## **Viewsand Estimates on the Fiscal Year 1998 Budget**

March 20, 1997

 

The Honorable John R. KasichChairmanCommittee on the Budget309 Cannon House Office BuildingWashington, D.C. 20515

Dear Mr. Chairman:

Pursuant to the provisions of Clause 4(g)of Rule X of the Rules of the House of Representatives for the105th Congress and Section 301(d) of the Congressional Budget Actof 1974, as amended, I am transmitting the Views and Estimates ofthe Committee on Commerce with respect to the President's BudgetProposal for Fiscal Year 1998. 

These Views and Estimates reflect the viewsof the Majority Members of the Committee. It is my understandingthat the Minority Members of the Committee plan to transmitseparate views to you for your consideration.

As always, the Members of the Committee onCommerce stand ready to work with the Members of the Committee onthe Budget to develop a budget for Fiscal Year 1998 that is notonly fiscally responsible, but one which will result in achievingour goal of a balanced budget by 2002. If I can be of any furtherassistance to you as you proceed with your Committee'sdeliberations, please do not hesitate to contact me.

Sincerely,

 

Tom BlileyChairman

Enclosure

 

# Views and Estimates onthe Fiscal Year 1998 Budget

 

## Submitted by theCommittee on Commerce

## U.S. House ofRepresentatives

## Tom Bliley, Chairman

## March 20, 1997

 

Introduction

Clause 4(g) of Rule X of the Rules ofthe House of Representatives for the 105th Congress and Section301(d) of the Congressional Budget Act of 1974, as amended,require each standing committee of the House to submit to theCommittee on the Budget (1) its views and estimates with respectto all matters to be set forth in the Concurrent Resolution onthe Budget for the ensuing fiscal year which are within itsjurisdiction or functions, and (2) an estimate of the totalamounts of new budget authority and budget outlays resultingtherefrom, to be provided or authorized in all bills andresolutions within its jurisdiction which it intends to beeffective during that fiscal year. 

On February 6, 1997, President Clintonsubmitted to Congress his proposed budget for Fiscal Year 1998.The Committee on the Budget has requested that Committees submittheir Views and Estimates by March 20, 1997.

The President's Fiscal Year 1998 budgetproposal purports to balance the Federal Budget in 2002. TheCommittee on Commerce fully supports this objective. Balancingthe Federal budget and reducing the Federal deficit is the majorgoal, not only of this Committee, but of every Committee in theHouse.

Balancing the Federal budget is not animpossible task. The Federal deficit can be eliminated. It simplywill take an honest approach to the Federal budget, an honestplan to achieve a balanced budget based on honest reforms ofcurrent programs, honest estimates of the savings from thosereforms, and an honest schedule to implement those programs.

Regrettably, after reviewing thePresident's budget, the Committee is forced to conclude that thePresident's February 6, 1997, budget proposal does not meet itsobjective. Rather than an honest plan to balance the budget in2002, the President has submitted a budget that does not balance.The proposed budget calls for practically no deficit reduction inthe first three years, to be followed by two years with 98percent of the reductions. But even the delayed reductions do notadd up to a balanced budget. The Congressional Budget Officeestimates that the Administration plan will not balance thebudget even using a series of budget gimmicks advocated by theAdministration. And these gimmicks would impose surprise taxes onindividuals and businesses across America. To put it simply, themath just doesn't work.

The Committee on Commerce is firmlycommitted to achieving a real balanced budget by 2002. In orderto attain that goal, the Committee intends to work for enactmentof fiscally responsible legislation to restructure the Medicareand Medicaid programs, while ensuring that the beneficiaries ofthose programs, both current and future, receive the highestquality of medical care and services. The Committee intends tocontinue working toward the enactment of legislation that willprovide a leaner, more efficient Federal government byeliminating unnecessary Federal bureaucracies and burdensomeregulations and by streamlining the programs necessary for theprotection of the environment and the public health and safety ofall Americans. 

Building a bridge to the 21st Centuryis a commendable goal. But that bridge should not be a "tollbridge" built with faulty estimates and substandard plans atthe cost of higher deficits and more American taxpayer dollars.

The Committee's Views and Estimates onthe President's Fiscal Year 1998 budget proposal dated February6, 1997, for programs within the jurisdiction of the Committee onCommerce are contained in the following pages.

 

## Consumer Protection

### Consumer Product Safety Commission

The Consumer Product SafetyCommission’s (CPSC's) budget request for Fiscal Year 1998 is$45 million, a 6 percent increase over its 1997 Fiscal Yearbudget authority, and a 13 percent increase over its FY 1996budget authority. The Committee recommends that funding for theCPSC continue at no more than last year’s funding level.

In keeping with the President’sbudget commitment that "the era of big Government isover," the Committee believes that the CPSC should focus onbetter government as opposed to larger government. TheCPSC’s budget submission requests an increase for everysingle one of its offices except the Office of the InspectorGeneral and the Office of Information Services. In fact, the CPSChas managed to include in its budget a new request for a 5percent addition for the Commissioners, as well as a 10 percentboost for "Executive Direction". There is no reason whythe CPSC should not contribute to deficit reduction efforts,particularly considering that almost 19 percent of its annualbudget is consumed by agency management expenses.

The Committee believes that the CPSCshould streamline its activities in order to more efficientlyperform its education and regulatory responsibilities whilemaintaining appropriate consumer safety standards. TheCPSC’s authorization expired in 1992, and the Committee doesnot believe that further funding is appropriate until theCommittee completes its consideration of reauthorizinglegislation.

### Federal Trade Commission

The Federal Trade Commission (FTC), anindependent agency charged with administering nearly 40 differentstatutes, requested new budget authority of $108 million forFiscal Year 1998, an increase of 5 percent over its estimatedbudget authority for Fiscal Year 1997. Much of the agency’sbudget authority is offset by Hart-Scott-Rodino merger fees.These fees are estimated to amount to $76 million in FY 1997 and$80 million for FY 1998 and will represent a 5 percent increasein merger fee revenues.

The 104th Congress enacted legislationto reauthorize the FTC through FY 1998 (P.L. 104-216). TheCommittee will again consider reauthorization legislation in theSecond Session of the 105th Congress. 

Given the heightened workload andresponsibilities facing the agency, both with the increase inmerger activity and legislative mandates, such as theTelemarketing Fraud Act, the President’s request representsan acceptable funding level for this agency. It is only slightlyless than the Committee’s own authorized level and willpermit the agency to retain its relatively lean posture withoutcompromising its primary missions.

