[House Report 104-408]
[From the U.S. Government Publishing Office]



                                                                       
104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-408
_______________________________________________________________________


 
        THE DISTRICT OF COLUMBIA FISCAL PROTECTION ACT OF 1995

                                _______


 December 14, 1995.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Clinger, from the Committee on Government Reform and Oversight, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 2661]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Government Reform and Oversight, to whom 
was referred the bill H.R. 2661 (the District of Columbia 
Fiscal Protection Act of 1995), having considered the same, 
report favorably thereon with amendments and recommend that the 
bill as amended do pass.

                                CONTENTS

                                                                   Page
  I. Background and Need for the Legislation..........................3
 II. Legislative Hearings and Committee Actions.......................4
III. Committee Hearings and Written Testimony.........................4
 IV. Explanation of the Bill..........................................6
  V. Compliance With Rule XI..........................................7
 VI. Budget Analysis and Projections..................................7
VII. Cost Estimate of the Congressional Budget Office.................7
VIII.Inflationary Impact Statement....................................8

 IX. Changes in the Existing Law......................................8
  X. Committee Recommendations.......................................10
 XI. Congressional Accountability Act; Public Law 104-1; Section 
     102(b)(3).......................................................10
     Appendix........................................................11

    The amendments are as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``District of Columbia Fiscal Protection 
Act of 1995''.

SEC. 2. PERMITTING DISTRICT OF COLUMBIA TO EXPEND DISTRICT FUNDS DURING 
                    PERIOD OF DELAY IN CONGRESSIONAL ENACTMENT OF 
                    DISTRICT OF COLUMBIA APPROPRIATIONS ACT.

  (a) In General.--Subpart 1 of part D of title IV of the District of 
Columbia Self-Government and Governmental Reorganization Act is amended 
by inserting after section 446 (sec. 47-304, D.C. Code) the following 
new section:
``expenditure of district funds during delay in congressional enactment 
                               of budget
  ``Sec. 446A. (a) Expenditure Permitted.--
          ``(1) In general.--Notwithstanding section 446, if the 
        District of Columbia Appropriations Act for a fiscal year has 
        not been enacted by the first day of the fiscal year, during 
        the period described in subsection (c) an authorized officer or 
        employee of the District of Columbia government may obligate or 
        expend any amounts available in the general fund, enterprise 
        funds, and other non-Federal funds of the District of Columbia 
        for such fiscal year to continue the operations of the 
        government of the District of Columbia.
          ``(2) Requirements for notification.--No obligations or 
        expenditures may be made pursuant to this subsection until the 
        Mayor of the District of Columbia has provided to the Council, 
        the District of Columbia Financial Responsibility and 
        Management Assistance Authority, the President, the Committees 
        on Appropriations of the House of Representatives and the 
        Senate prior written notification (prepared by the Chief 
        Financial Officer of the District of Columbia) containing a 
        description of such obligations and expenditures and a 
        description of the effect of such obligations and expenditures 
        on the spending plans in effect prior to the making of 
        obligations and expenditures pursuant to this subsection.
  ``(b) Applicable Rate of Obligations and Expenditures.--The amount 
made available for obligation or expenditure for a project or activity 
under subsection (a) for a fiscal year shall be equal to the lesser 
of--
          ``(1) the amount or authority made available under the 
        District of Columbia Appropriations Act for the fiscal year as 
        passed by the House of Representatives;
          ``(2) the amount or authority made available under the 
        District of Columbia Appropriations Act for the fiscal year as 
        passed by the Senate; or
          ``(3) the amount or authority provided in the previous fiscal 
        year.
  ``(c) Period Described.--The period described in this subsection with 
respect to a fiscal year is the period which begins on the first day of 
the fiscal year and ends on the date of enactment of the District of 
Columbia Appropriations Act for the fiscal year.''.
  (b) Conforming Amendment.--The fourth sentence of section 446 of such 
Act (sec. 47-304, D.C. Code) is amended--
          (1) by striking ``and subsections'' and inserting 
        ``subsections''; and
          (2) by inserting ``and section 446A,'' after ``section 
        490,''.
  (c) Clerical Amendment.--The table of contents for subpart 1 of part 
D of title IV of such Act is amended by inserting after the item 
relating to section 446 the following new item:

        ``Sec. 446A. Expenditure of District funds during delay in 
                        Congressional enactment of budget.''.

