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HR 4101 -- 06/23/98

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Office of Management and Budget


June 23, 1998

BILL, FY 1999

(Sponsors: Livingston (R), Louisiana; Skeen (R), New Mexico)

This Statement of Administration Policy provides the Administration's views on the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, FY 1999, as reported by the House Appropriations Committee. Your consideration of the Administration's views would be appreciated.

The Administration appreciates efforts by the Committee to accommodate the President's priorities within the 302(b) allocation. The President's FY 1999 Budget proposes levels of discretionary spending for FY 1999 that conform to the Bipartisan Budget Agreement by providing savings through user fees and certain mandatory programs to help finance discretionary spending. In the recently enacted Transportation Equity Act, Congress -- on a broad, bipartisan basis -- took similar action in approving funding for surface transportation programs paid for with mandatory offsets. We want to work with the Congress on mutually-agreeable mandatory and other offsets that could be used to increase high-priority discretionary programs, including those funded by this bill. In addition, we urge the Congress to adopt the user fee proposals included in the President's budget, which would enable over $600 million to be directed to important initiatives such as those proposed for food safety, nutrition programs, rural development, and conservation.

Below is a discussion of our specific concerns with the Committee-reported bill. We look forward to working with you to resolve these concerns as the bill moves forward.

Civil Rights

The Administration strongly supports the provision made in order in the rule that waives the statute of limitations for individuals who have previously filed a discrimination claim against USDA. The President is personally committed to righting any wrongs committed by USDA employees in years past, and a great many individuals who were discriminated against will have no recourse unless the statute of limitations is waived for them.

In a number of areas, the Committee has reduced funds to assist the most needy farmers and members of the rural community. The Committee has not provided the requested increase for the Outreach for Socially Disadvantaged Farmers program, which was a key recommendation of the Civil Rights Action Team (CRAT) report last year. With the additional $7 million requested, USDA could support 35 projects to assist 10,000 small family farms and stem the continuing reduction in the number of minority farmers and ranchers.

Another recommendation in the CRAT report is to increase the amount of farm ownership loans, a portion of which are targeted to minority and beginning farmers. The Administration urges the House to shift the $1 million in unrequested subsidy increase provided in the bill for boll weevil eradication loans to the farm ownership program, which would permit another 140 limited-resource farmers to finance real estate purchases.

Food Safety Initiative

The Administration is deeply concerned that the Committee has not fully funded the President's request for Food and Drug Administration (FDA) and USDA activities to enhance food safety, providing only $16.8 million out of the $101 million the President has requested for these activities, $96 million of which is requested in this bill. American consumers enjoy the world's safest food supply, but too many Americans get sick, and in some cases die, from preventable food-borne diseases. The President's budget increase would expand food safety research, risk assessment capabilities, education, surveillance activities, and food import inspections. The Administration wants to work with the Congress to explore user fee options within FDA and USDA that can be used to offset the cost of the needed increases in these programs as well as provide funds to further modernize the meat and poultry inspection system.

Women, Infants, and Children

The Committee bill would freeze funding for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) at the FY 1998 level of $3.9 billion, $157 million below the President's request. This would only support a participation level of between 7.3 and 7.4 million women, infants, and children, and, based on FY 1998 year-end projections, would mean cutting off over 100,000 needy participants from the program. The President's request would maintain participation at 7.5 million, fulfilling the bipartisan commitment to fully fund WIC. The Administration strongly encourages the House to fund WIC at the President's requested level.

Arms Export Control Act Modification

The Administration supports section 737, which will ensure that American farmers can continue to export wheat and other commodities to India and Pakistan through USDA export assistance programs. As the President recently announced, in the sanctions the U.S. is applying toward those countries, we are attempting to minimize the humanitarian impact on their people. Cutting off the supply of U.S. wheat would only hurt the citizens of Pakistan and India, as well as American farmers, without furthering the goal of nuclear nonproliferation.

Rural Development Funding

While the Administration supports the funds provided for the Rural Community Advancement Program (RCAP), the Administration strongly objects to the Committee's blocking the mandatory Fund for Rural America from being used in FY 1999. The Fund provides additional resources for rural development and innovative agricultural research that are vitally needed to improve the quality of life in rural America and increase the productivity of U.S. farmers. The intent of Congress in creating the Fund in 1996 was to boost the overall Federal investment in these activities, not to offset discretionary spending in them. Furthermore, Congress recently extended the authority for the Fund while increasing its resources. The Administration urges the House to strike this provision. In addition, for the RCAP program to be adaptable to unique local economic development needs, as envisioned in its 1996 Farm Bill authorization, the House should strike the Committee's limitation on the flexibility to transfer funds among programs and allow the program to be implemented as authorized.

