H.R. 2378 -- TREASURY, POSTAL SERVICE, AND
GENERAL GOVERNMENT APPROPRIATIONS BILL, FY 1998
(Sponsors: Livingston (R), Louisiana; Kolbe (R), Arizona)

The Committee has developed a bill that provides requested funding for many of the Administration's priorities. However, as discussed below, the Administration will seek restoration of certain of the Committee's reductions to the President's request. 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. The Administration is committed to working with the House to identify reductions in the bill in order to find offsets for the restoration of funds that the Administration seeks. 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.

Federal Election Commission

The Administration appreciates the Committee's action to provide the President's request of $34 million for the Federal Election Commission (FEC). However, funds have not been provided to support enforcement actions and audits of the 1996 campaign as requested in the President's April 7th budget amendment. Instead, the Committee has provided funding for accelerating various modernization initiatives. While modernization improvements are welcome, and are part of the FEC's long-term agenda, the immediate need is for staff and resources to address the backlogged workload.

The Administration strongly objects to the limitations included in appropriations language that would condition the availability of $4.2 million of the funding on filling all current Commission vacancies and on enactment of legislation prohibiting the reappointment of Commissioners. Both of these restrictions would place unwarranted and intrusive limitations on the Commission's ability to meet its current workload demands and are unrelated to the Commission's current performance. These provisions would amend underlying law without the benefit of hearings or debate. Therefore, we urge the House to drop these restrictions and amendments to underlying Federal Election Campaign law.

Importation of Lethal Firearms

The Administration strongly opposes section 518 of the Committee bill. The practical result of this section would be to deny the Federal Government an effective mechanism to control the importation of hundreds of thousands of inexpensive firearms such as M-1 carbines and M1911 45 caliber semi-automatic pistols. These are weapons provided to foreign governments by military assistance programs, and were not intended to become low cost firearms available for civilian use. Low-cost firearms that are concealable, and/or capable of accepting large capacity magazines, and/or capable of being easily converted to fully automatic fire frequently wind up in the hands of criminals. Such weapons are particularly attractive to criminals. In short, the net effect of the proposal would be to thwart the Administration's efforts to deny criminals the availability of inexpensive, but highly-lethal, imported firearms.

Federal Employees Health Benefits Program

The Administration strongly opposes the provision contained in the Committee bill that would restrict Federal Employees Health Benefits Program (FEHBP) coverage for abortions except in situations where the life of the mother is endangered or the pregnancy is the result of rape or incest. While the President believes that abortion should be safe, legal, and rare, the Administration does not believe that Federal employees and their families should be precluded from choosing to purchase health insurance that includes broader coverage. The Administration believes that the decision to cover abortion should be left to each health plan participating in the FEHBP. Thus, Federal employees who wish to purchase health coverage that does not include abortion services would have that choice. The provision in the Committee bill does not allow Federal employees and their families to make that choice.

Internal Revenue Service

The recently enacted Balanced Budget Act of 1997 provides authority for an Earned Income Tax Credit (EITC) compliance initiative. The Administration urges the House to appropriate $107.1 million for this initiative, as requested in a budget amendment submitted on September 17, 1997. A provision allowing for an adjustment to the discretionary spending caps was included in the Balanced Budget Act of 1997 to accommodate funding for this proposal.

The Administration requests restoration of the Committee's $73 million reduction to the requests for the Internal Revenue Service's (IRS's) Processing, Assistance, and Management and Tax Law Enforcement accounts. The Committee bill would not provide the funding necessary for the inflationary increases requested in the President's budget. At this reduced level, we project that IRS would have to reduce FTE funded through these two accounts by approximately 1,500. This would lead to reduced taxpayer service assistance and an IRS-projected, five-year revenue loss of $1.1 billion.

The Administration urges the House to fund the IRS Year 2000 needs without jeopardizing other critical information technology projects. The absence of funding for these projects would undermine the IRS's ability to improve customer service and compliance.

"Winstar" Funding

The Administration is very concerned that the bill does not include the President's request to authorize the Secretary of Treasury to transfer $33.7 million from the Federal Deposit Insurance Corporation's FSLIC Resolution Fund to the Department of Justice for expenses related to the ongoing Winstar litigation. This funding is vital to the Government's defense in this litigation, which involves over 120 cases and potential claims against the Government of about $20 billion. Without sufficient litigation support, the taxpayers are likely to be held liable for much larger damages. We look forward to working with the Committee to resolve this issue as the bill moves through the process.

