Calendar No. 414
Reported from the Appropriations Committee June 12, 1998, by a 27-to-0 vote.
S. Rept. 105-216.

• This diverse appropriation bill covers veterans, public and assisted housing (HUD), environmental protection (EPA), NASA, the National Science Foundation (NSF), the Federal Emergency Management Agency (FEMA), and the President's national service program, among others.
• Veterans' Funding. The bill provides $19.18 billion in discretionary funding for the Department of Veterans Affairs, an increase of $270.2 million above FY98 and $372.6 million above the budget request. In all, the bill provides $42.52 billion for the department, up $1.55 billion from FY98. The Committee has made veterans programs the highest priority in the bill. Increases in the bill include $222 million above the request for VA medical care, $10 million above the request for research, $53 million above the request for state extended care facilities construction, and $79.3 million above the request for other construction programs.
• Housing Funding. The bill funds HUD at $24.10 billion, $2.66 billion above FY98. The net amount for Title II (excepting rescissions) is $25.50 billion. The bill provides funding for all expiring section 8 contracts ($9.54 billion) and fully funds section 202 elderly housing at $676 million (opposing the Administration's request to slash funding to $109 million). The bill increases from FY98 funding for the HOME program and HOPE VI (revitalization of severely distressed public housing) by $50 million apiece, Housing Opportunities for Persons with AIDS (HOPWA) by $21 million, and Homeless Assistance Grants by $177 million, now funded at an even $1 billion. Excluding emergency funding, the Community Development Block Grant Program is increased by $75 million from FY98, and at $4.75 billion, is funded $25 million above the request. Also, the bill funds a new self-sufficiency vouchers program for welfare-to-work at $40 million, including funding for eight demonstration cities. In addition, the bill raises FHA mortgage insurance loan limits to $109,000, and establishes a new ceiling for high-cost areas at $197,000.
• EPA. The Committee bill provides $7.41 billion for the Environmental Protection Agency, an increase of $50.0 million over last year's level, but $382 million less than requested. Major changes from the Administration's request include $350 million more for State revolving funds, and $600 million less for the Superfund due to concerns with this program and the fact that the program is not authorized. The Committee has included $123 million in its recommendation for the Administration's Clean Water Initiative, or 80 percent of the budget request.
• FEMA. The Committee increases funding for FEMA by $524 million to $1.35 billion, including $846 million in disaster relief. The amount recommended for disaster relief, coupled with the $1.6 billion provided in the FY98 supplemental, approximates the five-year historical average cost of disaster relief in 1999 dollars. As the FEMA Director committed to in hearings before this Committee, FEMA is to propose through the regulatory process its plans for administrative changes to reduce disaster relief costs, and report to the Committee within 150 days. Also, the Committee includes $11 million in state and local assistance grants to state emergency management agencies and $25 million in the new predisaster mitigation program.
• NASA. The Senate version provides $13.62 billion, down by $33 million from FY98, but an increase of $150 million from the budget request, recommending an additional $50 million for space science activities, $25 million for earth science, $30 million for academic programs, $15 million for mission support, and $30 million for the International Space Station (ISS). It creates a new account for the International Space Station to ensure that Congress gets honest figures from the Administration, and provides $2.3 billion for the ISS. The Committee does not agree with the Administration's approach to provide additional funding for the space station by raiding NASA's other vital programs.
• National Science Foundation. The bill provides an increase of $215 million over the 1998 level for a total of $3.64 billion to support high-priority basic research and technology development activities.
• Corporation for National and Community Service. The bill provides $425.5 million (same level as last year) for this agency, which oversees the AmeriCorps program, and provides an additional $3 million for the Inspector General's office. The amount is $74 million below the request. .
• Other Independent Agency Funds. Other major expenditures in Title III include $60 million for the Neighborhood Reinvestment Corporation; $55 million for Community Development Financial Institutions; $46.5 million for the Consumer Product Safety Commission; $27 million for the American Battle Monuments Commission; and $25 million for the Selective Service System.

Veterans Affairs (VA)

Total Funding: The Committee has provided a total of $42.52 billion for the VA, including $23.34 billion in mandatory spending and $19.18 billion in discretionary spending. This total is $270.2 million above FY98, and $372.6 million above the request.

Compensation and Pensions: Provides $21.86 billion, which is $1.37 billion above last year and the same as the request.

Medical Care: Increases funding for veterans medical care by $222 million over the request for a total of $17.25 billion. In addition, the VA has authority to retain third-party collections estimated to total $677 million. This provides total discretionary resources for medical care of $17.93 billion.

