October 6, 2000
(Senate)

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.

Attachment

Attachment

Department of Justice

• Tobacco Litigation Support. The Administration strongly objects to language in the Committee bill requiring reprogramming notification for all reimbursements to the Department of Justice's General Legal Activities accounts. Enactment of this provision could potentially restrict the Department from utilizing agency reimbursement to support the cost of pursuing tobacco litigation. In addition, it would create a tremendous administrative burden by requiring the legal divisions to submit over 200 reprogrammings associated with reimbursements annually to the Congress. We strongly urge the Senate not to adopt this language. The Administration understands that an amendment to provide $22 million to the Department of Justice to support the costs of ongoing tobacco litigation may be offered. We strongly support this funding provision.

• Immigration Provisions. The Administration 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. We understand that an amendment will be considered on these issues. The President will insist that these provisions be included before the bill is signed into law. People who have been living for many years in the United States and have developed strong ties to their communities deserve the opportunity to normalize their immigration status. 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.

• Community Oriented Policing Services. The Administration appreciates the Senate Committee's decision to fund the Community Oriented Policing Services (COPS) at a higher level than the House. Nevertheless, the proposed level of $812 million is still $523 million below the Administration's request. We are concerned that this funding level may jeopardize the President's goal of funding up to 50,000 additional community police officers by FY 2005. In addition, the Administration strongly objects to the bill's failure to provide any funds for community prosecutors or the Police Integrity Initiative. We strongly urge the Senate to fully fund the Administration's request for COPS.

• Amendments to the Ethics in Government Act. The Administration strongly opposes provisions amending the Ethics in Government Act, which would exempt judges from the honoraria prohibition and exclude honoraria from the definition of outside earned income. While the Administration fully agrees that adequate judicial pay is an important component of judicial independence, we have serious objections to augmenting compensation for public officials in this manner. Moreover, this provision would have significant effects on the ethics law applicable to all three branches. It is the kind of change in law that should be made only after an opportunity for thoughtful deliberation.

  The honoraria prohibition of 5 U.S.C. app. § 501(b) being amended by this provision was struck down as unconstitutional in part by the Supreme Court in 1995 and determined by the Department of Justice to have no surviving force. To now amend this provision to exclude certain officers and employees of the judiciary without addressing the intended application to other officers and employees in all three branches could create confusion regarding the status of the honoraria prohibition as it applies to the other branches. In addition, by excluding honoraria from the definition of outside earned income, the amendment would change the statute to allow senior employees in all three branches to earn unlimited honoraria. This represents a change in the ethics law, which currently imposes a 15-percent limit on outside earned income for such employees.

• Gun Prosecutors. The Administration strongly opposes the failure of the Committee bill to fund nearly all of the Justice Department components of the President's Gun Enforcement Initiative, including the absence of any funding for Federal and local gun prosecutors to enhance prosecutions of dangerous gun criminals and illegal gun traffickers. The bill fails to provide funding for local anti-gun violence media campaigns to help cities replicate programs like Richmond's "Project Exile," which sends a message to criminals about tough penalties for violating gun laws. The bill also fails to provide the funding increase requested for "smart gun" technology, which can prevent unauthorized gun use and accidents by limiting the use of a given gun to its proper owner. The bill provides only $33 million of the requested $70 million for the National Criminal History Improvement Program, which would upgrade criminal history records to help make Brady background checks faster and more effective. We strongly encourage the Senate to include funding for these important initiatives.

• Law Enforcement and Litigation. The Administration opposes the funding levels provided for high-priority Federal law enforcement and litigation programs, including the FBI, the U.S. Attorneys, and the Department of Justice's legal divisions. The Committee bill provides $4.7 billion, $419 million below the Administration's request for these activities. The Committee mark, including the rescission of $40 million in previously available funds for the FBI's Information Sharing Initiative (now titled e-FBI) and the elimination of $20 million in base funding for e-FBI, would threaten the ability of the FBI to maintain its current level of operations.

