EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503

September 25, 2000
(Senate)

The President's FY 2001 Budget is based on a balanced approach that maintains fiscal discipline, eliminates the national debt, extends the solvency of Social Security and Medicare, provides for an appropriately sized tax cut, establishes a new voluntary Medicare prescription drug benefit in the context of broader reforms, expands health care coverage to more families, and funds critical investments for our future. An essential element of this approach is ensuring adequate funding for discretionary programs. To this end, the President has proposed discretionary spending limits at levels that we believe are necessary to serve the American people.

The President's senior advisers would recommend he veto the House bill over the elimination of funding for National Service, failure to address poverty and the shortage of affordable housing, undermining of investments in our future through space research and science and technology, reductions in our ability to pursue critical opportunities in basic research through the National Science Foundation, adverse affects on the environment and public health, adverse affects in our ability to respond quickly and fully to unforeseen disasters, and the inclusion of objectionable anti-environmental and other riders. The Administration appreciates the efforts of the Senate Committee in developing a bill that makes significant funding improvements over the House bill, as well as minimizing objectionable language riders. Despite these improvements, however, there continue to be serious problems that must be addressed before the bill is presented to the President.

While the Administration appreciates the Senate Committee's commitment to continue funding for the Corporation for National and Community Service, we regret that the Senate Committee bill provides inadequate funding, undermining the Administration's proposal to provide an additional 12,000 Americans the opportunity to help meet serious needs in communities across the country. The Senate Committee has severely reduced funding from the request for the Department of Housing and Urban Development (HUD), eliminating some of the most important increases that the President has requested to help HUD address poverty and the shortage of affordable housing. The Administration strongly objects to the Committee's decision not to fund new incremental Section 8 housing assistance vouchers in FY 2001, and to underfund Administration initiatives to invest in our Nation's cities, including the lack of funding for the Hastert-Clinton agreement on New Markets/Community Renewal/Empowerment Zones and the Community Development Financial Institutions Fund. The Administration has serious concerns about the structure of the new housing production program included in the Committee bill.

The Administration appreciates the Committee's action to show strong support for the National Science Foundation (NSF) by providing a $400 million increase above the FY 2000 funding level. Although this is a 10-percent increase, it is still $275 million below the President's request. This reduction from the request would eliminate funding for almost 10,000 researchers and science and mathematics educators -- slowing innovation and reducing the number of well-trained students needed by the Nation's high tech industries. It would also reduce funding for critical Administration initiatives in information technology and nanotechnology.

The Administration has serious concerns about the Committee's reduction to the Environmental Protection Agency's (EPA's) basic operating programs, which would seriously affect EPA's ability to provide American communities with cleaner water, cleaner air, and safer food. The Administration is concerned that the Committee has significantly reduced the Administration's request and added earmarks for the National Aeronautics and Space Administration (NASA), presenting a severe obstacle in our ability to carry out current programs.

Detailed discussions of certain of these issues, as well as additional Administration concerns with the Senate Committee bill, are provided in the attachment. We look forward to working with the Congress to address our mutual concerns.

Attachment

Attachment

Corporation for National and Community Service

The Administration appreciates the Senate Committee's commitment to providing funding for the Corporation for National and Community Service. However, the amount provided for AmeriCorps and other programs is inadequate. In its current form, the Committee bill would cut AmeriCorps Grants by $77 million below the President's request and $26 million below the FY 2000 level. This action undermines the Administration's proposal to provide an additional 12,000 Americans the opportunity to help meet serious needs in communities across the country -- including efforts to help bridge the digital divide -- and would reduce the current strength of AmeriCorps by 3,000. The Committee bill provides $29 million for program administration, $7 million below the request and $1 million above FY 2000. Fully funding program administration is crucial for the Corporation to support State commission administrative costs and continue making financial managerial improvements that the Congress and the Administration believe are critical. In addition, the $50 million rescission of balances in the National Service Trust could endanger the Corporation's ability to pay educational awards earned by AmeriCorps members in the future. The Administration strongly urges that additional funding be provided to the Corporation.

