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This Statement of Administration Policy provides the Administration's views on
H.R. 2160, the Agriculture, Rural Development, Food and Drug Administration,
and Related Agencies Appropriations Bill, FY 1998, as reported by the House
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. As discussed below, the Administration will
seek restoration of certain of the Committee's reductions to the President's
requests. We recognize that it will not be possible in all cases to attain the
Administration's full request and will work with the Committee toward achieving
acceptable funding levels.
The Administration is committed to working with the House to identify
reductions in the bill in order to find offsets for the restoration of funds
that the Administration seeks. For example, unrequested funds have been
provided to the P.L. 480 Title I account, and the Administration's proposed
user fees for meat and poultry inspection and new user fees for the Food and
Drug Administration have not been adopted. In addition, while we commend the
Committee for including additional funds to operate the Crop Insurance program,
the Committee has added $36 million more than requested for this purpose. The
increase above the request would result in lower administrative expense reimbur
sement payments from the mandatory side of the program. Instead of reducing
payments from the mandatory account, these discretionary resources could be
used to fund higher priority programs. We urge the House 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.
Women, Infants, and Children Program
The Committee bill would fund the Special Supplemental Nutrition Program for
Women, Infants, and Children (WIC) at $3.9 billion, $184 million below the
President's request. The Committee's mark is intended to support a
participation level of 7.4 million women, infants, and children, the
anticipated FY 1997 end-of-year caseload level. The President's FY 1998 Budget
request would allow program participation to grow modestly -- to 7.5 million by
September 1998 -- and fulfills the bipartisan commitment to fully fund WIC. It
also includes a $100 million contingency reserve to ensure that unanticipated
food price increases do not cause participation decreases.
The Administration appreciates the recent action by the Congress to provide
supplemental funding to ensure stable WIC participation in FY 1997. We also
appreciate that the Committee bill provides needed flexibility in allocating
WIC funding to States. However, we are disappointed that the Committee mark
does not provide funding for the contingency reserve and for the modest
increase in participation proposed in the President's budget. These two
provisions would allow WIC to reach and maintain the bipartisan commitment to
full program participation.
The Administration shares the Committee's concern that WIC be able to maintain
its successful cost containment efforts. The Administration strongly supports
the Committee's inclusion of a provision to ensure competitive contracting of
infant formula based on the lowest net wholesale cost. Without such a
provision, infant formula costs could rise dramatically, increasing WIC's total
costs and putting budgetary pressure on other programs funded by Agriculture
appropriations.
Food and Drug Administration
The Committee action would result in a total program level for the Food and
Drug Administration (FDA) of $1.0 billion: $926 million in budget authority
and $113 million in user fees. This level of fees is, in total, a net $132
million below the President's request. On March 28, 1997, the Administration
transmitted to the Congress legislation for the authorization of $237 million
in new and reauthorized fees. It is appropriate that regulated industries that
derive valuable benefits from some FDA activities contribute an appropriate
share of FDA's cost of ensuring the safety and effectiveness of their
products. The Administration urges the House to fund FDA at the requested
program level of $1.1 billion, offset by the proposed user fees.
The Committee would provide $24.3 million for the costs associated with
implementing the FDA's final rule for the regulation of nicotine-containing
tobacco products, $9.7 million below the President's request. The tobacco
regulation promotes and protects the health of the Nation's youth by reducing
the easy access and appeal of tobacco products to children. Full funding is
essential to meet the Administration's goal of significantly reducing under-age
tobacco use.
Rental Housing Programs
The Committee has reduced requested funding for the Rental Assistance Program
(RAP) by $99 million. The Committee has failed to include RAP funds needed to
subsidize rents for new or rehabilitated units constructed through the Section
515 multi-family housing loan program. Without these rental subsidies, more
than 3,500 low- and very low-income rural households would be unable to afford
the rents in new projects, and the projects themselves might not be viable.
In addition, we ask the House to restore, to the extent possible, the $52
million requested for RAP to convert expiring HUD Section 8 rental assistance
in USDA-financed rental properties to RAP assistance. While Section 8
assistance is renewed annually, RAP generally provides five-year contracts for
rental assistance. On an annualized basis, RAP assistance costs less than
Section 8 assistance, and over five years the conversion of these units in FY
1998 would save taxpayers $46 million.
While the Administration appreciates the increase in single-family housing
loans over the FY 1997 level, the House is urged to include funding, to the
extent possible, for the full $1 billion in direct loans requested. This
program has experienced a significant reduction in recent years, and additional
funds are required to meet some of the backlogged demand for homeownership
assistance to low-income rural Americans. The $50 million reduction made by
the Committee bill would deny over 1,000 rural families the opportunity to
become homeowners.
Rural Development Programs
The Administration appreciates the Committee's efforts to provide adequate
funding for rural development programs. However, we are concerned that the
Committee has reduced funding for the rural water and wastewater program from
the level provided by the Subcommittee. Further, the Committee has not adopted
the Administration's request to implement the Rural Community Advancement
Program, as authorized in the 1996 Farm Bill. This flexible delivery mechanism
would allow States and localities to tailor rural development assistance more
effectively to meet unique local conditions and needs. We urge the House to
permit this innovative funding mechanism to go forward.
Conservation Programs
The Committee bill does not include $18 million requested for the Resource
Conservation and Development Program for local coordinators to assist
communities in preparing watershed and rangeland plans. The goal of the new
funding is to implement successful, locally-led rangeland and watershed
planning efforts, such as by the Malpais Borderland Group in the Southwest, the
Quincy Library Group in California, and the Big Darby Watershed in Ohio, in
environmental-priority areas, including the salmon recovery area of the Pacific
Northwest. The Committee bill also reduces funds for Conservation Operations,
which could seriously impair USDA's ability to carry out critical conservation
programs, including those enacted in the 1996 Farm Bill. The Committee level w
ould also constrain improvements in conservation program implementation such as
through the Geographic Information Systems and the digitizing of soils maps.
