[Senate Report 106-379] [From the U.S. Government Publishing Office] 106th Congress Report 2d Session SENATE 106-379 _______________________________________________________________________ FEDERAL COURTS BUDGET PROTECTION ACT __________ R E P O R T of the COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE together with ADDITIONAL VIEWS to accompany S. 1564 TO PROTECT THE BUDGET OF THE FEDERAL COURTSAugust 25, 2000.--Ordered to be printed Filed under authority of the order of the Senate of July 26, 2000 COMMITTEE ON GOVERNMENTAL AFFAIRS FRED THOMPSON, Tennessee, Chairman WILLIAM V. ROTH, Jr., Delaware JOSEPH I. LIEBERMAN, Connecticut TED STEVENS, Alaska CARL LEVIN, Michigan SUSAN M. COLLINS, Maine DANIEL K. AKAKA, Hawaii GEORGE VOINOVICH, Ohio RICHARD J. DURBIN, Illinois PETE V. DOMENICI, New Mexico ROBERT G. TORRICELLI, New Jersey THAD COCHRAN, Mississippi MAX CLELAND, Georgia ARLEN SPECTER, Pennsylvania JOHN EDWARDS, North Carolina JUDD GREGG, New Hampshire Hannah S. Sistare, Staff Director and Counsel Dan G. Blair, Senior Counsel Michael L. Loesch, Counsel, International Security, Proliferation, and Federal Services Subcommittee Joyce A. Rechtschaffen, Minority Staff Director and Counsel Deborah Cohen Lehrich, Minority Counsel Darla D. Cassell, Chief Clerk C O N T E N T S ---------- Page I. Purpose.........................................................1 II. Summary.........................................................1 III. Background and Need for Legislation.............................2 IV. Legislative History of S. 1564..................................3 V. Section-by-Section Analysis.....................................4 VI. Regulatory Impact Statement.....................................5 VII. Congressional Budget Office Cost Estimate.......................5 VIII. Additional Views................................................6 IX. Changes in Existing Law.........................................9 106th Congress Report SENATE 2d Session 106-379 ====================================================================== FEDERAL COURTS BUDGET PROTECTION ACT _______ August 25, 2000.--Ordered to be printed Filed under authority of the order of the Senate of July 26, 2000 _______ Mr. Thompson, from the Committee on Governmental Affairs submitted the following R E P O R T together with ADDITIONAL VIEWS [To accompany S. 1564] The Committee on Governmental Affairs, to which was referred the bill (S. 1564) to protect the budget of the Federal courts, having considered the same, reports favorably thereon with an amendment in the nature of a substitute and recommends that the bill as amended do pass. I. Purpose The purpose of S. 1564 is to allow the judiciary to communicate directly to Congress its needs for appropriations without mediation from the executive branch, thereby preserving its independence as a separate branch of government. II. Summary of S. 1564 The legislation would make two changes in the process through which the budget for the judicial branch is submitted to Congress. First, it would provide that the judiciary budget request be submitted directly to Congress. It would also be submitted, without change, in the unified budget as submitted by the President. The Act emphasizes that the President may not in his budget request impose or recommend any alteration, negative allowance, rescission, or other change in the judiciary's request, directly or indirectly. However, the President would not be precluded from commenting on the judiciary's request outside of the formal budget document. Second, the legislation requires that the judiciary budget request submitted to Congress include a request for funding for courthouse construction, acquisition, and repairs and alterations. S. 1564 would direct that such funds be appropriated directly to the judiciary for deposit into GSA's Federal Buildings Fund. Under current law, requests for courthouse construction and related funding are contained in the President's budget request and are subject to review and modification by the executive branch prior to the budget's submission to Congress. The Act would retain existing procedures for GSA to develop prospectuses which assess facility requirements, specifications and costs of actual construction or alteration work, and the housing needs of executive branch agencies located in courthouses. GSA would provide these prospectuses to the Committee on Environment and Public Works of the Senate and the Committee on Transportation and Infrastructure of the House which would continue their current role in authorizing this work. GSA would continue to provide similar information for future project to the Director of the Administrative Office of the United States Courts. This bill would affect solely the manner in which the judiciary's budget request is submitted to Congress; it does not otherwise affect Congress' role in the budget process. III. Background and Need for Legislation The Budget and Accounting Act of 1921 (the Budget Act or the Act), as amended, calls for the President to submit annually to Congress the budget for the entire Government, containing among other things ``estimated expenditures and proposed appropriations the President decides are necessary to support the Government,'' 31 U.S.C. Sec. 1105(a)(5). Budget