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March 24, 1999
(House)


H. R. 1141 - EMERGENCY SUPPLEMENTAL
APPROPRIATIONS ACT, FY 1999

(Sponsor: Young (R), Florida)

This Statement of Administration Policy provides the Administration's views on H.R.1141, the bill making emergency supplemental appropriations to assist in Central America's recovery from recent natural disasters, to provide urgent funding related to the situation in Jordan, and to provide vital loans and other assistance to our farmers and ranchers. The Administration appreciates the Committee's consideration of the President's supplemental requests and looks forward to working with the Congress on a bi-partisan basis to complete action on this important legislation soon. However, we have significant concerns with the approach being taken in the House Committee bill and we ask that you consider the Administration's views.

Providing essential assistance to victims of natural disasters and helping our farmers at home with vital financing clearly fall in the category of needs that are urgent, unanticipated, and essential -- that is, emergency requirements. Therefore, they clearly deserve to be funded quickly, fully, and without requiring offsets that could force unacceptable reductions in important programs. We support the Committee's action of providing defense-related emergency funding in response to Hurricane Mitch without offsets and believe that consistent treatment should be applied to non-defense agencies performing similar emergency activities. The Administration would strongly oppose an amendment that may be offered that would require offsets for this defense-related emergency funding.

The Committee bill would rescind $875 million from international affairs accounts, with the largest portion being a rescission of $648 million in appropriations of callable capital from U.S. payments to the Asian Development Bank (ASDB), the World Bank and the InterAmerican Development Bank. Such rescissions would be extremely ill-advised. Rescinding the callable capital funding would send a dangerous signal to financial markets and could require the ASDB and other multilateral development banks (MDBs) to pay a higher premium on their borrowing, which could lead to the restriction of capital flows necessary to strengthen the global economy and expand U.S. exports. At a time when some of our emerging export markets in Asia and other developing economies are beginning to recover, this step would be highly unproductive.

In addition, this rescission of callable capital would call into question U.S. commitment to all multilateral development banks. This could have a detrimental effect on capital flows and economic growth globally, including in Asia, Africa, and Latin America. This unintended consequence would even more broadly delay economic recovery in markets vital to the United States, thereby hurting our own economy.

The other rescissions in the international affairs area would undermine a host of important objectives in many programs. For example, the rescissions would cut support for U.S. exports, undermining our efforts to penetrate foreign markets and provide jobs for American workers. At a time when the United States needs to promote its exports, this is a particularly misguided step. The rescissions would also undercut free market reform and democracy promotion in the New Independent States and in Eastern Europe, areas where it is manifestly in America's interests to encourage reform. The rescission of development assistance would set back efforts in the poorest countries, including possibly in those hit hardest by Hurricane Mitch.

Other rescissions would undermine our efforts to provide peacekeeping operations in troubled areas of the world. The rescission of Global Environment Facility funding would be highly detrimental to the cause of improving global environmental protection. Still other cuts would reduce our contributions to international organizations, where America's reputation as a contributor in good standing is already tarnished.

In addition, we are concerned with the $150 million cut in important nonproliferation programs to reduce stockpiles of excess weapons grade uranium and plutonium in Russia. Since the Department of Energy has already negotiated an agreement with Russia to purchase uranium for $325 million, the entire cut would have to come from the $200 million appropriated for plutonium. That would drastically undercut negotiations that are underway to dispose of 50 tons of weapons grade plutonium in Russia, enough for 15,000 nuclear weapons.

Taken together, these rescissions are so great that the supplemental as a whole would constitute a net reduction in U.S. foreign affairs spending -- a reduction that would seriously undermine America's capacity to pursue its foreign policy objectives and promote our economic security. The Administration strongly supports adoption of an amendment expected to be offered that would strike from the bill several of these objectionable rescissions.

Were the bill to be presented to the President with the offsets discussed above, the President's senior advisers would recommend that he veto the bill. We urge the House not to take actions that could result in gridlock and delay, and that would be detrimental both to our allies abroad and our citizens at home in their time of need. We urge the House not to add extraneous authorizations to the bill, particularly narrow, objectionable riders that would serve only to generate controversy, unnecessarily delaying the urgently needed emergency assistance contained in this bill.

Emergency Relief for Central America

The bill provides $962 million for Central America, $6 million more than the President's request. On February 16th, the President transmitted to the Congress a request for $956 million for International Assistance Programs, the Department of Defense, and the Department of Justice to provide assistance for emergency disaster and reconstruction assistance expenses arising from the consequences of the recent hurricanes in Central America and the Caribbean and the recent earthquake in Colombia. The Administration appreciates the full funding provided in the House bill for this request, which will provide relief from the effects of Hurricanes Mitch and Georges and restore hope to this devastated region.

Hurricane Mitch, the worst natural disaster in the history of the Western Hemisphere, left more than 9,000 dead and drove millions from their homes. Even today, hundred of thousands of Central Americans still cannot return to their homes. Schools, hospitals, businesses, farms and roads were destroyed, resulting in serious economic dislocation. Hurricane Mitch caused $8.5 billion in damages, and Hurricane Georges brings the total to $10 billion. The President's Central America package is urgent, unanticipated, and essential and should be funded as an emergency request.

Funds must be provided swiftly to prevent the spread of disease and to buy seed and plant crops in the fast-approaching Spring planting season, thereby providing food and jobs to many communities, and to demonstrate to Central Americans that they can find jobs and security in their own recovering economies. Much of the rural road system farmers and small merchants depend on for their livelihoods was destroyed. Water and sanitation systems have been disrupted, which can result in disease. Economic destruction and dislocation threaten to undermine the region's achievements of the past decade, as these nations have made tremendous strides toward settling conflicts, strengthening democracy, promoting human rights, opening economies and alleviating poverty. Emergency assistance for reconstruction aid will ensure that their transformation continues and that Central Americans will have cause to view their own futures in the region with hope.

Jordan

The Administration appreciates the Committee's providing the full $100 million for Jordan, fully funding the FY 1999 request. These funds will provide financial support to help promote stability in Jordan and the region during the period of transition subsequent to King Hussein's death. While the administration appreciates the full funding of the $100 million FY request, we are disappointed that the $200 million requested for advance appropriations for FYs 2000 and 2001 has not been provided. In the context of promoting peace in the Middle East, the Administration will continue to press for these advance appropriations.

Department of Agriculture

On February 26th, the President submitted a request for $152 million for urgently needed emergency funds for the Department of Agriculture (USDA). The Administration appreciates the Committee's providing fully for this request. The Administration's request would provide an additional $1.1 billion in farm ownership, operating, and emergency direct and guaranteed loans to help farmers through the Spring planting season. This additional loan authority would provide vitally needed financing for the Nation's farmers in light of the significant increase in demand for USDA loans, due to projected continuing low commodity and livestock prices.

Department of the Interior

The Administration is pleased that the Committee provided a total of $21.8 million in supplemental funding for Interior's Indian trust fund management reforms. Of this amount, $6.8 million was included in the President's FY 2000 Budget and $15 million was transmitted by the President with offsets on March 10, 1999. Together these funds will allow the Department to carry out critical activities, including court-ordered requirements in the Cobell v. Babbitt lawsuit alleging past mismanagement of individual Indian money accounts, and continued progress on trust fund management improvements.


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