S. 1034 -- DEPARTMENTS OF VETERANS AFFAIRS
AND HOUSING AND URBAN DEVELOPMENT,
AND INDEPENDENT AGENCIES
APPROPRIATIONS BILL, FY 1998
(Sponsors: Stevens (R), Alaska; Bond (R), Missouri)

The Committee has developed a bill that provides requested funding for many of the Administration's priorities. We appreciate the Senate's efforts to fully fund many high priority requests. Regrettably, there are a number of specific provisions of the Bipartisan Budget Agreement that are not reflected in the Committee bill. As a result, the bill is unacceptable.

As discussed below, the Administration will seek restoration of certain of the Committee's reductions below 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 Senate toward achieving acceptable funding levels. We also note that in a number of accounts, funding levels exceed requests in the FY 1998 Budget. 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. 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.

Corporation for National and Community Service

The Administration is deeply concerned about the $146.5 million, or 27 percent, reduction to the President's request for the Corporation for National and Community Service. These funds support the President's America Reads Challenge, the national literacy campaign to ensure that every child can read well and independently by the third grade. This is one of the Administration's highest priorities. The Bipartisan Budget Agreement specifically calls for funding a literacy program, "with the goals and the concepts of the President's America Reads program." Without the requested funding, the Corporation would not be able to finance 11,000 AmeriCorps tutor coordinators to help recruit, organize, and manage the America Reads army of a million volunteers to tutor over three million children. The Administration strongly urges the Senate to fully fund the Corporation at the requested level of $549 million and to adopt the appropriation language included in the President's FY 1998 Budget.

Environmental Protection Agency

The Administration appreciates the Senate's continued efforts to keep the bill free from contentious legislative riders. However, the Administration believes that the Committee's overall $669 million, or 8.8 percent, reduction to the President's request for the Environmental Protection Agency (EPA) would significantly limit key activities and fails to meet the funding levels contained in the Bipartisan Budget Agreement.

In particular, the Committee's reduction of $213 million to the President's $3.4 billion request for EPA's Operating Program is a violation of the Bipartisan Budget Agreement that could severely impair the Agency's ability to protect the environment adequately. In addition to the overall funding level, the Administration is concerned that the Committee has reduced funding for key Administration priorities while funding numerous unrequested and unauthorized projects. In particular, the Administration strongly opposes the 38 percent reduction to the President's requests for the Climate Change Action Plan. These voluntary programs represent the most cost-effective method of achieving reductions in greenhouse gases that are needed to fulfill U.S. treaty commitments. The Administration also urges the Senate to restore funding for the President's Kalamazoo Right to Know initiative, which will make more environmental data available to the public in 75 major cities; the Montreal protocol program, which works to prevent depletion of the ozone layer; finishing construction of the Research Triangle Park lab, which will replace several antiquated facilities; and, the innovative GLOBE program.

The Administration also strongly objects to the Committee's $694 million, or 33 percent, reduction to the President's request for Superfund. It is especially troubling that the Committee has failed to fund this program at the level anticipated in the Bipartisan Budget Agreement. These funds are urgently needed to eliminate the backlog of Superfund cleanups and to double the pace of cleanups over the next four years. This will improve the quality of life for more than 27 million Americans, including over four million children, who live within four miles of a Superfund site. Congress should fully fund the President's request for Superfund, as anticipated by the Bipartisan Budget Agreement.

In addition, the Administration urges the Senate to restore the President's request of $100 million for Boston Harbor to help improve water quality and reduce the number of beach closings. This funding would continue to fulfill a bipartisan Federal commitment to Boston Harbor. The Administration strongly opposes the Committee's $4 million reduction to EPA's budget to fund the Chemical Safety and Hazard Investigation Board, and continues to support the EPA/OSHA Joint Accident Investigation Program to investigate chemical accidents and recommend action for their further prevention. Since it began, the EPA/OSHA program has successfully investigated numerous accidents; produced an independently reviewed accident report with more reports pending release; disseminated alerts to industry; and prompted OSHA to consider changing its process safety rule. Rather than creating a duplicative agency, the Administration supports the EPA/OSHA program, which combines and improves existing agency efforts, as the most effective strategy to prevent accidents.