  The bill provides only $121 million to the Antitrust Division, $13 million below the Administration's request. This level of funding would inhibit the Division's ability to review the record number of corporate mergers and to investigate violations of antitrust laws. The Committee bill provides inadequate resources to represent the interests of the United States in the Nation's courts, thereby putting the U.S. Treasury at risk of paying out claims that lack merit and diminishing the Government's ability to pursue criminal and civil enforcement actions. Our litigating components, including the U.S. Attorneys, would lose 900 positions, including 400 attorneys. The Administration also objects to language included in the Committee bill and report that would require that funding be cut off mid-year for U.S. Attorneys unless the Attorney General publishes rules related to the conduct of Department employees and which limit payment of any potential judgments resulting from the case of Doe v. U.S. to the salaries and expenses of U.S. Attorneys and general legal divisions.

• Civil Rights Enforcement. The Administration strongly opposes the bill's funding level for the Civil Rights Division, which is $10 million below the FY 2000 enacted level and $26 million below the President's request. This level of funding would require the Division to reduce its staff by 20 percent and calls into question the Nation's commitment to enforcing civil rights legislation such as the Americans With Disabilities Act and the Voting Rights Act. The Civil Rights Division is essential in combating abuses in our institutions for the mentally ill and nursing homes, and in investigating allegations of misconduct within police departments where a pattern of widespread abuse exists. We urge the Senate to fully fund the Administration's request.

• Counterterrorism. We appreciate the Committee providing the full $31 million requested for Nunn-Lugar-Domenici State and local first responder training. However, the bill does not fund the Administration's counterterrorism budget amendment for the Department of Justice. Recent events have underscored the need for increased government efforts to combat counterterrorism. The Administration's budget amendment seeks funding for the FBI, including services to translate electronic intercepts in a foreign language, equipment to improve the capability to conduct lawful electronic intercepts, and resources to expand the number of joint terrorism task forces (JTTF). For the Immigration and Naturalization Service, no funding has been provided for JTTF staff, intelligence staff, and border technology needed to strengthen our defenses on the northern border. We urge the Senate to support these initiatives fully.

• Cybercrime. The Committee has not adequately addressed critical resources needed to improve the government's capacity to combat cybercrime. Recent computer security events have highlighted the need for additional government efforts. Not only has Congress provided no enhancements provided to the Criminal Division, but the Division would also have to reduce its staffing level below its current state to live within the Senate mark. Without the 97 positions requested for the U.S. Attorneys, there would be insufficient prosecutorial resources to address the burgeoning cybercrime caseload. Furthermore, the FBI would not have sufficient computer forensic examiners to address incoming cases, let alone reduce the backlog of pending cases. We urge the Senate to fully fund the Administration's cybercrime initiatives.

• Deputy Attorney General for Combating Domestic Terrorism. The Committee bill would establish a Deputy Attorney General for Combating Domestic Terrorism. While the Administration is supportive of efforts to improve the coordination of terrorism programs, we have serious concerns about the provision, particularly the assignment of responsibilities that appear to go beyond the Department's statutory role. In addition, creation of a second Deputy Attorney General position may not be structurally appropriate. We stand ready to work with the Committee to address these concerns.

• Immigration Budget. While the Administration supports the Committee's decision to reinstate section 245(i) of the Immigration and Nationality Act, we object to using the revenue generated by this provision to fund activities currently funded through direct appropriations. The Administration has recommended that section 245(i) revenue be used to reduce a backlog in naturalization applications and to maintain the current level of detention funding. In addition, the Committee has failed to provide $34 million in appropriations to support naturalization backlog reduction and also transfers $50 million from the Exams Fee account to fund previously appropriated adjudication functions. Combined, these actions would reduce funding available for citizenship and immigration benefit processing and result in longer wait times and greater backlogs.

• "Stop Drugs - Stop Crime" and Project Reentry. The Committee bill provides only $103 million for the "Stop Drugs - Stop Crime" initiative, $87 million below the Administration's request. The bill does not fund the Department of Justice's Zero Tolerance and Drug Intervention Program, which would help States and localities implement tough new systems to test, treat, and punish drug offenders. The bill provides $40 million, $10 million below the request, for the highly successful Drug Courts Program. Taken together, these actions would make it difficult, if not impossible, to achieve the drug reduction targets specified in the annual drug strategy and in the Office of National Drug Control Policy Reauthorization Act of 1998. Further, while the Administration appreciates the Committee's decision to provide $7 million for the Reentry Program, this funding level still falls significantly below the Administration's request of $60 million. The request would provide greater community and law enforcement supervision of released offenders, and key services such as drug testing and treatment and job training to help lower recidivism rates and promote responsible fatherhood among offenders.

