Statement of Administration Policy: Conference Report to Accompany H.R. 2072, Dire Emergency Supplemental Appropriations and Transfers, Urgent Supplementals, and Correcting Enrollment Errors Bill, 1989

(House)
(Sponsors: Whitten (D), Mississippi; and Byrd (D), West Virginia)

The FY 1989 "Dire Emergency" Supplemental Appropriations Bill (H.R. 2072) as reported by the conferees includes a number of unacceptable provisions. These are discussed below.

An acceptable "dire emergency" supplemental must be enacted soon in order to ensure that our Nation's veterans receive necessary medical care at the earliest possible opportunity. With the Senate expected to recess on June 23rd, it is essential that an acceptable bill be completed this week.

The Administration supports deletions of the three items reported in true disagreement.

In particular, while drug abuse is clearly a major national problem, the House provision of $822 million in drug funding is not needed at this time for the following reasons: a large drug supplemental increase was enacted only half a year ago — much of which is still unobligated; an assessment of additional needs should await the Congressionally-mandated drug strategy, which is due on September 5th; and a major increase in drug funding has been requested for FY 1990. The Senate considered this issue three times, it was soundly defeated each time. In addition, many Members of both parties in both Houses have supported deletion of unnecessary funding in a series of tough but fiscally responsible votes. Those difficult votes deserve respect — as does the need for a restoration of fiscal discipline. The unnecessary drug funding must be dropped if the President is to be presented with an acceptable bill.

The Administration also opposes a number of items reported in technical disagreement. In particular, the Administration opposes the shift of the first pay date in FY 1990 into FY 1989 for the Department of Veterans Affairs, the Environmental Protection Agency, and the National Aeronautics and Space Administration. This shift would result in the addition of $354 million in FY 1989 outlays. The proposed shift would not only increase the deficit; it would also be without precedent for these agencies and without programmatic justification.

The Administration strongly opposes the provision that would direct that the proceeds of Section 202 Department of Housing and Urban Development loan sales be treated as offsets for domestic discretionary spending. This requirement violates the Bipartisan Budget Agreement, which established separate targets for domestic discretionary spending and for asset sales. Scoring asset sales as a domestic discretionary offset also breaches the Congressional Budget Resolution and the Gramm-Rudman-Hollings law, both of which prohibit the use of asset sales as a means of deficit reduction. All asset sale provisions should be counted against the asset sale target, not as offsets to domestic discretionary spending.

With the deletion of these provisions, the balance of the Conference Report would be acceptable to the Administration. It would represent a reduction of over $1.8 billion in FY 1989 budget authority from earlier versions of the bill. The remaining discretionary spending that is not offset would be primarily for programs that have critical FY 1989 funding needs, such as veterans medical care, emergency refugee assistance, U.N. Peacekeeping activities, and drought assistance. The total adverse deficit effect from such additional discretionary funding would be slightly below the $715 million established by the Administration as an outer limit at the time of House floor action on this bill in May.

Further delays in enactment of an acceptable supplemental would have increasingly undesirable impacts on the intended beneficiaries. For example:

• Refugee admissions of Soviet Jews and Evangelical Christians would be suspended in mid-July.
• 345,000 outpatient visits by veterans would not be provided by the VA.
• 2,000 veterans in need of nursing care would find that VA care is not available.
• 15,000 veterans needing hospital care would not be able to be cared for by the VA.

If the objectionable provisions in the bill relating to drug funding, moving the pay dates for the Veterans' Administration, EPA and NASA, and the use of HUD loan sales in a manner contrary to the Bipartisan Budget Agreement, are not deleted, the Director of the Office of Management and Budget will recommend that the President veto the bill.

However, if the unacceptable provisions described above are dropped, the Director will recommend that the President sign the bill.