### National Highway Traffic SafetyAdministration

The President’s Fiscal Year 1998budget recommends several initiatives for funding the NationalHighway Traffic Safety Administration (NHTSA), an administrationin the Department of Transportation (DOT). First, thePresident’s budget recommends that all funding for theagency be taken from the Highway Trust Fund, instead of fundingmost of the agency’s administration and automobile safetymission from the general treasury, as has heretofore been thecase. Second, the President’s budget recommends a nearly 10percent increase in the agency’s overall budget over FY 1997enacted levels, to $333 million. An increase is requested forvirtually every major program for which the agency isresponsible.

NHTSA was last reauthorized in the 1991Intermodal Surface Transportation Efficiency Act (ISTEA). Thatauthorization expired at the end of Fiscal Year 1995.

Among those programs within theCommittee’s jurisdiction, the President has requestedincreases of nearly $1.9 million. This is in addition to thesubstantial increases the agency received for new or expandedactivities in the FY 1997 funding cycle. The Committee has notyet evaluated the merit of each of these requests, and some ofthe assumptions made in the budget, such as the "repeal ofthe requirements for collection and analysis of unnecessaryinsurance information," require statutory changes. In lightof these realities, the Committee believes that it would beprudent to withhold these increases until the Committee completesits reauthorization of the agency, planned for this session.

Finally, while the Committee has notyet fully evaluated the Administration’s proposal to secureall NHTSA funding from the Highway Trust Fund, the Committee isconcerned that such a change in funding schemes could place vitalautomobile safety programs in competition with othertransportation priorities, possibly threatening the availabilityof resources for those programs. This is a question that theCommittee will explore further in its reauthorization hearings.

## Energy

The President's Fiscal Year 1998 budgetrequests $19.2 billion in new budget authority for the Departmentof Energy (DOE). This represents an increase of $2.9 billion fromFY 1997 (17 percent), after two years at a relatively flat levelof $16 billion. Nearly all of the increase ($2.3 billion) abovethe FY 1997 level is the result of two new initiatives: (1)changing the financing of construction projects by requestingfull up-front funding ($1.6 billion); and (2) sharply expandingthe Environmental Management (EM) privatization program DOEestablished last year ($700 million). The DOE FY 1998 request forits core programs is 2.6 percent higher than the FY 1997 level.Although the request for core programs is relatively flat, DOEseeks major increases for three Department programs: (1) energyconservation and efficiency (25 percent); (2) solar and renewableenergy research and development (22 percent); and (3)environmental management (20 percent).

The Environmental Quality mission isthe most important DOE activity, accounting for $7.8 billion ofits FY 1998 budget request of $19.2 billion. This is a $1.2billion increase from the FY 1997 level of $6.6 billion, and aslight increase for core programs. The Department requests $5.6billion for core national security programs for FY 1998, and $1billion for full funding of construction projects. This comparesto the FY 1997 level of $5.5 billion for national securityprograms. DOE requests $2.5 billion for science and technologyprograms in FY 1998, a flat level since FY 1996. Finally, DOErequests $1.95 billion for energy resource programs, whichrepresents a $200 million increase over the FY 1997 level of $1.8billion. However, even with this proposed increase the energyresource mission accounts for only 10 percent of DOE’s FY1998 budget request.

The Department of Energy has made muchof its Strategic Alignment Initiative, declaring it has theability to reform itself. However, according to thePresident’s budget request. the Department is one of thelaggards in downsizing -- only the Environmental ProtectionAgency, the Department of Veterans Affairs, the Social SecurityAdministration, and the Department of Justice have done less toreduce the number of employees. While DOE is moving in the rightdirection, it clearly is not leading the way, but following inthe wake of other Federal agencies. 

### Construction Project Financing

The Department’s history ofmanaging the construction of major projects is at best checkered.DOE often has begun the construction of major projects based oncost estimates that later proved to be woefully optimistic, onlyto run into major cost overruns and schedule delays. The mostrecent example of this is the Defense Waste Processing Plant atSavannah River, which cost $1 billion more than projected and wasdelayed by many months. In some celebrated cases, DOE hasabandoned major construction projects after the investment ofbillions of dollars. A factor in these failures may have been themethod of financing project construction. Historically, DOErequested funding for construction projects on an incrementalbasis. That approach made it easy for the Department to begin theconstruction of major projects since annual costs would be afraction of completion costs. 

In FY 1998, the Department proposes toadopt procedures currently used in most other agencies thatrequire full up-front funding of construction projects. TheCommittee supports this initiative because it should make iteasier for the Administration and Congress to determine the truecost of projects before the onset of construction. Significantly,it should reduce the prospect that DOE will have to abandon largeconstruction projects in the future. While this change wouldresult in sharply increased budget authority until outlays begin,the Committee believes it is important for DOE to adopt thesemore responsible procedures for construction projects.

### Environmental Management Privatization

DOE requests $1 billion in new budgetauthority to sharply expand the privatization initiativeestablished last year -- tripling funding from the $330 millionlevel appropriated last year. The privatization initiative isintended to accelerate completion of cleanup projects by changingthe contractual relationship between DOE and contractors. Underprivatization, DOE purchases services on a competitivefixed-price basis and pays for treated waste under contractperformance criteria. Compensation is tied to the performance ofservice, rather than cost reimbursement and fee awards. Althoughthe privatization concept has promise, the Committee has seriousreservations about the increase requested by the Department.Given the poor performance of Environmental Management (EM)programs to date, it is tempting to believe any alternativeapproach will be more successful than methods used to date.However, the Committee has a responsibility to assure that thesubstantial sums spent on the environmental management programresult in the timely cleanup of sites at a reasonable cost. 

Privatization may well result inaccelerated completion of cleanup projects at a lower cost.However, the burden is on the Department to demonstrate theprivatization projects to date have been so successful thattripling funding is justified. DOE has made no suchdemonstration. At present, there is an insufficient track recordto warrant such a sharp expansion of the privatizationinitiative. Moreover, concerns have been raised about theperformance of some of the privatization projects launched in thepast. The Department has a long history of declaring victory fartoo soon when resorting to new approaches to long-standingproblems, and this appears to be a case in point. Theprivatization initiative may prove to be successful, but it mayalso turn out to be the latest failure in the environmentalmanagement program. Until there is a basis to believe theprivatization program will produce success, the Committeebelieves the sharp expansion proposed by DOE is unjustified.

