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S 2159 -- 07/13/98

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Office of Management and Budget


July 13, 1998


(Sponsors: Stevens (R), Alaska; Cochran (R), Mississippi)

This Statement of Administration Policy provides the Administration's views on S. 2159, the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, FY 1999, as reported by the Senate 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. However, the allocation is simply insufficient to make the necessary investments in programs funded by this bill, as discussed below. The only way to achieve the appropriate investment level is to offset discretionary spending by using savings in other areas. 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 additional resources 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 is working to include in the bill a provision 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. We will continue to work to identify appropriate offsets for the cost of this waiver.

In a number of areas, the Committee has reduced funds to assist the most needy farmers and members of the rural community. The Committee does not provide 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 Senate to provide the additional $3 million requested for this program by the President, which would permit another 290 limited-resource farmers to finance real estate purchases. This increase could be offset by approving the request to eliminate the Forestry Incentives Program, which promotes timber production on private lands.

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 $2.6 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. We want to work with the Congress to explore options that can be used to offset the cost of the needed increases in these programs as well as provide funds to modernize further 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 Senate to fund WIC at the President's requested level.

On language issues regarding administration of the WIC program, the Administration prefers the language included in the President's budget, in order to maintain the viability of infant formula rebates and so that funds are used to satisfy the highest priority WIC needs first. The Administration also supports transferring the Farmers' Market Nutrition Program to the Commodity Assistance Program, in order to prevent the diversion of already limited WIC resources from supporting program participation.

Arms Export Control Act Modification

The Administration supports section 738, 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 within the constraints of the Act to minimize the humanitarian impact on their people and adverse effects on American agriculture. 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

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. We urge the Senate to strike this provision.

In addition, the Committee has not fully funded the President's request for the Rural Community Advancement Program (RCAP), underfunding direct loans for water and wastewater and for community facilities. These loans provide the community infrastructure needed to improve the quality of life of rural Americans, and often finance the vital ingredient for diversifying the rural economy. The Committee bill would result in an estimated 35 fewer water and wastewater facilities serving 50,000 rural residents, and 75 fewer rural health clinics, police and fire stations, and child care facilities being built. Furthermore, for the RCAP program to be adaptable to unique local economic development needs, as envisioned in its 1996 Farm Bill authorization, the Senate 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 the Food and Drug Administration (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.

Agricultural Research

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 $33 million below the President's request. The 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, will slow progress toward addressing the most pressing needs of American agriculture and food consumers, and we urge the Senate to reverse this course of action. It can do so not only by reducing earmarked grants in the bill, but by reducing the $9 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.

Climate Change and Clean Water Initiatives, and Conservation Programs

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 Senate 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 Senate to provide these necessary funds to the NRCS.

In addition, the Administration is concerned with reductions in the Committee bill to USDA mandatory conservation programs. The bill eliminates funds to carry out a Conservation Farm Option program, and reduces signups under the Wetlands Reserve Program by 25,000 acres, to 140,000 acres. These programs provide technical and financial assistance to farmers to enable them to manage their land efficiently while providing environmentally-beneficial improvements to wetlands, wildlife habitat, soil erosion, and water quality. Taken together, the reductions in the bill to conservation and environmental programs are objectionable, and we want to work with the Senate to restore funding in this area.

Other Issues

  • Additional funds are needed for the farm labor housing program to improve the living conditions many farm labor families endure. The Committee's level of $16 million in direct loans is more than 50 percent below the Administration's request and, when coupled with the bill's $3 million reduction below the request for farm labor grants, would mean that over 350 fewer housing units would be built compared with the request. We urge the Senate to increase funding to assist these needy members of our society. This could be achieved by shifting $11.5 million from the amount in the bill that is in excess of the President's request for multi-family housing direct loans.

  • The Committee bill includes a $20 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 721 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 Senate to delete the provision.

  • The Administration objects to section 735 of the Committee bill, which would prohibit the Food and Drug Administration (FDA) from consolidating laboratory operations. The proposed consolidation offers the opportunity for better efficiency and mission coordination, and it is part of FDA's overall streamlining goals. This provision would force FDA to spend funds on infrastructure that could otherwise be used more directly to protect public health. The Administration urges the Senate to delete this provision.

  • The Committee has provided none 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 Senate to increase funds for this important initiative.

  • The Committee bill provides funding for research on nutrition programs within the Food and Nutrition Service (FNS). The Administration is very pleased that funding for these activities is returned to the FNS, where research on nutrition programs will occur in the context of the program's administration.

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