• Detention Trustee. The Committee mark does not establish the Detention Trustee, the first step in achieving the goal of centralized Federal detention policy, which is supported by the Committee. The Committee also has not provided the $25 million requested to cover the Department's costs for the detention, care and removal of illegal migrants held outside the continental United States. The establishment of a source of funding for routine illegal migrant detention is a priority for the Administration.

• State Criminal Alien Assistance Program (SCAAP). The Administration is disappointed with the Committee's decision to fund only $50 million of the $600 million request for SCAAP. The Committee's bill would virtually eliminate reimbursements to States for incarcerated criminal aliens. The Administration urges the Senate to fully fund this program.

• Native American Law Enforcement. While the Committee provides some additional FBI funding, most Justice programs aiding crime prevention and law enforcement in Native American communities are funded only at the enacted level. The Administration strongly urges the Senate to provide the additional tribal resources requested for U.S. Attorneys and within the Office of Justice Programs. The Administration also urges the Senate to provide the request for the COPS Tribal Resources Grants program, the Sexual Assault Nurse Examiner (SANE) Units, the Tribal Courts Project, the Tribal Youth Program, the Office of Tribal Justice, and Alcohol and Substance Abuse Testing. While the nationwide violent crime rate has dropped, homicides and violent crime in Indian Country are on the rise. These funds are designed to address this problem through both prevention and enforcement.

• Pardon Attorney. The Administration takes strong exception to the Committee's action to eliminate funding for the Office of the Pardon Attorney and to move the Office from the Department of Justice. For over 100 years, the Office of Pardon Attorney has assisted the President in carrying out this power. The Office consists entirely of career, nonpartisan, Department of Justice attorneys, who research clemency petitions and draft the Department's report and recommendation in each case for the signature of the Deputy Attorney General. The Department consults with the FBI, U.S. attorneys, and other relevant entities to provide a thorough analysis of each case and the impact of a clemency grant on law enforcement. The Office is properly assigned to and funded through the Department of Justice.

• United States Parole Commission. The Administration opposes the Committee's efforts to phase out the United States Parole Commission (USPC). The Committee mark of $7.4 million is $1.8 million, or 20 percent, below the Administration's request. Such a reduced funding level would seriously impede the USPC's ability to maintain current operations and render it virtually impossible for the Commission to assume statutorily mandated responsibilities over D.C. inmates and parolees.

• Prisoner Transportation. The Administration opposes the Committee's action to transfer "base" funding for the transportation of prisoners and aliens from the Immigration and Naturalization Service, the Bureau of Prisons, and the U.S. Marshall Service to the Justice Prisoner and Alien Transportation System (JPATS) revolving fund. The transfer would undermine the concept of JPATS being run as a business operation and eliminate the ability of participating agencies to make economic decisions regarding the most cost-effective way to transport prisoners.

• Telecommunications Carrier Compliance. The Committee bill does not include funding for the Telecommunications Carrier Compliance Fund. Additional funding is needed for implementation of the Communications Assistance to Law Enforcement Act (CALEA). Implementation of the Act would ensure that law enforcement has the capability to conduct court-approved electronic surveillance on digital telecommunications equipment. While the Administration is very appreciative of the funding provided for CALEA in P.L. 106-246, the FY 2000 Emergency Supplemental Act, only $300 million has been appropriated to date out of the $500 million authorized by CALEA. A delay in providing the remaining $200 million would hinder law enforcement, particularly in its fight against terrorists, drug lords, and organized crime.

• Fees and Expenses of Witnesses. The Committee mark reduces funding for expert government witness testimony to $79 million, 17 percent below the FY 2000 enacted level. The Committee's action is being taken at a time when large cases such as WINSTAR, tobacco and certain tax and environmental litigation raises the potential liability for the Federal Government into the billions of dollars. The full $156 million requested should be provided to ensure the Department will be able to hire expert witnesses and prepare and present testimony to strengthen the Government's ability to prevail in court.

