This Statement of Administration Policy provides the Administration's views
on the Treasury and General Government 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 making savings in mandatory
and other programs available to help finance this 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 encourage the
Congress to take advantage of such additional offsets, or to reduce
appropriations for programs or projects not requested by the President in
order to fund requested levels for items discussed below.
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.
Year 2000 Computer Conversion
The Administration appreciates the emphasis that the Committee has placed
on year 2000 (Y2K) computer conversion activities. OMB will continue to
assist all agencies in ensuring that adequate resources are available to
address this critical issue. In the FY 1999 Budget, the President has
requested more than $1 billion for Y2K computer conversion. In addition,
the budget anticipated that additional requirements would emerge over the
course of the year and included an allowance for emergencies and other
As we learn more about how to address this problem, we expect that ensuring
Government-wide compliance will require flexibility to respond to
unanticipated requirements. To the extent such unanticipated requirements
are identified, it will be essential to make that funding available
quickly. It will truly be emergency funding. The emergency mechanism
recently approved by the House Appropriations Committee provides such
Yesterday, the Rules Committee approved a rule that would strip the
emergency funding mechanism from the bill. This regrettable action will
not help agencies move forward in addressing this problem. We note that
the Committee bill allocates funds from the emergency reserve for Treasury
and other agency Year 2000 (Y2K) needs. If the emergency reserve is not
funded, the Congress will need to find other ways to fund Treasury's
critical Y2K needs.
The value of the emergency mechanism approved by the House Appropriations
Committee is the flexibility it provides in the event that we determine
that additional resources are required. We have only 555 days until
January 1, 2000. We want to solve this problem as soon as possible.
Delaying approval of emergency funding and reopening the issue of the use
of the emergency spending authority would create controversy and delay. We
hope that the House will reconsider.
Exchange Stabilization Fund
The Administration has serious concerns that an amendment to restrict
severely the use of the Exchange Stabilization Fund (ESF) may be considered
as part of the bill. Such an amendment would constitute an unacceptable
limitation on the executive branch's ability to protect critical U.S.
economic interests. The Secretary of Treasury would recommend a veto if
the provision is included in the bill.
Federal Election Commission
The Administration strongly objects to language included in the bill that
would limit the term of the Federal Election Commission's staff director
and general counsel to four years and require a vote of four commissioners
to reappoint them. This procedure is a departure from current practice,
established in statute, whereby the Commission appoints a staff director
and general counsel for an unlimited term. As with all Commission
decisions under current practice, removal of the staff director and general
counsel requires a vote of four commissioners. The Administration strongly
urges the House to eliminate this unacceptable provision from the bill.
Furthermore, because the provision effectively could remove the current
occupants of the positions, it would raise serious constitutional questions
under the separation of powers.
Executive Office of the President
The Administration is strongly concerned with a number of provisions
related to the Executive Office of the President. It is our hope that any
differences that exist concerning these provisions will be resolved as the
bill moves through the process.
Internal Revenue Service
The Administration appreciates the Committee's efforts to fund the
President's budget request for the IRS. However, if resources for Y2K are
struck from the bill, IRS would be significantly underfunded. We look
forward to working closely with the House to identify ways in which full
funding of the President's request can be achieved.
The Administration appreciates congressional support for IRS information
technology investments. However, tying obligation of funds to GAO review
of expenditure plans is objectionable since the Administration has no
control over the nature or timing of any prospective GAO review.
U.S. Customs Service
The Administration is concerned about the funding level for Customs'
Automated Commercial Environment (ACE). Without major revisions to the
existing system, Customs cannot keep up with increasing trade volumes nor
can it be responsive to the requirements stated in the 1993 Modernization
Act and the needs articulated by industry. The Committee has funded only
$8 million of the requested $56 million level, which would cause the
modernization effort to come virtually to a halt. To accommodate the full
amount requested, the Administration has proposed funding the majority of
ACE requirements through a user fee paid by those who stand to benefit most
from this system, the trade community.
Bureau of Alcohol, Tobacco and Firearms
The Administration appreciates the efforts of the Committee to fully fund
the President's Youth Crime Gun Interdiction Initiative (YCGII). This
initiative is an important part of the Administration's overall strategy to
curb youth gun violence. The Administration welcomes an opportunity to
report on the performance of the YCGII.
The Administration requests reconsideration of the Violent Crime
Coordinator initiative, as the U.S. Attorneys have requested additional ATF
support for bringing cases involving violent criminals to the Department of
Justice for prosecution.
We are pleased that the Committee shares the Administration's view that
relocation of the Bureau of Alcohol, Tobacco and Firearms headquarters
staff remains a key concern due to inadequate security at the present
headquarters site. We hope that the Congress will continue to consider
funding for this priority when the review process is completed.
Federal Employees Health Benefits Program
The Administration strongly opposes sections 514 and 515 of the bill.
These provisions would restrict Federal Employees Health Benefits Program
(FEHBP) coverage for abortions except in situations where the life of the
mother is endangered or the pregnancy is the result of rape or incest.
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. The Administration believes that the
decision to cover abortion should be left to each health plan participating
in the FEHBP. Thus, Federal employees who wish to purchase health coverage
that does not include abortion services would have that choice. The
provision in the Committee bill does not allow Federal employees and their
families to make that choice.
The Administration supports the Committee reported provision which requires
coverage of prescription contraceptives by health plans participating in
the Federal Employees Health Benefits Program (FEHBP) and would oppose an
amendment to strike it. We support improvements in basic health care
coverage for women and the goal of the amendment -- to reduce unwanted
pregnancies and the need for abortion. However, the Administration urges
the Congress to give authority to the Office of Personnel and Management to
waive the requirement for plans that are sponsored by organizations whose
religious beliefs do not support artificial methods of contraception.
