Draft Energy & Water Conferees Letter

from: Kate P.
to: RUDMAN_M, Elena Kagan, G., Jeffrey M., John, Joshua, Kathleen A., Kerri A., Lisa M., Martha, Paul J. Weinstein Jr., Rahm I. Emanuel, Ron, Sally, Todd, Wesley P., William P.
cc: FARRAR_J, Adrienne C., Charles, Charles R. Marr, Dawn L. Smalls, Elizabeth, Emil E., Jessica L., Jill M. Blickstein, Jonathan H., Judy, Kevin S., Laura, Lisa, Melissa G., Michelle, Paul J. Weinstein, Peter A., Robert L., Shannon, Victoria
      We aim to send the Energy & Water conferees letter tomorrow, Tuesday
 morning.   please review the draft and provide comments by 9am tomorrow.
 Thank you.

 The Honorable Bob Livingston
 Chairman
 Committee on Appropriations
 U.S. House of Representatives
 Washington, D.C. 20515

 Dear Mr. Chairman:

         The purpose of this letter is to provide the AdministrationD,s
 views on H. R. 4060, the Energy and Water Development Appropriations Bill,
 FY 1999, as passed by the House and by the Senate. As the conferees
 develop a final version of the bill, your consideration of the
 AdministrationD,s views would be appreciated.

         The Administration appreciates the challenges faced by both the
 House and Senate in funding a wide array of needs within tight budgetary
 constraints. However, we are concerned that the increase provided by both
 the House and Senate for Army Corps of Engineers projects    $723 million
 and $566 million, respectively -- has come at the expense of other
 priority programs.

 Army Corps of Engineers

         We urge the conferees to redirect some of the unrequested funding
 added for Army Corps of Engineers construction activities to fully fund
 priority Corps activities, including the Columbia and Snake River salmon
 recovery efforts and Everglades restoration, at their requested levels,
 and to ameliorate harsh cuts in other priority programs funded by the bill.

 Solar and Renewable Energy

          The House-passed bill eliminates the Administration's requested
increase for the solar and renewable energy program, effectively freezing
the program at its current level and eliminating funding for many valuable
cost-shared projects with industry. The House bill also cuts in half
requested new funding for fundamental research into carbon sequestration
and climate-change dynamics, a reduction of $13.5 million from the
PresidentD,s request.    The sum of these funding decreases would result in
a reduction of about one-third -- over $100 million -- in the PresidentD,s
total requested increase for the Department of Energy (DOE) for
development of clean, non-greenhouse gas power sources.


        The Administration strongly opposes these reductions, which would
seriously undercut DOED,s ability to move into the next phases of some of
the most promising research now underway, eliminate accelerated
introduction of clean power sources, and restrict our ability to lower
greenhouse gas emissions levels. These programs provide numerous
benefits, including greenhouse gas reduction, increased industrial
competitiveness, increased job opportunities, reduced energy costs for


 consumers, increased energy independence, and improved air quality.   The
 conferees are urged to fully fund these important programs.

         The Administration strongly supports the effort in the Senate to
 increase funding for solar and renewable R&D.  However, the Administration
 would like to work with the conferees to locate an alternative to the
 across-the-board reduction used to offset this spending, which would, for
 example, require reductions in the Science account of over $42 million and
 possibly lead to RIFs in departmental offices.

 Department of Energy Defense Activities

          The House would reduce by $358 million, and the Senate by $54
 million, the PresidentD,s request for nuclear weapons activities. The
 Administration strongly objects to the severe reductions in the House bill
 and urges the conferees to provide at least the Senate level. The House
 bill states that $305 million of its reduction is to come from the use of
 prior-year balances.  Such large balances are not available.  This cut
 would force real reductions in critical programs needed to ensure the
 safety, security, and reliability of AmericaD,s nuclear deterrent.

        The House version of the bill would cut $15 million from the
request for the Worker and Community Transition Program and would add $16
million for the unrequested acceleration of decommissioning activities at
old facilities used for Naval Reactors Development. The Naval facilities
are in safe shutdown condition and are not a threat to the environment.
The Administration objects to the shifting of funds needed to assist
displaced workers to accelerate low-priority activities. We urge the
conferees to adopt the Senate position.

 Science and Fusion

        The Administration appreciates the efforts of both the House and
Senate to fully fund the majority of the Science accounts.  However, the
Administration strongly urges the conferees to approve the Senate level of
$157 million for construction of the Spallation Neutron Source (SNS) in FY
1999, which is equal to the PresidentD,s request. The Administration is
committed to providing the resources required to complete the SNS on
schedule and on budget.