Department of Housing and Urban Development

The Senate bill provides $30.6 billion for the Department of Housing and Urban Development (HUD), an overall programmatic reduction of $1.8 billion to the President's request, excluding proposed offsets. This reduction would eliminate some of the most important increases that the President has requested to help HUD address poverty and the shortage of affordable housing.

• Housing Assistance. The Senate bill provides no net new housing assistance. The Senate bill also fails to address the shortage of affordable housing to help homeless and low-income families, low-income elderly, the disabled, and people living with HIV/AIDS.
  • The Administration is disappointed that the Congress has failed to include our request for a program to support and encourage the production of housing for low-income families and begin to reverse the loss of housing being made available for assisted families. Instead, the Senate bill authorizes a new program for the production and rehabilitation of low-income housing via block grants to State housing finance agencies. This new program would not be targeted to places where the shortage of affordable housing is severe because it distributes funding based on population, not need. It would provide housing to families earning significantly more than the typical voucher-eligible family, which earns 30 percent or less of an area's median income. And, unlike portable vouchers, the proposed program would not provide families with the option to move in order to pursue better opportunity or seek housing that better meets their needs.

  • Even the most effective new construction program would require several years to provide new low-income housing. Yet the shortfall of affordable housing exists now. Therefore, the Administration's highest priority is to secure full funding of its request for housing vouchers that can provide more immediate assistance. The Committee's bill does not fund the request for 120,000 incremental housing vouchers to help hard-pressed families, including working families moving from welfare to work. As a result, the bill contributes to the growing backlog of poor families who cannot afford adequate housing. The Committee also does not provide adequate funds for the renewal of all existing contracts and tenant protection vouchers. Over three million families depend on the annual renewal of rental assistance. A reduction of over $400 million to the request for contract renewals and tenant protection would mean that approximately 70,000 families currently receiving rental assistance could lose their housing.

    In addition to securing the full request for housing vouchers, the Administration would like to work with the Congress to perfect and, within available resources, to fund, the Committee's proposed housing production program.

  • The Administration opposes the set-aside that the Senate bill carves out of the FHA multi-family fund for projects insured in conjunction with State housing finance agencies. This proposal would have a disastrous effect on FHA multi-family programs, cutting by half the funding available for programs that are already targeted to low-income families. FHA and its business partners depend on the flexibility of the multi-family program to finance successful projects. This set-aside would only tie the program's hands, not increase the availability of affordable housing.

  • The Administration objects to the new authorization in section 201, the Section 8 Voucher Success Demonstration, which would require the Secretary to approve rents up to 150 percent of the payment standard. HUD has already provided for higher payment standards, where necessary, through administrative action announced on September 12, 2000. Still needed, however, are flexible funds for search assistance and landlord outreach to assure success rates with vouchers in difficult markets. The Administration urges restoration of $50 million for these activities through the Administration's Voucher Success Fund proposal.

  • The Administration objects to the section 301 language that would reduce the opportunity of low-income families to rent where they choose with a housing voucher. The Senate bill would indirectly reduce this choice by permitting localhousing authorities to attach up to 25 percent of their vouchers to specific projects. The Administration believes the existing maximum of 15 percent is sufficient.

  • The Administration objects to the section 302 language limiting the Secretary's tools for disposition of HUD-held and HUD-owned multi-family properties to replacement with other project-based rental subsidies. The Secretary needs all existing tools, including portable housing vouchers, to protect tenants of subsidized projects and dispose of these properties in a cost-effective manner.

  • The Committee has failed to extend FHA's Downpayment Simplification program. This program has made FHA loan products easier to use and understand by realtors, lenders, and other parties and has been endorsed by FHA's business partners. Without extension of this authority, 7,000 lenders would have to change their processes and may no longer offer FHA products.

