H. R. 3579 -- MAKING EMERGENCY SUPPLEMENTAL
APPROPRIATIONS, FY 1998
(Sponsor: Livingston (R), Louisiana)

H. R. 3580 -- MAKING SUPPLEMENTAL APPROPRIATIONS AND RESCISSIONS , FY 1998
(Sponsor: Livingston (R), Louisiana)

The Administration appreciates the Committee's action to approve vital resources needed for recovery from natural disasters, for our troops overseas, for the International Monetary Fund (IMF), and for the payment of arrearages to the United Nations (U.N.). The American people want their Government to be able to respond quickly and in a non-partisan manner to emergencies both here and overseas. It would be disappointing and disturbing if our ability to provide assistance to victims of natural disasters and continued funding for our troops in Bosnia and Iraq and the readiness of our military forces worldwide were held hostage to partisan politics in the House of Representatives. The Administration is disappointed that the pending supplemental appropriations have been segregated into two distinct appropriations bills and strongly recommends that the two measures be combined into a single bill. This assistance should be provided free of extraneous and controversial authorizing provisions. It is in the best interest of our national security that Congress pass a single bill that provides funding for our missions in Bosnia and Iraq, for overdue payments to the United Nations, and for the IMF. American economic and security interests will suffer badly if the President's requests are not promptly enacted into law.

It is also essential that Congress approves emergency disaster assistance for victims of recent natural disasters. As requested, the Senate included a $1.6 billion contingent emergency appropriation for the Federal Emergency Management Agency (FEMA) for emergency response and recovery efforts throughout the United States for unmet requirements from disasters declared in FY 1998, and anticipated requirements in the remaining months of the fiscal year. The Federal Government is currently responding to natural disasters in 49 States, and since January of this year, disasters have occurred in 16 States and territories. The Administration appreciates the Committee's efforts to provide funding for other disaster relief programs, and strongly urges the House to adopt the President's March 24 request for FEMA.

The Committee bill finances emergency defense requirements with reductions in important domestic programs and is a breach of the firewalls enacted into law in the Balanced Budget Act. We should be able to provide disaster assistance to communities here at home and support for our troops overseas without violating last year's budget agreement or attaching extraneous political provisions. We urge you to avoid actions that will result in gridlock and that will be detrimental to our troops abroad and our citizens at home in a time of need. The President's senior advisors would recommend that the President veto this legislation if it contains such offsets.

The Administration is deeply concerned with some of the IMF provisions of H.R. 3580 as currently drafted. These concerns relate primarily to the procedural requirements attached to the proposed appropriation for the quota increase, not necessarily to the underlying policy objectives of such requirements. In fact, the Administration is in agreement with many of those objectives as policies that the United States should vigorously promote at the IMF. However, a number of the bill's proposed procedures for achieving those objectives are unworkable. These concerns are addressed in more detail below. In addition, several provisions of H.R. 3114, the IMF authorizing legislation reported out of the Banking Committee on March 5, were not included in H.R. 3580. The Administration strongly urges the full House to support a bill that could enjoy bipartisan support on par with that of H.R. 3114.

The Administration strongly opposes the Committee's inclusion of language in H.R. 3580 making U.N. funding contingent on authorization and reducing the request by $416 million. The authorization requirement is intended to subject this important national security measure to the unrelated debate of abortion policy. Honorable people can disagree about the issue of abortion. But, it is wholly inappropriate to hold the payment of U.S. arrears to the United Nations hostage to unrelated and extraneous issues. Instead, the entire Congress should be given the opportunity to consider the U.N. arrearage funding issue on its merits. We strongly urge the House to drop the authorization contingency and to increase funding up to the request.

For these reasons, the Administration strongly opposes H.R. 3579 and H.R. 3580 as reported by the Committee and is deeply disappointed that the rule for consideration of H.R. 3579 does not make in order amendments that respond to these concerns. We urge Congress, as soon as possible, to send to the President a clean bill that he can sign.

U.N. Arrears

The Administration strongly objects to the severe cuts to the request for arrears payments to the United Nations and other international organizations contained in H.R. 3580. The draft bill includes only $505 million of the Administration's $921 million request for FY 1999 and FY 2000. This very substantial cut will seriously impede the ability of the United States to influence critical negotiations beginning in May which could reduce U.S. dues to the United Nations. There will not be another opportunity to lower these dues until the year 2000. In the meantime, U.S. efforts to promote far-reaching U.N. reforms will be impeded. The failure to provide the requested funds will undermine U.S. leadership in the international community and should not be separated from other critical emergency foreign affairs priorities (Bosnia, Iraq, and IMF). While the Administration would welcome an authorization for the U.N. arrears, and will continue to work with the authorizing committees, the Administration objects to the authorization requirement in H.R. 3580. The current version of the authorizing legislation (H.R. 1757) contains policy provisions unrelated to the U.N. arrears issue, which are unacceptable to the Administration. Therefore, the Administration strongly urges the House to provide the full request for arrears and to drop the authorization requirement.

