| EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503
| STATEMENT OF ADMINISTRATION POLICY (THIS STATEMENT HAS BEEN COORDINATED BY OMB WITH THE CONCERNED AGENCIES.)
July 24, 2000
(Senate)
S. 2900 - TREASURY AND GENERAL GOVERNMENT APPROPRIATIONS BILL, FY 2001
(Sponsors: Stevens (R), Alaska; Campbell (R), Colorado)
This Statement of Administration Policy provides the Administration's views
on the Treasury and General Government Appropriations Bill, FY 2001, as
reported by the Senate Committee. Your consideration of the
Administration's views would be appreciated.
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.
Unfortunately, the FY 2001 congressional budget resolution provides
inadequate resources for discretionary investments. We need realistic
levels of funding for critical government functions that the American
people expect their government to perform well, including education,
national security, law enforcement, environmental protection, preservation
of our global leadership, air safety, food safety, economic assistance for
the less fortunate, research and technology, and the administration of
Social Security and Medicare. Based on the inadequate budget resolution,
the Committee bill does not address critical needs of the American people.
In addition, the Committee bill includes several objectionable provisions.
Across the appropriations bills, there is a pattern of underfunding core
government operations such as air traffic operations, park maintenance, and
the administration of Social Security and Medicare. The Committee bill
continues this pattern by underfunding the Internal Revenue Service,
counterterrorism programs, firearms enforcement programs, an important
anti-drug program, and necessary construction and repair of Federal
facilities. If the bill were presented to the President in its current
form, his senior advisers would recommend that he veto it.
The attachment provides a discussion of our specific concerns with the
Committee bill. We look forward to working with the Senate to address our
mutual concerns.
Attachment
Attachment
TREASURY AND GENERAL GOVERNMENT
APPROPRIATIONS BILL, FY 2001
(As Reported by the Senate Committee)
Department of the Treasury
The Administration is very concerned with the large reductions in the
Committee bill for key priorities of the Department of the Treasury. The
bill provides $940 million less than the President's request for Treasury's
programs, which would significantly reduce funding for vital programs in
the IRS, counterterrorism, firearms enforcement, Customs, and other
activities. Specific funding issues include:
- Internal Revenue Service. The Administration strongly objects
to the deeply inadequate funding level provided for the IRS and urges
the Committee to fully fund the President's budget request. The
Senate Committee mark provides $8.5 billion for the IRS, $409 million
(4.6 percent) below the President's request. The mark would halt many
of our current efforts to modernize the IRS and to improve both
customer service and compliance. In 1998, an overwhelming, bipartisan
majority of the Congress passed the IRS Reform and Restructuring Act
(RRA) and joined the Administration in calling for changes that would
improve service to taxpayers and enhance the ability of the IRS to
administer our Nation's tax system in a fair and efficient manner.
The Committee mark would make it impossible to implement many of the
critical improvements contemplated under the RRA. Instead, the mark
would require the IRS to reduce its current staffing by up to 500
full-time employees. It would eliminate numerous customer service
initiatives and reduce audit rates to an unacceptably low 0.26
percent. We urge the Senate to restore the funding necessary to carry
through on the bipartisan commitment to improve the ability of the IRS
to serve its customers and administer the tax code in a fair and
efficient manner.
- Counterterrorism. The Administration appreciates the inclusion
of $55 million for Treasury's Counterterrorism Fund but is deeply
concerned that the Committee has not provided the other $47 million in
initiatives sought in the recent counterterrorism budget amendment.
These funds would enhance Treasury's work to deter and detect
terrorist activity and continue the high level of effort undertaken
during the Millennium celebration events. Because of its unique
financial investigative capabilities and role in border control,
Treasury is a critical component of the enhanced Government-wide
effort to combat terrorism. What we learned during the Millennium New
Year period concerns many of us. There is consensus that the threat
of domestic terrorist attack has increased significantly and that we
need to increase our efforts to protect against it. The
Administration is very concerned that the Committee has failed to
address this heightened threat.
- United States Secret Service. The Administration strongly urges
the Senate to restore the $46.2 million reduction to the President's
request for the Secret Service. This reduction, among other things,
would eliminate funding for increased staffing to address workforce
retention and workload balancing of the Service's agents, who perform
critical protective and investigative missions. In addition, the
Committee has not provided vital funding to support the Service's
expanded responsibilities associated with Presidential Decision
Directive-62 on National Special Security Events. For example, the
Committee has not funded $3.5 million for the Service's protective air
security program and has not provided $2.4 million for overtime and
travel associated with protecting the President as well as Vice
President and the President-elect and Vice President-elect.