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:

• Conservation Funding. The Administration strongly opposes the Committee's cuts to the President's Lands Legacy Initiative, which is funded at almost 60 percent below the request. Coastal ecosystem protection programs such as marine sanctuaries, coral reef restoration, State coastal zone management grants, and State coastal impact assistance grants (to assist States that have offshore oil and gas development) would be cut, along with the Pacific coastal salmon recovery fund, thereby complicating and delaying State, local, and Tribal salmon recovery initiatives. The Administration expects the Committee to honor the appropriations and congressional leadership agreement that would establish a new "conservation spending" discretionary budget category in FY2002 continuing through FY2006, and provide funding for the conservation programs at levels equal to or greater than proposed in that agreement for FY2001. The Administration is prepared to work with the Committee to ensure that the high priority environmental conservation programs under the new category are fully funded.

• National Oceanic and Atmospheric Administration. The Administration strongly urges full funding of the Climate Observation and Services initiative in order to support a transition of research observing and data systems into operational systems and products. Likewise, we strongly recommend funding for NOAA's efforts to establish an integrated inter-agency Global Disaster Information Network to improve disaster management information, for the Clean Water Action Plan, and for National Marine Fisheries Service activities to help recover endangered species. In addition, the Administration urges that funding be provided to continue the highly successful Global Learning and Observations to Benefit the Environment (GLOBE) program. We also recommend increased funding for the PORTS program, to enable NOAA to institute quality controls for data that assist the maritime industry.

  The Administration urges the Senate to provide requested advance appropriations for construction work at the Suitland Federal Center. The nearly 60-year-old buildings at the Center are failing, threatening the health and safety of employees of NOAA and the Census Bureau. The Administration is also concerned that the Evansville, Indiana, Doppler weather radar -- which the Modernization Transition Committee recognized as necessary before the Evansville Weather Service Office can close -- is not funded. The Administration urges that funding be provided to build capacity at minority serving institutions, both through NOAA and the National Institute of Standards and Technology, to increase the number of minorities trained in environmental and physical sciences.

• Digital Divide Initiatives. The Administration urges the Senate to fully fund the initiatives to help close the Digital Divide and help communities benefit from the emerging digital economy. During its six-year history, the Technology Opportunities Program (TOP) of the National Telecommunications and Information Administration (NTIA) has helped underserved and low-income communities across the country gain access to innovative information technology applications. The new Connecting America's Families (Home Internet Access) program builds on that success by supporting efforts to help low-income families receive the benefits of home access to computers and the Internet. The Committee bill provides no funding for the Connecting America's Families program and underfunds TOP. The bill also fails to provide funding for the Economic Development Administration's initiative to promote deployment of broadband infrastructure in economically-distressed areas.

• Economic Development Administration. The Administration strongly urges the Senate to fully fund the Economic Development Administration (EDA). The Committee's mark cuts EDA programs by 40 percent from the 2000 enacted level and 47 percent from the Administration's request. This reduction would severely impair efforts to assist economically disadvantaged communities. The bill denies Native American and Mississippi Delta communities, which are among the Nation's most distressed areas, some of the critical assistance they need in order to build stronger local economies and to connect with our overall prosperity. The Administration urges full funding of $49 million for EDA to fund infrastructure, planning, and public works projects in Indian Country. In addition, the bill does not fund assistance to be provided by EDA's proposed Office of Community Economic Adjustment to communities injured by economic downturns due to trade-related issues and other causes.

• Chemical Weapons Convention Compliance. The Administration strongly urges full funding of the President's request of $8.5 million for Chemical Weapons Convention inspections at industry facilities. Without this funding, the Department of Commerce would be unable to conduct site assistance visits to help U.S. companies prepare for these international inspections and thereby better protect confidential business information. The Department of Commerce would also be unable to host the full complement of industry inspections required under the Convention. Failure to provide the necessary funds could result in U.S. noncompliance with its industry inspection obligations under the Convention.