  • The Administration opposes the $28 million reduction below the request for the Housing Opportunities for People with AIDS (HOPWA) program, which impacts one of the most vulnerable populations in our society and would result in 5,170 fewer people living with HIV/AIDS receiving assistance. The proposed funding does not reflect the known demand for this program or the addition of four jurisdictions that will qualify for FY 2001 HOPWA funding.

  • The Administration opposes the Committee's reduction of $50 million below the request for the HOME program given the universally recognized success of this program, particularly in the area of increasing homeownership. There is bipartisan agreement that increasing homeownership and addressing a variety of other low-income housing needs is essential to improving our communities.

  • The Senate bill reduces requested funding for the homeless by $75 million. The Administration appreciates the $105 million for the Shelter Plus Care Program but prefers the House approach, which would include all funding in a single appropriation and the funding of Shelter Plus Care renewals through the Housing Certificate Fund. The direct impact of the Senate Committee action would be to crowd out grant funding for priority and emergency homeless needs identified by States and localities. The Administration believes that $105 million in funding should be provided for 18,000 vouchers that would provide permanent housing for long-term homeless. These vouchers are essential to meet one of the central goals discussed in the Senate Committee Report, to provide permanent housing.

  • The Administration appreciates the Senate's full support of public housing operating and capital investment needs but urges the Senate to fund HOPE VI at the requested level of $625 million. The denial of the $180 million set-aside would seriously jeopardize HUD's ability to ensure that the Nation's most severely distressed housing is demolished before the scheduled sunset of HOPE VI in FY 2002. Pursuant to a recent lawsuit settlement, we would like to work with the Congress both to provide $11.8 million in additional operating subsidy funds to the Puerto Rico Public Housing Administration, and to fully offset this increase.

  • The Senate bill does not provide sufficient funds for housing counseling, does not include provisions to create a new hybrid adjustable rate mortgage, and does not increase the loan limit for FHA single family guarantees. The Administration urges the adoption of these measures to increase homeownership opportunities and reduce costs.

• Community and Economic Development. The Senate bill fails to provide requested funding to help those places in America that our booming economy has left behind.
  • The Administration is deeply concerned that the Committee bill does not reflect the New Markets/Community Renewal/Empowerment Zone agreement between the President and Speaker Hastert to stimulate economic development in impoverished inner city and rural areas. The bill provides none of the $200 million that the agreement would provide for Round 2 Empowerment Zones and Enterprise Communities, and the Administration urges the Senate to include this funding. Nor does the bill provide funding for America's Private Investment Companies (APIC), a central part of the agreement, and does not recognize the passage of APIC legislation in the House and active authorizing legislation in the Senate. Zero funding for APIC would eliminate $1.5 billion in new capital for new private sector business development and the attendant creation of thousands of jobs in untapped new markets.

  • The Administration opposes the $100 million reduction to the request for Community Development Block Grants (CDBG). This is the Nation's largest and most flexible community assistance program focused on economic and physical development of low- and moderate-income neighborhoods. The Administration's proposed funding level recognizes the unmet needs that this program addresses, the impact of inflation on the program, and the reduction in individual grant size due to an increase in the number of new entitlement communities. The lost funding for technical assistance is an important resource that directly aids current CDBG grantees, enabling them to use their grant funds more effectively.

  • The Senate bill does not fund several key set-asides within the Community Development Block Grant program including the $22 million requested for the Mississippi Delta, the $5 million for the New Markets University Partnerships, and the $20 million for the Community and Interfaith Partnerships Initiative.

  • The Administration encourages the Congress to allow all of Economic Development Initiative funds to be allocated through a competitive process that is open to all eligible communities rather than through the special provisions in the Senate Committee bill.

  • The Administration is concerned that the Senate bill does not include full funding for the Native American Block Grant portion of the Community Development Block Grant program, which includes funds for the Native American Economic Development Access Center.

