H.R. 4461 - AGRICULTURE, RURAL DEVELOPMENT,
FOOD AND DRUG ADMINISTRATION, AND
RELATED AGENCIES APPROPRIATIONS BILL, FY 2001
(Sponsor: Young (R) FL, Skeen (R) New Mexico)

This Statement of Administration Policy provides the Administration's views on the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, FY 2001, as reported by the House Appropriations Committee. As the House considers its version of the bill, 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, 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.

Consequently, given the severe underfunding of critical programs and highly objectionable language provisions in the bill, the President's senior advisers would recommend that he veto the bill if it were presented to him in its current form.

Kyoto Protocol

The Committee bill's climate change language, together with the accompanying report language, is unacceptable and may well be unconstitutional. The Administration will not accept any appropriations language that limits activities under current law to reduce greenhouse gasses, or that restricts the President's constitutional authority to negotiate international agreements. As we have stated many times, the Administration has not, and will not, attempt to implement the Kyoto Protocol prior to ratification. Consequently, the Committee's language must be deleted since it is unwarranted, disruptive, and can be interpreted as unconstitutionally preventing the Department of Agriculture from assisting the President in carrying out his constitutional authority to conduct international negotiations. We note that this provision is cast in the language of permanent law.

Food Safety

While the Administration appreciates the Committee's support for the Department of Health and Human Services' Food and Drug Administration (FDA) portion of the Food Safety Initiative, we strongly urge the House to fully fund the Administration's request for the Initiative and base funding. The FDA increase will fund annual inspections of high-risk domestic foods, such as unpasteurized juice, and expand the number of inspections of imported and ready-to-eat foods. However, only $6 million of the Department of Agriculture's (USDA's) requested $28 million increase is included in the Committee bill. This cut would impair important activities, such as developing effective methods of handling and treating agricultural products to minimize microbial contamination and the implementation of the Egg Safety Action Plan, as endorsed by the President's Council on Food Safety. In addition, the Administration strongly objects to the provision of the Committee bill that would impede our efforts to reduce needless deaths and illness from eggs contaminated with salmonella. The Administration strongly urges the House to delete this provision and provide full funding for the Initiative.

Moreover, to maintain the food safety gains we have achieved to date, also requires full funding of the base budget for food safety, and the Administration is concerned about the Committee's bill in this regard. In particular, the Committee's funding for the Food Safety and Inspection Service (FSIS) is $14 million below the budget request of $688 million. This proposed funding level is inadequate to cover necessary levels of import/export inspection and would reduce funding for state food safety programs. The bill, in short, does not provide sufficient resources to fund activities critical to the safety of the Nation's meat and poultry supply. In addition, FSIS resources would be further strained by section 746, which would require mandatory inspection of ratites, such as ostriches and emus, rather than the current voluntary inspection-for-fee process for these animals. In order to fully fund FSIS food safety activities, and to release resources needed for priority programs as discussed elsewhere in this SAP, we urge the Congress to enact the Administration's proposed meat and poultry inspection user fees, which should cost consumers less than one cent per pound of inspected meat.

Plant Pest and Diseases

The Administration places a high priority on fighting plant pests and diseases, especially when they are invasive species that may be eradicated before becoming an established threat. To combat sudden outbreaks of invasive species, the Administration has used emergency transfers through the Commodity Credit Corporation (CCC) at a level that is much higher than the two previous Administrations combined. The Administration has been developing guidelines that will help direct future responses to these threats. To address ongoing plant pest and disease outbreaks, the Administration has proposed substantial appropriations in the FY 2001 Budget. The Committee bill has not provided these appropriations, therefore requiring a greater increase in emergency spending from CCC for activities that can no longer be considered unforeseen.

