CRS Report for Congress
Supplemental Appropriations for FY1999:
Central America Disaster Aid,
Middle East Peace, and Other Initiatives
Updated May 26, 1999
Larry Nowels
Specialist in Foreign Affairs
Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

Congress considered several FY1999 supplemental appropriation requests early in the 106th
Congress, including those for Central America hurricane relief, Middle East assistance,
agriculture farm loans, and Kosovo military and humanitarian operations. A major issue in
the debate was whether to declare the supplemental proposals as emergencies or offset their
costs with cuts in existing program funding. This report reviews the President’s supplemental
requests, discusses the offset issue, and tracks congressional action through enactment.

Supplemental Appropriations for FY1999: Central America
Disaster Aid, Middle East Peace, and Other Initiatives
During the early months of 106 Congress, lawmakers considered several majorth
FY1999 supplemental appropriation requests, including those for Central American
and Caribbean reconstruction aid in the wake of hurricanes that struck the region in
late 1998; additional aid for Jordan, the most urgently sought portion of a three-year
package for Israel, Jordan, and the Palestinians to help implement the terms of the
Wye Memorandum negotiated in October 1998; farm loan assistance for farmers
affected by continued low commodity prices; and Kosovo military and humanitarian
operations, a proposal initially considered separately from the others.
The President declared Central America aid, farm loan funds, and Kosova
operations as emergencies, thereby avoiding the need to offset the costs of the
supplemental. He proposed to cover the expenses of additional Middle East aid by
using mostly Defense Department funds. Last year, Congress approved about $21
billion in emergency funds that were not offset with cuts in existing appropriations,
a decision some lawmakers strongly opposed. They argue that all future supplemental
initiatives should be fully offset so as not to violate discretionary spending “caps” set
for FY1999 and beyond or reduce the projected surplus.
The House and Senate approved bills providing most of the President’s requests
for Central America and farm relief, plus adding funds for other congressional
priorities. The Senate (S. 544), provided $2.5 billion in supplemental funding,
including nearly four times as much as proposed for farm relief aid ($592 million) and
about $300 million in loan and other relief programs for American steel and oil and
gas industries. The House approved (H.R. 1141) $1.3 billion in supplemental funds
at levels similar to those proposed by the President for Central American, Jordan, and
farm relief.
The congressional decision to provide offsets, rescissions, and deferrals to cover
most of the costs of new supplemental spending raised significant opposition and veto
threats from the White House. S. 544 drew most of the program reductions — nearly
$3 billion — from non-defense emergency supplemental funds appropriated last year
in the Omnibus Appropriations Act for FY1999 (P.L. 105-277), plus another $1.3
billion from domestic programs. The House bill cut mostly (over $850 million) from
foreign policy programs. One of the largest was a rescission of callable capital
appropriated prior to 1980 to back U.S. contributions to the World Bank.
After the House, on May 6, passed a separate Kosovo supplemental (H.R.

1664), congressional leaders folded it into the conference report on H.R. 1141.

Conferees agreed on May 13 to a $15.1 billion supplemental measure providing
roughly the President’s request for Central America and Jordan, but significantly
higher amounts for farm relief and Kosovo operations. All but $2 billion of the
conference agreement is declared an emergency. Conferees dropped most of the
offsets opposed by the White House, as well as the Senate steel and oil/gas industry
loan programs. The President signed H.R. 1141 on May 21 (P.L. 106-31).

Key CRS Policy Staff
Issue Name Telephone
AgricultureRalph Chite7-7296
Central AmericaMark Sullivan7-7689
Community Development Block GrantsEugene Boyd7-8689
DefenseSteve Daggett7-7642
Disaster relief/Hurricane MitchLois McHugh7-7627
Food StampsJoe Richardson7-7325
Immigration/Naturalization ServiceBill Krouse7-2225Ruth Wasem7-7342
Middle EastClyde Mark7-7681
Steel ImportsGwenell Bass7-7773
TobaccoSteve Redhead 7-2261

Most Recent Developments........................................1
Background .................................................... 1
Central America/Caribbean Reconstruction........................2
Wye Memorandum — Middle East Supplemental...................3
Other Supplemental Requests..................................4
Paying for the FY1999 Supplementals............................5
Congressional Actions............................................6
Central America/Caribbean Relief...............................8
Wye Memorandum - Jordan Aid Package.........................8
Farm Relief Aid.............................................9
Other Congressional Supplemental and Policy Initiatives..............9
Congressional Offsets for Supplemental Appropriations..............11
Legislation .................................................... 14
List of Tables
Table 1. Wye Memorandum Supplemental............................4
Table 2. Supplemental Appropriations, FY1999.......................16
Table 3. Rescissions, Offsets, and Deferrals..........................18

Supplemental Appropriations for FY1999:
Central America Disaster Aid, Middle East
Peace, and Other Initiatives
Most Recent Developments
On May 21, President Clinton signed into law H.R. 1141 (P.L. 106-31),
legislation appropriating $15.1 billion supplemental FY1999 funds for Central
America hurricane relief, aid to Jordan, American farmer assistance, and Kosovo
military and humanitarian operations. As approved by Congress, H.R. 1141
provides funds roughly at the President’s request for Central America ($1 billion)
and Jordan ($100 million), but higher amounts ($574 million) for farm relief. In
addition, lawmakers merged into H.R. 1141 another supplemental spending bill
(H.R. 1664) passed by the House on May 6 for Kosovo and other defense-related
requirements. The $12 billion for Kosovo and other defense needs is nearly double
the $6.1 billion request, but $1 billion less than passed by the House on May 6. 1
All but $2 billion of the H.R. 1141 is declared an emergency. The conference
agreement dropped most of the House and Senate-passed offsets over which the
White House had threatened a veto. The largest remaining rescission is $1.25 billion
from food stamp surpluses. Conferees also deleted Senate provisions providing $1
billion-plus loan programs for U.S. steel and the oil and gas industries. The
conference agreement retains, however, a Senate amendment giving states complete
control over how to spend money derived from the settlement of lawsuits against
tobacco companies. The White House opposes this provision. Conferees further
added $900 million in domestic disaster relief funds to aid victims of the recent
tornados in the mid-west.
When the 106 Congress convened in January, it was widely assumed that theth
President would seek immediate approval of FY1999 supplemental funding for two
foreign policy requirements that arose in late 1998 after Congress had adjourned. The
Administration’s February 1 budget submission for FY2000 included the first of the
anticipated supplementals: $1.9 billion in FY1999 supplemental and FY2000/20001
advance appropriations for assistance to Israel, Jordan, and the Palestinians promised
after the October 1998 signing of the Wye River Memorandum. Two weeks later,