• HUD Operations. The Administration strongly objects to the $92 million reduction to the request for HUD Management and Administration. This cut would slash travel and other necessary support services, and could result in up to 500 fewer civil service positions. In addition, language in the bill would severely limit HUD's ability to manage its resources. For example, the bill limits HUD to an average cost of $78,000 per FTE by December 2000, including the cost of all contractors, even though HUD projects that costs will be higher than this amount. Another provision would limit HUD to 9,100 employees. The Administration objects to these actions and strongly urges the Senate to provide an adequate operating budget -- free of micro-management -- that will permit proper stewardship of these important programs and prompt delivery of services to needy families.

• Other Concerns. The Administration has several other concerns with provisions of the Senate Committee bill.
  • The Administration opposes the $7 million reduction to the request for the Fair Housing Initiatives Program (FHIP). The proposed reduction would eliminate funding of $2.5 million for the Project for Accessibility Training and Technical Assistance (PATTA) and $1 million for an accessibility-related Training Academy, which would strengthen past and current accessibility efforts through a Federal-building industry partnership. The funding request is focused directly on comments made by the Congress annually, asking that the Department provide guidance, education, and technical assistance in this area. Accessibility is a key component that drives a significant number of disability-related discrimination cases received by HUD. The Committee also eliminates $3.5 million of funds requested for the Fair Housing Partnership, which is a reduction of nearly 12 percent of HUD's budget for fair housing, despite research showing that discrimination remains a significant barrier to creating equal opportunities in society.

  • The Senate bill provides only a $2.5 million increase for the Office of Federal Housing Enterprise Oversight (OFHEO). The Administration supports an increase of at least $4 million over the Senate Committee level to ensure that OFHEO has the necessary capacity to provide effective oversight of enterprises that are growing and becoming more complex.

  • The elimination of $30 million for the Community Gun Safety and Violence Reduction initiative would seriously hinder HUD's ability to improve the safety of America's neighborhoods. Gun-related violence, which kills more than 30,000 and injures approximately 100,000 people each year, will continue to threaten the safety of communities HUD serves, thereby, undermining HUD's obligation to help ensure "a decent home and a suitable living environment for every American family."

  • The Administration urges the Senate to fully fund the request for Policy Development and Research (PD&R), which contributes directly to improving the quality of HUD's policy decisions and programs, plus the Partnership for the Advancement of Technology in Housing (PATH) program, to accelerate technologies that will improve the performance, energy efficiency, and affordability of America's housing. Much of PD&R's budget is used to cover the costs of periodic surveys of housing markets and conditions. These include the American Housing Survey, which is congressionally mandated, and others, such as the Residential Finance Survey and the Survey of Market Absorption, used heavily by the housing industry. The costs of these surveys are imposed by the Census Bureau and have grown in recent years. If the Senate level stands, HUD would have to cancel major studies expected to yield useful insights into the effectiveness of: moving families from high- to low-poverty neighborhoods, work incentives and how they enhance assisted-housing residents' ability to obtain and retain employment, and policies designed to improve success rates among voucher holders.

Environmental Protection Agency

The Administration appreciates the Committee's restraint in attaching anti-environmental riders to the Environmental Protection Agency's (EPA's) appropriations, and in approving the Administration's Tribal initiatives. However, the Administration is disappointed that the Senate Committee has chosen not to follow the House's lead in avoiding earmarked, special interest projects within the EPA's budget. Unfortunately, these types of unrequested projects squeeze out funding for core environmental and statutorily required programs. The Administration hopes to work with the Congress through the remainder of the appropriations process to eliminate remaining riders and restrain special interest projects.

The Administration has several major concerns with the funding levels provided for EPA in the Committee bill that must be addressed before enactment. In particular, the Administration strongly opposes the $219 million, or more than five percent, reduction to the Administration's request for EPA's Operating Programs, which are the backbone of the Agency's work. A cut of this magnitude would seriously affect EPA's ability to provide American communities with cleaner water, cleaner air, and safer food. The reduction to the operating programs would force the Agency to choose between addressing critical environmental needs, such as protecting the public from pesticides, and conducting environmental enforcement.