In cases where an extraordinary emergency exists, and there is still an opportunity to eradicate an invasive plant or disease within a single crop year, the Administration supports the use of the CCC as a means of delivering immediate assistance. Where eradication efforts extend over several seasons and incentives already exist for Federal, State, and industry cooperation, costs are predictable and should be incorporated into the discretionary appropriations process. Such long-term assistance should be carefully designed to provide an effective response without upsetting the markets for production and distribution of these products, and to maintain equity with assistance provided for crop losses in other circumstances. We look forward to working with the Congress to make certain that policies meet this test.

Tobacco

While the Supreme Court concluded that FDA does not have the authority under current law to continue its efforts to reduce underage use of tobacco products, the Court did state that tobacco is, "perhaps the single most significant threat to public health in the United States." The President has called on the Congress to enact new legislation to provide FDA the authority to protect our Nation's children. The Administration strongly encourages the House to restore the $39 million in the President's request to support this legislation. This would make it clear to the American people that Congress plans to protect our Nation's children. The Administration wants to work with the House to restore the FY 2000 funds rescinded by the Committee and provide FDA the capacity to reduce medical errors, improve oversight of gene therapy clinical trials, assure the safety of blood and tissue products, and provide critical infrastructure improvements.

International Programs and Trade Sanctions

The President believes that commercial exports of food and other human necessities should not be used as a tool of foreign policy except under the most compelling circumstances. On April 28, 1999, the Administration announced that the United States would exempt commercial sales of agricultural commodities and products for humanitarian purposes, as well as medicine and medicinal equipment, from future unilateral Executive Branch economic sanctions regimes ? unless the President determines our national interest requires otherwise. The President has extended this policy to existing sanctions on a case-by-case basis. The Administration would support codification of our current policy in legislation and views favorably certain legislative proposals in this spirit. However, the Administration strongly objects to the specific provisions of Title VIII in its current form of the bill because they would seriously limit the President's ability to implement foreign policy and would have grave implications for our non-proliferation, counter-terrorism, and counter-narcotics initiatives.

The FY 2001 Committee mark for P.L. 480 Title II at $800 million, $37 million below the requested level of $837 million, would seriously impair the ability of the U.S. Agency for International Development to continue the expansion of Title II non-emergency activities while maintaining adequate resources to respond to food emergencies around the world. The expansion of Title II activities continues to focus on the highly food insecure populations in sub-Saharan Africa and Asia but also includes new initiatives related to HIV/AIDS. In addition, if farm commodity prices recover to normal levels, the availability of surplus Section 416(b) resources in FY 2001 would not approach the levels available in FYs 1999 and 2000. As a result, the Title II request level is likely to be necessary to ensure the ability of the United States to respond to worldwide food aid requirements in FY 2001.

Conservation and Environmental Programs

The Administration strongly opposes a number of reductions to important conservation and environmental programs contained in the Committee bill, which would reduce benefits to all Americans by cutting or eliminating key activities proposed to be carried out through the Natural Resources Conservation Service (NRCS). The bill and report include highly objectionable language prohibiting NRCS funds from being used for climate change, biomass, urban resource partnerships, most of the American Heritage Rivers (AHR) initiative, or the Community Federal Information Partnership. These actions would harm local community development and environmental restoration efforts. The AHR is an interagency initiative that applies coordinated Federal resources to benefit all river communities, helps communities evaluate their needs and identify funding sources, and cuts red tape so they can promptly implement priority practices. In addition, NRCS soil databases provide the foundation for the Nation's vital soil carbon sequestration efforts. The Committee's action would severely limit the ability of all USDA agencies that rely on NRCS data to advance valuable research on the effects of climate change on agriculture and potential ways for farmers to adapt to climate change.

These restrictions, coupled with the $70 million reduction to the request for NRCS conservation operations salaries and expenses, would result in a significant step backwards in efforts to improve land stewardship capabilities of farmers and ranchers. Furthermore, the Administration strongly objects to the Committee's reduction in authorized mandatory funding for the Environmental Quality Incentives Program (EQIP) to $174 million. This represents a cut of $26 million from current law and $151 million from the President's request. This program is vitally important in assisting farmers and ranchers in improving their agricultural operations while benefitting all Americans through cleaner water and air, and it is an important component of the Clean Water Action Plan. Coupled with the Committee's funding only $9 million of the requested $48 million increase in discretionary funds for the Plan, this reduction would severely impede progress on cleaning up our Nation's waters. We urge the House to eliminate the EQIP reduction and fully fund the Administration's request for the Clean Water Action Plan.

