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This Statement of Administration Policy provides the Administration's views on
H.R. 2203, the Energy and Water Development Appropriations Bill, FY 1998, as
reported by the House Appropriations Committee. Your consideration of the
Administration's views would be appreciated.
The Committee has developed a bill that provides requested funding for many of
the Administration's priorities. However, the Administration strongly objects
to the Committee's reallocation of national defense funds from Department of
Energy programs to Department of Defense programs. These funds are needed for
key environmental privatization projects and to provide full funding for Atomic
Energy Defense Activities, as requested, which is consistent with fixed asset
funding practices in the Government's other defense programs. We believe that
this action is an unacceptable deviation from our understanding of the
Bipartisan Budget Agreement.
As discussed below, the Administration will seek restoration of certain of the
Committee's reductions. We recognize that it will not be possible in all
cases to attain the Administration's full request and will work with the House
toward achieving acceptable funding levels. We urge the House to reduce
funding for lower priority programs, or for programs that would be adequately
funded at the requested level, and to redirect funding to programs of higher
priority.
Department of Energy
The Administration objects to the Committee's providing only $102 million of
the $1.006 billion requested for environmental management privatization
projects. Based on this mark, several environmental privatization projects
would not be funded at all, and it is questionable whether the expected
out-year funding would allow support for higher priority cleanup privatization
projects at this funding level. Failure to invest in competitive privatization
contracts for cleanup activities would force the Department of Energy (DOE) to
continue using more costly, traditional contracting approaches, which the
Committee Report has strongly criticized. This would result in a substantial
increase to DOE's cleanup costs in future years and could jeopardize the Depar
tment's ability to comply with cleanup agreements.
The Administration strongly opposes the cuts to DOE's Federal staff and
management accounts, including Departmental Administration and the Office of
the Inspector General. Cuts in Federal staff and support service contractors
of this magnitude would make it nearly impossible for the Department to improve
contractor oversight or to develop, award, and manage more competitive
fixed-price contracts, which are some of the Committee's own recommendations in
the accompanying report.
The Administration also opposes the Committee's attempt to micromanage the
Department, limit its ability to exercise good business judgment, overly
restrict its ability to implement sound innovative contracting practices, and
limit its ability to participate in procurement reinvention. It would do this
by: (1) requiring special reports and notification prior to the start of any
FY 1998 approved construction and special congressional permission to make
procurement decisions currently authorized by other statutes; (2) inhibiting
market research; (3) further restricting the Department's ability to outsource
beyond that required in OMB Circular No. A-76; (4) unnecessarily restricting
the Department's ability to deviate from the Federal Acquisition Regulation;
and, (5) inappropriately limiting the Department's ability to use current
statutory exemptions from competition. Additional reporting requirements
combined with the proposed staffing reductions would erode DOE's ability to
gain better control over its operations and improve management of its complex
mission.
The Administration also strongly opposes the transfer of the Formerly Used
Sites Remedial Action Program (FUSRAP) from DOE to the Corps of Engineers. In
recent years, the Department has placed nearly half of this program under
competitive, fixed-price contracts and developed a plan to accelerate cleanup
by 12 years. DOE has established an open, interactive dialogue with
communities and regulators, through which the Department has developed cleanup
standards commensurate with land use plans and proceeded with early removal of
contamination at many sites. DOE has completed cleanup at 52 percent of the
main sites and 56 percent of the vicinity properties. Between FYs 1996 and
1997, DOE has reduced support costs for this program by 23 percent.
Transferring this well-managed program that is nearly complete to another
agency would be disruptive and would most likely delay completion and increase
costs.
The Administration objects to the program cuts in the requests for nuclear
nonproliferation programs. For example, the reductions in verification
research and development would delay the completion of next generation
land-based and satellite-borne sensors for the detection of nuclear, chemical
and biological weapons programs.
The Administration also opposes the $29 million reduction to the Uranium
Enrichment Decontamination and Decommissioning (D&D) program. DOE is about to
enter into a large contract for D&D and re-industrialization of the large
gaseous diffusion plant in Oak Ridge, Tennessee, using an approach that will
expedite cleanup, reduce costs, and create new jobs. The Committee's funding
cuts in this program would make it difficult to proceed with this effort,
comply with environmental requirements, and provide reimbursements to radium
and thorium licensees.
