S. 1033 -- AGRICULTURE, RURAL DEVELOPMENT,
FOOD AND DRUG ADMINISTRATION,
AND RELATED AGENCIES APPROPRIATIONS BILL, FY 1998
(Sponsors: Stevens (R), Alaska; Cochran (R), Mississippi)

The Committee has developed a bill that provides requested funding for many of the Administration's priorities. As discussed below, the Administration will seek restoration of certain of the Committee's reductions to the President's requests. We recognize that it will not be possible in all cases to attain the Administration's full request and will work with the Committee toward achieving acceptable funding levels.

The Administration is committed to working with the Senate to identify reductions in the bill in order to find offsets for the restoration of funds that the Administration seeks. For example, unrequested funds have been provided to the P.L. 480 Title I account, and the Administration's proposed user fees for meat and poultry inspection and new user fees for the Food and Drug Administration have not been adopted. In addition, while we commend the Committee for including the requested discretionary funds to operate the Crop Insurance program, the Committee has added $53 million more than requested for this purpose. These additional discretionary resources could be used to fund higher priority programs. We urge the Senate 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.

Women, Infants, and Children Program

The Committee bill would fund the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) at $3.9 billion, $180 million below the President's request. The Committee's mark is intended to support a participation level of 7.4 million women, infants, and children, the anticipated FY 1997 end-of-year caseload level. The President's FY 1998 Budget request would allow program participation to grow modestly -- to 7.5 million by September 1998 -- and fulfills the bipartisan commitment to fully fund WIC. The request also includes a $100 million contingency reserve to ensure that unanticipated food price increases do not cause participation decreases.

The Administration appreciates the recent action by the Congress to provide supplemental funding to ensure stable WIC participation in FY 1997. We also appreciate that the Committee bill provides needed flexibility in allocating WIC funding to States. However, we are disappointed that the Committee mark does not provide funding for the contingency reserve and for the modest increase in participation proposed in the President's budget. These two provisions would allow WIC to reach and maintain the bipartisan commitment to full program participation.

The Administration shares the Committee's concern that WIC be able to maintain its successful cost containment efforts. The Administration strongly supports the Committee's inclusion of a provision to ensure competitive contracting of infant formula based on the lowest net wholesale cost. Without such a provision, infant formula costs could rise dramatically, increasing WIC's total costs and putting budgetary pressure on other programs funded by Agriculture appropriations.

Food Stamps

Unlike other major Federal entitlement programs such as Supplemental Security Income and Medicaid, the Food Stamp appropriation does not include an indefinite authority that would provide funding in the event of an economic recession or estimating errors. Instead, the Congress has traditionally provided a benefit reserve, or "cushion." While less than the requested level, the Administration appreciates that the Committee recognized the need for a benefit reserve by providing $1 billion for this purpose and urges the Senate to provide the requested level of $2.5 billion, to the extent possible.

Food and Drug Administration

The Committee action would result in a total program level for the Food and Drug Administration (FDA) of $1.0 billion: $913 million in budget authority and $113 million in user fees. This level of funding for fees is, in total, a net $132 million below the President's request. It is appropriate that regulated industries that derive valuable benefits from some FDA activities contribute an appropriate share of FDA's cost of ensuring the safety and effectiveness of their products. The Administration urges the Senate to fund FDA at the requested program level of $1.1 billion, offset by the proposed user fees.

The Administration is also very concerned that the Committee bill includes only $5 million of the $34 million requested to enforce FDA's rule intended to reduce children's access to tobacco products and make the public aware of the requirements. The Federal Government should move as quickly as possible to reduce children's access to tobacco, and not make enforcement contingent upon approval of a national settlement with the tobacco industry. Full funding of the requested $29 million increase is essential to meet the Administration's goal of significantly reducing under-age tobacco use.

Rural Housing Programs

We commend the Committee for including requested funds for single-family housing direct loans and for increasing funds above the House bill's level for the Rental Assistance Program (RAP). However, we ask the Senate to restore, to the extent possible, the $52 million requested for RAP to convert expiring HUD Section 8 rental assistance in USDA-financed rental properties to RAP assistance. While Section 8 assistance is renewed annually, RAP generally provides five-year contracts for rental assistance. On an annualized basis, RAP assistance costs less than Section 8 assistance, and over five years the conversion of these units in FY 1998 would save taxpayers $46 million.