        The Administration also objects to the elimination of funds for
the Next Generation Internet (NGI) program by the House and the overall
reduction made by the Senate to Computational and Technology Research (the
parent account for NGI).  The House bill would eliminate all of the
requested funding, and the Senate bill does not provide the total $22
million request. The NGI initiative, announced by the President last
Fall, provides the R&D necessary to revolutionize high-speed networking
capabilities in the United States. Some DOE laboratories and their
researchers will be among those to benefit from the 1,000-times faster
network to be established by the NGI.  Further, the multi-agency NGI
effort would suffer without the participation of the Department's leading
networking researchers and advanced user communities.

        Finally, the Administration objects to the HouseD,s elimination of
funding for participation in the extension of the international planning
process to design the International Thermonuclear Experimental Reactor
(ITER). This action would negatively impact U.S. participation in present
and future international fusion efforts. Moreover, since the United
States hosts the international design center in San Diego, California, the
Administration is concerned that a U.S. withdrawal from the ITER-planning


 process would undermine the credibility of the United States in future
 negotiations on international science projects, in general.

 Environmental Management

         The Administration objects to the $230 million and $275 million
 cuts in the House and Senate bills, respectively, for the Defense
 Environmental Management Privatization account.  Likewise, the
 Administration opposes the $47 million reduction in the House bill and $77
 million reduction in the Senate bill for the Uranium Enrichment
 Decontamination and Decommissioning Fund. The House and Senate assume the
 availability of prior-year balances ($30 million in the Senate bill, $94
 million in the House bill). The Department intends to use these balances
 to meet ongoing requirements. Therefore, the use of prior-year balances
 would force real reductions in work needed to meet required compliance
 milestones and to complete nuclear waste c~eanup of DOE facilities.  The
 Administration strongly urges the conferees to fully fund these important
 programs.

 Nuclear Waste Disposal

         The House-passed billO,s reduction of $30 million to the request
 for the civilian radioactive waste program, combined with its directive to
 reduce support services by ten percent, would significantly reduce the
 quality of data and analysis for the Draft Environmental Impact Statement
 (DEIS) at Yucca Mountain.  A quality DEIS, which is an FY 1999 milestone,
 is a necessary prerequisite to an FY 2001 Site Recommendation.  Likewise,
 we oppose the SenateO,s diversion of $15 million requested for the Defense
 Nuclear Waste Disposal Account to begin long-term research on accelerator
 transmutation of waste, a highly controversial and costly technology that,
 even if ultimately found feasible many years from now, will require a
 reprocessing infrastructure and not obviate the need for permanent nuclear
 waste disposal.

 Bureau of Reclamation

         The Administration urges the conferees to fund the request for the
 California Bay-Delta program at least at the House level and to
 acknowledge the need to extend the programD,s authorization. We also urge
 the conferees to restore cuts to key Bureau of Reclamation programs -- the
 $16 million House reduction and $10 million Senate reduction to the
 environmentally important, user-financed Central Valley Project
 Restoration Fund and the $11 million House cut to vital dam safety work.

 Tennessee Valley Authority

         The Administration objects to the House bille,s elimination of all
 appropriations for the Tennessee Valley Authority (TVA). TVAO,s non-power
 programs should receive Federal appropriations just as similar programs in
 other regions of the Nation are financed by appropriations to other
 Federal agencies. We urge the conferees to adopt the Senate position.

 Other Issues

          The Administration strongly objects to the House billO,s provision of
 only $5 million of the $34 million requested for the Nuclear Energy
 Research Initiative and the Nuclear Energy Plant Optimization program and
 urges the conferees to restore funding to the requested level.

  The Administration requests that the conferees revise, or eliminate,


 section 505 of the House version of the bill that would require the
 Nuclear Regulatory Commission (NRC) and other agencies to regulate
 environment, safety, and health concerns at the Lawrence Berkely National
 Laboratory (LBNL).  As drafted, this provision fails to address major
 legal issues associated with NRC regulation of nuclear safety at LBNL.
 Specific statutory authorization may also be needed to provide appropriate
 agencies with proper jurisdiction for regulating occupational safety and
 health at that facility.  In consultation with congressional committees,
 the Administration is developing a plan for regulation of both
 occupational and nuclear safety within the DOE complex.

  The Administration objects to section 306 of the House bill, which would
 prohibit the Department from developing products or services for sale
 outside the Federal Government that are also produced in the private
 sector. This provision appears to preclude the Department from helping
 private sector entities to develop products or services, and from making
 sales of exces~ Department of Energy commodities or materials.

          The Administration objects to section 306 in the Senate bill.
 This section would impair DOED,s ability to ship transuranic waste to the
 Waste Isolation pilot Project (WIPP). Transuranic waste at Savannah
 River, Hanford, Mound, and Los Alamos sites could not be transferred to
 WIPP for disposal. This language would also prevent closure of the Rocky
 Flats site by FY 2006, eliminate savings of up to $1 billion, and add
 millions more in costs.

         We look forward to working with the conferees to address our
 mutual concerns.

