Statement of Administration Policy: S. 1036 - Rural Partnerships Act of 1989

(Senate)
(Leahy (D) VT and 39 others)

The Administration has serious concerns with S. 1036, and will seek to address these concerns in the House. A number of programs authorized by S. 1036 are already being implemented by Federal agencies pursuant to existing authorities. The expansion and duplication of these authorities would not add to the coherence or effectiveness of Federal aid to small, rural communities.

The President has formed a rural development working group, under the auspices of the Economic Policy Council (EPC), to reassess existing programs, establish priorities for the future, and seek ways to facilitate greater economic growth in rural America. The Administration believes that enactment of comprehensive rural development legislation would be premature until the EPC study and recommendations are completed.

Although the Administration's rural development review is still underway, it is clear that much of S. 1036 is duplicative, counter-productive, or otherwise raises substantive concerns. For example:

• The establishment of a Rural Business Investment Fund would essentially duplicate the existing Farmers Home Administration (FmHA) Intermediary Relending Program.
  
  
• The proposed Rural Capital Access Program would generally duplicate aid to small businesses now provided by FmHA and the Small Business Administration. In addition to being duplicative, the new aid would not provide sufficient incentives to ensure new participation by small, low volume, rural banks or by businesses not already able to obtain credit.
  
  
• The additional and altogether new responsibilities for the Rural Electrification Administration (REA) — e.g., assisting water and waste water facility construction and funding communications "links" for education systems — would substantially alter the mission of the REA. The REA could not carry out the new responsibilities as efficiently or universally as the agencies currently responsible for nearly identical programs, including FmHA, the Environmental Protection Agency, the Department of Education, and the Small Business Administration.
  
  
• The funneling of new assistance to heavily subsidized REA borrowers would give them an unfair competitive advantage over non-subsidized businesses.
  
  
• The specifying of appointments to the Rural Partnership Investment Board by political party membership impermissibly limits the President's appointments authority.