[Congressional Record Volume 141, Number 64 (Thursday, April 6, 1995)]
[Senate]
[Pages S5516-S5518]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE 
                                  ACT

  Mr. THOMPSON. Mr. President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of calendar No. 49, H.R. 1345.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will report.
  The legislative clerk read as follows:

       A bill (H.R. 1345) to eliminate budget deficits and 
     management inefficiencies in the government of the District 
     of Columbia through the establishment of the District of 
     Columbia Financial Responsibility and Management Assistance 
     Authority, and for other purposes.

  There being no objection, the Senate proceeded to consider the bill.


                           Amendment No. 593

            (Purpose: To amend the bill in several respects)

  Mr. THOMPSON. Mr. President, I send an amendment to the desk on 
behalf of Senators Cohen, Roth, and Jeffords, and ask for its immediate 
consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Tennessee [Mr. Thompson], for Mr. Cohen, 
     for himself, Mr. Roth, and Mr. Jeffords proposes an amendment 
     numbered 593.

  Mr. THOMPSON. Mr. President, I ask unanimous consent that the reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 7, line 2, strike ``or''.
       On page 7, line 6, strike the period at the end and insert 
     a semicolon.
       On page 7, between lines 6 and 7, insert the following:
       (3) to amend, supersede, or alter the provisions of title 
     11 of the District of Columbia Code, or sections 431 through 
     434, 445, and 602(a)(4) of the District of Columbia Self-
     Government and Governmental Reorganization Act (pertaining 
     the organization, powers, and jurisdiction of the District of 
     Columbia courts); or
       (4) to authorize the application of section 103(e) or 
     303(b)(3) of this Act (relating to issuance of subpoenas) to 
     judicial officers or employees of the District of Columbia 
     courts.
       On page 10 of the House engrossed bill, strike lines 7 
     through 9 and insert the following new paragraph:
       ``(4) maintains a primary residence in the District of 
     Columbia or has a primary place of business in the District 
     of Columbia.''.
       On page 12 of the House engrossed bill, strike lines 17 
     through 24 and insert the following:
       (c) Inapplicability of Certain Employment and Procurement 
     Laws.
       (1) Civil service laws.--The Executive Director and staff 
     of the Authority may be appointed without regard to the 
     provisions of title 5, United States Code, governing 
     appointments in the competitive service, and paid without 
     regard to the provisions of chapter 51 and subchapter III of 
     chapter 53 of that title relating to classification and 
     General Schedule pay rates.
       (2) District employment and procurement laws.--The 
     Executive Director and staff of the Authority may be 
     appointed and paid without regard to the provisions of the 
     District of Columbia Code governing appointments and 
     salaries. The provisions of the District of Columbia Code 
     governing procurement shall not apply to the Authority.

  Mr. COHEN. Mr. President, the District of Columbia's financial 
situation is in a state of crisis. The District government does not 
have sufficient funds to pay its bills which threatens the continued 
delivery of services to the residents of the District of Columbia and 
the many Americans that work in or visit our nation's capital.
  I am pleased that we were able to reach agreement earlier today with 
the House on a package of amendments that we believe will improve the 
House-passed bill and enable the Senate to pass this important 
legislation before the Congress adjourns for the April recess.
  The bill establishes the District of Columbia Financial 
Responsibility and Management Assistance Authority to aid the city in 
achieving financial stability while still preserving Home Rule. The 
concept of a financial control board is not new. A number of U.S. 
cities facing fiscal crisis have established similar boards.
  The new Authority will work with the Mayor and the Council toward 
resolving the city's financial and management problems. The Authority 
will have the power to act, following consultation with congress, on 
recommendations it believes are necessary to ensure the financial 
stability and operational efficiency of the District.
  I want to commend Congressman Davis and D.C. Delegate Norton, the 
Chair and Ranking Minority Member of the House D.C. Subcommittee, and 
Congressman Walsh and Congressman Dixon, Chair and Ranking Minority 
Member of the House D.C. Appropriations Subcommittee, who have worked 
hard to craft a bill which received strong bipartisan support in the 
House. The financial recovery of the nation's capital is important to 
all Americans and I urge my colleagues in the Senate to move 
expeditiously to pass this important legislation .
  Mr. ROTH. Mr. President, the financial crisis which requires the 
dramatic action we are taking today began sometime ago. I am not 
certain anyone can pick a particular date it began, but certainly it 
has been at least a decade since the signs of fiscal distress have been 
showing. Of all of the economic indicators, perhaps the most alarming 
is the continued loss of taxpayers. The District has lost nearly 50,000 
people since 1985.
  Five years ago, the Commission on Budget and Financial Priorities of 
the District of Columbia, known as the Rivlin Commission, warned that,

       The District of Columbia confronts an immediate fiscal 
     crisis. The budget deficit for this fiscal year will be at 
     least $90 million and will rise to at least $200 million in 
     1991 and $700 million in 1996 if actions are not taken 
     quickly to reduce spending or raise revenue or both.

