S. 1061 -- DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION,
AND RELATED AGENCIES APPROPRIATIONS BILL, FY 1998
(Sponsors: Stevens (R), Alaska; Specter (R), Pennsylvania)

The Committee has developed a bill that provides requested funding for many of the Administration's priorities. We are pleased that the Committee has fully funded Bilingual and Immigrant Education, School to Work, and Education Technology Programs. The Administration is also pleased that the Committee has limited the number of appropriations riders, consistent with the terms of the Bipartisan Budget Agreement. The Senate is urged to continue this practice. As discussed below, the Administration will seek restoration of certain of the Committee's reductions.

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, the Committee bill provides nearly $1.5 billion more than the President has requested for three dozen authorities in the Department of Education, while cutting the President's request by almost $2 billion. Similar reallocations are made in other sections of the bill. We strongly 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, particularly those specified in the Bipartisan Budget Agreement, as noted below.

Unfortunately, the Administration understands that a number of controversial amendments may be offered, such as an amendment to halt the President's national testing initiative, an amendment to prohibit the use of funds in the Act for supervising the Teamster's election, an amendment to enable states to privatize the administration of public assistance programs, and another amendment to provide that welfare recipients in workfare can be paid at rates below the minimum wage. In addition, a number of these proposals, as well as certain provisions of the Committee bill, such as the lack of funding for the President's America Reads Challenge, are contrary to the Bipartisan Budget Agreement. If such policies were adopted, particularly in light of other concerns raised in this Statement of Administration Policy, the President's senior advisers would be forced to recommend that the President veto the bill.

Department of Education

The Administration appreciates the Committee's efforts to provide substantial new funding for education activities. Unfortunately, the Committee has failed to provide the $260 million necessary for the President's America Reads Challenge in the Department of Education, and the bill provides only $16 million of the $42 million requested for America Reads in the portion of the Corporation for National and Community Service budget funded by this bill. The Committee has provided advance appropriations for America Reads to the Department of Education for FY 1999, pending new authorization, which would produce a full year's delay in getting needed reading assistance to millions of children. The Bipartisan Budget Agreement specifically calls for funding a literacy program, "consistent with the goals and concepts of the President's America Reads program" at the levels proposed in the President's FY 1998 Budget. America Reads is one of the Administration's highest funding priorities. The Administration believes that full FY 1998 funding for this initiative should be restored to both the Department of Education and the Corporation for National and Community Service activities funded in this bill and in the VA/HUD Appropriations bill.

The Administration is working closely with the authorizing committees to develop legislation effective for FY 1998. There is ample time to enact legislation, as needed, by April 1 for a program that would begin on July 1, in time for summer activities and the 1998-1999 school year. The Administration urges the Congress to do so. However, to ensure that funding is provided in a manner consistent with the Bipartisan Budget Agreement, the Administration strongly urges the Congress to include in this Act a provision to make the funds available on April 1 under existing authorities, in the event that final action on the authorization bill is not completed in a timely manner.

The Administration will strongly oppose potential amendments that would bring a halt to the President's national testing initiative. The national tests proposed by the President are critical because they will, for the first time, provide students, parents, and teachers the opportunity to measure how well students are performing in comparison to other students nationally and internationally and, as a result, they will help hold schools accountable for the performance of all students. The Department of Education has the authority to develop these tests under the Fund for the Improvement of Education (FIE) program, which provides the Secretary with the authority to support nationally significant programs and projects to improve the quality of education. We support the Committee report language requiring that the Department of Education contract with the National Academy of Science to conduct an evaluation of the testing initiative. In addition, we support legislation to place overall responsibility for the testing initiative with the independent, bipartisan National Assessment Government Board.

