CRS Report for Congress
Received through the CRS Web
Supplemental Appropriations and Rescissions for
Updated May 4, 1998
Larry Nowels, Coordinator
Specialist in Foreign Affairs
Foreign Affairs and National Defense Division
Congressional Research Service ˜ The Library of Congress
This report provides a background and overview of the President's numerous proposals for
supplemental appropriations and rescissions for FY1998. It discusses special budget rules
under which parts of the supplemental have been considered and includes detailed tables
listing all accounts affected by the supplement/rescission request. For those programs
receiving greatest congressional attention -- IMF funding, U.N. arrears payments, defense
operations in Bosnia and Southwest Asia, and natural disaster relief -- there is a more
extensive discussion of the issues. The report also identifies related legislation that may
impact the supplemental request. Finally, the report tracks congressional debate as the
legislation moves from committee to floor consideration to enactment. The report will be
updated frequently as legislative actions require.
Supplemental Appropriations and Rescissions for FY1998
Since early February, President Clinton has sent to Congress several
supplemental appropriation requests for FY1998, including funding for:
! U.S. participation in two IMF operations (about $17.9 billion),
! Payment of U.S. arrearages to international organizations ($921 million).
! U.S. peacekeeping operations in Bosnia through Sept. 30, 1998, and costs in
Southwest Asia related to the confrontation with Iraq ($1.86 billion).
! Natural disaster relief to aid victims of floods in California and elsewhere, ice
storms in the Northeast, tornadoes in Florida, and Typhoon Paka in Guam
($2.27 billion, including contingent funding).
Natural disaster and defense operation funds were submitted as “emergency”
spending that waives the need to find equivalent offsets. For IMF and U.N. arrears
funding, Congress enacted a special provision last year in the Balanced Budget Act
of 1977 that exempted these items from counting against the discretionary budget
During congressional debate on the supplemental proposals, sharp differences
emerged between House and Senate positions, and with the Administration,
especially on the issues of requiring offsets for emergency spending, conditions on
IMF transfers, and funding for U.N. arrears. The Senate (March 31) passed H.R.
3579, increasing to $5.4 billion emergency supplemental spending for defense
operations and natural disaster relief. As requested, the Senate did not offset these
emergency funds with cuts in existing appropriations. The Senate version of H.R.
3579 also provided the full request for the IMF, but did not fund the President's
initiative ($921 million) to clear U.S. arrears at the U.N. and other international
The House split the supplementals into two bills. H.R. 3579, passed on March
31 (212-208), provided $2.9 billion in emergency defense and natural disaster aid
that were offset by cuts in domestic programs -- a move that drew sharp criticism
from the White House. The second bill (H.R. 3580) provides $17.9 billion for the
IMF, $505 million for U.N. arrears and smaller amounts for non-emergency
supplementals. The House has not scheduled debate on H.R. 3580. The
Administration strongly opposed separating IMF and UN arrears issues from the
emergency supplemental. Officials also characterize conditions attached to the IMF
money as "unworkable."
Congress enacted H.R. 3579 on April 30, agreeing to $5.45 billion in defense
and natural disaster emergency relief, of which $2.58 billion is offset with cuts in
section 8 housing reserves and airport contract authority. Defense spending is not
offset. Including mandatory programs, H.R. 3579 appropriates $6.1 billion for
supplemental FY1998 spending. As approved, H.R. 3579 does not include IMF
funding, although Senate leaders say they have a House commitment that H.R. 3580
will be taken up soon. While concerned over the absence of IMF and U.N. arrears
money, President Clinton signed H.R. 3579 on May 1 (P.L. 105-174).
Several House members have said that they plan to link IMF and U.N. arrears
funding in H.R. 3580 with restrictions on U.S. international family planning
programs related to abortion. The President says he would veto such legislation.
Key Policy Staff
Area of Expertise
Bilingual & Immigrant Education
Corporation for National & Community Srvc.
Disaster Relief Programs
Defense Dept Budget/Bosnia/Iraq
Energy Department Programs
Energy Department Programs
Federal Retirement Systems
Food and Drug Administration
Forest Service - Roads
Health Care Financing Administration
Interior Department Programs
Intl Family Planning Programs
International Monetary Fund
Division abbreviations: E = Economics; EPW = Education and Public Welfare; ENR = Environment and Natural
Resources; F = Foreign Affairs; GOV = Government; STM = Science, Technology, and Medicine.
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Congressional Debate Schedule and Enactment of H.R. 3579 . . . . . . . . . . .
Budget Issues Related to the Supplementals . . . . . . . . . . . . . . . . . . . . . . . .
Offsets and the "Emergency" Designation . . . . . . . . . . . . . . . . . . . . . .
IMF and U.N. arrears special budget provisions . . . . . . . . . . . . . . . . .
Summary of Supplementals and Rescissions . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Emergency Natural Disaster and Defense Supplementals . . . . . . . . . . . . . . 7
Natural disasters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Defense Department Funds for Bosnia and Iraq-related requirements . 9
Offsets for Emergency Supplementals . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
HUD Section 8 Housing Excess Reserves . . . . . . . . . . . . . . . . . . . . 10
FAA Airport Grant-in-Aid contract authority and obligation limits . . 11
Corporation for National and Community Service . . . . . . . . . . . . . . 11
Bilingual Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Non-Emergency Supplementals, Rescissions and General Provisions . . . . 11
Non-Emergency Supplementals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Repeal or Language Changes in Existing Appropriation Laws . . . . . 13
Rescissions Offsetting Non-Emergency Supplementals . . . . . . . . . . . 14
Supplemental Appropriations for the IMF and U.N. Arrears . . . . . . . . . . . 15
Analysis of Selected Supplemental Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Natural Disaster Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Congressional action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Major Elements of the Natural Disaster Supplemental . . . . . . . . . . .
Defense Supplemental for Bosnia and Southwest Asia . . . . . . . . . . . . . . .
Congressional action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IMF New Arrangements to Borrow and Quota Increase . . . . . . . . . . . . . .
Congressional action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advance Appropriation for International Organization Arrears . . . . . . . . .
Congressional action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Related Issues and Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International Family Planning Policy and Anti-Abortion Restrictions . . . .
Foreign Policy Authorization Conference Agreement and U.N. Arrears . .
IMF Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
List of Tables
Table 1. FY1998 Supplemental Appropriations and Rescissions Summary . . . . 7
Table 2. IMF and U.N. Arrears Supplemental Appropriations . . . . . . . . . . . . . 15
Table 3. Natural Disaster Emergency Supplementals . . . . . . . . . . . . . . . . . . . . 32
Table 4. Defense & Iraqi Opposition Emergency Supplementals . . . . . . . . . . . 34
Table 5. Non-Emergency Supplementals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Table 6. Rescissions -- For Emergency and Non-Emergency Funds . . . . . . . . . 36
Supplemental Appropriations and Rescissions
Most Recent Developments
On April 30, Congress cleared H.R. 3579, the emergency supplemental
appropriations measure for FY1998 (House vote, 242-163; Senate vote, 88-11).
President Clinton signed the bill on May 1, 1998 (P.L. 105-174). On one of the most
contentious issues between the House and Senate bills, congressional negotiators
agreed to offset $2.6 billion in emergency natural disaster assistance with cuts in
existing domestic programs (section 8 housing reserves, $2.3 billion; and airport
construction contract authority, $241 million), but not to offset $2.86 billion in
emergency defense funding, $1.8 billion of which meets the President's request for
continuing operations in Bosnia and Southwest Asia. Conferees further excluded
from H.R. 3579 the Administration's $17.9 billion request for the IMF, a proposal
adopted by the Senate but placed by the House in a second supplemental measure,
H.R. 3580, that has not been scheduled for debate. The President's request for $921
million to pay U.S. arrears at the United Nations is also excluded in the conference
agreement on H.R. 3579. Although the President signed H.R. 3579 on May 1, he
expressed strong concern that the legislation did not include funds for the IMF and
While Senate Appropriations Committee Chairman Stevens says that he has a
House commitment to consider H.R. 3580 "soon," opposition to funding the IMF
appears to be growing. House Appropriations Committee Chairman Livingston told
President Clinton in a May 1 letter that if he vetoes a State Department authorization
bill (H.R. 1757) containing abortion restrictions on overseas family planning
programs and is not willing to seek an acceptable compromise on that issue, the
House will not pass an IMF/U.N. arrears supplemental. House Democrats have also
expressed concern over Administration support for certain IMF policies, including
Fund plans for unrestricted movement of investments in and out of countries.
Early in each new session of Congress, the Administration routinely submits
requests for supplemental appropriations for the current fiscal year. Such proposals
may include items rejected or deferred during congressional consideration of regular
appropriations requests the previous session, new requirements arising since
enactment of appropriations for the current fiscal year, or more routine matters that
are anticipated and generally non-controversial. The President may also ask that
Congress rescind, or cancel, funds previously appropriated. Often these rescissions
are proposed to offset some of the costs of the new supplemental proposals. Part or
all of a supplemental request may be deemed as an "emergency," thereby avoiding
the requirement under budget laws to find equivalent savings to offset the added
costs of new initiatives. The President may submit the supplementals and rescissions
in multiple packages over the course of several months, with Congress usually
considering and finalizing action on one or two supplemental bills by June.
Congress considered supplemental and rescission proposals this year in a
somewhat different budgetary environment than in the past. For the first time in over
30 years, the Administration has constructed a budget package for FY1999 that
shows a small surplus. Most recent projections by the Congressional Budget Office
for FY1998 indicate that the United States will also run a surplus for the current year.
Congressional leaders have expressed strong support for maintaining these balancedbudget forecasts for this year and for FY1999. Since most of these supplemental
initiatives will be spent in FYs1998/99, congressional action on these additional
spending and rescission proposals directly affect the goal of achieving a budget
surplus in both years.
Because supplemental appropriations and rescissions are often regarded as
"must-pass" legislation, extraneous and controversial issues are often attached to
these bills in an effort to enact otherwise stalled legislative items. It is widely
expected that during congressional consideration of the supplemental measure this
year, proponents of placing restrictions on U.S. international family planning
programs will attempt to link their initiatives to Administration requests regarding
the IMF and U.N. arrears payments -- either directly or in companion legislation.
Congress deferred consideration of these three matters late last year when House
leaders refused to take up the IMF and U.N. spending proposals without reaching a
compromise agreement with the White House and the Senate on family planning
policy. Representative Chris Smith, chief sponsor of House amendments to ban
foreign organizations that perform abortions or lobby to change restrictive abortion
laws with their own money from receiving U.S. population aid grants, says he has
House leadership backing to continue linking the contentious family planning issue
with IMF and U.N. legislation.
Congressional Debate Schedule and Enactment of H.R. 3579
During February and March 1998, the Administration submitted five
supplemental and rescission messages, anticipating that Congress would consider all
parts of the package in a single appropriations/rescission measure, as is common
practice. The Administration further encouraged Congress to act on the proposals
expeditiously, especially the IMF and international organization arrearage request.
House leaders, however, decided in early March to split the proposals into two
separate measures, one addressing the emergency defense and natural disaster
funding requirements and the other for IMF, U.N. arrears, and non-emergency
supplementals. Accordingly, on March 27, the House Appropriations Committee
reported two bills -- H.R. 3579, addressing the emergency requests and H.R. 3580
funding the IMF, U.N. arrears, and other non-emergency programs. A primary
reason to split the requests was to avoid delaying consideration of the emergency
portions of the supplemental if the House, as expected, attaches international family
planning and abortion restrictions to IMF and U.N. arrears funding. That issue has
stalled for several months final enactment of the Foreign Operations Appropriations
each of the past three years and is likely to result in a Presidential veto if included in
the final legislation. The Administration also opposed splitting the supplementals
into two bills, especially if it resulted in a delay of congressional enactment of the
IMF and U.N. arrears requests. The House emergency measure (H.R. 3579) also
included offsets for new spending, with cuts to domestic programs favored by the
White House. On March 31, the House narrowly passed H.R. 3579, 212-208, but has
not scheduled debate on H.R. 3580. IMF critics in the House, including Majority
Leader Armey, argue that further congressional hearings and additional institutional
reforms by the IMF are necessary before the House considers H.R. 3580.