- BATF Firearms Enforcement. The Administration is very concerned
that the Committee has provided only $75.6 million of the $94.0
million requested for gun enforcement initiatives. The $18.4 million
cut would reduce the number of new cities that participate in the
Youth Crime Gun Interdiction Initiative (YCGII) by 50 percent (from 12
to 6), underfund the Administration's request for new ATF agents, and
hinder our efforts to build towards comprehensive crime gun tracing by
State and local law enforcement. The proposed level would also
threaten BATF's ability to deploy the estimated 147 ballistic imaging
systems to State and local law enforcement in a timely manner. Gun
violence is a complex issue that requires a comprehensive approach.
The expansion of YCGII and the deployment of ballistic imaging systems
to State and local law enforcement are essential in the effort to
identify the most violent predators plaguing our communities and the
gun traffickers that supply firearms to them.
- United States Customs Service. We urge the Senate to provide
the full $210 million needed to fully fund the first year development
of the Automated Commercial Environment (ACE). To provide this
funding, we urge the Senate to consider the fee proposed in the
President's budget. The Customs Service must meet the demands of an
increasing volume of trade, expected to double by 2005. The Customs
Service can accomplish this task, vital to the success of American
business operations, only by converting to a paperless process and an
account-based system, such as ACE.
While we appreciate the Committee's recognition of the importance
of Customs work to combat international child labor by funding a $2.5
million increase, we urge the Congress to fully fund the requested $5
million increase in order to enforce the ban on the importation of
goods made with forced or indentured child labor, denying such
products access to the lucrative U.S. marketplace.
We are concerned about additional reductions that would impair
Customs programs to improve mission training for its officers, address
integrity problems that have been of concern to Congress and the
American public, and assure the safety of aircraft operated by Customs
employees. We urge the Senate to restore the full President's
request.
- Interagency Crime and Drug Enforcement. The Committee's
reduction of $12.5 million below the request would affect IRS' ability
to participate fully in the Organized Crime and Drug Enforcement Task
Forces (OCDETF) program. These funds will allow IRS to continue
current efforts toward the war on drugs where its unique financial
investigative expertise allows tracing of funds and financial
transactions.
- First Accounts. While the Administration is pleased that the
Committee has provided $0.4 million for the President's First Accounts
initiative, we urge the Committee to provide the full $30.0 million
requested. The First Accounts initiative would expand access to
mainstream financial services for millions of "unbanked" Americans
families who lack this basic passport to the modern American economy.
Access to bank accounts, ATMs, and consumer education can help to
reduce costs for low-income families, and can also help families to
manage household finances and plan and save for the future. Failure
to fully fund this bipartisan initiative would result in millions of
families being denied access to the financial services mainstream.
- Federal Public Key Infrastructure. The Committee bill does not
allocate the requested $7.0 million to fund the full-scale development
and implementation of a Federal Public Key Infrastructure, which is
critical to providing a secure environment for electronic government.
We urge the Senate to provide funding for this important initiative in
the Administration's request.
- Money Laundering. While the Administration is pleased that the
Committee has provided $6.5 million in funding to the Financial Crimes
Enforcement Network and the Customs Service for implementation of the
Money Laundering Strategy, we urge the Senate to provide the full
$15.0 million requested for the Money Laundering Strategy. The fight
against money laundering is critical. Counter-money laundering
efforts allow us to pursue those who commit the underlying crimes that
produce dirty money -- whether drug dealing, fraud, corruption, or
other forms of organized crime.
- Treasury Building and Annex Repair and Restoration (TBARR). The
Treasury Department is in the midst of a major renovation and
restoration effort of its main Treasury building facilities. The
reduction of $8.3 million to the request would stretch out this
important effort and significantly add to the overall cost to complete
the project. We urge the Congress to fully fund this request.
National Youth Anti-Drug Media Campaign
The Administration strongly objects to the proposed reduction in funding
for the National Youth Anti-Drug Media Campaign. To reduce the Campaign's
funding by almost one-half would imperil the positive momentum the program
has demonstrated just when the Campaign is beginning to take hold. The
proposed reduction, coupled with increased advertising costs of almost 40
percent in the past two years, would significantly undercut our ability to
meet our goal of reaching 90 percent of the youth audience with a Campaign
message four times a week, every week. Cuts of the magnitude proposed also
would require cancellation or major reduction of many of the Campaign's
integrated communications programs.
The Campaign needs five years of adequate and consistent funding to reach
its goal of educating America's youth and enabling them to reject illicit
drugs. Not only would the Campaign lose the message recognition and
cumulative audience impact it has built, but the interruption in sustained
level messaging would make less effective much of the more than $500
million the Congress has invested in this Campaign thus far.
General Services Administration
The Administration is disappointed by the Committee's funding levels for
key priorities of the General Services Administration (GSA). The Committee
bill provides $853 million less than the President's request for GSA's
programs, which would reduce construction and other program activities.