The Bipartisan Budget Agreement specifies funding at the levels proposed in the President's budget for Pell grants, which supports both a $3,000 maximum award and expanded eligibility for independent students. The Committee bill cuts the Pell request by over $725 million from the President's request, and thus does not fund the Administration's proposed independent student policy. The Administration proposes that the appropriation act include one year of authority while the reauthorization process is pending. This authorization is no different from the Committee's annual procedure of authorizing the maximum Pell grant award. In accordance with the terms of the Bipartisan Budget Agreement, we urge the Senate to fully fund Pell grants and to authorize both the maximum award and the independent student change.

While the Committee has exceeded the amount specified in the Balanced Budget Agreement for Education Reform, it has achieved this by adding technology funding currently within another account, rather than funding the full request for current Education Reform account programs. Within the total, Goals 2000 State and local grants are funded at only $500 million, $105 million below the request. Goals 2000 funds provide essential support to every State's education improvement strategy. We strongly urge the Senate to restore full funding for Goals 2000.

The Administration urges the Senate to fund Safe and Drug-Free Schools and Communities (SDFSC) at the President's FY98 request of $620 million, $64 million above the Senate mark. SDFSC, the largest Federal school-based drug and violence prevention program, serves more than 40 million students in over 97 percent of the nation's school districts and is an essential component of a comprehensive effort to reduce teen drug use.

A number of other high priority Education programs are funded significantly below the President's request. These include Adult Education, College Work-Study, Title I Targeted grants, Eisenhower Professional Development, Charter Schools, 21st Century Learning Centers, and educational research, statistics, and assessment. We urge the Senate to fully fund these activities at the levels requested in the President's FY 1998 Budget.

Department of Health and Human Services

The Administration is deeply concerned that the Committee has failed to provide $21 million for the Administration's new Adoption Initiative. The goal of this program is to double the number of children adopted or permanently placed outside of child welfare systems by FY 2002. The additional investment is small compared to the potential rewards of placing children in supportive and loving homes. The Administration strongly urges the Senate to fully fund this urgently-needed program at the President's requested level.

The Administration is pleased that the Committee has provided the requested $40 million increase over FY 1997 for Ryan White AIDS Treatment Grants, and an additional $41 million that could be used by grantees for the purchase of AIDS drugs. The Administration is also pleased to see that the Committee has allocated these funds roughly as requested in the President's budget, with an additional $38 million in Title II grants to States which spend a large proportion of the Ryan White grants on primary care and drugs for people with HIV and AIDS.

The Administration is concerned that the Committee bill does not appropriate a specific amount for AIDS research through a single appropriation, as requested in the President's budget for the National Institutes of Health's (NIH's) Office of AIDS Research. The single appropriation helps NIH target research funds effectively, minimizing duplication and inefficiencies across the 21 institutes and centers that carry out HIV/AIDS research.

The Committee has funded the Health Care Financing Administration (HCFA) program management activities at $1,719 million, $55 million below the President's request. The Committee's funding level could hinder HCFA's efforts to comply with year 2000 systems requirements and perform the CFO audit. In addition, the Committee's action could make it difficult to consolidate HCFA's current contractor systems, which needs to occur prior to, and independent of, final resolution of the Medicare Transaction System. The requested funds in the President's 1998 budget request are necessary to implement the Medicare and Medicaid provisions of the Balanced Budget Agreement, including the savings provisions and new program authorities, such as Children's Health and the Medical Savings Accounts (MSAs). To the extent possible, we urge the Senate to fund HCFA program management at the requested level.

The Committee has rescinded $21 million in mandatory research funds. The President's request assumes $18 million in discretionary and $21 million in mandatory welfare research funds, for a total of $39 million. In order to gauge the effects of welfare reform, research is needed now more than ever. The Administration urges the Senate to drop the rescission and to fund welfare research at the President's requested level. To ensure that welfare reform is successfully implemented across the nation, it is vital that we understand what has been successful and what has not been successful in the various states.

The Administration supports efforts to encourage minors to discuss their health care needs with their families. However, it would oppose a potential amendment on the Senate floor requiring parental consent for minors to receive reproductive health services in Title X Family Planning clinics. Mandating parental consent could discourage sexually active minors from seeking health care and reproductive counseling services and thus lead to more unwarranted pregnancies, more abortions and more sexually transmitted diseases, including HIV, among our nation's youth.