requests of executive branch agencies are subjected to an extensive pre-submission screening, as each agency is required to submit its requests for appropriations to the Office of Management and Budget (OMB), which in turn advises the President on which requests he should ``change'' under 31 U.S.C. Sec. 1108(b)(1). A different course is provided for requests from the judicial and legislative branches. These two branches are excluded from the definition of ``agency'' which encompasses the category of appropriations requests the President may change, 31 U.S.C. Sec. 1101(1). Section 201 of the Act specifically provides that the budget requests for the legislative and judicial branches shall be transmitted by the President to Congress ``without change,'' 31 U.S.C. Sec. 1105(b). This process was intended to protect the judiciary's budget request from changes made by the executive branch. Yet four times since 1990, the President's budget submission has proposed multi-hundred million dollar ``negative allowances.'' In order to keep its budget within the limits mandated by the spending cap legislation, the President included a ``negative allowance'' at the end of his budget request, equal to the amount that the entire budget exceeded the budget caps. The negative allowance, while not explicitly applied to the judiciary's budget, is by default attributable to it. Because OMB already has trimmed executive branch agencies' budget requests to comply with the spending caps, the negative allowance has been attributed as the amount by which OMB believes the judiciary's budget request should be cut. S. 1564 is intended to stop the use of negative allowances. It provides that the judiciary's request be submitted directly to Congress and expressly prohibits the executive branch from imposing any negative allowance against that request in the formal budget document. In addition to the operational resources included in the judiciary's budget request and appropriations, the judiciary must conduct its business in adequate courthouse facilities. Like most other government entities, the judiciary relies on GSA, an executive branch agency, to construct and repair its buildings. Pursuant to existing law, the funds for such projects are requested by GSA as part of the executive branch's budget submission. Because GSA is an executive agency, its budget requests have been subject to screening and change by OMB. For that reason, the need has arisen to protect the judiciary's ability to request directly from Congress the amount that it believes appropriate to fund courthouse construction. For the last several years, the judiciary has had to respond to major increases in its workload and to the need for an overhaul of the nation's aging inventory of federal courthouses. Therefore, GSA and the judiciary have engaged in an extensive construction and alteration program. While many projects have been successfully completed, both the judiciary and GSA agree that more work remains to be done. However, for the last four fiscal years OMB has eliminated or substantially reduced GSA's courthouse construction requests from the budget, ``zeroing out'' the entire request in two of these years as part of its prioritization of the budget requests from all executive branch agencies. Although Congress restored this request in fiscal year 1999, the Administration reduced the judiciary's courthouse funding request in its fiscal year 2001 budget request from $755 million to $488 million. Both Congress and the judiciary would be much better served by having the judiciary's construction request submitted directly and unchanged from the outset. IV. Legislative History of S. 1564 On August 5, 1999, Senator Cochran, along with Senators Collins, Roth, and Stevens, introduced S. 1564. Senators Hatch and Leahy were added as cosponsors on September 14, 1999. The bill requires the judiciary's budget request to be submitted directly to Congress and to include requests for funds for courthouse construction, acquisition, and repairs and alterations. On June 14, 2000, the Committee held a business meeting at which S. 1564 was considered. Senator Cochran offered an amendment in the nature of a substitute, which was approved by voice vote. With no other amendments being offered, Chairman Thompson moved adoption of S. 1564, as amended. The bill was ordered to be favorably reported by voice vote. Present for the vote were Senators Stevens, Collins, Voinovich, Cochran, Lieberman, Akaka, Torricelli, Cleland, Edwards and Thompson. (Senator Voinovich expressed opposition by voice vote.) V. Section-by-Section Analysis Section 1 states the title of the legislation, the ``Federal Courts Budget Protection Act''. Section 2 amends Section 605 of title 28, United States Code, to revise the way the judiciary's budget requests are submitted to Congress and to expand what is included in those requests. Section 2(a) requires the Director of the Administrative Office of the United States Courts to submit directly to Congress before January 25 of each year, cost estimates for the annual operating budget of the judicial branch, as approved by the Judicial Conference or appropriate courts, as well as for federal courthouse construction, acquisitions, repairs and alterations. The Director's