This Statement of Administration Policy provides the Administration's views
on S. 2312, the Treasury and General Government Appropriations Bill, FY
1999, as reported by the Senate Appropriations Committee. Your
consideration of the Administration's views would be appreciated.
The Administration appreciates efforts by the Committee to accommodate the
President's priorities within the 302(b) allocation. The President's FY
1999 Budget proposes levels of discretionary spending for FY 1999 that
conform to the Bipartisan Budget Agreement by making savings in mandatory
and other programs available to help finance this spending. In the
Transportation Equity Act, Congress -- on a broad, bipartisan basis -- took
similar action in approving funding for surface transportation programs
paid for with mandatory offsets. We want to work with the Congress on
mutually agreeable mandatory and other offsets that would be used to
increase high priority discretionary programs, including those funded by
this bill. In addition, we hope that the Senate will reduce funding for
lower priority and unrequested discretionary programs.
Below is a discussion of our specific concerns with the Committee-reported
bill. We look forward to working with the Senate to resolve these concerns
as the bill moves forward.
Year 2000 Computer Conversion
In the FY 1999 Budget, the President requested more than $1 billion for
Year 2000 (Y2K) computer conversion. In addition, the budget anticipated
that additional requirements would emerge over the course of the year and
included an allowance for emergencies and other unanticipated needs. It is
essential to make Y2K funding available quickly and flexibly as new needs
arise. The Administration appreciates the Committee's action to provide
$3.25 billion in contingent emergency funding for this purpose. We urge
Congress to leave as much as possible of the reserve unallocated so that
funds are available to address emerging needs.
The Administration strongly objects to language in the Senate Committee
bill that would impose $592 million in obligation delays on Treasury
programs. These provisions would prevent expenditure of funds before
September 30, 1999, effectively reducing program levels for FY 1999 and
seriously hindering Treasury program operations. For example:
- For the IRS, the obligation delay of $175 million for Tax Law
Enforcement would result in a six-percent reduction in personnel and a
loss of substantial tax collections. The $69 million obligation delay
for Information Systems would effectively halt IRS' modernization
efforts until the following fiscal year, jeopardizing efforts to refocus
the IRS on providing good customer service for taxpayers.
- For Treasury Enforcement, the obligation delay of $28 million for
Customs' Salaries and Expenses would hinder Customs' efforts to combat
drug smuggling across the southern tier of the United States and to
detect shifts in trafficking patterns, and would inhibit maintenance of
essential equipment. The $23 million obligation delay against Customs'
Operations and Maintenance, Air and Marine Interdiction Programs account
would lead to a reduction in interdiction flight hours, cripple
essential maintenance for air and marine fleets, and result in a
deterioration of air and marine fleet assets. The $14 million in
obligation delays for the Secret Service would cause unacceptable risks
to Presidential safety.
Internal Revenue Service
The Administration appreciates congressional support for IRS information
technology investments. However, the Administration urges the Senate to
adopt the $210 million for modernized information systems provided in the
U.S. Customs Service
The Administration is concerned about the funding level for Customs'
Automated Commercial Environment (ACE). Without major revisions to the
existing system, Customs cannot keep up with increasing trade volumes nor
can it be responsive to the requirements stated in the 1993 Modernization
Act and the needs articulated by industry. The Committee has funded only
$8 million of the requested $56 million level, and has imposed an
obligation delay against the $8 million provided, which would cause the
modernization effort to come to a halt. To accommodate the full amount
requested, the Administration has proposed funding the majority of ACE
requirements through a user fee paid by those who stand to benefit most
from this system, the trade community.
Bureau of Alcohol, Tobacco and Firearms (ATF)
The Administration appreciates the efforts of the Committee to fully fund
the President's Youth Crime Gun Interdiction Initiative. This initiative
is an important part of the Administration's overall strategy to curb youth
The Administration requests reconsideration of funding for the Violent
Crime Coordinator initiative, as the U.S. Attorneys have requested
additional ATF support for bringing cases involving violent criminals to
the Department of Justice for prosecution.
We are concerned about the Committee's lack of support for ATF headquarters
U.S. Secret Service
The Administration is concerned that by redirecting $13 million to Secret
Service travel costs, the Committee has effectively undermined other Secret
Service funding needs, resulting in a probable deterioration of critical
equipment and an undermining of the Service staffing needed to provide for
the protection of the President and foreign dignitaries.
Law Enforcement Vehicles
The Administration objects to the elimination of funding for Treasury law
enforcement vehicle replacement. Replacement funds are critical from a
public safety perspective, as aging vehicles present an inordinate risk to
the lives of both Treasury personnel and the public.
Federal Law Enforcement Training Center
The Administration urges the Senate to adopt the funding level for the
Federal Law Enforcement Training Center (FLETC) proposed by the President.
In particular, the Committee makes no provisions for funding of a dormitory
for FLETC's Glynco campus. This dormitory is needed to help FLETC absorb
the increased law enforcement training needs of the Immigration and
Naturalization Service and the Bureau of Indian Affairs.
The Committee bill fails to provide the requested $1 million to enable the
President to meet unanticipated needs in furtherance of the national
interest, security, or defense. The Administration urges the Senate to
include this amount to ensure that the President has the same ability to
meet such needs as previous Presidents have had.
Pay Raise for Federal Judges and Senior Executives
The Administration is disappointed that the bill includes a proposal to
eliminate the 1999 pay raise for Federal judges and employees paid under
the Executive Schedule. Failure to provide pay raises for senior
executives is eroding the value of their pay and causing severe pay
compression in the executive ranks. Pay adjustments have been made for
such individuals only once in the last five years. If continued, this
failure will affect the Government's ability to attract and retain the
executive talent that it needs. We urge the House to restore the pay raise
for Federal judges and employees paid under the Executive Schedule.
