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S 1004 -- 07/15/97

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Office of Management and Budget


July 15, 1997
(Senate Floor)

(Sponsors: Stevens (R), Alaska; Domenici (R), New Mexico)

This Statement of Administration Policy provides the Administration's views on S. 1004, the Energy and Water Development Appropriations Bill, FY 1998, as reported by the Senate Appropriations Committee. Your consideration of the Administration's views would be appreciated.

The Committee has developed a bill that provides requested funding for many of the Administration's priorities. However, the Administration strongly objects to the Committee's reallocation of national defense funds from Department of Energy programs to Department of Defense programs. These funds are needed for key environmental privatization projects and to provide full funding for Atomic Energy Defense Activities, as requested, which is consistent with fixed asset funding practices in the Government's other defense programs. We believe that this action is an unacceptable deviation from our understanding of the Bipartisan Budget Agreement.

As discussed below, the Administration will seek restoration of certain of the Committee's reductions. We recognize that it will not be possible in all cases to attain the Administration's full request and will work with the Senate toward achieving acceptable funding levels. The Administration is committed to working with the Senate to identify reductions in the bill in order to find offsets for the restoration of funds that the Administration seeks. We urge the Senate to reduce funding for lower priority programs, or for programs that would be adequately funded at the requested level, and to redirect funding to programs of higher priority.

Department of Energy

The Administration objects to the Committee's providing only $343 million of the $1.006 billion requested for environmental management privatization projects, while adding $283 million in unrequested funds to the stockpile stewardship and management programs. Based on this mark, several environmental privatization projects would not be funded at all, and it is questionable whether the expected out-year funding would allow support for higher priority cleanup privatization projects at this funding level. Failure to invest in competitive privatization contracts for cleanup activities would force the Department of Energy (DOE) to continue using more costly, traditional contracting approaches. This would result in a substantial increase to DOE's cleanup costs in future years and could jeopardize the Department's ability to comply with legally enforceable cleanup agreements.

The Administration opposes the $19 million dollar reduction to the request for the Uranium Enrichment Decontamination and Decommissioning (D&D) program. DOE is about to enter into a large contract for D&D and re-industrialization of the large gaseous diffusion plant in Oak Ridge, Tennessee, using an approach that will expedite cleanup, reduce costs, and create new jobs. The Committee's funding cuts in this program would make it difficult to proceed with this effort, comply with legal environmental requirements, and provide reimbursements to radium and thorium licensees.

The Administration is concerned that the Committee's reduction of $30 million from the request for the civilian radioactive waste management program would seriously threaten the DOE's viability assessment. Both the Nuclear Waste Technical Review Board and independent expert advisers have urged DOE to build and study an east-west tunnel "drift" through the repository block to reduce current uncertainty about water moving downward through the site. The funding cut would virtually eliminate any input from this important research to the viability assessment. The Committee's recommendation for the Nuclear Energy Security initiative would eliminate Departmental funding for any nuclear energy research, including university-based research efforts in nuclear engineering departments.

The Administration strongly opposes the Committee's $57 million cut (after the use of prior-year balances) to the request for the Solar and Renewable Energy program and the elimination of $25 million requested for Next Generation Internet. The Solar and Renewable Energy mark would be particularly damaging to solar-thermal R&D, which has been making some of the fastest progress in reducing costs of any renewable technology, and would provide an unwanted and unnecessary increase for hydrogen system testing. While the Administration agrees that the private sector has shown the capability and willingness to fund considerable technology development for the Internet, the Next Generation Internet funds requested in the President's budget are necessary to assist universities and national laboratories in implementing advanced, high-speed connections that will not be financed by industry, and to accelerate research in areas where DOE laboratories have particular expertise.

The Administration urges restoration of $2 million to fund the Office of Inspector General (OIG). The President's request level is the minimum funding necessary for the OIG to continue its present level of investigation, audit, and oversight. The OIG was instrumental in DOE's ability to obtain the only clean audit opinion for the consolidated financial statement in a cabinet-level department.

Bureau of Reclamation

The Administration objects to the Committee's decision to fund the restoration of California's Bay-Delta ecosystem at $50 million, a level $93 million below the amount that Congress recently authorized. Because this program is central to resolving the water conflicts that have plagued the State for over thirty years, we believe that Congress should provide the full $143 million requested in the FY 1998 Budget. The citizens of the State of California have demonstrated their commitment to this historic effort with the passage of a $995 million State bond issue last Fall. In addition, we urge the Senate to provide the full $39 million authorized for the Central Valley Project Restoration Fund, which is an important component of the effort to restore this critical ecosystem. The Fund is financed through offsetting receipts from project users.

The Administration also objects to the Committee's decision to fund a number of Reclamation projects not requested in the FY 1998 Budget, some of which could result in a demand for additional funding in the out-years.

Army Corps of Engineers

The Administration urges the Senate to reduce the number of unrequested Corps of Engineers projects and to restore funds that the Administration has requested for priority projects, including the Columbia and Snake Rivers Juvenile Fish Mitigation Program for salmon run restoration, and for construction of an emergency outlet for Devils Lake, North Dakota. The Administration urges the Senate to use the over $290 million in unrequested funds that the Committee has provided for the Corps of Engineers construction, studies, and operation and maintenance programs to restore reductions made in other priority Corps and DOE programs.

The Administration urges the Senate to restore the Committee's $6 million reduction from the Administration's request for the Corps' regulatory program and to include the Administration's requested regulatory permit fee. At the Committee's proposed level of funding, permit processing times could increase. Without the permit fee, the Corps would be unable to recover its costs for processing commercial application.

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