Vol. 2 No. 20	October 1, 2001	About OMB Watch Search Our Site Email Lists Publications Connect with Lawmakers and the Media Type your zip code in the box below to locate your elected officials or follow this link: http://capwiz.com/ombwatch Write Congress
OMB WATCHER ONLINE

Comments from the Executive Director

Next to the computer monitor in my office is a button that reads "Information is the Currency of Democracy." I'm proud of that button. I'm proud of the fact that in the United States we place a premium on having an informed and educated public. I'm proud that our country was founded on a principle that there should be a free flow of information. And I'm proud that the federal government has encouraged use of the Internet to expand the public's right-to-know, which is this century's newest grand experiment in democracy.

I like to think OMB Watch has played a role in advancing public access to government information. In 1989, for example, OMB Watch helped to start RTK NET, an online service providing access to various government databases, but mostly those dealing with pollution. RTK NET has been praised by Presidents, by the Environmental Protection Agency (EPA), by community groups across the country, and by many others. We have received many "thank you" notes from families who found RTK NET an easy way to learn about dangers that are present in their communities.

So I was surprised in the wake of the September 11 terrorist attacks to receive hostile email about RTK NET. One individual wondered "how much blood will be on your hands for posting" information about environmental dangers. "You are truly proof that sincerity is no guarantee for truth, and that education is no guarantee for wisdom." Many of these comments are not fit to print. However, some are and we have posted one at the end of this newsletter. The person fears that someone will use the information on RTK NET to "create an explosion and chemical release."

These fears warrant careful consideration and thoughtful response. While "information is the currency of democracy," we certainly recognize the necessity to balance our right to access information with the nation's security and with the realization that some information may both create risks and provide needed facts to ensure public safety and security.

In an open society we run enormous risks. Any individual or group of individuals can cause great damage. We try to protect against such damage, but the potential remains. One way is to make ourselves as aware as we can of the risks and take steps to ameliorate them. An alternative is to limit the free flow of information, which is how totalitarian societies operate. While security may improve, the spirit of civil society is lost. We cannot let that happen here.

In the last ten days there has been an understandable, but we believe inappropriate, response to cut back on public access to government information.

We recognize the importance of this debate and believe that all parties are motivated by a hope to protect and serve all Americans. After careful review, we conclude:

• People deserve to know what dangers they are facing in their communities so that they can protect themselves. Thus, the right-to-know must prevail in an open society.
  
  
• Strong measures should be developed to protect plants that are using dangerous chemicals from attack. Such measures will require federal funds to study site security and implement changes; it will require mandating safer substitutes for dangerous chemicals where possible; it will also likely call for smaller volumes of chemicals located on-site; and it calls for sharing more information with workers and families who face potential dangers.
  
  
• An on-going analysis of the threats faced by our society is needed so that the public can develop a sober, clear-eyed view of the realities and policies that may be necessary to deal with these threats.

Prior to September 11, the chemical industry fought tooth and nail to undermine the public's right to know about the risks to which they are exposed by chemical plants. In the aftermath of September 11, they will renew their arguments about the danger of information being used for the purposes of terrorism. However, the central issue before September 11 and after, remains the same -- right-to-know is about improving the safety of communities and workers. It is shocking to learn that hundreds of lives are lost each year from chemical accidents, causing untold sorrow for families across the country. Yet our sense of outrage is muted, possibly because the disaster comes in small amounts from routine chemical accidents. We thank goodness that it is not our family that is affected and in a matter of days forget about the news story -- and the accident behind the story.

Yet, we know that the disclosure of chemical dangers helps save lives. When a chemical plant accident in Pennsylvania damaged a nearby child care center, the parents of the children were thankful that the accident occurred when the center was closed and their children were at home. But they were upset that they did not know that such an accident could put their children in jeopardy. Don't these parents have a right-to-know?

Similarly, the September 21 petrochemical plant explosion in Toulouse, France, that killed at least 25 people and injured more than 2,000, graphically demonstrates how the twin hazards of government laxity and public ignorance made an already dangerous situation worse. (There had been a previous ammonia explosion at the same plant in 1998.) Hiding information about the potential risks won't make them go away.

Paul Orum of the Working Group on Community Right to Know has done a great job in collecting reports about efforts at retrenching or eliminating the public's right-to-know about toxic pollution and health dangers. He has led an effort calling for safer chemical substitutes and for improved site security.

Examples of Recent Responses:

• EPA has removed from its web site Risk Management Plans (RMP) that are collected under the Clear Air Act. RMPs created an enormous controversy two years ago when the first round of data was to be posted to the Internet. One section of the RMP provided an Offsite Consequence Analysis (OCA) that required chemical companies to describe what could happen under worst case scenarios. Needless to say, chemical companies did not want to disclose that nearby families were living or working by a place that could seriously injure or kill them. With encouragement from the chemical manufacturers, the FBI noted that posting the OCA data on the Internet would increase the chances of a terrorist attack. Congress quickly followed suit with a law to prohibit government from posting the OCA data unless the President decided otherwise. Accordingly, EPA posted the RMP, minus the OCA, to its web site. With extremely narrow permissions, the law allowed the public to go to designated reading rooms where they could review a select number of the OCAs.
  
  Both the FBI and Congress have acknowledged that disclosure through the Internet of the remainder of the RMP information presented no unique increased threats of terrorism. This is why EPA's decision to remove the entire RMP is quite startling.
  