Department of Labor

The Bipartisan Budget Agreement specifies funding at the levels proposed in the President's budget for Training and Employment Services (TES), including Job Corps. The Committee mark provides the Administration's request for low-income youth training programs, dislocated workers, and the Job Corps. However, in order to be consistent with the Agreement, we urge the Senate to provide an additional $285 million to fully fund the request for TES programs in FY 1998. The Committee has provided $250 million in FY 1999 for the Youth Opportunity Area proposal, subject to enactment of authorizing legislation by April 1, 1998. This program is an essential component of the Administration's Empowerment Zones/Enterprise Communities initiative. It may be carried out under existing legislation, and a separate authorization is not necessary. The Senate is urged to provide resources for this initiative in FY 1998, without the restriction provided by the Committee.

The Administration appreciates the Committee's allocation of $150 million to help finance the year 2000 conversion of State Unemployment Insurance (UI) systems. However, that amount is $50 million below the level needed to ensure that the year 2000 costs are met. In addition, the Committee has failed to provide $89 million for spending on UI "integrity" initiatives (e.g., increased eligibility reviews, tax audits). This spending is explicitly assumed in the Balanced Budget Act of 1997, and would, over five years, achieve $763 million in mandatory savings assumed in the Act. The Senate is urged to provide this increase and the increase for year 2000 conversion costs.

On July 17, 1997, the President sent to Congress a budget amendment for $6.2 million for the Labor Department to administer the $3 billion Welfare-to-Work program. This program is included in the Balanced Budget Act of 1997, effective October 1, 1997. We urge the Senate to add these funds to this appropriation bill so that the administrative resources needed to move long-term welfare recipients off welfare and into lasting, unsubsidized employment are available on a timely basis.

The Committee has provided $990 million, an increase of $41 million over the FY 1997 enacted level, for the Department of Labor workplace protection programs, about 60 percent of the proposed increase. Without the requested increases, the Department would not be able to carry out a balanced program of targeted enforcement, with expanded partnerships and compliance assistance in the regulated community. Nor would the Department be able to streamline its operations to provide assistance to small businesses in complying with various workplace laws and related executive orders, such as the systems and technical assistance improvements requested for the Office of Federal Contract Compliance. In addition, the Senate is urged to provide the requested level for the Bureau of Labor Statistics to ensure the continued accuracy and reliability of all of the Bureau's statistical programs. Funding for the independent National Labor Relations Board has been frozen, a cut of $11 million below the request. The Administration urges the Senate to enact the Administration's request for these programs.

Social Security Administration

The Committee has provided $245 million for additional Continuing Disability Review (CDR) funding and SSI reforms implementation, $45 million less than the President's request. The Balanced Budget Act of 1997 contains a provision that would provide authority for a $290 million upward cap adjustment ($45 million more than current law) to the non-defense discretionary spending caps for funding provided by the Committee for additional CDRs. This is consistent with the President's request. Failure to provide the additional funds would mean that some 15 percent fewer individuals would have their status reviewed in FY 1998, potentially costing hundreds of millions of dollars in benefits to individuals who would have been found no longer eligible. We urge the Senate to provide the additional $45 million.

The Committee has reduced funding for the Office of the Inspector General (IG) by $7 million from the President's request of $44 million and for research and demonstration projects by $9.7 million from the President's request of $16.7 million. The reduction to the IG request would hamper the IG's ability to perform audits and investigations needed to prevent fraud, waste, and abuse and to assure program integrity. The reduction in research and demonstration funding would reduce SSA's ability to understand the reasons for growth in the disability programs and implement initiatives intended to improve SSA's record in returning disabled beneficiaries to work. The Administration urges the Senate to restore funding to the maximum extent possible in these two key areas.

Additional Administration concerns with the Committee bill are contained in the attachment.

Attachment