Rural Development Programs

The Administration strongly supports and commends the Committee action that would adopt the Administration's request to implement the Rural Community Advancement Program (RCAP), as authorized in the 1996 Farm Bill. This flexible delivery mechanism would allow States and localities to tailor rural development assistance more effectively to meet unique local conditions and needs. However, we urge the Senate to include funds for grants to States, as authorized, in order to give States and localities the opportunity to better tailor a portion of this assistance to their particular priorities.

Agricultural Research Programs

While we commend the Committee for including $1.25 million of the $2 million requested for important Everglades restoration research, the Committee bill does not appear to provide sufficient funding for a number of important agricultural research initiatives. Only $8 million of the $12 million requested is included for the Administration's Human Nutrition Research Initiative, a multi-year initiative to improve the understanding of the nutrition needs of diverse populations, notably children, but also including the elderly, pregnant women, and healthy adults. The Committee bill provides $100 million for the National Research Initiative (NRI) competitive grants program, a $6 million increase over FY 1997 but a $30 million reduction from the President's request. In order to provide funding for these important activities, the Administration urges the Senate to reduce funds included for unrequested, earmarked research grants.

Food Safety Initiative

While we commend the Committee's action to fully fund the FDA portion of the request for the President's Food Safety Initiative that is within the Subcommittee's jurisdiction, only $5 million of the $9 million requested through the Department of Agriculture (USDA) has been funded. In May, the Administration announced a detailed plan to strengthen America's food safety through this initiative, including establishing a national early warning system for outbreaks of food-borne illnesses; improving meat, poultry, and seafood inspections; increasing research to develop new tests to detect food-borne pathogens and to assess risks in the food supply; and, establishing public-private partnerships to improve the public's understanding of safe food practices. We urge the Senate to fully fund this important initiative.

Food and Consumer Service Studies and Evaluations

The Administration appreciates the Committee action to provide the requested level for Food Stamp, Child Nutrition, and WIC program research. The challenge of ensuring the success of welfare reform has increased the importance of practical, applied, and timely research. The Committee's action would ensure that the Food and Consumer Service research function maintains its close connection to all facets of program operation, and its core of highly-skilled professional career researchers with a well-recognized track record of conducting and managing effective, objective program evaluations.

Outreach for Socially Disadvantaged Farmers and Ranchers

The Committee bill would significantly limit USDA's initiative to improve efforts to ensure equal access for all clientele to training, technical assistance, and other agriculture-related services intended to assist low-income farm families in becoming successful producers. The Secretary of Agriculture has stated his commitment to improving the Department's outreach to and relations with its minority and socially disadvantaged clientele. The Committee has provided only $2 million of the requested $4 million increase for this important component of USDA's Civil Rights initiative. We urge the Senate to increase funds for this priority program to the extent possible.

Micromanagement

The Administration objects to the inappropriate micromanagement of Executive Branch authorities that the Committee bill would impose, which would impede the ability of the Department to operate effectively. The Committee bill would block facility closings of the Agricultural Research Service (ARS), which are needed in order to channel resources effectively to improve the overall impact and quality of ARS research. The bill also would limit funds for advisory committees, task forces, panels, and commissions to $1 million, which is insufficient to support ongoing and new committees, including those required by the 1996 Farm Bill. We recommend that the limitation on expenditures for these purposes be lifted.

The Committee bill would also prohibit FDA from consolidating two laboratories: St. Louis and Baltimore. These consolidations are part of FDA's overall streamlining efforts and are consistent with FDA's goal to consolidate its field laboratory operations. The 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.

Packer Concentration

The FY 1998 Budget proposes a $1.6 million increase for monitoring and analyzing meat packer market competition and the implications of structural changes and behavioral practices in the meat-packing industry. We urge the Senate to increase funds to the maximum extent possible so that USDA can maintain continuous, systematic collection and analysis of data along with aggressive investigative activities to address these issues effectively.

Nutrition Education and Training

The FY 1998 Budget proposes $10 million for the Nutrition Education and Training program. The Welfare Reform bill enacted last year replaced mandatory funding for this program with an authorization for discretionary appropriations. The Administration is disappointed that the Committee has not provided the requested funding for this valuable resource to the child nutrition programs. We urge the Senate to fund this important program to the maximum extent possible.