Specifically, the Committee bill would hamper EPA's efforts to reduce smog, soot, and air toxic emissions, primarily in urban communities. This would leave 80 percent of our citizens exposed to hazardous air pollution. The Senate Committee's proposed reductions would also slow the Agency's efforts to control the causes of fish kills and hazardous algae blooms in the Nation's rivers, lakes, and streams. Major cuts are targeted at:

• Clean Water Action Plan and Great Lakes Initiative. The Committee reductions would harm EPA efforts to provide States and localities with funding to help them address their water pollution problems. We strongly urge the Senate to restore requested funding for the Great Lakes Initiative. This funding is critically needed to address contaminated "areas of concern" in the Great Lakes. The Administration, likewise, urges restoration of funding for section 319 non-point source pollution control grants, to provide needed assistance in combating polluted runoff -- the largest remaining source of water pollution today -- and for State grant funding for the specific purpose of protecting water quality through Total Maximum Daily Load (TMDL) allocations. In addition, the Administration urges that the increased State grant funding in the bill be accompanied by increases in State matching funds, a requirement that the current Senate language does not ensure.

• Climate Change Technology Initiative (CCTI). The Administration urges full funding of EPA's Energy Programs, particularly in the face of the energy issues that the country is facing. A cut of the magnitude proposed in the bill would damage and further delay the common sense EPA programs designed to reduce the Nation's dependence on foreign oil, improve the Nation's energy efficiency and energy conservation efforts, and save consumers money, while also mitigating against global climate change. The Committee bill also makes reductions that would set back efforts to develop fuel-efficient automobiles, sport utility vehicles, and trucks.

• Information Exchange Network. The Committee bill would eliminate all but $5 million for a major effort to integrate environmental databases, an initiative designed to give EPA and the States the tools to use environmental data more efficiently and cost-effectively in cleaning up the environment.

• International Initiatives. The Committee bill would reduce funding for the Montreal Protocol by $9 million, hampering efforts to help developing countries reduce the use of ozone-depleting substances in order to protect the Earth's ozone layer, and eliminate $4 million in funding for international environmental monitoring and capacity building. The latter initiative is designed to help developing countries strengthen their capacity to establish effective environmental institutions and provide U.S. policymakers and businesses with reliable information about environmental conditions and policies in foreign markets. Failure to fund this initiative would undermine efforts to ensure that the increased trade stimulated by new trade programs and agreements, such as the U.S.-Caribbean Trade Partnership Act and African Growth and Opportunity Act, is accompanied by environmental improvements.

The Administration opposes the $72 million reduction to the request for Superfund funding available to the EPA, which under this Administration has operated at a record pace to clean up hazardous waste sites. This reduction would needlessly jeopardize the public health for citizens living near affected sites by eliminating virtually all new cleanup starts, depriving EPA of critical enforcement funds, and making it difficult to meet the President's 900-site construction completion goal by FY 2002. Further, the Administration objects to the Committee's proposal to finance half of the appropriation from general revenue. Such financing is contrary to the "polluter pays" principle and would be unfair to the general public, who would be forced to pay for the irresponsible actions of polluters.

The Administration objects to the elimination of funding for the Clean Air Partnership Fund. This Fund would provide grants to State and local governments for innovative projects that reduce multiple air pollutants, such as toxics, soot, and smog, as well as reducing greenhouse gases. This Fund would support a wide range of projects that would mean cleaner air and savings for consumers.

The Administration also objects to the Senate's $50 million reduction in funding for critical infrastructure projects to address conditions along the U.S./Mexico border, where hundreds of thousands of residents face serious health threats caused by the discharge of untreated and inadequately treated wastewater. The incidence rates for typhoid in parts of the border area are nearly 200 times the U.S. nationwide rates and over 500 times the national rate for amoebic dysentery. Congress should restore full funding for this program.

