Statement of Administration Policy: H.R. 5019 - Energy and Water Development Appropriations Bill, FY 1991

(Senate Floor)
(Sponsors: Byrd (D), West Virginia; Johnston (D), Louisiana)

The Administration continues to oppose Congressional action on appropriations bills in advance of a budget summit agreement. Such action could unnecessarily and perhaps harmfully complicate implementation of a final budget resolution that reflects the agreement. However, inasmuch as the Senate is apparently going to take action, the Administration will express its views on these bills. The purpose of this statement is to express views on the Energy and Water Development Appropriations Bill, as reported by the Senate Appropriations Committee on July 19, 1990.

The Administration is pleased that the Senate has responded to many of the Administration's objections to the House bill. In particular, the Administration is pleased that the number of new Corps of Engineers construction starts was reduced, that the mandate that the Corps assume full responsibility for oversight of DOE cleanup activities at the Hanford Site was eliminated, and that several objectionable provisions for the Bureau of Reclamation were deleted. Finally, the Administration is pleased that language is included which would enable the Corps to continue research and development on magnetic levitation.

However, the Administration continues to object to the overall funding level provided in H.R. 5019. This bill exceeds FY 1990 enacted levels for domestic discretionary spending by $0.6 billion in budget authority and $0. 2 billion in outlays. Pending the outcome of the budget summit, the more appropriate levels for this bill would be the current funding levels for most programs.

The Administration remains concerned about the amount of unjustified spending for new construction starts and other unrequested items in the bill. Specifically, the Administration objects to including approximately 16 new construction starts, financed in part by unjustified increases in savings and slippages, that were not requested for the Corps of Engineers. Although fewer in number than provided by the House, these projects would be added to the 31 new construction starts (22 of them unrequested) funded in FY 1990. The new construction starts alone would increase the deficit by more than $300 million in the next five years. Funding new starts at this level is particularly inappropriate at a time when budget negotiators are trying to find ways to reduce the current deficit. Therefore, including these unnecessary new projects, and the accompanying new level of spending, would threaten the President's approval of the bill.

The Administration strongly objects to several other features of the bill:

—  Language in the report would provide $35 million in funding for the Garrison Diversion Unit in North Dakota. The project is uneconomical and would cost over $1 billion to complete. The Department of the Interior's Inspector General has found that those who receive irrigation benefits from the project would be unable to repay the annual operation and maintenance expenses, which they are required by law to do. The Administration previously stated a willingness to re-examine its position on funding for the project if Congress made an explicit commitment to terminating the irrigation component. The Senate report adds $5 million to the House-passed version and includes report language providing for further irrigation-related work studies.

—  No funding is included to implement the Administration's proposal to transfer technical responsibility for dam safety from the Bureau of Indian Affairs (BIA) to the Bureau of Reclamation. BIA has failed to correct serious safety deficiencies at various BIA dams, and how lives are at stake. The Administration must be permitted to take steps to remedy this situation before a tragedy occurs.

—  Language is included that would provide $7 million to initiate construction of a new bridge over the Chesapeake and Delaware Canal in Delaware. While the Administration is willing to support the transfer of budgeted FY 1991 funds originally requested for the rehabilitation of an existing bridge to this new project, both the Department of the Army and the Justice Department have indicated that the Federal Government has neither the responsibility nor the authority to construct this bridge. The Administration would strongly oppose any further Federal funding for this project.

—  Language has been added that would direct the Secretary of the Army to conclude a local cooperative agreement for a bridge across the Missouri River in the vicinity of Fort Yates, North Dakota. It is not the responsibility of the Federal Government to undertake this project.

These and other Administration concerns with the bill are discussed in more detail in the attachment.

Attachment

(Senate Floor)
July 23, 1990

H.R. 5019 - ENERGY AND WATER DEVELOPMENT APPROPRIATIONS BILL, FY 1991

I. MAJOR SENATE PROVISIONS OPPOSED BY THE ADMINISTRATION

A. Funding Levels

Department of Defense-Civil: Army Corps of Engineers.