SEC. 3. SENSE OF CONGRESS REGARDING FEDERAL PAYMENT UNDER CONTINUING 
                    RESOLUTION.

  It is the sense of Congress that the financial condition of the 
District of Columbia should be the primary factor taken into account in 
determining the amount of any Federal payment made to the District of 
Columbia under any continuing resolution providing for appropriations 
during any portion of a fiscal year for which Congress has not enacted 
the budget of the District of Columbia for the fiscal year, and that 
(notwithstanding any amendment made by this Act) a continuing 
resolution providing for such a Federal payment should be enacted prior 
to the first day of such a fiscal year.

SEC. 4. EFFECTIVE DATE.

  The amendments made by this Act shall apply with respect to fiscal 
years beginning with fiscal year 1996.

  Amend the title so as to read:

      A bill to amend the District of Columbia Self-Government 
and Governmental Reorganization Act to permit the District of 
Columbia to expend its own funds during any portion of a fiscal 
year for which Congress has not enacted the budget of the 
District of Columbia for the fiscal year.

               I. Background and Need for the Legislation

    The Home Rule Act and the Financial Responsibility and 
Management Assistance Act (P.L. 104-8), which created the 
Control Board for the District of Columbia, requires 
congressional authorization and appropriation before the 
District of Columbia can spend funds. In the absence of passage 
of a District Appropriations Act for fiscal year 1996, which 
establishes the District's annual budget and authorizes 
spending, combined with the President's veto of a Continuing 
Resolution on November 13, the Nation's Capital was forced to 
shut down all but the emergency services during the period of 
November 14-19, 1995. The Control Board estimated that the 
shutdown cost the District government $7 million in lost 
productivity. In addition to the inability of the District to 
deliver important municipal services, the shut down also 
prevented City officials from working on solutions which this 
Congress has identified. This comes at a time when the District 
of Columbia is in the midst of an unprecedented fiscal crisis.
    The City is unique in that it is the only non-federal 
entity whose entire budget requires Federal approval before it 
can obligate or expend any of its revenue. Until the District 
has an enacted appropriations bill or is covered by a 
Continuing Resolution, it cannot legally spend even its own, 
locally generated revenue.
    The effects of even a partial government shut down were 
severe, unintended, and unacceptable. A city government, unlike 
many Federal agencies, is responsible for the delivery of basic 
municipal services. For example, although many individuals were 
inconvenienced by the closure of the National Parks, their 
inconvenience is obviously not nearly as serious as the City's 
closure of its eleven public health clinics. Is is a very 
serious problem not to have trash picked up from the curbs of 
our Nation's Capital. In addition to the inability to provide 
front line municipal services, the District was also unable to 
continue to work its way through its current fiscal crisis. 
Members of the Mayor's cabinet were forced to deal with the 
problems associated with closing down the City government when 
they needed to be working on the City's multi-year financial 
plan. Although short term continuing resolutions permit the 
City to remain open, they do not allow the City to follow 
normal, efficient municipal contracting and procurement 
practices. In fact, the emergency, stopgap nature of Continuing 
Resolutions prevents the District from being able to formulate 
stable, long range financial decisions.
    In cooperation with the Financial Responsibility and 
Management Assistance Authority, Mayor Marion S. Barry's office 
implemented a plan which it had developed for the shutdown that 
reportedly applied Federal guidelines in order to determine 
which workers would be furloughed. A majority of City workers, 
approximately 26,000 of 39,000, were deemed essential and were 
required to report to work. About 13,000 city workers were sent 
home. The operations at several City agencies were either 
halted or cut-back, adversely affecting a number of city 
services.
    The D.C. Public Libraries, the Department of Motor 
Vehicles, and public health clinics were closed. Trash 
collection and street repairs were halted. The Department of 
Consumer and Regulatory Affairs was closed, except for food and 
building inspections. The D.C. Public Schools, Police 
Department, Fire and Emergency Medical Services, D.C. General 
Hospital, D.C. Superior Court, the Department of Employment 
Services, and Department of Corrections were all kept open.
    On November 17, 1995 Delegate Eleanor Holmes Norton 
introduced H.R. 2661, the ``District of Columbia Fiscal 
Protection Act of 1995.'' The goal of this legislation is to 
give the necessary amount of budgetary authority to the City so 
that it can provide normal front line municipal services 
without significantly reducing Congressional oversight and 
responsibility to enact the entire District of Columbia budget. 
This legislation has been carefully crafted so that it is 
triggered by highly unusual conditions and applies specific 
guidelines that restrict the City's ability to use its own 
resources. H.R. 2661 takes effect only when Congress and the 
president fail to make provision for the District to obligate 
and expend revenue. The level of expenditure would be no more 
than the lesser of the preceding fiscal year, the House passed 
appropriation bill, or the Senate passed appropriation bill. 
Furthermore, the Mayor is required to transmit a detailed 
spending plan prepared by the Chief Financial Officer to the 
Council, the Authority, the President and the appropriations 
committees of Congress prior to the expenditure of its own 
revenues. This legislation would be effective with the fiscal 
year beginning October 1, 1996

