Statement of Administration Policy: S. 83 - The Uranium Enrichment Act of 1989

(Senate)
(Ford (D) Kentucky and Johnston (D) Louisiana)

The Administration supports (1) the establishment of a Government corporation to manage the Department of Energy's uranium enrichment enterprise, and (2) eventual privatization of the enterprise. A Government corporation would have the flexibility, which Government agencies typically lack, to operate effectively in today's complex commercial environment..

The Administration, however, has serious concerns about certain provisions in S. 83, and will work with the House to address these concerns, the most important of which are explained below.

Constitutional Concerns. S. 83, as reported, raises serious separation of powers concerns which, if not addressed satisfactorily, would result in the Attorney General recommending that the President veto the bill. By restricting the authority to remove the head of the Corporation, the bill unconstitutionally limits the President's exclusive power to appoint and remove superior officers. Second, the bill offends the principle of the unitary executive by seeking to limit the purpose and circumstances under which the Secretary can supervise the Administrator. Third, the bill's requirement that the Corporation keep Congress apprised of its activities by making available to it all books, files, and other materials further violates the constitutional principle of separation of powers.

The Constitution grants to the President, not Congress, the executive power to manage the day-to-day operations of the Executive branch. Fourth, the bill's requirement that the Corporation submit budget and legislative proposals directly to Congress raises serious constitutional problems insofar as it could- be construed to interfere with the internal deliberative process of the Executive branch.

Oversight of Corporation. S. 83 fails to provide for effective fiscal and managerial oversight and accountability.

Specifically, the Corporation established in S. 83 lacks the typical oversight mechanisms which exist in both private sector corporations (e.g., a Board of Directors) as well as in governmental corporations (e.g., requirements of the Government Corporation Control Act). Also, by failing to provide for privatization of the Corporation, as proposed by the Administration, a key incentive for more efficient operations is lacking.

Other Concerns. S. 83 should be amended, consistent with the Administration's proposal (S. 847), to: (1) establish a formula for setting enrichment prices for Federal customers, in order to prevent the Federal Government from subsidizing private sector enrichment purchases; and (2) establish procedures for the Attorney General to review the competitive/antitrust implications of any proposal to privatize the Corporation. The Administration will work towards adoption of these and other provisions of its bill in the House.