  Congress responded to that warning and immediately passed a $100 
million supplemental appropriation for the District in early 1991. 
Congress went on to increase the Federal payment and authorized the 
District to borrow $330 million to stabilize the local budget. Federal 
funds to the District increased nearly 30 percent between 1991 and this 
fiscal year. In all, the District has received a cash infusion of over 
$1 billion since 1991.
  Revenues were increased but spending was not reduced. Between 1985 
and 1994, general fund tax revenues increased by 61 percent. But 
expenditures increased by 87 percent. Now the trickle of red ink has 
turned into a raging river. Unfortunately, and despite our efforts, the 
Rivlin warning is about to come true.
  Along with the fiscal crisis, the District appears to be locked in a 
perpetual management crisis as well. The city has been buffeted from 
one scandal to the next turmoil. The city's infrastructure is decaying. 
Crime, taxes, and schools continue to drive families out of the 
District. [[Page S5517]] 
  During the entire time of this gathering storm, the Congress has time 
and again deferred to the local government to take corrective action. 
All opportunity have been afforded to the locally elected officials to 
avert the very action we are taking today. While there is no need to 
recite the history of this sad course of events we know all too well, 
it is sufficient to state for the Record that congressional warnings of 
intervention have been unmistakable.
  The sweeping changes we are introducing into the current local 
structure must now be given every opportunity to succeed. The District 
of Columbia Financial Responsibility and Management Assistance 
Authority must have all of the powers it needs to restore the 
confidence of everyone concerned for the well-being of the Nation's 
Capital. I do have serious concerns as to whether the legislation is 
sufficiently clear in this regard and will raise those concerns with my 
colleagues.
  Let me say is closing, today's action is not a victory of one 
political idea over another. Today's action is being taken because the 
path leading to it is littered with failure. We cannot fail the people 
of this City and the many people who visit it each year. I support the 
passage of H.R. 1345.
  Mr. JEFFORDS. Mr. President, the Nation's Capital is in financial 
trouble. This bill provides the mechanism to restore the city to fiscal 
health, but make no mistake the responsibility for acting rests 
squarely on the shoulders of the elected leaders of the District of 
Columbia. This Authority has the tools to get the job done, but the 
District government has the responsibility and accountability to act.
  This bill is not perfect. There are things that I would change, I am 
sure most Senators feel that way, however on balance it has the 
essentials to get the job started and deserves our support. The 
amendments proposed make improvements and clarifications, and I 
encourage our House colleagues to accept these changes and send the 
bill on to the President so that the Authority can begin its work.
  There is a financial crisis in the city, we should not delay action 
and send the message to the citizens of the city, to the financial 
markets, and to the District government that the Congress does not 
consider this crisis worthy of our immediate attention.
  Every Senator who has worked on this bill, and indeed probably every 
Senator in this body, wants to preserve home rule for the citizens of 
this city. Other cities have gotten into financial difficulty and their 
states established a financial control board which for a time assisted 
the city government in managing its fiscal affairs. But there are 
important features of those state statutes that are also part of this 
bill which preserves to the local citizens the right, and 
responsibility, to make difficult decisions. These features include 
provision for reduction of the Authority's powers upon certain events, 
principally achieving balanced budgets during 4 consecutive years. In 
short, there is a clear definable end to this intrusion on the city's 
sway over its fiscal matters, this bill preserves home rule.
  I want to express my appreciation to Senators Cohen and Roth for 
bringing this bill to the Senate for consideration. They and their 
staffs have worked tirelessly to make sure that this bill reached this 
point today. In the long-term this bill will make a positive difference 
to the citizens of the District.
  Mr. ROTH. Mr. President, I would like to ask my colleague on the 
Governmental Affairs Committee, the chairman of the subcommittee with 
jursidiction over District affairs, about one aspect of this 
legislation in particular. I have been concerned that the bill does not 
make clear our intent that the District of Columbia Financial 
Responsibility and Management Assistance Authority will have sufficient 
authority to ensure that its recommendations are adopted. I have 
thought that such authority should be expressly stated in the statute, 
in order to leave no ambiguity about our purpose in enacting section 
207. This authority is too important to the underlying purpose of the 
legislation to leave at all in doubt, which I am concerned it may be. 
