Letter to the U.S. Senate The Fiscal Year 2003 Omnibus Appropriations Bill (HJ Res. 2)

To Members of the United States Senate:

The U.S. Chamber of Commerce, the world's largest business federation, representing more than three million businesses and organizations of every size, sector and region, offers our strong support of H.J. Res. 2 — the Fiscal Year 2003 Omnibus Appropriations bill. Passage of this measure is critical for continuity of existing domestic spending programs and initiation of funding for new programs for Homeland Security.

The U.S. Chamber and the business community applaud the Senate's resolve to wrap up the Fiscal Year 2003 spending bills prior to the upcoming Appropriations Committee's important work on the Fiscal Year 2004 appropriations measures. While separate passage of the 11 remaining individual Fiscal Year 2003 spending bills would be preferable, we support the Senate's determination in creating and moving this $385.9 billion spending package during this compressed time frame. We are troubled that passage of this important appropriations measure could be jeopardized by the addition of several onerous policy riders to this package.

The Chamber strongly opposes any efforts to stall needed reform of the new source review (NSR) program. The amendment offered by Senator John Edwards (D-NC) would effectively prohibit the U.S. Environmental Protection Agency (EPA) from expending funds to implement recently promulgated changes to the NSR program. This amendment would derail much needed NSR reforms at a time when the courts are reviewing the regulations.

The Edwards NSR amendment would disrupt the Clean Air Act permitting process, and stifle economic activity during an economic downturn by making the maintenance and expansion of existing industrial facilities and power plants almost impossible. The new regulations have restored some certainty to the troubled NSR process. Congress should not interfere in the regulatory efforts of two administrations in this way.

In addition, we specifically urge you to oppose an amendment offered by Senator Barbara Mikulski (D-MD) that would prohibit the expenditure of funds by executive agencies to establish, apply or enforce any numerical goals, targets or quotas for public-private competitions of commercial functions within federal agencies. Such language would legislatively weaken any President's authority to manage the Federal government and effect real saving and fundamental improvements. It is directly counter to efforts by the Bush Administration to increase government efficiency through competition between the public and private sectors. It would limit the President's ability to establish goals for outsourcing, and other procurement and acquisition workforce initiatives. Such a prohibition could significantly limit private sector involvement and discourage competition, which has proven to reap significant cost savings and performance enhancements regardless of who wins. The time is now to create more efficient and effective partnerships between the public and private sector, not to enact restrictive policies that limit funding or flexibility in the sourcing decision-making process.

We also ask you to oppose an amendment sponsored by Senator Mark Dayton (D-MN) that would deny new contracts to subsidiaries of a publicly traded corporation if the corporation is incorporated in certain tax-advantaged foreign countries. By imposing these bans on contracting with domestic subsidiary corporations, Congress is seeking to discourage corporate "inversions," i.e., corporate flight from U.S. tax domicile in order to achieve tax parity with foreign competitors. We believe Congress should be asking why our tax system is causing corporate flight increasingly to occur.

Corporations should be free to incorporate where they choose, without the federal government imposing economic penalties upon their free exercise of prudent business decision-making, and that the U.S. Congress certainly should not favor foreign firms over U.S. firms in the tax code. These contract bans are a poor substitute for needed reform of the U.S. tax code's archaic international provisions which currently put our corporations at a competitive disadvantage internationally and provide great incentive for them to leave this country. We believe that the proper response should be the undertaking of serious and overdue tax reform, such as conversion of the U.S. tax system to one based on territoriality, to achieve parity.

We also urge you to oppose the amendment offered by Senator Tom Harkin (D-IA) and Senator Russ Feingold (D-WI) pertaining to cash balance plans. Cash balance plans have become popular among both employers and employees. Because they are a relatively new "hybrid" type of plan, until last month, Treasury had not provided clear guidance to plan sponsors about how such plans should be designed. On December 10, 2002, after more than three years of study by an interagency task force, the Treasury Department issued proposed cash balance plan regulations.

The Harkin/Feingold amendment would prohibit the Treasury Department from finalizing or enforcing this rule. The proposed regulation clarifies how cash balance plans must be designed in order to satisfy existing laws pertaining to age discrimination and pension accruals. While the Chamber has concerns about certain parts of the regulations, which we will be conveying in comments to the Treasury Department, we do not believe the appropriations process is the proper place for enforcing pension laws and regulations.

We urge your swift consideration of the Fiscal Year 2003 Omnibus spending measure. In addition we strongly support the concept that spending restraint is a critical component to encouraging economic growth and long-term prosperity. Because of the importance of fully funding our domestic spending priorities, the U.S. Chamber may include votes on or in relation to these issues in our annual How They Voted Ratings for 2003.

Sincerely,

R. Bruce Josten
Executive Vice President, Government Affairs
U.S. Chamber of Commerce
 

cc:

The Honorable J. Dennis Hastert
The Honorable Tom DeLay
The Honorable Roy Blunt
The Honorable C.W. (Bill) Young
The Honorable David Obey