• Critical Infrastructure Protection. The Administration urges support for the President's requested funding for the Critical Infrastructure Assurance Office (CIAO) in the Bureau of Export Administration and for the Expert Review Team in the National Institute of Standards and Technology to help Government agencies identify vulnerabilities and plan secure systems. Likewise, the Administration strongly urges providing the $50 million requested by the President to establish the Institute for Information Infrastructure Protection to address research and development needs related to the protection of the Nation's critical infrastructures. In addition, the $6.3 million requested by NTIA will support the National Infrastructure Assurance Plan for the communications and information sectors, as well as research to evaluate telecommunication system and network enhancements that address infrastructure vulnerabilities -- such as design weaknesses and external threats. These funds will help ensure the security of the Nation's critical infrastructure now and in the years to come.

• Economic and Statistical Infrastructure. The Administration appreciates the Senate bill's funding for the decennial census, base restoration, and e-business initiatives in the Census Bureau, as well as the funding provided for the Economic and Statistics Administration. However, we urge the Senate to include full funding for the Census Bureau's continuous measurement program (which will provide current information to allocate nearly $200 billion in Federal funds annually), demographic survey sample redesign (an interagency process that updates the sample populations of the major national demographic surveys after the decennial census), and planned improvements in measuring economic well-being and exports.

• International Trade Administration. The Administration appreciates the Committee's support for the International Trade Administration's (ITA's) Trade Compliance initiative. However, in order to support ITA's trade enforcement capabilities fully and ensure that U.S. companies and workers receive the full benefits of international agreements, we urge the Senate to provide an additional $4 million to fund the full request. The $35 million cut to the President's request for the U.S. and Foreign Commercial Service could lead to significant reductions in the Service's export promotion activities.

• Public Television's Digital Transition. The Administration appreciates the Committee's providing an increase over the House-passed bill for NTIA's Public Telecommunications Facilities, Planning, and Construction Program. However, we urge the Senate to fully fund the program at $110 million in order to help ensure that public broadcasters can meet the Federally-mandated May 2003 deadline for the transition to digital broadcasting.

• Technology Administration Programs. While the Administration appreciates increases for key research and development programs at the National Institute of Standards and Technology (NIST), we urge the Senate to fully fund the President's request. The bill provides insufficient funds for NIST initiatives to promote the development of new information technologies, nanotechnology, and infrastructure assurance, as well as to enhance the use of e-commerce services by small manufacturers.

• Inspector General. The Administration urges the Senate to review the Committee's proposed funding of the Office of Inspector General (OIG), which is 16 percent below the request and five percent below the FY 2000 enacted level. Through audits, inspections, and investigations, the requested OIG funds support the Department's efforts to prevent and detect fraud, waste, and abuse.

• Security and Departmental Management. The Administration commends the Committee for providing full funding for Digital Department investments and salaries and expenses within Commerce's Departmental Management. The Administration also acknowledges the Committee's effort to support Department Security services, but encourages full funding for this important activity.

• New Markets Initiative. The Senate bill fails to provide the $58.3 million requested for the New Markets Initiative ($21.7 million for credit subsidy for New Markets Venture Capital (NMVC), $30 million for technical assistance to small businesses by NMVC firms, and $6.6 million for BusinessLINC). Without these funds, the Administration and the Congress would be unable to fund the Hastert-Clinton Agreement on New Markets/Empowerment Zones and Renewal Communities to bring America's economic prosperity and growth to those communities (including Indian reservations) lagging behind the rest of the Nation.

Department of State and the Broadcasting Board of Governors

• Contributions for International Peacekeeping Activities (CIPA). The Administration strongly opposes the Senate bill's funding levels for UN peacekeeping. The bill would cut the Administration's FY 2001 request by one-third, from $739 million to $500 million, and would halve the FY 2000 CIPA allocation by means of a $213 million rescission and another $45 million shift out of FY 2000 CIPA funds -- money already agreed to and appropriated by the Congress. This is on top of denying an earlier Administration request for $107 million in supplemental FY 2000 CIPA funds, which remains as a pending request to address current funding requirements. If enacted, these funding levels would be devastating to UN peacekeeping and our efforts to reform the UN, rationalize peacekeeping and reduce U.S. assessment rates there. They would prevent us from meeting our treaty obligations and would undermine important missions in Kosovo, East Timor, Sierra Leone, Lebanon, Ethiopia-Eritrea, and elsewhere.

