[Congressional Record Volume 143, Number 61 (Monday, May 12, 1997)]
[House]
[Pages H2486-H2487]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        INFORMATION ON H.R. 1486, THE FOREIGN POLICY REFORM ACT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from New York [Mr. Gilman] is recognized for 5 minutes.
  Mr. GILMAN. Mr. Speaker, in what I am advised is a practically 
unprecedented move, the minority leadership, apparently acting on 
behalf of minority members of the Committee on International Relations, 
indicated that they would interpose an objection to the committee 
majority's request to file a supplemental report on the bill, H.R. 
1486, the Foreign Policy Reform Act. The supplemental report would have 
provided the cost and mandate estimate of the Congressional Budget 
Office and the ``Ramseyer print'' of the amendment ordered reported by 
the International Relations Committee.

  For the information of the Members, the CBO report is printed below. 
The Ramseyer print, which would cost $30,000 or more to print in the 
Record according to an informal estimate from the GPO, will be 
available for Members to review in the offices of the International 
Relations Committee.
                                                     U.S. Congress


                                  Congressional Budget Office,

                                     Washington, DC, May 12, 1997.
     Hon. Benjamin A. Gilman,
     Chairman, Committee on International Relations, House of 
         Representatives, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for H.R. 1486, the 
     Foreign Policy Reform Act.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contacts an Joseph C. 
     Whitehill and Sunita D'Monte.
           Sincerely,
                                                  June E. O'Neill.
                                                         Director.
       Enclosure.

               Congressional Budget Office, Cost Estimate

     H.R. 1486--Foreign Policy Reform Act
       Summary: H.R. 1486 would consolidate various international 
     affairs agencies, would authorize appropriations for foreign 
     assistance programs, the Department of State, and related 
     agencies, and would authorize the sale of 14 naval vessels.
       Assuming appropriation of the authorized amounts, CBO 
     estimates that enacting H.R. 1486 would result in additional 
     discretionary spending of $33 billion over the 1998-2002 
     period. The legislation would increase direct spending by $11 
     million in 1998 and by $0.3 billion over the next five years; 
     therefore, pay-as-you-go procedures would apply. The sale of 
     naval vessels would generate an estimated $163 million in 
     offsetting receipts.
       The bill contains a provision that would result in costs to 
     state, local, or tribal governments. CBO is unsure whether 
     this provision constitutes an intergovernmental mandate as 
     defined in the Unfunded Mandates Reform Act (UMRA), but 
     mandate costs, if any, would be well below the threshold 
     established in the law ($50 million in 1996, adjusted 
     annually for inflation). H.R. 1486 would impose no new 
     private-sector mandates as defined in UMRA.
       Estimated cost to the Federal Government: The estimated 
     budgetary impact of H.R. 1486 is shown in the table. For the 
     purpose of this estimate, CBO assumes that all amounts 
     authorized would be appropriated by the start of each fiscal 
     year and that outlays would follow historical spending 
     patterns.

                                                                                                                
----------------------------------------------------------------------------------------------------------------
                                                                     By fiscal year in millions of dollars      
                                                              --------------------------------------------------
                                                                 1997     1998     1999    2000    2001    2002 
----------------------------------------------------------------------------------------------------------------
                                                 DIRECT SPENDING                                                
                                                                                                                
Proposed changes, refugee determination: \1\                                                                    
    Estimated budget authority...............................        0        0       20      60      70      80
    Estimated outlays........................................        0        0       20      60      70      80
Other proposed changes:                                                                                         
    Estimated budget authority...............................        0       11       15      15      16      17
    Estimated outlays........................................        0       11       15      15      16      17
Total changes in direct spending:                                                                               
    Estimated budget authority...............................        0       11       35      75      86      97
    Estimated outlays........................................        0       11       35      75      86      97
                                                                                                                
                                                 ASSET SALES \2\                                                
                                                                                                                
Estimated budget authority...................................        0     -163        0       0       0       0
Estimated outlays............................................        0     -163        0       0       0       0
                                                                                                                
