June 22, 2000
(House)

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 fails to address critical needs of the American people.

Consequently, given the severe underfunding of critical programs and highly objectionable language provisions in the bill, such as language undermining Justice's current lawsuit to recover funds from the tobacco industry, the President's senior advisers would recommend that he veto the bill if it were presented to him in its current form.

Below is a discussion of the Administration's specific concerns with the Committee bill. We look forward to working with the House to resolve these concerns as the bill moves forward.

Department of Justice

Tobacco Litigation Support. The Administration strongly objects to the provisions that would limit reimbursement authority by other agencies to the Department of Justice in support of their litigation against tobacco companies to recover money properly owed to the Treasury. These provisions would also restrict the use of the Health Care Fraud and Abuse Control account (HCFAC) by the Department of Justice in pursuit of this litigation. The Federal Government spends billions of dollars annually treating veterans, service members, and all Federal medical beneficiaries suffering from tobacco-related illnesses. The reimbursement from other agencies to the Department of Justice is crucial in supporting the costs associated with bringing litigation against tobacco companies. Provisions limiting the reimbursement of this money and the use of the HCFAC would seriously undercut and threaten our ability to conduct litigation in this area on behalf of the American people. The Administration strongly supports an amendment we understand may be offered that would allow this important litigation to proceed.

Gun Enforcement. The Administration strongly opposes the bill's failure to fund key components of the President's Gun Enforcement Initiative, including $150 million to hire 1,000 state and local gun prosecutors. These state and local gun prosecutors are critical in taking more gun criminals off our streets and continuing to bring down gun crime across America. In addition, the bill fails to provide funding for local anti-gun violence media campaigns to help cities replicate programs like Richmond's "Project Exile" that advertise penalties for breaking gun laws. The bill also does not provide funding to expand research into "smart gun" technology, which can prevent unauthorized gun use and accidents by limiting a gun's use to its proper adult owner. Finally, the Committee has not included the President's proposed doubling of the National Criminal History Improvement Program (NCHIP) to help make Brady background checks faster and more effective. We are pleased, however, with the decision to fully fund the Administration's request to add more Federal gun prosecutors. The Administration strongly supports an amendment we understand may be offered to provide funding for 1,000 new state and local gun prosecutors.

Community Oriented Policing Services. The Administration strongly opposes the decision to provide only $595 million of the $1,335 million requested for the highly effective Community Oriented Policing Services program. The level provided would jeopardize the President's goal of funding up to 50,000 additional community police officers by FY 2005. The bill would defund the community prosecutors program, and would seriously underfund technology funding requested by the President to give law enforcement the tools they need to fight crime in the 21st Century. The bill also provides no funds to expand community-based crime prevention efforts to help build partnerships between law enforcement and the communities they serve.

Antitrust Enforcement and Consumer Protection. The Committee bill provides $113 million to the Department of Justice's Antitrust Division, $21 million below the request, and $135 million for the Federal Trade Commission, $30 million below the request. These levels would deny necessary funds to address and review the record number of mergers, to investigate violations of the antitrust laws, and to protect consumers from fraud and deception.

Counterterrorism. Despite now widespread recognition that the threat of terrorism has increased, the Committee has not funded most of the requested increases to enhance efforts to combat terrorism, including the initiatives in the Administration's budget amendments. For the FBI, this includes funding for services to translate electronic intercepts in a foreign language; equipment to improve the capability to conduct lawful electronic intercepts; Weapons of Mass Destruction preparedness, including the Hazardous Devices School; and, counterencryption equipment. For INS, no funding has been provided for joint terrorism task force staff, intelligence staff, and border technology, all of which are needed for the INS to strengthen our defenses on the Northern border and to work cooperatively with other law enforcement agencies. These increases are critical to our efforts to combat the increased threat of terrorist attacks. The recently released report from the National Commission on Terrorism supports many of the Administration's requests. The Administration is also disappointed that funding is not provided for the Office of Justice Programs (OJP) to assume responsibility for the Nunn-Lugar-Domenici first responder training program. The Administration believes that OJP could more effectively administer this program than the Department of Defense.

