Statement of Administration Policy: H.R. 1976 - Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, FY 1996

(Senate Floor)
(Sponsors: Hatfield (R), Oregon; Cochran (R), Mississippi)

This Statement of Administration Policy provides the Administration's views on H.R. 1976, the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, FY 1996, as reported by the Senate Appropriations Committee.

The Administration is committed to balancing the Federal budget by FY 2005. The President's budget proposes to reduce discretionary spending for FY 1996 by $5 billion in outlays below the FY 1995 enacted level. The Administration does not support the level of funding assumed by the House or Senate Committee 602(b) allocations. The Administration must evaluate each bill both in terms of funding levels provided and the share of total resources available for remaining priorities. The Committee bill is $836 million below the President's request.

Favorable Senate consideration of the concerns discussed below would help substantially in working toward the development of an Agriculture/Rural Development appropriations bill that the Administration could support.

Rural Development Funds

The Administration commends the Committee for embracing the concept of the Administration's Rural Development Performance Partnership and for expanding the number of programs included under the Partnership beyond the number in the House bill. However, the Committee bill would make unacceptable reductions in these vital programs for rural America. Total funding for programs included in the "Rural Community Advancement Program" would be just over one-half of the funding level requested for these programs. Even if all funds were directed to water and wastewater loans and grants, the Committee's recommendation would represent a 32-percent reduction from the President's request and would deny assistance to hundreds of small, rural communities. In addition, this allocation would leave no funds for rural economic and community development programs, such as the Community Facility and Intermediary Relending Programs.

Food Stamps

The Committee-reported bill, unlike the House-passed bill, would preserve the essential nature of the Food Stamp Program — its ability to respond to increased need during times of economic downturn. For the last five years, the Congress has provided a benefit reserve, or "cushion," to guard against an unexpected economic downturn or estimating errors.. The House-passed bill would remove this cushion, placing all food stamp recipients in jeopardy of reduced benefits in the event of a regional recession. The Administration commends the Committee for partially restoring the food stamp benefit reserve and urges the Senate to provide the entire $2.5 billion, which is essential to this national nutrition safety net.

The Administration urges the deletion of language in the Committee-reported bill that would freeze the food stamp standard deduction at the FY 1995 level. The Administration understands that the Committee has anticipated savings of $190 million in FY 1996 due to this action. This proposal is similar to one included in the welfare reform bill pending on the Senate floor (S. 904), and the authorizing committee for that bill already has claimed similar savings. Shifting these savings to the discretionary side of the budget would put pressure on the authorizing committees to replace the lost mandatory savings by making further cuts in agricultural programs or assistance to needy individuals.

WIC

Under the Committee's proposals, the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) would be funded at $260 million above the FY 1995 appropriation but $90 million below the request. The Administration appreciates the Committee's support for this important program but recommends that the Senate provide the full amount of the request.

The Committee-reported bill would require that $20 million of FY 1996 administrative funds be made available for food benefits. The Administration is concerned that this would set a precedent for reducing administrative funding within WIC. Administrative funds in the WIC program support critical program oversight and cost containment efforts. Continued reductions in administrative funds could diminish program management and limit the WIC program's ability to conduct nutrition education and medical referrals — essential components for achieving the program's positive health benefits.

In addition, the Committee-reported bill would allow FY 1995 recoveries of WIC program funds in excess of $100 million to be transferred to the Rural Community Advancement Program. While appreciative of the Committee's effort to provide additional funds to rural development, the Administration has reservations about redirecting WIC monies for other purposes.

Export Enhancement Program

The Administration strongly objects to Committee reductions in key export assistance programs that could disadvantage exports of U.S. commodities. In particular, the Committee bill would reduce direct (mandatory) spending for the Export Enhancement Program (EEP) to $800 million, $159 million below the President's request and the GATT-permissible level. These export subsidies are needed to combat the excessive subsidy levels provided by the European Union for its agricultural exports.