— The Administration objects to nearly 25 unbudgeted Corps of Engineers construction starts and other unrequested projects (approximately 16 of which are new starts) which will require more than $800 million in Federal funding over the next few years. The cost of the 16 new starts alone is over $300 million. Some of these unrequested projects are uneconomical, some are not the responsibility of the Federal Government to undertake, and some are not a budget priority. Many are not in accordance with the beneficiary- pay cost-sharing principles of the Water Resources Development Act of 1986.

For example, the $6 million provision to initiate construction of the Lower Mingo County (WV) element of the Levisa and Tug Forks of the Big Sandy and Upper Cumberland River project is programmatically and economically irresponsible, and should be deleted. This project will cost about $120 million and is not economically justified based on normal water resources development criteria applied throughout the country. Furthermore, review of the Corps of Engineers' report on the Lower Mingo County element has not yet been completed by the Administration.

The $7 million provision for a new bridge over the Chesapeake and Delaware Canal at Saint Georges (DE) should be deleted. Construction of a new bridge, which would benefit only highway traffic, would cost about $65 million. The required connector roadways would cost an additional $47 million. The Administration believes it is inappropriate for the Corps to be involved in construction of this bridge. As the Department of the Army and the Justice Department have both made clear, the Federal government has neither the responsibility nor the. authority to construct a new bridge across the canal. Similarly, the $23 million in funding for construction of the Fort Yates Bridge (ND) should be deleted, as this state infrastructure project is not a Federal responsibility. Finally, a local-drainage project for Chicago, O'Hare Reservoir (IL), should be eliminated.

—  The Administration objects to proposed funding for approximately 16 new construction starts. The Corps of Engineers has made a commitment to the Administration, Congress, and project cost-sharing sponsors to deliver sound projects on time and within budget. Because the Administration recognizes the follow-on requirements for the large number of unbudgeted projects funded in the FY 1990 appropriations, no new starts were recommended in the President's Budget. The interest of program credibility requires that the Federal Government not mislead non-Federal cost-sharing sponsors by asking them to commit to a project construction schedule that the Corps of Engineers cannot possibly meet. In addition, the interest of deficit reduction requires Congress to exercise a more prudent application of scarce Federal resources.

—  The Administration objects to including about 62 unbudgeted planning starts and other unrequested studies. Many of these studies involve planning projects that are a low priority or should be the responsibility of non-Federal interests. Neither the taxpayers nor the Corps of Engineers' program benefits by funding studies that detract from the Corps' ability to plan and implement high-priority flood control and navigation projects.

Department of the Interior; Bureau of Reclamation.

— The Administration objects to including $35 million for the Garrison Diversion Unit (ND). The President's Budget proposed terminating this uneconomical project, which would require in excess of $1 billion to complete. Also, the Department of the Interior's Inspector General recently found that farmers would be unable to repay the annual operation and maintenance expenses, which they are required by law to do.

— The Administration objects to the failure of the bill to include proposed funding to implement the transfer of technical responsibility for oversight of the Bureau of Indian Affairs (BIA) dam safety program to the Bureau of Reclamation. The Department of the Interior's Inspector General found that BIA has not effectively managed this program, either from an engineering or financial standpoint. The Administration should be permitted to carry out this important program in the most effective way possible. The Administration proposes to use the technical and management expertise of the Bureau of Reclamation to ensure that timely correction of serious safety deficiencies takes place at a number of high- hazard BIA dams. The Administration plan provides for participation by the affected Indian tribes in implementing corrective actions on reservation dams, including provision for contracting with tribes.

— The Administration objects to the addition of funds for several projects in the construction program that are a low priority or a non-Federal responsibility, or are inconsistent with Administration cost-sharing policy. Most objectionable are provisions for the Umatilla (OR) and Mni Wiconi (SD) projects.

Department of Energy (DOE).