             II. Legislative Hearings and Committee Actions

    The Subcommittee on the District of Columbia held a hearing 
on H.R. 2661 on December 6, 1995. Testimony was received from 
Rep. George Gekas, (R-PA) , Hon. Edward DeSeve, Controller, 
Office of Management and Budget, Dr. Andrew Brimmer, Chairman, 
District of Columbia Financial Responsibility and Management 
Assistance Authority, Mayor Marion S. Barry, City Administrator 
Michael Rogers; Chief Financial Officer Anthony Williams; Dr. 
Marlene Kelly, Deputy Commissioner of Public Health; and 
representatives of local labor organizations and the business 
community. The Subcommittee on the District of Columbia held a 
mark-up on December 13, 1995. Del. Norton offered an amendment 
in the nature of a substitute that was adopted unanimously by 
voice vote. The Subcommittee proceeded to unanimously report 
out H.R. 2661 by voice vote.
    The Government Reform and Oversight Committee met on 
December 14, 1995 to consider H.R. 2661. The bill, as amended 
by the subcommittee, was favorably reported to the House 
unanimously by voice vote and without further amendment by the 
full committee.

             III. Committee Hearings and Written Testimony

    Subcommittee Chairman Tom Davis spoke of the Federal 
government's responsibility to make provisions for the District 
to continue to provide the basic municipal services needed by 
its citizens. He was particularity concerned that the shutdown 
prevented the local government from moving forward in the 
development and implementation of badly needed reforms in their 
financial and management practices. Chairman Davis did, 
however, express serious reservations about the permanent 
appropriation of the Federal payment contained in Section 3 of 
the bill as originally introduced. He was also concerned about 
some of the expansive language found in Section 2 of the 
original bill.
    Delegate Norton expressed her gratitude to Chairman Davis 
for giving H.R. 2661 a timely hearing. Delegate Norton 
explained that the goal of the bill was to permit the District 
to spend its own, locally generated revenue in the event of a 
future federal government shutdown. Finally, she stressed the 
importance of prompt congressional action to avoid the 
repetition of the recent shutdown.
    Congressman George W. Gekas testified in support of H.R. 
2661. His testimony placed the shutdown of the District's 
government within the larger context of the partial shut down 
of the federal government. He indicated that he also supports 
enactment of a permanent continuing resolution that would 
prevent the future shutdown of all Federal agencies. Rep. Gekas 
looked at H.R. 2661 as a first step in that direction.
    The Honorable G. Edward DeSeve, Comptroller, Office of 
Management and Budget expressed the support of the Clinton 
Administration for the concept of the bill. He was concerned, 
however, that the bill failed to provide a mechanism to control 
the rate of District spending when it was not operating under 
either a Continuing Resolution or an appropriations bill. He 
also stated the Administration's opposition to the automatic 
appropriation of the Federal payment in Section 3 of the 
introduced bill. Mr. DeSeve offered the Administration's 
assistance in resolving the drafting difficulties with the 
bill.
    Dr. Andrew Brimmer, Chairman of the District of Columbia 
Financial Responsibility and Management Assistance Authority, 
began by stating that roughly 67% of the District's 
expenditures are funded out of locally generated revenues. He 
also stated that the recent shutdown cost the District 
government $7.3 million in lost productivity. Dr. Brimmer 
explained that the District's critical financial condition 
would be aggravated should it have to endure any further 