For details on the Kosovo supplemental, see CRS Report RS20161, Kosovo Military1
Operations: Costs and Congressional Action on Funding, by Stephen Daggett.

on February 16, the White House submitted the second major supplemental request
— $955.5 million — for emergency disaster relief and reconstruction assistance to
countries in Central America and the Caribbean affected by Hurricanes Mitch and
Georges that struck the region in late 1998, and for more recent earthquake damage
relief for Colombia.
Normally, when seeking supplemental funds for the current fiscal year, the
Administration recommends prompt congressional action — within a few months —
to meet what are usually unanticipated requirements. Congress generally completes
action on early-year supplemental requests by May or June. In the case of the Central
America/Caribbean natural disaster relief, given its emergency nature, the President
has asked Congress to act expeditiously, finalizing the funding legislation by the end
of March. The Middle East assistance did not appear so urgent until the death of
Jordan’s King Hussein. Following his death, the White House modified the pending
Middle East supplemental on February 19, asking Congress to separate the $300
million portion for Jordan and to consider it as part of the Hurricanes Mitch and
Georges relief package. Presumably, the balance of the Wye Memorandum proposal
for Israel and the Palestinians, and the portion of the Jordanian request not funded in
the FY1999 supplemental can be taken up later by Congress as part of the regular
FY2000 Foreign Operations funding measure.
Central America/Caribbean Reconstruction2
Hurricane Mitch, which struck in late October/early November 1998, left in its
wake severe destruction to the economies and people of Honduras, Nicaragua, and
other countries in the region. More than 9,000 are confirmed dead, with another

9,000 still missing. More than 3 million people were displaced from their homes.

Infrastructure, including roads, bridges, schools, and health clinics, especially in
Honduras, was badly damaged. More than a third of Nicaragua’s most important
crops were destroyed. The World Bank estimates that destruction to the region totals
$5.36 billion.
The United States responded immediately to the crises, providing over $300
million in emergency humanitarian assistance in the following months, for what has
amounted to the largest foreign disaster relief operation ever conducted by the United
States. The Administration drew funds for the immediate relief efforts from a number
of disaster aid accounts managed by the U.S. Agency for International Development
(USAID) and the Defense Department.
To enter the second phase of the U.S. response, the rehabilitation phase, the
Administration sought supplemental funding of $955.5 million. Most of the funds3

For more information regarding the effects of Hurricane Mitch and the U.S. response, see2
CRS Report 98-1030, Central America: Reconstruction After Hurricane Mitch, by Lois
The Clinton Administration’s request for hurricane relief excluded a proposal to enhance the3
trade benefits now extended under the Caribbean Basin Initiative (CBI). The Administration
has announced that it will send a separate CBI enhancement proposal soon See CRS Report
RS20102, Caribbean Enhancement Legislation, by Raymond Ahearn, March 4, 1999.

are for housing, education, transportation, and public health needs for the victims of
Hurricane Mitch, but smaller amounts would also provide relief for two other natural
disasters that struck the region recently: Hurricane Georges, especially in the
Dominican Republic, and an earthquake in Colombia. Part of the request would also
replenish USAID and DOD emergency accounts which were drawn-down during the
initial U.S. relief efforts. Major components of the supplemental include:
!$474 million for road, school, and health clinic repairs, and loans for farmers
!$64 million for environmental management and disaster mitigation aid
!$42 million for reconstruction assistance to the victims of Hurricane Georges
!$10 million for Colombian earthquake relief
!$41 million for debt reduction for Honduras ($16 million) and a U.S.
contribution ($25 million) to a Central American trust fund to help countries
service their debts owed to the World Bank and regional development banks
!$80 million for the Justice Department’s Immigration and Naturalization
Service to pay for the costs of reduced deportations to Central America and
to deal with illegal immigrants coming to the United States because of
Hurricane Mitch
!$157.5 million to replenish DOD ($132.5 million) and USAID ($25 million)
!$56 million for U.S. National Guard and Reserve “New Horizons” exercises4
in the region that will assist with infrastructure repair and medical services.
Wye Memorandum — Middle East Supplemental5
On October 23, 1998, Israeli and Palestinian leaders, meeting at the Wye River
Plantation in Maryland, signed the Wye River Memorandum calling on the two
countries to meet commitments made in earlier peace initiatives, including further
Israeli withdrawal from territory on the West Bank. In support of the Wye
Memorandum, the United States subsequently pledged additional assistance for Israel,
the Palestinians, and Jordan beyond regular annual levels of foreign aid. For Israel,
the supplemental military funds would help pay for the costs of redeploying from
areas of the West Bank; for the Palestinians, the additional aid would support
continuing economic development programs mostly administered through non-
governmental organizations; and for Jordan, the economic and military aid would
assist Jordanian economic reform programs and military modernization efforts.