Agricultural Research Programs
The Committee bill does not provide sufficient funding for a number of
important agricultural research initiatives. Only $5 million of the $12
million requested is included for the Administration's Human Nutrition Research
Initiative, a multi-year initiative to improve the understanding of the
nutrition needs of diverse populations, notably children, but also including
the elderly, pregnant women, and healthy adults. The Committee bill provides
$106.7 million for the National Research Initiative (NRI) competitive grants
program, a $12.5 million increase over FY 1997 but a $23.3 million reduction
from the President's request. The bill also includes inappropriate
programmatic earmarks within the NRI, a program from which grants are to be
awarded based on scientific merit and a peer-review process. We urge the House
to allow the NRI to function in the manner authorized. In order to provide
funding for these important activities, the Administration urges the House to
reduce the $37 million in funding included for over 75 unrequested, earmarked
research grants.
Food Safety Initiative
While we commend the Committee's action to fully fund the FDA portion of the
request for the President's Food Safety Initiative that is within the
Committee's jurisdiction, only $3 million of the $9 million requested through
the Department of Agriculture (USDA) has been funded. In May, the Vice
President announced the Administration's detailed plan to strengthen America's
food safety through this initiative, including establishing a national early
warning system for outbreaks of food-borne illnesses; improving meat, poultry,
and seafood inspections; increasing research to develop new tests to detect
food-borne pathogens and to assess risks in the food supply; and, establishing
public-private partnerships to improve the public's understanding of safe food p
ractices. We urge the House to fully fund this important initiative.
Food and Consumer Service Studies and Evaluations
The Committee has transferred all funding ($18.5 million in FY 1998) for
studies and evaluations from the Food Stamp, Child Nutrition, and WIC programs
to the Economic Research Service (ERS). ERS is directed to manage all studies
and evaluations in consultation with the Food and Consumer Service. The
Administration strongly opposes the proposed transfer of functions and funding.
The challenge of ensuring the success of welfare reform has increased the
importance of practical, applied, and timely research. This research is most
appropriately managed by the Food and Consumer Service, the organization
closest to and most knowledgeable of Federal nutrition programs. The Food and
Consumer Service has highly skilled professional career researchers with a
well-recognized track record of conducting and managing effective, objective
program evaluations. The Committee proposal is an inappropriate congressional
intrusion into the Administration's prerogative to manage programs in the most
effective manner.
Outreach for Socially Disadvantaged Farmers and Ranchers
The Committee bill would severely limit USDA's initiative to improve efforts
to ensure equal access for all clientele to training, technical assistance, and
other agriculture-related services intended to assist low-income farm families
in becoming successful producers. The Secretary of Agriculture has stated his
commitment to improving the Department's outreach to and relations with its
minority and socially disadvantaged clientele. The Committee has provided only
$1 million of the requested $4 million increase for this important component of
USDA's Civil Rights initiative. We urge the House to increase funds for this
priority program to the extent possible.
Department of Agriculture Micromanagement
The Administration objects to the inappropriate micromanagement of Executive
Branch authorities that the Committee bill would impose, which would impede the
ability of the Department to operate effectively. In this regard, we strongly
object to the Committee's action to delete funding for the immediate office of
the Deputy and Assistant Deputy Administrators for Farm Programs.
Disagreements over program management and implementation should not be
addressed by targeting for elimination those positions involved in the
decision-making process. In addition, the Committee bill would terminate the
authority of the Secretary of Agriculture to have a Western Director and a
special assistant in the West, who facilitate the resolution of complex issues
and provide important feedback to the Secretary about concerns of Western
States and citizens. The Committee bill would further micromanage by blocking
facility closings of the Agricultural Research Service and transferring
research functions from the Food and Consumer Service to the Economic Research
Service. The bill also limits funds for advisory committees, task forces,
panels, and commissions to $1 million, which is insufficient to support ongoing
and new committees, including those required by the 1996 Farm Bill. We
recommend that the limitation on expenditures for these purposes be lifted.
The Administration strongly opposes the Committee's action to designate Galt,
California, arbitrarily as "non-rural" in order to make it ineligible for USDA
housing programs. There is a backlog of 400 very-low and low-income housing
applicants in Galt, which meets USDA's definition of a rural area. Denying a
community's eligibility status in order to exclude low-income individuals from
the community is counter to the Administration's -- and, we believe, the
Congress' -- goal of expanding opportunities for equal access to quality
housing for all Americans. We urge the House to delete this provision.
Packer Concentration
The FY 1998 Budget proposes a $1.6 million increase for monitoring and
analyzing meat packer market competition and the implications of structural
changes and behavioral practices in the meat-packing industry. We appreciate
the Committee's action to provide a portion of the requested funding. We urge
the House to increase funds to the maximum extent possible so that USDA can
maintain continuous, systematic collection and analysis of data along with
aggressive investigative activities to address these issues effectively.
Nutrition Education and Training
The FY 1998 Budget proposes $10 million for the Nutrition Education and
Training program. The Welfare Reform bill enacted last year replaced mandatory
funding for this program with an authorization for discretionary
appropriations. The Administration appreciates the Committee's action to
provide $5 million of the requested funding for this valuable resource to the
child nutrition programs. We urge the House to fund this important program to
the maximum extent possible.
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