The Administration is pleased that the Committee has adopted the President's proposal to provide subsidized loans to State and local governments to rehabilitate dams built with NRCS assistance. These loans will safeguard the Federal investment, as well as protect local citizens and property from flooding.

The Administration objects to section 742, which would prohibit the use of funds for floodplain determinations carried out as part of an application for a Farm Service Agency aquaculture loan. For Federally-financed aquaculture projects, floodplain determinations are a critical part of the statutorily-required environmental impact statement process. Prohibiting USDA funds from being used for this activity will result in environmental impact statements that do not comply with the National Environmental Policy Act or USDA loan procedures and would likely result in loan applications that could not be approved.

Crop Insurance and Farm Safety Net Assistance

The Administration is concerned that the Congress has not approved comprehensive farm safety net legislation, which could provide assistance to a wide range of crop, dairy, and livestock producers to expand the amount of acres that could be enrolled in the Conservation Reserve Program and the Wetlands Reserve Program, as the Administration proposed.

The Administration objects to the amendment added in Committee that would significantly reduce administrative reimbursement rates to private crop insurance companies who deliver Federal crop insurance. The provision would cut nearly $100 million, or 20 percent, from the current funding for delivery of the program, weakening the crop insurance program when it is becoming a more effective and widely-used tool to improve risk management in the agricultural sector. Smaller companies, in particular, could find it difficult to maintain high-quality customer service at the reduced level of reimbursement, which could lead to fewer companies and less competition in the sector. Such a reaction could, in turn, make the crop insurance program less attractive to farmers, which is inconsistent with the actions Congress is taking to enact crop insurance reform legislation. We urge the House to delete this provision.

Food Stamp Program Employment and Training (E&T)

The Administration strongly objects to the use of Food Stamp Employment and Training (E&T) funds as a means to pay for non-Food Stamp activities. E&T funds were increased under the Balanced Budget Act of 1997 as part of a bipartisan agreement to create important employment and training opportunities for able-bodied adults without dependents who are at risk of losing food stamps.

Outreach for Socially-Disadvantaged Farmers

The Committee bill provides $3 million for the Outreach for Socially-Disadvantaged Farmers program, $7 million less than the request. In FY 2000, the Administration used mandatory spending provided through the Fund for Rural America to increase the Outreach program level by $5.2 million, to an enacted level of over $8 million. However, the Committee bill would eliminate all resources available in FY 2001 for the Fund for Rural America, thereby blocking the possibility of augmenting program resources again. The bill would, therefore, cut the program by more than half from the FY 2000 enacted level. This reduction would severely isrupt the important services being provided to minority farmers.

This program has aided over 9,000 borrowers, improving USDA default rates in areas where the program operates. It has also assisted over 100,000 families and has proven to be effective in mitigating the decline in the number of minority farmers by increasing their participation in agricultural programs, assisting them in marketing and production, and improving the profitability of their farming operations. Reducing program resources at this critical juncture, when USDA has begun improving its civil rights record, would stymie progress USDA is making to further equal opportunity for minority farmers, and we urge the Committee to restore funding to the requested level.

Agricultural Research and Education Programs

The Committee bill would severely reduce high-priority agricultural research that is needed to improve farm productivity and benefit all Americans. Funding for competitive grants through the National Research Initiative would be cut by $22 million, or 19 percent, from the FY 2000 enacted level and $53 million from the request. Only $16 million of the $98 million in increases for priority research through the Agricultural Research Service would be funded, while instead, the bill would fund hundreds of unrequested, lower-priority research projects. Diversion of funds to these unrequested projects is particularly objectionable in light of the extremely limited increase in funding for research and higher education programs targeted to Native Americans and minority institutions.