  
• Angela Logomasini of The Competitive Enterprise Institute published a piece in the Washington Times on September 27 providing a "wake-up call" to re-evaluate disclosure of RMP information. The article criticizes Greenpeace for collecting the OCA data from 50 plants in Louisiana and producing a report on potential dangers. Rick Hind, the legislative director for the Greenpeace Toxic Campaign responded with a letter that noted that "[the idea that] greater restriction of this information will somehow prevent terrorist attacks is hopelessly naive." He adds, "Any cursory reading of chemical engineering text books will show that facilities making and using large amount of chemicals such as chlorine have the potential for a catastrophic leak of poison gas." He continues by suggesting the "ultra hazardous" chemicals that have safer substitutes be phased out as recommended by the International Joint Commission in 1992.
  Following on the heels of the CEI article, the American Water Works Association is planning a lobby campaign to stop access to the OCA data through the reading rooms. And at least one treatment plant in the Washington, D.C. area will no longer provide access to its RMP, even without the OCA data.
  
  
• A lobby campaign was started by pipeline companies to remove legislative proposals that encourage community right-to-know, using the argument that such information would help terrorists. As anyone who has driven by pipelines knows, they are publicly marked with big signs. One environmentalist posted the following to an email list: "of what possible value to terrorists is public information about a pipeline company's pipeline integrity plans, past performance, spill data, testing results, etc.?" Referring to where he lives, he noted that "We... found that terror does not only come from abroad, and one way of reducing this type of terror [accidents] is by making company pipeline safety plans and performance more transparent to the public."
  
  
• The Office of Pipeline Safety within the Department of Transportation has posted a note to its web site saying that they "have discontinued providing open access to the National Pipeline Mapping System." Because of new security concerns about critical infrastructure systems, they will only provide pipeline data to pipeline operators, and federal, state and local government officials.
  
  
• The Agency for Toxic Substances and Disease Registry dropped from its web site a report that notes "security at chemical plants ranged from fair to very poor"and that "security around chemical transportation assets ranged from poor to non-existent." The report, Industrial Chemicals and Terrorism: Human Health Threat Analysis, Mitigation and Prevention, does not provide information about individual facilities.
  
  
• The U.S. Public Interest Research Group (PIRG) removed from its web page information from a recent report on the use of fertilizers in the states. The report listed the top 25 facilities storing extremely hazardous substances. PIRG says it removed the information from the web site after receiving a call from the fertilizer industry complaining that the report invited terrorists to attack those plants.

Amazingly, little has been done to address chemical plant security as was discussed in the last OMB Watcher. EPA did post a chemical safety advisory that "suggests that those who manufacture, distribute, transport or store hazardous chemicals should be especially vigilant regarding the physical security of those chemicals." We believe much more should be done to protect the public. The FBI, EPA, and the Departments of Energy and Transportation should be working on a coordinated plan to boost site security at chemical plants, nuclear facilities, water treatment plants, and other sites that present vulnerabilities. Congress should provide the resources to help companies and governments to implement such security measures, and require companies, when possible, to use an alternative to extremely hazardous chemicals.

Last week, on September 26, Reps. John Dingell (D-MI), Henry Waxman (D-CA), Sherrod Brown (D-OH ), and Diana DeGette (D-CO ) sent President Bush a letter asking him to free up $7 million from the September 11 emergency money just approved by Congress to assess the vulnerability of the nation's chemical facilities. The letter summarizes some of the findings from ATSDR's report on plant security.

We recognize that these are tough issues in tough times. We continue to wrestle with the balancing that must go on between security and the public's right-to-know. In that vein, we invite you to e-mail us with your thoughts.

Economic Stimulus Package

Members of Congress and the Administration are currently working on "economic stimulus" legislation -- a package of tax cuts and/or spending measures designed to pull the economy out of the decline that has become much more severe since the tragic events of September 11. The need for an economic stimulus -- measures that would likely be temporary (so as not to worsen the long-term budget picture) and would increase consumer confidence and spending-seems indisputable, although some members of both parties remain concerned with the fact that more spending will quite likely return the budget, at least temporarily, to a deficit. There is general agreement that the cost of the package should be at least $100 billion (including the approximately $50 billion emergency legislation directly addressing the attacks and providing assistance to the airline industry) that has been passed.

The timing and the specific legislation to be included are still up for grabs. On the one hand, there is a push for accelerating the phase-in of the tax cuts passed in June and adding new tax cuts, mostly targeted to corporations, like reductions in corporate tax rates, breaks for expense and depreciation accounting, or reducing the capital gains tax. On the other hand, there is support for measures that will:

• Address nationwide unemployment, caused by the economic slump and exacerbated by the September 11 attacks;
  
  
• Shore up the safety net by expanding eligibility for Food Stamps, WIC, LIHEAP, and health care benefits, freeing up more resources of low and middle income Americans to boost consumption;
  
  
• Assist low-income families by extending the full tax "rebate" to those who received no rebate or by lowering payroll taxes to increase consumption;
  
  
• Provide federal funds to hard-pressed states so that state and local services will not be cut;
  
  
• Improve the nation's infrastructure -- air travel, better rail service, rebuilding New York City, school construction, and the like.

Many economic experts have pointed out that spending will do more to rescue the economy than tax cuts, unless the tax cuts are particularly targeted to result in increased consumption. (It is more likely that low and middle-income families will spend resources on needs than wealthier families.) While increased federal spending is likely to put the budget back in deficit, many economists agree that the circumstances that we are currently experiencing make deficit spending a good idea and the wisest way to get the economy moving again.