Finally, the Administration opposes Committee bill language related to the Kyoto Protocol. The bill language, which purports to prohibit the implementation of the Kyoto Protocol, is unnecessary as the Administration has no intent of implementing the Protocol prior to congressional ratification.

Council on Environmental Quality

The Administration appreciates the additional $84,000 for FY 2001 provided in the Committee bill, but believes full funding of the requested increase of $204,000 is needed for the Council on Environmental Quality (CEQ) to fulfill its statutory responsibilities. The Administration opposes the Committee's bill language prohibiting the use of detailees by CEQ and urges the Senate to eliminate this language as the House has done.

National Aeronautics and Space Administration (NASA)

The Senate Committee bill provides $13,844 million for NASA, a reduction of $192 million to the President's request. The Administration appreciates the Committee's efforts to fully fund NASA's Space Launch Initiative, a critical priority for enabling a vibrant future civil space program. However, the Committee bill includes two, large unallocated reductions and a large number of unrequested earmarks. Together, these reductions and the net effect of earmarks totaling $406 million present a severe obstacle to NASA's ability to carry out current programs. The Administration urges the full restoration of funding and reconsideration of the serious displacement of NASA research and development activities threatened by the magnitude of earmarks included in the bill.

• Earmarks. The Administration is gravely concerned with the number, size, and nature of unrequested earmarks in NASA's Science, Aeronautics, and Technology and Mission Support accounts. These earmarks amount to a net total of $214 million. Most of these earmarks are site-specific, circumventing the competitive, peer-review process -- and several lack relevance to NASA's mission. In contrast, the House-passed bill includes no such earmarks. We encourage the Senate to adopt the House's restraint.

• Science, Aeronautics, and Technology. The Administration strongly opposes the unallocated reduction of $92 million in NASA's Science, Aeronautics, and Technology account. This reduction, in addition to the $178 million in earmarks, would require the deferral or termination of several Space Science missions, Earth Science missions, and aeronautics research projects currently under development.

• Human Space Flight. The Administration strongly opposes the unallocated reduction of $100 million made in NASA's Human Space Flight account. This reduction would hamper efforts to address risks at the height of International Space Station assembly, test, and operation.

• Bill Language. While we appreciate the Committee's support for the transition of NASA's budget to full cost in FY 2002, the Administration objects to bill language that directs NASA to separate the Space Shuttle and International Space Station programs into two separate appropriation accounts. Furthermore, the Committee has not provided the needed flexibility for transition to the new account structure that is included in the Administration's proposal and the House-passed bill. This would undermine the integrated and efficient management of these two critical programs and hamper efforts to address critical unforeseen situations.

Community Development Financial Institutions

The Administration is very concerned with the Senate Committee's decision to fund the Community Development Financial Institutions (CDFI) Fund at $95 million, $30 million below the request. This reduction would result in approximately 45 fewer organizations receiving awards than assumed in the request. We urge the Senate to fully fund CDFI at the President's request of $125 million. Funding the Administration's request will enable CDFI to meet the increasing demand by financial institutions to leverage investments, make loans, and provide technical assistance and other financial services in some of the country's most distressed communities. In addition, we ask the Senate to adopt the appropriations language proposed in the budget and passed by the House, and to provide funding for administrative expenses at the level requested by the President.

National Science Foundation

The Administration will work with Congress to fully fund the President's requested 17-percent increase for NSF. The Administration is particularly concerned with the following priority areas.

• Research Priorities. Although the Committee provides increases for priority investments in Information Technology, Nanotechnology, and Biocomplexity, the amount provided is $112 million, $92 million, and $61 million, respectively, below the request. External advisory committees have emphasized the vital importance of sustained and adequate Federal investments for long-term, fundamental research in these key areas. These priority areas hold great promise for breakthroughs that are revolutionary, likely reshaping science and engineering, and changing the way we think and live. The Administration is troubled by over $90 million in unrequested funding that displaces badly needed resources for critical programs.