Prior to the White House submission of its supplemental appropriations request, Senator4
Graham and others introduced S. 371, the Central American and Caribbean Relief Act,
authorizing funds for disaster aid and rehabilitation for the region. Amounts recommended
in S. 371 are very similar to those proposed by the President in his appropriation request. S.
371, however, further includes a CBI trade enhancement initiative, something the White House
says it will submit for consideration, but has not yet sent to Congress. A similar bill was
introduced in the House, H.R. 984, on March 4.
For more information on the Wye Memorandum and Middle East peace efforts, see CRS5
Issue Brief 91137, The Middle East Peace Talks, by Carol Migdalovitz; and CRS Report
RS20107, Middle East: U.S. Foreign Aid - Wye Agreement Funding and the Request for
FY2000, by Clyde Mark.

Initially, the Administration submitted to Congress (February 1, 1999) a
comprehensive Wye Memorandum aid request, proposing $1.9 billion over three
years: $900 million as an FY1999 supplemental and $500 million each for FY2000
and FY2001 as an advance appropriation. The country allocations and yearly6
distributions are illustrated in Table 1. Following the death in mid-February of
Jordan’s King Hussein, however, the Administration revised its Wye Memorandum
supplemental, asking that the Jordan portion be separated and considered by Congress
on an urgent basis together with the Hurricane Mitch supplemental. In amending its
request, the White House argued that accelerated assistance would help promote
stability in Jordan and throughout the region during the leadership transition period.
Table 1. Wye Memorandum Supplemental
($s in millions)
FY1999 FY2000 FY2001 TOTAL
Israel — military aid$600$300$300$1,200
Palestinians — economic aid200100100400
economic aid50500100
military aid5050100200
TOTAL $900 $500 $500 $1,900
Other Supplemental Requests
In addition to the Central America/Caribbean reconstruction and Wye
Memorandum supplementals, the President also proposed several much smaller
FY1999 supplemental spending proposals in his February 1 budget submission for
FY2000, including those for:
!Supreme Court salaries and expenses — $1 million for additional staff
!National Oceanic and Atmospheric Administration — $5 million to address
new regulations in the Northeast Multispecies fishery (Gulf of Maine)
!Department of the Interior — $6.8 million for the Trust Management
Improvement Project
!Corporation for Public Broadcasting — $11 million (plus $37 million in
advance appropriations for FY2000) for acquisition of satellite capacity.

An advance appropriation is a mechanism for Congress to appropriate funds immediately6
for an activity or program that will not require funds in the current year. The advance
appropriation would be enacted in one year but not be available for obligation until a future
year. For scorekeeping purposes, the advance appropriation would count against the year in
which the funds are available for obligation. Congress has generally been reluctant to provide
advance appropriations. Exceptions, however, are occasionally agreed to, including about $7
billion in education funding in the FY1999 Labor, HHS, and Education appropriation.

On February 26, President Clinton proposed a further supplemental spending
initiative, asking for $152 million to provide credit and delivery of services to
American farmers and ranchers who continue to be affected by a weakened farm
economy. Of the total, $109.6 million would be available to support $1.1 billion in
additional direct and guaranteed loans extended through five programs. Because of
low commodity prices, farmers have been drawing on existing USDA loan programs
at a faster rate than expected, that may result in the depletion of current resources
sometime in the spring.
Submitted separately from this series of supplemental requests, and weeks after
the House and Senate had given their approval, the President sent Congress additional
supplemental proposals to cover the costs of U.S. military and humanitarian
operations in Kosovo ($6.15 billion) and for additional resources ($372 million) for
the Federal Emergency Management Agency (FEMA) to aid victims of the recent
tornados in the mid-West. The House passed a separate Kosovo spending measure
(H.R. 1664), but lawmakers added the Kosovo and FEMA funds to the supplemental
package for Central America, Jordan, and American farmers when the latter was taken
up in mid-May by a House/Senate conference committee.
Paying for the FY1999 Supplementals
A continuing controversy during the recent consideration of supplemental
appropriations — and one that has emerged as the most contentious issue in the
current debate — is whether to cover the costs of the additional spending through
offsets, or to declare the requirement as an “emergency.” The emergency designation7
allows Congress to approve the supplemental funds without offsetting the amounts
with rescissions in previously enacted discretionary appropriations or finding cuts in
mandatory spending programs. But if Congress agrees with the President to define
all or part of the supplemental as an “emergency” and not offset the amounts,
discretionary spending rises beyond the agreed-upon “caps” and the size of the budget
surplus for FY1999 declines. Between 1994 and 1997, Congress usually enacted
budget authority offsets for supplementals. Reversing that practice, last year
Congress declared nearly all of the $21 billion supplemental appropriation enacted in
P.L. 105-277 as an emergency. Some lawmakers strongly objected to this action and
are vigorously opposing efforts to approve any supplemental funding for FY1999
without corresponding cuts in existing budget authority. Some congressional critics
argue that, since the current surplus is due to Social Security, approving supplemental
funds without offsets will reduce Social Security resources in the future.
The Administration designated the Central America/Caribbean relief package,
USDA farm loans, and Kosovo operations as “emergencies,” not requiring reductions
in existing budget authority. For the Wye Memorandum, however, the White House
proposed to offset most of the $900 million FY1999 portion with Defense
Department funds has met with some opposition in Congress. In addition to
rescinding $18 million in previously enacted military assistance funds, the President

For a discussion of the debate over emergency supplemental appropriations for defense7
programs since FY1993, see CRS General Distribution Memo, Emergency Appropriations
for the Department of Defense, by Stephen Daggett, August 18, 1998.

