NES legislation presented to the President contains the UMWA bailout or other objectionable provisions, the President's senior advisers would recommend veto.

Other Administration concerns will be presented to the conferees when they begin their deliberations. Moreover, the Administration strongly opposes the addition of nongermane or contentious amendments to H.R. 776 on the Senate floor, which would impede swift Senate consideration of H.R. 776.

The Administration commends both the Senate Finance Committee on its quick action on H.R. 776 and the Senate for its timely consideration and enactment of balanced energy legislation earlier this session. Swift action by the Senate on H.R. 776 will facilitate conference action on comprehensive energy legislation and expedite its final passage.

Scoring for purposes of Pay-As-You-Go

Several provisions of H.R. 776, as amended by the SFC, would increase direct spending or reduce receipts; therefore, H.R. 776 is subject to the Pay-As-You-Go requirement of the Omnibus Budget Reconciliation Act (OBRA) of 1990. A budget point of order applies in both the House and the Senate against any bill that is not fully offset under CBO scoring. If, contrary to the Administration's recommendation, the Senate waives any such point of order that applies against H.R. 776, the effects of enactment of this legislation would be included in a look back pay-as-you- go sequester report at the end of the congressional session.

OMB's preliminary scoring estimates for the Senate Finance Committee provisions of this bill are presented in the table below. Final scoring of this legislation may deviate from these estimates. If H.R. 776 were enacted, final OMB scoring estimates would be published within five days of enactment, as required by OBRA. The cumulative effects of all enacted legislation on direct spending will be issued in monthly reports transmitted to Congress.

Estimates of Title XIX for Pay-As-You-Go
(dollars in millions)