"Stop Drugs - Stop Crime" and Project Reentry. The bill provides only $103 million for the "Stop Drugs - Stop Crime" initiative, $87 million below the request. It does not fund the $75 million request for the Department of Justice's Zero Tolerance and Drug Intervention Program, which would help States and localities implement tough new systems to drug test, treat, and punish drug offenders. The bill provides $40 million, $10 million below the request, for the highly successful Drug Courts Program. Taken together, these actions would make it difficult, if not impossible, to achieve the drug reduction targets in the annual drug strategy and in the Office of National Drug Control Policy Reauthorization Act of 1998. The bill also fails to fund Project Reentry, which would provide greater community supervision of released offenders to address community safety concerns, lower recidivism rates, and promote responsible fatherhood among offenders returning to communities.

Civil Rights Enforcement/Indian Country Law Enforcement. The Administration urges the House to fully fund the President's request of $98 million for the Civil Rights Division. The Committee level includes no programmatic increases for FY 2001 and would be inadequate to maintain current services. Funding increases are needed to continue the Division's important efforts in enforcing the Voting Rights Act, promoting compliance with the Americans with Disabilities Act, combating abuses in our institutions for the mentally ill, and prosecuting cases where there is a pattern or practice of police misconduct in law enforcement agencies. Also, the Administration is disappointed that increases for Indian Country law enforcement programs and the Community Relations Service have not been provided.

Detention Trustee. The Administration appreciates the Committee's establishment of the Detention Trustee. However, the bill does not include the appropriations language or the $25 million requested to cover the Department of Justice's costs associated with the detention, care, and removal of illegal migrants held outside of the continental United States. The establishment of a source of funding for illegal migrant interdiction and detention away from the Nation's borders is a priority for the Administration.

Immigration. Funding for the Immigration and Naturalization Service (INS) is $178 million below the Administration's request and reduces the INS enforcement request for detention, investigations, inspections and the Border Patrol by $72 million. The allotment neither increases inspection fees nor removes an exemption from inspection fees for cruise ship passengers. Lack of inspection fees would result in insufficient funds in FY 2001 to maintain current inspection operations at the Nation's air and seaports, resulting in longer passenger wait times. The Administration likewise is disappointed that the Committee has not reinstated the 245(I) adjustment of status provision to assist immigrant families as requested.

Radiation Exposure. The bill provides only $3.2 million for the Radiation Exposure Compensation Trust Fund, $10.5 million below the request. At this funding level, most of the projected 205 approved claimants would go uncompensated in FY 2001.

Bureau of Prisons - Advance Appropriations. While the Administration appreciates that the Committee has fully funded the FY 2001 request for the Bureau of Prisons (BOP), we are disappointed that the bill fails to provide advance funding requested in FY 2002 and FY 2003 for prison construction. For capital investment programs that address a known multi-year need, advance appropriations provide the funding certainty needed to plan and execute a construction program that will reduce the overall completion time, saving money and delivering benefits sooner. Examples of such programs are Bureau of Prisons construction and State embassy security. Advance appropriations would help to reduce dangerous levels of prison overcrowding and save money by accelerating the delivery of new prison beds. Accelerating construction of new prisons by one year will help BOP keep pace with a Federal prison population expected to almost double over the next six years.

Bureau of Prisons/Section 103. The Administration urges the House to strike section 103 of the Committee bill, which would prohibit the Bureau of Prisons from funding abortions except in cases of rape or where the life of the mother is endangered. The Department of Justice believes that there is a great likelihood that this provision would be held unconstitutional.

Department of Commerce

The Administration strongly objects to the inadequate funding provided virtually across-the-board for Commerce programs. The bill fails to provide funding at a current services level in most Commerce bureaus. Such low funding would unnecessarily burden the Nation with impaired levels of basic and essential services, including basic economic statistics, critical infrastructure protection, environmental and weather services, high technology research, trade compliance, economic development activities, and fee-funded patent and trademark services. Apart from the funding for the decennial census, the bill provides almost $300 million less for Commerce programs than was enacted for FY 2000.