Ad Hoc Disaster Payments for Cotton Farmers

The Administration strongly objects to the Committee provision that would provide $41 million in ad hoc disaster payments for cotton farmers. Last year, through a bipartisan effort, a major reform of the crop insurance programs was enacted. At the same time, all ad hoc disaster payment authorities were repealed, with the understanding that farmers would be required to carry crop insurance. Basic catastrophic coverage is available for a $50 administrative fee, and farmers can purchase additional, Federally-subsidized coverage through private insurance companies. The Committee provision is in direct conflict with one of the major tenets of last year's crop insurance reform: that farmers would be discouraged from risk- management through crop insurance as long as Federal crop disaster payments were continually provided on an ad hoc basis. The Administration urges the Senate to delete this provision.

Labeling Regulation

The Administration is strongly opposed to the Committee bill's prohibition on the use of funds to implement or enforce the final regulation on fresh and frozen poultry, which was published on August 25, 1995. Publication of this regulation was the culmination of nearly two years of effort; during which the views of all stakeholders were heard and considered. The issue of proper labeling of poultry products has been the subject of litigation in Federal Court as well as congressional and USDA- sponsored public hearings throughout the Nation. Committee language would prevent consumers from receiving accurate information and assurance of a national standard in this area and could result in disparate and conflicting State enforcement activity. The Committee's language represents unwarranted legislative intrusion into the regulatory process.

University Research Buildings and Facilities

The Committee bill would provide $57.8 million for buildings and facilities in the Cooperative State Research, Education, and Extension Service. The Administration has proposed, and the House-passed bill provides for elimination of this program. The Committee report has repeated the historical practice of earmarking all funds for the program to particular land-grant universities. The Administration believes that scarce Federal resources are better targeted to higher-priority purposes, including those identified herein. The Administration urges the Senate to delete funds for this program.

Wetlands Reserve Program (WRP)

The Committee mark would hold WRP sign-ups in FY 1996 to only 100,000 acres, at an estimated program cost of $77 million. This is well below the Administration's request for 300,000 acres and $210 million in direct (mandatory) spending. The lower level of funding for this program, which provides long-term and permanent easements for restored wetlands, would make the goal of achieving and surpassing the no-net-loss of wetlands more difficult. Also, by restricting acreage rather than funds, the incentive to seek lower-priced lands would be reduced.

Conservation Reserve Program (CRP)

The Committee bill would block any FY 1996 signups for new CRP acreage, which are funded through direct (mandatory) spending. In a year when the Farm Bill will undoubtedly address CRP reauthorization, it is inappropriate for appropriations action to preclude sign-ups for the first year of the new farm bill. In addition, not being able to retire vulnerable cropland through the CRP would make clean water goals more difficult to achieve, provide less habitat for wildlife and migratory birds, and decrease farm commodity prices While increasing Commodity Credit Corporation outlays.. In light of the acreage that is soon to expire from the CRP, additional sign-ups must be permitted to retain the program's benefits.

Food and Drug Administration

The President's budget proposes language to permit the Food and Drug Administration (FDA) to collect new user fees for medical device review and import inspection. The language references the government's general user fee authority, 31 U.S.C. 9701, as one potential authority for these collections. The Committee-reported bill would limit the ability of the FDA to ensure the proper and most efficient use of its resources through the recovery of full value for its services to industry. The Administration urges the Senate to permit the FDA to collect and use these user fees.

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

Attachment

Attachment (Senate Floor)

ADDITIONAL CONCERNS

H.R. 1976 — AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS BILL. FY 1996

(AS REPORTED BY THE SENATE APPROPRIATIONS COMMITTEE)

The Administration looks forward to working with the Congress to address the following concerns:

Department of Agriculture

• Rural Telephone Bank (RTB) Privatization. The Administration encourages the Senate to reconsider the Committee mark for RTB privatization. The mark would severely impede privatization efforts by placing a limitation of five percent on the amount of Federal stock that can be retired in FY 1996. Current law sets a minimum of five percent retirement per year beginning in FY 1996, and the Committee would set the maximum at five percent. The Administration will submit the appropriate authorizing legislation in the near future to accelerate privatization. This legislation will address the concerns raised by the Committee in its report. The Administration urges the Senate to allow the balances in the RTB "equity fund" to be used to repurchase government-held stock in the RTB, and to allow the RTB privatization to be accelerated, consistent with a smaller, streamlined Government.
  