proposed to use $652 million of DOD intelligence and $230 million of DOD ballistic
missile defense funds enacted last year as contingent emergency supplemental
appropriations in P.L. 105-277. Additional spending for intelligence and missile
defense resulted directly from initiatives developed by congressional leaders. Because
the funds were “contingent” on the President designating them as an emergency, they
are not available until the White House makes such a determination; and the President
may choose not to do so. The President said the monies for intelligence and missile
defense are not needed this year, and his budget request includes proposals for
advance FY2001 appropriations for both of these accounts as offsets.
This proposal is especially controversial as it comes at a time when many in
Congress believe that defense spending is too low and are seeking ways to increase
appropriations for next year and beyond. Congress is considering a number of
alternative offsets, and as noted below, some of these options have drawn sharp
criticism from the Administration. A few have brought veto threats from the White
Congressional Actions
Agreeing with the President’s recommendation for immediate consideration of
the Central America/Caribbean and Jordan supplemental requests, the Senate
Appropriations Committee met on March 4 and reported out legislation providing
$1.9 billion in supplemental funding (S. 544), including $100 million for Jordan,
slightly higher than requested amounts for Central America/Caribbean rehabilitation
efforts, and about twice as much as proposed for farm relief aid ($308 million). The
Senate panel also added about $340 million to other Administration proposals,
primarily for the transfer of resources for domestic disaster relief programs from HUD
to the Federal Emergency Management Agency (FEMA) and for a $1 billion loan
guarantee program for the American steel industry.
Following three days of debate and consideration of more than 50 amendments,
the Senate passed S. 544 on March 23. During Senate consideration, several
amendments adding and rescinding funds were adopted, bringing the total amount of
new spending to $2.5 billion. The largest new funding amendments were those offered
by Senator Bond for an additional $150 million in aid for American hog farmers, a
proposal by Senator Bingaman of $125 million for oil and gas industry relief, and an
initiative by Senator Domenici to create a $500 million oil and gas guaranteed loan
program. The Senate further set aside by tabling three other controversial
!to require prior congressional approval for the United States to support
China’s membership in the World Trade Organization (Senator Hutchinson;
tabled 69-30)
!to end funding for any independent counsel in existence more than 42 months
after the termination of the independent counsel statute (Senator Torricelli;
tabled by voice vote)

!to waive federal recoupment of medicaid claims stemming from tobacco-
related state settlements if states agree to fund certain health programs
(Senator Specter; tabled 71-29) (see below for more on this issue).
The House Appropriations Committee, meeting on March 11, reported a similar
bill (H.R. 1141), adding small amounts to the Central America rehabilitation request,
providing $100 million for Jordan and $152 million for farm relief assistance, as
proposed by the President. The House Appropriations Committee reported its
measure on March 17 and the full House passed it on March 24 (220-211). The
House rejected several amendments, including two relating to the contentious offset
New spending programs initiated in the Senate for the steel and oil/gas
industries, the Senate provision permitting states to maintain full control over how to
spend money from the settlement of tobacco lawsuits, and the congressional proposed
cuts in existing resources to pay for the supplementals emerged as the most
controversial issues as the legislation went before a conference committee in mid-
May. S. 544, which offset all new supplemental budget authority and outlays, drew
much of the program reductions from domestic spending (about $1.3 billion). In
order to ensure the bill was budget neutral in terms of outlays, the Senate further
adopted an amendment by Senator Gramm that would rescind $2.25 billion of non-
defense emergency supplemental funds enacted in October 1998 (P.L. 105-277) for
such things as U.S. embassy security and counter-terrorism programs, Y2K problems,
and anti-narcotics programs. When Congress passed P.L. 105-277 last year,
lawmakers did not include offsets for these supplemental initiatives.
H.R. 1141, which offset in budget authority all but about $195 million in defense
funds used to provide emergency relief for Central America, cut mostly from foreign
policy programs — $845 million. Unlike the Senate bill, however, the House
measure did not provide enough rescissions to make the legislation budget-neutral in
terms of outlays — CBO estimated that the House-passed version of H.R. 1141
would cost about $800 million in outlays over the next 5 years. One of the largest
rescissions included in the House bill was callable capital appropriated by Congress
prior to 1980 to back U.S. contributions to multilateral development banks. Because
of this and other foreign policy cuts, some Administration officials said the President
should veto the House measure. Some House Members, on the other hand, opposed
the bill because it does not offset all new supplemental spending.
Efforts to convene a conference committee to work out House and Senate
differences stalled for weeks as controversy continued over higher spending in the
Senate measure and the composition of offsets in both bills. Following the submission
in April of another supplemental request for Kosovo military and humanitarian
operations, congressional leaders decided to hold preliminary debate on Kosovo
spending, and following House passage, to convene a conference meeting that would
combine the issues of H.R. 1141 and the Kosovo measure.
On May 13, House and Senate conferees reached agreement on a $15.1 billion
supplemental measure (H.R. 1141), legislation that passed Congress by May 20 and
was signed into law by the President on May 21 (P.L. 106-31). The enacted bill
provides funds roughly at the President’s request for Central America ($1 billion) and