### Environmental Management Program

The Committee maintains its strongcommitment to the Department’s Environmental Management (EM)program. DOE is responsible for remediating the Cold War legacyof contamination at its nuclear weapons complex, which spans10,000 locations at 140 sites in 33 States. The nuclear weaponsfacilities are among the most contaminated sites in the U.S. andmay take decades to remediate. The effort to clean up these sitesis likely to be among the costliest public works ever attempted,and estimates range between $200 and $350 billion.

DOE requests $6.3 billion for EM andEnvironmental Restoration core programs for FY 1998, $1billion for privatization projects, and $645 million for fullfunding of construction projects. This compares to a FY 1997level of $6.2 billion, and $330 million for privatizationprojects. At the Subcommittee on Energy and Power hearing onFebruary 11, 1997, on the Department of Energy's Proposed Budgetfor Fiscal Year 1998, a representative of the Departmenttestified that this funding level is sufficient to permit DOE tofulfill the legal obligations it has entered into with States andlocal communities, and the Committee vigorously supportsmaintaining these legal commitments and responsibilities to theStates.

The EM budget also supports the Officeof Science and Technology (OST), with a budget request of $308million, and is not tied to DOE’s legal obligations at EMsites. The Committee is concerned that the $2.6 billionappropriated to OST since 1990 has resulted in little real orpotential benefit to the EM cleanup effort. Further spending inthis area should be justified with a demonstration of programneed and effectiveness, or these funds should be utilized fordirect cleanup efforts.

A major new initiative of EM is its"Ten Year Plan," an effort to complete cleanup at mostnuclear sites over the next decade. To that end, EM sites aredeveloping Ten Year Plans intended to produce major cost savingsthrough mortgage reduction in the out years. According to DOE,treatment will continue at a small number of sites that havecertain waste streams, such as high level and transuranic waste.The first draft of EM’s Ten Year Plan is scheduled to bereleased by DOE on March 31, 1997, and the final draft inSeptember 1997. The Committee strongly supports the goal ofcompleting cleanup at most nuclear sites over the next decade,and encourages the Department to complete this plan in a timelymanner and consult with the Congress on its implementation. 

### Nuclear Waste Program

The Committee is dissatisfied with theDepartment’s request for funding the nuclear waste program.DOE requests $380 million for FY 1998 -- the lowest budgetrequest in several years. Since the payments of utilityratepayers to the Nuclear Waste Fund are expected to collect over$600 million in FY 1998, the Administration proposes divertingmore than 70 percent of funds paid by electricity consumers toother Federal programs. The Department proposed this diversiondespite a Federal court ruling (*Indiana Michigan Power v. DOE*,88 F.3d 1272 (D.C. Cir. 1996)) which determined that theDepartment of Energy has a legal obligation to begin acceptanceof high-level radioactive waste and spent nuclear fuel by January31, 1998.

In addition, the budget request reducesthe contribution of the Department of Defense to the wastedisposal program, although that contribution is in arrears by $2billion. By relying unduly on consumer contributions and failingto provide for an adequate defense contribution to the program,the Administration in effect forces consumers to lend money tothe Department of Defense. For that reason, the Committeebelieves the Administration should increase the defensecontribution to the nuclear waste program. The Committee is alsogravely disappointed that DOE’s budget request is notaccompanied by any proposal from the Administration on how itintends to comply with its legal obligation to begin acceptanceof high-level radioactive waste and spent nuclear fuel by January31, 1998 -- less than one year from now.

### Tritium Production

The Department is pursuing a dual trackstrategy for a new source of tritium: (1) purchase an existingcommercial light water reactor or irradiation services; or (2)develop a linear accelerator. The Committee has doubts aboutwhether DOE should pursue an accelerator as a new source oftritium. The Department has a poor history managing largeconstruction projects, and there is concern the Department maynot succeed with a linear accelerator. In addition, a linearaccelerator would be a far more expensive method of producingtritium than would the purchase of a light water reactor orirradiation services -- costing at least three or four times asmuch. Reliance on the dual track approach entails substantialcosts with respect to the accelerator option -- in FY 1998 alone,DOE requests $168 million simply for design work on anaccelerator for tritium production. 

In addition, it appears that anaccelerator cannot begin tritium production by 2005, as requiredby Presidential Directive. As a result, a decision to rely on anaccelerator as a new source of tritium production may make itmore likely that the Fast Flux Test Facility (FFTF) will beneeded for tritium production, albeit on a temporary basis. Atthe Subcommittee on Energy and Power hearing on February 11,1997, on the Department of Energy's Proposed Budget for FiscalYear 1998, a representative of the Department testified that theFFTF may be needed as a "bridge" to assure tritiumproduction can begin in 2005, and requests $40 million tomaintain the FFTF in standby. That need will be even greater ifthe Department decides to rely on an accelerator for a new sourceof tritium. 

### DOE National Laboratories

The DOE national laboratories are at acrossroads. The Cold War is over and the size and missions of thelabs are a matter of debate. The Task Force on AlternativeFutures for the DOE Laboratories (the Galvin Task Force)commissioned by the Department concluded in 1995 that thenational laboratory system is oversized for its current missionassignments and warned against allowing the labs to expand theirmissions to justify existing capacity. Further, the Galvin TaskForce report faulted DOE management of the labs, stating"numerous instances of poor DOE regulatory and managementpractices have come to the attention of all members of the TaskForce during its investigation of the national laboratories. Thesystem has been tried long enough; the evidence is in." 

DOE has developed a StrategicLaboratory Missions Plan to determine the future of the nationallabs. The Plan recognizes the labs do not have clearly definedstatutory missions assigned to them by Congress. The MissionsPlan discussed options such as reducing the number oflaboratories, evaluating whether small, mission-specific labs arecandidates for privatization, reducing the size of eachlaboratory, focusing each lab around a single mission, orfocusing each lab around a technical competency. The Committeeobserves that the Department recognizes that efforts to reformthe labs must involve a partnership with the Congress.

The Committee believes DOE has beenmoving in the right direction, but too slowly. There is a cost todelaying decisions on the future role of the national labs.According to a General Accounting Office report entitled *DOE'sLaboratory Facilities* (GAO/RCED-96-183R), 62 percent of labfacilities are more than 26 years old and the backlog for urgentrenovation and upgrades is at least $1.3 billion. If DOE adopts a"preserve all options" approach, the cost ofmaintaining and upgrading the labs will be tremendous. TheCommittee urges the Department to finalize its StrategicLaboratory Missions Plan and work with the Congress to determinethe future role of the national laboratories.