Specific funding issues include:
- Construction and Repair and Alteration Funding. Although
advance appropriations have been provided for select courthouse and
other construction projects, the Committee bill fails to fund in FY
2001 any new design or construction, including courthouses, the FDA,
NOAA, and ATF headquarters, and several border stations. In addition,
the Committee bill does not provide $30 million for additional window
protection as recommended by the Department of Justice's
"Vulnerability Assessment of Federal Buildings." The Administration
is concerned that delaying these projects not only would leave
unaddressed important safety, security, and health concerns but also
would increase costs in the future. The Administration strongly urges
the Senate to provide funds for these needed projects.
- Policy and Operations. The Committee bill cuts funding for the
GSA Policy and Operations account by $22 million below the request.
While the bill provides $10.0 million for critical infrastructure
protection programs, it does not provide funding for some new
initiatives, such as the requested $3.3 million for protection and
maintenance at the Lorton Correctional Complex and $2.0 million for
the RISC/OIRA Consolidated Information System. We urge the Senate to
provide funding for these important initiatives.
- National Health Museum. The Administration is concerned about
section 639, which would transfer a Federal building at 2nd and C
Streets, S.W., in Washington, D.C. to the National Health Museum. The
Administration supports the establishment of a National Health Museum
and recognizes the potential value of locating that Museum along the
Mall. Although this provision requires the National Health Museum to
pay fair market value for the property, it does not require the Museum
to compensate taxpayers for the other substantial costs that such a
transfer would entail. The Administration encourages the Congress to
address this issue either here or in the context of H.R. 3171, the
"National Health Museum Site Selection Act."
National Archives and Records Administration
While the Committee bill is $94 million below the request, and would delay
the Archives I renovation, the Administration appreciates the Committee's
action to provide $88 million in advance appropriations for the project.
However, the bill still does not provide funding for essential repairs
needed to the Kennedy Library due to severe water damage.
Office of Personnel Management
The Administration strongly objects to the Committee's failure to provide
the full request for the Office of Personnel Management. Specific funding
issues include:
- Federal Cyber Services (FCS) Initiative. The President's
overall critical infrastructure protection initiative is essential to
ensuring that the Federal Government is protected from acts of
cyber-terrorism and can maintain its information security
infrastructure with a highly trained and competent workforce. FCS is
a key element to ensure that adequate numbers of people are recruited,
trained, and motivated to remain in Federal service. The
Administration urges the Senate to provide the full $6.2 million
requested for OPM's responsibilities in this initiative.
- Retirement Systems Modernization. The Administration strongly
urges the Senate to restore the $2.0 million reduction made by the
Committee in funding for upgrading and modernizing the systems used
for providing retirement benefits to Federal annuitants. The current
systems infrastructure -- technology, organization, and processes --
is badly outdated and inefficient. In addition, OPM faces a
significant workload increase in the years ahead as more and more
employees retire under the Federal Employees' Retirement System
(FERS). Failure to invest now in retirement systems upgrades will
lead to unacceptable cost increases and service degradations in the
future.
Office of Special Counsel
The Administration is concerned that the Committee bill does not include
$414,000 requested by the Office of Special Counsel (OSC) to fully support
all 10 FTEs needed to continue the Office's efforts to reduce its pending
backlog. In 1994, Congress imposed upon the OSC a 240-day deadline for
processing and investigating complaints, including those involving
prohibited personnel practices and reprisal for whistleblowing. The
request for additional staff is an essential part of an aggressive,
multi-year strategy by the agency to meet the congressional mandate, in the
face of an escalating number of complaints.
Morris K. Udall Foundation
The Administration objects to the Committee's 65 percent reduction to the
request for the Morris K. Udall Scholarship and Environmental Dispute
Resolution Funds, and urges the Senate to restore the level of funding to
the President's request of $4.25 million. In particular, we are concerned
with the cut in funding for the Environmental Dispute Resolution Fund of
$750,000, or 60 percent, from the President's request. The Fund provides
for the operation of the U.S. Institute for Environmental Conflict
Resolution, established in 1999. The requested funding is necessary for
the Institute's continued operation. Such a decrease in funding from the
President's request would result in significant reductions in Institute
personnel, preventing the Institute from carrying out existing commitments
to Federal agencies for case work, including assistance in current
mediation projects. The Institute's goal is to become self-sustaining, but
it is still in a start-up mode. Without the requested funding level, it
would be difficult for the Institute to continue operating.