Is it the Senator's belief that the intention of Congress is 
sufficiently clear, nonetheless, that the Authority may implement any 
recommendations it has made to the Mayor or Council, but which were 
rejected?
  Mr. COHEN. The full scope of the authority's power to implement its 
rejected recommendations is well stated in the House report that 
accompanied the legislation. First of all, any non-response to a 
recommended action is deemed a rejection under the act. Likewise, if 
the District government does respond that it will adopt the 
recommendation, but then fails to do so to the satisfaction of the 
Authority, this shall be considered the same as if it had originally 
rejected the recommendation under section 207.
  Mr. ROTH. The language of this section provides that in such a case, 
``the authority may by a majority vote of its members take such action 
concerning the recommendations as it deems appropriate''. From reading 
the House report, I believe it is clear that this is very broad power, 
including the ability to enact local laws and ordinances, provided 
there is a period of congressional review of such legislation, as in 
the case of an act of the D.C. Council. Is this your understanding of 
that section's intent?
  Mr. COHEN. Yes it is. Any recommendation made by the authority to the 
District government which either the Mayor or the Council has the 
authority to adopt, may itself be adopted by the Financial 
Responsibility and Management Assistance Authority, if rejected as I 
described previously, and if the authority first consults with the 
Senate Committee on Governmental Affairs and the House Committee on 
Government Reform and Oversight. This includes the authority to enact 
local legislation, which would go into effect after a congressional 
review period, under the same conditions as if it had been enacted by 
the District government itself. It also includes such matters as 
personnel actions and structural reforms to the District government. It 
is clearly the intent of this section to give the authority as broad a 
range of legislative, executive, and administrative powers as the Mayor 
and Council possess, while expecting that the District government will 
be given the opportunity to act first.
  Mr. JEFFORDS. As chairman of the District of Columbia Appropriations 
Subcommittee, I too have been closely involved in the development of 
this legislation, and I can say that the Senator from Maine [Mr. Cohen] 
has in his description accurately reflected my understanding of the 
effect of section 207.
  Mr. ROTH. Is this also the understanding in the other body?
  Mr. JEFFORDS. Yes. The Senator from Maine [Mr. Cohen] and I met with 
the chairman of the House Subcommittee on the District of Columbia and 
the District's congressional delegate to discuss this legislation, and 
both of them agreed that the language in the House report accurately 
reflects the scope of authority being granted this new entity, which we 
are here creating.
  Mr. COHEN. I believe it is correct to say that the drafters of this 
legislation, in both Houses of Congress, understand that the authority 
is to have the full authority to adopt any recommendation that it deems 
appropriate, as submitted under this section of the act, if the 
District itself does not adopt such a recommendation, subject to the 
conditions that I have already mentioned.
  Mr. ROTH. I thank my two colleagues for their explanations and for 
clarifying this important matter.
  I have one other point. We are today adopting several useful 
modifications to this legislation, but I have other improvements that I 
would have liked to have seen added. I know that my colleagues are 
aware of these provisions that I think are important, and I hope that 
in the near future we will be able to make those improvements to this 
law.
  Mr. JEFFORDS. I can assure the Senator that I will work with him to 
enact those provisions as soon as is feasible.
  Mr. ROTH. I thank my friend for his support as I know the has a 
strong interest in making this legislation work. I know that we all 
have a great concern for our Nation's Capital, and especially for the 
citizens who live and work here, and that we look forward to the day 
when the actions taken under legislation are no longer necessary.
  Ms. MOSELEY-BRAUN. Mr. President, the District of Columbia is facing 
the most serious financial crisis in its [[Page S5518]] history. The 
District made a number of major mistakes and bears a major portion of 
the responsibility for the current debacle, however, the Federal 
Government also played an important part in creating this emergency 
because of its refusal to give the District the kind of home rule 
powers enjoyed by all 50 states.
  Unlike every State from Alaska to Wyoming, the District does not have 
the right to full self-governance. Our country was founded on the 
principal of no taxation without representation, but the Federal 
Government denies the District this right. The notion that 600,000 
American citizens are denied their fair voice in Congress offends the 
core principles of representative democracy on which this republic was 
founded.
  Residents of the District, unlike residents across the bridge in 
Arlington, Virginia, or residents of any other city in America, are not 
