EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503

June 27, 2000
(House)

This Statement of Administration Policy provides the Administration's views on the Energy and Water Development Appropriations Bill, FY 2001, as reported by the House Committee. Your consideration of the Administration's views would be appreciated.

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, this bill fails to address critical needs of the American people.

The Administration appreciates efforts by the Committee to accommodate certain Presidential priority programs within its 302(b) allocation. However, the Committee allocation is $0.9 billion below the President's program level request and the Committee bill includes significant reductions in a number of high priority programs. The Administration strongly objects to the Committee's unacceptable $320.0 million cut to the Department of Energy's Office of Science, which would force cancellation of the Spallation Neutron Source project, and its $106.0 million cut to the Solar and Renewable Energy program. These concerns and others are discussed below.

Department of Energy

The Administration is concerned with the large reduction in the House Committee bill for key priorities of the Department of Energy (DOE). The bill provides $850.0 million less than the President's request for DOE's programs, which would significantly reduce vital programs in science, energy research, and other activities. Specific funding issues include:

• Science. The Administration strongly opposes the severe cuts made by the Committee in basic science programs across the government, including the Committee's $320 million cut to energy science programs, 10 percent below the requested level. The Administration strongly opposes the $161.9 million reduction in construction funding for the Spallation Neutron Source (SNS), a 62 percent cut. When completed, the SNS will provide a world-class tool for materials sciences, a field that has many economically important applications. The Department has met each of the management reforms the House included in report language last year. Congress should now do its part and fully fund the SNS construction project. The Committee mark of $100.0 million would force the cancellation of the project and require its immediate closeout.

The Administration opposes the elimination of $30.0 million in Basic Energy Sciences and Biological and Environmental Research for increased operating time and instrumentation at the Department's synchrotron light and neutron sources. These facilities are operated by the Department of Energy for the use of the entire research community, including researchers funded by the National Institutes of Health, the National Science Foundation, universities, and private industry.

The Administration strongly opposes the $45 million cut in the President's budget request for Mathematical, Information, and Computer Sciences and funding for high end applications for modeling and simulation. This cut will seriously hamper critical programs that are a core feature of the R&D agenda recommended by the President's Information Technology Advisory Committee. The Administration also believes that the Committee has been shortsighted in not providing requested funding for nanotechnology. The Department of Energy has been a leader in the development of nanostructured materials and is uniquely qualified to contribute advances in the design and synthesis of materials at the atomic level. Nanoscience has been designated as one of the nation's top science and technology priorities by external advisory committees. The Committee also did not provide the funds requested for the microbial cell project. Neglecting to support these cutting-edge scientific research areas jeopardizes our national capacity to sustain scientific and technical supremacy.

• Solar and Renewable Energy. The Committee's mark for solar and renewable energy falls $11.7 million below the current appropriation and is $106.0 million, or 23 percent, below the request, providing essentially none of the Administration's requested increases or initiatives. Many renewable energy technologies, including wind, biofuels, photovoltaics and solar thermal, are at a crucial stage in their development, requiring scale-up and a real push toward commercialization. With mounting evidence of global climate change and concern over oil prices, the Committee's net cut is shortsighted and undermines the Nation's effort to implement a 21st century energy policy. Technologies that are just beginning to see real market acceptance would be held back, and opportunities to develop farm-based products that can substitute for petroleum products would be delayed, to the detriment of America's consumers.

• Strategic Petroleum Reserve and Home Heating Oil Reserve. While the Administration supports reauthorization of the Energy Policy and Conservation Act (EPCA) and the creation of a Northeast Heating Oil reserve, the inclusion of the text of H.R. 2884 on the Energy and Water Appropriations bill highlights the difficulty the Administration has had in getting the Congress to act on measures that are important to our national energy security. Since the House passed H.R. 2884 on April 12, 2000, it has been pending in the Senate for more than two months. In addition, a simple reauthorization of the strategic petroleum reserve has languished during this Congress since last year. The Administration is seeking improvements to H.R. 2884 that would create a realistic trigger mechanism for the release of heating oil from the Northeast Heating Oil reserve, ensure compliance with relevant environmental reviews, and address the issue of the purchase of marginal well oil production at above market prices.