Unanticipated Needs
The Committee bill includes neither the $1.0 million requested to meet
general unanticipated needs related to the national interest, security, or
defense, nor the $2.5 million specifically requested to facilitate public
education in Puerto Rico on the islands' status options and a local choice
among them. Although Puerto Rico became part of the U.S. over a century
ago, its ultimate status still has not been determined. The situation
raises questions of democracy and the appropriate economic and social
policies for the islands. A primary reason for the situation -- and the
requested funding -- is that Puerto Ricans have been unsure of the
possible options for the islands' status. The United States has a
responsibility to ensure that Puerto Ricans are aware of and can seek a
fully democratic governing arrangement if they wish. The Administration
will work with the Congress to address this concern as the bill moves
forward.
Objectionable Language Provisions
The Administration objects to several language provisions in a variety of
programs. Specific issues include:
- Firearms Procurement. We strongly oppose a provision of the
bill and a further amendment that may be offered that would restrict
the Department of the Treasury, while pursuing the procurement of the
highest quality firearms and ammunition, from working with the gun
industry to reform the way gun manufacturers design, distribute, and
market their products. Such reforms, like those being implemented
through the Administration's historic agreement with Smith & Wesson,
can make significant progress in the fight to reduce gun violence in
America and save lives. At a time when our Nation loses nearly 12
children per day in gunfire, Congress should be doing all it can to
move forward, not backward, in the fight to reduce gun violence.
- Federal Employees Health Benefits Program (FEHBP) Abortion
Coverage. The Administration supports the Committee's exclusion
of any restriction on FEHBP coverage of abortions except in situations
where the life of the mother is endangered or the pregnancy is the
result of rape or incest. The Administration would strongly oppose an
amendment that would restrict such coverage. While the President
believes that abortion should be safe, legal, and rare, the
Administration does not believe that Federal employees and their
families should be precluded from choosing to purchase health
insurance that includes broader coverage.
- FEHBP Contraceptive Coverage. The Administration supports the
language in the Committee bill that continues requirements in current
law for coverage of prescription contraceptives by health plans
participating in the FEHBP and would oppose an amendment that may be
offered that would strike this authority.
- FEHBP Cost Accounting Standards. The Administration has
consistently opposed a broad-based statutory waiver of the cost
accounting standards (CAS). CAS provide a mechanism for
experience-rated carriers to accumulate and report consistently
Federal Employees Health Benefits Program (FEHBP) administrative costs
(i.e., overhead), along with other financial data, to OPM. This
information provides a means for ensuring that the carriers are
accurately allocating these costs between their FEHBP business line
and their other business lines, so that, among other things, OPM can
ensure that taxpayers and participating Federal employees are paying
an equitable amount of administrative costs in their health insurance
premiums.
- Section 514. The Administration opposes the inclusion of
section 514 as unnecessarily duplicating two reports that will already
be submitted to Congress -- the Information Collection Budget for FY
2001, and the benefit-cost report on Federal regulation required by
section 627 of this bill. Paragraph (1) in section 514 would have OMB
evaluate the extent to which implementation of the Paperwork Reduction
Act (PRA) has reduced reporting burden imposed by all of the agency
rules issued since 1981. However, OMB does not generally participate
in agency rule development prior to E.O. 12866 review and does not
have records of how the PRA was applied during the development of a
regulation.
Paragraph (2) in section 514 calls for recommendations on how to
amend the PRA to better achieve its purposes and calls for this report
to be submitted six months after enactment. The timing of this report
under section 514 would require the current Administration to begin
developing a report it will not complete and would require the next
Administration to submit a report it did not have the opportunity to
develop. If this provision is to be included in the final bill, the
next Administration should be given sufficient opportunity to develop
legislative recommendations in accordance with its own prerogatives
and be allowed to offer its recommendations and suggested amendments
to the PRA through the normal legislative process.
- Federal Contracting. The Administration appreciates the
Committee not including a provision that would keep the Executive
Branch from clarifying the current legal requirement that Federal
contractors have a record of integrity and business ethics. In order
to help contracting officers carry out their responsibilities and
avoid forcing them to do business with businesses that are
untrustworthy because they have broken the law, the proposed
regulation provides guidance to contracting officers, combined with
extra due process protections for small business and other
contractors. Unfortunately, the House-passed bill includes a
provision that would prevent implementation, even though the
regulation is only at the proposal stage and public comments are still
being solicited. The Administration would oppose a potential floor
amendment. GAO has concluded that violations of laws by contractors
doing business with the Government resulted in the assessment of
hundreds of millions of dollars in fines for procurement fraud and
other violations. Delaying implementation will undermine attempts to
reform Federal procurement, encourage responsible behavior by
contractors and reduce fraud, waste and abuse.
- Infringement on Executive Authority. The Administration objects
to a number of provisions in the Committee bill that would require
congressional approval before Executive Branch execution. The
Administration will interpret these provisions to require only
notification of Congress, since any other interpretation would
contradict the Supreme Court ruling in INS v. Chadha.
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