shutdowns. He testified that the Authority supports the concept 
of H.R. 2661, but believes it should be amended to prohibit the 
obligation or expenditure of funds equal to the federal payment 
or federal grants without appropriation, and to make it clear 
that the District's Chief Financial Officer should prepare the 
report which the Mayor would submit to the Authority on planned 
spending made under the authority of this Act.
    Mayor Marion Barry and D.C. City Administrator Michael 
Rogers both expressed strong support for this legislation. They 
pointed out that shutting down a local government means that 
the various resident services such as trash collection, the 
issuance of licenses and permits, health and safety 
inspections, and libraries are halted. They further indicated 
that terminating these services does not save money, but only 
serves to compound problems, add expense, and cause a loss of 
revenues.
    Mr. Anthony Williams, the City's Chief Financial Officer, 
testified that while he supports the goal of this legislation, 
he would like to see it amended as recommended by Dr. Brimmer. 
He was particularly concerned that the role of the Chief 
Financial Officer in the implementation of this legislation be 
more clearly specified. He also suggested that the intent of 
H.R. 2661 be clarified in light of Public Law 104-8. Mr. 
Williams also expressed concern about the consequences for the 
City's financial condition if the City were to spend the 
federal payment before it was appropriated.
    The Subcommittee also heard from representatives of 
organized labor. Mr. Charles Hicks, President of American 
Federation of State, County, and Municipal Employees, D.C. 
Council 20 spoke in favor of H.R. 2661. He discussed the 
consequences of the last shut- down, especially in regard to 
the orderly functioning of the Department of Human Services 
(DHS), Department of Consumer and Regulatory Affairs, and the 
D.C. Public library. For example, DHS needs to process 
approximately 1,600 foods stamp applications per week. Because 
the DHS employees were furloughed, they could not process the 
applications. Dr. Marlene N. Kelly, the Deputy Commissioner of 
Public Health went into further detail about the deleterious 
effects that the shutdown had on the delivery of medical 
services to the most needy residents of the City. Mr. David 
Schlein, national vice president of the American Federation of 
Government Employees also spoke in favor of the bill. The local 
business community, represented by Mr. John R. Tydings, 
President of the Greater Washington Board of Trade, joined with 
organized labor in support of the bill. Ms. Diane C. Duff, who 
presented Mr. Tydings testimony, spoke of the delays to the 
business community caused by the closure of the Department of 
Consumer and Regulatory Affairs and how this extracted a heavy 
cost not only to the City from the foregone revenues but it 
also increased the cost of doing business in Washington.

                      IV. Explanation of the Bill

                              A. Overview

    H. R. 2661 as amended by the Committee provides that the 
District of Columbia could continue its normal municipal 
operations using only its own locally raised taxes in a fiscal 
year while awaiting final action on its appropriation even if 
there is no Continuing Resolution in effect. Thus, this would 
prevent a future shutdown of the District government during a 
federal furlough permitting the District to use its own 
resources. The bill does not confer budget autonomy, but is 
rather a limited hold harmless stopgap to address a unique set 
of emergency circumstances that if left unaddressed would 
adversely affect the Nation's Capital. The bill specifically 
mandates that the City must spend at the lowest spending level 
approved by Congress.