budget request for courthouse projects will be based on prospectuses and cost estimates prepared by GSA. To ensure that the judiciary can prepare the courthouse projects budget request in a timely manner, the Administrator of General Services is directed to prepare and submit to the Director prospectuses, including cost estimates, and preliminary planning, design and cost estimates for courthouse projects. These prospectuses shall also be provided to the Senate Committee on Environment and Public Works, the House Committee on Transportation and Infrastructure, and the Senate and House Committees on Appropriations. Funds are authorized to be appropriated to the judicial branch for deposit into the Federal Buildings Fund for courthouse projects. These funds may be obligated only if the Committee on Environment and Public Works of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives have approved a prospectus, if such is required by law. (This is a repeat of standard language included each year in the Treasury, Postal Service and General Government appropriations bill.) The Director is also required to submit the same cost estimates under subsection (a) to the President for inclusion in the budget of the United States. The President must include these estimates without change in the national budget submitted pursuant to the first sentence of section 1105(a) of title 31, United States Code, and is prohibited from using a negative allowance, rescission or any other direct or indirect form of reduction to such estimates. Nothing in this legislation precludes the President, however, from making comments about the judiciary's funding request in a medium outside of the formal budget submission process. To assist the President in preparing the unified Federal budget, the Director is required to transmit preliminary estimates prepared under subsection (a) to the President before October 16 each year and final estimates before December 24 each year. The final estimates transmitted to the President must be identical to those submitted to Congress under subsection (a). TheDirector is required to have periodic examinations made of the judicial survivors annuity fund by an outside actuary and to transmit those findings and recommendations to the Judicial Conference. (This is an existing requirement in Section 605.) Section 2(b) amends section 1105(b) of title 31, United States Code to make conforming changes regarding inclusion of the judiciary's budget request in the budget submitted by the President. Section 2(c) clarifies that, with the exception of the new process for providing prospectuses and cost information to the Director and to Congress under subsection (a), the role of the Administrator of General Services with regard to courthouse construction, acquisitions, repairs and alterations, including housing plans of executive branch elements which should be included in these buildings, shall remain the same as it is now. VI. Regulatory Impact of Legislation Paragraph 11(b)(1) of rule XXVI of the Standing Rules of the Senate requires that each report accompanying a bill evaluate ``the regulatory impact which would be incurred in carrying out this bill.'' The enactment of this legislation will not have a significant regulatory impact. S. 1564 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would affect the budgets of state, local or tribal governments. VII. Congressional Budget Office Cost Estimate U.S. Congress, Congressional Budget Office, Washington, DC, June 20, 2000. Hon. Fred Thompson, Chairman, Committee on Governmental Affairs, U.S. Senate, Washington, DC. Dear Mr. Chairman: The Congressional Budget Office has prepared the enclosed cost estimate for S. 1564, the Federal Courts Budget Protection Act. If you wish further details on this estimate, we will be pleased to provide them. the CBO staff contact is Lanette J. Keith. Sincerely, Steven Lieberman (For Dan L. Crippen, Director). Enclosure. S. 1564--Federal Courts Budget Protection Act CBO estimates that enacting S. 1564 would have no impact on the federal budget. Because enactment of S. 1564 would not affect direct spending or receipts, pay-as-you-go procedures would not apply. The bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would not affect the budgets of state, local, tribal governments. S. 1564 would require that the Administration submit the budget request of the judicial branch to the Congress without charge. The bill also would require that the funding request for court construction and maintenance be included in the budget request of the judicial branch instead of the General Services Administration. Because enactment of S. 1564 would change the procedure for submitting the budget and would not authorize additional amounts, CBO estimates that this legislation would have no impact on the federal budget. The CBO staff contact is Lanette J. Keith. This estimate was approved by Peter H. Fontaine, Deputy Assistant Director for Budget Analysis. VIII. Additional Views I write to express my opposition to S. 1564, the Federal Courts Budget Protection Act, sponsored by my good friend from Mississippi, Senator Cochran and co-sponsored by four members of this Committee, as well as the Chairman and Ranking Member of the Senate Judiciary Committee. I regret