Office of Management and Budget Print this document

October 6, 2000


(Sponsors: Stevens (R), Alaska; Gregg (R), New Hampshire)

This Statement of Administration Policy provides the Administration's views on the Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Bill, FY 2001, as reported by the Senate Committee. Your consideration of the Administration's views would be appreciated.

The President's FY 2001 Budget is based on a balanced approach that maintains fiscal discipline, eliminates the national debt, extends the solvency of Social Security and Medicare, provides for an appropriately sized tax cut, establishes a new voluntary Medicare prescription drug benefit in the context of broader reforms, expands health care coverage to more families, and funds critical investments for our future. An essential element of this approach is ensuring adequate funding for discretionary programs. To this end, the President has proposed discretionary spending limits at levels that we believe are necessary to serve the American people.

Unfortunately, the FY 2001 congressional budget resolution provides inadequate resources for discretionary investments. We need realistic levels of funding for critical government functions that the American people expect their government to perform well, including education, national security (including critical infrastructure protection and counterterrorism initiatives), law enforcement, environmental protection, preservation of our global leadership, air safety, food safety, economic assistance for the less fortunate, research and technology, and the administration of Social Security and Medicare. Based on the inadequate budget resolution, this bill fails to address critical needs of the American people.

The Senate Committee-reported bill severely underfunds critical programs and includes highly objectionable language provisions. For example, funding that needs to be restored includes the following: tobacco litigation support, funding to support the agreement between the President and the Speaker regarding New Markets/Empowerment Zones and Renewal Communities, U.S. contributions to international peacekeeping, community oriented policing services, gun enforcement programs, civil rights and legal services, counterterrorism and critical infrastructure programs, construction to provide greater security for U.S. embassies, anti-drug abuse programs, programs to assist in the reentry of offenders, law enforcement for Native Americans, programs to close the "digital divide," public television's digital transition, environmental programs to enhance and restore fisheries and coastal areas, improved climate information, trade compliance and promotion efforts, and economic development funding for disadvantaged communities. Consequently, the President's senior advisers would recommend that he veto the bill if it were presented to him in its current form.

The Administration understands that an amendment will be considered to provide $22 million to the Department of Justice to support the costs of ongoing tobacco litigation. We strongly support this funding provision. The Department of Justice lawsuit alleges that the tobacco companies have conducted their business for decades in a false and deceptive manner, without regard to the truth, the law, or the health of the American public. This matter is now being considered by the courts, which will determine whether the tobacco companies should bear responsibility for the staggering costs of treating tobacco-related illnesses. The Administration urges the Congress not to undermine the judicial process by underfunding Justice's efforts.

In addition, the Administration also strongly supports efforts by Members of Congress to address injustices in the immigration system by changing the registry date and amending the Nicaraguan Adjustment and Central American Relief Act (NACARA), and reinstating section 245(i). This amendment would help individuals and their families who have been living for many years in the United States and have developed strong ties to their communities by giving them the opportunity they deserve to normalize their immigration status. We urge the Senate to accept this amendment. The President will insist that these provisions be included before the bill is signed into law. While we support the Committee's decision to reinstate section 245(i), we object to using the revenues for the purposes recommended by the Committee and urge that the funds be used instead to reduce the backlog of naturalization applications and to support detention funding.

The attachment provides a discussion of the Administration's specific concerns with the Senate Committee bill.




(As Reported by the Senate Committee)

Department of Justice

Department of Commerce

The Administration appreciates that the Senate Committee-reported bill is a significant improvement over the House-passed version. Nevertheless, we believe that certain key Commerce programs are still significantly underfunded:

Department of State and the Broadcasting Board of Governors

Legal Services Corporation

While the Administration appreciates that the Committee has approved funding at a level above the House, the bill is still $40 million below the President's request and $4 million below the FY 2000 enacted level. This level of funding would undermine the commitment of the Federal Government that all persons have access to the judicial system, regardless of income. We strongly urge the Senate to fund the LSC at the requested level to help ensure equal access to the courts for all.

Equal Employment Opportunity Commission

The Senate Committee-reported bill is preferable to the House-passed level, in that it provides sufficient funds to allow the Equal Employment Opportunity Commission (EEOC) to maintain current service levels. The Committee level, however, is still inadequate in that it eliminates over $29 million in funding needed to ensure fair, efficient, and effective handling of employment discrimination charges. At this funding level, the EEOC would be unable to provide certain mediation and prevention opportunities for employers and employees, make needed information technology investments, and provide training and outreach as part of the President's Equal Pay Initiative. The Administration urges the Senate to support these important activities.

