Statement of Administration Policy: S. 617 - Second Supplemental and Rescission Bill, FY 1995

(Senate Floor)
(Sponsor: Hatfield (R), Oregon)

This Statement of Administration Policy provides the Administration's views on S. 617, the Second Supplemental and Rescissions Bill, FY 1995, as reported by the Senate Appropriations Committee.

While the Senate Committee bill would delete or reduce several of the most objectionable rescissions contained in the House-passed bill, the Administration must strongly oppose many provisions of the Committee bill, and, therefore, finds the bill unacceptable. We believe that it unnecessarily cuts valuable, proven programs that educate our children and aid the disadvantaged, including the National Service program. The Administration also opposes reductions in programs that were established to ensure our Nation's role in the advancement of technology.

Deficit Reduction

The Administration remains firmly committed to deficit reduction, in 1993, the Administration worked with the Congress to enact the largest deficit reduction package in history. We cut Federal spending by $255 billion over five years, cut taxes for 40 million low- and moderate-income Americans, and made 90 percent of small businesses eligible for tax relief, while increasing income tax rates only on the wealthiest 1.2 percent of Americans. As we placed a tight "freeze" on overall discretionary spending at the FY 1993 levels, we shifted spending toward investments in human and physical capital that will help secure our future.

This Administration's economic plan helped bring the deficit down from $290 billion in FY 1992 — to $2$3 billion in FY 1994, to a projected $193 billion this year — providing three straight years of deficit reduction for the first time since Harry Truman was President.

We believe that we can address the issue of deficit reduction and provide for the Middle class Bill of Rights without putting low-income families at risk. The Administration does not believe that sound programs, particularly those aimed at the disadvantaged and those that will ensure our Nation's preeminent standing in science and technology, should be cut. The Administration would be particularly troubled if such cuts were made to finance a tax cut for higher-income taxpayers. It is noted that the Senate Committee bill does not include language that would direct that savings generated by the bill be set aside for deficit reduction.

In the FY 1996 Budget, the President has proposed significant rescissions for FY 1995 and additional program terminations in FY 1996 for numerous low-priority programs. In contrast, the Senate-reported bill would impose severe reductions on a number of high-priority programs. These cuts would have a particularly harmful effect on our Nation's children by cutting funding for National Service, Summer Jobs, WIC, Goals 2000, Head Start, Job Corps, Education for the Disadvantaged, direct student loans, and housing for families. Many of the cuts are shortsighted — reducing funding for education, for advanced technology programs that are critical to our Nation's future, and eliminating funding for the Community Development Financial institutions (CDFI) Fund, which would be instrumental in leveraging investments in our country's most distressed communities. Other cuts would adversely affect the health of Americans by cutting funding for safe drinking water and violent crime prevention and anti-drug programs. In its consideration of the bill, we urge the Senate to restore these cuts.

FEMA Emergency Supplemental

The Administration is disappointed that the Committee has chosen to include in this controversial bill the urgently needed FEMA supplemental, which is appropriately designated as an emergency for which offsets are not required under the Budget Enforcement Act of 1990. This could cause an unnecessary delay in assistance to victims of natural disasters in 40 states, including victims of the Northridge earthquake. If action on the Administration's request is delayed, FEMA will, beginning in May, be unable to allocate funds to meet any new disaster requirements, unless money reserved for the 40 states currently receiving disaster assistance is cut.

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

Attachment

Attachment (Senate Floor)

ADDITIONAL CONCERNS

S.617 — SECOND SUPPLEMENTAL AND RESCISSION BILL, FY 1995

(AS REPORTED BY THE SENATE APPROPRIATIONS COMMITTEE)

National Service Program

The proposed $210 million rescission for the Corporation for National and Community Service would reduce significantly the President's National Service program, depriving more than 15,000 young adults of the opportunity to serve their communities as an AmeriCorps member and earn an education benefit. The proposed rescission would eliminate funding for the opportunity for thousands of school children to learn about responsibility to their community for the first time.