The Committee Report supports the restructuring efforts of the Veterans Health Administration (VHA) and the goals to achieve a 30-percent decrease in the cost of care in per-patient costs, a 20-percent increase in the numbers of veterans served, and 10 percent of the medical care budget from nonappropriated revenues by the year 2002 relative to the baseline year 1997. However, the VA has fallen behind its estimates in the collection of funds from third-party payers and the Committee Report states that the VA is to aggressively implement all recommendations from the GAO and Coopers & Lybrand MCCR national study to improve its collections efforts.

The Committee bill delays the availability until September 30, 1999, of $687 million in the equipment, lands and structures object classifications.

Construction Projects: Provides $142.3 million for major construction projects and $175 million for minor projects.

Departmental Administration: Appropriates $854.7 million for general operating expenses, an increase of $68.5 million over last year, and $5 million over the request. Additional resources are made available through reimbursements totaling $374.1 million, with total estimated obligations of approximately $1.2 billion. Although the Committee provides an additional $5 million above the request to restructure the Veterans Benefits Administration, no funds are to be spent prior to submission of a spending plan which follows the recommendations of the National Academy of Public Administration.

Housing and Urban Development (HUD)

Housing Reforms: The Committee remains concerned over HUD's continuing efforts at reinventing itself, most recently through the HUD 2020 management reform plan. Nevertheless, it urges the Secretary as his first priority to the implementation of the plan, coupled with HUD program reform and consolidation. The entire Department has been designated as "high risk" by GAO largely due to inadequate internal controls and the fact that HUD lacks reliable data to ensure accountability within HUD programs, especially the section 8 program. Therefore, the Committee directs the Department to report within 120 days of enactment of this bill on how many programs the Department plans to eliminate, what cost savings may occur, and what increased efficiency will be gained. Also, the Committee urges HUD to meet all the requirements of the Government Performance and Results Act.

Housing Certificate Fund: The Committee recommends $10.01 billion, of which $9.54 billion is to fund expiring section 8 contracts, and $433.5 million is to fund section 8 relocation assistance, including the costs of "sticky vouchers" for families that choose to continue to live in multifamily housing in which a mortgage is refinanced and the housing was previously eligible for the Preservation Program. This account includes $40 million in incremental section 8 assistance to be provided to public housing agencies and for families that have agreed to participate in a local self-sufficiency/welfare-to-work program; of these funds $32 million would be committed to eight demonstration cities. Also, this account includes funds for new section 8 certificates and vouchers to assist residents that are facing displacement due to prepayment of subsidized mortgages or because of demolition and redevelopment activities under HOPE VI, and for certain displaced disabled families.

Based on the GAO budget scrub of section 8 accounts, and after discussions with HUD, the Committee determined that the budget request for section 8 contract amendments for FY99 is unnecessary, thus saving some $1.3 billion. Further, based on the GAO analysis, the Committee rescinds $1.4 billion in excess of section 8 project-based assistance.

Public Housing Capital Fund: The bill provides $2.55 billion for modernization and capital needs of public housing authorities ($50 million over last year and same as requested).

Public Housing Operating Fund: The bill recommends $2.82 billion (same as request) for the Fund.

Drug Elimination Grants for Low-Income Housing: The Committee recommends $310 million for these grants (same as last year and as the request), including $10 million for technical assistance grants, and $10 million for Operation Safe House, and $20 million for competitive grants under the New Approach Anti-Drug Program.

Revitalization of Severely Distressed Public Housing (HOPE VI): The Committee appropriates $600 million for this account (an increase of $50 million from both the request and last year's level) and urges the Department to fund innovative projects that work both as public and mixed-income housing.

Native American Housing Block Grant: The Committee recommends $600 million (same as last year and as the request) for the Native American housing block grants to help Indian Tribes address their housing needs within their communities. The Committee requests that HUD report every six months beginning on June 1, 1999, with an evaluation of this new grant funding structure.

Rural Housing and Economic Development: Due to its concern about the level of resources provided to rural communities, the Committee establishes a new office to administer housing and economic development programs in rural communities and funds it at a level of $35 million. Of this amount, $10 million is to be used to establish a clearinghouse of ideas for innovative strategies and the remaining $20 million is to be awarded to state housing finance agencies to support innovative community development initiatives in rural communities.

Community Development Grants: The bill provides $4.75 billion for the Community Development Block Grant (CDBG) Program, $75 million above last year and $25 million above the budget request. The Committee rejects the Administration's proposal to provide $100 million for a new initiative called regional connections, stating that this proposal should be considered through the appropriate authorization committees, not through the appropriation process. The Committee includes a provision contained in the FY98 bill to make brownfields cleanup an eligible activity under CDBG.

Home Investment Partnerships Program: This program, which provides assistance to states and local governments for the purpose of expanding the supply of affordable housing, is funded at $1.55 billion, $50 million over last year, and $333 million below the budget request. However, the budget request anticipated merging the section 202 elderly housing program and the section 811 disabled housing program into HOME. Instead, these programs are funded separately with section 202 fully funded.