                                                 Sincerely,




                                                Jacob J. Lew
                                                Acting Director
    

Draft Energy & Water Conferees Letter

from: Kate P.
to: RUDMAN M, Elena Kagan, G. E., Jeffrey M., John, Joshua, Kathleen A., Kerri A., Lisa M., Martha, Paul J. Weinstein Jr., Rahm I. Emanuel, Ron, Sally, Todd, Wesley P., William P.
cc: FARRAR J, Adrienne C., Charles, Charles R. Marr, Dawn L. Smalls, Elizabeth, Emil E., Jessica L., Jill M. Blickstein, Jonathan H., Judy, Kevin S., Laura, Lisa, Melissa G., Michelle, Paul J. Weinstein, Peter A., Robert L., Rosemary, Shannon, Victoria A.
      We aim to send the Energy & Water conferees letter tomorrow, Tuesday
morning.   Please review the draft and provide comments by 9am tomorrow.
Thank you.

The Honorable Bob Livingston
Chairman
Committee on Appropriations
u.s. House of Representatives
Washington, D.C. 20515

Dear Mr. Chairman:

        The purpose of this letter is to provide the AdministrationD,s
views on H. R. 4060, the Energy and Water Development Appropriations Bill,
FY 1999, as passed by the House and by the Senate.  As the conferees
develop a final version of the bill, your consideration of the
AdministrationD,s views would be appreciated.

        The Administration appreciates the challenges faced by both the
House and Senate in funding a wide array of needs within tight budgetary
constraints. However, we are concerned that the increase provided by both
the House and Senate for Army Corps of Engineers projects    $723 million
and $566 million, respectively -- has come at the expense of other
priority programs.

Army Corps of Engineers

        We urge the conferees to redirect some of the unrequested funding
added for Army Corps of Engineers construction activities to fully fund
priority Corps activities, including the Columbia and Snake River salmon
recovery efforts and Everglades restoration, at their requested levels,
and to ameliorate harsh cuts in other priority programs funded by the bill.

Solar and Renewable Energy

         The House-passed bill eliminates the Administration's requested
increase for the solar and renewable energy program, effectively freezing
the program at its current level and eliminating funding for many valuable
cost-shared projects with industry. The House bill also cuts in half
requested new funding for fundamental research into carbon sequestration
and climate-change dynamics, a reduction of $13.5 million from the
PresidentD,s request.   The sum of these funding decreases would result in
a reduction of about one-third -- over $100 million -- in the President'l,s
total requested increase for the Department of Energy (DOE) for
development of clean, non-greenhouse gas power sources.


        The Administration strongly opposes these reductions, which would
seriously undercut DOED,s ability to move into the next phases of some of
the most promising research now underway, eliminate accelerated
introduction of clean power sources, and restrict our ability to lower
greenhouse gas emissions levels.  These programs provide numerous
benefits, including greenhouse gas reduction, increased industrial
competitiveness, increased job opportunities, reduced energy costs for


consumers, increased energy independence, and improved air quality.   The
conferees are urged to fully fund these important programs.

        The Administration strongly supports the effort in the Senate to
increase funding for solar and renewable R&D. However, the Administration
would like to work with the conferees to locate an alternative to the
across-the-board reduction used to offset this spending, which would, for
example, require reductions in the Science account of over $42 million and
possibly lead to RIFs in departmental offices.

Department of Energy Defense Activities

         The House would reduce by $358 million, and the Senate by $54
million, the PresidentD,s request for nuclear weapons activities.  The
Administration strongly objects to the severe reductions in the House bill
and urges the conferees to provide at least the Senate level.  The House
bill states that $305 million of its reduction is to come from the use of
prior-year balances.  Such large balances are not available.  This cut
would force real reductions in critical programs needed to ensure the
safety, security, and reliability of AmericaD,s nuclear deterrent.

        The House version of the bill would cut $15 million from the
request for the Worker and Community Transition Program and would add $16
million for the unrequested acceleration of decommissioning activities at
old facilities used for Naval Reactors Development. The Naval facilities
are in safe shutdown condition and are not a threat to the environment.
The Administration objects to the shifting of funds needed to assist
displaced workers to accelerate low-priority activities.  We urge the
conferees to adopt the Senate position.

Science and Fusion

        The Administration appreciates the efforts of both the House and
Senate to fully fund the majority of the Science accounts.  However, the
Administration strongly urges the conferees to approve the Senate level of
$157 million for construction of the Spallation Neutron Source (SNS) in FY
1999, which is equal to the PresidentD,s request.  The Administration is
committed to providing the resources required to complete the SNS on
schedule and on budget.

