National Journal's CongressDaily
Issue date:  October 29, 2001
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BUDGET
Administration Says FY01 Surplus $30B Less Than Anticipated
   The Bush administration today said the total surplus for FY01
is $127 billion, more than $30 billion less than predicted just
weeks ago and less than half the estimate made when the
administration released its budget this spring. Expectations for
the surplus plummeted as the economy stalled this year and
worsened further in the wake of the Sept. 11 terrorist attacks.
"Circumstances have changed radically," OMB Director Daniels
acknowledged in a statement today. "We must make sure that this
is not the last surplus by limiting additional spending to
purposes directly related to the nation's battle against
terrorism."
   The FY2000 surplus was $237 billion, making the FY01 surplus
the second largest on record. The April OMB budget estimate for
the FY01 surplus was $281 billion. The administration's mid-
session review surplus forecast late this summer was for $158
billion. At that time, the administration forecast receipts of
$2.013 trillion and outlays of $1.855 trillion. Actual FY01
receipts were $1.99 trillion and outlays were $1.863 trillion.
The administration also announced it had paid down $90 billion in
publicly held debt during FY01. The $127 billion FY01 surplus
includes a $12 billion reduction in anticipated spectrum auction
recoveries.
   For comparison, in its most recent budget analysis, released
Sept. 26, CBO projected the FY01 budget surplus would be $121
billion, down from the $153 billion it had projected in the mid-
session review that came out in late August. In May, CBO had
expected a far larger FY01 surplus of $275 billion. - by Keith
Koffler and Lisa Caruso
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TRANSPORTATION
Bush Still Resistant To Federalization Of Airport Security
   The White House said today it continues to support allowing
airport screeners to remain private workers with increased
federal supervision, backing away from a statement White House
Chief of Staff Card made over the weekend saying President Bush
probably would sign legislation that fully federalizes the
workers if it came to his desk in that form. "That may or may not
be the case," White House Press Secretary Ari Fleischer said
today, when asked about Card's statement. Fleischer said it was
"premature" to speculate on whether Bush would veto legislation
federalizing airport workers. "The president continues to believe
that the best way to guarantee safety is through a more flexible
system, where not everyone is on the federal payroll," Fleischer
said. Bush continues to back legislation by House Transportation
and Infrastructure Chairman Young that provides federal standards
for airport workers but does not require that all become federal
employees. Card told NBC's "Meet the Press" Sunday that if Bush
received a bill federalizing airport security workers: "I suspect
that he wouldn't want to sign it but he would. He wants airline
security."
   House Democrats appeared bolstered by Card's comments and are
hoping for a win on a Democratic substitute that would federalize
workers when the Young bill comes up for a floor vote Wednesday.
"This shows that the White House position against [making baggage
screeners] federal employees is rather soft," said a spokesman
for House Transportation and Infrastructure ranking member James
Oberstar, D-Minn. Oberstar has introduced an alternative to
Young's bill that would federalize workers like the Senate bill,
but place them under the Transportation Department. The Senate
bill places much of the oversight with the Justice Department.
Democratic aides said that Democrats are likely to offer the
Senate bill in order to move the legislation quickly. The Young
bill goes before the Rules Committee Tuesday. - by Keith Koffler
and April Fulton
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FINANCE
House May Not Accept Senate Terrorism Insurance Plan
   House members may be playing catch up on federal terrorism
insurance this week after an agreement was reached late Friday
between key senators lawmakers and the Bush administration on the
bill's rough outline. Senate Banking Committee members are
expected this week to introduce the legislation which would have
the insurance industry financing the first $10 billion in
payments following a future terrorist attack. After that,
taxpayers would foot somewhere between 70 percent and 90 percent
of the costs. Meanwhile, members of the House Financial Services
Committee, who have been a more difficult sell, are still in the
discovery phase of the process. But in striking a deal with such
influential and ideologically disparate members as Senate Banking
Chairman Sarbanes, ranking member Phil Gramm, R-Texas, and Sen.
Christopher Dodd, D-Conn., the White House may have found a way
to effectively circumvent a House debate, sources said. "I don't
see how and where the House plays into that mix," one observer
said. At the same time, the observer added, "consideration needs
to be given to [House Financial Services] Chairman Oxley and
probably some of the Democrats ... they shouldn't be cut out of
the picture."
   House members were prepared to "dig in" on the subject with a
roundtable discussion organized for Wednesday by Financial
Services Capital Markets Subcommittee Chairman Richard Baker, R-
La. Criticism and caution about a federal terrorism insurance
backstop has been most pronounced and most bipartisan among
members of the House committee. Baker has been especially vocal
about the need to ensure the industry does not get something for
nothing, while Democrats raised the specter that federal dollars
would open the door for federal regulation of the insurance
industry. "I think in general there's an appreciation of what the
Senate's put together so far," a Baker spokesman said today.