having to take this position, but as Chairman of the Senate Committee on the Budget I feel it is my responsibility to make clear that this legislation is both an unnecessary and unwarranted amendment to the federal budget process. Let me begin by explaining how the request for construction of new federal courthouses is produced. First, the Administrative Office of the United State Courts (AO) compiles a five-year plan which prioritizes the Judiciary's request for new courthouses. Second, based on AO's prioritization, the General Service Administration (GSA) uses the ranking in preparing its annual budget request to the Office of Management and Budget (OMB) and to Congress for the authorization and funding of new courthouse construction. Although the Judiciary has the responsibility to identify and propose courthouse construction projects, the GSA, as the primary federal real property agency, must formally request the courthouse funding as part of its annual budget request to Congress. Acquiring real property and constructing federal buildings is GSA's mission. GSA bases its funding request for new courthouse projects on two plans, which are updated annually by the AO, the Long-Range Facility Plan (LRP) and a Five-Year Rolling Plan. As executive agencies and departments such as GSA formulate their budget request, they maintain continuous contact with OMB examiners. Once these agencies complete their budget request, OMB, in consultation with the President and his aides, has the oversight duty of reviewing them all for consistency with presidential policy and to ensure they all fit within a framework of a fiscally responsible budget which meets the needs of the American people. I understand the concerns of the proponents of S. 1564. I also believe that Congress should have full and complete information when making funding decisions, especially for courthouse construction. I would submit that it already does. The President's budget presents the Judiciary budget in full. In fact, page 6 of the Appendix to the President's 2001 budget Request, states the following: In accordance with the law or established practice, the presentations for the Legislative Branch, the Judiciary * * * have been included, without review, in the amounts submitted by the agencies. Moreover, nothing prevents the Judiciary from directly submitting its own budget request to Members and staff for consideration. As a matter of fact, this is regularly done. For the Committee's review, I have included in the record a copy of the AO's budget request which they provided my staff earlier this year. This given, it remains the President's constitutional prerogative to request appropriations (and Congress's to fund all, none or part of such a request) for any or all of the courthouses requested by the Judiciary. The proponents of S. 1564 believe that it will reinforce the ``balance of powers'' within our constitutional form of government by ensuring that the Judiciary's Budget is not used as a ``political football.'' I disagree. In my view, the Judiciary's budget is appropriately presented in the President's budget and any prioritizing surrounding the funding of courthouse construction is properly handled by the GSA in the normal appropriations process. If ``politics'' has played a role, I suggest to my colleagues that it is the result of the usual ``give and take'' that goes on between members of Congress in exercising their most revered constitutional prerogative: the ``power of the purse.'' Building courthouses is a fiscal matter, not a separation of powers issue. I believe that S. 1564 will simply leapfrog the proper budgetary and management role that OMB provides to the President. If S. 1564 were to become law, OMB would no longer be able to analyze the details of each request made for courthouse construction--thus removing a crucial layer of much needed oversight. As members of this Committee may recall, past reports issued by the General Accounting Office (GAO) and news accounts have highlighted the excesses of the federal courthouse construction program. Based partly on these accounts of excessive costs, inadequate management, inefficient oversight and inconsistent execution across the country, Members of Congress requested that the GSA help find ways to make the federal government's real estate program more cost effective. In 1994, the GSA responded by identifying $1.2 billion (including $227 million from courthouse construction) in savings for the federal government in its Time-Out and Review Report of nearly 200 major new construction, modernization and lease projects. As a result, the AO complies a five-year plan which prioritizes the Judiciary's request for new courthouse and assists in determining project urgency. Since then the AO, GSA, Congress, as well as the increased oversight role of OMB, have all played a positive role in effectively managing the courthouse construction program. Proponents of S. 1564 have also argued that the President's use of ``negative allowances'' has been unfairly (and presumably unconstitutionally'') applied against the Judiciary's budget request. I believe that this view arises from a misunderstanding of the various components of the President's budget. The fact is, ``negative allowances'' are applied to the ``bottom line''--the President's budget in its totality. They represent unspecified reductions in spending and are often referred to, in budget jargon, as a ``plug''--a way to make the number add up. They are not applied to any specific program or federal agency within the President's budget--this includes the Judicial and Legislative branch. So to argue that the existence of a ``negative allowance'' within the President's nearly $2 trillion annual budget submission is somehow a misrepresentation of, or a reduction to, the Judiciary's $3.96 billion budget belies a serious misunderstanding of the federal budget process. I also understand the frustration of those who believe that recently courthouse construction has not received adequate levels of funding. And while it is true that no funds were requested for courthouse construction by the President for the past three years and Congress appropriated funds in only one of those years, the passage of S. 1564 is not the answer. I would like to remind my colleagues that the President's 2001 Budget does request $488 million for courthouse construction and the Senate version of the 2001 Budget Resolution assumed $700 million. I support responsible funding of courthouse construction and as a member of the Senate's Committee on Appropriations, I welcome the opportunity to work with the members of the federal Judiciary to ensure that they have appropriate facilities in which to perform their crucial role in our federal system. Now that federal budget deficits have turned into surpluses, I believe the time is right to revisit the level of courthouse funding. The following table (which does not include funds requested or provided for repairs and alterations and any possible rescissions of courthouse construction funds) shows the amounts for new courthouse construction funded through GSA's Federal Buildings Fund for the past fifteen years. It highlights the cyclical nature of budgeting for courthouse construction. In some years funding may be minimal, while in other years a sizable amount of money may be appropriated. ------------------------------------------------------------------------ Amount requested in Total Fiscal year President's appropriated budget ($ in by Congress ($ thousands) in thousands) ------------------------------------------------------------------------ 2001.................................... 488,000 N/A 2000.................................... 0 0 1999.................................... 0 462,290 1998.................................... 0 0 1997.................................... 622,744 583,940 1996.................................... 0 335,973 1995.................................... 0 519,932 1994.................................... 566,336 760,517 1993.................................... 132,189 222,082 1992.................................... 13,572 317,235 1991.................................... 231,644 545,816 1990.................................... 24,027 13,727 1989.................................... 72,660 89,418 1988.................................... 850 5,036 1987.................................... 1,057 1,057 1986.................................... 0 182,173 ------------------------------------------------------------------------ Source: Appendix, Budget of the United States Government, Fiscal Years 1986-2001 (as compiled by the Congressional Budget Office). This bill is not the answer to the ``problem'' of insufficient funding for courthouse construction--the answer lies within the appropriations process. It will strip OMB of its proper oversight role and it will handicap the President as he develops his yearly budget request. As Chairman of the Committee on the Budget, I cannot support S. 1564; nonetheless, as a member of the Committee on Appropriations I have and will continue to work to support appropriate levels of funding. IX. Changes In Existing Law In compliance with paragraph 12 of rule XXVI of the Standing Rules of the Senate, changes in existing law made by the bill, as reported are shown as follows (existing law proposed to be omitted is enclosed in brackets, new matter is printed in italic, and existing law in which no change is proposed is shown in roman): TITLE 28--JUDICIARY AND JUDICIAL PROCEDURE Chapter 41--ADMINISTRATIVE OFFICE OF THE UNITED STATES COURTS * * * * * * * SEC. 605. BUDGET ESTIMATES. [The Director, under the supervision of the Judicial Conference of the United States, shall submit to the Office of Management and Budget annual estimates of the expenditures and appropriations necessary for the maintenance and operation of the courts and the Administrative Office and the operation of the judicial survivors annuity fund, and such supplemental and deficiency estimates as may be required from time to time for the same purposes, according to law. The Director shall cause periodic examinations of the judicial survivors annuity fund to be made by an actuary, who may be an actuary employed by another department of the Government temporarily assigned for the purpose, and whose findings and recommendations shall be transmitted by the Director to the Judicial Conference. [Such estimates shall be approved, before presentation to the Office of Management and Budget, by the Judicial Conference of the United