[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
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\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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