Acting in mid-March, the Senate Appropriations Committee, at the request of
the House, also divided the supplementals/rescissions package and reported on
March 17 two bills: S. 1768 providing emergency supplementals for defense
operations and natural disasters, non-emergency supplementals, and rescissions; and
S. 1769 providing funds for the IMF. (The Committee did not approve the payment
of U.S. arrearages to the U.N.) However, during debate on S. 1768, the Senate
adopted an amendment attaching IMF funds to S. 1768, thereby re-joining the entire
supplemental appropriations and rescissions into a single legislative vehicle. Unlike
the House, however, the Senate did not provide offsets for emergency supplemental
appropriations. The Senate completed debate on S. 1768 on March 26, but waited
to pass it until it received the House companion measure, H.R. 3579. Accordingly,
on March 31, the Senate adopted H.R. 3579 after striking out the House language and
substituting the amended text of S. 1768.
Although congressional leaders had hoped to enact at least the emergency
portions of the pending supplemental requests prior to the spring recess, the shortage
of time put off conference meetings until late April. With such significant
differences between the two versions of H.R. 3579, House and Senate leaders met
April 23 in advance of the conferees in order to resolve the largest of the disputed
issues. They agreed to remove IMF funds, as included by the Senate but not by the
House, from H.R. 3579 conference committee negotiations, but reportedly, in
exchange, the Senate received a House commitment that it would schedule debate
soon on its second supplemental bill, H.R. 3580. House supporters of the IMF had
attempted to instruct conferees to include IMF funding in H.R. 3579, but the motion
offered on April 23 failed 186-222. Congressional negotiators worked under
considerable time pressure stemming largely from Defense Department concerns that
without the additional funds, the Pentagon would be forced to cut training and
furlough civilian personnel after May 1.
House and Senate conferees met for two days -- April 28-29 -- with most of the
debate centered on the question of whether to offset the emergency natural disaster
and defense appropriations, and if so, where to find the necessary cuts in existing
program budgets. Further controversy surrounded proposals made by several
Members to attach other issues to the supplemental, including a bill regarding
guaranteed student loan interest rates and bank subsidies. On April 30, conferees
reached agreement on H.R. 3579, deciding to offset $2.58 billion for emergency
natural disaster aid, but not to offset $2.8 billion for defense operations. Later on
April 30, the House passed the conference report (242-163), followed by the Senate
President Clinton signed H.R. 3579 on May 1 (P.L. 105-174), but expressed
strong reservations that the legislation did not include IMF and U.N. arrears funding.
He also objected to several provisions included in the enacted bill:
! permission to build a highway through the Petroglyph National Monument
near Albuquerque, New Mexico (section 3005).
! conditions on the implementation of an Administration of a suspension of
road construction in roadless areas of national forests (section 3006).
! delay in the application of an Interior Department rule that would increase the
valuation of crude oil for royalty purposes extracted from federal lands by
major oil companies (section 3009).
! extension of the comment period and delay in implementation of Organ
Procurement Transplantation Network" final rule (section 4002).
! cuts in section 8 housing reserves.
Budget Issues Related to the Supplementals
Debate over FY1998 supplementals included references to how certain aspects
of the request would be considered from a budgetary standpoint. For the IMF and
international organization arrearages, Congress and the White House agreed last year
in the Balanced Budget Act of 1997 to specific budget procedures under which these
funding requests would be considered, if and when Congress took them up. But the
issue of whether to designate most of the remaining supplemental requests as
"emergency" requirements and not offset the additional spending with rescissions,
as proposed by the President and adopted by the Senate, became one of the most
controversial features of the supplemental debate.
Offsets and the "Emergency" Designation. The White House designated the
entire $4.1 billion requested for DOD operations in Bosnia and Southwest Asia, and
domestic natural disaster relief as "emergency" requirements. (The President also
asked for another $46 million in non-emergency supplementals, to be offset by either
rescissions, transfers, or the collection of fees.) The emergency designation allows
Congress to approve the additional funds without rescinding, or canceling an
equivalent amount from enacted appropriations. If Congress agreed with the
President to define any part of the supplemental as an “emergency” and not offset the
amounts, discretionary spending would likely rise above the budget caps set last year
by Congress for FY1998 and reduce the size of the budget surplus for this year. This
would break a five-year pattern in which nearly all supplementals have been offset,
in budget authority but not in outlays, by corresponding reductions.
Lawmakers supporting the emergency designation believe that rescissions in
discretionary spending enacted the past few years to offset previous supplementals
have narrowed the options for further cuts to a very difficult set of alternatives.
Moreover, many say that defense spending reductions in recent years, combined with
the practice of paying for overseas missions by raiding other DOD accounts, have
stretched military readiness capabilities to the limit. Protecting defense spending by
finding offsets exclusively among domestic programs, however, presents the
problem of breaking the so-called "firewalls" between defense and domestic
accounts. In the past, defense supplementals would be offset by cuts in the defense
budget, while additions for domestic programs would be paid for by reducing
existing domestic appropriations. Members critical of the emergency designation,
including House Budget Committee Chairman Kasich, argue that Congress and the
President should adhere to the discretionary caps established for the next five years
in the Balanced Budget Act of 1997 and include offsets for the entire supplemental
package. Breaking the caps, they believe, sets a dangerous precedent for future
Congress split on the question of offsets, with the Senate supporting the
President's decision not to seek offsets while the House required rescissions for all
new money. During debate on S. 1768, the Senate increased the President's
emergency supplemental requests to $5.4 billion, designating the entire amount as
emergency funds without providing offsets or rescissions. The Senate also discussed
the offset issue but rejected three amendments that would have had the effect of redesignating parts of the additional funding as non-emergency, and thus requiring
Two days earlier, however, the House Appropriations Committee orderedreported an emergency supplemental measure of $2.9 billion, that included
rescissions offsetting the entire amount in budget authority.2 The House panel's
selection of programs to cut -- HUD's section 8 housing excess reserves, FAA's
airport contract authority, the Corporation for National and Community Service
(AmeriCorps), and the Department of Education's bilingual education program -also became highly controversial. Other House critics expressed concern that the
offset issue had delayed enactment of emergency funds for DOD that would
adversely impact Pentagon operations over the next four months. An effort by
Representative Murtha, however, to recommit H.R. 3579 to the Committee in order
to strike all offsets failed 195-224. Some, including Senate Minority Leader Daschle,
speculated that such offsets would prompt a Presidential veto of the supplemental
As mentioned above, House and Senate negotiators agreed to offset domestic
natural disaster aid with cuts in section 8 housing reserves ($2.35 billion) and airport
The Senate tabled three proposals: a Gramm/Santorum amendment (76-24) that would have
designated any funds not obligated in FY1998 as non-emergency; a Feingold amendment
(92-8) designating the Bosnia funds as non-emergency; and a Nickles amendment (68-31)
that would have removed the emergency designation for the FEMA request.
The main difference between House and Senate emergency funding levels concerned the
Administration's $1.6 billion request submitted on March 24 for the Federal Emergency
Management Agency (FEMA). During debate on S. 1768, the Senate added the emergency
funding proposal, while the House Appropriations Committee did not.
construction contract authority ($241 million). Over $2.8 billion in emergency
defense funds, $1.8 billion of which is for continuation of operations in Bosnia and
Southwest Asia, was not offset in H.R. 3579. Although Congress dropped several
other controversial House offset proposals concerning cuts to AmeriCorps and
bilingual education budgets, congressional leaders acknowledge that the housing
reserves reductions leaves a gap that will have to be filled for FY1999.
IMF and U.N. arrears special budget provisions. Last year, during
congressional-executive negotiations over a budget resolution for FY1998 and
subsequent reconciliation legislation, Congress and the White House agreed to
provide special budgetary treatment for the IMF and for U.N. arrearage payments.
Enacted as part of the Balanced Budget Act of 1997 (section 10114 of P.L. 105-33),
this provision establishes a procedure for the chairmen of the Budget Committees to
adjust various budgetary levels for the period FY1998-2002. Included among the
programs that could trigger automatic adjustments to statutory discretionary spending
limits are the IMF and international organization arrears.
At the time of congressional consideration of the Balanced Budget Act (BBA),
requests for the IMF/NAB and U.N. arrears were pending in Congress, and the
Administration had indicated that an IMF quota increase would be included in its
FY1999 budget submission. Anticipating possible, but not certain, congressional
approval of these proposals, the BBA provided specific budgetary accommodations.
Under the terms of the BBA, when legislation appropriating funds for the IMF quota
increase and/or the NAB through FY2002, and for U.N. and other multilateral
development bank arrears through FY2000 (up to a maximum of $1.884 billion) is
reported by the Appropriations Committees, the Budget Committee chairmen will
increase the overall discretionary spending caps by an amount equivalent to the new
IMF and arrears appropriations. Accordingly, since a budgetary allowance has
already been made for enactment of IMF and U.N. arrears payments, the President's
supplemental request does not have to be offset by corresponding reductions in other
discretionary budget authority and outlays. Some had expressed concern that unless
the budget agreement included special provisions for these foreign policy priorities,
they would face considerable opposition if Congress had to find savings in domestic
or other international programs to offset their costs.
Summary of Supplementals and Rescissions
Administration supplemental and rescission requests, plus those added by
Congress, cover a wide range of domestic, international and defense programs. Most
involve new spending, although in some cases the supplemental resources are made
available through transfers from existing appropriations or by the collection of fees.
In other cases, the requests do not require additional appropriations, but are
proposals to repeal or clarify language enacted in prior appropriation acts.
Budgetary treatment of the proposals varies among the programs. Congress, for
example, enacted special budget rules last year for consideration of the IMF and U.N.
requests. As noted above, large portions of the supplemental -- DOD Bosnia and
Iraq-related funds and domestic disaster relief aid -- have been submitted as
"emergency" requirements, that if sustained by Congress, would not require offsets
to cover the additional costs. Finally, the President and Congress have proposed a
number of smaller non-emergency requests that are offset with a package of
rescissions. Table 1 and the discussion that follows summarize each of the
supplemental and rescission initiatives. Table 2 and Tables 3-6, the latter which
appear at the end of this report, provide details of the legislative action on each
Table 1. FY1998 Supplemental Appropriations and Rescissions Summary
(budget authority millions of dollars)
HR 3580/S. 1769
Domestic -- Natural Disasters
Defense -- Natural Disasters
Defense -- Bosnia
Defense -- other
Iraqi opposition aid
U.N./Intl Organizations arrears*
Other domestic (non-emergency)
Rescissions/offsets for emergencies
Defense -- Southwest Asia/Iraq
Total, Emergency supplementals
IMF Quota Increase and the NAB*
Rescissions/offsets for non-emergency
NOTE: The Senate passed H.R. 3579 after striking the House-passed text and substituting S. 1768.
* These non-emergency items do not require rescissions or offsets.