Commission on Civil Rights

The Senate Committee's recommendation to freeze the Commission's funding at the FY 2000 level of $9 million is $2 million below the President's request and would impair the Commission's ability to advance civil rights for all Americans. The Administration urges the Senate to restore funding to this critical agency.

Small Business Administration

The Administration is deeply concerned that the Senate bill provides insufficient funding for critical Small Business Administration programs, especially the following:

Federal Communications Commission

The Administration strongly opposes the Senate provision that would prevent the FCC from granting or transferring a license or authorization to any corporation of which more than 25-percent is directly or indirectly owned by a foreign government or its representatives. The prospect of a foreign government-owned company investing in a U.S. telecommunications carrier could raise legitimate concerns. However, existing law already requires that the FCC, the Executive Branch, and the multi-agency Committee on Foreign Investment in the United States ensure that the proposed foreign investment would not harm the public interest, including competition in our market and national security or law enforcement capabilities. The United States has benefitted greatly from the widespread opening of foreign telecom markets in recent years. If the U.S. institutes this provision, many countries may be tempted to restrict existing opportunities offered to U.S. carriers and resist any further opening. This could affect billions of dollars in current U.S. investment abroad, and even more future investment. The Administration supports the objective of robust competition for global markets. We believe this can be achieved within existing legislative, regulatory and international mechanisms, without risking possible disruption of the international telecommunications market. The Senate provision is unnecessary and potentially harmful; it should be dropped.

We understand that amendments may be offered which affect current FCC authorities. For example, we understand there may be an amendment that would hinder FCC from approving low power broadcasting by community groups. We do not believe such amendments should be added to this bill.

Securities and Exchange Commission

We understand that an amendment may be offered that would substantially reduce the registration and transaction fees collected by the Securities and Exchange Commission (SEC). The Administration would have deep concerns about such an amendment. In 1996, Congress and the President collaborated on legislation -- the National Securities Markets Improvement Act (NSMIA) -- that established a calendar for reducing SEC fee rates. The Administration continues to support the declining fee rates agreed to in the NSMIA legislation. Proposals to reduce these fees further should be considered only in the context of an overall fiscal policy that balances the importance of debt reduction and competing priorities such as strengthening Social Security and Medicare, providing tax relief to middle-income families, and other critical initiatives called for in the President's FY 2001 Budget.

In addition, the Administration would strongly oppose any amendment that would prevent the SEC from moving forward with its proposal relating to its requirements for auditor independence, which have not been updated in 18 years. The SEC is currently receiving public comments on the proposed regulation and has held several public hearings to ensure concerns of all interested parties are considered. An amendment that prevents the SEC, a well-respected independent regulatory agency, from completing its legal regulatory process could undermine its ability to ensure confidence in our Nation's financial markets.

General Provisions

The Administration is very concerned that Section 626 -- called Amy Boyer's law -- purports to protect individual privacy by restricting the public display of Social Security numbers, but fails to do so effectively. The exceptions in the section narrow its impact substantially. For example, the prohibition does not apply to information obtained from public records, which are the source of Social Security numbers for many information brokers. Businesses could thus comb through public records and display and sell the information they glean without any restrictions whatsoever. In addition, Section 626 contains a broad provision preempting state laws, which could actually result in the American people losing significant privacy protections.

The Administration has offered an alternative proposal, which has been introduced by Senator Feinstein as S. 2699, that would prohibit the sale and purchase of social security numbers. We believe that this proposal would more effectively preserve legitimate business practices while also helping to prevent identity theft and the sort of heinous crime of which Amy Boyer was a victim.

Metropolitan Statistical Areas

The Administration would strongly oppose an amendment that may be offered that would prohibit implementation of revised standards for metropolitan statistical areas. The metropolitan area standards provide nationally consistent definitions for collecting, tabulating, and publishing Federal statistics for a set of geographic areas. Since 1950, when the metropolitan areas were first used in census reports, OMB has reviewed the criteria for designating metropolitan areas and, if warranted, revised them in the years preceding their application to new decennial census data. Periodic review is necessary to ensure that the standards stay abreast of changes in population distribution and activity patterns. OMB is currently conducting the fifth such review. This has been a multi-year process during which OMB has actively sought public involvement through conferences, outreach to interested organizations, and three Federal Register Notices.

Other Issues

The Administration understands that items contained in Division B of the FY 2001 Agriculture bill may be considered by the appropriate Subcommittee of jurisdiction. The Administration has serious concerns about pending provisions in the bill affecting Commerce and Justice programs and a pending supplemental request under the Department of State heading. Therefore, the Administration provides the following views on those items relevant to this bill:

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