However, the House roundtable "should be taking up several other
questions House members have," the spokesman added. "While the
Senate proposal looks like a good start for the short-term
question ... the final legislative package may need to go a bit
further," specifically in addressing whether there is going to be
any repayment by the industry once it finds its footing, he said.
An Oxley spokeswoman added, "Our concerns remain the same as they
were last week. I think we want to stand firm in defense of the
taxpayer," and in a way that "encourages the private sector to
provide as much terrorism coverage as possible."
    Sources said they believe the final Senate bill could include
modest language, probably crafted by Sen. Jon Corzine, D-N.J.,
requiring some repayment from the insurance industry in return
for federal aid. Corzine's staff could not be reached for
comment. As for the substance of the Senate-White House proposal,
Frank Torres of Consumers' Union said the details remain to be
seen. "We're encouraged that the first dollar losses are going to
be picked up by the industry," Torres said. However, he added,
the Senate plan calls for a $10 billion threshold that sounds low
to him, given that the industry has some $300 billion in
reserves. Moreover, "We understand the legitimate need for some
[federal] assurances, but it is turning out to be a subsidy,"
Torres said. "Nobody's talked about the impact of insurance rates
on taxpayers. The government will be there to help out, but why
can't we have it in some form of loan guarantee? We think the
House folks are asking all the right questions," Torres added. As
for the position of House Republican leaders, "Our sense ... is
that they do not want a big bailout," Baker's spokesman said.
Leadership wants the bill to "be something free market
conservatives can feel proud about," he said. - by Pamela Barnett
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TRADE
English Predicts Congress Will Restore Trade Authority
   Rep. Phil English, R-Pa., a member of the House Ways and Means
Committee, predicted that the restoration of presidential trade
negotiating authority will be voted on and probably approved by
the House "in the next few weeks." He added that it is
"reasonable" that the president will have the authority again by
the end of the year. Speaking at a forum on trade sponsored by
the U.S. Chamber of Commerce, English endorsed a measure to renew
trade authority authored by Ways and Means Chairman Thomas. He
said the Thomas bill was "the strongest one I have seen since
I've been in Congress" with regard to promoting higher labor and
environmental standards and also preserving the consultative role
of Congress. The Thomas bill borrows heavily from a free trade
agreement concluded recently between the United States and
Jordan. English emphasized that the Thomas bill calls on
countries to "be on the record as being willing to enforce their
standards." English said Thomas' bill gives the United States
flexibility to negotiate trade pacts based on the particular
circumstance of various countries.
   Meanwhile, President Bush today announced the creation of a
$200 million Overseas Private Investment Corporation support
facility to provide U.S. corporations access to loans, guarantees
and political risk insurance for investment projects in Sub-
Saharan Africa. Speaking to a forum on the African Growth and
Opportunity Act - a free trade agreement between the United
States and African nations - Bush said the United States would
also establish a regional office in Johannesburg, South Africa,
to coordinate trade issues between the United States and Africa.
The president also announced $15 million in seed funding to
launch the Trade for African Development and Enterprise Program,
which will establish regional hubs to help African businesses
take advantage of the African Growth and Opportunity Act. - by
Stephen Norton and Keith Koffler
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AGRICULTURE
Dorgan Pushes For Farm Bill Approval By Year's End
   Sen. Byron Dorgan, D-N.D., told CongressDaily Friday that if
the Senate Agriculture Committee does not soon succeed in sending
a farm bill to the floor, Senate Majority Leader Daschle could
bring up the House-passed bill for amendment. Dorgan said he was
not "suggesting" that Daschle bring up the bill because he
believes the "responsible" thing for the Senate Agriculture
Committee to do is come to an agreement on it. However, Dorgan
said he so strongly believes Congress should pass the farm bill
this year that he did not rule out that option. Dorgan, who does
not sit on the Senate Agriculture Committee, appear to signal the
frustration non-committee Democrats feel toward the Senate
Agriculture Committee's lack of progress on the bill. One Capitol
Hill source working on the bill said Democrats are "splintered"
in trying to satisfy Democrats from different regions. The source
said Senate Agriculture Chairman Harkin's staff is circulating
his concept paper - which he may publicly release this week, the
source said - among other Democratic committee members while
quietly sounding out Republican staffers who work for Republican
Senate Agriculture Committee members other than Senate
Agriculture ranking member Richard Lugar, R-Ind., who has
released his own proposal with dramatic farm program changes.
   When the House sent its farm bill to the Senate, Daschle did
not assign it to a committee, which left him the option of
bringing it up on the Senate floor. Daschle staffers have said
the majority leader wants the Senate Agriculture Committee to
write a bill that is better than the House bill, but they also
left the option of bringing up the House bill and amending it.