### Energy Technology Development

The Department insists, in its FY 1998Budget Request: Budget Highlights and Performance Plan, that"helping guard against energy supply disruptions and theirassociated threats to the United States remains a fundamentalpriority of the Department of Energy." DOE’s energysecurity strategy is based on energy technology development,including developing renewable energy; improving efficiency inenergy-intensive industries; designing and delivering cars of thefuture; implementing the Climate Change Action Plan; developingthe clean, high efficiency power plant for the future; increasingU.S. energy technology exports and investments; fostering energyefficient buildings and communities; developing technologies toaddress the aging of nuclear plants; and other means. 

The DOE energy security strategy relieson reducing demand for energy rather than increasing U.S. energyproduction. The Department does propose a modest initiative toboost U.S. oil and gas production by 500,000 barrels per dayduring the period 2001-2010. However, this program would dolittle to reverse increased U.S. dependence on oil imports, evenif it were successful, since DOE projects imports will rise from9 million barrels per day in 1994 to 13 million barrels per dayin 2010 -- an increase of 500,000 barrels per day in productionwould reduce imports by only 3 percent. Likewise, although coalis the most abundant domestic energy resource, the Departmentproposes to rescind $153 million in unobligated balances in FY1998 and defer an additional $133 million until FY 1999.

Because the Department’s energysecurity strategy is based on energy technology development, itpromises no near-term improvement in U.S. energy security. Thishelps explain why the Department projects that U.S. dependence onoil imports will continue to rise sharply -- from 48 percent ofpetroleum consumption in 1995 to 59 percent in 2000, 63 percentin 2005, 65 percent in 2010, and 66 percent in 2015. If energysecurity indeed is a fundamental priority of the Department ofEnergy, it is a long-term priority. The only near-term energysecurity measure offered by DOE is maintaining the StrategicPetroleum Reserve (SPR). Unfortunately, the President hasproposed selling 50 million barrels of SPR stocks in the year2002 as part of his budget proposal.

### Strategic Petroleum Reserve

The Committee notes DOE did not proposeselling any of the stocks in the Strategic Petroleum Reserve(SPR) during FY 1998. If this request is approved, it will be thefirst time in several years that SPR operation is funded withoutthe sale of oil stocks or transferring balances from otheraccounts. In its FY 1998 budget submittal, DOE declares that itsrequest "supports several efforts to ensure greater domesticoil security," including maintaining the Strategic PetroleumReserve at 563 million barrels through 2001. It is not at allclear how U.S. energy security is increased by maintaining theSPR at its current size. On the contrary, given that U.S.dependence on oil imports continues to increase, it would seemnecessary to increase the SPR to maintain domestic oil security.The Committee observes the DOE statement promising to maintainthe SPR through 2001 is worded with great care, since thePresident has proposed selling over 50 million barrels out of theSPR in 2002. The Committee believes this sale will reduce U.S.energy security and opposes the Administration proposal.

## Environment

### Clean Air Act

The Environmental Protection Agency's(EPA's) budget request for Fiscal Year 1998 proposes a $59.8million increase in air programs. On a percentage basis, thisincrease exceeds 23 percent. The budget proposal also specifiessix program objectives that EPA has established for FY 1998.Among these objectives are: (1) the adequacy of the NationalAmbient Air Quality standards; (2) reduction of hazardous airpollutants; (3) encouraging the use of market-based approaches topollution control; (4) reduction of energy consumption andvoluntary pollution prevention; (5) implementation of theMontreal Protocol; and (6) technical support to State and tribalair programs.

With respect to the first objective,the Commerce Committee notes that on page 3-108 of theEnvironmental Protection Agency Fiscal Year 1998 Justification ofAppropriations Estimates for the Committee on Appropriations, thefollowing statements are made concerning a $26.58 million requestfor Particulate Matter (PM) research:

> 
While the available epidemiological    data are sufficient to indicate an association between PM and    adverse human health effects, many scientific uncertainties    remain. Plausible biological mechanisms by which PM at low    ambient levels could cause mortality and morbidity effects    suggested by epidemiological studies have yet to be    identified. It is not yet possible to determine which ambient    concentrations are the most significant in causing adverse    health effects.

Money for additional research isproposed to:

> 
reduce uncertainties [. . .]    thereby providing strong scientific bases for future PM NAAQS    revision decisions by the Agency (with potential multibillion    dollar control costs); and (2) produce the data and tools    needed to guide future risk reduction strategies so that the    PM NAAQS can be attained to reduce potential health threats    to the U.S. population.

The Committee agrees that additional PMresearch is an extremely necessary component of EPA's workregarding criteria air pollutants. The Committee recommends thatthe full amount of the appropriation be granted to reduce thesubstantial uncertainties which apparently exist.

The Committee also intends to continueits review of Title III of the Clean Air Act Amendments of 1990and notes the Agency development of an "integrated urban airtoxics strategy." EPA states on page 2-56, that $881,350 isbeing allocated for this activity. This activity is apparentlyassociated with EPA’s interpretation of its statutory dutiesunder section 112(k)(3) of the Clean Air Act, as amended. Whilethe Committee does not express a current opinion on the amount ofthis expenditure, the Committee intends to review the workproduct of this expenditure and obtain other informationconcerning this effort from the Agency. The Committee is alsointerested in reviewing the $871,700 expenditure allocated forthe initiation of an evaluation of residual risk for sourcescovered by current Maximum Achievable Control Technology (MACT)standards.

Finally, EPA has requested $21 millionto support the Montreal Protocol Multilateral Fund. During 1997,the Committee will closely review the operation of this Fund aswell as the expenditures that have been made in the years sincethe Fund was established. The Committee specifically notes thatthe legislative authority for the Fund has expired. 

### Safe Drinking Water

The Fiscal Year 1998 budget request forthe Office of Water includes extensive changes that are aconsequence of enactment of the Safe Drinking Water ActAmendments of 1996 (P.L. 104-182). Total program changesrepresent an increase of $10.5 million over FY 1997. Thisincrease is justified on the basis of numerous regulatory andprogram activities required by the 1996 Amendments, includingreform of the standard-setting process, new pollution preventionapproaches, consumer information, and establishment of theDrinking Water State Revolving Fund.