• Arrearage Payments. The Committee recommendation includes $102 million for additional arrearage payments to the United Nations and other international organizations, but includes a variety of spending restrictions on the funding. While this amount would belatedly bring the total appropriated for the payment of arrears to the Administration's originally requested level of approximately one billion dollars, the funding comes with too many hindrances to be an asset to our current reform efforts and creates new certification requirements above and beyond those in the United Nations Reform Act of 1999. The Administration notes the irony of seemingly providing additional funding for payment of arrears while severely underfunding, and even rescinding existing appropriated funds from CIPA, thus creating new arrears at least four times as high as those the Committee proposed to pay. If the Committee is interested in strengthening our hand in negotiating assessment scale reforms at the United Nations, the Administration strongly recommends that it provide full funding of current peacekeeping bills.

• Embassy Security. The Administration strongly opposes the Committee's decision to cut the President's FY 2001 request for embassy security in the Diplomatic and Consular Programs (D&CP) and Embassy Security, Construction, and Maintenance (ESCM) accounts by $420 million, or 40 percent. This would require steep reductions in requested worldwide security upgrades and ongoing security enhancement support within the ESCM and D&CP accounts. Only three of the six new security construction projects requested in the ESCM account received funding in the Committee mark, and nothing is provided for buildings to support USAID activities. In addition, of the embassy security funding the Committee does provide, $72 million is earmarked for unrequested projects. Although the Administration appreciates funding for these unrequested projects located primarily in China, it opposes funding them at the expense of important security-related facility requirements. The overall unacceptable level of funding would leave Americans working in our diplomatic facilities overseas more vulnerable to terrorist attack and would slash the Administration's effort to support a long-term replacement program for unsafe facilities.

  The Administration is also disappointed that the Committee has not provided the requested advance appropriations for embassy security construction to help ensure successful implementation of that long-term capital investment program. The need to pursue a multi-year program to improve security and protect all Americans serving abroad was recognized by the authors of the Crowe report, which was produced in the aftermath of the embassy bombings in Nairobi and Dar es Salaam. These findings were reaffirmed in the more recent report of the Overseas Presence Advisory Panel.

• State Department Operations. The Administration appreciates the Committee's support for the regular operations of the Department of State but opposes the multiple earmarks, restrictions including bill language limiting the detail of employees, and unrequested items that the Committee has included in its bill and report that seek to micro-manage the activities of the Department of State and reduce the Administration's flexibility to address foreign policy needs. Of utmost concern is the Committee's unacceptable restriction on Machine Readable Visa fees that support the President's Border Security Program. This restriction would result in a reduction below current estimates of $101 million in resources available to the program in FY 2001. The Administration requested permanent, unrestricted extension of this authority. These funds have become indispensable to American citizens for timely passport services and the improvement and support of the visa process including the control mechanisms that prevent travel to the U.S. of individuals associated with terrorist organizations or others who may seek to use the process illegally.

  In addition, the Administration is disappointed that the Committee mark does not include $3 million in funds requested for trade compliance, $1.5 million for labor and environmental standards coordination, and $1 million in transfer authority to meet potential needs of the Presidential Advisory Commission on Holocaust Assets. Finally, the Administration appreciates funding provided to support the 1999 Pacific salmon treaty agreement. The Administration would prefer, however, this funding be provided in the National Oceanic and Atmospheric Administration accounts, where the funding was requested.

• Contributions to International Organizations. While the Administration does not object to the overall level of funding for this account, which is $21 million above the Administration's request, we are concerned with the funding assumptions that undergird the $944 million provided. The Committee recommendation includes approximately $78 million in unrequested funding, and after factoring in the recent reprogramming notification would still leave a shortfall in requested funding for assessments for the United Nations and other international organizations. To meet this shortfall, the Committee recommends some untenable measures, including a directive to transfer $25 million provided for Contributions to International Peacekeeping Activities in FY 2000, which comes on top of a proposed rescission of $213 million in FY 2000 Peacekeeping Funds. We urge the Senate to fund this account at a level sufficient to meet all our assessments to international organizations.