With some Democrats wavering on the need for a stimulus package or wanting to delay it in the name of "fiscal responsibility," some Republican conservatives likewise concerned with reducing government spending, and other Republicans leaning towards corporate tax breaks, possibly permanent, as the stimulus solution, it is vital that others make their voices heard. For more information on proposed elements of an economic stimulus plans, as well as arguments against including capital gains or corporate rate tax cuts, see:

• The Economic Policy Institute's "Addressing the Nation's Needs: A Plan for Emergency Relief and Economic Stimulus," which sets forth a variety of proposals for a two-year economic stimulus plan.
  
  
• The Coalition on Human Needs has drafted a set of principles for an economic stimulus plan which should be on its website shortly
  
  
• The Center on Budget and Policy Priorities has also released an analysis showing why corporate tax rate cuts will not provide the necessary immediate benefits to the economy.

None of us wants to be seen as advancing our own interests in this difficult time -- whether we are arguing for aiding corporations through tax cuts or assisting people through increased federal spending. Nevertheless, the events on September 11 have either directly or indirectly affected the livelihood of thousands of Americans, like the thousands of low and moderate income people who provided services and were killed in the World Trade Center and Pentagon attacks; the hundreds of people who stocked airplanes with meals and staffed restaurants at Reagan National Airport, which remains closed; the thousands of people laid off from airlines, as well as people all over the country who are losing their jobs due to the slow-down in travel and tourism. This, added to the mix of an already shaky economy, makes it imperative that we find ways to help those who have been affected, whether directly or indirectly. If this can be done to provide a strong economic boost, it should be encouraged.

The full analysis is available on OMB Watch's Budget Update page.

CR Passed

Without any controversy, a continuing resolution (CR) was passed by Congress on September 25 and was signed by the President in order to keep the government running. Although the federal 2002 fiscal year begins today, October 1, 2001, none of the 13 appropriations bills has been signed into law. In fact, as of today, there has not even been a conference committee started on any appropriations bill, although 8 of the 13 appropriations bills have been readied for conference.

The continuing resolution, H.J. Res 65 passed within minutes in the House and Senate and is a "clean" bill. There are no riders or special provisions. Instead the CR keeps government operating at its FY 2001 levels until October 16. House and Senate leaders believe that all 13 bills can be wrapped up by then. Most observers believe, however, that it will take at least one other continuing resolution before the appropriations process is complete. RollCall reported on Thursday that Senate Appropriations Chair Robert Byrd (D-WV) believes that Congress can finish 9 appropriations bills by the time the CR runs out, leaving 4 more bills and the need for another CR before Congress could adjourn.

The optimism about completing action on all spending bills by October 16 is in sharp contrast to attitudes before the September 11 terrorist attacks. There had been considerable disagreement over particular provisions in a number of the spending bills, and it was expected that the Defense and Labor-HHS appropriations bills would likely be the last to be decided, partly because of a very limited pot of money. Disagreements still remain over the overall amount of discretionary spending for FY 2002, with a variety of numbers being floated throughout much of last week. Although no agreement has been formally announced, White House and Congressional negotiators have reportedly reached an agreement on a revised discretionary spending level for FY 2002. The new level is likely to be $25 billion more than the budget resolution set last May. This new $686 billion total will take into account the extra $18.4 billion in defense spending the President requested several months ago, as well as the additional $3.3 billion in education spending agreed to early this Summer and funding for disaster recovery efforts. The remaining issue in these negotiations is who will make the official request for the extra education and disaster recovery funds -- Congress or the President. Democrats, especially concerned about being perceived as those responsible for increased spending, are holding out for the White House.

Despite the bipartisan spirit post-September 11, it is not clear that anything has changed with regard to the budget crunch. In fact, it may be worse as some of the new spending that is likely to occur will likely be outside the "emergency" spending category.

One other sticking point in the effort to get the appropriations process wrapped up in the next 2 weeks is an Office of Management and Budget (OMB) memo issued the day before the attacks. As mentioned in the last Watcher, the memo asked that all executive departments and agencies, in preparing their budget proposals for FY 2003, look for ways to hold FY 2003 spending levels below those provided in the Administration's FY 2002 Budget. With the exception of the Department of Defense, all agencies and departments were encouraged to evaluate all programs to find those that are "less effective" or that fall into "lower priority areas" for a proposed reduction of 5 %. Agencies were supposed to submit these revised budget proposals by September 28. Usbudget.com has suggested that OMB will find a new use for these initial budget proposals in determining spending levels for FY 2002, if cuts in discretionary spending are needed.

More Revised Surplus Figures

It will probably come as no shock to anyone, but the Congressional Budget Office (CBO), in its September Monthly Budget Review, again revised down its FY 2001 surplus estimate. Noting that, "Several recent developments have substantially changed the budget outlook for fiscal year 2001," CBO is now estimating the total FY 2001 surplus to be $121 billion -- down from its August estimate of $153 billion.