The Committee believes it is logical toexpect that some funding increases will be necessary toaccommodate the deadlines which the 1996 Amendments establishedfor recasting the Federal effort to ensure the safety of ournation’s drinking water supply. At the present time,however, the Committee is not able to either endorse or criticizethe proposed funding increases.

Instead, the Committee believes that anassessment of agency expenditures for the drinking water programmust await a future review of the 1996 Amendments and theireffectiveness in promoting cost-effective regulations, greaterprotection of the public health, and the ability of the agency toimplement other elements of the 1996 Amendments in a manner whichcomports with the law and Congressional intent. In short, theCommittee is aware that its legislative handiwork has produced aflurry of activity to reform and improve the Federal drinkingwater program. Thus, the Committee will not rush to judgment onthis activity, but rather evaluate the results of the reformsenacted in 1996 when it renders its judgment on theappropriateness of future funding requests. 

In addition, the Committee notes that$725 million has been requested for the Drinking Water StateRevolving Fund (SRF). Approval of this funding would result in atotal capitalization of $1.275 billion based on prior yearappropriations. Referencing the unanimous 42-0 vote of theCommittee on Commerce to establish this fund on June 11, 1996,the Committee believes that this funding level is consistent withthe intent of the 1996 Amendments. As with other elements of theSafe Drinking Water Act, however, the Committee will be vigilantin its oversight of SRF expenditures and operations. 

### Superfund Program

For the Superfund program administeredby the Environmental Protection Agency, the Committee recommendsfunding at a level commensurate with current program needs andfuture needs based on comprehensive reauthorization and reform.The Committee further recommends that some or all of the revenuesto the Superfund Trust Fund be made available for cleanup ofhazardous wastes sites as mandatory spending.

## Finance

### Securities and Exchange Commission

The President's budget request for theSecurities and Exchange Commission (SEC) for Fiscal Year 1998 is$317.4 million. The Committee on Commerce authorized the agencyfor $318 million in Fiscal Year 1997, and it received a totalappropriation of $305 million. The Committee endorses theproposed total budget authority for the SEC.

 

The longstanding problem of SEC fundingwas addressed in Title IV of the National Securities MarketsImprovement Act (the Improvement Act) (P.L. 104-290) whichcodified the Bliley-Rogers-Archer-Hollings agreement to provide along term funding mechanism for the SEC. Title IV of theImprovement Act diminishes over time the reliance of the agencyon fee revenue and anticipates instead, funding the agency bymeans of appropriations. The fee requests in the President’sbudget are consistent with the reductions codified in theImprovement Act, and the Committee commends the Administrationfor structuring its budget request to be consistent with theImprovement Act. 

The Committee notes that theunprecedented level of activity in the securities markets hasproduced fee revenue in excess of that which was anticipated byeither the Office of Management and Budget (OMB) or theCongressional Budget Office (CBO) in their estimates of the levelof revenue that would be generated by the fee levels set in TitleIV of the Improvement Act. This additional revenue has beencarried over for use to fund the SEC in Fiscal Year 1998. Thiscarryover has the effect of reducing the need for additionalappropriations to fund the SEC in Fiscal Year 1998.

Using additional fee revenue generatedby market activity to diminish the need for appropriations isconsistent with the agreement codified in Title IV. It does,however, present some concern to the Committee. The ImprovementAct was structured so that increases in appropriations for theSEC, replacing offsetting collections as fee levels are reduced,would be in gradual, even increments. These relatively evenincrements were designed to provide for a return to funding theSEC by means of appropriation with minimal disruption to theother important programs under the Commerce, Justice, State andRelated Agencies Appropriations cap. If market activitydiminishes, and fee revenue returns to that which was projectedby OMB and CBO, there will be need for larger appropriations tofund the SEC in subsequent fiscal years. This need will bemagnified by the fact that the rate of the Section 6(b) fee willbe reduced from 1/34 of one percent to 1/150 of one percent inthe next ten years. Title IV anticipated that there would be aneed for approximately $68 million in appropriations for the SEC,with $250 million offsetting revenue generated by fees. TheCommittee believes that it would be prudent to provide for alarger appropriation than the $36 million called for in thePresident’s budget. The additional surplus generated by SECfees can be used for deficit reduction.

Finally, although the President'sbudget does not address the issue, the Committee notes that theSEC has estimated the contract costs for operating the EDGARsystem at $8.2 million for 1997. While the SEC has indicated thatthe costs for the follow-on contract that will succeed thecurrent EDGAR contract are not known, the Committee expects thatthe privatization of significant parts, if not all, of the EDGARsystem will reduce the operating costs of the system in thecoming years.

## Health

### Medicaid

The President’s Fiscal Year 1998budget proposes a significant restructuring of the Medicaidprogram. The Committee commends the President on many aspects ofthis proposal, which is the latest in a series of incrementallyimproving measures put forth by the President. However, theCommittee is concerned that the President’s proposal failsto adopt reforms deemed critical by the Nation’s Governors.The Committee supports reform based upon the unanimous bipartisanagreement reached on February 4, 1997, by the National GovernorsAssociation and intends to explore options for translating theGovernors’ agreement into a consensus for Federallegislation.

The Committee believes that theAdministration’s per capita cap proposal would freeze inplace current per capita funding levels. This model wouldmaintain the current Medicaid program’s highly unequitablefunding system in which some States receive as much as threetimes as many Federal dollars per recipient as do other States.As such, the Administration’s proposal may be especiallyharmful to those States in which the current level of medicalassistance expenditures is insufficient to meet current andfuture needs. The Committee will closely examine theAdministration proposal in order to determine the optimalapproach for ensuring that Federal Medicaid funds are distributedin an equitable, sustainable, and predictable manner. 

The President's FY 1998 budget alsocalls for the reduction of aid to hospitals serving adisproportionate share of the Medicaid and uninsured populations,while directing much of the remaining funding to targetedcommunity and rural health centers. The Committee is concernedthat the Administration plan derives twice as many saved dollarsfrom disproportionate share hospital (DSH) cuts than from broaderreform of the process by which Federal Medicaid funds aredisbursed to the States.

The Committee commends the Presidentfor the inclusion in the budget proposal of certain waiverprovisions and the repeal of the Boren amendment. However, theCommittee maintains its conviction that States will not be ableto exercise the flexibility that is essential to truly improvingthe effectiveness, responsiveness, and efficiency of the Medicaidprogram as long as the program's existing structure remainslargely intact.