                     B. Section by section analysis

    Section 1 cites the title of the bill as the ``District of 
Columbia Fiscal Protection Act of 1995.''
    Section 2 permits the District to expend only District 
funds (non-federal funds) during a period of delay in enactment 
of the District's Appropriations Act. This is done by amending 
the Home Rule Act. The funds to be expended are those in the 
District's ``general fund, enterprise funds, and other non-
Federal funds.'' It is required in Subsection (a)(2) that any 
expenditure may only be made if there is notice to Congress and 
the President ``prepared by the Chief Financial Officer'' of a 
detailed spending plan ``of such obligations and expenditures * 
* * prior to the making of obligations and expenditures 
pursuant to this subsection.'' Subsection (b) limits the rate 
of obligations and expenditures ``to the lesser of'' the 
District Appropriations bill passed by the House, the Senate, 
or ``the amount or authority provided in the previous fiscal 
year.''
    Section 3 provides a Sense of Congress that the financial 
condition of the District of Columbia should be the primary 
factor taken into account in determining the amount of any 
Federal payment made to the District ``under the circumstances 
of the bill, and calls upon Congress to pass a continuing 
resolution providing for such a Federal payment * * * prior to 
the first day of such a fiscal year.''
    Section 4 provides that the Act would be effective starting 
with Fiscal Year 1996.

                       V. Compliance With Rule XI

    Pursuant to rule XI, clause 2(l)(3), of the Rules of the 
House of Representatives, under the authority of rule X, clause 
2(b)(1) and clause 3(f), the results and findings from those 
oversight activities are incorporated in the recommendations 
found in the bill and amended in this report.

                  VI. Budget Analysis and Projections

    This Act provides for no new authorization or budget 
authority or tax expenditures. Consequently, the provisions of 
section 308(a) of the Congressional Budget Act are not 
applicable.

         VII. Cost Estimate of the Congressional Budget Office

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, December 14, 1995.
Hon. William F. Clinger, Jr.,
Chairman, Committee on Government Reform and Oversight, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 2661, the District of Columbia Fiscal Protection 
Act of 1995, as ordered reported by the House Committee on 
Government Reform and Oversight on December 14, 1995. CBO 
estimates that enacting the bill would result in no cost to the 
federal government and would impose no costs on state or local 
governments. Enacting H.R. 2661 would not affect direct 
spending or receipts; therefore, pay-as-you-go procedures would 
not apply.
    H.R. 2661 would allow the mayor of the District, with prior 
written notification to the District Council, the District 
Control Board, the Congress, and the President, to obligate and 
spend District funds in the event that a new fiscal year begins 
and the District's regular appropriations bill has not been 
enacted. The bill would limit the amount the District may 
obligate or spend during such periods to the lesser of the 
amounts provided in its regular appropriations bill, as passed 
in the new year by the House or the Senate, or as enacted in 
the previous year. The bill would not allow the District to 
obligate or spend federal funds in the absence of an 
appropriation.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Deborah 
Reis and John R. Righter.
            Sincerely,
                                         June E. O'Neill, Director.

                  VIII. Inflationary Impact Statement

    In accordance with rule XI, clause 2(l)(4) of the Rules of 
the House of Representatives, this legislation is assessed to 
have no inflationary effect on prices and costs in the 
operation of the national economy.

       IX. Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

 DISTRICT OF COLUMBIA SELF-GOVERNMENT AND GOVERNMENTAL REORGANIZATION 
                                  ACT

                            TABLE OF CONTENTS

             TITLE I--SHORT TITLE, PURPOSES, AND DEFINITIONS

Sec. 101. Short title.
     * * * * * * *

                     TITLE IV--THE DISTRICT CHARTER

     * * * * * * *

            Part D--District Budget and Financial Management

               Subpart 1--Budget and Financial Management

Sec. 441. Fiscal year.
     * * * * * * *
Sec. 446A. Expenditure of District funds during delay in Congressional 
          enactment of budget.
     * * * * * * *