CBO emphasizes that the drop in revenue from FY 2000 to FY 2001 is the first since 1983 and cites as primary sources the weakening economy and the tax bill, which cut revenue almost $35 billion in advance tax rebates and also moved back the date of payment of corporate income taxes from September to October 1 (the start of FY 2002). Ironically, changing the payment date for corporate income taxes was for the purpose of offsetting the cost of the tax cut bill in 2002, by lowering revenue in 2001. While attributing the decline in revenue collected in the month of September to a weakening economy that lowered the amount of payroll taxes and employer-paid withholding taxes, CBO also notes that the events of September 11 will still have an impact on revenue. Specifically, depending on the number of people who decide to utilize the Internal Revenue Service (IRS) extension on estimated tax payments -- the final revenue total for September could be "several billion dollars" more or "several billion dollars" less.

BNA reports that Office of Management and Budget (OMB) Director Mitch Daniels conveyed similar estimates to the top four Congressional budget committee members, Senate Budget Committee Chair Kent Conrad (D-ND) and Ranking Member Sen. Pete Dominici (R-NM) and House Budget Committee Chair Jim Nussle (R-IA) and Ranking Member John Spratt (D-SC). Daniels is currently estimating a FY 2001 surplus estimate in the "$120 - $130 billion range."

Unlike last month, when much energy was devoted to the small differences in the CBO and OMB mid-session surplus figures, the last half of September has given us a wholly unpredictable new set of budget circumstances. On top of the lower budget surplus for FY 2001 and estimates of lower surpluses for the coming year, we now also have: a $40 billion emergency spending package (with half counted as an expenditure for FY 2001 and half for FY 2002), a $15 billion emergency airline industry support package ($5 billion of the total was in the form of direct grants to the airlines, with the remaining $10 billion in loan guarantees, which will not count as a revenue loss), and the possibility of an economic stimulus package, estimated at $50 billion - $60 billion. BNA reports that members of Congress, CBO staff and OMB have all been trying to calculate just how much money (if any) will remain for FY 2002 -- estimates range from deficits of $8 billion to $75 billion (estimated by Rep. John Spratt (D-SC), to a more moderate $22 billion deficit (estimated by Sen. Conrad (D-ND). All estimates are based on an economic stimulus package ranging from $50 billion - $60 billion. Variations arise according to the size of the decrease in revenues arising from the economic downturn. One thing seems clear, as many commentators have pointed out, nothing is known for certain about the numbers involved in the coming fiscal year.

In the last few weeks, we've seen that the lockbox really could be -- and needed to be -- unlocked in the face of important national priorities. However, some members of Congress and OMB Director Daniels are maintaining their fiscal conservatism, even as so many economists point out the necessity and economic utility of increasing federal spending -- even if there are temporary budget deficits. True "fiscal responsibility" may involve increasing federal spending and running a deficit for a few years in order to stimulate the economy and provide for unanticipated needs. For more on the many needs and benefits of such spending on an economic stimulus package, see this related article.

Schregardus Withdraws Nomination to Head EPA Enforcement

Facing strong opposition and mounting criticism, Donald Schregardus withdrew his nomination on September 17 to head EPA's Office of Enforcement and Compliance Assistance.

The decision followed an announcement by Sen. James Jeffords (I-VT) -- chair of the Environment and Public Works Committee, which has jurisdiction over the nomination -- that a new investigation was needed into Schregardus' record as director of the Ohio EPA (from 1991-1999) before he could be confirmed.

Under Schregardus, the state of Ohio had one of the worst environmental records on the books, prompting a number of environmental groups to ask the Environmental Protection Agency (EPA) to revoke Ohio's authority to enforce federal environmental laws and install federal enforcers instead.

In response to this request, EPA reviewed Ohio's environmental programs and released a draft report on September 4 that raised additional concerns about Schregardus' ability to lead EPA's enforcement efforts. The report confirmed that the Ohio EPA is in danger of losing its authority to run Clean Air Act programs.

This caught the attention of Jeffords, who had originally backed Schregardus, allowing the nomination to be voted out of committee. With Jeffords turning against him and broad opposition among Democrats, Schregardus realized his nomination was likely sunk.

Graham Signals Activist Agenda for Regulatory Review

John Graham, who was confirmed as head of the Office of Management and Budget's (OMB) Office of Information and Regulatory Affairs (OIRA) amid a firestorm of protest, is beginning to use the immense power of his office -- which must give clearance to all agency rules and paperwork -- to shape policies and procedures across government, signaling a return to OIRA's activist past.

This past week, Graham put agencies on notice with a memo outlining his priorities at OIRA. On the surface, the memo may seem rather benign -- not much more than a restatement of OIRA's current responsibilities. But in a number of ways, it signals a new aggressiveness, which may not bode well for health, safety, and environmental protections.

In particular, Graham signals that he will exercise increased oversight over agency cost-benefit analysis, risk assessment, and other various executive orders, including those requiring assessments of effects on our energy supply and federalism. OIRA has always exercised authority in these areas, but with varying degrees of diligence (and in the Clinton administration, at least, provided the agencies a degree of deference). For instance, the federalism executive order, which has its roots in the Reagan administration, served more as a general statement of policy and has never been enforced by OIRA. Graham, however, makes clear that his OIRA will be more demanding of agencies than ever before (at least in this respect). "As OMB Director Daniels has pledged to Congress," he says in the memo, "rulemaking proposals that were not subjected to adequate State and local consultation will be returned to agencies for reconsideration." Interestingly, Graham's memo makes no mention of enforcing an executive order, signed by President Clinton, requiring that agencies give special attention to children's health. The memo is clear that emphasis should be on burdens to regulated industry.

For more on this, please see OMB Watch's Regulatory Issues page.

