Statement of Administration Policy: S. 2864 - Export Enhancement Act of 1992

(Senate)
(Sarbanes (D) Maryland and 3 others)

The Administration would support Senate passage of S. 2864 if the following objectionable provisions are amended or deleted:

—   Section 102, which authorizes appropriations of $500 million for each of Fiscal Years 1993-1995 for tied aid, nearly a five-fold increase over the currently appropriated level. (Tied aid is the combining of grants or low interest foreign assistance funds with regular export credits to win export sales.) Such an amount is inconsistent with the intent of the recent Organization for Economic Cooperation and Development (OECD) Agreement to reduce trade-distorting use of tied aid.

In addition, other aspects of section 102(c) are inconsistent with the Agreement and should be deleted or amended. For example, section 102(c) should: (1) not make tied aid a permanent program; (2) amend the permissible uses of the tied aid credit fund to focus efforts on exceptions to the Agreement and not refer to grandfathered projects; and (3) not require that the tied aid report to Congress include "all principal offers of tied aid credit financing by foreign governments."

—   Section 106, which would allow Eximbank to compensate its personnel from Bank earnings at pay levels comparable to those received by employees of bank regulatory agencies. This section is unnecessary because of already available pay flexibilities that may be used to achieve comparability. It also would unwisely fragment the Government's pay system and lead to pressure from other agencies for similar treatment, resulting in pay competition among Federal agencies.

Using Bank earnings to pay employee salaries, benefits, and expenses is inconsistent with credit reform, as required by Title V of the Congressional Budget Act of 1974, as amended. In addition, this provision would increase direct spending, which is not offset.

—   Section 201, which statutorily establishes the Trade Promotion Coordinating Committee. Although the Administration supports the TPCC process, it does not believe that establishing the committee in statute is necessary or appropriate.

—   Section 203, Which would require the Department of Commerce to provide assistance in completing Eximbank loan applications. This would require Commerce to undertake functions which duplicate those of Eximbank.

—   Section 301, which would restrict the President's existing authority under the International Emergency Economic Powers Act. This provision represents an unwarranted intrusion on the President's ability to protect national security and administer U.S. foreign policy.

Pay-As-You-Go Scoring

Section 106 of S. 2864 would increase direct spending; therefore, it is subject to the pay-as-you-go requirement of the Omnibus Budget Reconciliation Act (OBRA) of 1990. No offsets to the direct spending increases are provided in the bill. A budget point of order applies in both the House and Senate against any bill that is not fully offset. If, contrary to the Administration's recommendation, the Senate waives any such point of order that applies against S. 2864, 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 of this bill are presented in the table below. Final scoring of this proposal may deviate from these estimates. If S. 2864 were enacted, final OMB scoring estimates would be published within five days of enactment, as required by OBRA. The cumulative effects of all legislation on direct spending will be issued in monthly reports transmitted to Congress.

ESTIMATES FOR PAY-AS-YOU-GO
(in millions of $)