Homeless Assistance Grants: The bill provides $1 billion ($177 million over last year and $150 million under the request) to fund the emergency shelter grants program, the supportive housing program, the section 8 moderate rehabilitation single-room occupancy program, and the shelter plus care program. Because the Committee believes there is a need for stable housing for those with mental disabilities, it recommends that 30 percent of funds be allocated to permanent housing. Also, the Committee expects HUD to provide a full accounting of the Homeless Assistance Grants Program by May 1, 1999, as well as analysis of strategies for the transition to permanent housing.

Housing for Special Populations: This account funds the housing for the elderly under section 202 and the housing for the disabled under section 811. These programs provide capital grants to eligible entities for the acquisition, rehabilitation, or construction of housing. The Committee recommends $870 million for development of additional new subsidized housing, including capital advances of $676 million for elderly housing and $194 million for disabled housing. The Committee is concerned with the state of elderly housing and does not agree with the Administration's proposal to sharply decrease funding for the elderly housing program from $645 million in FY98 to $109 million in FY99, or the Administration's proposal to merge section 202 and section 811 into the HOME program.

Federal Housing Administration: The Federal Housing Administration (FHA) fund covers the mortgage and loan insurance activity of about 40 HUD mortgage/loan insurance programs. The Committee included the requested amounts for the Mutual Mortgage Insurance Program: a limitation of $110 billion on guaranteed loans and $100 million on direct loans, and an appropriation of $328.9 million for administrative expenses. For the General and Special Risk Program, the Committee recommends a limitation of $18.1 billion on guaranteed loans and $120 million on direct loans, and $211.5 million for administrative expenses.

FHA loan limits: The bill increases the FHA mortgage insurance limits, raising the floor from $86,317 to $109,032, and establishes a new ceiling for high-cost areas from the existing loan limit of $170,362 to $197,620. The Committee Report states that these new limits especially will help in nonurban areas where the price of new housing has escalated beyond the capacity of first-time homebuyers. The Administration proposes a FHA mortgage insurance limit for all areas throughout the nation of $227,150.

Legislative Provisions: The bill contains a number of administrative provisions, including a number of yearly provisions which provide savings and certain public housing reforms which are a foundation for more comprehensive reform.

Environmental Protection Agency (EPA)

Total Funding: The Committee recommends a total of $7.41 billion for FY 1999, $382.2 million below the budget request and $50 million more than the appropriation for FY 1998. The Committee's recommendation falls below the budget request largely because the Committee has decided not to provide the entire amount requested by the Administration for the Superfund Program. Generally, funding is at or slightly above the FY 1998 appropriation for all programs except for "buildings and facilities" and "special water and sewer projects."

The Committee also is concerned over the failure of EPA to meet the requirements of the Government Performance and Results Act (GPRA) and requires that when EPA presents its FY 2000 budget and annual plan that the agency will "...improve its allocation of resources to reflect real risks that particular environmental problems pose, and the benefits of Federal investments in addressing these problems, and target for priority attention those areas offering the greatest opportunity for risk reduction." The criticism springs from unfavorable reports from GAO, the EPA inspector general, and the National Association of Public Administrators.

The Committee also has provided $123 million, or 80 percent, of the Administration's request for its Clean Water Initiative.

Science and Technology: The Committee provides $643.5 million for science and technology. The amount is $10 million above the budget request and $12.5 million above the amount appropriated for FY 1998. The Committee also recommends a transfer of $40.2 million from the Superfund account bringing the total for science and technology to $683.7 million.

State Assistance Program: The Committee appropriates $3.3 billion for state and tribal assistance grants, an increase of $352.3 million over the 1998 enacted level, and an increase of $41.9 million over the request. The Committee provides $1.4 billion for clean water state revolving funds ($325 million above the request); $850 million for performance partner ship/categorical grants ($98.6 million over the request; $800 million for drinking water state revolving funds (an increase of $25 million over the budget request; and $75 million for water and wastewater projects on the U.S.-Mexico border. The Committee also provides $123 million for the Administration's clean water initiative (80 percent of the amount requested).

Environmental Programs and Management: This account includes the development of environmental standards; monitoring and surveillance of pollution conditions; direct federal pollution control planning; preparation of environmental impact statements; and compliance assurance. For these activities, $1.84 billion is appropriated, an increase of $39.5 million above last year, and $153.3 million below the budget request. Several programs received significant reductions below the budget request. The climate change technology initiative was reduced by an amount of $81 million (an increase of $5 million over FY 1998), and the Committee has placed a restriction on the use of these funds that prohibits any expenditures to implement the Kyoto protocol prior to its ratification. The Committee also reduced the budget request for the Montreal protocol fund by $9 million, leaving the appropriation at the FY 1998 level of $12.6 million. The Administration's request for sustainable development challenge grants was reduced $5 million, leaving funding at the current level. Finally, the Administration's request for the environmental monitoring for public access and community tracking program was reduced by $11.5 million, leaving funding at the FY 1998 level.