States, except that the estimate with respect to the Court of International Trade shall be approved by such court and the estimate with respect to the United States Court of Appeals for the Federal Circuit shall be approved by such court.] (a) The Director, under the supervision of the Judicial Conference of the United States, shall submit to Congress before January 25 of each year annual estimates of the following: (1)(A) The expenditures and appropriations necessary for the maintenance and operation of the courts and the Administrative Office and the operation of the judicial survivors annuity fund and any supplemental and deficiency estimates as may be required for such purposes according to law. (B) The estimates required by this paragraph shall be approved, before presentation to Congress, by the Judicial Conference of the United States, except that the estimate with respect to the Court of International Trade shall be approved by that court and the estimate with respect to the United States Court of Appeals for the Federal Circuit shall be approved by that court. (2)(A) The expenditures and appropriations necessary for real property construction activities, including construction and acquisitions and repairs and alterations, related to United States courthouses and other space occupied by entities of the judicial branch. (B) Estimated expenditures and appropriations under this paragraph shall be based on prospectuses and other information provided by the Administrator of General Services. (C) For the purpose of preparing estimated expenditures and appropriations under this paragraph, the Administrator of General Services shall, at such times as are required by Congress or the judicial branch to ensure timely development and consideration of courthouse needs and budget requests, prepare and submit directly-- (i) prospectuses, including cost estimates, for future judicial branch construction, acquisition, and repair and alteration projects to the Director, the Committee on Environment and Public Works of the Senate, the Committee on Transportation and Infrastructure of the House of Representatives, and the Committees on Appropriations of the Senate and House of Representatives; and (ii) preliminary planning, design and cost estimates of future judicial branch construction, acquisition, and repair and alteration projects to the Director. (D) In accordance with estimates prepared under this paragraph, funds may be appropriated to the judicial branch for deposit into the Federal Buildings Fund for the construction, acquisition, and repair and alteration of Federal courthouses. Funds deposited into the Federal Buildings Fund under this subparagraph shall not be available for expenses in connection with any construction, acquisition, and repair and alteration project for which a prospectus, if required by section 7 of the Public Buildings Act of 1959 (40 U.S.C. 606), has not been approved by the Committee on Environment and Public Works of the Senate and the Committee on Transportation and Infrastructure of the House of Representatives, except that necessary funds may be expended for each project for required expenses in connection with the development of a proposed prospectus. (b)(1) The estimates submitted to Congress under subsection (a) shall also be submitted to the President for inclusion in the budget of the United States. In each budget of the United States Government submitted by the President under the first sentence of section 1105(a) of title 31, the President shall make no change or alterations whatsoever, and shall not impose or otherwise recommend, directly or indirectly, implementation of a negative allowance, rescission, or any other form of reduction or change to such estimates. (2) For the purpose of preparing a unified Federal budget by the President, the Director shall transmit to the President-- (A) preliminary estimated expenditures and proposed appropriations for the judicial branch before October 16 of each year; and (B) final estimated expenditures and proposed appropriations for the judicial branch before December 24 of each year, and such final estimates shall be identical to the estimates to be submitted to Congress under subsection (a). (C) The Director shall cause periodic examinations of the judicial survivors annuity fund to be made by an actuary, who may be an actuary employed by another department of the Government temporarily assigned for the purpose, and whose findings and recommendations shall be transmitted by the Director to the Judicial Conference. * * * * * * * TITLE 31--MONEY AND FINANCE CHAPTER 11--THE BUDGET AND FISCAL, BUDGET, AND PROGRAM INFORMATION * * * * * * * SEC. 1105. BUDGET CONTENTS AND SUBMISSION TO CONGRESS. (b) Estimated expenditures and proposed appropriations for the legislative branch and the judicial branch to be included in each budget under subsection (a)(5) of this section shall be submitted to the President before October 16 of each year and included in the budget by the President without change. Estimated expenditures and proposed appropriations for the judicial branch described under section 605 of title 28 shall be included in the budget and submitted to the President in accordance with that section.
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