One problem with the House farm bill, Dorgan said, is that it
does not treat wheat farmers well, but he called it a "step
forward" compared to current law. On Friday, Dorgan wrote Harkin
and Lugar saying they should finish the bill this year and
pointed out how, in his view, the House bill "shortchanges" wheat
and barley growers. Dorgan said his letter reflected meetings he
held last week with both Daschle and Harkin.
   Meanwhile, the National Association of Wheat Growers Friday
issued a new call for completion of the farm bill this year
saying the uncertainty is causing problems for winter wheat
farmers who are planting crops now. "Our agriculture lenders are
increasingly nervous about committing themselves to farm loans in
light of an uncertain farm policy environment. We need these
loans now for the operating capital on our 2002 crop," NAWG Chief
Executive Officer Daren Coppock said. In what appeared to be a
response to Dorgan's letter, corn, soybean and livestock groups
wrote Daschle saying they were so satisfied with the Bush
administration's promises of funding that action could wait until
next year. But cotton and rice growers and the American Farm
Bureau Federation and the National Farmers Union declined to sign
the letter to Daschle and are still pushing for the bill this
year. - by Jerry Hagstrom
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AGRICULTURE
Administration Backs Away From Lugar Farm Plan
   The Bush administration is distancing itself from the farm
bill proposed by Senate Agriculture ranking member Richard Lugar,
R-Ind. Although there are "many similarities" between the Bush
administration's recently issued farm policy guidelines and
Lugar's proposal on food stamps and other nutrition programs,
Agriculture Undersecretary for Nutrition and Consumer Services
Eric Bost told CongressDaily Friday, "This is the first inning of
a nine inning ball game." When Lugar issued his farm bill on Oct.
18 he said he had the "full" backing of the administration, with
Agriculture Secretary Veneman even issuing a statement that
praised his proposal. But the Lugar proposal has not won support
from any major farm groups and rumors continue swirling that farm
groups told White House officials they were offended by its
support of the Lugar proposal.
   Bost told the Associated Press the administration supports
Lugar's plan to restore food stamp benefits to legal immigrants
who have been in the country for five years or worked for four
years. Bost said Friday that the "40 quarters of work"
requirement for food stamp eligibility "is something that we feel
comfortable supporting. However, we are continuing to work at it.
We don't want to say that is where the administration is." Bost
then dismissed those who would pigeon-hole him on the issue.
"Reporters want to box me in [on] the issue. We are continuing to
look at additional options" for food stamp eligibility. Bost
said. "The options could be narrower or broader." Bost also
pointed out the administration is continuing to discuss the
nutrition title of any new farm bill with congressional leaders
and OMB, and noted that last week he offered assistance in
writing the nutrition title. Bost said he "doesn't have an
opinion" at the present time about making the Women's, Infants'
and Children's program mandatory, rather than discretionary
funding - another issue raised in the USDA policy book. - by
Jerry Hagstrom
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CONGRESSIONAL OPERATIONS
House Awaits Remediation Results On Longworth, Ford
   Although the search for anthrax contamination continued to
hamper normal House operations today, officials are nearing the
end of their efforts to detect and destroy any harmful bacteria.
The Longworth and Ford House office buildings, where anthrax has
been detected, remain closed; but a spokesman for House
Administration Chairman Ney said health officials have completed
remediation and are waiting on test results to confirm that any
trace of anthrax has been destroyed. The Ney spokesman said that
tunnels connecting the Capitol and the Rayburn and Cannon House
offices buildings have been reopened, but entrances to Longworth
are blocked off and sealed. Anthrax was discovered Friday in the
Longworth offices of Reps. John Baldacci, D-Maine, Rush Holt, D-
N.J., and Mike Pence, R-Ind. A conference call for chiefs of
staff and district directors of legislators with Longworth
offices is scheduled for this afternoon.
   Meanwhile, Senate aides said leaders have still not decided
what method to employ in order to eliminate anthrax from the Hart
Senate Office Building, as health officials from various federal
agencies advise congressional officials. EPA Administrator
Whitman had been invited to brief senators today about cleanup
efforts in the Capitol complex, but the event was cancelled. The
Hart building remains closed, as staff who work in the building
make preparations for what could be a prolonged dislocation. - by
Mark Wegner and Geoff Earle
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JUDICIARY
Court To Decide On Federal Authority Over Drug Mixing
   The Supreme Court today agreed to decide if the government can
regulate the mixing of drugs at local pharmacies. The Bush
administration had urged the court to take the case, arguing
there were serious health implications in allowing unregulated
drug-mixing. The government has wide inspection authority over
drugmakers in their plants, but this case involves pharmacies
that dilute or alter prescription drugs to make them easier to
consume or for use by a child or someone with allergies. Congress
changed guidelines for compounding in 1997, and the government
was sued in Nevada by pharmacies that frequently mix drugs. The
FDA contends it can regulate companies that advertise mixing
services or have sales personnel.