The rule under which the bill will be considered by the House makes in
order an amendment that would restrict the definition of contraceptives to
exclude any drug, device, or procedure "which has as one of its known
effects the interference with the implantation of a fertilized human ovum
or embryo." The Administration would strongly oppose such an amendment,
which could result in the denial of safe and legal contraceptive options to
Federal workers. Further, such an amendment would interfere with physician
decision-making and communication with patients, as it may restrict the
ability of physicians to discuss such treatment options with patients.
The Administration shares the Committee's concern with the current system
for setting and adjusting Federal pay. However, the potential costs and
programmatic disruptions should section 644 of the Committee bill be
enacted are significant. A Federal employee pay raise of about 15 percent
would be automatically triggered in January 2000. Therefore, the
Administration urges that this provision be dropped. Under the leadership
of the Office of Personnel Management, the Administration is working
expeditiously on a reform proposal and, as part of this process, will
consult with appropriate stakeholders, including the Congress.
The Administration is disappointed that the bill includes a proposal to
eliminate the 1999 pay raise for Federal judges and employees paid under
the Executive Schedule. Failure to provide pay raises for senior
executives is eroding the value of their pay, causing severe pay
compression in the executive ranks. Pay adjustments have been made for
such individuals only once in the last five years. If continued, this
failure will affect the Government's ability to attract and retain the
executive talent that it needs. We urge the House to restore the pay raise
for Federal judges and the Executive Schedule.
The Administration commends the Committee for including a provision
(section 639) in the bill to reform the overtime pay system for Federal
firefighters. A more rational, understandable, and uniform system for
calculating the overtime pay of Federal firefighters is long overdue. The
Committee provision would accomplish this important and much-needed
legislative change and reflects a consensus agreement among the various
stakeholders, such as affected executive branch agencies and employee
United States Trade Representative
The Administration opposes the provision that would make the U.S. Trade
Representative the United States representative to the Universal Postal
Union. The U.S. Trade Representative lacks the resources and expertise in
postal administration to take on this responsibility. In addition, this
provision would repeal the authority of the Postal Service to establish
international postage rates. We urge that this provision be dropped.
United States Postal Service
The Administration is concerned that the Committee bill would prohibit the
Postal Service from initiating new non-postal commercial activities or pack
and send services. An appropriations bill should not be used to legislate
such restrictions on Postal Service operations.
Office of National Drug Control Policy (ONDCP)
The Administration appreciates the support the Committee has provided for
drug control efforts in general, and for ONDCP in particular. The
Administration encourages the House to provide the full amount requested
for the Special Forfeiture Fund as anything less would adversely impact our
ability to continue moving towards our mutual goal of reducing drug use.
Failing to fully fund this request would negatively impact the National
Drug Control Strategy and our efforts to meet the targets established in
the Performance Measures of Effectiveness system. The House could fund
this spending, in part, by reducing amounts earmarked by the Committee for
an unrequested technology transfer program.
Federal Buildings Fund
The Committee has not provided $14 million requested for the design of a
new Department of Transportation (DOT) Headquarters. Instead, the
Committee urges GSA to enter into a lease transaction, as authorized by the
House Transportation and Infrastructure Committee and the Senate
Environment and Public Works Committee. The Administration requests that
the House provide funding for the design of a new DOT Headquarters.
Providing for a government-owned building would save taxpayers
approximately $190 million, in present value terms, compared to the cost of
entering into a lease.
The Committee bill would delay the availability of funding until September
30, 1999, for the repair and alterations program ($19 million) and building
operations program ($223 million). The Administration is concerned that a
delay in obligations of this amount for buildings operations would impede
GSA's ability to operate and maintain Federal facilities under its control.
The Administration is also concerned that the Committee bill has approved
over $500 million for 15 unrequested courthouse construction projects.
National Bioethics Advisory Commission
The Administration objects to section 628 of the Committee bill, which
would prevent interagency funding of the National Bioethics Advisory
Commission. The work of the Commission affects at least 15 Federal
agencies. Access to interagency funding is essential for continued
operations of this small, but important commission.
Bureau of Engraving and Printing
The Administration objects to section 116 of the Committee bill, which
would prevent the Bureau of Engraving and Printing from awarding a contract
for currency paper under an ongoing competitive procurement without prior
congressional approval. The Administration will interpret such provisions
to require notification only, since any other interpretation would
contradict the Supreme Court ruling in INS vs. Chadha.
Potential Amendment Related to Peer Review
The Administration strongly opposes an amendment that may be offered
mandating peer review of "scientific data" supporting final regulations.
The Administration is committed to using the best possible science and peer
review for rule-making. However, this amendment is unnecessary,
inappropriate and wasteful. Peer review is currently incorporated in the
Government-wide rule-making process where it is needed through extensive
outreach, public comment, and scientific advisory boards. This amendment
as drafted mandates a one-size-fits-all requirement that would serve only
to delay important government action, in particular, rules designed to
protect health safety and the environment. It would impose a costly
additional step in the regulatory process and would cover a large
heterogeneous set of rules, as diverse as meat and poultry inspection
rules, airplane and automobile safety standards, FDA drug and device
approvals, and rules to ensure safe drinking water and clean air. 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.
Potential Amendment Related to Presidential Executive Order
The Administration would oppose an amendment that may be offered that would
prohibit the use of funds in the Act for implementing the May 28, 1998,
Presidential Executive Order which provides a uniform policy for the
Federal Government to prohibit employment discrimination based on sexual
orientation in the federal civilian workforce.