The Administration objects to the bill's underfunding of programs to advance the use of bioproducts made from agricultural commodities. The bill includes only $4 million of the $35 million increase requested by the Administration for funding under this bill. Expansion of bioproducts, including biofuels, is an essential part of improving the farm safety net and diversifying the rural economy, and we urge increased funding for these purposes.

Mandatory Research and Rural Development Funds

The Administration strongly objects to Committee language that would block the use of all funding to implement the Fund for Rural America and the Initiative for Future Agriculture and Food Systems, representing a reduction of $180 million from the requested level. These programs fund projects benefitting and supported by all Americans, including food safety and human nutrition, agricultural genomics, including biotechnology risk assessment research, improvements in farm efficiency, and economic development assistance vital to diversifying the rural economy and improving rural Americans' quality of life. We urge the House to set aside jurisdictional concerns and adopt the Administration's request for these programs.

Rural Development Programs

The Committee bill would reduce rural single-family housing direct loans by over $200 million from the request, which would prevent over 4,500 very-low to low-income rural families from having the opportunity to live in decent, safe, affordable housing. In addition, funding for the Intermediary Relending Program would be reduced by $26 million, or 41 percent, from the requested level, resulting in an estimated 20,000 fewer jobs created or preserved. We urge the House to restore funding for these programs to the President's request.

The Administration strongly objects to the $47 million, or eight percent, reduction in requested funds for Rural Development staff. Given the need to absorb automatic pay increases, cuts of this magnitude would cause a reduction-in-force of an estimated 300 employees, which would significantly impair the agency's mandate to provide "supervised" credit, reducing the speed and thoroughness of customer service for the agency's growing loan portfolio. Without adequate service, many borrowers, such as very-low income families with USDA single-family housing loans, may not receive the advice and service they need to remain current on their loans and remain in their homes, and taxpayer losses on the portfolio may grow. Adequate staff funding should be restored by the House.

Special Supplemental Nutrition Program for Women, Infants, and Children

The Administration is concerned that the small increase provided by the Committee would not allow the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) to provide supplemental food packages, nutrition education, and health care referrals to all the women, infants, and children who are eligible to participate in the program. While the Administration is pleased that the Committee has provided requested funds for the School Breakfast Demonstration, Commodity Assistance Program, and Food Donations Program, the mechanism that would require these funds to be transferred from WIC carryover funds would impede effective program operations.

Common Computing Environment

The Committee bill provides only $25 million of the $75 million requested to improve USDA's field office information systems through the Common Computing Environment (CCE). Given the bill's low level of investment, USDA would not be able to reduce the Federal paperwork burden on its farmer and other county-office customers until well into the future at best, or achieve the "e-commerce" initiatives envisioned by the Congress in the "Freedom to E-File" bill. As the Committee Report notes, the CCE will "replace the current, aging information systems with a modern CCE that optimizes information sharing, customer service, and staff efficiencies." These reforms are long-overdue, and we urge the House to increase funding for the CCE. Continuing to underfund the modernization initiative would mean Congress would have to provide significant investments in USDA's outdated information systems just to maintain existing services, when additional funds would be more productively spent on implementing an improved system.

Language/Other Issues

• Concentration in the Livestock Sector. The Administration has made a strong commitment to address the problems of concentration and anti-competitive behavior in the livestock sector, and objects to the insufficient funding in the bill for these purposes. The House bill provides only $1 million of the $3.7 million increase requested to address this problem through the Grain Inspection, Packers, and Stockyards Administration. The bill's funding level would not allow USDA to develop the modeling and analytic capability necessary to identify anti-competitive actions by livestock companies, ensure that time-sensitive, priority cases are investigated promptly, and establish the swine contract library required by last year's mandatory price reporting legislation. These activities are crucial to better ensuring that family farmers have a level playing field in which to market their livestock.