OMB Issues Data Quality Guidelines

As the federal government has become better at disseminating information through the Internet, industry groups have looked for new ways to clamp down on data that might prove embarrassing. This has occurred on a number of different fronts, as elaborated here. In all of these cases, industry has shied away from taking on dissemination directly, which would likely be a losing debate, and instead has picked a number of red herrings that threaten the public's right-to-know.

In this context, the Office of Management and Budget (OMB), on September 27, issued new guidelines on information quality, meant to ensure the "quality, objectivity, utility, and integrity of information," as mandated in section 551(a) of the FY 2001 omnibus appropriations act.

To be sure, data quality is a real and important issue; OMB Watch, in fact, provided a list of recommendations to EPA on how to improve data quality. But, as industry clearly realizes, data quality can also be exploited to block the free flow of information. Indeed, industry lobbyists have urged that information be subjected to rigorous scrutiny before it is disseminated to the public, some even arguing for procedural mechanisms for dissemination that now apply only to regulatory decisions.

Agencies should certainly strive for quality. Yet under industry's formulation, data quality and dissemination to the public are put at odds. In fact, the two should go hand in hand. EPA's Toxic Release Inventory (TRI) data provides an important lesson on this point. Online public access to the data has demonstrated that the quality of the data -- interpreted as reliable estimates of toxic releases and completeness of the form -- greatly improved as public access increased. In other words, as Supreme Court Justice Louis Brandeis memorably noted, "Sunlight is the best disinfectant."

Unfortunately, OMB's guidelines do not quite grasp this. On the surface, they are somewhat ambiguous, and certainly could have been worse. Yet there is still the potential for serious abuse. For instance, OMB instructs that "agencies should develop a process for reviewing and documenting for users the quality (including the objectivity, utility, and integrity) of information before it is disseminated" (emphasis added). Depending on how this is carried out by agencies -- which now must develop their own guidelines on information quality, also directed by the appropriations rider -- this could become a significant barrier to public access.

Fortunately, this requirement will only apply to information that agencies disseminate on or after October 1, 2001 -- a change to the proposed OMB guidelines recommended by OMB Watch's comments. But significant issues need to be resolved.

In formulating their own guidelines -- which must be subjected to a public comment period (also a change from the proposed guidelines) -- agencies should take note of OMB's instruction in the supplementary information: "It is important that these guidelines do not impose unnecessary administrative burdens that would inhibit agencies from continuing to take advantage of the Internet and other technologies to disseminate information that can be of great benefit and value to the public." Along these lines, data publication should not be delayed or retracted every time someone who is opposed to the potential commercial impact (including possible regulatory action) decides to attack it. There should be a burden of proof on the challenger -- who should also be required to disclose any conflicts of interest -- to show that there is serious scientific merit to the challenge before action is taken.

OMB Watch will be providing further analysis of the OMB data quality guidelines. Check the OMB Watch website for updates.

House Bills Would Allow Religious Congregations To Use Funds For Partisan Politics

Just before news of the tragic events of September 11 reached Capitol Hill, House Majority Whip Tom DeLay (R-TX) and Rep. Walter Jones (R-NC) held a news conference to promote H.R. 2357, the Houses of Worship Political Speech Protection Act. It would allow religious congregations to support or oppose candidates for office without losing their tax exemption or ability to receive deductible contributions, as long as election related efforts do not amount to a substantial portion of their overall activities. The bill would not extend this expansion of advocacy rights to non-religious 501(c)(3) organizations. It has 56 co-sponsors.

Ten days later Delay, Majority Leader Richard Armey (R-TX) and Rep. Phil Crane (R-IL) introduced a similar bill, H.R. 2931, which would allow congregations to spend up to 5% of their funds on partisan electioneering, and up to 20% of their funds on legislative lobbying. Called the "Bright-Line Act of 2001" the bill does not define what constitutes partisan electioneering and current Internal Revenue Service (IRS) rules are not clearly delineated. This could lead to significant spending on "issue advocacy" that does not mention candidates and may not be counted toward the 5% ceiling. This bill would also apply to 501(c)(3) affiliates of congregations, but not to other types of charities.

These bills represent growing Republican interest in expanding the role of religious organizations in the election process. After H.R. 2357 was introduced in June, Jones spoke on "Jay Sekulow Live," a radio program sponsored by the chief attorney for Pat Robertson's American Center for Law and Justice (ACLJ). Jones told the audience that he hoped hearings on the bill would be held in September, and that the law is needed to allow preachers to "speak their mind and heart" from the pulpit. Obviously, in light of the September 11 events, no hearing occurred.

In January, Jones introduced H.R. 355, the Nonprofit Political Speech Protection Act, co-sponsored by Rep. John Hostettler (R-IN), which would allow all 501(c)(3) organizations to participate in partisan politics as an insubstantial part of their activities. The bill proposed amending Section 501(h), which contains an expenditure test for measuring legislative lobbying by 501(c)(3)s, to apply a similar test to measure an organization's partisan electioneering activities. However, the bill did not move, and in June Jones introduced the bill limiting the extension to religious organizations. The new bill does not contain the language extending the expenditure test to partisan electioneering.

Bush May Split Faith Initiative, Push Incentives To Donate

Administration officials are discussing how to proceed with the President's Faith-Based and Community Initiative now that the national agenda has been refocused following the September 11 terrorist attacks. Legislation (H.R. 7) containing both tax incentives to increase giving and broad extension of "charitable choice" passed the House this summer, but it has not moved in the Senate because of constitutional problems with the charitable choice provisions. Last week the Washington Post quoted Bush aides who said they are considering "holding off on the charitable choice provisions and working on that later," and moving forward with the tax incentives. There was also indication that more support for the AmeriCorps program could be included in a tax incentive package.