• Environmental Management. The Administration objects to the $256.0 million reduction taken against the Tank Waste Remediation System. Increases over the Committee mark are needed to support termination costs and to continue design activities until a new procurement can be conducted to select another contractor. The Administration opposes the $43.0 million reduction to the Uranium Enrichment Decontamination and Decommissioning Fund, which the Committee transfers to a new Uranium Facilities Maintenance and Remediation account. The Committee-recommended funding level would jeopardize the Department's ability to meet its cleanup commitments at uranium enrichment facilities in Paducah, Kentucky; Portsmouth, Ohio; and, Oak Ridge, Tennessee. Also, DOE would be unable to accelerate cleanup of these sites in response to recently identified threats to the safety and health of workers, the public, and the environment. In addition, the Administration urges the House to include the $10 million as requested to initiate cleanup activities at Moab, Utah.

• Energy Employees Compensation Initiative. The Administration strongly objects to the Committee's decision not to fund the Energy Employees Compensation Initiative. The $17.0 million requested is essential to initiate an Exposure Compensation Fund to provide compensation benefits to current and former contractor workers who contracted beryllium diseases and radiogenic cancers as a result of their employment with the DOE nuclear weapons program.

• Nuclear Energy Research Initiative. The Administration strongly objects to the Committee's decision to reduce funding for the Nuclear Energy Research Initiative by $12.5 million (36 percent) below the request of $35.0 million. This program, which awards research grants to laboratories, universities, industry, and consortia using an independent peer-review process, is the only Federal research effort dedicated to addressing the key issues affecting the future of nuclear energy.

• Tritium Readiness. The Administration objects to the $25.0 million recommended by the Committee for accelerator production of tritium (APT). The Department's Commercial Light Water Reactor program is developing a tritium production system based on using highly reliable and technically mature technology.

• Contractor Travel. The Administration opposes the statutory cap of $150.0 million on contractor travel. The cap is too low and may adversely impact scientific activities at the laboratories and the exchange of information by scientists at conferences.

Department of Energy Security Reorganization

As part of our efforts to improve security at the Department of Energy, the Administration has requested a budget-neutral amendment to reorganize all safeguards and security functions, and to fund all of these activities under the office of Security and Emergency operations. We urge the Congress to support this critical proposal to address the current institutional issues associated with ensuring safeguards and security.

Regional Economic Development

The Administration is disappointed by the Committee's failure to provide $30 million requested for the Delta Regional Authority (DRA), part of the President's Mississippi Delta Initiative. The Administration urges the House to provide these funds. Although the Delta has seen some economic progress, it remains far behind most of the rest of the country. In the Delta's distressed counties, per capita income is only 53 percent of the national average, and the poverty rate is more than twice the national average. The Delta Regional Authority would bring the resources of a Federal-State partnership to the fight for economic growth in the region. The DRA's funding will be targeted to the counties with the highest poverty and unemployment rates and lowest per-capita income.

The bill also fails to provide funding requested for the Denali Commission. The bill also cuts the President's request for the Appalachian Regional Commission by 12 percent.

The Administration urges the Congress to provide full funding for these important regional economic development programs, which assist areas of the country that have not benefitted fully from the Nation's strong economy.

Defense Nuclear Facilities Safety Board

The Administration strongly opposes the Committee's $1.5 million reduction to the $18.5 million request for the Defense Nuclear Facilities Safety Board. The Board provides a critical independent source of information to the Department of Energy about worker health and safety issues.

Nuclear Waste Technical Review Board

The Administration strongly opposes the Committee's $0.5 million reduction to the $3.2 million request for the Nuclear Waste Technical Review Board. The Board's ability to provide an independent evaluation of the technical and scientific validity of the Department of Energy's program to characterize the Yucca Mountain site is crucial to the decisions that will be made about the site in FY 2001 and the next several years. The reduction could hurt the site evaluation process.

Kyoto Protocol

The Administration opposes Committee bill and report language relating to the Kyoto Protocol. The bill language is unnecessary, as the Administration has no intent to implement the Protocol prior to congressional ratification. To the extent this language might reach expenditures for negotiations with foreign governments, it would raise serious constitutional concerns because the Constitution commits to the President the power to decide whether to engage in such negotiations. In addition, the report language goes far beyond the compromise agreed to originally by the conferees in the FY 1999 appropriations process. We support an amendment expected to be offered that would clarify that the limitation does not apply to activities otherwise authorized by law.