Food and Drug Administration

The Administration strongly urges the Congress to provide the full $1,251 million in resources to fund the program level proposed for FDA in the President's budget. The Administration is deeply disappointed and concerned that the Committee has not funded the President's request for FDA's tobacco enforcement activities. This funding is vital to the Administration's plan to reduce youth smoking. Congress' failure thus far to pass comprehensive tobacco legislation should not prevent the Committee from providing adequate resources for these critical public health activities. We will work with the Congress to develop the appropriate means of funding.

Climate Change and Clean Water Initiatives

The Committee has not provided any of the $7 million increase requested for additional research as part of the Administration's Climate Change Technology Initiative. These funds would support high-priority research to reduce emissions of greenhouse gases caused by agricultural practices, develop improved feedstocks that can be used to generate energy, and improve techniques to convert agricultural products to biofuels. The Administration urges the House to provide the necessary funding.

The Committee also has not included the Administration's requested increase of $23 million for the Natural Resources Conservation Service (NRCS) to implement the President's Clean Water Action Plan to help State and local organizations hire watershed coordinators, document baseline conditions, and target resources to farmers requesting assistance. The Plan, developed by USDA and EPA, outlines a strategy on how to address water quality problems, including polluted runoff, in watershed areas across the Nation. The Administration urges the House to provide these necessary funds to the NRCS.

Agricultural Research

The Administration strongly objects to the Committee's elimination of the $120 million in competitively-awarded research funds authorized in the Agricultural Research, Extension, and Education Reform Act of 1998. These funds will finance vital investments in food and agriculture genome research, food safety and technology, human nutrition, and agricultural biotechnology. At the same time, the Committee bill includes over $50 million in unrequested earmarks for lower-priority research while funding competitive grants through the National Research Initiative (NRI) at $30 million below the President's request. This systematic rejection of additional funds for competitive research grants for national and regional priorities, in favor of earmarked grants for more local or industry-specific requests, would slow progress toward addressing the most pressing needs of American agriculture and food consumers, and we urge the House to reverse this course of action. The House can do so not only by reducing earmarked grants in the bill, but by reducing the $25 million in unrequested increases for the Agricultural Research Service's buildings and facilities program. A task force created by the 1996 Farm Bill to review the Nation's agricultural research facilities comprehensively is due to report to Congress next year, and further construction should be minimized until the Administration and Congress have had the opportunity to review the report.

Other Issues

The Administration strongly opposes an amendment that may be offered mandating peer review of "scientific data" supporting final regulations. The Administration supports the peer review process for rule-making. However, this amendment is not needed -- peer review is currently incorporated in the Government-wide rule-making process through public comment and scientific advisory boards. This amendment as drafted would impose an additional step in the review process and would cover a large number of rules, as diverse as meat and poultry inspection rules, country and product-specific quarantine rules, and the Animal and Plant Health Inspection Services annual fee regulations. This would impose an undue burden on numerous final rules by requiring substantial personnel and other resources and could result in significant delays on important public health and safety rules.

Additional funds are needed for the farm labor housing program to improve the living conditions many farm labor families endure. The Committee's $20 million in direct loans is more than 35 percent below the Administration's request and would mean that 230 fewer housing units would be built compared with the request. In addition, the Committee provides $69 million, or seven percent, less than requested for single-family housing direct loans, which would keep 1,300 fewer low-income rural families from achieving the dream of homeownership and the ability to live in safe, decent, affordable housing. The Administration urges the House to increase funding to assist these needy members of our society.

The Committee bill includes a $10 million reduction to the President's request for the mandatory Emergency Food Assistance Program (TEFAP), which purchases commodities for individuals greatly in need of assistance. Given reported increases in need for food assistance through food banks and soup kitchens, the Administration is concerned that this reduction from the authorized level would mean less food will reach the most vulnerable Americans.

The Administration objects to section 722 of the Committee bill, which would limit Executive Branch review of USDA responses to congressional inquiries. Congress expects the Administration to be responsible for agency activities. This provision erodes that responsibility and is contrary to the widespread congressional view that more, not less, accountability is needed for improved management results. The Administration urges the House to delete the provision.

The Administration strongly objects to the Committee bill's provision that provides funding for research on nutrition programs only within the Economic Research Service. It is important that research on nutrition programs also occur in the context of the program's administration, and the Administration urges the Committee to provide funding for these activities within the Food and Nutrition Service, as requested and as included in the Senate version of the bill.

The Committee has provided only $2 million of the requested $22 million increase for the Inspector General as part of the Administration's law enforcement initiative. This USDA initiative would save taxpayers millions of dollars lost through fraud in the food and nutrition programs, in USDA disaster, multi-family housing, and other programs, as well as improve the integrity of USDA programs. The Administration urges the House to increase funds for this important initiative.

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