Emergency Natural Disaster and Defense Supplementals
Natural disasters. Following a series of floods, ice storms, and other natural
disasters in late 1997 and early 1998, the President requested a total of $640 million
in new spending and contingent funding to meet the emergency requirements posed
by these natural disasters. Subsequently, on March 24, the Administration sent to
Congress a proposal for an additional $1.632 billion for the Federal Emergency
Management Agency (FEMA), bringing the total natural disaster funding request to
$2.27 billion. All the proposed money was sought as an “emergency” requirement.
Of this amount, $390 million would have been immediately available, while another
$1.88 billion was requested as contingent emergency funding. Full assessments of
the damage caused by these recent natural disasters was continuing, and the
availability of the $1.88 billion was contingent on the identification of specific
requirements by the Departments of Agriculture, Defense, the Interior,
Transportation, the Corps of Engineers and FEMA. Pursuant to the "emergency"
designation process set forth in the Balanced Budget Act of 1985, in order to release
these funds following congressional enactment of the supplemental spending
measure, the President must submit a finding to Congress that the money is needed
for specific purposes. (See Table 3 and discussion below for more details on the
natural disaster portion of the supplemental.)
Congressional action. H.R. 3579, as passed by the Senate, increased by nearly
$675 million the President's proposed natural disaster supplemental requests, but
made available a much larger portion of the funds on a contingent basis. Of the $2.9
billion total, all but $86 million was contingent funding. Major items added by the
Senate included $260 million for HUD community development bloc grants, $208
million to cancel the sale of oil from DOE's Strategic Petroleum Reserve that had
been mandated for FY1998, $33 million for the Corps of Engineers, $9 million for
HHS' Disease Control programs and polio eradication in Africa, and $100 million for
USDA watershed and flood prevention. The Senate designated all amounts as an
The House, in its version of H.R. 3579, recommended $790 million for
emergency natural disasters, but did not include the $1.632 billion FEMA request
that arrived in Congress during House deliberations. Excluding FEMA, the House
level was about $130 million higher than the Administration proposal. The House
added $25 million for USDA watershed and flood prevention, nearly $60 million for
the Army Corps of Engineers, $20 million for HUD community development bloc
grants, and roughly $70 million (net) for weather-related damage to Defense
Department facilities in Guam and the United States. All amounts were designated
as an emergency, but were offset by non-defense rescissions.
The enacted bill provides $2.84 billion for weather-related disaster relief,
including $257 million for damage at Defense Department facilities in Guam and
throughout the United States. The level is about $550 million higher than the
President's request. The non-defense portion of natural disaster aid -- $2.58 billion -is fully offset by cuts in domestic programs while the defense funds are not offset.
Congress provided most -- $1.6 billion -- of the FEMA request, plus increased the
President's proposal in a number of areas, including Corps of Engineers funding
($105 million) and USDA watershed and flood prevention ($80 million). H.R. 3579
further includes items not requested by the Administration, including HUD
community development bloc grants ($130 million) and $208 million to cancel the
required sale of oil from the Strategic Petroleum Reserve. Congress also adopted the
Senate provision providing $9 million for polio eradication programs in Africa, but
designated the funds as non-emergency.
Defense Department Funds for Bosnia and Iraq-related requirements. The
President sought supplemental funding for two DOD overseas deployments: $486.9
million to continue U.S. peacekeeping operations in Bosnia beyond June 30, 1998,
and $1.361 billion for expenses of building up American forces in Southwest Asia
in response to the confrontation with Iraq. Both were offered as "emergency"
requirements and were not offset by cuts in other DOD programs. (See below for
more discussion and Table 4 at the end of this report.)
Congressional action. The Senate, in passing H.R. 3579, supported the full
request for Bosnia, but reduced by $65.9 million DOD's Southwest Asia funding
proposal. Most of the cut came from the denial of $50 million for transportation
costs of allied personnel and equipment associated with buildup in the Persian Gulf
region. During floor debate, the Senate added several emergency defense spending
amendments that had not been formally requested, including $151 million for theater
missile defense, $273 million for F/A-18 fighter aircraft for the Marine Corps, $37
million for DOD humanitarian assistance channeled through the Red Cross, and $35
million for demining activities in Bosnia.
In addition, the Senate adopted an amendment, offered by a bipartisan group of
Senators, appropriating $10 million--designated as "emergency" funds--to assist
Iraq's opposition to Saddam Husayn. Of those funds, $5 million would back such
opposition activities as organization, training, dissemination of information, and
brokering cooperation among the diverse groups that comprise the opposition. The
other $5 million would be made available to Radio Free Europe/Radio Liberty for
surrogate broadcasting to the Iraqi people, known as "Radio Free Iraq." The
provision appears to have broad support in Congress; it incorporates elements
included in the March 10 conference report on the State Department authorization for
FY1998-99 (H.R. 1757).3
The House (H.R. 3579) also approved all requested funding for Bosnia and
Southwest Asia, except for $50 million in drawdown authority. But unlike the
Senate, the House offset the additional spending with cuts in non-defense accounts.
H.R. 3579 also adds $37 million for the Reserve Mobilization Income Insurance
Fund, an account set up in 1996 to provide income insurance for reserve personnel
involuntarily called into service. The House also incorporated an amendment by
Representative Skaggs that would ban the use of any funds appropriated to be used
in an offensive attack on Iraq unless authorized by Congress.
As passed, H.R. 3579 makes a small reduction ($7.9 million) in Bosnia funds,
based on the assessment that the request included excessive infrastructure
development costs, and reduces by $50 million Southwest Asia funding, as passed
in both Houses, for drawdown authority not necessary for U.S. operations. Congress
further accepted nearly all new defense spending items not requested but added in the
House and Senate, including theater missile defense ($179 million), F/A-18 aircraft
($273 million), humanitarian aid through the Red Cross ($37 million), Bosnia
demining ($28 million), and Reserve Mobilization Income Insurance Program ($47
million). The enacted bill includes $5 million for Radio Free Iraq and earmarks $5
million of existing FY1998 Foreign Operations appropriation for programs in support
the Iraqi opposition. None of the defense funds are offset by cuts in current program
For further information on this issue, see CRS Report 98-179 F, Iraq's Opposition
Movements, by Kenneth Katzman.
spending. Congress also adopted the Skaggs amendment requiring congressional
authorization for an offensive strike against Iraq, but made it a non-binding "sense
Offsets for Emergency Supplementals
As discussed above, one of the most contentious issues in the supplemental
debate was whether to offset additional emergency funds with cuts in existing
appropriations, and if so, from which programs should the reductions be drawn. The
Senate did not include offsets in its bill, but legislation (H.R. 3579) passed by the
House reduced by $2.89 billion spending for five domestic programs.4 The decision
to offset new emergency funds and the selection of these five activities raised strong
objections from the Administration and a number of lawmakers.
HUD Section 8 Housing Excess Reserves. In recent years, HUD’s
accounting system for tracking funding for vouchers, certificates, and project-based
assistance developed substantial reserves in budget authority. In part, these reserves
supported program flexibility thought necessary because funding for housing
assistance was disbursed widely to local housing authorities to meet the specific
needs of eligible families. However, concerns about lack of clear accountability and
potential for abuses led Congress and the Department of Housing and Urban
Development (HUD) to alter the section 8 funding structure, combining several
different accounting responsibilities under the new Housing Certificate Fund (HCF).
As a part of this financing restructure, HUD has sought to identify and recover
existing reserve accounts, restoring them to the old Housing Preservation Account,
temporarily continued under P.L. 105-65 for this purpose. These funds represent
spending authority that may eventually be needed.
As passed by the House, H.R. 3579 rescinded $2.19 in HUD section 8
reserves billion, accounting for about three-fourths of total offsets in the bill. During
debate, the House adopted an amendment by Chairman Livingston increasing the
Committee-reported rescission by $264 million in order to reduce the cuts in FAA
airport contract obligation limitation for this year and to add funding for HUD
community development bloc grants.
The majority view of the House
Appropriations Committee was that the recaptured funds could be safely rescinded,
and actual needed amounts could be appropriated for FY1999 to the HCF. In
dissenting remarks to the Committee's report, however, Representative Obey, argued
that the rescission would eliminate 20 percent of funds needed to renew section 8
contracts in FY1999 with no identification of where such money will be found to
restore the offset in H.R. 3579. As enacted, H.R. 3579 rescinds $2.347 billion of
section 8 reserves that supporters of the proposal say will not impact FY1998 housing
needs and that will be restored in subsequent legislation. Although critics agree that
the funds are not required for this year, they argue that funding the gap for next year
that the rescission creates will result in cuts for other programs in FY1999.
During floor debate, a motion by Congressman Murtha to recommit H.R. 3579 to
Committee in order to strike the offsets lost on a vote of 195-224.
FAA Airport Grant-in-Aid contract authority and obligation limits.
Initially, the House Appropriations Committee had recommended a $610 million
rescission, $275 million of which would reduce the FY1998 Airport Improvement
Program to $1.425 billion. In the face of strong opposition from a bipartisan group
of House Transportation Committee leaders and others, the House adopted an
amendment paring back the airport rescission by $244 million so that it would not
affect FAA programs for this year. As enacted, H.R. 3579 further reduced the
rescission to $241 million.
Corporation for National and Community Service. For FY1998, Congress
appropriated$425.5 million for National and Community Service Programs
administered by the Corporation for National and Community Service. Of this
amount, the largest earmarks are for AmeriCorps Grants ($227 million) to national,
state, and local organizations that operate community service programs and for the
National Service Trust ($70 million) from which educational awards are made to
made to participants in the AmeriCorps Grants program, the National Civilian
Community Corps, and the VISTA program. (VISTA is funded under the Labor/H
appropriation bill). A $250 million recission would have reduced FY1998 funding
by 58%, an action which would be expected to significantly curtail community
service activities administered by the Corporation. In dissenting views to the
Committee's report, Congressman Obey maintained that the rescission would
eliminate nearly all remaining unobligated funds for the program, virtually closing
down additional AmeriCorps activities for the rest of FY1998. House-Senate
conferees, however, deleted this rescission from the enacted bill.
Bilingual Education. The House recommended rescinding $75 million,
including obligated but unspent money, of the Department of Education's Bilingual
and Immigrant Education program. It was estimated that approximately 39,000 fewer
bilingual education students would be served than otherwise anticipated at the initial
FY1998 funding level. Congress deleted the bilingual education rescission, however,
from the final text of H.R. 3579.
Non-Emergency Supplementals, Rescissions and General Provisions
The Administration submitted a number of relatively small non-emergency
supplemental requests for domestic programs that would paid for by the transfer of
funds, by the collection of fees, or through requested rescissions that would cancel
funds previously appropriated. One case -- Veterans compensation -- represented a
Non-Emergency Supplementals. Action by the House and Senate increased
the President's $45.6 million non-emergency supplemental requests. The House
Appropriations Committee recommended (H.R. 3580) nearly $134 million, while the
Senate approved (H.R. 3579) almost $270 million. As enacted in H.R. 3579,
Congress appropriated $142 million for non-emergency programs, nearly $100
million more than requested by the President. The largest amounts approved in H.R.