                     TITLE IV--THE DISTRICT CHARTER

          * * * * * * *

            Part D--District Budget and Financial Management

               Subpart 1--Budget and Financial Management

          * * * * * * *

                enactment of appropriations by congress

  Sec. 446. The Council, within fifty calendar days after 
receipt of the budget proposal from the Mayor, and after public 
hearing, shall by act adopt the annual budget for the District 
of Columbia government. Any supplements thereto shall also be 
adopted by act by the Council after public hearing. Such budget 
so adopted shall be submitted by the Mayor to the President for 
transmission by him to the Congress. Except as provided in 
section 467(d), section 471(c), section 472(d)(2), section 
483(d), [and subsections] subsections (f) and (g)(3) of section 
490, and section 446A, no amount may be obligated or expended 
by any officer or employee of the District of Columbia 
government unless such amount has been approved by Act of 
Congress, and then only according to such Act. Notwithstanding 
any other provision of this Act, the Mayor shall not transmit 
any annual budget or amendments or supplements thereto, to the 
President of the United States until the completion of the 
budget procedures contained in this Act. After the adoption of 
the annual budget for a fiscal year (beginning with the annual 
budget for fiscal year 1995), no reprogramming of amounts in 
the budget may occur unless the Mayor submits to the Council a 
request for such reprogramming and the Council approves the 
request, but only if any additional expenditures provided under 
such request for an activity are offset by reductions in 
expenditures for another activity.


 expenditure of district funds during delay in congressional enactment 
                               of budget


  Sec. 446A. (a) Expenditure Permitted.--
          (1) In general.--Notwithstanding section 446, if the 
        District of Columbia Appropriations Act for a fiscal 
        year has not been enacted by the first day of the 
        fiscal year, during the period described in subsection 
        (c) an authorized officer or employee of the District 
        of Columbia government may obligate or expend any 
        amounts available in the general fund, enterprise 
        funds, and other non-Federal funds of the District of 
        Columbia for such fiscal year to continue the 
        operations of the government of the District of 
        Columbia.
          (2) Requirements for notification.--No obligations or 
        expenditures may be made pursuant to this subsection 
        until the Mayor of the District of Columbia has 
        provided to the Council, the District of Columbia 
        Financial Responsibility and Management Assistance 
        Authority, the President, the Committees on 
        Appropriations of the House of Representatives and the 
        Senate prior written notification (prepared by the 
        Chief Financial Officer of the District of Columbia) 
        containing a description of such obligations and 
        expenditures and a description of the effect of such 
        obligations and expenditures on the spending plans in 
        effect prior to the making of obligations and 
        expenditures pursuant to this subsection.
  (b) Applicable Rate of Obligations and Expenditures.--The 
amount made available for obligation or expenditure for a 
project or activity under subsection (a) for a fiscal year 
shall be equal to the lesser of--
          (1) the amount or authority made available under the 
        District of Columbia Appropriations Act for the fiscal 
        year as passed by the House of Representatives;
          (2) the amount or authority made available under the 
        District of Columbia Appropriations Act for the fiscal 
        year as passed by the Senate; or
          (3) the amount or authority provided in the previous 
        fiscal year.
  (c) Period Described.--The period described in this 
subsection with respect to a fiscal year is the period which 
begins on the first day of the fiscal year and ends on the date 
of enactment of the District of Columbia Appropriations Act for 
the fiscal year.
          * * * * * * *

                      X. Committee Recommendation

    On December 14, 1995, a quorum being present, the Committee 
ordered the bill favorably reported.
    December 14, 1995, Final Passage.
    Offered by: Mr. Davis.
    H.R. 2661, District of Columbia Fiscal Protection Act of 
1995--Passed by Voice Vote.

    XI. Congressional Accountability Act; Public Law 104-1; Section 
                               102(b)(3)

    This provision is inapplicable to the legislative branch 
because it does not relate to any terms or conditions of 
employment or access to public services or accommodations.
                            A P P E N D I X