Technology Administration Programs. The Administration strongly opposes the bill's elimination of funding for the Advanced Technology Program (ATP). ATP is a public-private partnership for developing high-risk technologies that have significant commercial potential. Terminating the program would stop 185 ongoing projects as well as new grants, and would halt research and development efforts that are beginning to produce widespread economic benefits.

The bill insufficiently funds National Institute of Standards and Technology (NIST) initiatives to promote the development of new information technology, nanotechnology, and infrastructure assurance, as well as enhance the use of e-commerce services by small manufacturers.

National Oceanic and Atmospheric Administration. The Administration strongly opposes the bill's cuts to the President's Lands Legacy Initiative, which is funded 63 percent below the request. Coastal ecosystem protection programs such as Marine Sanctuaries, estuarine reserves, coral restoration, and State coastal zone grants would be cut, along with salmon habitat grants, impeding States and Tribes in their Pacific salmon recovery efforts. In addition, the failure to provide any funds for U.S. obligations under the Pacific Salmon Treaty would jeopardize the Treaty's continued implementation and put already dwindling salmon stocks at further risk.

Failure to provide inflationary cost increases for core programs, along with other reductions in National Oceanic and Atmospheric Administration (NOAA) programs, could lead to staffing cuts of up to 1,000 employees. NOAA customers would receive reduced services -- including nautical charts, long-term climate and weather data, and fishery stock assessments. Reductions to the National Weather Service (NWS) request would jeopardize NWS base operations and would limit radiosonde replacements, potentially risking upper air observations. The Administration strongly recommends full funding for the climate services initiative, Climate and Global Change, the Clean Water Action Plan, the Global Disaster Information Network, the GLOBE program, NOAA weather radio, polar weather satellites, the Minority Serving Institutions initiative, and NOAA's investments in improved financial management.

The Administration urges the House to provide requested funding for design and construction work at the Suitland Federal Center. The nearly 60-year-old buildings at the Center are failing, threatening the health and safety of employees of NOAA and the Census Bureau.

Digital Divide Initiatives. The Administration urges full funding for initiatives to help close the Digital Divide and help communities benefit from the emerging digital economy. During its six-year history, the Technology Opportunities Program of the National Telecommunications and Information Administration (NTIA) has helped underserved and low-income communities across the country gain access to innovative information technology applications. The new Connecting America's Families (Home Internet Access) program builds on that success by supporting communities in their efforts to help low-income families receive the benefits of home access to computers and the Internet. The Committee provides no funding for the Home Internet Access Program and underfunds the Technology Opportunities Program. The bill also fails to provide $23 million for the Economic Development Administration's initiative to deploy broadband infrastructure in economically-distressed areas.

Chemical Weapons Convention Compliance. The Administration strongly urges full funding of the President's FY 2001 budget request of $8.5 million for Chemical Weapons Convention inspections at industry facilities. Without this funding, Commerce will be unable to conduct site assistance visits to help U.S. companies prepare for these international inspections and thereby better protect confidential business information. Commerce will also be unable to host the full complement of industry inspections required under the Convention. Failure to provide the necessary funds will likely result in U.S. noncompliance with its industry inspection obligations under the Convention.

Critical Infrastructure Protection. Recent events have underscored the importance of protecting critical infrastructure. The Administration urges support for the provision of the President's requested funding for the Critical Infrastructure Assurance Office and for the Expert Review Team in NIST to help Government agencies identify vulnerabilities and plan secure systems. Likewise, the Administration strongly urges funding to establish the Institute for Information Infrastructure Protection to address research and development shortfalls related to the protection of the Nation's critical infrastructures.

Economic and Statistical Infrastructure. While the Administration appreciates the bill's funding for the decennial census, the Congress should ensure that the census is not burdened with restrictive reprogramming language. Moreover, other statistical programs are inadequately funded, including the Census Bureau's continuous measurement program, which will provide current information to allocate nearly $200 billion in Federal funds annually, and the economic statistics programs in the Bureau of Economic Analysis. Failure to upgrade the Economic and Statistics Administration's inadequate computer and production systems would jeopardize production of the Nation's core economic statistics, including Gross Domestic Product and balance of trade accounts, and planned improvements in estimates of e-business, non-salary income, economic well-being, and exports.