The giving incentives in H.R. 7 include a limited deduction for donations by nonitemizers, a provision allowing tax-free contributions from IRA rollovers, deductions for donations of food inventory and creation of Individual Development Accounts. More substantial incentives are contained in a bill introduced earlier this year by Sens. Rick Santorum (R-PA) and Joe Lieberman (D-CT). This bill does not include the controversial charitable choice provisions. On September 10, Sen. Orrin Hatch (R-UT) introduced S. 1415, which would allow deductions for donations of book inventory for educational purposes.

The outpouring of giving following the September 11 attacks has been impressive, but there is concern that ongoing work of charities will suffer from reduced giving in the long run. Passage of strong tax incentives, including a much larger nonitemizer deduction than passed by the House in H.R. 7, would be a plus for the nation. However, the administration should hold back on charitable choice, which will only stir intense controversy about the role of religious organizations in government programs.

Movement on a broader nonitemizer deduction remains difficult because of the cost involved. OMB Watch opposed the version passed by the House, which in its maximum (in 2009) provides a $100 deduction ($200 for couples), yielding a tax break of $15 for non-itemizing taxpayers -- well below the current average giving by nonitemizers. In light of the economic downturn accelerated by the September 11 events, OMB Watch thinks it wise for the nonprofit sector to weigh the benefits of a larger nonitemizer deduction versus support of spending initiatives that may help the nonprofit sector and the economy.

FEC Announces Rulemaking On Use of Internet in Campaigns

At its September 27 meeting, the Federal Election Commission (FEC) approved a Notice of Proposed Rulemaking (NPRM) seeking public comment on three proposed regulations relating to use of the Internet in political campaigns. Comments will be due 60 days from the date of publication in the Federal Register.

The notice is the result of the FEC's 1999 Notice of Inquiry on a wide range of issues relating to Internet-based election activity by individuals, corporations and labor organizations. More than 1,300 comments were received, and a public hearing was held. The NPRM summarizes the comments, and the proposed rules reflect the majority views by being limited in scope and permissive in their approach.

The three proposed regulations address activity by individual volunteers, hyperlinks and posting of candidate endorsements on websites. Proposed new rule 11 CFR 117.1 would exempt volunteer use of home computer equipment and Internet access for election activity from the definition of "contribution" or "expenditure," making them unregulated by the FEC. This would apply whether or not the activity is coordinated with a candidate, party or campaign. The exception would not apply to the equipment or Internet access of a volunteer's employer, unless the use is "occasional, isolated or incidental" and the volunteer reimbursed the employer for any increased overhead expenses.

The second regulation, proposed 11 CFR 117.2, exempts web hyper-links to candidate or party committee websites posted on sites of corporations or labor organizations from the definition of regulated "contributions" or "expenditures" if there is no charge for the link (or the charge is a nominal amount), the link does not contain language urging support or opposition to the candidate and is not a "coordinated general public communication" under Section 110.23 of the FEC's rules.

The third proposed rule, proposed 11 CFR 117.3, would allow corporations and labor unions to post press releases of candidate endorsements on the public section of their websites if it is posted in the same manner as other releases and the statement is limited to an announcement of the endorsement and the reasons for it.

The complete text of the NPRM can be found online. Comments should be sent to:
Rosemary C. Smith, Assistant General Counsel or
Paul Sanford, Staff Attorney
999 E Street NW
Washington, D.C. 20463 or
e mail to internetnprm@fec.gov or
fax to 202/219-3923, followed by printed copy in the mail.

Lobby Disclosure Reports Now Online

Federal lobbying disclosure records collected by Congress under the Lobbying Disclosure Act (LDA) are now available online. The LDA, passed in 1995, requires an electronic disclosure of lobbying records, but did not set a deadline for this requirement. The Senate Office of Public Records has been working for several years to get the site online.

LDA records are searchable by registrant name, client name, lobbyist name, amount reported and date the record was posted. Reports from 1999 onwards are currently available, and records from 1998 are supposed to be online within a few weeks. While the records are searchable by the above parameters, users are given a graphical image of the paper report. This means that searches by anything other than these five items are not possible, leaving out useful searches such as type of issues being lobbied or for lobbyists spending above a certain amount. Moreover, the data cannot be aggregated to find out how much an industry is spending on an issue, for example.

Several bills to expand disclosure are pending. Senate Resolution 21 would require internet access to some Congressional Research Service publications, Senate lobbying and gift report filings, and some committee documents. House Resolution 48 directs the House Clerk to post all House LDA reports on the House of Representatives website. S. 645 would require individuals who lobby the President on issues pertaining to pardons to register under the LDA, as well as require the President to report "gifts, pledges, or commitments of a gift to a trust fund established for purposes of establishing a Presidential library."