• Research Facilities. The Administration appreciates the Committee fully funding the Terascale Computing System. However, the Committee's deletion of funding for Earthscope and the National Ecological Observatory Network (NEON) will not only delay, but also impede the development of large-scale research equipment to enable us to understand better and to predict more reliably earthquakes and related threats to sensitive ecological regions of our country.

• Education. The Administration appreciates the Committee fully funding the Scholarships for Service program to build a cadre of individuals in the Federal sector with the skills to protect the Nation's information systems. The Administration, however, is troubled by the Committee's $13 million reduction to the request for the Graduate Teaching Fellows in K-12 Education program. This program addresses instructional workforce issues by placing graduate students and advanced undergraduates in the K-12 classrooms as resources for teachers in science and mathematics at a time when there is a critical shortage of math and science teachers for our children.

Federal Emergency Management Agency

The Administration greatly appreciates the efforts of the Senate to provide funds needed for the operation of the Federal Emergency Management Agency (FEMA). The Administration also appreciates the Senate's support for FEMA's mitigation programs and recognition of the need for flood map modernization. This support will help to prevent future losses of life and property. However, the Administration urges the Senate to allow the use of up to $30 million of disaster relief funds for flood map modernization, as requested (instead of the $15 million provided in the Committee mark and without the restrictions in the Committee mark), and to provide the full request of $30 million for pre-disaster mitigation so that communities can take steps to become more disaster resistant.

The Administration strongly urges the Senate to provide the full request of $140 million for the Emergency Food and Shelter Program. Funding the program at only $110 million would result in 25 million fewer meals served and more than one million nights of temporary lodging not provided. The Administration also strongly urges the Senate to provide the $25 million requested to establish a pilot grant program to fund firefighter health and safety-related activities. More than 100 firefighters lost their lives in the line of duty last year, and countless more were injured.

National Credit Union Administration

The Administration is concerned that the bill does not provide the $1 million requested for the National Credit Union Administration (NCUA) to support community development credit unions. The timely loans and technical assistance provided by NCUA help new and developing credit unions meet the needs of traditionally under-served customers. We request that the Senate restore these funds.

Department of Veterans Affairs

• Medical Care. The Administration commends the Senate Committee for recognizing that the President's FY 2001 request for Medical Care fully funds the new benefits authorized in the Millennium Act, and supports its handling of the offsetting receipts authorized by that Act.

• Construction. The Administration is pleased that the Senate fully funds Minor Construction but opposes the exclusion of $26.6 million from the Major Construction account for a new gero-psychiatric nursing home facility at the Menlo Park Division of the Palo Alto Health Care System. This project is VA's Capital Investment Board's top priority and has been judged to be the best alternative for addressing major seismic deficiencies in the existing facility that houses volatile and combative patients whom community facilities have consistently refused to accept. It is inconceivable that any recommendations from the Capital Asset Realignment for Enhanced Services (CARES) initiative will suggest closing or relocating this program.

• Vocational Rehabilitation and Employment. The Administration commends the Senate for accepting the proposed, one-time $30 million adjustment from the Readjustment Benefits account to the General Operating Expenses account to fund correctly vocational rehabilitation services.

• Paralympics. The Administration will work with Congress to provide language authorizing VA to spend no more than $2 million from the Medical Care account over a two-year period in support of the Paralympic Games, which follow the 2002 Olympic Games in Utah. VA sponsors rehabilitative sports programs for veterans four times each year and understands that recreation is an important part of the healing process for severely disabled people. Involvement in the 2002 Paralympics will give VA an opportunity to highlight its programs for disabled veterans.

Consumer Product Safety Commission

The Administration commends the Senate for providing $52.5 million for the Consumer Product Safety Commission, the same as the request, and $1.5 million more than the House has provided. These funds will ensure that the Commission's can sustain its efforts to protect children and families against unreasonable risks of injury and death from consumer products.

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