                              ----------                              

            Government of the District of Columbia,
                         Office of the Corporation Counsel,
                                 Washington, DC, December 12, 1995.
To: Bernard Demczuk, Director, Office of Intergovernmental Relations.
From: Karen L. Cooper, Chief, Legislation and Opinions Section, Legal 
        Counsel Division.
Subject: Amendment in the nature of a substitute to 104th Congress, 1st 
        Sess. H.R. 2661, ``District of Columbia Fiscal Protection Act 
        of 1995''.
    This is in reply to your request on December 11, 1995 for 
our expedited comments on the Amendment in the Nature of a 
Substitute to H.R. 2661, ``District of Columbia Fiscal 
Protection Act of 1995'', which is a discussion draft.
    In summary, this Amendment is more restrictive than H.R. 
2661 in what it does and how it does it. Finally, this 
Amendment in the Nature of a Substitute to Bill H.R. 2661 does 
not incorporate our earlier recommendations on H.R. 2661: to 
use ``District revenues'' and ``resources'', terms of art in S. 
103 (a) of the District of Columbia Self-Government and 
Governmental Reorganization Act of 1973, as amended, Pub. Law 
93-198, to describe resources available for obligation or 
expenditure in a fiscal year for which Congress has not enacted 
by the first day of the fiscal year a budget for the District. 
Our detailed review follows.
    First, this Amendment changes the notification requirement 
in 2 significant ways. Obligation or expenditure of District 
resources would be subject to new notification requirements. 
This Amendment would require the Chief Financial Officer 
(``CFO'') to prepare the written notice which would describe 
the proposed obligations and expenditures and their effect on 
spending plans already in effect prior to making the proposed 
obligations and expenditures pursuant to the Amendment. Under 
H.R. 2661, there was no role for the CFO in this process. H.R. 
2661 also would have imposed a less ambitious notification 
requirement on the Mayor. Under this Amendment, the Mayor would 
be responsible for transmitting the written notice to more than 
the Financial Responsibility and Management Assistance 
Authority (``FRMAA''), to wit, it would add the following to 
the distribution list: the Council, the President, and the 
Committees on Appropriations of both the House and the Senate.
    Second, the amount of ``District resources'' available 
during a period for which there is no appropriation would be 
the lesser of: the amount or authority passed by either the 
House or Senate, or the amount or authority provided in the 
previous fiscal year.
    Finally, this Amendment would not appropriate the ``Federal 
Payment'' on a pro rata basis or otherwise. Rather, it would 
continue to make the obligation and expenditure of the Federal 
Payment subject to appropriation. It would establish a rather 
nebulous standard for use in a continuing resolution. Section 3 
of the Amendment reads, in pertinent part, as follows:

          It is the sense of Congress that the financial 
        condition of the District of Columbia should be the 
        primary factor taken into account in determining the 
        amount of any Federal payment made to the District of 
        Columbia under any continuing resolution providing for 
        appropriations.* * *

    In conclusion, this Amendment would further restrict the 
Mayor's ability to obligate or expend the District's own 
resources and would continue to make the Federal payment 
subject to appropriation.
                                ------                                


                      Why Shut Down the District?

               at least let the city spend its own money

                        (By Thomas M. Davis III)