IMF

The Administration is supportive of the Committee's recognition that the Congress should act now to authorize and appropriate funds for both the New Arrangements to Borrow (NAB) and the quota increase. The Administration believes the immediate approval of these requests is necessary to provide the IMF with the resources it needs to protect the international financial system and, therefore, the U.S. economy against the risk of new or escalating financial crises of the kind now gripping key East Asian economies. A failure to act or a significant delay in action could leave us without the capacity to protect United States interests in the current environment.

Many of the provisions in the Committee version of H.R. 3580 are unworkable. Section 401 of the bill, for example, would condition the availability of the increased U.S. quota resources on the inclusion in certain lending agreements with member countries of certain specified provisions. The Administration believes that the practical effect of this section alone would delay indefinitely the implementation of the quota increase, denying the IMF resources it needs to perform its mission during a period of crisis.

Section 402(c) would impose new notification requirements on the use of the Exchange Stabilization Fund (ESF), which would limit our ability to respond flexibly under existing law. Use of the ESF is not related to legislation to authorize and appropriate funds for the IMF, and the Administration strongly objects to the inclusion of ESF provisions in this bill.

Section 408, like Section 401, would impose unworkable conditions on the release of U.S. funds to the IMF and, therefore, also would be likely to delay indefinitely the implementation of the quota increase at the IMF. This provision is worded much more broadly than Section 401 and could be read to condition the release of all U.S. funds to the IMF, not just those appropriated for the quota increase, which could jeopardize the Fund's ability to finance its existing as well as new programs. This would amount to a retroactive conditioning of all past U.S. commitments to the Fund, including quota subscriptions and the General Arrangements to Borrow, and would also apply to the NAB.

To solve these problems in a constructive manner, the Administration will work to amend these provisions as this much needed bill moves through the appropriations process. If the IMF does not have sufficient resources to deal with future crises, it will significantly affect our workers, our farmers, and our businesses. The Administration also wishes to reiterate its position that it is important for Congress to act on this request at the earliest possible legislative opportunity.

Department of Defense

The Administration welcomes the Committee's support for the President's FY 1998 emergency supplemental request for Bosnia, Southwest Asia, and natural disasters. Additional funding for Bosnia and Southwest Asia will cover the costs of unanticipated military operations in these areas that directly support U.S. national interests, while also protecting military readiness. Additional funding for natural disasters will ensure that affected bases and facilities can recover fully and quickly from storm damage.

The Administration strongly opposes any provision requiring prior Congressional authorization before offensive operations against Iraq can be conducted. While the Administration will consult with Congress if further military action becomes necessary, a prior authorization requirement would hinder the President's ability to carry out his responsibility as Commander-in-Chief and to effectively conduct U.S. foreign relations. Such legislation could lead Iraq to believe that the U.S. will not react promptly to provocation or further intransigence.

Other Issues

The Administration is extremely disappointed that the Senate struck funding for HCFA to implement provisions of the Health Insurance Portability and Access Act (HIPAA) of 1996. The Administration is pleased that the House Committee included such funding and urges the Congress to retain this important provision in any final legislation. HIPAA imposed on HCFA major new implementation and enforcement responsibilities in reforming the private insurance market to help people keep their health insurance when they change jobs, and in limiting the ability of insurers to deny coverage for pre-existing conditions. Moreover, HCFA must administer this program in any State that chooses not to enforce the law -- and several States have chosen not to do so. Without additional resources this year, HCFA's ability to implement the new HIPAA provisions will be at risk. These resources represent critical funding for an agency that, overall, has significant new responsibilities to undertake.

The Administration is also concerned about report language concerning financial terms for oil and gas lease sales in the Gulf of Mexico eligible for royalty relief by the 1995 Deep Water Royalty Relief Act. In addition, the Administration objects to two overly-broad Department of Agriculture (USDA) authorities added by the Committee. One provision would provide compensation for any decrease in value to stored wheat due to USDA emergency action notices in response to the presumed or actual presence of "karnal bunt" (a fungus that affects wheat). The provision authorizes payments not just for the effects of such past notices, but for any emergency action notices issued in the indefinite future. This is an inappropriate period of time for inclusion in an emergency supplemental bill. The assistance should be limited through the date of the bill's enactment. Secondly, in the provision providing compensation to producers for losses of livestock, the Committee added authority to compensate losses to owners of ratites (flightless birds, including ostriches). The Administration objects to this expansion of assistance to a single group of owners, since other game or specialty bird losses have not been covered by past livestock disaster programs, in part due to the pricing complexities in the speculative and thin markets for such birds.