3579 concern "Year 2000" computer conversion problems at both the Treasury
Department and the Federal Aviation Administration. The President asked Congress
to permit the transfer of $250 million in existing Treasury funds to address this
problem. While supporting the intent of the executive branch proposal, Congress
provided in H.R. 3579 a direct appropriation of $40.8 million, plus the
reprogramming of $133 million that covers the total requirement that Treasury
officials now estimate. Although not requested for the FAA, H.R. 3579 provides $25
million to correct Year 2000 problems in air traffic control computers and software
Table 5 at the end of this report provides funding details on each of the nonemergency supplementals. Other selected non-emergency supplementals are
! Food and Drug Administration -- The Prescription Drug User Fee Act
(PDUFA) authorizes revenues from fees paid by human drug and biologics
companies to fund additional personnel to expedite the review of human drug
applications. The President sought an additional $26 million to be collected
during FY1998 (bringing the total to $117.2 million) to continue the
expedited review of drug and biologics applications. Congress enacted $25.9
! Department of Agriculture (USDA) -- The President requested $5 million, of
which $3.1 million would fund USDA's civil rights activities, including
$500,000 for an advisory committee on civil rights. The remaining $1.9
million would support USDA Departmental Administration non-civil rights
programs that were reduced in the enacted FY1998 appropriations. The
proposal would increase FY1998 outlays by $5 million, but would be offset
by rescissions totaling $5 million from 13 different USDA accounts.
Congress reduced the request to $2.2 million.
! Department of Energy (DOE) -- The Administration proposed $12 million to
accelerate the pumping schedule of underground tanks containing hazardous
chemicals and radioactive liquid waste at the Hanford, Washington site.
Funding for this proposal would be derived from prior year appropriations
under DOE Weapons Activities, Uranium Enrichment Decontamination and
Decommissioning Fund, and Other Defense Activities. Outlays for FY1998
would rise by $0.35 million. The Senate and the House Appropriations
Committee, however, did not approve this request, saying that there were
sufficient unobligated balances to meet DOE's needs.
! Department of the Interior -- The President sought $5.7 million for document
collection in litigation over Bureau of Indian Affairs (BIA) mismanagement
of individual Indian trust funds ($1.05 million for BIA costs and $4.65 million
for the Office of Special Trustee for American Indians). This would increase
FY1998 outlays by $3.9 million. Congress approved the request.
! USDA -- The executive branch proposed $6.7 million for Farm Service
Agency farm ownership direct and guaranteed loans. Congress approved a
total of $11.6 million, including $3.4 million for direct and guaranteed farm
ownership loans, $8 million for direct and guaranteed farm operating loans,
and $222,000 for boll weevil eradication loans.
! NASA -- The Administration asked Congress to provide authority to transfer
up to $173 million to the "Human Space Flight" account in order to maintain
the International Space Station's planned assembly schedule and to control
outyear costs. Funding would be drawn from NASA's Science, Aeronautics
and Technology ($45 million), and the Mission Support ($128 million)
accounts. There would be no outlay impact for FY1998. Congress agreed to
$53 million, to be transferred from the Mission Support account. The House
had approved the full request, while the Senate had rejected it.
! Department of Health and Human Services -- The President proposed $16
million for Health Care Financing Administration (HCFA) Program
Management in order to develop national standards to simplify claims
processing for both federal and private health care providers. The request
would also support federal oversight and enforcement of the Health Insurance
Portability and Accountability Act (HIPAA, P.L. 104-191). Among other
responsibilities, this law requires (through HCFA) to directly administer
HIPAA's insurance reforms in states that elect not to do so. At least five states
have elected this option. HCFA argued that the supplemental appropriation
is critical to its HIPAA implementation activities. Outlays for FY1998 would
have increased by $4.8 million, but be offset by an accompanying reduction
in the obligation limitation for Peer Review Organizations. The House
Appropriations Committee approved the request, but the Senate deleted the
$16 million in a floor amendment offered by Senator Nickles. (The Senate
rejected 51-49 a Kennedy amendment to the Nickles amendment that would
have provided $8 million for HCFA.) The enacted version of H.R. 3579
includes $2.2. million.
Congress further included funding for several additional non-emergency
! Health and Human Services (HHS) -- $100,000, as added by the Senate, for
Indian Health Services for counseling services at the Standing Rock
Reservation, where there has been a growing suicide attempt rate in the past
! Architect of the Capitol -- $7.5 million to begin emergency repair and
rehabilitation of the Capitol dome and $20 million to implement the Capitol
square perimeter security plan and to improve perimeter security of the Senate
Office Buildings and the Capitol square.
! Amtrak -- $2.5 million for Amtrak's Reform Council, as added in the House.
Repeal or Language Changes in Existing Appropriation Laws. The
President included proposed repeals or modification of general provisions and other
text contained in several enacted FY1998 appropriation measures. During debate,
Congress added others. Among these general provisions were two concerning "open
season" for Federal employees retirement plans and forest service road moratorium,
that received prominent attention.
Federal employee retirement "open season". Last year, Congress approved
legislation (section 642 of the Treasury and General Government Appropriations Act,
1998) providing an "open season" in 1998 for federal workers to switch retirement
programs from the Civil Service Retirement System to the Federal Employees
Retirement System. An estimated one million employees would be eligible to
participate in the "open season," an initiative opposed by the Administration which
says it would divert agency operating resources from funding pay raises and other
priorities, and would slow government downsizing. OMB estimated that repeal of
section 642, as proposed in the supplemental request, would save $167 million in
FY1999 and a total of $1.036 billion through FY2003. Congress rejected the
Forest Service Road Moratorium General Provision. A new general
provision added by the Senate dealt with Forest Service road construction. On
January 22, 1998, the Administration proposed a temporary moratorium on new road
construction into Forest Service roadless areas, to provide a respite while developing
a new long-term policy for transportation planning in the national forests. Western
Republicans have strongly objected to the expected short-term decline in timber
sales, because of the loss of supply for dependent mills and the decline in
revenue-sharing payments to counties. Senator Craig offered an amendment,
accepted by the Senate, directing the Forest Service (1) to offer timber sales proposed
for roadless areas despite the moratorium or to offset any proposed sales not sold
with other timber sales; (2) to provide compensation to the counties if the sale value
declines; and (3) to report on existing management plans, on the road inventory; and
on the economic and social effects of the moratorium. The Senate also approved the
use of $2 million from this Act, and additional money from any non-earmarked funds
as needed, for any additional costs to pay the counties. The enacted text of H.R. 3579
(section 3006) adopts the Senate provision with several modifications. Although
House-Senate conferees expressed their disagreement with the Forest Service's
proposed moratorium, as approved, section 3006 neither endorses nor prohibits a
road building moratorium. Timber sales scheduled as of October 1, 1997 should be
considered for compensation or substitution, but conferees deleted $2 million to
compensate counties for lost timber-receipt revenue caused by the moratorium.
Instead, the Forest Service may make such payments out of any FY1998/99 funds
available, with advance approval by the Appropriation Committees. The enacted text
also includes the reports required in the Craig amendment.5
Rescissions Offsetting Non-Emergency Supplementals. A final part of the
President's request and the enacted bill is a package of rescissions, or the cancellation
of previously appropriated funds, that offset the additional costs of non-emergency
supplementals. President Clinton recommended the rescission of about $46 million
from 26 appropriation accounts, most in the amount of $1 million or less. (See
Table 6 at the end of this report for rescission details.)
Congressional action. Congress increased to $142 million the amount of
rescissions, largely because of congressional add-ons for non-emergency spending
For background on this issue, see CRS Report 97-706 ENR, Forest Roads: Construction
that require offsets. The largest rescission -- $54 million -- reduces the contract
authority for the Federal Aviation Administration's Grants-in-Aid for Airports
program. Congress further rescinded $30.3 million of the IRS' information
technology investments, funds it believes are not needed for IRS modernization this
year. Other changes from the President's request include cuts to Customs Service
salaries ($6 million) and drug interdiction programs ($4.5 million) and to HHS'
Health Professional Education Fund ($11.2 million).
Supplemental Appropriations for the IMF and U.N. Arrears
Among the supplemental requests attracting considerable attention are three
concerning the IMF and the United Nations. None of these supplementals were
included in the enacted text of H.R. 3579, but are still pending in Congress as part
of second supplemental spending measures, H.R. 3580 and S. 1769.
! U.S. participation in the IMF's New Arrangements to Borrow (about $3.4
billion in budget authority, no outlay impact). (See below for more
discussion.) (Approved by the Senate, H.R. 3579, and by the House
Appropriations Committee, H.R. 3580.)
! U.S. share of the IMF's quota increase (about $14.5 billion in budget authority,
no outlay impact). (See below for more discussion.) (Approved by the Senate,
H.R. 3579, and by the House Appropriations Committee, H.R. 3580, but with
significantly different conditions under which the funds can be made
! U.S. payment of arrearages to the United Nations and other international
organizations (an advance appropriation totaling $921 million, to be made
available in FY1999 ($475 million) and FY2000 ($446 million)). (See below
for more discussion.) (Not approved by the Senate. The House
Appropriations Committee recommends in H.R. 3580 $505 million, including
the full amount for FY1999)
Table 2. IMF and U.N. Arrears Supplemental Appropriations
(budget authority in millions of dollars)
IMF New Arrangements to Borrow
IMF Quota Increase
U.N. arrears payments
Analysis of Selected Supplemental Issues
Natural Disaster Assistance
States, localities and voluntary organizations manage thousands of disasters
each year with little or no federal assistance. When damages exceed the capabilities
and resources of these organizations, however, many federal agencies provide
domestic disaster assistance. Grants, loans, and technical assistance are funded
through authorized programs with annual as well as supplemental appropriations.
Similar to other supplemental appropriations in the past, the President requested
additional funds for several agencies to meet the needs of disaster victims suffering
from the effects of flooding in California, Florida, and other parts of the country, ice
storms in the Northeast, Typhoon Paka in Guam, and other domestic natural
The Federal Emergency Management Agency (FEMA), an independent
agency, coordinates federal disaster assistance activities and makes grants and loans
available to individuals, state and local governments, and certain nonprofit
corporations. For-profit enterprises, including utilities not owned by state and local
governments, are not eligible for FEMA grants or loans. The principal federal
authority for the provision of domestic disaster relief is the Robert T. Stafford
Disaster Relief and Emergency Assistance Act.6 The act authorizes the President to
issue major disaster declarations, sets out eligibility criteria, and specifies the types
of assistance the President may authorize. FEMA, through delegated powers,
administers most of the authority granted in the Stafford Act.
The Departments of Housing and Urban Development (HUD), Agriculture,
Transportation, Defense, and the Small Business Administration (SBA) also help
devastated communities return to their pre-disaster condition. In recent years,
Community Development Block Grant (CDBG) funds administered by HUD have
been used by communities to pay for infrastructure repair as well as the non-federal
share of other federal assistance programs. SBA loans may be used to rebuild homes,
replace personal property, or assist businesses that sustain disaster-related damages.
Funds are appropriated for Stafford Act assistance on a “no-year” basis; that
is, the funds remain available indefinitely and do not have to be spent in any given
fiscal year. The balance in the fund fluctuates continually as contracts between
FEMA and grantees are negotiated. At the end of calendar year 1997, $3.8 billion
was available in the Fund. The President's initial supplemental request did not
include funding for FEMA. One possible explanation was that, at that time,
sufficient funds were considered to be available to meet the needs of disaster stricken
communities in FY1998. Subsequently, however, on March 24, the Administration
requested an additional $1.632 billion for FEMA. See Table 3 at the end of this
report for complete funding details on the natural disaster supplementals.