• Making U.S. Exporters Pay Fees for Munitions Export License Applications. The Administration opposes section 403, which would authorize the State Department to collect fees to process export license applications for munitions, satellites, and related items controlled under section 38 of the Arms Export Control Act. A number of issues would need to be seriously considered before the Administration could consider supporting this proposal, which has not been previously addressed by Congress in hearings, or in discussions with the Administration or U.S. industry. Making the State Department's licensing resources dependent on fees collected could encourage additional licensing requirements at a time when current Administration policy is to support mechanisms to streamline the munitions licensing process. We urge the deletion of this provision.

• Foreign Buildings Operations. While the Administration appreciates the Committee's support of the Department of State's ongoing overseas building program, the Administration objects to unrequested items in the Embassy Security, Construction, and Maintenance mark. For example, the Committee Report provides an earmark for fresco restoration in the Palazzo Corpi in Istanbul Turkey. These earmarks would reduce the amount available to pay leases and other building requirements and divert funds away from higher-priority security enhancements.

• Diplomatic Telecommunications. The Administration is opposed to efforts by the Congress to mandate the management, operations, and security procedures for diplomatic telecommunications. The Administration is working diligently to resolve any outstanding problems with diplomatic telecommunications. Provisions such as those proposed would be counterproductive to this effort. The Administration looks forward to consulting with the Congress on remaining concerns.

• International Broadcasting Operations. The funding level of $388 million recommended by the Committee is $17 million below the President's request of $405 million This $17 million reduction is directly tied to the proposal to merge the WORLDNET Television and Film Service into the Voice of America (VOA). By funding only a skeletal version of the merger, the U.S. Government would not have the ability to support technically any television broadcasts for the U.S. Broadcasting Board of Governors or Interactive Dialogues of the Department of State. The Administration requests that the Senate support the continuation of television production and delivery through the consolidation of WORLDNET with the VOA by fully funding the President's request.

• Educational and Cultural Exchanges. The Administration appreciates funding for Education and Cultural Exchanges at the requested level of $225 million, but is disappointed with the funding level of $118 million for the J. William Fulbright Educational Exchange Program, and urges the Senate to provide the President's request of $125 million. The Administration opposes earmarking $1,750,000 within this account for the North/South Center, in lieu of a separate appropriation, as requested in the budget. The Administration further requests that funding in this account be made available until expended, as in previous years.

• Other International Accounts. The Administration appreciates the overall level of funding for the International Boundary and Water Commission, the International Joint Commission, the International Boundary Commission, the Border Environment Cooperation Commission, and the International Fisheries Commissions. However, the Administration objects to report language setting forth earmarks and spending directions with no allowance to deviate without first consulting with Congress. This restriction would hamper effective program management. The Administration opposes the Committee's decision to eliminate funding for the Asia Foundation.

• Foreign Policy Concerns. The Administration strongly opposes provisions in the Committee bill concerning Jerusalem on constitutional, foreign policy, and operational grounds. These provisions would intrude on the President's constitutional authority to conduct foreign affairs and to determine recognition by directing U.S. policy regarding Jerusalem as the capital of Israel. At Camp David, the parties agreed to continue their efforts to conclude an agreement on permanent status issues as soon as possible and avoid actions that would prejudge the outcome of these negotiations. The actions called for by these provisions would prejudge the outcome of these negotiations and thus would severely undermine U.S. efforts to promote a peaceful resolution of the Arab-Israeli conflict.

• Trade in Conflict Diamonds. The Administration recognizes that trade in "conflict diamonds" fuels instability in Africa and, therefore, launched a State Department Initiative in 1999 aimed at curbing the illegal diamond trade. We strongly support the intent conveyed in section 409 of the Committee-passed bill, in particular the intent to restrict trade in illegal diamonds while recognizing the certification of origin of rough diamonds by the Governments of Sierra Leone and Angola. We also support the identification of countries actively engaged in the illicit diamond trade.

  The Administration believes that while we counter illicit trade in diamonds, legitimate diamond procedures should be protected and encouraged. Therefore, we cannot support language that would inhibit trade in legitimate diamonds. We are also concerned that section 409, as drafted, could provide a disincentive for several African governments to participate in an internationally-accepted certification regime, as their diamonds would be excluded from the United States even if they decided to participate in such a regime. In addition, there are technical administrative issues which must be addressed in order to make the bill enforceable. The Administration would be pleased to work with the Senate to try to develop language that resolves these concerns while preserving the intent of section 409.