able to make basic decisions regarding their available resources. As 
the District is unable to control its resources, it faces this fiscal 
crisis, which Congress must step in to solve. The immediate solution to 
the problem the District faces lies in the bill before us today.
  I reluctantly support the legislation before us today, only because 
it is a step towards bringing the District out of this financial 
emergency. Congress can not allow the District of Columbia to go 
bankrupt while we go on vacation. We have an obligation to assist the 
residents of the District of Columbia get its fiscal house in order. 
Unlike other cities, the District has no State to protect its 
interests, so Congress must act as a State would and help solve the 
fiscal problems that it has helped create.
  There is no question that the District has mismanaged its finances, 
however, truth be told the District does not have the tools to deal 
with its problems. The District can not do what States do. The District 
can not truly receive revenue from its entire tax base because at least 
\1/3\ of the land mass in the District of Columbia is non-taxable 
because it is owned by the Federal Government. Furthermore, the 
District of Columbia is unable to tax the wages of those who earn their 
living in the District but who reside elsewhere. Without the power to 
fully tax, the District fell into the fiscal crisis it faces today.
  Because Congress is partially responsible for the District's fiscal 
problems, it should act quickly to avoid the District's further 
economic decline. That is why Congress should support H.R. 1345, which, 
quite literally, saves the city. It allows the District, which is now 
insolvent, to borrow and avoid payless paydays and the shut down of 
city services. It allows the city to stretch out its huge deficit in 
order to protect its citizens.
  Other cities have gotten into trouble and the legislation before us 
today is not unlike what we have previously encountered. The major 
difference is that the District is not a State. States have the ability 
to step in and help avoid fiscal problems within its cities. Since the 
District has not been granted Statehood, Congress must step in at this 
point to establish this control board.
  This bill establishing the D.C. control board has particular elements 
of the Philadelphia and the New York City boards. These great American 
cities worked constructively and fruitfully with similar authorities 
without any evidence that their monitors had somehow made them less 
self-governing. The boards in those cities did not have to use their 
strong powers because the elected city officials did what was necessary 
themselves to revive their own cities and I expect no less in the 
District.
  As important as it is to save the city, however, I will not support a 
D.C. control board that undermines the autonomy of the District. That 
is why I am glad that the type of control board being proposed in this 
legislation has been used by a number of other major cities in the 
United States, such as New York, Philadelphia and Cleveland, which no 
one has suggested did not remain fully self-governing.
  To address the city's projected $722 million shortfall, H.R. 1345 
establishes the District of Columbia Financial Responsibility and 
Management Assistance Authority. The Authority's five members will be 
appointed by the President, in consultation with Congress. The members 
will be responsible for managing the District's finances until the 
District balances four budgets in a row.
  The bill authorizes the District's Chief Financial Officer to prepare 
the financial plan and budget for the District and implement programs 
and policies for budgetary control. The bill also establishes an 
Inspector General for the District, who will make an independent 
assessment of budget assumptions and report those findings to the 
board.
  This bill allows the Mayor to retain his budgetary and operational 
authority and the Council to retain its lawmaking powers. However, the 
Board is responsible for monitoring these activities to ensure that the 
city is not acting inconsistent with fiscal prudence.
  I would hope that we can act today to pass this legislation in an 
effort to ensure that the District's fiscal crisis will be on its way 
to recovery when Congress reconvenes. But the truth be told, the real 
long term solution is not control boards and less home rule; the real 
long term solution is the expansion of the District's autonomy, 
increasing home rule. The citizens of the District of Columbia deserve 
to have full democratic privileges like all other United States 
citizens enjoy.
  Mr. THOMPSON. Mr. President, I ask unanimous consent that the 
amendment be agreed to.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 593) was agreed to.
  Mr. THOMPSON. Mr. President, I ask unanimous consent that the bill be 
deemed read a third time and passed; that the motion to reconsider be 
laid upon the table; and that any statements relating to the bill be 
placed at the appropriate place in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  So the bill (H.R. 1345), as amended, was deemed read the third time 
and passed.

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