Among the top concerns are the Administration’s weak spending plan to promote e-government, ensuring adequate pay increases for government employees, and proposed cuts in the Federal Emergency Management budget.

Following is a text of the letter:

The Honorable Pete V. Domenici
Chairman
Committee on the Budget
United States Senate
Washington, D.C.

The Honorable Kent Conrad
Ranking Member
Committee on the Budget
United States Senate
Washington, D.C.

Dear Senators Domenici and Conrad:

Thank you for requesting me to provide views regarding the Fiscal Year 2002 budget for matters within the jurisdiction of the Governmental Affairs Committee. Based on the President’s budget "blueprint" presented to Congress on February 28, 2001, I have the following concerns:

I am encouraged that the Administration wants to use the Internet to create a "citizen-centric" government. I wholeheartedly agree that the Internet and other innovative information technologies allow government to provide greater access to services and information and to consolidate functions around the needs of its citizens. I intend to introduce legislation shortly that will promote these goals, and I look forward to working with the Administration and my colleagues in the Senate on this issue.

At the same time, I am disappointed that the Administration is not making a greater commitment of resources to the effort. I believe that $10 million is an insufficient initial investment for the first year of the

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proposed e-government fund, especially considering that this money will be spent on several ongoing initiatives like agencies’ implementation of the Government Paperwork Elimination Act; this will probably leave little if any funds remaining for true innovation. Considering that the federal agencies spend at least $40 billion on information technology each year, we should be willing to spend more than $10 million in FY 2002 on technologies and systems that can create significant new efficiencies and revolutionize the way government serves the public.

A top priority in the Administration’s blueprint is to assure that military personnel are adequately paid, and, to this end, the Administration proposes a 4.6 percent increase in military pay, plus an additional $1 billion for military compensation to address specific recruiting and retention needs. I fully support this proposal. Federal civilian employees, who work side-by-side with military personnel in service to the Nation, also deserve our strong support. Adequate pay is essential not only for fairness, but also for effective human-capital management. As Comptroller General David Walker testified before our Committee, high-performance organizations must "competitively recruit, hire, develop, and retain employees while recognizing industry and labor market conditions." Especially in the present competitive job market, adequate pay levels are essential for the recruitment and retention of the employees that agencies need to maintain and enhance their performance and achieve their missions.

In the last Congress, the Senate (in a vote of 94 to 6) passed a resolution calling for parity between civilian and military personnel pay increases. Now, in considering the FY 2002 budget, our commitment to adequate military pay must be matched by ensuring parity in pay increases for civilian employees.

I do not fully understand a provision in the blueprint to extend higher agency contributions to the retirement fund. The Balanced Budget Act of 1997 required agencies to make increased payments into the Civil Service Retirement and Disability Trust Fund through the end of calendar year 2002, and the "blueprint" apparently would extend this requirement. This requirement functions as a per-employee tax on the agencies, consuming resources needed to meet agency missions. However, the original requirement was mandated to help address the deficit, and the Administration’s blueprint offers no explanation for extending this mandate in the present period of surpluses.

I am concerned that several proposed cuts in FEMA's budget could have negative consequences for states that have suffered losses due to major disasters, including my state of Connecticut. All three proposals would shift part or all of the funding burden for these programs back on the states, whose resources are already tightly stretched. Moreover, these programs are designed to reduce future losses that would in many cases greatly outstrip the federal government’s original investment; as a result, we will spend more on recovery programs tomorrow than we will save today by eliminating these programs. Connecticut, for example, is already receiving less federal funding for emergency management than it did in 1995, and it will be hard for states like mine to absorb these additional cuts and still maintain the current level of services.

The Administration is proposing to zero out funding for "Project Impact." This is a $25 million pre_disaster mitigation and preparedness program that was recently instituted by FEMA. The agency partners with cities at risk for flooding and other disasters to create programs boosting awareness of how to prepare and lessen the damage from disasters. Since Project Impact is new and still being implemented, it has not yet been fully evaluated; however, one of Project Impact’s strengths is providing funding directly to cities. In Connecticut, for example, four cities have been included in this program — Westport, East Haven, Norwich and Milford — and zeroing this out without providing something in its place is "not prudent," according to Connecticut's Director of Emergency Management. Moreover, the program helps FEMA to achieve its Strategic Goal 1, which seeks to protect lives and prevent the loss of property by implementing predisaster mitigation and preparedness measures. Project Impact is a key part of this effort.

The Administration is proposing to save $83 million by cutting the federal share of funding for hazard mitigation grants which are given for post_disaster mitigation to prevent future additional losses. Instead of providing funding to states on a 75/25 ratio, the Administration would reduce the federal government’s share to 50%. Again, this places the burden back on the states to fund these efforts. The Administration is also proposing

to cut the $100 million fire grant program. This is money that was provided directly to municipalities across the

country to support local fire departments. Localities really need this money to supplement their limited budgets, especially in states like Connecticut where many localities rely on volunteer firefighters.

I am pleased that the President’s budget blueprint supports continued implementation of management reforms, such as those required by the Government Performance and Results Act, although the Administration has not yet set out many specifics concerning how it plans to achieve its goals in this area. I also support the Administration’s call for increased financial accountability. This year, agencies achieved a significant milestone by turning in their audited financial statements on time for FY 2000; more of these agencies than ever before received "clean" opinions on these statements. However, it is imperative that agencies receive the support they need to make their financial systems more reliable on a daily basis. OMB Deputy Director Sean O’Keefe has called for providing agencies the resources they need to achieve this goal; I hope the Administration will follow through to combine its call for accountability with the tools agencies must have to make these necessary changes.

I commend the President’s endorsement of "share-in-savings" contracts in which contractors employ innovative, efficient and cost-saving techniques for energy and information technology contracts and are paid out of the resulting savings. Agencies are able to realize annual savings which often total in the hundreds of thousands of dollars, with little administrative or initial investment costs to the government.

I am pleased that the Administration has endorsed the precedent established by prior Administrations in supporting biennial budgeting and appropriations legislation. The Committee on Governmental Affairs has reported out biennial budgeting and appropriations bills in the last two Congresses, both times with my support, and this year, I am again an original co-sponsor of the measure introduced by Chairman Domenici. Biennial budgeting legislation would give Congress more time to work through the budget and appropriations process in an orderly fashion, and it would also allow more time to legislate and engage in oversight.

I disagree, however, with the idea that our difficulties in completing the appropriations process in a timely manner can be solved, or even improved, by automatic continuing resolution legislation. I believe that Congress could do more to prevent government shutdowns by passing its appropriations bills on a timely basis, and by working responsibly with the President to negotiate the compromises that are required by our political process. It is unrealistic for either party to expect it will get everything it wants simply because it controls Congress or the White House. However, appropriators and Presidents have frequently held out until the end of the fiscal year for their preferred funding levels. Often it is only the looming deadline of a new fiscal year that forces the necessary negotiations and compromises. Although the process is not as streamlined as we would like, as long as both parties agree to enact "clean" continuing resolutions that do not contain political conditions and other measures to change the status quo, there will be no disruptions affecting the American public. The Administration cites last year’s

appropriations negotiations as an example of why an automatic continuing resolution law is needed; I wonder, however, how much longer it would take to iron out differences between the branches if government could go on auto-pilot indefinitely.

I appreciate this opportunity to comment on issues of interest within the jurisdiction of the Committee on Governmental Affairs.

Sincerely,

Joseph I. Lieberman

JIL:lbn

cc: The Honorable Fred Thompson