This Statement of Administration Policy provides the Administration's views
on H.R.1141, the bill making emergency supplemental appropriations to
assist in Central America's recovery from recent natural disasters, to
provide urgent funding related to the situation in Jordan, and to provide
vital loans and other assistance to our farmers and ranchers. The
Administration appreciates the Committee's consideration of the President's
supplemental requests and looks forward to working with the Congress on a
bi-partisan basis to complete action on this important legislation soon.
However, we have significant concerns with the approach being taken in the
House Committee bill and we ask that you consider the Administration's
Providing essential assistance to victims of natural disasters and helping
our farmers at home with vital financing clearly fall in the category of
needs that are urgent, unanticipated, and essential -- that is, emergency
requirements. Therefore, they clearly deserve to be funded quickly, fully,
and without requiring offsets that could force unacceptable reductions in
important programs. We support the Committee's action of providing
defense-related emergency funding in response to Hurricane Mitch without
offsets and believe that consistent treatment should be applied to
non-defense agencies performing similar emergency activities. The
Administration would strongly oppose an amendment that may be offered that
would require offsets for this defense-related emergency funding.
The Committee bill would rescind $875 million from international affairs
accounts, with the largest portion being a rescission of $648 million in
appropriations of callable capital from U.S. payments to the Asian
Development Bank (ASDB), the World Bank and the InterAmerican Development
Bank. Such rescissions would be extremely ill-advised. Rescinding the
callable capital funding would send a dangerous signal to financial markets
and could require the ASDB and other multilateral development banks (MDBs)
to pay a higher premium on their borrowing, which could lead to the
restriction of capital flows necessary to strengthen the global economy and
expand U.S. exports. At a time when some of our emerging export markets in
Asia and other developing economies are beginning to recover, this step
would be highly unproductive.
In addition, this rescission of callable capital would call into question
U.S. commitment to all multilateral development banks. This could have a
detrimental effect on capital flows and economic growth globally, including
in Asia, Africa, and Latin America. This unintended consequence would even
more broadly delay economic recovery in markets vital to the United States,
thereby hurting our own economy.
The other rescissions in the international affairs area would undermine a
host of important objectives in many programs. For example, the
rescissions would cut support for U.S. exports, undermining our efforts to
penetrate foreign markets and provide jobs for American workers. At a time
when the United States needs to promote its exports, this is a particularly
misguided step. The rescissions would also undercut free market reform and
democracy promotion in the New Independent States and in Eastern Europe,
areas where it is manifestly in America's interests to encourage reform.
The rescission of development assistance would set back efforts in the
poorest countries, including possibly in those hit hardest by Hurricane
Other rescissions would undermine our efforts to provide peacekeeping
operations in troubled areas of the world. The rescission of Global
Environment Facility funding would be highly detrimental to the cause of
improving global environmental protection. Still other cuts would reduce
our contributions to international organizations, where America's
reputation as a contributor in good standing is already tarnished.
In addition, we are concerned with the $150 million cut in important
nonproliferation programs to reduce stockpiles of excess weapons grade
uranium and plutonium in Russia. Since the Department of Energy has
already negotiated an agreement with Russia to purchase uranium for $325
million, the entire cut would have to come from the $200 million
appropriated for plutonium. That would drastically undercut negotiations
that are underway to dispose of 50 tons of weapons grade plutonium in
Russia, enough for 15,000 nuclear weapons.
Taken together, these rescissions are so great that the supplemental as a
whole would constitute a net reduction in U.S. foreign affairs spending --
a reduction that would seriously undermine America's capacity to pursue its
foreign policy objectives and promote our economic security. The
Administration strongly supports adoption of an amendment expected to be
offered that would strike from the bill several of these objectionable
Were the bill to be presented to the President with the offsets discussed
above, the President's senior advisers would recommend that he veto the
bill. We urge the House not to take actions that could result in gridlock
and delay, and that would be detrimental both to our allies abroad and our
citizens at home in their time of need. We urge the House not to add
extraneous authorizations to the bill, particularly narrow, objectionable
riders that would serve only to generate controversy, unnecessarily
delaying the urgently needed emergency assistance contained in this bill.
Emergency Relief for Central America
The bill provides $962 million for Central America, $6 million more than
the President's request. On February 16th, the President transmitted to
the Congress a request for $956 million for International Assistance
Programs, the Department of Defense, and the Department of Justice to
provide assistance for emergency disaster and reconstruction assistance
expenses arising from the consequences of the recent hurricanes in Central
America and the Caribbean and the recent earthquake in Colombia. The
Administration appreciates the full funding provided in the House bill for
this request, which will provide relief from the effects of Hurricanes
Mitch and Georges and restore hope to this devastated region.
Hurricane Mitch, the worst natural disaster in the history of the Western
Hemisphere, left more than 9,000 dead and drove millions from their homes.
Even today, hundred of thousands of Central Americans still cannot return
to their homes. Schools, hospitals, businesses, farms and roads were
destroyed, resulting in serious economic dislocation. Hurricane Mitch
caused $8.5 billion in damages, and Hurricane Georges brings the total to
$10 billion. The President's Central America package is urgent,
unanticipated, and essential and should be funded as an emergency request.
Funds must be provided swiftly to prevent the spread of disease and to buy
seed and plant crops in the fast-approaching Spring planting season,
thereby providing food and jobs to many communities, and to demonstrate to
Central Americans that they can find jobs and security in their own
recovering economies. Much of the rural road system farmers and small
merchants depend on for their livelihoods was destroyed. Water and
sanitation systems have been disrupted, which can result in disease.
Economic destruction and dislocation threaten to undermine the region's
achievements of the past decade, as these nations have made tremendous
strides toward settling conflicts, strengthening democracy, promoting human
rights, opening economies and alleviating poverty. Emergency assistance
for reconstruction aid will ensure that their transformation continues and
that Central Americans will have cause to view their own futures in the
region with hope.
The Administration appreciates the Committee's providing the full $100
million for Jordan, fully funding the FY 1999 request. These funds will
provide financial support to help promote stability in Jordan and the
region during the period of transition subsequent to King Hussein's death.
While the administration appreciates the full funding of the $100 million
FY request, we are disappointed that the $200 million requested for advance
appropriations for FYs 2000 and 2001 has not been provided. In the context
of promoting peace in the Middle East, the Administration will continue to
press for these advance appropriations.
Department of Agriculture
On February 26th, the President submitted a request for $152 million for
urgently needed emergency funds for the Department of Agriculture (USDA).
The Administration appreciates the Committee's providing fully for this
request. The Administration's request would provide an additional $1.1
billion in farm ownership, operating, and emergency direct and guaranteed
loans to help farmers through the Spring planting season. This additional
loan authority would provide vitally needed financing for the Nation's
farmers in light of the significant increase in demand for USDA loans, due
to projected continuing low commodity and livestock prices.
Department of the Interior
The Administration is pleased that the Committee provided a total of $21.8
million in supplemental funding for Interior's Indian trust fund management
reforms. Of this amount, $6.8 million was included in the President's FY
2000 Budget and $15 million was transmitted by the President with offsets
on March 10, 1999. Together these funds will allow the Department to carry
out critical activities, including court-ordered requirements in the Cobell
v. Babbitt lawsuit alleging past mismanagement of individual Indian money
accounts, and continued progress on trust fund management improvements.