Congressional action. The Senate (H.R. 3579) approved many of the
President's natural disaster supplemental recommendations, expanded relief funding
P.L. 93-288, Disaster Relief Act of 1974 (May 22, 1974), as amended by P.L. 100-707
(Nov. 23, 1988). The Act was further amended by: modification of hazard mitigation
authority, P.L. 103-181 (Dec. 8, 1993) and transfer of civil defense authority, P.L. 103-337
(Oct. 5, 1994). For further information see: FEMA and Disaster Relief, by Keith Bea, CRS
Report 97-159 GOV (Jan. 26, 1998), p. 27. See also: Disaster Relief Program Summaries,
by Keith Bea, CRS Report 97-273 GOV (Feb. 25, 1997), p. 4.
in a few areas, but made most of the money available on a contingent basis. Overall,
the Senate appropriated $2.9 billion, including $1.6 billion for FEMA, representing
a level $673 million more than the President's proposal. The House approved a much
smaller amount -- $790 million -- largely because it did not consider the FEMA
proposal. As enacted, H.R. 3579 provides $2.84 billion for natural disasters, about
$550 million more than the President's request. Of the total, $2.58 billion is for
domestic programs while $257 million funds weather-related damage assistance for
defense facilities in Guam and throughout the United States. The legislation further
includes $1.6 billion for FEMA.
Major Elements of the Natural Disaster Supplemental.
! Repair of highways damaged by floods in California, the Northeast, and
nation-wide -- The President requested $259 million for the Department of
Transportation's Federal Highway Administration, of which $35 million
would be contingent funding. Congress approved the full $259 million,
! Assistance for farmers and ranchers affected by ice storms in the Northeast,
rains and flooding in California, tornadoes in Florida, and other disasters -The Administration proposed $85 million in total for USDA programs,
including 1) $40 million for the Watershed and Flood Prevention Program to
repair damages to waterways and levees following flooding; 2) $20 million
for the Emergency Conservation Program, a cost-sharing program that helps
agricultural producers clean up and rehabilitate their lands following a
disaster; 3) $21 million in new budget authority to support up to $87 million
in Farm Service Agency's low-interest emergency disaster loans; and 4) $4
million in direct payments to livestock producers experiencing severe
production losses or a high livestock mortality rate due to a disaster. Of the
$85 million requested, $20 million was designated as emergency funding and
the balance of $65 million is contingent funding.
The Senate increased total assistance for farmers and ranchers to $217
million, which included $44.5 million more than the Administration's request for the
Emergency Conservation Program, and $60 million more for watershed and flood
prevention operations. The Senate also provided $8.7 million to defray the cost of
rehabilitating or replanting trees and vineyards damaged by disasters, and $10 million
to separately compensate dairy producers for lost milk production. The House
approved $121.5 million for these programs, including an increase of $30 million
over the Administration request for watershed and flood prevention, $4.7 million in
tree assistance, and $6.8 million in dairy producer disaster payments. As enacted,
H.R. 3579 provides a total of $159.8 million for these activities, nearly double the
President's request. Appropriations include $34 million for the Emergency
Conservation Program, $6.8 million for dairy producers, $4 million for livestock
producers, $14 million for tree and vineyard damage, $80 million for watershed and
flood prevention, and $21 million, as requested, for Farm Service Agency emergency
! Repair of damage in several National Forests caused by ice storms in New
England in January 1998 and by high winds in the Routt National Forest in
Colorado last fall -- The executive branch sought $10 million for the
Department of Agriculture’s National Forest System, of which $5 million was
contingent funding. Congress approved $10.5 million.
! Repair of damage to urban and rural trees and forests in the Northeast caused
by ice storms -- The President proposed $48 million for the Agriculture
Department’s State and Private Forestry program, $28 million of which would
be contingent funding. Congress approved this request.
! Repair of damage to national wildlife refuge property, national park facilities,
and flood control levees and dikes -- The Administration asked for $40.5
million for several Interior Department programs, all available on a contingent
basis. The Senate approved $43.5 million for these purposes; the House
recommended $39 million. H.R. 3579 provides $47 million.
! Repair of navigation channels and harbors, flood control channels, and
reservoir facilities due to flooding in California, the Pacific Northwest, and
Florida -- The President proposed $30 million, all contingent. The Senate
approved the entire amount, plus added $33 million for the repair of levees
and waterways in Elba and Geneva, Alabama, and repairs to the Archusa Dam
in Mississippi. The House raised the requested amount to $84.5 million. As
enacted, H.R. 3579 provides $105.2 million, but drops the Senate earmarks for
repairs to facilities in Mississippi and Alabama.
! Repair of several U.S. military facilities in Guam damaged by the December
1997 Typhoon Paka — The Administration requested $120.7 million for
various DOD operation and maintenance, family housing, and working capital
fund accounts. Congress approved the total amount as requested.
! Assisting needs at U.S. military facilities, especially in California, that arise
from severe weather conditions -- The executive sought $50 million from
DOD O&M Defense-wide account, all of which would be contingent funding.
The Senate reduced the amount to $44 million, while the House did not
include funding for this request. Based on more current estimates of damage
needs, Congress enacted $125.5 million for this account.
In addition to these requested natural disaster supplementals, the Senate and
House added funds for other requirements, including:
! Assisting efforts to eradicate polio in Africa -- The Senate added $9 million
for the Center for Disease Control to support CDC and World Health
Organization "national immunization days" in 40 countries over the next
several months and to link Africa with the global polio surveillance network.
H.R. 3579, as enacted, includes the Africa polio eradication funding, but
designates it as a non-emergency activity.
! HUD Community Development bloc grants -- The Senate ($260 million) and
the House ($20 million) both added funds to assist States in recovering from
natural disasters this year. Congress approved $130 million in the final bill.
! DOE Strategic Petroleum Reserve -- The Senate included $208 million to
cancel the upcoming sale of oil from the Strategic Petroleum Reserve, a
provision included in the enacted bill.
Defense Supplemental for Bosnia and Southwest Asia
The Administration's March 3 supplemental funding package included a
request for FY1998 funds to cover two major Department of Defense expenses -- (1)
$486.9 million for costs of extending the U.S. peacekeeping mission in Bosnia from
July 1, 1998 through the end of the fiscal year on September 30 and, (2) $1,361.4
million for costs of expanded operations in Southwest Asia due to the confrontations
with Iraq last fall and again this year. Costs of U.S. operations in Bosnia through
June 30 and of ongoing operations in Southwest Asia were funded in the FY1998
Defense Appropriations bill. The extension of the Bosnia mission and the more rapid
pace of operations in the Persian Gulf, however, have not been financed. The cost
estimate for Southwest Asia remains somewhat uncertain. The request assumed that
U.S. forces will be kept at the current level and operate at the current pace through
the end of the fiscal year on September 30. If the crisis eases and some forces are
withdrawn, however, actual costs would be lower. Conversely, if the crisis escalates,
and, especially, if a conflict develops, costs could be significantly higher. Defense
officials urged Congress to act quickly on supplemental funding for Bosnia and
Southwest Asia, and warned that a delay beyond May 1 would require drastic cuts in
training and the furlough of civilian personnel.
Perhaps the key issue in congressional action on the defense requests was
whether to insist on offsets for the supplemental amounts. The Administration
requested that the entire amount be provided as emergency appropriations, and the
Defense Department did not identify offsetting rescissions. The "emergency"
designation would increase caps on defense and total discretionary spending for
FY1998, so that offsets would not be required to stay within budget limits. Since
1993, however, Congress has insisted on offsets -- in budget authority, if not in
outlays -- for nearly all supplemental appropriations, so the Administration's request
is a break from recent precedent.
Although not a formal part of the FY1998 supplemental request, on March
3, the Defense Department also submitted an amendment to its FY1999 defense
budget request asking for$1,858.6 million in additional funding for Bosnia in
FY1999 as emergency appropriations. DOD did not provide room to absorb those
costs within the FY1999 request that was submitted to Congress on February 2, 1998.
That request, which amounts to $270.6 billion for the national defense budget
function, is right at the cap on FY1999 defense discretionary spending established by
last year's Balanced Budget Act. The "emergency" designation would raise the
FY1999 defense cap. This again breaks with recent precedent, in which anticipated
costs of ongoing operations in Bosnia, Southwest Asia, Haiti and elsewhere have
been financed as part of the regular appropriations bill within the totals established
by the annual budget process.
Congressional action. In its markup of S. 1768, the Senate Appropriations
Committee agreed, as requested, to provide all of the defense funding as emergency
appropriations, and the Committee did not identify offsets. The Committee made
only minor changes in the requested amounts. It provided the full amount requested
for operations in Bosnia and reduced funding for Southwest Asia by just $65.9
million. Of that amount cut, $50 million came from requested funds to cover
transportation of allied forces and the remaining $15.9 million to improve facilities
in Bosnia. The Committee also approved a provision, Section 203, urging the
President to seek allied contributions to offset costs of U.S. operations in the Persian
Gulf and establishing an account in the Treasury to receive any contributions.
Regarding the request for FY1999, the Senate Appropriations Committee did not act
on this proposal -- Committee Chairman Stevens said that it will be considered in
action on the regular FY1999 defense appropriations bill. In floor action, the Senate
approved an amendment by Senator Levin to require consultation with the allies on
"benchmarks" which, if achieved, would allow the withdrawal of troops from Bosnia.
The Senate also added a separate measure, not related either to Bosnia or Iraq, to
provide $151 million for Theater Missile Defense programs, of which $50 million
would be for the Israeli Arrow program. This funding was intended to respond to
new estimates of the future intermediate-range missile threat from Iran, and would
be contingent on an Administration request for the funds. All of these provisions
were included in the final Senate-passed version of H.R. 3579.
The House also approved (H.R. 3579) all requested funding for Bosnia and
Southwest Asia, except for $50 million in drawdown authority. The House
Appropriations Committee believed that the $50 million were not required by the
current pace of operations. The House further provided additional amounts for
classified purposes. As discussed elsewhere, defense funds were offset by cuts in
non-defense accounts. The House bill also added $37 million for the Reserve
Mobilization Income Insurance Fund. This fund was established in 1996 to provide
income insurance for reserve personnel involuntarily called into service. The fund
was supposed to be financed by subscription fees from reservists, but the account was
badly overdrawn from the start, and Congress terminated the program last year. The
$37 million was intended to pay benefits owed to personnel who had signed up for
the program and were called to active duty.
On an issue related to DOD's expanded operations in Southwest Asia, the
House approved in H.R. 3579 a provision proposed in Committee by Rep. Skaggs
that would ban the use of funds appropriated in the bill for the conduct of offensive
operations by U.S. forces against Iraq, unless such operations are specifically
authorized by a law. This amendment was an effort by its supporters to ensure that
Congress exercises its Constitutional authority to decide whether or not United States
armed forces should be used in an offensive war against Iraq. Mr. Skaggs in a House
floor statement on February 24, 1998, took issue with the Clinton Administration's
position that it already had sufficient authority to use military force against Iraq based
on the fact that Congress in 1991, through passage of a law , P.L. 102-1, had
provided such authority. Mr. Skaggs' amendment was a vehicle for giving force to
his position that Congress must first provide authority to the President to engage in
offensive military action against Iraq before he can Constitutionally order such
action. It is an effort to use Congress' power of the purse to ensure that Congress' role
in the use of the war power is acknowledged by the President. Mr. Skaggs noted that
his limitation would not apply to defensive responses to attacks against U.S. forces,
nor affect the enforcement of no-fly zones over Iraq. The White House objected to
this provision as an inappropriate infringement on the President's powers.
As enacted, H.R. 3579 provides nearly all defense funding requested by the
President and incorporates most of the new provisions added by the House and
Senate, with some key modifications. On the broad question of offsets, Congress
designated all defense funds as emergency resources and did not require rescissions.
Specifically, the final bill provides:
! $478.9 million for Bosnia, a cut of $7.9 million for what conferees declared
as excessive infrastructure development costs.
! $1.311 billion for Southwest Asia operations, as passed by the House.
! $179 million for theater missile defense, including $45 million for the Israeli
! $47 million for the House-added Reserve Mobilization Income Insurance
! $28 million for demining activities in Bosnia, a Senate initiative.