   The court also rejected a constitutional challenge to
congressional salary increases dating back a decade. Justices
refused to reinstate a lawsuit filed by Rep. Bob Schaffer, R-
Colo., seeking to block yearly cost-of-living adjustments for
Congress. The latest increase, earlier this month, bumped up
congressional salaries to about $150,000. Schaffer contends the
increases violate the 27th Amendment, which forbids members of
congress from increasing their salary during their term. Congress
can block the adjustments, which it has done five times in the
last eight years, the court was told.
   The court also agreed today to hear the case of a man who
wanted an oil refinery job his own doctor said could kill him,
the Associated Press reported. Mario Echazabal sued Chevron Corp.
under the Americans With Disabilities Act, claiming he should
have gotten the job despite a chronic case of hepatitis C.
Doctors who examined Echazabal said exposure to chemicals at the
refinery would speed the deterioration of Echazabal's liver, and
that a large exposure from a plant fire or other emergency could
kill him. Chevron appealed to the Supreme Court, arguing that
Echazabal's medical condition puts him outside the protection of
the Americans With Disabilities Act. The federal anti-bias law
mandates equal treatment for qualified workers, no matter their
disability. A court decision in the case could help clarify what
duty an employer has to potential employees with disabilities.
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POLITICS
White House To Consider Proposals Designed To Limit Liability
   An administration official Friday confirmed reports that the
White House will consider proposals designed to limit the
liability of businesses affected by the Sept. 11 terrorist
attacks. Owners and architects of buildings destroyed by the
attacks, manufacturers of airplane components and others could be
sued as a result of the attacks. "We are open to proposals that
would treat all companies that would be sued similarly to each
other," the administration official said. The White House
believes that such proposals would be fair since caps on claims
against one industry - the airlines - are already in place, and
lawsuits that would have been directed at air carriers may now
end up in the lap of other businesses. The White House also
believes that protection for other industries is needed to
prevent some businesses from entering into bankruptcy and thereby
"ensure plaintiffs could recover damages." If a deal with
Congress is reached on the issue, the White House would be open
to adding the initiative onto legislation helping "reinsurers"
provide coverage to insurance companies writing policies
protecting businesses against future terrorist attacks, the
official added.
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POLITICS
Cook To Run As A Republican
   Former Rep. Merrill Cook, R-Utah, has decided to run as a
Republican for the seat he lost last year, satisfying Republicans
who feared his plan to campaign as an independent would split the
GOP vote, the Associated Press reported. Cook, in announcing his
change of heart Saturday, said he did not want to be blamed for
possibly helping Democratic Rep. Jim Matheson win a second term.
"I don't want to be called a spoiler. I want to carry on with the
important issues," Cook said. Cook said he was inspired to run
again after comments Tuesday by National Republican Congressional
Committee Chairman Tom Davis of Virginia, who said he hoped Cook
would not run and that a Republican should win the redrawn 2nd
District "if we can find a decent candidate." Cook was enraged by
Davis' comments and then issued his threat to run as an
independent. But Cook said he spoke with Davis on the phone later
in the week and was assured that Davis would stop saying negative
things about him and show neutrality in the Utah Republican
Party's nominating process.
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ATTACK UPDATE
   U.S. warplanes hit an area of caves and tunnels in eastern
Afghanistan today known as a hideout of Osama bin Laden, killing
two people, Reuters reported. Frustrated at weeks of U.S. bombing
that have failed to budge Taliban front lines, Afghanistan's
opposition forces plotted what they said today would be a major
push on a vital Taliban-held northern stronghold, the Associated
Press reported. To bring it off, a spokesman of the Northern
Alliance stressed, "We will need American help." Afghan
opposition forces are complaining increasingly that U.S. bombing
to date is too light to drive out Taliban forces defending Kabul
and the northern city of Mazar-e-Sharif. U.S. strategy has
focused on selective strikes on Taliban positions and those of
bin Laden's al-Qaida network, rather than mass bombing.
   Meanwhile, Sen. Phil Gramm, R-Texas, said Saturday death is
the only justice for anyone found responsible for aiding the
Sept. 11 terrorist attacks. "I'm interested in hunting down these
people and bringing them to justice, and that's killing them," he
told a GOP leadership training seminar in Dallas. Gramm, who is
retiring at the end of his current term, praised the leadership
of Bush, who has said he wants bin Laden "dead or alive." Gramm
offered his own homespun directive: "We have an old Texas Rangers
principle that if you ride with thieves, you die with thieves.
The modern incantation is if you ride with terrorists, you die
with terrorists."
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THE FINAL WORD
   "[They] would have to be living in a cave not to know."
   - White House Homeland Security Chief Tom Ridge, speaking last
week while saying that terrorists "seriously misjudged" the U.S.
public by thinking they could break the public's spirit with
terrorist attacks.


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