— Power Marketing Administrations (PMA). The Administration objects to increasing the Bonneville Power Administration's (BPA) use of borrowing authority by $205. 5 million, to $375. 3 million. The Senate Committee bill would fund the President's FY 1991 capital investment program, along with an additional $45. 6 million for the Third AC Intertie transmission line; $53. 1 million for conservation, other transmission projects, and fish and wildlife activities; and, $15. 8 million for maintenance and replacement work. It would also provide that previously estimated but unobligated borrowing authority would be carried forward, rather than lapsed. As the Administration has previously noted, these increases are not needed. By existing agreement, BPA will not proceed with the Third AC Intertie until several contingent contracts are negotiated. Sufficient funds are, therefore, already in the President's budget request to meet BPA's needs. For conservation activities, the bill would restore a program to capitalize projects that most utilities are reluctant to capitalize because they regard such projects as annual operating expenses. The remaining increases in the bill are inappropriate in FY 1991 because they have not been included in any previous BPA budget request for Executive Office review.

— The House and Senate Committees removed from their respective bills existing language that would require the Western and Southwestern Area Power Administrations to repay short-term loans to meet revenue shortfalls during periods of low hydropower generation. Deleting this language would enable the PMAs to capitalize over long periods loans that are intended to finance temporarily annual operations.

— The Administration objects to language that would place the total burden of salmon protection on taxpayers rather than ratepayers. The cost of water spilled from Shasta Dam to protect salmon runs should not be borne by Federal taxpayers. Other utilities across the country require beneficiaries of hydroelectric projects to pay for similar environmental mitigation measures (e. g., fish ladders).

— Energy Supply R&D. The bill adds $36 million for the Fast Flux Test Facility (FFTF) at the Hanford Site in Richland, WA, and directs that the facility be used in support of environmental clean-up activities. The FFTF previously has been used as a test facility for new reactor technology concepts and has never been used in support of waste cleanup. An assessment by DOE has shown that this effort is neither cost-effective nor necessary and would divert funding from clean-up activities required by compliance agreements. The President's Budget requests $46. 6 million to begin shutdown of this facility.

— The bill earmarks over $100 million in funds for research at specific institutions. Earmarking funds to colleges and universities for "pet projects? circumvents the normal. research grant peer-review process and results in not funding meritorious projects.

Other Independent Agencies.

— Tennessee Valley Authority. The bill would increase funding by 37 percent over the Administration's request. This increase would continue unnecessary and unproductive research activities to derive ethanol from hardwoods. The bill would maintain Federal funding for fertilizer activities, negating efforts to place the program on a self-supporting basis through user fees and cost-sharing by program beneficiaries. The bill also would continue funding for economic development activities that are more appropriately conducted by State and local governments.

B. Language Provisions

Department of the Interior: Bureau of Reclamation.

— The Administration objects to Section 201 of the bill, which would unjustifiably expand the definition of emergencies qualifying for expenditure or transfer of appropriated funds.

Department of Energy.

—  Power Marketing Administrations. The Senate is urged to reconsider the debt repayment reform proposal. It is inappropriate to continue taxpayer subsidy of Federal electric rates for electricity consumers in certain regions of the country when other ratepayers already pay higher rates for non-subsidized supplies, particularly when there are no significant differences in their ability to pay.

—  The Administration objects to language that would continue to prohibit the Administration from studying the sale or the reform of the PMAs. Reasonable data collection and analysis is necessary to support the President's constitutional responsibility to prepare and submit legislative proposals to Congress.

—  The Administration objects to Section 510, which would prohibit the use of appropriated funds to change certain employment levels determined to be necessary by the Administrator of the Bonneville Power Administration. Under 16 U.S.C. Section 832a(a), the Administrator is an Executive Branch officer. Legislation purporting to deny the President the power to review and to alter (within the bounds of applicable statutes) the employment levels set by the Administrator is unconstitutional, as it would deny the President the authority to supervise his subordinates within the Executive branch.

—  Environmental Clean-up. The Administration is very concerned about the Committee's rejection of the proposed new appropriation that would consolidate all cleanup activities at DOE facilities. The single appropriation would give the Secretary of Energy the flexibility to manage most effectively the activities covered by the Five-Year Plan, and thus help to ensure full compliance with the legal requirements. The bill, which would split the appropriations between Atomic Energy and Energy Supply R&D, could complicate and delay execution of this complex program.