Statement of Administration Policy: S. 1959 - Energy and Water Development Appropriations Bill, FY 1997

(Senate Floor)
(Sponsors: Hatfield (R), Oregon; Domenici (R), New Mexico)

This Statement of Administration Policy provides the Administration's views on S. 1959, the Energy and Water Development Appropriations Bill, FY 1997 as reported by the Senate Appropriations Committee.

Department of Energy

The Administration appreciates the work of the Committee in a number of respects but continues to have serious concerns. The Administration opposes the Committee's action to shift the balance of priorities within the Department of Energy (DOE) by curtailing investments in important civilian activities and providing increases for defense-related activities that have not been requested.

The Administration notes that the Senate Committee has provided more than the House Committee for solar and renewable energy research and development Nevertheless, the Administration still objects to the Si 16 million reduction from the President's request of $363 million for solar and renewable energy research. By threatening this investment in the development of advanced renewable energy technologies, which have a large potential export market these cuts would reduce the creation of new jobs and limit our ability to reduce pollution, control climate change, and protect human health and the environment The Administration also opposes the restrictions placed on the use of biomass research and development funds, that would prevent the Department from implementing a program providing balanced support for biomass derived electricity and fuels research.

The Administration opposes the effective reduction of $31 million (12 percent) for Fusion Energy Sciences. The Administration's request is explicitly responsive to congressional direction contained in last year's spending bill to restructure the program's priorities. At the same time, the Administration's proposal manages the transition to the new program by maximizing the return from the existing facilities during FY 1997. The funding level provided by the Committee would not allow this orderly transition.

The 20-percent across-the-board reduction of program direction funds in the civilian research programs, coupled with an approximate 16-percent reduction in funds for Departmental Administration, would jeopardize the Department's ability to perform its missions and maintain its financial management responsibilities. In the past year alone, DOE has reduced its Federal workforce by over 1, 300, and large, additional reductions are planned over the next four years as part of a comprehensive downsizing initiative. The abrupt reductions mandated by the Committee would require Federal layoffs (RIFs) and would make it difficult for the Department to manage its programmatic responsibilities. These funds should be restored.

The Administration is pleased that the Senate Committee has restored cuts made by the House Committee to the President's request for International Nuclear Safety Activities and to program direction funding for defense-related activities, including the cleanup of defense facilities. The Administration has concerns, however, about the Senate Committee's $531 million increase for Atomic Energy Defense Activities in light of the severe cuts to DOE's civilian research and energy programs.

The Administration's request for Weapons Activities represents a 16-percent increase over FY 1995. The request provides for a significantly enhanced Science-Based Stockpile Stewardship and Management program that will place DOE on a firm course toward ensuring the long-term safety and reliability of the nuclear weapons stockpile. The Administration is committed to supporting this program in the out-years. Increases beyond the President's request are not required in FY 1997 and would put unnecessary pressure on other Department programs.

The Administration opposes the Committee's cutting $216 million needed to provide-fell, up-front funding for civilian basic science facilities construction. These investments would allow enhanced accountability and efficiencies in the planning, budgeting, and acquisition of fixed assets.

The Administration is opposed to the $13 million, or eight-percent, reduction to the President's request for the Federal Energy Regulatory Commission. The resulting funding level would be inadequate to implement the Commission's sweeping initiatives to bring competition to wholesale electricity markets and to the interstate natural gas pipeline industry. Since the Commission expects $4 million in additional carryover balances from FY 1996 to be available at the start of FY 1997, restoration of $9 million would expedite the Commission's efforts to reduce consumer energy costs by billions of dollars per year.

The Administration .opposes the significant reduction in funding for the DOE Office of Inspector General (OIG). The Senate Committee mark of $23.1 million is 22 percent below the President's request The OIG has a successful track record of identifying waste and baud in DOE programs, as well as in streamlining operations. In FY 1995, for example, OIG actions provided a positive dollar impact of about $3.4 million per audit employee, providing a payback that far exceeded its operating costs. A reduction this large to the OIG would very likely reduce DOE's ability to improve financial control and assure better program and contract management

The Committee bill would reduce by $17.7 million the request for Environment, Safety, and Health (ESH) activities in the Energy Supply, Research and Development Activities account Specifically, this reduction would cut program direction activities by $7.8 million and would cut the technical assistance program by $9.9 million. The ESH program has achieved a significant track record in improving work productivity and saving taxpayer dollars through its technical assistance programs, and funding reductions would be particularly detrimental to that effort at this time. In addition, the proposed reductions in program direction activities would result in reductions-in-force in safety and health personnel at a time when the Department can least afford it.

Section 503 provides, in part, that funds for the Department of Energy shall only be available "in accordance with the recommendations contained in this report" This provision should be deleted. The bill is not a "report," and the "recommendations" are not specified, so the reference is unclear and ambiguous. In addition, to the extent that the phrase, "this report," refers to a document that is not in final form at the time Congress passes the legislation, the provision would be unconstitutional.

Army Corps of Engineers

The Administration urges the Senate to use the over SI60 million in unrequested funds provided by the Committee for Corps of Engineers construction, studies, and operation and maintenance programs to fund new construction starts requested by the Administration and to restore reductions that the Committee has made in other priority Corps and DOE programs.

The Administration is gratified that the Committee recognizes the importance of the Corps regulatory program's administrative appeals process. However, the proposed funding level of $101 million would adversely affect the timeliness and responsiveness to the American public of the administrative appeals process and other important elements of the regulatory program. Permit evaluation time could increase by five to 10 percent, and the backlog of permits could increase by about 10 percent

The Administration urges deletion of the provision of the Committee bill that would limit the Army's ability to comply with the requirement of the FY 1996 Energy and Water Appropriations Act to reduce the number of Corps Division offices to no less than six and no more than eight. In addition, any restriction of the Army's efforts to streamline Corps operations would reduce the Corps' ability to meet out-year budget targets.

Bureau of Reclamation

The Administration appreciates the Committee's support of the Bureau of Reclamation's water resources management mission, but is concerned by the decision to underfund operation and maintenance (O&M) in order to finance additions to the construction and general investigations programs. The increased funding requested by the Administration for O&M is required to maintain the safety and reliability of existing infrastructure and to support new facilities coming on line. In addition, the Administration is concerned about the Animas-La Plata language in the Senate Committee Report

Tennessee Valley Authority

The Administration appreciates the Senate Committee's funding for TVA's Environmental Research Center.

Other Independent Agencies

The Committee bill would eliminate funding for Federal representatives to several independent river basin commissions. In keeping with the need to shift responsibility for local flood control and other projects from the Corps of Engineers to State and local governments, these commissions are representative of the type of State and locally oriented entities that could assume responsibilities for ensuring that the water resource needs of the various regions are met in a coordinated, cost-effective manner. Federal participation is necessary to protect the Federal interest in water supply issues in these basins.