    Shutting down the federal government because Congress and 
the president fail to agree on a budget resolution is an act 
that has many unintended victims and numerous unintended 
consequences. The damper these failures put on recruiting and 
maintaining the best and the brightest for our federal work 
force will be with us for some time. On another level, the 
backsliding its inflicts on our efforts to change the District 
of Columbia government are profound.
    The D.C. government is not just another federal agency. It 
is a front-line government providing vital health, safety and 
personal services to 570,000 residents and 300,000 metropolitan 
commuters. When federal agencies shut down, citizens in any 
city in the country can still get a driver's license and 
register their automobiles. When federal agencies shut down, 
the states can continue to process AFDC and Social Security 
applications. But when the District government shuts down, 
people needing services whether medical care at a clinic or 
trash collection from their homes, are not served.
    Congress should act immediately to ensure that the District 
of Columbia can spend its own locally generated tax dollars 
during such a shutdown. We can do this before this week's 
expiration of the current continuing resolution. Del. Eleanor 
Holmes Norton has introduced legislation, H.R. 2661, to allow 
the District to spend its own revenues even if its budget has 
not been approved by Congress (the budget will still be subject 
to approval by the control board). I am a cosponsor of H.R. 
2661, which yesterday was approved by the House subcommittee 
that oversees the District and is scheduled for full committee 
action today. It is imperative that Congress pass it for two 
important reasons.
    First, without passage of H.R. 2661, the District 
government is subject to being shut down again, as it was Nov. 
14-19. That's because the District' owns appropriation has not 
been enacted, and there may be no continuing resolution to keep 
the government open.
    The unique status of the District--the city cannot spend 
one penny of its budget, either local or federal revenues, 
without an appropriations bill being passed by Congress and 
signed by the president--has never before seemed important. In 
past federal shutdowns, the District appropriation had been 
enacted so that the city government could continue operations, 
or else the District has been put under a continuing resolution 
along with federal agencies that were without approved 
appropriations.
    But this time there was no District appropriation and no 
continuing resolution. This places on the District of Columbia 
a unique burden. Every other city or state in the country can 
continue to operate its own programs, and may even take up the 
slack of missing federal funds from its own revenues when the 
federal government is shut down. But the District is stymied.
    This situation is inexcusable even in normal times, but in 
the current financial crisis it has become extreme. The 
District lost more than $7 million in productivity during the 
recent shutdown, according to the control board, and it failed 
to collect up to $70 million in revenue that it was owed. 
Meanwhile, contractors around the metropolitan area are going 
bankrupt every day, and the IRS files liens for unpaid tax 
withholding because the District of Columbia doesn't have the 
cash to pay its bills. Allowing the District to fall even 
further behind in its revenue collection is tantamount to 
negligence on the part of Congress.
    In addition to lost productivity and lost or delayed 
revenues, the very officials who have so much work ahead to 
rebuild and reform the city were forced to spend their time 
deciding what services and employees were ``essential'' in a 
government that is already notoriously dysfunctional. Instead 
of working on privatizing city services, City Administrator 
Michael Rogers had to write furlough notices. Instead of 
reviewing contracts and improving cash management, Chief 
Financial Officer Anthony Williams had to figure out new ways 
not to pay bills. Instead of pushing ahead publicly with the 
council on urgently needed reforms, Mayor Barry could only 
wonder what new disaster he would have to deal with next. And 
the control board, which is trying to push the District 
forward, could only make certain that the district complied 
with the provisions of the Anti-Deficiency Act and shut down 
everything that was not an imminent threat to health or safety. 
This is no way to run a city in the grips of a financial 
crisis.
    Congress and the president could keep the federal and 
District governments open either by reaching a budget agreement 
or by enacting another continuing resolution. I am hopeful that 
one of these two events will occur before there's another 
shutdown. No one can possibly expect to escape the public 
outcry that would come from sending hundreds of thousands of 
workers home 10 days before Christmas.
    But there is an even more compelling reason to enact H.R. 
2661 immediately. While operating under a temporary continuing 
resolution, the D.C. government has no legal authority to 
obligate funds beyond the expiration of that resolution. Since 
continuing resolutions are emergency, stopgap measures, this 
forces the District government to operate on an emergency 
basis, signing contracts and planning spending schedules from 
week to week. This ad hoc operational mode is not only bad for 
contractors and other service providers; it runs exactly 
counter to what is most needed in the District government; 
stability and the ability to make long-range decisions.
    Unless H.R. 2661 is enacted and the District is allowed to 
obligate its own revenues, even without an appropriation bill, 
the District will continue to limp from crisis to crisis, 
lacking the ability to take concrete, long-term actions or to 
make the decisions that would be in everyone's best interest.
    Congressional oversight and ultimate control would not be 
threatened, because the District's federal payment is not 
included in H.R. 2661. This legislation would not free the 
District from federal oversight and would not give the city 
budget autonomy. It would simply allow the District to escape 
from the threat of shutdown and the gross inefficiencies of 
operating on a week-to-week basis, and to at least be able to 
crawl along on its own revenues during a budget impasse.
    I am pleased that Speaker Gingrich, President Clinton and 
the control board support this legislation. Congress should act 
now to pass it, and thus prevent further paid furloughs and a 
shutdown of city operations.


--The writer is a Republican representative from Virginia and 
    chairman of the House subcommittee that oversees operations 
    of the District government.

                                
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