Statement of Administration Policy: H.R. 5835 - Omnibus Reconciliation Act of 1990

(House Floor)

The House version of Omnibus Reconciliation Act of 1990 produces budgetary savings that are generally consistent with the Bipartisan Budget Summit Agreement. However, the President's Senior advisors would recommend that the President veto the bill if it includes any of the following provision.

• Highway, Transit, and Aviation Trust Funds- The Administration strongly opposes the inclusion of a number of extraneous provisions for highways, transit end aviation. In particular, the House bill would attempt to rewrite the Budget Summit Agreement before it is even completed by excluding transportation spending from discretionary spending ceilings. This provision would disrupt the balance of the Agreement by removing long-standing discretionary programs from the caps on discrationary spending that were agreed to after many weeks of negotiations by the Congressional leadership, Appropriations Committees, and the Executive Branch. Instead of a deficit reduction package that produces $500 billion in savings over 3 years, the package would produce only about $470 billion if these increases to these funds provided for elsewhere in the bill were removed from the discretionary caps and the caps not reduced. In addition, the House bill would remove highways, transit and aviation trust funds from the unified Federal budget further disrupting the balance of the Budget Agreement and eroding the fiscal discipline that is required to control Federal spending. If either of these provisions were included in the version of the bill that is presented to the President for signature, the President's senior advisors would recommend that the bill be vetoed. (If the Panetta amendment on extraneous provisions were adopted, these provisions would be deleted as extraneous. The Administration supports the Panetta amendment.)
• GATT Trigger. The GATT trigger provision would cancel savings in the commodity price support programs on July 1, 1992, if a GATT agreement is not implemented by that time. This provision could potentially reduce savings in these programs by as such as $8 billion in FY 1993-1995. In addition, this provision would create perverse incentives for the U.S. agriculture community to ensure that a GATT agreement is never consummated. If this provision is included in the version of the bill that is presented to the President for signature, the President's senior advisors would recommend that the bill be vetoed.
• OSHA and MSHA fines. The House bill raises the ceilings on OSHA fines seven-fold and on most MSHA fines five-fold, establishes floors for most fines, and makes certain safety and health violations of OSHA a criminal offense. While the Administration has agreed that some increase in OSHA aad MSHA fines are acceptable, it strongly objects to including floors in the amount of fines that may be levied and to criminalizing certain OSHA violations. The reconciliation bill, with its expedited rules and limited debate, is not the proper place to enact legislation that has criminal penalties. If the OSHA provisions with criminal penalties and minimum fines were included in the version of bill presented to the President for signature, the president?s senior advisors would recommend that the bill be vetoed.

In addition, the Administration has serious concerns about several other provisions in the House bill, including tout not limited to the following:

• Civil Penalties for Certain Unfair Labor Practice violations. The bill assesses a minimum fine of $1,000 and a maximum fine of $10,000 per affected individual for employer or union violations of the National Labor Relations Act (NLRA). The fines apply to sections 8(a)(3) and 8(b)(2), which deal with discriminatory discharge, end sections 8(a)(5) and 8(b)(3), which deal with bad faith bargaining. This provision was not discussed by the Bipartisan Budget Summit negotiators end it attempts to enact legislation that has not been the subject of hearings or debate. The National Labor Relations Board, currently pursues compensatory damage suits for affected individuals successfully; it does not levy fines, such fines, especially a floor on the fines, will, generate; substantial additional litigation and is apt to delay justice. Restitution is not required while oases are contested.
• Guaranteed student Loans. The House included $1.7 billion in savings from the Guaranteed Student Loan program, $.3 billion less than the original $2. 0 billion target. the House would eliminate subsidized loans at schools with default rates of 35 percent or greater with specific exemptions for certain types of schools, while the Senate authorizing committee would eliminate all Title IV aid at high default schools (40% in 1991, 30% in 1992 and 25% in 1993), without specific exemptions. The Administration strongly prefers the Senate committee provision. If subsidized loans are to be eliminated at had schools, grants and work-study funds backed either completely or substantially by Federal dollars should also be eliminated as would be done by the Senate committee language
• EPA Fee Provisions. The Administration does not believe that the savings claimed for these provisions my both the Merchant Marine and Fisheries committee ($21 million in FY 1991, $145 million over 9 years) and the Public Works and Transportation Committee ($42 million in FY 1991, $212 Billion over 5 years) can be achieved unless language were added to these provisions that specifically authorises pesticide registration fees.
• Patent and Trademark Office (PTO) User Fees. The House Judiciary Committee authorised increased PTO user fees, as provided in the Budget Agreement, but it neglected to prevent those fees from being spent under the discretionary caps. As a consequence, no funds are returned to the Treasury and no savings accrue to offset the deficit. This situation can toe rectified by a language change which deposits the increased fees in a "Special Fund" in the Treasury.
• Budget Process Reforms. The Administration will continue to work with the House to make the Bouse language on budget process reforms more consistent with the Bipartisan Budget Summit Agreement.