Finally, the Committee recognizes thatthe Administration shares Congress' longstanding commitment tobetter health coverage for the Nation's children. The President'sbudget provides for a number of options intended to expandcoverage among children, which include continuous coverage oftemporarily insured children, the immediate phase-in of childrenage 15 through 18, and grant funding for State outreach andenrollment of Medicaid-eligible uninsured children. The Committeeis deeply committed to ensuring that efforts to improve the scopeand quality of children's health coverage avoid the serious risksthat have contributed to the problem of uninsured children today.According to General Accounting Office estimates, as many asone-third of all uninsured children are *currently* eligiblefor Medicaid. Establishing additional options or mandates withinthe Medicaid program, therefore, may not succeed unless theobstacles to more responsive, cost-effective coverage that plaguethe program are addressed. As a result, the Committee willcontinue its efforts to expand the coverage of eligible childrenby working to modernize and improve the program upon which somany children rely.

### Medicare 

The Committee commends the Presidentfor submitting a Fiscal Year 1998 budget that recognizes the needto address the problems of the Medicare Trust Fund and improvethe choices available to the Medicare beneficiaries. While theCongressional Budget Office's estimates of the actual savings ofthe President's proposal are lower than those presented by theAdministration, the plan appears to include provisions thatextend solvency of the Part A Trust Fund into the next decade.The Committee is examining the specific measures proposed by thePresident, however, to ensure that they also utilize the mostoptimal approaches available to achieving at least short-termfiscal sustainability.

Among the most notable of theseprovisions is the Administration's proposed transfer of homehealth coverage from Part A of Medicare to Part B. Under thePresident's proposal, the first 100 visits after an inpatientadmission would be covered under Part A; all subsequent visitsand all visits without prior hospitalization would be shifted toPart B. Currently, all services covered by Part B -- includingphysician services, durable medical equipment, clinicallaboratory services, ambulatory surgical expenses, and othermedical services -- are financed through a combination ofbeneficiary premiums (currently 25 percent of program costs) andFederal general revenues. If shifted into Part B as proposed bythe President, however, home health services would be fullyfinanced by general revenues and would not be subject to theconditions of other Part B services. Under the President's plan,home health services would not be included in the calculation ofthe Part B premium and would not be subject to Part B deductiblesor premiums.

The Administration proposal includes anumber of provisions intended to stem the growth in providerreimbursement and specified benefits costs. These include theestablishment of a single conversion factor for physicianpayments and a prospective payment system for hospital outpatientservices, reduction in the prospective payments made toambulatory survey centers, and the elimination of averagewholesale price-based payments for prescription drugs. ThePresident's budget also proposes an increase in Medicare premiumsby fixing them to a level equivalent to 25 percent of programcosts. Absent this change, the premium cost would fall toapproximately 20.8 percent of program costs in FY 2002.

Finally, the Administration planincorporates a number of changes relative to managed care. Itincorporates provisions intended to expand the managed careoptions available to Medicare beneficiaries to include preferredprovider organizations and provider sponsored networks. It alsoestablishes a new approach to making payments to risk plansserving beneficiaries by establishing a new rate methodology forthe adjusted average per capita cost (AAPCC)-based paymentsreceived by participating plans and by disaggregating medicaleducation and DSH payments from the managed care payment. Basedon the limited data provided by the Administration on theseproposals to date, it appears that the methodology would raisethe floor for managed care payments and gradually phase in ablended rate of national and local payment levels. However, theextent to which this change will achieve significant variabilityabove the floor is not yet clear. Also unknown at this time isthe extent of the impact of the removal of medical education andDSH payments on plans operating in large urban areas.

The Committee maintains its commitmentto expanding the range of choices available to beneficiarieswithin a more sustainable and responsive Medicare program. TheCommittee will continue its analysis of the President's plan,including forthcoming data requested from the Administration, inan effort to determine whether the proposals included in the FY1998 budget achieve the Committee's longstanding objectives. 

### Food and Drug Administration

Starting in the 104th Congress, theCommittee pursued an active initiative to achieve greaterefficiency and accountability and less unnecessary regulation bythe Food and Drug Administration (FDA). This initiative wasundertaken in order to expand patient and provider access to safeand effective medicines, medical devices, and food products, aswell as to keep U.S. industries from conducting clinicalresearch, or moving factories, overseas.

Through an extensive series of hearingsand investigations, the Committee conducted numerous hearings andrelated efforts to identify and address FDA inefficiency andmanagement concerns. The Committee also developed three landmarkFDA reform measures on medical devices, pharmaceuticals andbiologics, and foods, which were introduced and utilized as thebenchmark for extensive negotiations with the Administration. Theoutcome of this process is encouraging, in that the agencyresponded to the Committee's focus by making importantcorrections to its review and approval process. However, thelimited extent of these changes also emphasizes the need forfundamental improvement of the agency's operations andadministration.

The President’s Fiscal Year 1998budget proposal for $1,064 million reflects a $69 million or a 7percent increase over the FDA’s FY 1997 authorized budget.The budget proposal includes a number of provisions which are ofconcern to the Committee and which are the subject of intensiveanalysis. Among these is a significant reduction inappropriations for the agency and the apparent intention of theAdministration to offset the resulting funding shortfall withunauthorized user fees. The FY 1998 budget seeks to replace asignificant percentage, 12 percent, of appropriated funds withnew user fees. It includes a legislative proposal to add $133million in new user fees for a total of $244 million in userfees, or 23 percent of FDA’s budget, more than a doubling ofthe total of 11 percent from user fee funding authorized in FY1997. Existing user fees would increase by 4 percent for feescurrently collected under the Prescription Drug User Fee Act(PDUFA) paid to expedite FDA’s review of human drugapplications and under the Mammography Quality Standards Act(MQSA) for the inspection of mammography facilities. In additionto the existing PDUFA and MQSA fees, FDA’s legislativeproposal would add $133 million in new user fees for medicaldevice reviews, animal drug approvals, import inspections, foodadditive petition reviews, generic/over-the-counter drugapplications, and fees for postmarket surveillance of products.

The Committee believes that the successof the Prescription Drug User Fee Act should be preserved by aresponsible effort to achieve reauthorization of the program in amanner that does not expand the scope of agency user fees norincrease their cost without a consensus on additional performanceenhancements that will be realized as a result. 

The Committee intends to activelypursue its ongoing effort to expand patient and provider accessto safe and effective medical devices, drugs and biologics, andfoods. This commitment will be undertaken by engaging theAdministration in negotiations over its budget and reformproposals, reauthorizing PDUFA in concert with reform of thereview and approval process for dugs and biologics, and achievingreforms in the Agency's review and approval processes for medicaldevices and foods.