Critical Infrastructure Protection

The Administration urges the House to provide the President's request of $13.0 million for the Department of Energy for critical infrastructure protection/cyber crime. These funds are a crucial component of the national, interagency effort to protect infrastructure -- particularly information systems -- in both Government and the private sector that is essential to the functioning of our economy, national defense, and the safety of the population. The funds requested for the Department of Energy are necessary to develop and implement a plan to protect against and respond to attacks that would significantly disrupt the Nation's energy infrastructure.

The Committee's recommendation would provide only $3.0 million for critical infrastructure protection. This funding level would severely scale back the Administration's efforts to work with industry to identify and address vulnerabilities in this area.

National Monument Designation

The Administration strongly opposes report language that would prohibit the Department of Energy from using any funds for activities related to a national monument designated under the 1906 Antiquities Act in the State of Washington. This prohibition interferes with the President's authority to direct an Executive Branch agency to comply with the Antiquities Act, which authorizes the President to protect Federal land of historic and scientific interest such as the salmon spawning grounds and the archaeologically rich areas covered by the recent national monument designation of 195,000 acres of Federal lands in south central Washington. The Interior Department's Fish and Wildlife Service will manage this monument under existing agreements with the Department of Energy.

Army Corps of Engineers

The Administration is concerned that the Committee's reduction in funding for priority Army Corps of Engineers projects would result in significant delays for certain critical construction projects. Of particular concern is a reduction from $91.0 million to $80.0 million to the request for the Columbia River Fish Mitigation project (Washington and Oregon). The full amount requested is needed to meet requirements to save endangered salmon and other species. The Administration supports funding for the construction of an emergency outlet at Devil's Lake, North Dakota, and based on this emergency, urges the House to approve construction funding in the bill. The Committee's mark would delay providing the flood protection that the Devils Lake area urgently needs. The Administration also urges the House to fund the limited number of priority new projects and programs in the President's budget, including the "Challenge 21" program for environmentally friendly flood damage reduction projects, modifications to Folsom Dam on the American River, California, restoration of the Hillsboro and Okeechobee Aquifer in the Florida Everglades, and the program to modernize Corps recreation facilities.

We urge the House to act on the Administration's Harbor Services Fund proposal, which would provide a stable source of funding for port and harbor activities. This proposal would also free up funds that could be used for the priority projects and programs noted above, as well as for important new navigation projects, including projects to deepen Baltimore Harbor in Maryland and the Arthur Kill Channel (New York and New Jersey harbor), which have not been funded by the Committee.

Bureau of Reclamation

The Administration appreciates the Committee's action to provide full funding for the Central Valley Project Restoration Fund and substantial funding for the Water and Related Resources program. However, we urge the House to provide the full $60.0 million requested for the California Bay-Delta program. The Committee's decision to provide no funds for this effort would significantly hamper Federal and State efforts to restore this ecosystem, protect the drinking water for 22 million Californians, and enhance water supply and reliability for over seven million acres of highly productive farmland and growing urban areas across California.

We urge the House to restore funding for the Rocky Boys Indian Water Rights Settlement in Montana. Eliminating funding for the settlement would prevent the Federal Government from honoring its legal commitments to the Chippewa Cree Tribe. We strongly object to proposed restrictions on addressing important public safety and environmental concerns at the Auburn Dam site. We also object to language constraining the Bureau of Reclamation's water acquisitions for the Middle Rio Grande and Carlsbad projects by requiring the acquisitions to comply with the narrower provisions of the Drought Emergency Assistance Act. This language could substantially hinder our ability to meet requirements of the Endangered Species Act while maintaining services to project beneficiaries. In addition, we are disappointed that the House has not enacted the Administration's proposal to convert the Central Valley Project Restoration Fund program from discretionary to permanent funding to improve its operating efficiency and effectiveness. Finally, we note that the Committee's reduction to the Policy and Administration account would hinder the Bureau of Reclamation's ability to administer important Reclamation activities.

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