! $36.5 million for humanitarian assistance channeled through the Red Cross,
as proposed by the Senate.
! $272.5 million for the purchase of F/A-18 aircraft for the Marine Corps, as
initiated by Senator Bond.
The enacted bill furthers includes Senate amendments urging the President to seek
allied contributions for costs of maintaining forces in Southwest Asia and to set
benchmarks for assessing the success of the Bosnia peacekeeping mission. Avoiding
a potential veto threat, Congress modified the Skaggs amendment, making it a nonbinding sense of Congress that the none of the funds in the Act may be used for an
offensive strike against Iraq unless specifically authorized by Congress.
IMF New Arrangements to Borrow and Quota Increase
In late spring of 1997, beginning in Thailand, a major international financial
crisis emerged in East Asia. It then spread to financial markets worldwide, including
the U.S. stock market. Ultimately, the crisis will have a profound effect on the real
economies of those countries at the center of this financial storm. Spillovers from
the Asian crisis are certain also to affect U.S. economic growth, employment, and
international trade, though the degree of impact is subject to varying estimates.7
The International Monetary Fund (IMF), as the international lender-of-last has
extended new loans to Thailand, Indonesia, and South Korea. A pre-existing loan to
the Philippines was also augmented.
For background on the crisis, see CRS Report 97-1021, The 1997-1998 Asian Financial
Crisis, updated March 6, 1998, by Dick K. Nanto, and CRS Report 98-74, Asian Financial
Crisis: An Analysis of U.S. Foreign Policy Interests and Options, January 28, 1998, by
Richard P. Cronin.
A number of major legislative issues revolve around the IMF and its role in
the current crisis. The most prominent of these are two proposals for funding the
! a request for funding a proposed increase in the U.S. capital share in the IMF,
that is, in the so-called U.S. "quota," and
! a request for funding U.S. participation in the "New Arrangements to Borrow"
(NAB), a medium-term credit arrangement intended to provided supplemental
resources to the IMF in the event of a financial crisis.
Initially, the Administration had planned to seek funding for the quota increase as
part of the FY1999 Foreign Operations request. The onset of the Asian financial
crisis, however, convinced Executive branch officials to accelerate the request and
propose it as an FY1998 supplemental. For the NAB, the President requested
funding over a year ago and the Senate approved it during the first session as part of
the FY1998 Foreign Operations spending bill. In the midst of a controversy over
international family planning and abortion restrictions, however, Congress stripped
provisions related to the NAB from the Foreign Operations measure (P.L. 105-118).
The President has resubmitted the NAB proposal as part of the current supplemental
The most important of the two funding requests is the request for an increase
in the U.S. quota.8 It represents a permanent contribution to the IMF's capital base,
whereas the NAB represents a supplemental line of credit that could only be activated
in an emergency and that, indeed, might never be activated.
Quotas provide the IMF with the financial resources from which it extends
loans to economically troubled countries. In addition to determining the size of the
IMF's capital and members' contributions, quotas also determine a member country's
voting power, its access to IMF loans, and its share in any allocation of Special
Drawing Rights (SDRs).9 Quotas, therefore, are fundamental to the IMF's operation.
The U.S. quota would increase by 40%, from SDR 26.5 billion (currently
about $35.4 billion) to SDR 37.1 billion ($49.6 billion), an increase of about $14.2
billion. At the same time, the U.S. share of total IMF quotas would drop from
18.25% to 17.52%. The United States would, however, retain its veto on important
IMF decisions, including any decision to increase quotas, allocate SDRs, or amend
the IMF's Articles of Agreement. The United States would also continue to be the
IMF's largest shareholder, a position that gives it considerable voice in the decisions
and operations of the IMF.
Additional information on the proposed quota increase may be found in, U.S. Library of
Congress. Congressional Research Service. The International Monetary Fund's (IMF)
Proposed Quota Increase: Issues for Congress, CRS Report 98-56 E, by Patricia A.
The Special Drawing Right (SDR) is an international reserve asset created by the IMF and
used to denominate all IMF accounts.
Historically, requests for approval of an increase in the U.S. quota have
always been the occasion for vigorous congressional oversight of the programs and
policies of the IMF. The current financial crisis in Asia, with its spillover-effects on
the U.S. economy and financial markets, has heightened the rigor of congressional
oversight, particularly with regard to the IMF's conditionality, its emergency
financing mechanisms, and its surveillance and data dissemination procedures.
Additionally, while some are concerned about specific IMF policies or procedures,
others are opposed to any further funding of the IMF or even to the continued
participation of the United States in the IMF.
The request for approval of an increase in the U.S. quota contribution to the
IMF is complicated by the additional request that Congress reconsider and approve
U.S. participation in the "New Arrangements to Borrow" (NAB).10 The NAB are an
arrangement of medium-term credit lines that the IMF may borrow against to
supplement its resources in the event of an international financial crisis. They were
proposed in the wake of the late 1994 Mexican peso crisis. Commitments to the
NAB from 25 participants amount to SDR 34 billion, currently about $45 billion.
The U.S. share in the NAB would total SDR 6,712 ($9 billion), including SDR 4,250
million ($5.7 billion) that was authorized and appropriated prior to 1983 for U.S.
participation in the "General Arrangements to Borrow" (GAB).11 Because of this
earlier funding, only the SDR 2,462 million (currently $3.3 billion) increment need
be approved for the United States to fulfill its NAB commitment.
Congress has veto power over both the proposed quota increase and the NAB.
In order for the quota increase to become effective, IMF member countries
accounting for not less than 85% of total quotas must consent to the increase. The
United States, with 17.78% of the Fund's total votes, thus, can block the quota
increase from going forward. Similarly, in order for the NAB to enter into force, the
five participants having the largest commitments must approve. The United States
has made the largest commitment to the NAB, accounting for 19.7% of the total.
Under the Bretton Woods Agreements Act (P.L. 79-171, 22 U.S.C. 286), both
the increase in the U.S. quota in the IMF and U.S. participation in the NAB must be
authorized by the U.S. Congress. In addition, current U.S. budgetary treatment
requires that both be appropriated.12 Both, however, are considered to be an
exchange of monetary assets. They, therefore, are considered as having no impact
on the net budgetary position of the United States; that is they do not result in a net
budgetary outlay and, under the Balanced Budget Act of 1997, do not require an
For more details on the NAB, see U.S. Library of Congress. Congressional Research
Service. The International Monetary Fund's "New Arrangements to Borrow" (NAB), CRS
Issue Brief 97038, by Patricia A. Wertman. Updated regularly.
Additional information on the GAB may be found in, U.S. Library of Congress.
Congressional Research Service. The IMF's General Arrangements to Borrow (GAB): A
Background Paper, CRS Report 97-467, by Patricia A. Wertman.
More details on U.S. budgetary treatment of the IMF may be found in, U.S. Library of
Congress. Congressional Research Service. U.S. Budgetary Treatment of the International
Monetary Fund. CRS Report 96-279 E, by Patricia A. Wertman.
Congressional action. House-Senate conferees meeting on H.R. 3579 agreed
not to include IMF funding, as proposed by the Senate, but to wait until the House
takes up H.R. 3580, a second supplemental spending measure, or other legislation
(possibly FY1999 appropriation bills). Senate Appropriations Committee Chairman
Stevens says that he has a House commitment to take up the IMF issue soon, but
considerable opposition exists to the proposal making the outcome of a House vote
highly uncertain. Moreover, some House Members say that they will attach
contentious abortion restrictions related to U.S. overseas family planning programs
to any measure funding the IMF unless the President is willing to compromise on the
Prior to the conference meetings, on March 26, 1998, the Senate agreed by
a vote of 84-16 to an amendment modifying IMF appropriation language reported the
previous week by the Appropriations Committee. Conditions and restrictions
included in the Committee-reported bill had been opposed by the Administration as
inflexible and largely unworkable. As incorporated into H.R. 3579 that passed the
Senate on March 31, the amendment, proposed by Senators McConnell, Hagel,
Gramm, and Stevens, provided funding for both the $3.4 billion for the NAB and the
$14.5 billion for the proposed increase in the U.S. quota. Funds for the NAB would
be available immediately. Funds for the quota increase, on the other hand, would be
conditional; they may not be transferred to the IMF until 30 days after the Secretary
of the Treasury certifies that the major shareholders, including the G-7 countries (the
U.S., Japan, Germany, France, Italy, the United Kingdom, and Canada), have
publicly agreed to and will seek to require borrowers from the IMF to:
! liberalize restrictions on trade in good and services and on investment, at a
minimum consistent with the terms of all international obligations and
! eliminate the practice or policy of government-directed lending or provision
of market distorting subsidies to favored industries, enterprises, parties, or
Conditional approval of funding for the IMF would be unprecedented. The Secretary
of the Treasury would report annually on the implementation and enforcement of
these provisions. In addition, the United States would exert its influence in the Fund
to see that borrowing countries take action to remove discriminatory treatment
between foreign and domestic creditors in debt resolution proceedings.
The bill also contained industry specific provisions that require the Secretary
of the Treasury to certify that no IMF resources have supported the semiconductor,
steel, automobile, textile and apparel industries. The insertion of this section grew out
of initiatives led by Micron Industries, the last U.S. producer of microchips.13 The
addition of an amendment by Senator Hollings would establish a team with in the
U.S. Commerce Department to collect data and monitor the impact of the Asian crisis
on imports and prices in these industries.
Rogers, David. IMF Funds Conditionally Voted by Senate Panel. Wall Street Journal,
March 18, 1998, p. A2.
The Senate also passed an amendment introduced by Senator Gorton. It
provided that the Secretary of the Treasury was to instruct the U.S. Executive
Director to use the voice and vote of the United States to prevent IMF resources from
being used for the direct benefit of President Suharto of Indonesia or his family and
to oppose any disbursements to Indonesia that would be on less stringent terms than
those imposed on Korea and the Philippines.
H.R. 3579, as passed by the Senate, also provided for timely public access to
information and documents relating to the funds operations and programs and for
access by the General Accounting Office (GAO) for the purpose of financial and
program audits. The bill also added a variety new reporting requirements, including
information on 1) the rules and regulations of IMF borrowing countries' with regard
to capitalization ratios, reserves, deposit insurance, and transparency of their financial
institutions; 2) burden-sharing by private sector investors and creditors, including
commercial banks in the G-7 countries; 3) the Fund's repayment schedules; and 4)
the status of efforts to meet the Basle Committee's Core Principles for Effective
Banking Supervision. It is worth noting, perhaps, that, while the U.S. Treasury has
generally complied with past reporting requirements, sometimes this has been more
pro forma than substantive, particularly when the department has been faced with a
list of reporting requirements that might be viewed as administratively burdensome.
The House bill for the IMF (H.R. 3580), which is still awaiting floor debate,
is tougher than the Senate. Like the Senate bill, the House Appropriations
Committee provides for unconditional appropriation of funding for the NAB. Funds
for the quota increase, however cannot be obligated or made available until 15 days
after the Secretary of the Treasury provides written notification that IMF loans above
$500 million include provisions committing the borrowing country to:
! comply with the terms of international trade agreements of which the borrower
is a signatory;
! eliminate the practice or policy of government-directed lending by private or
public financial institutions; and
! guarantee nondiscriminatory treatment in debt resolution proceedings between
domestic and foreign creditors, and for debtors and other concerned persons.