Community Development Financial Institutions (CDFI) Fund

The Administration is very concerned about the Committee's decision not to fund the CDFI Fund. The Bipartisan Budget Agreement clearly indicates that funding for CDFI will be at the level projected in the FY 1998 Budget. The CDFI Fund has a demonstrated record of success. In the first round of the CDFI Program, the Fund awarded $37.2 million in loans, equity investments, grants, and technical assistance to 31 CDFIs serving 46 States and the District of Columbia. These investments have already leveraged more than $50 million in non-Federal matches and, over the long term, are estimated to leverage 10 to 20 times the amount awarded. Furthermore, under the Bank Enterprise Award Program, the CDFI Fund has awarded $13.1 million to 38 banks and thrifts. These awards have encouraged $126 million in support for CDFIs and direct lending and financial services in distressed neighborhoods. We strongly urge the Senate to fund CDFI at the requested level of $125 million, as agreed upon in the Bipartisan Budget Agreement, and as funded by the House in H.R. 2158.

Council on Environmental Quality

The Administration urges the Senate to restore the reduction from the request for the Council on Environmental Quality (CEQ). The Committee's reduction would severely affect CEQ's ability to perform its statutory obligations under the National Environmental Policy Act (NEPA) and, consequently, would cripple its ongoing effort to reinvent NEPA, a project designed to improve decision-making and raise efficiency in the performance of NEPA reviews. The results of the NEPA reinvention will reduce costs, time delays, and paperwork to the benefit of the general public. We also urge the Senate to include requested bill language concerning the number of CEQ council members.

Department of Housing and Urban Development

The Administration notes that the overall level of funding provided by the Committee for the Department of Housing and Urban Development (HUD) is generally consistent with the Administration's request. However, the Committee has failed to fund a number of Presidential initiatives, including Brownfields Redevelopment, Empowerment Zones, Homeownership Zones, Bridges to Work, and housing certificates to help families make the transition from welfare to work. The Administration strongly urges the restoration of funds for these priorities by eliminating some of the unrequested funds for several HUD programs.

The Administration seeks restoration of new incremental housing assistance funding in the Housing Certificate Fund to aid additional low-income families. These funds would be allocated to collaboratives consisting of State welfare agencies and housing authorities. The Administration objects to the Committee's inclusion of a three-month delay in rescinding housing vouchers, which would reduce the number of families assisted.

The Administration objects to the reduction in resources for the Office of Federal Housing Enterprise Oversight (OFHEO). OFHEO provides crucial taxpayer protection through its financial supervision of Fannie Mae and Freddie Mac.

The Administration also seeks restoration of requested funding for HUD Salaries and Expenses. The proposed Committee reduction would not allow HUD to implement critical phases of its management reform and restructuring plan.

Department of Veterans Affairs

The Administration appreciates the Senate's responsiveness to several of the President's key initiatives. We are pleased that the Administration's user fee proposal has been included in the bill. The Administration also appreciates the continued support the Senate has shown for the Veterans Equitable Resource Allocation (VERA).

The Administration urges the Senate to grant authority and provide related funding for the Veterans Benefits Administration to reimburse the Veterans Health Administration for medical examinations conducted in support of veterans' disability compensation claims. We believe that the establishment of a customer and service provider relationship between the two bureaus will result in higher quality medical exams. Improved medical exams are expected to translate into improved timeliness of claims processing, fewer appeals and remands, and better service to veterans.

Federal Emergency Management Agency

We are concerned that the Committee has chosen not to fund the Administration's proposal for a new pre-disaster mitigation program. Pre-disaster mitigation is important in reducing disaster damage, saving disaster relief expenditures, and preventing loss of life. We urge the Senate to provide funding for this important program, to the extent possible.

National Aeronautics and Space Administration (NASA)

We appreciate the Committee's efforts to fully fund the President's request for NASA. The Administration suggests that language concerning the $150 million in transfer authority provided by H.R. 2158 for the International Space Station be incorporated in the Senate bill. The Administration will oversee the implementation of this transfer authority to ensure that it will not have adverse effects on other priority NASA programs. The Administration supports funding for Russian Program Assurance, which can be accommodated within the President's requested level for NASA.

Office of Consumer Affairs

The Administration opposes the Committee's proposed termination of the Office of Consumer Affairs (OCA). This agency represents consumer needs and viewpoints across the Federal Government by coordinating Federal consumer policy and providing information to consumers through a help-line and educational materials. The Administration requests that the Senate restore funding for OCA and, as requested in the FY 1998 Budget, restore OCA's authority to accept and expend donated funds.