This Statement of Administration Policy provides the Administration's
H.R. 3579 and H.R. 3580, as reported by the House Appropriations Committee.
Your consideration of the Administration's views would be appreciated.
The Administration appreciates the Committee's action to approve vital
resources needed for recovery from natural disasters, for our troops
overseas, for the International Monetary Fund (IMF), and for the payment of
arrearages to the United Nations (U.N.). The American people want their
Government to be able to respond quickly and in a non-partisan manner to
emergencies both here and overseas. It would be disappointing and
disturbing if our ability to provide assistance to victims of natural
disasters and continued funding for our troops in Bosnia and Iraq and the
readiness of our military forces worldwide were held hostage to partisan
politics in the House of Representatives.
The Administration is disappointed that the pending supplemental
appropriations have been segregated into two distinct appropriations bills
and strongly recommends that the two measures be combined into a single
bill. This assistance should be provided free of extraneous and
controversial authorizing provisions. It is in the best interest of our
national security that Congress pass a single bill that provides funding
for our missions in Bosnia and Iraq, for overdue payments to the United
Nations, and for the IMF. American economic and security interests will
suffer badly if the President's requests are not promptly enacted into law.
It is also essential that Congress approves emergency disaster
assistance for victims of recent natural disasters. As requested, the
Senate included a $1.6 billion contingent emergency appropriation for the
Federal Emergency Management Agency (FEMA) for emergency response and
recovery efforts throughout the United States for unmet requirements from
disasters declared in FY 1998, and anticipated requirements in the
remaining months of the fiscal year. The Federal Government is currently
responding to natural disasters in 49 States, and since January of this
year, disasters have occurred in 16 States and territories. The
Administration appreciates the Committee's efforts to provide funding for
other disaster relief programs, and strongly urges the House to adopt the
President's March 24 request for FEMA.
The Committee bill finances emergency defense requirements with
reductions in important domestic programs and is a breach of the firewalls
enacted into law in the Balanced Budget Act. We should be able to provide
disaster assistance to communities here at home and support for our troops
overseas without violating last year's budget agreement or attaching
extraneous political provisions. We urge you to avoid actions that will
result in gridlock and that will be detrimental to our troops abroad and
our citizens at home in a time of need. The President's senior advisors
would recommend that the President veto this legislation if it contains
The Administration is deeply concerned with some of the IMF provisions
of H.R. 3580 as currently drafted. These concerns relate primarily to the
procedural requirements attached to the proposed appropriation for the
quota increase, not necessarily to the underlying policy objectives of such
requirements. In fact, the Administration is in agreement with many of
those objectives as policies that the United States should vigorously
promote at the IMF. However, a number of the bill's proposed procedures
for achieving those objectives are unworkable. These concerns are
addressed in more detail below. In addition, several provisions of H.R.
3114, the IMF authorizing legislation reported out of the Banking Committee
on March 5, were not included in H.R. 3580. The Administration strongly
urges the full House to support a bill that could enjoy bipartisan support
on par with that of H.R. 3114.
The Administration strongly opposes the Committee's inclusion of
H.R. 3580 making U.N. funding contingent on authorization and reducing the
request by $416 million. The authorization requirement is intended to
subject this important national security measure to the unrelated debate of
abortion policy. Honorable people can disagree about the issue of
abortion. But, it is wholly inappropriate to hold the payment of U.S.
arrears to the United Nations hostage to unrelated and extraneous issues.
Instead, the entire Congress should be given the opportunity to consider
the U.N. arrearage funding issue on its merits. We strongly urge the House
to drop the authorization contingency and to increase funding up to the
For these reasons, the Administration strongly opposes H.R. 3579 and
H.R. 3580 as reported by the Committee and is deeply disappointed that the
rule for consideration of H.R. 3579 does not make in order amendments that
respond to these concerns. We urge Congress, as soon as possible, to send
to the President a clean bill that he can sign.
The Administration strongly objects to the severe cuts to the request
for arrears payments to the United Nations and other international
organizations contained in H.R. 3580. The draft bill includes only $505
million of the Administration's $921 million request for FY 1999 and FY
2000. This very substantial cut will seriously impede the ability of the
United States to influence critical negotiations beginning in May which
could reduce U.S. dues to the United Nations. There will not be another
opportunity to lower these dues until the year 2000. In the meantime, U.S.
efforts to promote far-reaching U.N. reforms will be impeded. The failure
to provide the requested funds will undermine U.S. leadership in the
international community and should not be separated from other critical
emergency foreign affairs priorities (Bosnia, Iraq, and IMF).