In addition, the quota increase cannot take effect until the Secretary of the Treasury
certifies that private investors and bankers have made a significant contribution in
conjunction with a financing package that, in the context of an international financial
crisis, might include taxpayer supported official financing. Finally, U.S. funds
cannot be provided to the IMF unless the Secretary of the Treasury certifies,
beginning six months after enactment, that Executive Board minutes and staff
reviews of ongoing loan programs have been released. Like the original
Senate-reported conditions, Treasury Secretary Rubin asserts that some of these
requirements are unworkable.
The bill further provides for notification of five days prior to disbursal of
funds from the Exchange Stabilization Fund (ESF) and for the establishment of an
International Financial Institution Advisory Commission, which also appears in the
Senate legislation but differs slightly. Sec. 405-415 of the House Committee bill
constitutes the "International Monetary Reform and Authorization Act." It would
establish an ongoing Advisory Commission on IMF Policy to review loan programs.
It also instructs the U.S. Executive Director to use the voice and vote of the of the
United States to promote a variety of policy goals. These include promoting: more
effective IMF surveillance and fuller disclosure; sound banking practices and good
governance; the structuring of IMF assistance to ensure that public funds are not
channeled toward unproductive purposes, including "show case" projects and
excessive military spending; internationally recognized worker rights; a more open
IMF policy of document release; IMF self-evaluation, including the possible
establishment of an operations evaluation department; and coordination with the
World Bank in advancing credit to small business, including microenterprise. It
provides for reports on reforming the architecture of the international financial
system; annual testimony by the Secretary of the Treasury on the IMF and on the
state of the international financial system; and audit of the IMF by the General
Accounting Office (GAO).
Advance Appropriation for International Organization Arrears
The Clinton Administration proposes paying $1.021 billion in accumulated
arrearages to international organizations over the next three fiscal years. Most of the
funds — $921 million — are sought in a proposed advance appropriation14 to be
included in a FY1998 supplemental that would only be disbursed in FY1999 and
FY2000. The Administration is requesting as part of a supplemental package, $921
million ($475 million for FY1999 and $446 million for FY2000 disbursement) to pay
U.S. outstanding dues owed to international organizations and for U.N. peacekeeping
Congress appropriated $100 million ($54 million for U.N. regular budget
arrears and $46 million for U.N. peacekeeping arrears) last year (P.L. 105-119), but
those funds may not be paid until specific authorizing legislation is enacted which
makes payment contingent on specific U.N. reforms. In 1997, Congress and the
Administration had negotiated such authorizing language, including provisions
(popularly known as the Helms-Biden agreement) which would have allowed the
United States to pay $926 million in arrears payments over three years to
international organizations and U.N. peacekeeping operations. The arrearage
payments were made contingent, however, on the implementation of specified
international organization reforms ("benchmarks"), including a reduction in U.S.
assessment rates for the United Nations, some U.N. system organizations, and for
U.N. peacekeeping operations.15 That legislation (H.R. 1757) was not enacted
In an advance appropriation, budget authority is provided in an appropriation act to
become available in a fiscal year beyond the fiscal year in which the appropriation act is
enacted. The amount is included in the budget totals for the fiscal year in which the amount
will become available. See Glossary of Budgetary Terms in CRS Report 91-902, Manual
on the Federal Budget Process, by Schick, Allen, et. al.
For additional discussion see CRS Issue Brief 86116, U.N. System Funding: Congressional
Issues; CRS Issue Brief 90103, United Nations Peacekeeping Issues for Congress; and CRS
because of disagreement over unrelated House language restricting activities of
foreign family planning organizations. Following further negotiations in early 1998,
House and Senate conferees agreed on March 10 to a conference report on H.R.
1757, and the House approved H.R. 1757 on March 27. This omnibus foreign policy
measure provides $926 million, including the $100 million already appropriated, for
international organization arrearage payments, subject to a series of conditions and
reforms that must be met by the U.N. system. Nevertheless, because of family
planning and abortion restrictions that remain in H.R. 1757, the President is expected
to veto the bill. (For more on H.R. 1757, see below under "Related Legislation.")
Subsequent to U.S. government inaction on arrearage payments, the U.N.
General Assembly in December 1997 established a new three-year (1998-2000) scale
of assessments which did not lower the U.S. assessment rate from its present ceiling
of 25% of the regular U.N. budget. A reduction in the U.S. rate had been sought by
the Administration and was central to the Helms-Biden agreement. In a December
23, 1997 statement, Deputy Spokesman for the U.S. Department of State James
Foley, noted that allowance was made by the U.N. General Assembly for "the ceiling
negotiations to be reopened depending upon congressional action to address our
arrears and commitment to regularly pay the U.N." He called on Congress "to act
early next year to provide the necessary legislation and funding for the U.S. to pay
its obligations to the U.N. and other international organizations. Without such
action, we will not be able to re-open negotiations to reduce our rate of assessment.
Each year we are unable to reduce our share, the cost to the U.S. taxpayer is at least
A central focus of the Helms-Biden agreement (in exchange for payment of
most of the arrears) has been a reduction in the U.S. share of the U.N. regular budget
assessment to 22% (with U.N. peacekeeping assessments to 25% from current 31%)
by FY1999 and U.N. regular budget and some other U.N. system organizations to
20% by FY2000. While Administration officials are pressing for enactment of an
arrears package in order to get an assessment reduction, the U.N. General Assembly
has only agreed to consider revisiting the assessment scale (in light of U.S. funding
actions). U.N. members have not agreed to any reduction in the U.S. rate.
The United States is assessed 25% of the U.N. regular budget. Because there
is a 25% ceiling on assessments, the U.S. contribution is below the figure reflecting
the ratio of its wealth to world GNP. If there were no ceiling, the U.S. assessment
would be more than 26%. The difference is made up by other major donors paying
more. In order for the U.S. rate to go down, other countries rates would have to go
up. While some reduction in the ceiling, perhaps to 22%, might be agreed to by the
U.N. membership (provided there is positive U.S. government funding action), a
reduction to 20% seems unlikely. Japan's rate under the current assessment scale is
to go up to 20.573% in the year 2000. If a ceiling of 20% were adopted, the other
Report 97-711, U.N. Funding, Payment of Arrears and Linkage to Reform: Legislation in
the 105th Congress.
major donors (mainly European Union countries) would have to make up not only
the drop in the U.S. rate, but also that for Japan.
The Administration's three-year arrears package calls for payment of $1.021
billion, although the total U.S. arrears are closer to $1.5 billion. The approximately
$428 million discrepancy consists of several items: about $162 million for the U.N.
regular budget (legislative and policy withholdings including about $100 million in
dispute over tax reimbursements for U.S. citizens working for the United Nations);
about $256 million in U.N. peacekeeping withholdings because of policy and
legislative limits on U.S. contributions,16 about $5 million in legislative and policy
withholdings for U.N. affiliated organizations; and about $5 million for other
international (non U.N.) organizations.
Congressional action. Congress did not address the U.N. arrears
supplemental in H.R. 3579, but may consider it later when the House takes up H.R.
3580, a second supplemental spending bill for FY1998. In reporting S. 1769, the
original Senate version of H.R. 3579, Chairman Stevens noted that Congress had not
yet enacted legislation authorizing these and previously appropriated arrearage funds,
and that he expected to take up $921 million recommendation during consideration
of the FY1999 State Department appropriations bill. He observed, however, that the
House could attach the arrears package, making it an issue for conference.
The House Appropriations Committee approved (H.R. 3580) $505 million
in advance appropriations ($475 million for FY1999 and $30 million for FY2000)
for U.N. peacekeeping arrearages. The House Committee makes expenditure of
funds subject to enactment of authorization legislation including required reform
conditions and prohibits payment of arrearage funds until the U.S. assessment for the
U.N. regular budget is reduced to 22% and for peacekeeping to 25%. The Committee
explains that the $505 million it recommends, together with the $100 million
provided in the regular FY1998 appropriation (P.L. 105-119), and another $107
million authorized in the State Department authorization legislation (H.R. 1757) to
be credited to U.S. arrearages to the United Nations, totals $712 million. This, the
Committee says is the amount the Administration sought for payment of U.N. regular
budget and peacekeeping arrears. The remaining $309 million is requested for
payment of arrears to other international organizations and, in the House Committee's
view, need not be dealt with in an advance appropriation, but can be considered
following the normal order.
The scale of assessments for U.N. peacekeeping accounts is based on a modification of the
scale for U.N. regular budget contributions, with the five permanent members of the U.N.
Security Council assessed at a higher rate than for the regular budget. Since 1992, U.S.
policy has been to seek a U.N. General Assembly decision to reduce U.S. peacekeeping
assessments to the regular budget assessment of 25%, meaning other countries' assessments
would have to increase. Instead, because of regular budget assessment changes for Russia
after the breakup of the Soviet Union, the U.S. peacekeeping assessment (with that of China,
France, and the United Kingdom) rose. The Administration, however, has recognized only
30.4% and by legislative requirement, since October 1, 1995, U.S. peacekeeping
contributions have been limited to 25%.
Related Issues and Legislation
As noted above, it is common for Congress to attach unrelated, and at times
controversial legislative issues to pending supplemental spending measures. It is
widely anticipated that some House Members will attempt to link IMF and U.N.
arrearage payments with anti-abortion international family planning policy, as was
done in late 1997. Other pending legislation, especially authorizing bills for the IMF
and U.N. arrears, may also affect the outcome of the supplemental spending debate.
For over a decade, Congress has engaged in contentious debates over U.S.
international population assistance policy, an issue that has stalled enactment of the
Foreign Operations appropriations bills each of the past three years. In order to freeup passage of the FY1998 Foreign Operations measure, the House agreed to drop its
restrictive family planning provisions, but insisted that appropriations for the
IMF/NAB and U.N. arrearage payments also be removed from pending spending bills
and linked with the family planning matter. When House leaders were unable to
reach agreement on family planning language with the White House and the Senate
in mid-November, Congress recessed without concluding debate on the IMF or U.N.
Representative Chris Smith, the main sponsor of anti-abortion family
planning restrictions, has stated consistently since late 1997 that, with the support of
the House leadership, he will continue to link the three issues in whatever legislative
venue they are packaged. While it is not certain that the family planning issue will
be attached to supplemental appropriations legislation, it is widely expected to be
linked in some manner to consideration of IMF and U.N. arrears funding. If not
added as an amendment to a supplemental spending measure, the family planning
controversy could be debated as a separate, but parallel bill
The main dispute in the family planning debate centers on abortion
restrictions and the eligibility requirements for foreign organizations receiving funds
to implement U.S.-sponsored population assistance programs. For many years, U.S.
law has prohibited the use of any U.S. government funds for the performance of
abortions by recipient organizations implementing American foreign aid programs.
The prohibition, however, did not apply to activities conducted by these
organizations with privately raised funds. During the mid-1980s, in what has become
known as the “Mexico City” policy, the Reagan, and later the Bush Administrations,
restricted funds for any foreign organization that was involved in any way in
voluntary abortion activities, even if such activities were undertaken with non-U.S.
government funds. Several groups, including International Planned Parenthood
Federation-London (IPPF), became ineligible for U.S. financial support. President
Clinton in 1993 reversed the position of his two predecessors, allowing the United
States to resume funding for all family planning organizations so long as U.S. money
was not used in abortion-related work.
During the past three years, the House and Senate have taken opposing
positions on the Mexico City issue. The House position supports reinstatement of
the Mexico City policy restricting U.S. aid funds to foreign organizations involved
in abortion-related activities or to those that lobby to change anti-abortion laws in the
countries within which they work. The Senate, on the other side, has always deleted
the House provisions dealing with Mexico City policy, leaving decisions in the hands
of the Administration. Moreover, Administration officials have stated that President
Clinton would veto any bill if it included the House-passed Mexico City restrictions.