International Trade Administration. The Administration urges the House to fully fund the $16 million trade compliance initiative requested to support the International Trade Administration's trade enforcement capabilities and ensure that U.S. companies and workers receive the full benefits of international agreements.

Patent and Trademark Office. The Committee bill reduces the Patent and Trademark Office (PTO) program level by $134 million from the request. Such severe constraints on the use of PTO fees when patent and trademark applications are at record levels make it difficult for the agency to process applications in a timely manner and issue patent and trademarks more rapidly. Longer processing times weaken the Nation's intellectual property system's ability to support the current high technology boom. While urging the House to fully fund the request for PTO, the Administration opposes an amendment we understand may be offered that would increase funding by imposing severe cuts elsewhere in Commerce and other departments (for example, cutting Commerce's Bureau of Economic Analysis programs and Census Bureau activities significantly).

Public Television's Digital Transition. The Administration urges full funding for NTIA's Public Telecommunications Facilities, Planning and Construction Program. Failure to fund this program could jeopardize the ability of public broadcasters to meet the Federally-mandated May 2003 deadline for the transition to digital broadcasting.

Economic Development Administration. The Committee mark would impair the Economic Development Administration (EDA) efforts to assist economically disadvantaged communities. It would eliminate assistance to be provided by EDA's proposed Office of Community Economic Adjustment to communities injured by economic downturns due to trade and other causes. The bill would also restrict EDA's ability to assist Native American and Delta communities, which have some of the Nation's most distressed economic conditions.

Security and Departmental Management. The bill fails to provide the centralized security funds requested to ensure a secure environment for Commerce employees and for sensitive data. In addition, the bill does not provide funds to upgrade the Department's electronic communications systems and create paperless administrative processes.

Legal Services Corporation

The bill funds the Legal Services Corporation (LSC) at $141 million, $163 million below the FY 2000 level and $199 million below the President's request of $340 million. This funding level is unacceptable and would severely cripple the program. Such a low funding level would undermine the commitment of the Federal Government to ensuring that all Americans, regardless of income, have access to the judicial system. The Administration urges the House to fully fund the President's request for the LSC.

Kyoto Protocol

The Administration opposes Committee bill and report language relating to the Kyoto Protocol. The bill language, which purports to prohibit implementation of the Kyoto Protocol is unnecessary, as the Administration has no intention of implementing the Protocol prior to ratification. To the extent these provisions could be read to prevent the United States from negotiating with foreign governments, it would be inconsistent with the President's Constitutional authority. In addition, the report language goes far beyond the compromise negotiated by conferees on the language originally agreed to in the FY 1999 appropriations process.

Small Business Administration

The Administration is deeply concerned that the Committee bill provides insufficient funding for critical Small Business Administration programs, especially the following:

Small Business Loans. The Committee bill provides only $9.2 billion in loan volume, a reduction of $500 million from the enacted level and $2.3 billion from the Administration's request. In addition, the Committee only provides $1.778 billion of the $2 billion requested for the SBIC participating securities program. The microloan direct loan level and its accompanying technical assistance are less than half of the funding requested. The funding level for these programs would be insufficient to meet demand for small business loans and would lead to fewer new business start-ups.

New Markets Initiative. The Committee bill fails to provide the $58.3 million requested for the programs in the May 23rd New Markets Agreement between the President and the Speaker of the House ($21.7 million for venture capital, $30 million for technical assistance, and $6.6 million for BusinessLINC). Without these funds, the Administration and the Congress would be unable to keep commitments to bring America's economic prosperity and growth to those communities lagging behind the rest of the Nation.

Business Assistance Programs. The Committee has failed to provide the Administration's request for several business assistance programs, including: PRIME Technical Assistance Grants ($15 million), SBIR Phase III ($15 million), Electronic Commerce ($5 million), and HUBZones ($5 million). The Committee also has not provided the requested $5.75 million for the Native American Initiative ($3 million for Native American Small Business Development Centers, $1.25 million of BusinessLINC program funding and $1.5 million for Tribal Business Information Centers), which would provide needed business assistance to an important economically-underserved segment of our Nation. Further, the Committee has not provided the requested increases necessary to support other business assistance programs, including Women's Business Centers, One Stop Capital Shops, and SCORE.