Anti-Terrorism Legislation Hearings

Last week, several different Congressional Committees (House Judiciary, Senate Judiciary, and Senate Select Intelligence) held hearings on the Department of Justice (DOJ) anti-terrorism proposal. The proposal, which runs to over 40 pages and contains a large number of provisions, would have profound impacts on the civil liberties of people living in America. After the rush to passage of an amendment on wiretapping to the appropriations bill for DOJ in the immediate aftermath of the September 11 attacks, there was great apprehension that the DOJ proposal would also sail through with no public hearings and no debate. However, the Committees were persuaded to deal with this proposed legislation in a more deliberate manner. The House Judiciary Committee postponed its mark-up of the bill, which had been scheduled for September 25. Sen. Patrick Leahy (D-VT), the Chairman of the Senate Judiciary Committee, offered his own set of proposals, and said his Committee could take weeks. The Senate Select Intelligence Committee was unique in holding a hearing that involved witnesses from non-governmental organizations, including the Center for National Security Studies and the Center for Democracy and Technology. In the cases of the Judiciary Committees, only Attorney General Ashcroft was invited to testify.

Leahy has drafted legislative proposals to "improve law enforcement tools in the fight against terrorism." In his opening statement at the hearing, he noted the need to "maintain a proper balance between the desires of law enforcement and the need to maintain fidelity to our constitutional rights and way of life. We cannot allow terrorism to prevail by curtailing our constitutional democracy or constricting our freedoms." Sen. Bob Graham (D-FL), Chair of the Senate Select Committee on Intelligence, introduced legislation (S.1448) on September 21 "to enhance intelligence in the prevention of terrorism." A caution similar to that of Leahy's was voiced by Graham in his statement, "I also want to make it clear that I am mindful of the concerns we are beginning to hear from various organizations that we might overreact and impinge upon the civil liberties of our people. We would hand the ultimate victory to terrorists if we were to allow them to coerce our great Nation into compromising our highest values, personal freedom, and civil rights."

On the House side, Rep. Bob Barr (R-GA) urged fellow members of the House Judiciary Committee not to "blindly expand law enforcement's investigative authority, or the government's prosecutorial authority." Congress should first conduct a thorough examination of why current authority is inadequate. Rep. John Conyers (D-MI) also called for caution, warning that "If we quickly cast aside our constitutional form of government, then the enemy will not be the terrorists, it will be us."

The Ashcroft proposal was supported by Sens. Orrin Hatch (R-UT) and Strom Thurmond (R-SC). According to press reports, the Democratic Leadership Council supports Ashcroft and his contention that the changes proposed in the bill (especially in regard to wiretapping and electronic surveillance) are needed to bring law enforcement capability in line with technology.

In Defense of Freedom

As reported in the last Watcher, there has been great concern that in the process of rushing to respond to the terrorist attacks of September 11, a vast collection of civil liberties may be sacrificed. As of September 20, 2001, more than 150 organizations, 300 law professors, and 40 computer scientists expressed support for the declaration below to address these concerns. The current list of signers is now available online. Some number of individuals also have signed on, but those names are not, at this time, being displayed on the public web site. This decision is under discussion by the organizers of the coalition.

A press conference was held at the National Press Club on September 20 to release the Statement In Defense of Freedom. Speakers included Anthony Romero (American Civil Liberties Union) and Grover Norquist (Americans for Tax Reform).

The full text of the statement, with a list of all signers, is available online at indefenseoffreedom.org.

City E-Gov Evaluations

San Diego, San Jose, and Seattle are among the best city "e-government" websites in the U.S., according to the August 2001 Civic Resources Group report and Brown University's Taubman Center September 2001 report. The three cities took top spots on both lists.

The Civic Resource Group (CRG) study examined 70 variables among 224 sites for cities with populations of over 100,000 people. While 97% of sites listed information about elected officials and 92% provided listings of departments, only 64% of sites provided e-mail addresses for executives (such as mayors and city managers). Online participation mechanisms were limited to 11% of sites, and only 5% provided online forms for citizens to provide feedback or complaints.

The Brown University study -- directed by Prof. Darrell West, author of two previous federal and state e-government comparison studies -- examined over 1500 websites in 70 major metropolitan areas, including those of "one-stop" portals, mayor and city managers, city councils, and a range of agencies, including public safety, transportation, health and human services, and economic development. Websites were evaluated with respect to 28 features, including the level of public accessibility to information, type of content available, range of services offered, and privacy and security.

Details of the two studies are available on OMB Watch's Information Policy page.

Domain Name Dispute Resolution

The nonprofit domain name legal battles outlined in the previous installment of NPTalk would seem to suggest a common theme: the holders of trademarked names tend to get the benefit of the doubt in disputes with domain name registrants. This is generally because of the consideration paid to the public's association of a trademark name with its holder. But it is also because entities holding trademarks are presumed to actually have used them to deliver goods and services (or demonstrated the intent to do so). For more, see this week's NPTalk.

OMB Watch Upgrades Its Online Options

OMB Watch is currently upgrading its online capacity over the next few months to help increase the range of advocacy resources available to individuals and organizations. The first of these features is an expanded version of our Activist Central service, supported by Capitol Advantage's CapWiz tools. Through Activist Central, users can communicate with state and federal lawmakers, federal agencies, and national and local media -- located by state or specific zip code. To access this service, enter your zip code in the box below or visit: http://capwiz.com/ombwatch.

Reader Responses

RE: DOJ Must Complete Its Chemical Plant Site Security Study

You may not know this but one of the most dangerous chemicals of concern to the hazmat team in Baltimore when the train caught fire in the tunnel earlier this year was hydrofluorosilicic acid. (Baltimore Sun, July 19, 2001). This is the water treatment chemical used to fluoridate drinking water. It liberates hydrogen fluoride and silicon tetrafluoride when exposed to air. One particularly nasty spill occurred in Florida, a few years back (~1994), which sent 50 people to the hospital and forced an evacuation of 500 homes.