   

• Funding for USDA Salaries and Expense Accounts. The Committee has straightlined funding at the FY 2000 level for a number of important organizations such as the Foreign Agricultural Service, the Office of the Inspector General, and the Office of the General Counsel. Without funding for unavoidable expenses such as pay cost increases, as well as the initiatives recommended in the President's budget, these organizations cannot effectively carry out their essential functions for the Department.

   

• Community Food Security Program. The Administration strongly objects to the Committee provision that prohibits the use of funds to carry out a Community Food Security program or any similar activity without the prior approval of the Committees on Appropriations. This broad provision would hamper the modest ongoing efforts to provide assistance to local governments and organizations to address food insecurity faced by low-income families.

   

• Partnership for Change - Colonias Initiative. The Administration is disappointed that the Committee has not provided funding for an intergovernmental partnership lead by the Food and Nutrition Service that would increase use of already authorized assistance programs, such as nutrition and housing assistance, by impoverished citizens of border areas known as Colonias. Furthermore, the Administration objects to language prohibiting the availability of funds for a Colonias initiative without prior approval by the Committee.

   

• USDA Headquarters Modernization. The Administration strongly objects to the lack of funding for the renovation now in progress of USDA's downtown D.C. headquarters building. A ten-year renovation plan was approved by Congress in 1995 for the sixty-year-old building, to address health and safety problems. The building will house 6,800 employees, and USDA is solely responsible for its repair and maintenance. Since the renovation project was approved by Congress in 1995, only 15 percent of the total planned cost has been appropriated, and no funding was provided in FY 2000. The Administration strongly urges the House to fund the needed renovation, as continued delays will leave the renovation project only partially complete, resulting in higher long-term costs for the needed renovation, and continued exposure of USDA employees to health and safety risks.

   

• Friends of the National Arboretum. The Committee bill includes a provision that would allow a private, nonprofit organization, the Friends of the National Arboretum (FONA), to compensate directly, make donations, and provide gifts to Arboretum employees who assist FONA in fundraisers for the Arboretum. The Administration objects to this provision, which would create a situation whereby a private organization would have undue influence over the employees and operations of the Arboretum. There are other fundraising methods that might yield similar or greater benefits without creating undue hardship on, conflict for, and inequities among these USDA employees.

   

• Food and Nutrition Service Research. The Administration is concerned that the Committee did not provide funds to the Food and Nutrition Service (FNS) for research and evaluation and objects to any provision of the bill that would prohibit the use of FNS funds for these activities. The funds are essential so that FNS can effectively and promptly address program integrity and performance issues facing nutrition assistance programs as well as continue critical updates of basic program information.

   

• Infringement on Executive Authority. The Administration objects to a number of provisions in the bill that would require congressional approval before Executive Branch execution. The Administration will interpret these provisions to require only notification of Congress, since any other interpretation would contradict the Supreme Court ruling in INS v. Chadha.

   

•  

  Section 721. The Act provides that no funds appropriated or otherwise made available to the Department of Agriculture may be used "to transmit or otherwise make available to any non-Department of Agriculture employee questions or responses to questions that are a result of information requested for the appropriations hearing process." This provision could impede communications within the Executive Branch to a degree that undercuts the President's ability to exercise his constitutional responsibilities as the Nation's Chief Executive Officer to enforce the laws. Accordingly, this section is constitutionally objectionable.

• Recommendations Clause. Section 731 of the bill provides that no funds appropriated or otherwise made available to the Department of Agriculture may be used to pay the salaries of personnel who prepare or submit appropriations language as part of the President's Budget submission that "assumes revenues or reflects a reduction . . . due to user fees proposals . . .". Under the Recommendations Clause, Congress can neither require, nor prohibit, the President from making particular legislative or policy recommendations to Congress. Therefore, this section is constitutionally objectionable because it would undermine the President's ability to fulfill his constitutional duties under the Recommendations Clause.