This program has a proven track record. For example, AmeriCorps members have already reclaimed recreation areas in inner cities from gangs, and thousands of low- income and migrant children have received proper immunizations to protect their health. AmeriCorps members also have helped raise the spelling scores and reading levels of rural disadvantaged children, built homes for "working-poor" families, and provided disaster relief assistance to victims throughout the western part of the country. The Administration strongly believes that national service is a key to solving problems inside America's communities. The Senate is urged to restore full funding for this important program.

Community Development Financial Institutions (CDFI) Fund

The proposed rescission of $124 million contained in the Committee-reported bill would terminate this program. Without this funding, in FYs 1995 and 1996 the CDFI Fund would not be able to provide: $10 million in direct loan subsidies to support over $23 million of direct loans to CDFIs; $70.5 million in grants, technical assistance, and other financial assistance to CDFIs; and $39 million in community development incentives for depository institutions. The Fund's investments in CDFIs, banks, and thrifts would leverage an estimated $500 million in investments, loans, and financial services in the country's most distressed communities. The Senate is urged to restore this funding.

Women, Infants, and Children (WIC)

The Committee-reported bill would reduce funds available for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) by $35 million. The WIC program provides nutritious supplemental foods to low-income pregnant, post-partum, and breastfeeding women, and to infants and children up to their fifth birthday. The Committee's action would result in 840,000 fewer food packages for women, infants, and children. Jeopardizing the health and welfare of these mothers and children cannot be justified.

Head Start

The Administration objects to the Senate action that would reduce funding for Head Start by $42 million. At the FY 1995 estimated par-child cost of $4,530, $42 million would be sufficient to provide Head Start services to approximately 9,300 children. HHS would make every effort to minimize the number of children and families who could potentially be affected by a mid-year funding reduction. However, at a minimum, the statutorily-mandated effort to serve children under age three would be sharply reduced, with more than 3,000 children not receiving Head Start services. The rescission could also eliminate all new funding for the statutorily-mandated initiative to enhance the transition of Head Start children into the public schools.

Education Programs

The Committee-reported bill would reduce the funding for Goals 2000 by $68 million, Which would greatly diminish support to States and communities for raising academic standards and improving their local schools. The Committee-reported bill also proposes to cut the Education for the Disadvantaged program by $80 million, which would reduce services to educationally disadvantaged children. The Administration is also opposed to the $95 million reduction proposed for the direct student loan program.

Summer Jobs

The Summer Jobs Program provides meaningful work experience for hundreds of thousands of economically disadvantaged youth who might otherwise not have any opportunity to learn necessary job skills and workplace behaviors during crucial formative years. The Administration is pleased that the Committee has not reduced funding for this program for the summer of 1995. However, the Administration remains concerned that the rescission contained in the Committee-reported bill would eliminate funding for the Summer Youth Employment program in the summer of 1996, thereby eliminating job opportunities for about 615,000 disadvantaged youth. The Administration strongly believes that improving the job prospects of at-risk youth is an important element in a broader strategy to ensure employment opportunities for all Americans and a vibrant, productive workforce for U.S. business.

Job Corps

The Administration objects to the Senate Committee action that would rescind $46 million for Job Corps. This action would halt expansion of a youth training program with a track record of improving the employment and earnings of poor youth. The Committee action would eliminate funds to continue work on the eight new Job Corps centers that were launched with previous years' appropriations. Work is underway on these eight centers, which would create 3,200 new training slots for about 4,700 severely disadvantaged youth each year. In addition, the Senate Committee action would eliminate funds to initiate four new Job Corps centers in 1995, Which would boost capacity by another 1,600 slots.

Violent Crime and Drug Abuse Control

The Administration is concerned that the Committee has chosen to rescind nearly $100 million in funding for the Safe and Drug Free School Program at the same time that every poll shows that crime and school safety are a major concern of Americans. This program is the centerpiece of the Administration's fight against the use of drugs and stimulants by an alarmingly increasing number of our youth.