Superfund: The Committee recommends $1.5 billion for the Superfund program, the same amount as last year, and $593 million less than requested by the Administration. This includes $250 million from general revenues, as authorized, and the balance from the trust fund. The amount of $1 billion is provided for response action (site clean up activities), including the President's full request for brownfields. Also, the Committee includes $155.9 million for enforcement, and $119 million for management and support. In refusing to add the additional funding requested by the Administration, the Committee noted that such an increase would "...force unacceptable tradeoffs in such areas as veterans medical care or low-income housing owing to the constraints imposed by the budget cap." The Committee also agreed with the Administration in FY 1998 that additional funds would be made available for Superfund in FY 1999 "...only if the program was reauthorized." The Committee listed a number of concerns about the program:

• The General Accounting Office continues to list Superfund as a high-risk program, subject to fraud, waste, and abuse.
• EPA has failed to demonstrate whether it could effectively allocate the additional funds requested for site cleanups.
• It is clear (to the Committee) that funds invested in Superfund cleanups result in relatively little reduction of risk to human health, and the environment compared to spending on other environmental programs.
• EPA's budget request assumed inflated costing factors, according to the Congressional Budget Office and the General Accounting Office.
• The committee of jurisdiction does not support increased funding for Superfund prior to reauthorization because the program is seriously flawed and needs significant legislative improvement.

Federal Emergency Management Agency

The bill provides a total of $1.35 billion, which includes $846 million in disaster relief expenditures and $508.2 million for other programs. In lieu of the Administration's request for $307.7 million and an additional $658.5 million in disaster relief contingency funds (a total of $966.2 million), the Committee provides $846 million in disaster relief. The amount provided, coupled with the $1.6 billion in the FY98 supplemental, approximates the five-year historical average cost of disaster relief in 1999 dollars. The Committee recommendation includes $11 million for state and local assistance grants to state emergency management agencies and $25 million for the new predisaster mitigation grants.

National Aeronautics and Space Administration (NASA)

Total Funding: The bill provides $13.62 billion for NASA, which is $150 million more than the request to ensure adequate funds for the space station and other critical NASA programs. It also includes a restructuring of the NASA appropriation accounts to improve fiscal accountability.

International Space Station: The Committee provides $2.3 billion for this program, which is $30 million above the request. The Committee "continues to be very troubled about the potential that escalating cost pressures from the International Space Station Program might have on other NASA activities, particularly science and aeronautics." Due to the long history of space stations overruns, the Committee has created a new account for the ISS to ensure that Congress gets honest figures from the Administration.

Science and Technology: The Committee recommends $4.3 billion for this new account, which is $105 million above the budget request for these activities and also reflects the transfer of aeronautics and space transportation technology activities to another separate appropriation account.

Other new accounts created by the Committee are the "launch vehicles and payload operations" account ($3.2 billion) and the "aeronautics, space transportation and technology" account ($1.3 billion). An amount of $2.5 million is provided for mission support activities.

Corporation for National and Community Service

For the Corporation for National and Community Service, the Committee appropriates a total of $428.5 million ($73.8 million less than requested, but the same as last year). Of this amount, $70 million is for educational awards; $227 million is for grants under the National Service Trust, including the AmeriCorps program; $5.5 million is for the Points of Light Foundation; $18 million is for the Civilian Community Corps; $43 million is available for school-based and community-based service-learning programs; $30 million is for quality and innovation activities; $27 million is for administrative expenses; $5 million is for audits and other evaluations; and $3 million is for the Office of the Inspector General.

Government Performance and Results Act

The Government Performance and Results Act of 1993, commonly called GPRA, was intended to rationalize the agency budget process by requiring each agency and department to develop a strategic plan, including a comprehensive mission statement based on the agency's statutory authority, a set of outcome-related strategic goals, and a description on how the agency will accomplish these goals.

The Committee remains concerned regarding the compliance of most of the major agencies covered by this bill. While each agency has made some effort toward compliance with GPRA, each agency must do better at providing objective, measurable goals for all program activities and projects, and each budget justification must tie these goals into a coherent set of funding requests.

CBO estimates that the bill would result in outlays of $53 billion in FY 1999; $18.1 billion in FY 2000; $7.4 billion in FY 2001; $4 billion in FY 2002; and $4.1 billion in FY 2003.

Bumpers. Delete funding for the space station.

Faircloth and others (bipartisan). Re FHA loan limits and targeted HUD management reforms of FHA programs.

Unknown. Re Kyoto treaty or EPA riders.