Jordan ($100 million), but higher amounts ($574 million) for American farm relief.
H.R. 1141, as approved, nearly doubles the President’s Kosovo request — from
$6.15 billion to $12 billion — but trims $1 billion from the level passed by the House
in H.R. 1664 on May 6. All but $2 billion of the enacted supplemental is declared an
emergency. Conferees dropped most of the House and Senate-passed offsets over
which the White House had threatened a veto. The largest remaining rescission is
$1.25 billion from food stamp surpluses. Conferees also deleted Senate provisions
providing $1 billion-plus loan programs for U.S. steel and the oil and gas industries.
The conference agreement retains, however, a Senate amendment giving states
complete control over how to spend money derived from the settlement of lawsuits
against tobacco companies. The White House opposes this provision. Conferees
further added $900 million in domestic disaster relief funds to aid victims of the recent
tornados in the mid-West.
Tables 2 and 3, attached at the end of this report, summarize funding and offsets
proposed in the supplemental and compares congressional positions with the
President’s requests. Congressional action on major elements of the supplemental are
discussed below.
Central America/Caribbean Relief
S. 544, as passed the Senate, recommended slightly higher funding (+$12
million) than proposed by the President for Hurricanes Mitch and Georges
reconstruction aid and assistance to earthquake victims in Colombia. The Senate fully
funded the debt reduction and the Immigration and Naturalization requests, and made
small changes to the mix of funding for other elements of the rehabilitation initiative.
The House, in H.R. 1141, approved the same overall level as the Senate for Central
American/Caribbean relief aid, making slight modifications in the allocation of funds,
including the addition of $5.6 million for USDA to repair damage to the Caribbean
National Forest in Puerto Rico. In Committee, the Appropriations panel had defeated
an amendment by Representative Pelosi that would have added $25 million to forgive
all debt owed to the U.S. by Nicaragua and Honduras.
The enacted bill fully funds the President’s request for Central American relief,
plus adds about $44 million for defense disaster relief and training programs in the
region, and military construction repairs in Puerto Rico.
Wye Memorandum - Jordan Aid Package
Both the Senate and House supported the President’s request for $100 million
of additional and immediate economic and military assistance for Jordan but deferred
the $200 million advance appropriation proposal for funds beyond this year. The
House Appropriations Committee further said that it strongly supported the full
Jordan request and expected to favorably consider it as part of the FY2000 Foreign
Operations spending bill. As anticipated, the Senate and House also deferred
consideration of the remaining portions of the Wye Memorandum package for Israel
and the Palestinians. H.R. 1141, as enacted, adopts the approach approved in House
and Senate bills.

Farm Relief Aid
S. 544 went well beyond the President’s request for supplemental credits and
delivery of services to farmers and ranchers affected by continuing low commodity
prices. The Senate approved the President’s full recommendation for agriculture
credits ($152 million in loan subsidy), plus several new initiatives, including $100
million for repairs to waterways and watersheds caused by domestic natural disasters,
$30 million for farm land rehabilitation following storm damage, $150 million in relief
for hog farmers who have been hurt by continued low pork prices, and $70 million
the livestock industry. In total, S. 544 appropriated a total of $592 million for farm
assistance. H.R. 1141, as passed in the House, provided funding at levels
recommended by the President. The final agreement on H.R. 1141 provides $574
million in farm relief aid, roughly at amounts passed by the Senate.
Other Congressional Supplemental and Policy Initiatives
The Senate and House funded several of the President’s other smaller
supplemental proposals. In addition, S. 544 added $12.6 million for the U.S. Fish and
Wildlife Service’s storm damage repair efforts in the Pacific Northwest and Nevada
and provided $2 million for security enhancements at the Holocaust Museum. The
latter was deleted by in the conference agreement. An amendment by Senator
DeWine added $23 million for State Department counter-narcotics programs, a
provision included in the final bill. An initiative by Senator Bingaman provided for
$125 million in oil and gas industry relief, while a related amendment by Senator
Domenici would create a $500 million oil and gas guaranteed loan program. Neither
were adopted by conferees.
The House measure added $3 million for the U.S. Commission on International
Religious Freedom, also included in S. 544, and $5.6 million for a House page
dormitory and renovation of the O’Neill House Office Building. The final legislation
includes both of these initiatives.
The Senate bill also contained two new initiatives:
!S. 544 transferred from the Department of Housing and Urban Development
(HUD) to the Federal Emergency Management Agency (FEMA) $313.6
million that had been appropriated in previous supplementals. The funds
would be available for disaster relief, recovery, and mitigation assistance to
communities included in major disaster declarations issued by the President in
FY1998 and FY1999. The Committee noted in its report dissatisfaction with
HUD’s failure to distribute funds under the Disaster Recovery Initiative, a
view sparked mainly by the management of disaster funds after the Northeast
ice storms of 1998. The $313.6 million FEMA supplemental is offset by a8
rescission of $313.6 million from HUD’s Community Development Block
Grants. The Administration opposes this proposal, requesting instead to

For a description of the Initiative see: U.S. Dept. of Housing and Urban Development,8
“HUD Disaster Recovery Initiative,” Federal Register, v. 62, no. 173, Sept. 8, 1997, p.


consult with the Senate Appropriations Committee regarding its concerns with
HUD’s disaster relief program. Nevertheless, the enacted bill includes a $230
million transfer to FEMA.
!On the recommendation of Senator Byrd, S. 544 would create a $1 billion
Emergency Steel Loan Guarantee program to aid American steel companies
that have been adversely affected by a surge of foreign steel imports. Subsidy
appropriation costs for the loan guarantee activity would be $140 million.
Following strong House opposition to the steel loan program because of its
cost, conferees dropped the proposal. House and Senate leaders, however, say
they will permit future debate on legislation to establish such a guarantee loan
The Senate bill further raised as General Provisions several policy issues,
!Extension of the public comment period, due to expire on May 10, 1999, on
proposed amendments to surface mining regulations (Section 2002). There
is special concern, especially from the Western Governors Association, that the
Department of Interior will implement these revisions before the National
Academy of Sciences (NAS) issues its anticipated July 31, 1999, report on the
adequacy of existing state and federal regulations. Section 2002 would block
any implementation until at least 120 days after the NAS issues its report,
pushing back publication of new rules until at least December 1999. The
Administration opposes a delay in the rule-making process. Conferees adopted
the Senate position.
!Prohibition for the federal government to recoup any of the Medicaid funds
recovered by the states in the $206 billion tobacco settlement. The President's
FY2000 budget includes a 5-year projection of federal recoupment of
settlement funds, starting at $4.6 billion in FY2001 and increasing to $4.8
billion in FY2004. Since the lawsuits against tobacco companies were partially
based on tobacco-related Medicaid expenditures, some argue that some of the
settlement money should return to the federal government. At a minimum,
some contend, the states should be required to earmark a portion of the funds
for smoking abatement and child health programs. During floor debate, the
Senate tabled an amendment by Senator Specter (71-29) that would have
allowed the federal government to waive recoupment of medicaid claims if
states used a portion of the tobacco-related settlement funds for activities
intended to reduce the use of tobacco products, to improve public health, and9
to help tobacco farmers diversify their production. The Administration
opposes the Senate Committee provision but supports positions similar to
those expressed in the defeated Specter amendment. The final legislation
retains the Senate position.