While the Administration would welcome an authorization for the U.N.
arrears, and will continue to work with the authorizing committees, the
Administration objects to the authorization requirement in H.R. 3580. The
current version of the authorizing legislation (H.R. 1757) contains policy
provisions unrelated to the U.N. arrears issue, which are unacceptable to
the Administration. Therefore, the Administration strongly urges the House
to provide the full request for arrears and to drop the authorization
The Administration is supportive of the Committee's recognition that
the Congress should act now to authorize and appropriate funds for both the
New Arrangements to Borrow (NAB) and the quota increase. The
Administration believes the immediate approval of these requests is
necessary to provide the IMF with the resources it needs to protect the
international financial system and, therefore, the U.S. economy against the
risk of new or escalating financial crises of the kind now gripping key
East Asian economies. A failure to act or a significant delay in action
could leave us without the capacity to protect United States interests in
the current environment.
Many of the provisions in the Committee version of H.R. 3580 are
unworkable. Section 401 of the bill, for example, would condition the
availability of the increased U.S. quota resources on the inclusion in
certain lending agreements with member countries of certain specified
provisions. The Administration believes that the practical effect of this
section alone would delay indefinitely the implementation of the quota
increase, denying the IMF resources it needs to perform its mission during
a period of crisis.
Section 402(c) would impose new notification requirements on the use
of the Exchange Stabilization Fund (ESF), which would limit our ability to
respond flexibly under existing law. Use of the ESF is not related to
legislation to authorize and appropriate funds for the IMF, and the
Administration strongly objects to the inclusion of ESF provisions in this
Section 408, like Section 401, would impose unworkable conditions on
the release of U.S. funds to the IMF and, therefore, also would be likely
to delay indefinitely the implementation of the quota increase at the IMF.
This provision is worded much more broadly than Section 401 and could be
read to condition the release of all U.S. funds to the IMF, not just those
appropriated for the quota increase, which could jeopardize the Fund's
ability to finance its existing as well as new programs. This would amount
to a retroactive conditioning of all past U.S. commitments to the Fund,
including quota subscriptions and the General Arrangements to Borrow, and
would also apply to the NAB.
To solve these problems in a constructive manner, the Administration
will work to amend these provisions as this much needed bill moves through
the appropriations process. If the IMF does not have sufficient resources
to deal with future crises, it will significantly affect our workers, our
farmers, and our businesses. The Administration also wishes to reiterate
its position that it is important for Congress to act on this request at
the earliest possible legislative opportunity.
Department of Defense
The Administration welcomes the Committee's support for the
President's FY 1998 emergency supplemental request for Bosnia, Southwest
Asia, and natural disasters. Additional funding for Bosnia and Southwest
Asia will cover the costs of unanticipated military operations in these
areas that directly support U.S. national interests, while also protecting
military readiness. Additional funding for natural disasters will ensure
that affected bases and facilities can recover fully and quickly from storm
The Administration strongly opposes any provision requiring prior
Congressional authorization before offensive operations against Iraq can be
conducted. While the Administration will consult with Congress if further
military action becomes necessary, a prior authorization requirement would
hinder the President's ability to carry out his responsibility as
Commander-in-Chief and to effectively conduct U.S. foreign relations. Such
legislation could lead Iraq to believe that the U.S. will not react
promptly to provocation or further intransigence.
The Administration is extremely disappointed that the Senate struck
funding for HCFA to implement provisions of the Health Insurance
Portability and Access Act (HIPAA) of 1996. The Administration is pleased
that the House Committee included such funding and urges the Congress to
retain this important provision in any final legislation. HIPAA imposed on
HCFA major new implementation and enforcement responsibilities in reforming
the private insurance market to help people keep their health insurance
when they change jobs, and in limiting the ability of insurers to deny
coverage for pre-existing conditions. Moreover, HCFA must administer this
program in any State that chooses not to enforce the law -- and several
States have chosen not to do so. Without additional resources this year,
HCFA's ability to implement the new HIPAA provisions will be at risk.
These resources represent critical funding for an agency that, overall, has
significant new responsibilities to undertake.
The Administration is also concerned about report language concerning
financial terms for oil and gas lease sales in the Gulf of Mexico eligible
for royalty relief by the 1995 Deep Water Royalty Relief Act. In addition,
the Administration objects to two overly-broad Department of Agriculture
(USDA) authorities added by the Committee. One provision would provide
compensation for any decrease in value to stored wheat due to USDA
emergency action notices in response to the presumed or actual presence of
"karnal bunt" (a fungus that affects wheat). The provision authorizes
payments not just for the effects of such past notices, but for any
emergency action notices issued in the indefinite future. This is an
inappropriate period of time for inclusion in an emergency supplemental
bill. The assistance should be limited through the date of the bill's
enactment. Secondly, in the provision providing compensation to producers
for losses of livestock, the Committee added authority to compensate losses
to owners of ratites (flightless birds, including ostriches). The
Administration objects to this expansion of assistance to a single group of
owners, since other game or specialty bird losses have not been covered by
past livestock disaster programs, in part due to the pricing complexities
in the speculative and thin markets for such birds.