Supporters of the Mexico City policy argue that funds received by foreign
organizations implementing family planning programs are fungible, and that while
technically, no U.S.-funds are used to perform abortions or lobby to alter abortion
laws, American grants to such organizations can release other resources for these
purposes. Administration and other supporters of current policy contend that existing
laws ensures that U.S. foreign aid funds do not pay for overseas abortions or lobbying
activities. They believe that undue restrictions placed on international family
planning programs will undermine the principal of a policy based on informed choice
and will affect the quality and quantity of services provided through U.S. grants.
Disruptions to U.S. programs, such as funding delays and reductions experienced in
the past three years, they contend, diminishes access by couples in developing
countries to a wide-range of family planning methods, that in some cases may
contribute to increasing the number of abortions performed.
Congress unsuccessfully considered several options in 1997 to resolve this
dispute. The final proposal offered by the House leadership in mid-November
dropped the restrictions on abortions, maintaining only those associated with foreign
organizations working to relax abortion laws and government policies overseas. In
exchange, House leaders promised to allow IMF and U.N. arrears consideration to
move forward. The White House reportedly rejected the offer, and has remained
strongly opposed to linking what it terms as important U.S. foreign policy interests
with un-related domestic abortion politics.
After being deadlocked for nearly six months over the family planning issue,
House and Senate conferees approved a conference report on March 10 for H.R. 1757
(Foreign Affairs Reform and Restructuring Act). Family planning restrictions
included in the conference version of H.R. 1757 are similar to those offered by House
leadership in November 1997, but rejected by the White House: that is, no funds to
foreign organizations that use their own money to perform abortions or lobby to
change abortion laws, but allows the President to waive the abortion prohibition, an
action that would reduce population aid from $385 million to $356 million. The
House passed the conference report on H.R. 1757 on March 27, followed by the
Senate (51-49) on April 28. Although the bill has not reached the White House,
aides say the President will veto H.R. 1757.
Foreign Policy Authorization Conference Agreement and U.N.
When Congress recessed in November, House and Senate conferees had
reached a tentative agreement on an omnibus foreign policy authorizing bill (H.R.
1757) that, among other things provided for $819 million in U.N. arrearage payments
under certain conditions. The legislation stalled when conferees could not reach
agreement on international family planning restrictions that had been attached by the
House. Subsequently, Congress enacted the Departments of Commerce, Justice, and
State Department Appropriations, 1998, (P.L. 105-119), legislation that provides
$100 million this year for U.N. arrears payments, as requested by the Administration.
The payment, however is subject to congressional enactment of authorizing
legislation that was deadlocked in conference.
On March 10, House/Senate conferees broke the deadlock, reaching
agreement on H.R. 1757 that authorizes a total of $819 million for arrearage
payments: $100 million for FY1998, $475 million for FY1999, and $244 million in
FY2000. Although it falls short of the $921 million advance FY1999/2000
appropriation request, the authorization would release the $100 million approved in
P.L. 105-119. Moreover, H.R. 1757 authorizes the use of $107 million the U.N.
owes the United States for reimbursable peacekeeping expenses as an additional
arrearage reduction. Therefore, the total authorized in H.R. 1757 for international
organization arrearage payments falls $95 million below the $921 million advance
appropriation request. While it would authorize the full amount proposed for
FY1999, the shortfall would occur in FY2000. The House passed on March 27 the
conference report on H.R. 1757, followed by the Senate (51-49) on April 28.
Nevertheless, most observers expect the White House to reject the family planning
restrictions contained in the bill, leaving the U.N. arrears payments unauthorized.
As noted above, congressional procedures call for the enactment of both
authorization and appropriations for U.S. participation in IMF quota increases or new
facilities. Congress, however, has found it difficult for over a decade to enact
separate authorizations for IMF and multilateral development bank replenishments.
Authorizations have routinely been included in appropriation measures or
incorporated into other broad foreign policy authorization acts.
Following this pattern. Congress has moved on legislation appropriating IMF
funds without previously debating authorizing bills. Nevertheless, House and Senate
supplemental spending measures (H.R. 3579 and H.R. 3580) incorporated many
elements included in authorization bills reported or introduced by House Banking
(H.R. 3114) and Senate Foreign Relations (S. 1795) Committees.
Table 3. Natural Disaster Emergency Supplementals
(budget authority in millions of dollars)
Department of Agriculture
Emergency Conservation Program (contingent)
Dairy & Livestock Disaster Asst Program
Dairy Disaster Asst Program (contingent)
Livestock Disaster Asst Program (contingent)
Agricultural Credit Insurance Fund (subsidy)
of which, Farm Operating Loans
Tree Assistance Program (contingent)
Watershed & Flood Prevention
National Forest System
National Forest System (contingent)
State & Private Forestry
State & Private Forestry (contingent)
U.S. Geological Survey (contingent)
Bur of Reclamation-Water Resources (contingent)
National Park Service (contingent)
Bureau of Land Management (contingent)
Bur. of Indian Affairs, construction (contingent)
O & M, General (contingent)
O & M, General (contingent) (by transfer)
Ag. Credit Insurance Fund (subsidy) (contingent)
Watershed & Flood Prevention (contingent)
Wildland & Fire Management (contingent)
Department of the Interior
Fish & Wildlife, Construction (Guam)
Fish & Wildlife, Construction (contingent)
Corps of Engineers
Construction, General (contingent)
Department of Transportation
Federal-aid Highways (contingent)
Railroad Repair (contingent)
Health & Human Services
Disease Control, Research/Training (contingent)
Housing & Urban Development
Community Develop. Bloc Grants (contingent)
Department of Energy
Strategic Petroleum Reserve (contingent)
Prohibition of Strategic Petroleum Reserve sale
Operation & Maintenance, Army (Ft Drum)
O & M, Army (contingent)
O & M, Navy (contingent)
O & M, Marine Corps (contingent)
O & M, Air Force (contingent)
O & M, Defense-wide (Guam)
O & M, Army Reserve (Guam)
O & M, Air Force Reserve (Guam)
O & M, Army National Guard (NY State)
O & M, Army National Guard (contingent)
O & M, Air National Guard (contingent)
O & M, Defense Health Program (Guam)
Military Construction, Navy (contingent)
Military Construction, Air Force (contingent)
Military Construction, Army Natl Guard (cont)
Family Housing, Navy (CA) (contingent)
Family Housing, Air Force (Guam)
Family Housing, Air Force (CA) (contingent)
Navy Working Capital Fund (contingent)
Defense-wide Working Cap Fund (Guam)
O & M, Defense-wide (by transfer)
Base Realignment & Closure Acct (contingent)
Fed. Emergency Mgmt Agency (contingent)
Department of Defense
O & M, Navy (Guam)
O & M, Air Force (Guam)
O & M Defense-wide (Calif) (contingent)
O & M, Defense Health Program (by transfer)
Family Housing, Navy (Guam)
Navy Working Capital Fund (Guam)
TOTAL, Natural Disaster Supplementals
of which, contingent funds
* Contingent funds in Senate-passed H.R. 3579.
Table 4. Defense & Iraqi Opposition Emergency Supplementals
(budget authority in millions of dollars)
O & M, Overseas Contingency Operations
Military Personnel, Army
Military Personnel, Navy
Military Personnel, Marine Corps
Military Personnel, Army
Military Personnel, Navy
Theater Missile Defense
Reserve Mobilization Income Insurance Program
Overseas Humanitarian, Disasters & Civic AidRed Cross (contingent)
Aircraft procurement, Navy
Demining activities in Bosnia
Economic Support Fund (AID) (contingent)
Radio Free Iraq (USIA) (contingent)
Military Personnel, Air Force
Reserve Personnel, Navy
O & M, Overseas Contingency Operations
Military Personnel, Marine Corps
Military Personnel, Air Force
Reserve Personnel, Navy
TOTAL, Southwest Asia/Iraq
* Negative amount reflects adjustments to funds provided in the FY1998 Defense Appropriations Act.
Table 5. Non-Emergency Supplementals
(budget authority in millions of dollars)
Food & Drug Admin. (from fee collections)
USDA civil rights & non-civil rights activities
USDA General Counsel civil rights activities
USDA, Farm Service Agency Loans (subsidy)
USDA, Karnal bunt in wheat
DOE Weapons Activities [by transfer]
DOE Cost of Work program [from receipts]
Interior, Operation of the National Park System
Interior, Indian Programs
Interior, Indian trust fund accounts
USDA, National Forest System
HHS, Indian Health Services
HHS, Disease Control, Research, & Training
HHS, Health Care Financing Administration
Transportation, Planning, R & D
Transportation, Amtrak Reform Council
Transportation, FAA (Airport & Airways Trust
Fund), "Year 2000" computer problems
Transportation, Emergency Transportation
Treasury Dept., Building Repair
Customs Service, hanger construction
Natl Transportation Safety Bd-TWA Flight 800
Emergency Trade Deficit Review Commission
Architect of the Capitol, Capitol Buildings
Architect of the Capitol, Capitol Grounds
Capital Police Board (by transfer)
DOE Defense Environmental Restoration &
Waste Management [by transfer]
Interior, Royalty & Offshore Minerals
Management [from receipts]
Interior, Abandoned Mine Rec. Fund [by transfer]
Treasury Dept. “Year 2000" conversion problems
NASA Human Space Flight [by transfer]
TOTAL, Non-Emergency Supplementals
Veterans Compensation & Pensions
House of Rep., Gratuities, Deceased Members
Table 6. Rescissions -- For Emergency and Non-Emergency Funds
(budget authority millions of dollars)
RESCISSIONS/OFFSETS FOR NON-EMERGENCY SUPPLEMENTALS
Department of Agriculture:
Agricultural Research Service
Animal & Plant Health Inspection Service
Food & Safety Inspection Service
Grain Inspection, Packers & Stockyards Admin
Agricultural Marketing Service
Farm Service Agency salaries & expenses
Agricultural Credit Insurance Fund Program
Natural Resources Conservation Service (NCRS)
NCRS, Farm Option Program (offset)
Rural Housing Service
Child Nutrition Programs
Food Program Administration
National Forest System
Forest & Rangeland Research
State & Private Forestry
Wildland Fire Management
Reconstruction and construction
BLM-Management of Land Resources
BLM-Oregon & California Grant Lands
Bur. of Reclamation-Water & Related Resources
Bureau of Mines-Mines & Minerals
Royalty & Offshore Minerals Mgmt (offset)
US Fish & Wildlife Service-Construction
US Fish & Wildlife Service-Resource Mgmt
National Park Service-Construction
Bureau of Indian Affairs-Construction
Department of the Interior:
Department of Transportation:
Payments to Air Carriers (contract authority)
Payments to Air Carriers (Airport/Airway Trust
Fund) (contract authority)
FAA, Grants-in-aid-Airports (Airport/Airway
Trust Fund) (contract authority)
FAA, Facilities, Engineering, & Development
Federal Rail Road Administration, Conrail Labor
Maritime Guaranteed Loan (title XI) program
U.S. Customs Service, salaries & expenses
U.S. Customs Service, Drug Interdiction
IRS, Information Technology Investments
Health & Human Services:
Health Professionals Education fund
Peer Review Limitation (offset)
RESCISSIONS/OFFSETS FOR EMERGENCY SUPPLEMENTALS
Housing & Urban Development:
Public & Indian Housing, Sec. 8 Reserve
Corporation for National & Community Service
TOTAL, EMERGENCY RESCISSIONS
Department of Transportation:
FAA, Grants-in-aid-Airports (Airport/Airway
Trust Fund) (contract authority)
Department of Education:
Bilingual and Immigrant Education