  
• Export Assistance Programs. The Committee mark for the Foreign Agricultural Service (FAS) is $5.7 million below the request. The Administration included additional FAS funds in order to expand the presence of U.S. agriculture overseas, and to increase GATT- compatible, "greenbox" spending for agricultural promotion. Providing adequate export funding is essential in order to maintain the momentum of increased agricultural exports that has been achieved.
  
  
• P.L. 480. The Committee has not funded the request of $1.5 million for the cost of reducing the P.L. 480 Title I debt of the poorest, most heavily indebted countries. This is an important element of multilateral action by the creditor community to support policy reforms and improve growth and export opportunities in these countries. The President has agreed, at both the Naples and Halifax G-7 Summits,, to participate in this multilateral endeavor. The Administration urges the Senate to support this request. Offsets for debt restructuring for the poorest countries could be found in the funding level for Title I, which is $115 million above the President's request level. The Administration urges the Senate to reduce this program so that higher priority programs can be funded.
  
  
• Food and Consumer Service. The Senate Committee, in report language, would provide the Administration's request of $20 million in support of the School Meals Initiative. The Administration commends the Committee for providing this funding, which is a critical part of our national effort to improve school meals.
  
  The Committee-reported bill would provide $1 million for an ADP infrastructure investment. The Administration believes that funding in this area is prudent as it will assist the agency to manage with less — through long-term increased efficiencies. The Administration urges the Senate to provide the full ADP investment of $4 million.
  
  
• The Center for Nutrition Policy and Promotion. The Committee has not provided funding for The Center for Nutrition Policy and Promotion. As the lead Federal agency in human nutrition, the Department of Agriculture is charged with designing and disseminating nutrition education and information to all American consumers. The Center is the focal point in the Department for linking scientific research to the consumer. The Administration urges the Senate to fund the $4.7 million request for the Center and its Nutrition Promotion Initiative.
  
  
• Info Share.The Administration has requested $59 million as a direct appropriation for Info Share; however, the Committee bill provides $10 million. At the funding level approved by the Committee, telecommunications and other needed investments in the new county service centers would be curtailed. Under the Committee mark, all other Info Share program areas would be eliminated, such as business process reengineering and planning for management changes. The Administration urges the Senate to include Info Share funding at the requested level.
  
  
• User Fee Proposals. The Committee mark would not provide appropriations language for user fees proposed in the marketing and regulatory programs area. The Administration has proposed fees of $105 million for meat, poultry, and egg inspection; $8 million in the Animal and Plant Health Inspection Service; $4 million in the Agricultural Marketing Service; and $17 million in the Grain Inspection, Packers and Stockyards Administration. Although the Committee would continue to allow the collection of fees for Agricultural Marketing Service standardization activities, it would not allow the collections to be credited to the appropriations account, as requested in the 1996 Budget. The Administration urges the Senate to reverse this action.
  
  
• Office of the Chief Financial Officer. The Administration has requested an increase of $819 thousand to support policy improvement activities required by the Chief Financial Officer's Act. This increase has not been provided by the Committee. Without the requested funds, preparation and review of audited financial statements might be delayed beyond their statutory deadlines, quality implementation of GAO and Inspector General audit recommendations would be at risk, and Departmental support for implementation of major new policies, such as installing performance measures in bureau systems, would remain nominal.
  
  
• Infringement on Executive Branch Authority. Section 722 of the Committee bill inappropriately intrudes into Executive Branch decision-making by limiting the authority of the Department of Health Human Services to allocate full-time equivalent employment where they can be best put to use within the Food and Drug Administration. The Administration urges the Senate to delete this provision.