There have also been a number of cases of pump failures in water treatment plants leading to lethal levels of hydroflurosilicic acid entering drinking water systems. (Hooper Bay, Alaska, was one of them). Bottom line: you have a built in source of toxins for terrorists right in most water treatment plants.

Dr. Bob Carton
Former President of EPA Professionals Union

* * * * * * *

I very much appreciate the range of topics covered in the latest OMBWatcher. Beyond information infrastructure & dangerous chemical plants, another area of concern re future vulnerability would be dangerous energy facitilities, such as liquified natural gas (LNG) tanks (or tankers) near cities, and commercial-scale nuclear power reactors (again, especially if located near cities). Your OMBWatcher perhaps alludes to this when it mentions "utilitiy plants" along with dangerous chemical facilities, but then doesn't elaborate on the former.

As I wrote in an article some 10 years ago: "Certain industrial facilities, such as nuclear power plants and hydroelectric dams, have been the target of terrorist threats and even actual assaults. In 1980, armed men, besieging the embassy of the Dominican Republic in Bogota, Columbia, attempted to ward off U.S. intervention by issuing a communiqué that read: 'You must remember, U.S. gentlemen, that you have never experienced war in your vitals, and that you have many nuclear reactors.' Sabotage of an operating nuclear power plant could cause a disaster of Chernobyl-like (or worse) proportions, and prompt a government to reduce civil liberties and rights, while the responsible subversive group is sought out."

Thanks for OMBWatch's important work.

--Richard Sclove
Richard@Sclove.org

Dr. Sclove recently retired from the Loka Institute, which he founded in 1987. He is the author of Democracy and Technology (Guilford Press).

RE: Right-to-Know

[Ed. Note: OMB Watch operates RTK NET, which provides environmental data.]

I agree that people should have the right to know, but when someone uses the information contained on your site to create an explosion and chemical release, will I have the right to know the address of the person who posted it on your site? I might want to send that person a photo showing the damage they helped create.

Just asking.
Mike Albrecht
Cincinnati, Ohio

RE: White House Denies Relaxed Oversight of Nursing Homes

I would question the introduction of The Medicare Education and Regulatory Act -- S. 452 in the Senate and H.R. 868 in the House. The Act would allow health care providers: (1) to mount blanket challenges to federal regulations they didn't like, and (2) to delay correction of serious violations until they had completed time-consuming appeals. I think we should hear the Administration's position on this Act which would shed more light on the veracity of their denial.

Sincerely,
Francine Fineman
Director, Helen L. Weiss Adult Day Health Center

First Things First

Rep. Jan Schakowsky (D-IL) is planning to introduce legislation on Tuesday, October 2, that would reinstate the top 39.6% marginal tax rate, freeze the 30.5% and 35.5% tax rates, and freeze changes in the estate tax with the exception of increasing the exemption level for small family farms and businesses UNTIL the following needs -- first things first -- are addressed, including adequately responding to needs created by the September 11 attacks; extending the solvency of Social Security and Medicare; providing a comprehensive Medicare prescription drug plan; funding school modernization and hiring 100,000 new teachers; and significantly reducing the number of people with worst case housing needs.

Trust in Government Up

A new Washington Post poll indicates that the public's faith in government's ability to make the right decisions is at a 35-year high. The poll of 1,215 people, conducted last week, shows that 64% of those surveyed trust the Federal government to do the right thing "just about always" or "most of the time." This is more than twice as many people who felt this way in April of last year, when a similar survey was conducted. One respondent commented, "People see that the government is one of the only avenues we have to get some things done."
For more on the results, see the Washington Post report

Poverty Drops in 2000 -- Unemployment up to 4.9%

New figures released by the Census Bureau on September 25 for the year 2000 show that poverty dropped to 1979 levels. The unemployment level (4%) was the lowest in 31 years. An analysis by the Center on Budget and Policy Priorities details some of the highlights of the report. While this is great news for human needs advocates, it must be tempered with the fact that the unemployment rate was up to 4.9% in August of 2001, and is anticipated to rise, especially given ramifications on employment stemming from the September 11 attacks. Further, the economic downswing shows no signs of abating, and it seems altogether too likely that poverty rates will also be increasing.

Recession on the Way?

18 of 21 economists surveyed by the National Association for Business Economics on Sept. 21 said the terrorist attacks have tipped the economy into a recession. Only four thought the economy would have been in recession if there had been no attacks.
A Conference Board survey conducted Sept. 18-19 of 750 households found that 47% of consumers believe the Sept. 11 attacks will send the economy into recession. A large majority of households (89%), however, say they will not cut back on their buying plans.

CBPP Non-defense Spending Analysis

The Center on Budget and Policy Priorities (CBPP) has released its most recently-updated analysis comparing the amounts of new funding for defense and non-defense programs. This report argues that when the budgets of both the President and Congress are adjusted for population growth and inflation, FY 2002 non-defense funding levels decrease by 0.9% from their FY 2001 levels. While acknowledging that education, health research and training, and international affairs do receive real increases, it suggests that the remaining non-defense programs could receive cuts of up to 3.6%. Finally, in the course of explaining the need for increases in non-defense spending, the report puts into the context the often-cited "explosion" in spending by showing that, as a percentage of GDP, spending has actually dropped over the last 30 years.

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