For more information, see the CRS tobacco electronic briefing book at9

In addition, conferees added a new provision regarding the Federal Aviation
Administration's (FAA) program of grants-in-aid to airports. The Airport
Improvement Program (AIP), is currently authorized through May 30, 1999. House
and Senate leadership has indicated this leaves insufficient time to enact either of the
multi-year FAA reauthorization bills under consideration (H.R. 1000; S. 82).
Language added to the supplemental appropriations would extend the AIP's
authorization to August 6, 1999. If the authorization is not extended, the AIP could
go into abeyance. Projects underway could continue but no new projects could be
Congressional Offsets for Supplemental Appropriations
Representing the greatest departure from the President’s supplemental proposal,
the Senate and House recommended the rescission and other savings provisions that
would offset nearly all new budget authority, and in the case of the Senate, outlays as
well. The Senate measure cut $4.8 billion, mostly from domestic budgets, plus
proportional reductions in emergency and regular FY1999 non-defense budget
accounts. The House measure cut $1.12 billion from existing budget authority, three-
quarters of which was drawn from foreign policy programs. During House floor
debate on March 24, lawmakers rejected two amendments that would have, in one
case, deleted several of the foreign policy rescissions (amendment by Representative
Obey; 201-228) and in the other, rescinded additional funds in order to make H.R.

1141 fully offset in budget authority (amendment by Representative Tiahrt; 164-264).

The decision to offset the supplemental and the selection of specific program
reductions raised the strongest objections from the Administration, with
recommendations from some officials that the President should veto either measure.
The final conference agreement, however, appears to defuse the offset controversy.
Of the total amount of new appropriations ($14.9 billion), all but $2 billion is
designated as emergencies, not requiring cuts in existing funds. Nearly all of the
emergency appropriations are for Kosovo operations. Conferees deleted the most
controversial offsets: the Senate-passed across-the-board cuts in non-defense
emergency funds enacted last year, and the House-approved $648 million rescission
of World Bank and other MDB callable capital.
Instead, conferees increased a Senate-proposed $521 million rescission in the
food stamp program to $1.25 billion. In proposing this offset initially, the Senate
Appropriations Committee noted that according to revised requirements, not all food
stamp funds would be needed in FY1999 and would expire at the end of the fiscal
year. The Committee had recommended a $285 million rescission, but the level grew
during Senate debate in order to offset additional new spending for hog farmer relief,
State Department counter-narcotics programs, grants to low-income migrant and
seasonal farm workers, the Conservation Reserve Program, and the Rural
Communities Advancement Program. Based on the most recent estimates, it appears
that there will be at least a $1.4 billion, and perhaps as much as $2 billion surplus in
food stamps. Conferees also rescinded $350 million in HUD public and Indian10

For further information, see CRS Report 98-59, Food Stamps: Background and Funding.10

housing funds. Food stamps, the housing deferral, and the transfer of HUD funds to
FEMA make up nearly all rescissions included in the enacted legislation.
Among those rescissions dropped by conferees, but over which strong White
House opposition emerged, included:
!Immigration and Naturalization Service — $65 million rescission in S. 544 for
salaries and the citizenship and benefits program office. The reduction in INS
salaries could have effected efforts to hire additional border agents. The INS
is also facing an unprecedented two million pending case load of naturalization
!Contributions to International Organizations and Peacekeeping — $46 million
rescinded in S. 544, funding that, according to the Senate Appropriations
Committee, was in excess of approved or required levels. It is possible that
recent exchange rate gains coming from a stronger dollar could have reduced
the impact of this reduction for international organization contributions, but it
also might have resulted in adding to existing U.S. arrears to these
!Foreign aid to Haiti, Russia, and Bosnia — $30 million rescinded in S. 544 that
would be drawn from existing funds for Haiti, Russia, and Bosnia. H.R. 1141
rescinded $45 million for aid to Eastern Europe and the former Soviet Union.
!Foreign food aid loans — $30 million rescinded in H.R. 1141. The House
Appropriations Committee said that funds carried in from the previous year
would be sufficient to maintain the program at planned levels even with this
reduction. The Administration, however, had assumed a $50 million carry-in
for FY2000 in its budget request in order to keep the program operating at
current levels.
!Callable capital for the World Bank and other regional international financial
institutions — $648 million rescinded in H.R. 1141. Prior to 1980, Congress
appropriated both paid-in capital, funds the U.S. actually transferred to the
Banks, and callable capital, a “full faith and credit” commitment by the U.S.
government that could be provided in the event of a bank crisis. None of this
callable capital has ever been drawn upon, and since 1980, only paid-in capital
has been appropriated and “scored” as a budget item. The House Committee
contended that its action would not alter its support for the MDBs nor would
it have any significant impact on the financial strength of the banks. Treasury
Secretary Rubin, however, told the House Foreign Operations Subcommittee
on March 17 that several experts had advised him that the Committee’s action
could increase the borrowing costs of the banks and undermine MDB efforts
to stabilize Asian and Latin American economies in crisis. He further warned
of the precedent this rescission would set — about $12 billion in pre-1980
appropriated callable capital exists that some lawmakers might be inclined to
draw from in future spending bills that require offsets. He would recommend
a veto of the bill, he said, if the rescission remained in the bill. Moreover,
some Members pointed out that the callable capital appropriations had no