Administrative Expenses. The Committee bill fails to provide the full Administration request for operating expenses, the additional $5 million requested for the Systems Modernization Initiative to begin work to modernize the disaster loan systems, $4 million for Workforce Transformation, and $7 million requested for the needed upgrade and maintenance of SBA's IT systems. These reductions would weaken SBA's loan program management and result in higher loan program costs.

Department of State and the Broadcasting Board of Governors

Contributions to International Peacekeeping. The Administration is strongly opposed to the devastating $241 million reduction of funding to pay our U.N. peacekeeping assessments. These payments fund ongoing operations and are for bills that we must pay. The absence of full and timely payment of our assessments would severely impede the success of critical U.N. missions in Kosovo, East Timor, Sierra Leone, Congo, Lebanon, and elsewhere. These missions support important U.S. interests. This reduction would also create substantial new arrears to the U.N. and jeopardize negotiations for much needed reforms that the Administration is undertaking to achieve the goals of the United Nations Reform Act of 1999 passed by the Congress last year, including a reduction in the U.S. peacekeeping assessment percentage.

Contributions to International Organizations. The Administration strongly opposes a provision that would withhold $100 million of our U.N. assessment pending a semi-annual budget certification. This provision would only serve to handicap the U.N. finances unnecessarily, delay payment of our assessment as much as 20 months from the due date, and seriously undermine our campaign to lower the U.N. assessment rate ceilings for both the U.N. regular budget and for peacekeeping. We share the Committee's commitment to strict budget discipline at the United Nations and have worked hard to reduce the U.N.'s proposed operations budget to a level less than $3 million above the budget for the 1998-1999 biennium. We will continue to insist, as we have successfully done in the past, that any program increases in the U.N. be fully offset by program decreases. The Administration is also very concerned by a reduction of $43 million from our $923 million request that would leave us unable to pay our full assessments to the budgets of the U.N. and other international organizations. This reduction would also lead to the creation of new arrears.

State Department Operations and Embassy Security. The Administration appreciates the Committee's continued strong support for Administration efforts to improve embassy security by providing the President's full request for this critical activity. The Administration also appreciates funding provided to support the worldwide operations of the Department of State. However, the Administration is concerned that several earmarks, language provisions, and report language seek to micro-manage the activities of the Department of State and reduce the Administration's flexibility to address foreign policy needs. Of particular concern is report language that seeks to restrict the Department's ability to construct Agency for International Development facilities to be colocated on embassy compounds as required by the Secure Embassy Construction and Counterterrorism Act of 1999. The Administration is also concerned with the spending limit on machine readable visa fee revenues, constraining a program important to our border security, and is disappointed that the Committee has not recommended permanent authority to retain machine readable visa fees essential to sustaining the Department's border security program in future years. The Administration appreciates the Committee's support for the pilot test of a common information technology infrastructure overseas as recommended in the Overseas Presence Advisory Panel but regrets that additional new funding is not provided in the bill. Finally, the Administration is disappointed that the bill does not include requested advance appropriations for embassy security, funds for trade compliance and labor and environmental standards coordination, and transfer authority to meet potential needs of the Presidential Advisory Commission on Holocaust Assets. We believe the requested advance appropriations for embassy security will help ensure successful implementation of that long-term capital investment program.

Other International Accounts. The Administration is concerned about the large reductions below the FY 2001 request for the International Boundary and Water Commission, the International Joint Commission, the International Boundary Commission, the Border Environment Cooperation Commission, and the International Fisheries Commissions. These reductions would place a disproportionate burden on the operating budgets of these small agencies and would make it impossible to meet international treaty obligations. We also oppose the Committee's decision to eliminate funding for the East-West Center and the North-South Center.

International Broadcasting Operations. The Administration appreciates the Committee's support for the consolidation of WORLDNET with the Voice of America.

Emergencies in the Diplomatic and Consular Services. The Committee bill cuts the President's request for emergencies in the diplomatic and consular services by 50 percent, leaving the Department unprepared to bear the costs associated with evacuations above only a minimal level and to pay rewards currently advertised for the capture of suspected terrorists, narcotics traffickers, and war criminals.