Bureau of Alcohol, Tobacco and Firearms

The Administration requests restoration of $19 million to avoid compromising the Bureau of Alcohol, Tobacco and Firearms' (ATF's) ability to combat the Nation's most violent criminals. The reductions made by the Committee would force ATF to make FTE reductions at the same time that it is responding to recent congressional and Administration initiatives such as the Brady Law, church fires, Youth Crime Gun Interdiction, arson and bombing investigations, criminal firearms trafficking, and other anti-violent crime initiatives. The reductions would also force ATF to curtail its drug-related law enforcement activities, which could result in increased numbers of incidents committed by those involved in drug distribution.

Secret Service

The Administration strongly objects to the Committees's $15.5 million reduction to the request for White House security funding (in the Secret Service Salaries and Expenses account and the Violent Crime Reduction Trust Fund). This funding is needed to implement fully all of the security requirements identified in the White House Security Review. We also request restoration of the $12 million reduction to the President's request for funds to ensure the ability of the U.S. Secret Service to continue providing adequate Presidential and dignitary protection, as well as maintain financial crime enforcement efforts.

Cooperative Purchasing

The Administration opposes the repeal of section 1555 of the Federal Acquisition Streamlining Act (FASA) of 1994 and would support an amendment to strike the repeal. This section would allow State and local governments, and Indian tribes to buy products off the General Services Administration's Federal supply schedule contracts, often at advantageous prices. If the repeal is not stricken, the Administration is willing to work with the Congress on a compromise provision that would permit such purchases for a number of specified product categories in demand by State and local governments and whose affected producers have not objected. We would further urge that this authority include a limited pilot program for pharmaceuticals used to treat life-threatening conditions, beginning with drugs used to treat HIV. We also urge the retention of GSA's authority to make any of the services it provides to Federal agencies available to a qualified nonprofit agency for the blind or other severely handicapped that is to provide a commodity or service to the Federal Government under the Javits-Wagner-O'Day Act. GSA's total collection of administrative fees will not increase by more than the incremental increase in the cost of administering the program.

Office of National Drug Control Policy

The Administration appreciates the Committee's support for the Office of National Drug Control Policy's (ONDCP's) national media campaign to prevent drug abuse among America's youth. However, we are concerned that the funding level provided is not adequate to accomplish our goals. Prohibiting the obligation during FY 1998 of $46 million of the $195 million appropriated to the media campaign would limit available funding for the campaign to $149 million. The Administration's request for $175 million is based upon recommendations from experts in the field and is the amount necessary to fund four media exposures per week to the 9-17 age group. Funding the campaign at significantly lower levels than requested would limit the number of media exposures or restrict the scope of the campaign, thus hindering its success.

In addition, the Administration is particularly concerned about the legislative veto provisions in the bill that seek to condition the obligation of funds provided for the national media campaign upon the approval of a strategy by the Appropriations Committees. Such consultation with Congress can be achieved without this specific language.

Finally, the Committee bill would create two new High Intensity Drug Trafficking Areas. The designation of High Intensity Drug Trafficking Areas in the appropriations bill would undermine ONDCP's statutory authority to designate such areas based on its review of the larger picture of drug use, availability, and trafficking in specified areas of the country, in consultation with other Federal and State officials. The Administration is also opposed to the language that would require funding for existing High Intensity Drug Trafficking Areas at no less than the FY 1997 level, as funding decisions are based, in part, on annual performance evaluations.

Whistleblower Protection.

The Administration objects to section 505 of the bill, which would prohibit the use of funds provided in the Act to pay the salary of any official who interferes with communications by other Federal employees with Congress. While the Administration strongly supports the Whistleblowers Protection Act and the protections it affords Federal employees, this section raises substantial separation of powers concerns in depriving the President and his department and agency heads of their ability to supervise the operations and communications of the Executive Branch, including the dissemination of information affecting Executive Branch confidentiality interests. The House is urged to strike this provision.

Unanticipated Needs

The Committee bill fails to provide the requested $1 million to enable the President to meet unanticipated needs in furtherance of the national interest, security, or defense. The Administration urges the House to include this amount to ensure that the President has the same ability to meet such needs as previous Presidents have had.

Infringement on Executive Authority

There are several provisions in the Committee bill that purport to require congressional approval before Executive Branch execution of aspects of the bill. These include provisions that purport to require congressional approval for certain transfers between appropriations within the Internal Revenue Service, the Federal Law Enforcement Training Center, the Financial Crimes Enforcement Network, the Bureau of Alcohol, Tobacco and Firearms, the U.S. Customs Service, the U.S. Secret Service. The Administration will interpret such provisions to require notification only, since any other interpretation would contradict the Supreme Court ruling in INS vs. Chadha.

Additional Administration concerns with the Committee bill are contained in the Attachment. We look forward to working with the House to address our mutual concerns.

Attachment