        The Administration also objects to the elimination of funds for
the Next Generation Internet (NGI) program by the House and the overall
reduction made by the Senate to Computational and Technology Research (the
parent account for NGI).  The House bill would eliminate all of the
requested funding, and the Senate bill does not provide the total $22
million request.  The NGI initiative, announced by the President last
Fall, provides the R&D necessary to revolutionize high-speed networking
capabilities in the United States. Some DOE laboratories and their
researchers will be among those to benefit from the 1,000-times faster
network to be established by the NGI.  Further, the mUlti-agency NGI
effort would suffer without the participation of the Department's leading
networking researchers and advanced user communities.

        Finally, the Administration objects to the HouseD,s elimination of
funding for participation in the extension of the international planning
process to design the International Thermonuclear Experimental Reactor
(ITER). This action would negatively impact U.S. participation in present
and future international fusion efforts.  Moreover, since the United
States hosts the international design center in San Diego, California, the
Administration is concerned that a U.S. withdrawal from the ITER-planning


process would undermine the credibility of the United States in future
negotiations on international science projects, in general.

Environmental Management

        The Administration objects to the $230 million and $275 million
cuts in the House and Senate bills, respectively, for the Defense
Environmental Management Privatization account.  Likewise, the
Administration opposes the $47 million reduction in the House bill and $77
million reduction in the Senate bill for the Uranium Enrichment
Decontamination and Decommissioning Fund.  The House and Senate assume the
availability of prior-year balances ($30 million in the Senate bill, $94
million in the House bill).  The Department intends to use these balances
to meet ongoing requirements. Therefore, the use of prior-year balances
would force real reductions in work needed to meet required compliance
milestones and to complete nuclear waste cleanup of DOE facilities.  The
Administration strongly urges the conferees to fully fund these important
programs.

Nuclear Waste Disposal

         The House-passed billO,s reduction of $30 million to the request
for the civilian radioactive waste program, combined with its directive to
reduce support services by ten percent, would significantly reduce the
quality of data and analysis for the Draft Environmental Impact Statement
 (DEIS) at Yucca Mountain. A quality DEIS, which is an FY 1999 milestone,
is a necessary prerequisite to an FY 2001 Site Recommendation.   Likewise,
we oppose the SenateO,s diversion of $15 million requested for the Defense
Nuclear Waste Disposal Account to begin long-term research on accelerator
transmutation of waste, a highly controversial and costly technology that,
even if ultimately found feasible many years from now, will require a
reprocessing infrastructure and not obviate the need for permanent nuclear
waste disposal.

Bureau of Reclamation

        The Administration urges the conferees to fund the request for the
California Bay-Delta program at least at the House level and to
acknowledge the need to extend the programO,s authorization.  We also urge
the conferees to restore cuts to key Bureau of Reclamation programs -- the
$16 million House reduction and $10 million Senate reduction to the
environmentally important, user-financed Central Valley Project
Restoration Fund and the $11 million House cut to vital dam safety work.

Tennessee Valley Authority

        The Administration objects to the House bilUJ, s .elimination of all
appropriations for the Tennessee Valley Authority (TVA).    TVAO,s non-power
programs should receive Federal appropriations just as similar programs in
other regions of the Nation are financed by appropriations to other
Federal agencies. We urge the conferees to .adopt the Senate position.

Other Issues

         The Administration strongly objects to the House billO,s provision of
only $5 million of the $34 million requested for the Nuclear Energy
Research Initiative and the Nuclear Energy Plant Optimization program and
urges the conferees to restore funding to the requested level.

The Administration requests that the conferees revise, or eliminate,
  ,


section 505 of the House version of the bill that would require the
Nuclear Regulatory Commission (NRC) and other agencies to regulate
environment, safety, and health concerns at the Lawrence Berkely National
Laboratory (LBNL). As drafted, this provision fails to address major
legal issues associated with NRC regulation of nuclear safety at LBNL.
Specific statutory authorization may also be needed to provide appropriate
agencies with proper jurisdiction for regulating occupational safety and
health at that facility.  In consultation with congressional committees,
the Administration is developing a plan for regulation of both
occupational and nuclear safety within the DOE complex.

 The Administration objects to section 306 of the House bill, which would
prohibit the Department from developing products or services for sale
outside the Federal Government that are also produced in the private
sector. This provision appears to preclude the Department from helping
private sector entities to develop products or services, and from making
sales of excess Department of Energy commodities or materials.

         The Administration objects to section 306 in the Senate bill.
This section would impair DOED,s ability to ship transuranic waste to the
Waste Isolation pilot Project (WIPP).  Transuranic waste at Savannah
River, Hanford, Mound, and Los Alamos sites could not be transferred to
WIPP for disposal.  This language would also prevent closure of the Rocky
Flats site by FY 2006, eliminate savings of up to $1 billion, and add
millions more in costs.

        We look forward to working with the conferees to address our
mutual concerns.

                                               Sincerely,




                                               Jacob J. Lew
                                               Acting Director
    
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