outlays associated with them, so that the rescission would not have resulted in
any real reduction in U.S. government expenditures.
!Russian plutonium and uranium disposal — $150 million rescinded in H.R.
1141. The Committee noted that U.S.-Russian agreements to set up programs
to dispose of the excess plutonium and uranium from nuclear weapons had yet
to be settled and that not all of the $525 million appropriated for FY1999 was
needed. Administration and other critics contended, however, that the
agreements are nearly in place, and that the House action sent a signal that the
United States was not committed to maintaining the security of the excess
nuclear material.
In addition, S. 544 proposed to rescind nearly $3 billion of the funds Congress
appropriated in last year’s Omnibus Appropriation Act (P.L. 105-277) for non-
defense emergency activities. This would have represented about a 44% reduction
for all emergency funding, other than DOD—Military, provided in Division B of the11
omnibus spending measure. The Senate Appropriations Committee had proposed
a rescission of $343 million, or about 5% of unobligated non-defense emergency
funds in P.L. 105-277, in the reported version of S. 544. During floor debate,
Senator Gramm pointed out that while S. 544 offset new budget authority
recommended in the bill, outlays for supplemental funds would be higher than outlays
rescinded in the bill — the overall effect of S. 544 would be to add about $441 million
in expenditures for FY1999. In order to ensure that new spending in S. 544 would
not reduce the projected surplus, Senator Gramm proposed and the Senate agreed to
rescind $2.25 billion in budget authority from emergency non-defense money in P.L.

105-277, an amount that would result in $441 million in fewer outlays for FY1999.

After adopting the Gramm amendment, the Senate also approved additional
supplementals for livestock industry relief and oil and gas industry aid, both of which
were offset by additional cuts from last year’s emergency supplemental. As passed,
S. 544 rescinded $2.968 billion in budget authority from the non-defense emergency
money in P.L. 105-277.
Cuts would be have been made on a proportional basis across all non-defense
accounts, which Congress approved on an emergency basis without offsets. Among
the major emergency initiatives funded in P.L. 105-277 that would have potentially
been affected by a proportional reduction included money for U.S. embassy security
and other counter-terrorism enhancements, Y2K conversion, counter-narcotics
programs, and domestic natural disaster assistance. The reduction in embassy security
funding was especially contentious. The Administration has proposed a follow-on,
$3 billion 5-year initiative that would begin in FY2001. But an expert panel
recommended in late 1998 that the State Department needs to spend $1.4 billion per
year for 10 years in order to provide adequate security to counter terrorist threats at

Congress approved about $5.9 billion for emergency agriculture relief programs in P.L.11
105-277, but because these amounts were enacted in Division A of the bill, where regular
FY1999 appropriations were placed, they would not be affected by this provision in S. 544.

U.S. facilities overseas. Some critics in Congress have called the Administration’s $3
billion initiative as inadequate and say they will press for more funding. 12
P.L. 106-31 (H.R. 1141)
Making Emergency Supplemental Appropriations for FY1999. Marked-up and
ordered reported by the House Appropriations Committee, March 11, 1999.
Introduced and reported (H.Rept. 106-64) on March 17. Passed the House March 24
(220-211). Passed the Senate on March 25, after inserting the Senate-passed text of
S. 544. House/Senate conferees reached agreement on May 13, after inserting
funding for Kosovo military and humanitarian operations that the House had passed
in H.R. 1664 on May 6 (H.Rept. 106-143). Conference report filed on May 14
(H.Rept. 106-143); agreed to in the House on May 18 (269-158); agreed to in the
Senate on May 20 (64-36). Signed by the President on May 21.
S. 544 (Stevens)
Emergency Supplemental Appropriations Act for Fiscal Year 1999. Introduced
and reported by the Committee on Appropriations, March 4, 1999 (S.Rept. 106-8).
Passed the Senate March 23. Senate passed H.R. 1141 on March 25, after inserting
the text of S. 544.

For example, on April 29, the House International Relations Committee reported H.R.12
1211, authorizing $1.58 billion for security and maintenance of U.S. missions, $1.1 billion
more than the State Department proposes for FY2000.

Table 2. Supplemental Appropriations, FY1999
($s in millions)
Request Senate House Conf.
Central America/Caribbean Aid:
Central America/Caribbean Recovery Fund$621.0$611.0$621.0$621.0
Debt Restructuring-Nicaragua & Honduras41.
USAID Disaster aid25.
DOD Disaster Relief 132.5132.5132.5133.6
DOD “New Horizons”
Justice/Immigration & Naturalization80.
Caribbean Natl Forest, Puerto Rico0.
Mil Con-Hurricane Georges Reconstruction0.
TOTAL, Central America/Caribbean955.5971.2967.5999.9
Jordan/Wye Memorandum Assistance300.0*100.0100.0100.0
Farm Relief Aid:
Migrant & Seasonal Farm worker grants0.
Farm Service Agency S&E42.842.842.842.8
Ag Credit Insurance Fund subsidy109.6109.6109.6109.6
Emergency Conservation Program0.
Livestock Indemnity Program0.
Livestock Industry Relief0.
Watershed & Flood Prevention0.0100.00.095.0
Conservation Reserve Program0.
{Conservation Reserve Program — FY2000}{35.0}
Rural Communities Advancement Program0.
Rural Housing Insurance Fund subsidy0.
Rural Housing Grants0.
Section 32 agriculture asst (pork sector aid)0.0150.00.0145.0
Agricultural Marketing Service0.
Total, Farm Relief152.4591.6152.4608.9
Kosovo Military & Humanitarian Operations (HR 1664):
Military personnel (SW Asia)16.5— 16.516.5
Kosovo Military Operations3,300.9—3,300.93,300.9
DOD Kosovo Refugee Operations335.0—335.0335.0
Readiness & Munitions Reserve850.0—1,311.81,100.0
Southwest Asia Military Operations257.8—257.8257.8
Munitions Procurement697.9—697.9697.9
Operational Rapid Response Account0.0—400.0300.0
Spare Parts0.0—1,339.21,124.9
Depot Maintenance0.0—927.3742.5
Recruiting 0.0 — 156.4 100.0
Readiness Training0.0—307.3200.2
Base Operations0.0—351.5182.4
FY2000 Pay & Retirement0.0—1,838.41,838.4
Coast Guard pay and O&M0.0——200.0
Military Construction0.0—1,071.0475.0