Office of National Drug Control Policy (ONDCP)
The Administration appreciates the support the Committee has provided for
drug control efforts in general, and for ONDCP in particular. The
Administration encourages the Senate to provide the full amount requested
for ONDCP's Special Forfeiture Fund, especially the national youth
anti-drug media campaign. The Senate could fully fund the budget request
for the media campaign by reducing amounts earmarked by the Committee for
unrequested ONDCP programs. The Administration opposes bill language that
would bar funding for: new ads, Internet programming, joint efforts with
the entertainment industry, partnerships with community and other
organizations, and evaluation of the effectiveness of the media campaign.
Unless the Senate rectifies these problems, our efforts to meet the targets
established in ONDCP's performance measures would be negatively affected.
Federal Buildings Fund
The Administration is pleased that the Committee has provided $14 million
for the design of a new Department of Transportation Headquarters.
Providing for a Government-owned building would save taxpayers
approximately $190 million, in present value terms, compared to the cost of
entering into a lease.
The Committee bill would delay the availability of funding until September
30, 1999, for the repair and alterations program ($324 million), rental of
space program ($52 million), and building operations program ($31
million). The Administration is concerned that a delay in obligations
would essentially eliminate the FY 1999 basic repairs and alterations
program, which provides for emergency repairs and ensures the operational
continuity of facilities.
The Administration is also concerned that the Committee bill provides over
$500 million for 15 unrequested Federal courthouse construction projects.
Morris K. Udall Foundation
The Administration is concerned about the lack of funding for the Morris K.
Udall Scholarship and Excellence in National Environmental Policy
Foundation, particularly the lack of funding for the U.S. Institute for
Environmental Conflict Resolution, as authorized in PL 105-156. The
Administration believes that the Institute would provide valuable
assessment, mediation, and training services to Federal agencies to resolve
environmental disputes, thus reducing expenses due to lengthy litigation
Federal Election Commission
The Administration urges the Senate to fully fund the Federal Election
Commission (FEC) at the level requested by the President and provided by
the House, $36.5 million.
Paperwork Reduction Act and Congressional Review Act
The Administration shares the Committee's interest in improving the
implementation of the Congressional Review Act and the Paperwork Reduction
Act. However, we have concerns with several provisions of the Committee
bill. We would like to work with the Committee to resolve these
- The Administration strongly objects to section 117 of the Committee
bill. This provision would undermine the authority of the President to
use assets of countries under economic sanctions pursuant to the Trading
with the Enemy Act or the International Economic Powers Act as leverage
when economic sanctions are used to modify the behavior of a foreign
state, or are used in negotiations with that state in an effort to
- The Administration objects to language tying obligation of funds for
Customs automation modernization improvements to GAO certification to
Congress that measures have been established "to enforce compliance with
the architecture." The Administration has no control over the nature or
timing of any prospective GAO review and certification.
- The Administration is concerned that section 115 of the Treasury
General Provisions could limit the Secretary's discretion in determining
how best to stimulate increased electronic tax filing, which reduces IRS
errors, permits more timely refunds to taxpayers, and lowers IRS tax
- The Administration supports the Joint Financial Management
Improvement Program and urges the Senate to include language in Title VI
that was included in the House Committee-reported version of the bill
that would provide up to $3 million from Government-wide credit card
rebates in support of that program.
- There are several provisions in the bill that purport to require
congressional approval before Executive Branch execution of aspects of
the bill. The Administration will interpret such provisions to require
notification only, since any other interpretation would contradict the
Supreme Court ruling in INS vs. Chadha.
Federal Employees Health Benefits Program
The Administration would strongly oppose any amendment to the bill that
would restrict Federal Employees Health Benefits Program (FEHBP) coverage
for abortions except in situations where the life of the mother is
endangered or the pregnancy is the result of rape of incest. While the
President believes that abortion should be safe, legal, and rare, Federal
employees and their families should not be precluded from choosing to
purchase health insurance policies with broader coverage.
The Administration would support an amendment that requires coverage of
prescription contraceptives by health plans participating in the Federal
Employees Health Benefits Program (FEHBP). We support improvements in
basic health care coverage for women and the goal of the amendment -- to
reduce unwanted pregnancies and the need for abortions. Any such amendment
should give authority to the Office of Personnel Management to waive the
requirement for plans that are sponsored by organizations whose religious
or conscientious beliefs do not support artificial methods of
Potential Objectionable Amendments
It is our understanding that a number of objectionable and extraneous
amendments may be offered, such as an amendment to repeal the current tax
code effective December 31, 2002. The Administration strongly urges the
Senate to oppose such amendments so that an acceptable bill can be sent to
the President. If the tax repeal provision was presented to the President,
the Secretary of Treasury has stated that he would recommend veto of the
bill. If further objectionable and extraneous amendments are offered, we
will provide additional views.
With regard to the amendment that would terminate the tax code, it would be
irresponsible for Congress to enact legislation to terminate the tax code
without having already provided a reform plan to replace it. Many
families, for example, would refrain from buying homes because of the
uncertain tax treatment of mortgage interest and property taxes (as well as
other State and local taxes). Many businesses would hire fewer workers and
make fewer capital investments because of uncertainties in how taxes would
affect the return on productive assets. Furthermore, the uncertainty of
the size of future receipts would raise the specter of increased Federal
deficits, which in turn would raise interest rates and weaken or destroy