                                        SPENDING SUBJECT TO APPROPRIATION                                       
                                                                                                                
Spending under cuttent law: \3\                                                                                 
    Estimated authorization level \4\........................   15,740        0        0       0       0       0
    Estimated outlays........................................   16,322    7,073    2,974   1,513     702     383
Proposed changes:                                                                                               
    Estimated authorization level............................        0   16,467   16,099     621     633     646
    Estimated outlays........................................        0    9,337   13,547   6,031   2,592   1,601
Spending under the bill: \3\                                                                                    
    Estimated authorization level \4\........................   15,740   16,467   16,099     621     633     646
    Estimated outlays........................................   16,322   16,410   16,521   7,544   3,294   1,984
----------------------------------------------------------------------------------------------------------------
\1\ Spending for Medicaid, Food Stamps, and Supplemental Security Income. Under current law, CBO estimates that 
  spending for these programs will be $150 billion in 1997 and will rise to $208 billion in 2002.               
\2\ Under recent budget resolutions, proceeds from asset sales are counted in the budget totals for puropses of 
  Congressional scoring. Under the Balanced Budget Act, however, proceeds from asset sales are not counted in   
  determining compliance with the discretionary spending limits or pay-as-you-go requirement.                   
\3\ Funding for foreign assistance programs, the Department of State, and related agencies.                     
\4\ The 1997 level is the amount appropriated for that year.                                                    

       Basis of estimate:


                            direct spending

       This bill would increase direct spending by an estimated 
     $0.3 billion over the next five years.
       Refugee determination.--Section 1218 would extend a 
     provision of U.S. immigration law that favors the automatic 
     admission as refugees of certain nationals of the former 
     Soviet Union (chiefly Jews and evangelical Christians), 
     Vietnam, Laos, and Cambodia. Applicants for admission need 
     only assert that they have a fear of persecution and a 
     ``credible basis'' (not the stricter ``well-founded basis'' 
     that others must prove) for that fear. (These provisions are 
     commonly known as the Lautenberg criteria.)
       These criteria were first enacted in November 1989, and 
     have been renewed several times since then. They currently 
     cover applicants for refugee status who apply through 
     September 30, 1997. Section 1218 would extend that deadline 
     for two years, through September 30, 1999.
       Under current law (section 207 of the Immigration and 
     Nationality Act), the annual ceiling on refugee admissions is 
     set by the President after consultation with the Congress. 
     The refugees affected by this bill are accommodated within 
     that ceiling. However, CBO believes that these criteria lead 
     the President and the Congress to set a higher ceiling for 
     refugee admissions than they otherwise would. That is, 
     without these criteria, refugee admissions would be lower. 
     There is no mechanism by which lower admissions of, for 
     example, Soviet Jews and evangelicals would automatically 
     lead to higher admissions of, say, Rwandans or Bosnians.
       According to the Department of State, approximately 2,000 
     people in the former Soviet Union currently apply for 
     admission each month as refugees, and about three-quarters of 
     them are found to meet those criteria. (They are the 
     principal beneficiaries of the provision.) Those figures are 
     significantly smaller than the peak levels of the early 
     1990s. Because there are lags in scheduling applicants for 
     interviews and then in assembling travel documents, CBO 
     expects that extending the criteria for fiscal years 1998 and 
     1999 would boost the number of entries in 1999 and 2000. By 
     the end of 1999, an estimated 18,000 more refugees would be 
     in the United States as a result of the extension; by the end 
     of 2000, an estimated 36,000.
       According to the annual Report to the Congress of the 
     Office of Refugee Resettlement in the Department of Health 
     and Human Services, about 10 percent of these refugees go on 
     Supplemental Security Income (SSI), 60 percent on Food 
     Stamps, and up to 60 percent on Medicaid. (Also, some go on 
     Aid to Families with Dependent Children, which has now been 
     converted to a block grant at fixed levels of funding; on 
     general assistance, which is state-funded; or on short-term 
     refugee assistance, a federally-funded program that is 
     subject to appropriation.) Last year's welfare reform law, 
     the Personal Responsibility and Work Opportunity 
     Reconciliation Act of 1996 (Public Law 104-193), curtailed 
     the eligibility of most immigrants for welfare benefits, 
     but spared refugees during their first five years in the 
     United States. Based on these past patterns of welfare 
     participation, CBO estimates that extra outlays in the 
     SSI, Food Stamp, and Medicaid programs would total $20 
     million in 1999 and would grow to $80 million in 2002.
       Appropriation of interest.--The bill contains several 
     sections that authorize the deposit of certain funds into 
     interest-bearing accounts and the spending of subsequent 
     interest earnings without further appropriation. Sections 
     1205, 1202, and 1204 provide this authority for proceeds from 
     the sale of overseas property, the Foreign Service National 
     Separation Liability Trust Fund and the International Center 
     Reserve Fund, respectively. CBO estimates that these 
     provisions would increase direct spending by $7 million to 
     $10 million a year. Section 1402 authorizes recipients of 
     grants from the National Endowment for Democracy to deposit 
     grant funds in interest-bearing accounts and to use the 
     interest for the same purpose for which the grant was made. 
     Under current law, the grantees refund their interest 
     earnings to the government. CBO estimates that under this 
     provision the Treasury would forgo collections of less than 
     $60,000 a year.
       Recovery of health care costs.--Section 1214 would 
     authorize the Secretary of State to recover from insurance 
     companies the reasonable costs of health care services 
     provided by the department and to deposit the funds as 
     offsetting collections. These amounts would