## Telecommunications

### Federal Communications Commission

> FCC Salaries and Expenses

The President's budget request for theFederal Communications Commission (FCC) allocates $219.079million for Fiscal Year 1998, of which $162.523 million is offsetthrough the fee authority provided in Section 9 of theCommunications Act of 1934, as amended. This amount represents anincrease of $30 million over the Fiscal Year 1997 appropriationsand is intended to cover the cost of moving the FCC'sheadquarters. 

The President’s Fiscal Year 1998budget for the FCC covers 2,155 full time employees. This is adecrease of 100 FTEs from Fiscal Year 1997 and will beaccomplished through routine attrition and expiration of termappointments for employees hired to implement theTelecommunications Act of 1996 (the 1996 Act). 

The Committee intends to examine theallocation of FCC resources, given that the FCC is statutorilyrequired to: (1) forebear from regulating where such regulationis not in consumers’ interest nor otherwise in the publicinterest; and (2) beginning in 1998, determine whetherregulations can be eliminated as unnecessary, due to competitionin such regulated services. In addition, as rulemaking andenforcement priorities have shifted for purposes of implementingthe 1996 Act, the Committee believes that the FCC must reassessand reallocate personnel and resources to reflect the newpriorities and the deregulatory nature of the 1996 Act. Althoughmany of the larger rulemakings required by the 1996 Act have beencompleted, the Committee recognizes that the FCC still has beforeit a substantial workload. Thus, the Committee will examine theseparticular issues more closely as the Committee considerslegislation to reauthorize the FCC later this year, but does notrecommend any substantial reductions in the FCC's budget at thistime.

> FCC Spectrum Auction Authority

The Omnibus Budget Reconciliation Actof 1993 (OBRA93) permits the FCC to use competitive biddingprocedures (*i.e.*, auctions) to assign to mutuallyexclusive applicants the right to use portions of theelectromagnetic spectrum for subscription-based services. OBRA93also established that the FCC’s auction authority wouldexpire at the end of FY 1998. The President’s budgetspecifically proposes to raise $36.1 billion through FiscalYear 2002 by: (1) broadening and extending the FCC’sexisting auction authority ($17.1 billion); (2) auctioning the"analog return" spectrum ($14.8 billion); (3)auctioning broadcast channels 60-69 ($3.5 billion); and (4)auctioning "888" vanity telephone numbers ($700million). 

The Committee has very serious concernswith the President’s proposed budget in this area. First andforemost, the Administration’s budget, if enacted, wouldjeopardize an important telecommunications policy goal: amarket-driven, rather than government-mandated, transition todigital television. The transition plan was initiated during theReagan Administration, and was recently codified in theTelecommunications Act of 1996 (P.L. 104-104). The plan providesthat incumbent broadcast licensees will be granted an additionalsix megahertz (MHz) of spectrum to simulcast in both analog anddigital while American consumers steadily migrate to the digitalformat. And once the transition is complete, the licensees willreturn the original six MHz of spectrum to be re-allocated as theFCC sees fit. Throughout debate over the transition to digital,the Committee has impressed upon the FCC that the transition todigital must be made with as little disruption as possible to theAmerican consumer. The FCC has thus recognized that thetransition should occur in some markets sooner than others,depending upon the ability of consumers and broadcast stationsalike to make the transition in any given market. 

But the Administration now proposes, inconjunction with its budget submission, that this market-basedtransition be replaced with an arbitrary, government-imposedreturn date, namely 2006. Thus, in 2006, all localbroadcast stations would be required to convert to digital, regardlessof whether consumers and stations are prepared to actually makethe transition. This mandatory give-back date, if enacted,will inevitably raise serious doubts in the minds of equipmentmanufacturers, broadcasters, and -- most importantly -- consumerstoday as to whether digital broadcasting will ever beviable and whether any investment for transmission or receptionof a broadcast signal is prudent. As a result, many localbroadcast stations will simply choose to forgo the transitionrather than make a costly investment that will bear little, ifany, fruit. The result: the transition to digital television isunlikely. 

Beyond this policy concern, theCommittee also seriously questions the spectrum auction estimatescontained in the President’s budget proposal for Fiscal Year1998. The Committee’s skepticism is based on several keyconsiderations. First, the estimates defy historical trends. ThePresident’s budget proposes to raise $35.4 billion inspectrum auctions over the next five years, with $22.1 billion(or 62 percent) to be raised in FY 2002. This latter figure issignificantly more than has been bid in any given year, and infact, is more than has been bid for all spectrum auctions from1995 through 1997. Moreover, even if the estimates are accurate,they do not appear to consider the fact that defaults andinstallment payments will push receipts into years well beyond2002.

Second, the President’s spectrumauction proposal includes a so-called "failsafe"mechanism that the Committee believes is unworkable. ThePresident’s budget specifically proposes to hold an auctionin FY 2002 for the returned spectrum at the end of the transitionto digital television. To the extent the auction fails to raisethe estimated $14.8 billion, the budget proposes that incumbentlicensees be taxed by an amount equal to the difference betweenthe budget estimate and actual receipts. 

And third, the estimates ignore recentevidence that highlights the risk in quantifying the value ofspectrum. The FCC, pursuant to the Omnibus ConsolidatedAppropriations Act of 1997, will hold an auction on April 15,1997, for 30 MHz of spectrum to be used for flexible-use wirelesscommunications services (WCS). The auction was estimated to raise$2.9 billion. The FCC, however, recently advised the Committeethat the auction will, in all likelihood, fall well short of theestimated $2.9 billion in revenue.

The Committee is similarly skepticalwith regard to the proposal to raise $700 million by auctioning"888" telephone numbers. While auctioning these numbersmay be an economically efficient way to distribute toll freenumbers, the President’s budget provides no justificationfor the estimate, no policy rationale addressing internationalissues, and no understanding of the policy implications ofauctioning one particular service access code (*i.e.*,numbering plan area code) vis-a-vis other codes. Once again, aswith the other spectrum estimates, the President’s proposalswould let the budget process drive telecommunications policy. 

> Universal Service Fund

Universal service is the term used todescribe the intent to keep all Americans connected to the publicswitched telephone network through various means. ThePresident’s budget, which includes the FCC’s currentsubsidy mechanisms, characterizes universal service payments as"unavailable collections." In other words, theAdministration is forced to include the FCC’s currentsubsidy mechanisms within its budget, but it is not authorized toalter the programs or to divert funding to other programs. Thus,the Administration is not making budgetary recommendations asthey relate to universal service. 