Request Senate House Conf.
State Dept. Diplomatic & Consular17.1—17.117.1
Security of U.S. Missions & Evacuations7.9—53.453.4
Migration & Refugee aid125.0—195.0266.0
Emergency Migration & Refugee Fund95.0—95.0165.0
Economic Support Fund--“front-line” states105.0—105.0105.0
East European aid170.0—75.0120.0
USAID Disaster aid71.0—163.0163.0
Food aid for refugees in the Balkans0.0— 0.0 149.2
Temp resettlement-Kosovar Albanians in US100.0**— 0.0 100.0
TOTAL, Kosovo6,149.1—13,014.512,010.2
Other Supplementals:
US Fish & Wildlife natural disaster repair0.
US Holocaust Museum security0.
Federal Emergency Management Agency0.0313.60.0230.0
FEMA tornado disaster relief372.00.00.0900.0
Steel Loan Guarantee Program0.0145.00.00.0
NOAH - Northeast Multispecies Fisheries5.
Supreme Court
Army National Guard Technician Pay0.
Special Trustee for American Indians21.86.821.821.8
Corporation of Public Broadcasting48.0*18.048.0*48.0*
Court of Veterans Appeal0.
Postal Service Fund29.00.0 29.029.0
US Commission on Intl Religious Freedom0.
Architect of the Capitol0.
HHS-Nursing Home Appeals0.
Corps of Engineers-Lake Tahoe0.
Interior-Headgate Rock Hydroelectric Project0.
Interior-Glacier Bay Natl Park fishing comp.
Counter-narcotics R&D — State Department0.
Natl Drug Control-High Intensity Trafficking0.
Oil and Gas Industry Relief0.0125.00.00.0
Oil and Gas Guaranteed Loan Program0.0127.50.00.0
Census funding0.
WTO meeting in Seattle0.
Election monitoring in East Timor (ESF)
BATF Natl Tracing Center0.
Education for the Disadvantaged (FY2000)*
NTSB-TWA Flight 800 investigation0.
Terrorism Commission0.
Chapter 11 — General Provisions0.
IFI Commission & IMF Committee0.
TOTAL, Other Supplementals477.1820.5108.31,455.2
GRAND TOTAL7,834.12,483.314,342.715,174.2
* Includes advance appropriations for FY2000/FY2001.
** Unofficial request from the Administration.

Table 3. Rescissions, Offsets, and Deferrals
($s in millions)
Request Senate House Conf.
Domestic Programs:
Food Stamp Program$0.0521.0$0.0$1,250.0
Dept. of Justice—IG Office0.
Dept. of Justice—INS, S&E0.
Dept. of Justice—INS, Citizenship & Benefits0.
Natl Oceanic & Atmospheric Administration0.
Interior Dept-Bureau of Land Mgmt.
Labor Dept-Unemployment Insurance5.717.421.022.4
HUD-Public and Indian Housing0.0350.00.0350.0
Education Dept-Research, Stats,&Improve.
HUD-Community Development Block Grant0.0313.60.0230.0
EPA-Climate Change Technology Initiative0.
Executive Office of the President10.
USDA - Counter-drug R & D0.
Drug Control Program-Special Forfeiture Fund0.
Farm Service Agency-Emergency Conservation Fd0.
Dept of Transportation, Payments to Air Carriers0.
Fed Hwy Admin-State Infrastructure Bank Prog0.
PL 480 Food aid0.
Federal Transit Administration0.
HHS, Fed Capital Loan Program for Nursing0.
Corps of Engineers-Scranton, PA0.
Bureau of Tobacco and Firearms0.
Total, Domestic22.51,330.386.01,914.1
Foreign Policy Programs:
Contribution-Intl Organization/Peacekeeping0.
Contribution-Global Environment Facility0.
Contribution (voluntary)-Intl. Orgs.
Contribution-Intl Peacekeeping (non-UN)
Multilateral Development Banks Callable Capital0.00.0648.00.0
USAID Development aid0.
Economic Support Fund0.
East Europe/Bosnia aid0.
Former Soviet/Russia aid0.
Foreign Military Financing18.
Export-Import Bank0.

Request Senate House Conf.
Trade and Development Agency0.
USIA Buying Power Maintenance0.
International Broadcasting0.
Total, Foreign Policy18.0144.0845.050.0
Defense Programs:
DOD, O&M Defense-Wide—fuel costs 0.0217.70.00.0
DOD—Intelligence 82.0 0.0 40.0 0.0
Mil Con/DOD Base Realignment & Closure0.
Russian Plutonium & Uranium Disposal0.00.0150.00.0
Total, Defense82.0232.2190.031.4
Non-defense emergency in P.L. 105-2770.02,968.00.00.0
Non-defense discretionary for FY19990.0100.00.00.0
TOTAL, Rescissions, Offsets, & Deferrals$122.5$4,774.5$1,121.0$1,995.5