[[Page H2487]]

     be available for spending. The provision would increase 
     mandatory payments for Federal Employee Health Benefits 
     (FEHB) and discretionary appropriations. CBO estimates that 
     the department would collect and spend $12 million in 1998. 
     Collections in 1999 through 2002 were estimated assuming that 
     collections grow at the same rate as inflation in health care 
     costs, rising to $17 million by 2002.
       CBO assumes that, after a short lag, insurance companies 
     would recover the amount paid to the State Department plus 15 
     percent for administrative overhead through higher FEHB 
     premiums. The government pays 72 percent of FEHB premiums; of 
     this, 45 percent is paid through a mandatory government 
     payment for annuitants and 55 percent is paid through 
     discretionary appropriations. Additional mandatory spending 
     would average about $5 million a year, and increases in 
     discretionary spending would average $6 million a year.
       Reappropriations.--The bill contains two provisions that 
     would extend the availability of funds by specifying that the 
     funds ``shall'' remain available until expended. Section 1203 
     would extend the availability of funds deposited into the 
     Capital Investment Fund and section 1216 would extend the 
     availability of fees for commercial services. CBO estimates 
     that reappropriations from both sections would be less than 
     $500,000.
       Authority to provide services on a reimbursable basis.--
     H.R. 1486 contains several provisions that would allow the 
     Department of State to provide various services on a fee-for-
     service or reimbursable basis. CBO estimates that collections 
     and spending from the provisions would total less than 
     $500,000 per year. Section 1209 allows the department to 
     accept reimbursement for the expenses of pursuing a claim 
     against a foreign government or entity. Section 1213 
     authorizes the department to provide training services to 
     corporate employees, their families, and Congressional 
     employees on a reimbursable basis and to collect a new fee 
     for the use of the Foreign Affairs Training Center. And 
     finally, section 1215 would authorize the department to 
     collect a new fee for the use of diplomatic reception rooms. 
     All provisions specify that amounts collected would be 
     deposited as offsetting collections and would remain 
     available until expended.
       Termination expenses.--Section 704 authorizes the President 
     to deobligate and reobligate development assistance funds for 
     countries whose assistance program is terminated. The 
     reobligation would cover equitable settlements of third 
     parties whose contracts were canceled when the assistance 
     ended. CBO cannot estimate the budgetary effect of this 
     section.


                              asset sales

       Chapter 5 would authorize the Secretary of the Navy to sell 
     14 naval vessels to certain foreign countries. Based on 
     information from the Navy, CBO estimates the sale would 
     generate $163 million in offsetting receipts in 1998.
       Under recent budget resolutions, proceeds from asset sales 
     have been counted in the budget totals for purposes of 
     Congressional scoring. Under the Balanced Budget Act, 
     however, proceeds from asset sales are not counted in 
     determining compliance with the discretionary spending limits 
     or pay-as-you-go requirement.


                   spending subject to appropriations

       CBO estimates the bill would authorize appropriations of 
     $16.5 billion in 1998, $16.1 billion in 1999, and $0.6 
     billion per year thereafter for foreign assistance programs, 
     the Department of State, and other related agencies. The 
     estimate includes authorizations that specify both the dollar 
     amounts and fiscal years, and the permanent, indefinite 
     authorization for the appropriation of collections in special 
     funds in the amounts discussed below under governmental 
     receipts. In addition, the bill would authorize indefinite 
     appropriations discussed below.
       Department of State rewards program.--Subject to 
     appropriations action, section 1201 would authorize the 
     President to take up to 2 percent of the earnings from the 
     assets of foreign governments that have been blocked under 
     the International Emergency Powers Act. Based on information 
     from the Treasury Department, CBO estimates that 2 percent 
     of the earnings on blocked assets would be $2 million per 
     year. The funds would be available for the Department of 
     State to pay rewards for the prevention of international 
     terrorism, narcotics trafficking, and other crimes. The 
     assets affected are not the property of the U.S. 
     government. Any taking would create a claim against the 
     U.S. Government that would need to be resolved when normal 
     relations between the United States and the countries are 
     restored. The Department of State currently provides 
     rewards totaling approximately $2 million a year, and this 
     estimate assumes that section 1201 would result in an 
     authorization of that amount each year.
       Indefinite authorizations for currency fluctuations.--
     Section 1102(f) authorizes such sums as may be necessary in 
     1998 and 1999 for international organizations and programs to 
     compensate for adverse fluctuations in exchange rates. Any 
     funds appropriated for this purpose would only be obligated 
     and expended subject to an OMB certification. Section 1107 
     authorizes such sums as may be necessary in 1998 and 1999 for 
     the Arms Control and Disarmament Agency (ACDA) to compensate 
     for increases in pay, employee benefits, and adverse 
     fluctuations in exchange rates.
       Currency fluctuations are extremely difficult to estimate 
     in advance. The spending to meet the foreign currency 
     requirements for the two programs could be higher or lower 
     than the amounts specifically authorized in the bill. 
     Therefore, this estimate includes no costs associated with 
     currency fluctuations.