• National Endowment for Democracy. While the Administration appreciates the Committee's funding recommendation for the National Endowment for Democracy, it objects to report language earmarking funds and mandating activities that are inconsistent with the Endowment's mission of working with the non-governmental sector to promote democracy at the grassroots level.

• General Provisions. Other provisions in the Committee bill regarding the conduct of foreign affairs raise constitutional concerns. Section 609 regarding Vietnam would unconstitutionally constrain the President's authority with respect to the conduct of diplomacy. In addition, language in the Contributions for International Peacekeeping Activities appropriation that would require a report to Congress prior to voting for a U.N. Peacekeeping mission would unconstitutionally constrain the President's authority with respect to the conduct of diplomacy as well as his authority as Commander-in-Chief.

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:

• Small Business Loans. The Senate bill underfunds the Administration's request of $11.5 billion in 7(a) business loan volume, by providing less than half the amount requested for direct microloans, and less than twenty-five percent of the requested accompanying microloan technical assistance. The funding level provided for these programs would be insufficient to meet demand for small business loans and would lead to fewer new business start-ups.

• Business Assistance Programs. The Administration appreciates the $90 million funding level for the Small Business Development Centers (SBDCs). We ask that the Senate provide the requested earmarks for Native American SBDCs and for Tribal Business Information Centers, including the request to waive the necessity for matching funds. In addition, the Administration is disappointed that the Senate failed to provide the Administration's request for several other business assistance programs, including: SBIR Phase III ($15 million) and Electronic Commerce ($5 million). Further, the Senate has not provided the requested increases necessary to support other business assistance programs, including Women's Business Centers, One Stop Capital Shops, and SCORE.

• Modernizing Program Management. The Senate bill fails to provide the additional $5 million requested for the Systems Modernization Initiative to begin work to modernize the disaster loan system, $7 million for the needed upgrade and maintenance of SBA's IT systems, $4 million for workforce transformation, and $1.5 million for the financial program advisor to support SBA's successful loan asset sales program. These reductions would weaken SBA's loan program management and result in higher loan program costs. At the same time, the Administration appreciates the Senate's inclusion of language permitting up to $3 million in reimbursement to the SBA for qualified expenses to be derived from increased collections of delinquent debt. The Administration also appreciates the Senate's support for the creation of a new account (Non-Credit Business Assistance), which separates the costs directly attributable to non-credit business programs from salaries and expenses, thereby increasing the accountability of both.

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:

• Department of Commerce Administrative Funding. The Administration opposes funding the Commission on Online Child Protection by reducing funding for the Department of Commerce's General Administration and Inspector General accounts by $1.5 million. While the Administration has no objection to providing funding for the Commission, cutting these already small accounts with less than one month remaining in the fiscal year would negatively affect the Department's ability to carry out its management and auditing activities for the remainder of the fiscal year.

• Law Enforcement. Proposed law enforcement rescissions would have a detrimental effect. For example, the $15 million rescission to INS enforcement and service programs would result in cutbacks to current border enforcement operations -- particularly Operation Safeguard -- along the Rio Grande and adversely affect Border Patrol recruitment efforts. A reduction in immigration service funding would directly impact the timely processing of immigration benefits such as citizenship, adoption, and adjustment of status. The $15 million rescission to the FBI's Information Sharing Initiative would impede the FBI's response to criminal incidents, including cases involving national security. The FY 2000 $2 million rescission for Civil Division would impede the office's ability to effectively defend the Treasury from meritless lawsuits. The proposed FY 2000 $1.1 million rescission to the U.S. Parole Commission would require drastic furloughs or reductions in staff, as well as disrupt the transition of District of Columbia parolees into the Federal system as required by law.

• Presidential Advisory Commission on Holocaust Assets in the United States. The Administration encourages Congress to approve the FY 2000 supplemental request of $1.4 million for the Presidential Advisory Commission on Holocaust Assets in the United States. These funds would support the completion of the Commission's statutorily mandated comprehensive report on the acquisition and disposition of Holocaust-era assets in the United States.

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