Unfortunately, theAdministration’s budget does include unrealistic budgetaryprojections associated with the new Universal Service Fund, whichhas not even been created yet by the FCC. Specifically, theAdministration believes that the fund will increase yearly fromits initial balance of $944 million to over $12.8 billion by2002. The Committee does not, and will not, support the growth ofa large Federal Universal Service Fund.

### National Telecommunications andInformation Administration

The National Telecommunications andInformation Administration's (NTIA's) allocation under thePresident's budget for Fiscal Year 1998 is $54.074 million, ofwhich $16.22 million will come in the form of reimbursements fromother Federal agencies for spectrum management activitiesconducted by NTIA. The funding would be divided accordingly: (1)$18.074 million for salaries and expenses, and (2) $36 millionfor the Telecommunications and Information InfrastructureAssistance Program (TIIAP) grant program. The total requestrepresents an increase of $1.561 million over NTIA’s FiscalYear 1997 appropriations. When the Committee considersNTIA’s authorization, it intends to reexamine NTIA’score functions, as well as the need for the continuation of itsgrant programs.

In addition, as part of itsReconciliation package in 1995, the Committee voted to privatizeNTIA's laboratories by selling the assets to a private entityintending to perform substantially the same functions. TheCommittee believes now, as it did last Congress, that suchprivatization is necessary and would result in a savings of $3.6million for Fiscal Year 1998. At a minimum, NTIA could contractwith the private labs to conduct any necessary work rather thancontinuing to operate its own labs and contracting with privateindustry for work. 

Regarding NTIA’s grant programs,the Committee agrees with the President's budget that no fundingshould be allocated for the Public Telecommunications FacilitiesProgram (PTFP) or for the National Endowment for Children'sEducation Television (NECET). While zero funding of NECET wouldnot generate any savings because no funding was appropriated forthis program last year, the elimination of the PTFP would save anadditional $15.25 million. The Committee disagrees, however, withthe President’s request for TIIAP. The request is anincrease of $14.51 million for TIIAP grants from the previousyear. In the past, these grants have been used primarily to"help develop a nationwide, interactive, multimediainformation infrastructure that is accessible to all citizens, inrural as well as urban areas." Given the passage of theTelecommunications Act last Congress, and in particular, Sections254 (Universal Service) and 255 (Access by Persons withDisabilities), the need for such "seed money" isdrastically reduced because of the new support mechanisms beingestablished. The Committee believes that funding for the TIIAPcan be eliminated or substantially reduced. 

The Committee is also concerned by thepotential administrative costs of the program if the TIIAPprogram is maintained. Specifically, under the President’sbudget NTIA would be authorized to spend $3.010 million of the$36 million on administration costs, or 8.4 percent. While thesavings would be minimal, the Committee sees no reason why NTIAcannot live within the 5 percent administrative cost thresholdauthorized for other agencies and programs, such as theCorporation for Public Broadcasting. 

The Committee intends to examine andpush these objectives as the Committee considers reauthorizingNTIA later this year.

### Corporation for Public Broadcasting

The President’s proposed budgetrequests $325 million for the Corporation for Public Broadcasting(CPB) for FY 2000. (CPB operates on an advanced-funding basis,meaning Congress authorizes and appropriates funds two fiscalyears in advance.) The Committee finds that the President’sproposed expenditure unacceptably high. Congress appropriated$250 million for CPB for FY 1999. Thus, if enacted, thePresident’s proposal would result in a 30 percent increasefor CPB. The Committee views this 30 percent increase asunnecessary, and intends to explore proposals to either reduceCPB’s funding or fund it through alternative means. In fact,CPB has demonstrated in recent years that it is capable ofindependently raising funds, which suggests that reasonablereductions in public financing do not threaten the viability ofpublic broadcasting. 

## Trade

### International Trade Administration

The Committee is disappointed with thelack of progress in reforming the role of the Federal governmentin trade. The Committee intends to use the blueprint fordismantling the Department of Commerce it approved andtransmitted to the Committee on the Budget on September 19, 1995,as the Committee’s model for terminating and consolidatingprograms under its jurisdiction. That plan would set in motionthe consolidation of Federal trade and export promotion programsinto a single United States Trade Administration.

The President's Fiscal Year 1998budget, on the other hand, merely maintains the *status quo*-- no duplicated programs are to be terminated, and no duplicatedresponsibilities are to be merged. Indeed, the InternationalTrade Administration (ITA) itself requests a *status quo*budget: a slight increase in spending from an FY 1997 total of$270 million to $272 million in Fiscal Year 1998. 

Maintaining this *status quo*budget might be warranted if the agency had a clear conception ofits mission, and was able to reorder its priorities according toaccurate and meaningful analyses of its marginal impact on trade.As part of a preliminary compliance with the GovernmentPerformance and Results Act of 1993, ITA cites as a keyperformance measure of its success in negotiating open marketsincreasing the number of briefing papers it churns out. In fact,by this measure, ITA will achieve great success in its resourceallocation for the coming years, as it expects to increase from4,696 reports in FY 1996 to 7,015 reports in FY 1998 (a 49percent increase) while the number of "meetings,negotiations, and consultations" on multi-lateral tradeproblems is projected to decline by 6.5 percent, despite arelatively static number of employees.

The President's budget claimsthat "we are more closely integrating the Government’strade promotion activities through the Trade PromotionCoordinating Committee (TPCC)," although the Committee foundno evidence of coordination while conducting hearings on theDepartment of Commerce Dismantling Act of 1995 nor on other tradematters. The President's budget goes on to state that "TPCCagencies are developing rigorous performance measures to helpensure that programs in this area are effective." TheCommittee is pleased to note that rigor will be added to theperformance measures: DOE’s exaggerated claims of $19.4billion in deals being signed worldwide (which were submitted tothe TPCC for their own "statistical" purposes)evaporated to a GAO estimate of $448 million, if one were tocount those projects that appear to have benefited foreign firmsmore than U.S. companies.

Export promotion programs are toodiffuse and often result in ineffective trade efforts andunnecessary expenditures. Consolidation and better managementobjectives would reduceprogrammatic duplication and would strengthen U.S. leadership ininternational markets.

|  | The        Committee on Commerce        2125 Rayburn House Office Building        Washington, DC 20515        (202) 225-2927[email protected] |
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