                         governmental receipts

       The bill contains two provisions that would authorize 
     collections of certain passport and consular fees to be 
     deposited into special funds of the Treasury. CBO estimates 
     these provisions would not affect governmental receipts or 
     direct spending. The State Department already has the 
     authority to collect these fees, and the authority to spend 
     them would be subject to appropriation and is included as 
     such in the table above.
       Section 1210 would authorize the deposit of passport and 
     consular fees into a special fund of the Treasury. These 
     collections would be available to the Department of State in 
     such amounts as are provided for in advance in appropriations 
     acts. CBO estimates the department would collect $446 million 
     in 1998 and $483 million in 2002.
       Similarly, section 1211 would establish a Machine Readable 
     Visa fee account such that collections of the fee, a 
     surcharge for processing certain types of visas, would be 
     deposited into a special fund of the Treasury and would be 
     available to the department in such amounts as are provided 
     for in advance in appropriations acts. CBO estimates that the 
     department would collect $143 million in 1998 and $155 
     million in 2002.
       Pay-as-you-go considerations: The Balanced Budget and 
     Emergency Deficit Control Act of 1985 establishes pay-as-you-
     go procedures for legislation affecting direct spending or 
     receipts through fiscal year 1998. CBO estimates that 
     enactment of H.R. 1486 would cause an increase in direct 
     spending of $11 million in 1998.
       Estimated impact on State, local, and tribal governments: 
     While H.R. 1486 would, by itself, establish no new 
     enforceable duties on state, local, or tribal governments, 
     increasing the number of refugees admitted to the United 
     States, as required by the bill, would increase the costs 
     associated with state SSI supplementary payments. 
     Approximately ten percent of the additional refugees would be 
     eligible for federal SSI payments. Most states would be 
     required under current law to supplement the federal payments 
     to these individuals. CBO cannot determine whether these 
     additional payments would be considered the direct costs of a 
     mandate for the purposes of UMRA. In any event, CBO estimates 
     that the additional costs to states would not exceed $5 
     million annually.
       States would face other costs as a result of the increases 
     in the number of refugees admitted to the United States, but 
     these costs would result either from state public assistance 
     requirements that are not controlled by the federal 
     government, or from an increase in the number of people 
     eligible for federal entitlement programs. Because the bill 
     would not increase the stringency of conditions for these 
     entitlement programs, the costs associated with these 
     provisions do not constitute mandate costs under the law.
       The bill also contains a provision that could encourage 
     foreign governments to pay parking fines they owe to 
     Maryland, Virginia, New York State, New York City, and the 
     District of Columbia. Section 308 of the bill would require 
     that an amount equal to 110 percent of the total unpaid 
     parking fines owed by foreign governments be withheld from 
     the foreign aid for those countries. The funds would become 
     available for obligation once the parking fines are paid.
       Estimated impact on the private-sector: H.R. 1486 would 
     impose no new private-sector mandates as defined in UMRA.
       Estimate prepared by: Federal Cost: Joseph C. Whitehall and 
     Sunita D'Monte (226-2840); Kathy Ruffing and Dorothy A. 
     Rosenbaum (226-2820); Robin Rudowitz and Jeffrey Lemieux 
     (226-9010); impact on State, Local, and Tribal Governments: 
     Pepper Santalucia (225-3220); impact on the Private Sector: 
     Lesley Frymier (226-2940).
       Estimate approved by: Robert A. Sunshine, Deputy Assistant 
     Director for Budget Analysis.

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