The Administration opposes the Committee's elimination of $25 million
requested for the Next Generation Internet. While the Administration
acknowledges that the private sector has shown the capability and willingness
to fund considerable technology development for the Internet, the Next
Generation Internet funds requested in the President's budget are necessary to
assist universities and national laboratories in implementing advanced,
high-speed connections that will not be financed by industry, and to accelerate
research in areas where DOE laboratories have particular expertise.
The Committee's overall reduction of $30 million from the request for the
civilian radioactive waste management program would threaten satisfactory
completion of the Department of Energy's viability assessment of Yucca
Mountain. Both the Nuclear Waste Technical Review Board and independent expert
advisers have urged DOE to build and study an "east-west tunnel" or "drift"
through the repository block at Yucca Mountain in order to reduce uncertainty
about water moving downward through the site. The $14 million (16 percent)
reduction to the request for the core science program would virtually eliminate
any scientific input from this important research to the viability assessment.
Additionally, the $16 million reduction in support services and personnel costs
would severely constrain, if not eliminate, an independent review of critical
elements of the viability assessment, including a validation of repository
design concepts and operating strategies, as well as refined cost estimates of
these designs.
The Administration strongly objects to the Committee's $60 million reduction
to the Solar and Renewable Energy R&D request (calculated on a comparable
basis). The overall funding cuts, particularly in biofuels and solar thermal
energy, would seriously set back environmentally promising and increasingly
economic sources of energy. Research programs such as these are also the least
burdensome way for the Nation to respond to global climate change.
Army Corps of Engineers
The Administration urges the House to reduce the number of unrequested Corps
of Engineers' projects and programs and to restore funds that the
Administration has requested for priority Corps projects, including the
Columbia and Snake Rivers Juvenile Fish Mitigation Program for salmon run
restoration and for construction of an emergency outlet for Devils Lake, North
Dakota. The Administration urges the House to use the $540 million in
unrequested funds that the Committee has provided for the Corps of Engineers
construction, studies, and operation and maintenance programs to restore
reductions made in other priority Corps and DOE programs.
The Administration appreciates the Committee's full funding of the
Administration's request for the Corps' regulatory program. This will allow
the Corps to implement its administrative appeals process fully and to continue
to process wetlands permits in a timely manner. The Administration urges the
House to include the Administration's requested regulatory permit fee, which
would allow the Corps to recover its costs for processing permit applications
for commercial uses.
Bureau of Reclamation
The Administration appreciates the Committee's support for funding to restore
the California Bay-Delta ecosystem. However, we urge the House to provide the
full $143 million that Congress authorized for this program and that was
requested by the President in the FY 1998 Budget. This important program plays
a central role in resolving long-standing water conflicts that have plagued the
State of California. In addition, we oppose the reduction of $14 million in
requested Central Valley Project funding, which is an important component of
the effort to restore this critical ecosystem.
The Administration objects to the Committee's decision to fund a number of
Reclamation projects and activities not requested in the FY 1998 Budget, some
of which could result in demands for additional funding in the out-years. The
Administration supports the Committee's decision to provide funds to cover the
estimated authorized Federal share of costs for the purchase of water
associated with variable flood control operations at Folsom Dam during FY 1997.
Tennessee Valley Authority
The Administration objects to the Committee's elimination of all
appropriations for the Tennessee Valley Authority in FY 1998. We believe that
an abrupt and total elimination of funding for the agency in FY 1998 is
premature. The Administration has proposed continued funding in FY 1998 while
TVA completes its consultations on potential alternate funding arrangements for
future years for its appropriated program.
Nuclear Regulatory Commission
The Administration urges restoration of the Committee's $4 million reduction
to the request for the Nuclear Regulatory Commission's (NRC's) High-level Waste
Program. This 24-percent reduction would adversely affect the NRC's ability to
maintain a strong scientific capability, independent of DOE, to review
high-level waste activities. This reduction could jeopardize the NRC's ability
to complete timely reviews of DOE's viability assessment. Timely resolution of
the high-level waste issue is important to the Nation as well as to the nuclear
industry.
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