The Administration opposes the Committee's recommendation to rescind $53 million for violent crime prevention and drug control initiatives — $39 million of which is funded through the Violent Crime Reduction Trust Fund (VCRTF). Of the total amount rescinded, nearly $27 million would come from the Drug Courts program, which will provide drug treatment and real opportunities for rehabilitation for non-violent, first-time drug offenders. Another $11 million would come from the Family and Community Endeavor Schools (FACES) program, which seeks to provide healthy alternatives to the streets for youth. All grant funding for the Ounce of Prevention Council would be rescinded. Another $13 million (non-VCRTF funding) would come from Substance Abuse and Mental Health Services Administration (SAMHSA) block grants, which would reduce States' abilities to offer drug abuse treatment.

FEMA Disaster Relief

P.L. 102-229, the Dire Emergency Supplemental Appropriations Act of 1992, contained a special provision on emergency designations under the Budget Enforcement Act (BEA) for FEMA Stafford Act activities. That provision specifies that all appropriations for disaster assistance in excess of the then historical annual average obligation of $320 million (or the amount of the President's budget request, whichever is lower) "shall be considered as 'emergency requirements' pursuant to" the BEA, and "such amounts shall hereafter be so designated." This provision is permanent law applying in FY 1993 and "thereafter," and expressly applies "notwithstanding any other provision of law." In FY 1995, the President requested and the Congress did in fact appropriate $320 million for FEMA disaster activities.

The Administration is disappointed that the Committee has decided to disregard this provision of law and to include this emergency funding in a controversial rescission bill, which will inevitably lead to delay.

Housing Assistance

me committee-reported bill would threaten the wellbeing of our Nation's most needy and vulnerable citizens and would wreak havoc upon the stability of our Nation's most distressed communities. The draconian cuts targeted towards programs of the Department of Housing and Urban Development would deny help to thousands of needy, low-income households, including many homeless families. Hundreds Of communities would lose money that they have counted on for critical community needs such as housing rehabilitation.

Timber Sales

The Administration is opposed to a provision of the Committee-reported bill that would too broadly define "salvage timber sales" to include sales of primarily healthy trees, supersede the otherwise applicable environmental and land management statutes, and restrict citizens' access to the courts. The Administration remains steadfastly committed to the Northwest Forest Plan, which establishes a careful balance between sustainable timber harvest and sound ecosystem management.

The Departments of-the Interior, Agriculture, and Commerce last month announced a comprehensive plan to accelerate timber salvage sales. Nevertheless, the Administration is concerned that the current timber salvage program does not meet expectations. In addition to the measures already underway at these agencies to accelerate timber salvage sales, we stand ready to work with the Congress to find appropriate, productive solutions to this pressing national problem that would not result in a return to gridlock.

Davis-Bacon Provision

The Administration opposes a provision in the bill that would exempt any contract associated with the construction of facilities for the National Museum of the American Indian from the Davis-Bacon Act- The Act requires that all Federally-funded or Federally- assisted construction be covered by the Davis-Bacon Act. An exception in this case would be counter the goals of the Act.

Science and Technology

This Administration remains firmly committed to increasing the Nation's productivity and raising living standards by investing in science and technology. These investments will lead to a healthy, educated public; job creation and economic growth; world leadership in science, mathematics, and engineering; and harnessed information technology. The rescissions proposed by the Committee for many of the programs in the Department of Commerce would severely threaten the United States' standing with respect to technology advancements and competitiveness.

The proposed rescission of funds for the Manufacturing Extension Partnership Program at the National Institute of Standards and Technology (NIST) contained in the Committee-reported bill would reduce the number of new centers established from 36 to 10. This would result in reduced access to state-of-the-art manufacturing technology and techniques by U.S. manufacturers — a key component of the U.S. economy.

The proposed $19-5 million rescission of funds for laboratory research at NIST would have a real impact on industry's ability to compete in both emerging and mature markets. NIST laboratories develop and deliver measurement techniques and services that provide a common language needed by industry in all stages of commerce. The rescissions would result in the elimination of new starts in the areas of Advanced Manufacturing, Biotechnology, Semiconductor Metrology, and Information Infrastructure standards development resulting in the diminished competitive posture of U.S. industry.

Reductions are also proposed by the Committee for the Department of Energy's (DOE's) solar, renewable energy, and conservation research programs. Such reductions would threaten our national effort to implement fully the Energy Policy Act of 1992 and the Climate Change Action Plan. Reduction to the DOE science budget also would adversely impact climate change, human genome, and neutron research. The additional reductions to the Environmental Management program would impede progress at several of the Department's cleanup sites.