Educational and Cultural Exchanges. While the Administration appreciates funding provided to continue ongoing educational and cultural exchanges at a current services level, we are disappointed that no program increases were provided, including the requested increase to the J. William Fulbright Educational Exchange Program.

Departmental Management. The Committee bill contains two unrequested authorization provisions that would significantly affect the management and operation of the Department of State. Section 403 would limit the number of Deputy Assistant Secretaries to 71 and constrain the Department's ability to meet current management requirements. Section 405 would create a new position, the Deputy Secretary for Management and Resources. The Secretary of State has identified an immediate need for the creation of an additional Under Secretary position for Security, Law Enforcement and Counter Terrorism. We oppose the creation of a second Deputy, and believe that any other organizational changes should be addressed through the regular authorization process.

Foreign Policy Issues. A number of provisions regarding the conduct of foreign affairs raise constitutional concerns. Section 610 regarding Vietnam would unconstitutionally constrain the President's authority with respect to the conduct of diplomacy. In addition, two provisions would unconstitutionally constrain the President's authority as Commander-in-Chief and authority with respect to the conduct of diplomacy: section 609, which relates to command and control of United Nations peacekeeping efforts; and, language in the Contributions for International

Peacekeeping Activities that would require a report to Congress prior to voting for a U.N. Peacekeeping mission.

Equal Employment Opportunity Commission

The Committee mark for the Equal Employment Opportunity Commission (EEOC) would eliminate over $30 million in requested program increases needed to ensure fair, efficient, and effective handling of employment discrimination charges, preventing the EEOC from achieving its goal of reducing its private-sector backlog to under 29,000. The Committee's $10 million increase over the enacted level falls short of amount needed by EEOC just to cover inflationary increases, forcing it to absorb the difference through program reductions. The Committee level would also set back the Commission's efforts to expand mediation opportunities for employers and employees. In addition, the EEOC will be unable to provide training and outreach to combat wage discrimination as part of the President's Equal Pay Initiative. The Administration urges the House to support these important activities.

Commission on Civil Rights

The Committee's recommendation to freeze the Commission's funding at the FY 2000 level of $9 million, $2 million below the President's request, would impair the Commission's ability to advance civil rights for all Americans.

Office of the United States Trade Representative

The Committee mark, which is below the current services level for the Office of the United States Trade Representative (USTR), would reduce USTR's personnel level at a time when the President's Executive Order on environmental reviews, the Trade and Development Act of 2000, and the entry of China into the WTO would add major additional responsibilities to USTR's expanding workload, reinforcing the need for the 25 additional positions requested. The bill does not fund the 13 new enforcement positions requested as part of the President's Trade Compliance Initiative, which are needed to enforce those agreements that the United States has already concluded, and to ensure that our trading partners live up to their commitments so that American companies and workers receive the benefits promised under these agreements. Nor does the bill provide requested funds for the 12 professional positions for core negotiators and a security officer -- positions that are needed in the China, Agriculture, Japan, and other offices to implement existing trade laws and agreements, including the "Built-In" agenda under the Uruguay Round Agreement for agriculture and service. Without these additional staff, the implementation of these agreements will be slowed, and trade benefits for U.S. companies delayed.

Federal Communications Commission

The Committee mark would reduce funding for the Federal Communications Commission (FCC) below the FY 2000 level. This could seriously impair the FCC's ability to carry out its mission by delaying implementation of necessary information technology systems and would likely require an agency-wide furlough. In turn, this would slow down the FCC's regulatory processes leading to delays in implementation of new communication technologies. The Administration urges the House to fully fund FCC.

Securities and Exchange Commission

The Administration appreciates the Committee's increase of $25 million over the FY 2000 enacted level to provide for adjustments to base funding. However, the Administration encourages the House to provide an additional $30 million in requested program increases for information systems, additional staff, and special pay rates that are critical to ensuring the Commission can adequately respond to changes in the securities industry. Given the anticipated level of fees and the dynamic nature of the securities markets, it would be wise to enhance the Commission's oversight capacity.

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