The Committee's proposed rescission of $12.5 million for the National Biological Service in the Department of the Interior would severely hamper the Service's ability to provide basic scientific information to the land managing bureaus within the Department, including programs in the Pacific Northwest. This rescission would force the Service to consider closing the Great Lakes Science Center in Ann Arbor, Michigan. Also, certain laboratory facilities would be considered for closure, and joint State projects underway in more than 30 States would be reduced.

The Committee has proposed rescinding $42 million of upgrades to the national transonic wind tunnel. These upgrades have been planned for many years and are critical to maintaining the performance of these tunnels. The wind tunnel complex has contributed to the development of almost every U.S.-developed military and civil aircraft. Failure to modernize this facility will increase the delay in critical test data. These upgrades are needed now and are unrelated to the development of a new wind tunnel facility.

The Senate is urged not to imperil our Nation's standing on the technology frontier.

International Programs

The Committee-reported bill does not appropriate the requested $672 million emergency supplemental for assessed U.N. peacekeeping costs that will accrue during FY 1995. The United States is bound by treaty to pay these costs. Failure to pay them by the end of the fiscal year will imperil the continuity of U.N. missions in regions of great importance to the U.S. national security and foreign policy interests. Rather than approve the requested supplemental, the Committee has proposed.to rescind peacekeeping funds.

Drinking Water State Revolving Funds

While an improvement over the House-passed bill, the rescission of $0.8 billion in funds to help municipalities comply with Safe Drinking Water Act requirements contained in the Committee-reported bill would still seriously exacerbate local financing problems. Municipalities need almost $9 billion in capital costs to comply with existing regulations and additional billions to comply with future rules needed to prevent problems such as the Cryptosporidium outbreak in Milwaukee in 1993 that killed 100 people and caused illness in another 400,000.

Most affected by this rescission would be the 27 million people who get their water from a system that has violated drinking water standards. If Congress fails to authorize the drinking water state revolving fund program, these funds can be used without further Congressional action to address the $l37 billion in wastewater construction needs.

Social Security Administration (SSA) Automation investment

The Committee bill reduces funding for SSA computer systems by $88 million, thus eliminating all second- year funding for SSA's multi-year automation investment. This reduction would lead to deterioration in service by not allowing for the purchase of new computer equipment as existing equipment wears out and customer demands increase. The funds proposed for rescission are already programmed to support contract awards- for quantities of computers supported by the Committee and the General Accounting Office.

The Administration notes the Committee's concern about the total number of computers SSA plans to acquire over a five-year period. Under the current SSA plan, the level of funding provided in FYs 1994 and 1995 funds the installation of less than one-third of the total number of workstations planned. The Administration believes that the Committee's concern with out-year plans would be more appropriately addressed in relation to out-year funding.

Coast Guard

The Administration opposes the Committee's action to reduce Coast Guard operating expenses while supplementing funding for expenses related to operations in Haiti and Cuba. Offsets to pay for those activities deemed ah emergency by the Administration are counterproductive. Additional cuts would negate the effects of the supplemental, thereby rendering the Coast Guard less able to provide the level of service the public expects.

Base Realignment And Closure

The Committee bill would rescind $104 million from the Base Realignment and Closure accounts. This action would slow local communities' productive reuse of base closure property by delaying the departure of military units and by limiting funding for environmental restoration. Making property available for economic redevelopment is a key part of the Administration's Five Point Plan for assisting base closure communities.

NATO Infrastructure

The Committee bill would rescind $69 million from the NATO Infrastructure account. This action could undermine existing NATO infrastructure agreements and treaty commitments and frustrate our efforts to increase the burdensharing contributions of our allies. All of the FY 1995 appropriations for NATO Infrastructure have been obligated or committed for specific NATO construction projects, which would have to be terminated — with potential termination penalties — if the rescission were enacted. Furthermore, such a rescission would set a precedent for other NATO nations to withdraw their support from the NATO Infrastructure budget.