Washington's Labyrinthine Ways By Otto J. Hetzel Clinton Exercises His First Veto. President Clinton vetoed the congressional rescission of some $16 billion in federal funds already appropriated for 1995, that would have resulted in cuts more than eight months into the fiscal year. Clinton cited in justifying his action, cuts in education and training programs, $150 million in assisted housing funds, $30 million for housing for persons with AIDS, and his refusal to approve attempts by Republicans to fund certain "pork projects," such as local transportation and courthouse construction. Having tasted blood, will he find it easier to veto other Republican-sponsored measures coming to him shortly for approval? It seems doubtful that his action will ultimately save the considerable funding for local governments that the bill would have rescinded, although HUD in the interim continues to obligate funds under its programs. Republican leaders have indicated they will restore the $750 million in cuts to which Clinton objected and eliminate the identified "pork." The main problem will be whether severe divisions among GOP legislators on how to respond will be resolved. More than a short delay seems unlikely. Thus, $5 billion in 1995 funds for assisted housing are likely to be lost. Over $1.5 billion in previously obligated amounts provided to public housing authorities in annual contributions contracts are also probably going to be subject to rescission. Rescissions in the last four months of the fiscal year seem inherently unfair, anyway. If such a rescission actually occurs, it would raise potential constitutional issues over whether Congress has power to withdraw 1995 funds now already under contract to local authorities. The bill would also defer, not permanently rescind, some $400 million in low-income housing preservation funds until the next fiscal year starting October 1, allowing more time to decide how or even if to continue the program that attempts to preserve the existing stock and low-income use of units, preventing conversion to market-rate rental dwellings. The one bright spot was for Community Development Block Grant funds; the House- proposed cut of $349 million was not included in the conference bill, perhaps because the program is already a "block grant" like those which Republicans have proposed for many current federal programs. Whether CDBG funds will survive actions based on budget resolutions enacted by each house that are to be worked out in conference, is not so sure, given the cut of 50 percent proposed in federal housing outlays, and specifically in CDBG funds. Over the next five years, the Senate Budget Committee would cut HUD funds by $13.3 billion, while the House is only slightly less drastic; its committee proposed a $9.08 billion reduction. Efforts Underway to Centralize Republican Party Power in the Senate. Not to be undone by House actions resulting in centralizing power in the Speaker, Senate Republicans are moving toward increasing the Majority Leader's powers, curbing seniority, and imposing term limits for committee chairs, in recommendations being considered by the Senate Republican Conference. The Conference would determine official party policy positions on issues and loyalty to them would be established as a norm. Power would be spread to more senators (particularly those more recently elected who are less moderate than those with seniority) by restricting chairs to one six-year term. Aimed at disciplining chairs, such as Mark Hatfield who refused to support the balanced budget amendment, seniority would be undercut by authorizing the Senate Republican leader, now Majority Leader Dole, to nominate committee chairs, subject to approval by the Conference. Whether these proposals will be adopted in total will depend upon the inter-generational fight going on between Republicans in the Senate. Key Senators Oppose HUD's Proposed Conversion of Public Housing to Tenant-Based Subsidies. Senators Chris Bond of Missouri, the Appropriations Committee chair, and Barbara Mikulski of Maryland, the ranking minority member, have indicated their opposition to a key provision of Secretary Cisneros' Reinvention Blueprint. They have rejected removing financial support from housing authorities to transfer funds to provide voucher subsidies directly to tenants. In general, Cisneros seems to be gaining converts on the Hill to reforming not abolishing HUD. However, the Budget Resolutions being considered call for elimination of many HUD programs. Cisneros' proposals, moreover, would ultimately drop HUD staffing to about 7,500, from the current 11,400 level, already down more than 2,000 from two years ago. Monitoring federal dollars will be increasingly more difficult, thereby making HUD an easier target for extinction before the year 2000, especially given the proposed reduction in its programs. Receiverships and HUD Takeovers of Major Public Housing Programs. Soon after a HUD-engineered agreement by Mayor Barry in Washington, D.C., to relinquish control of the city's public housing to a court-appointed receiver, HUD has announced it has obtained Mayor Daley's agreement for a HUD takeover of Chicago's embattled public housing authority. A five-member executive committee will oversee operations, including HUD Assistant Secretary Joe Shuldiner, a representative of the mayor, a resident leader, and a business and civic leader, to be selected by HUD and the mayor. Days later, an agreement was reached with Detroit's mayor to establish a similar executive committee to oversee its low-rent housing program. A few weeks earlier, HUD persuaded New Orleans Mayor Marc Morial to agree to turn over two of the city's most troubled projects to a newly formed public benefits corporation, to be governed by a resident-controlled board. Greater independence from local governments, but not from local political responsibility, is occurring in many troubled authorities. Chester, Pennsylvania, and Kansas City, Missouri, are both currently being operated by court-appointed receivers. Management teams from other PHAs will be brought in to assist Chicago and a private management contract will be issued to administer the city's voucher and certificate programs. Detroit has already benefitted from help from other PHA staff, which is to continue. In addition to management improvements, redevelopment of various projects will also be undertaken with federal funds. Previously prohibited demolition of many long- vacant projects will also occur. The actions are an important element in HUD's efforts to deal with the ninety-two troubled authorities while it also provides far greater exercise of discretion by the 3,308 authorities that have been well-managed and successful. The problems of the few troubled authorities have overshadowed the successes of those programs that have been effective. OMB A-87 Guidelines Re-issued, Preserving Eligibility for Using Federal Funds to Pay Legal Counsel. An earlier version of proposed guidelines for "Cost Principles for State, Local, and Indian Tribal Governments," OMB A-87, would have prevented use of federal funds for assistance of legal counsel in federally funded programs administered by state and local governments. Acknowledging that states and local governments had successfully persuaded it on the importance of legal counsel, the Office of Management and Budget accepted their objections that such a restriction on the right to counsel was both unwise and unfair. OMB's revised guidelines set forth in the Federal Register on May 19, 1995, continue the prior eligibility for such legal fees: "Legal expenses required in the administration of Federal programs are allowable. Legal expenses for prosecution of claims against the Federal Government are unallowable." The OMB decision clearly continues to make legal fees in the defense of federal claims eligible. A Lucrative Avocation Holding Places in Line for Busy Lobbyists. With so much going on up on Capital Hill, what's a lobbyist to do? One cannot be everywhere at once, whether at budget hearings, telecommunication deregulation hearings, hearings to eliminate various cabinet departments, or those discussing expanding rights to compensation of property owners affected by environmental regulations. The solution: hire a stand-in. Current pay rates are $10 per hour. Thus, in chaos, there are business opportunities. Of course, the practice often prevents the general public from having access to any important hearings. The lobbyist, however, needs to be free, except when the hearing is actually occurring, to meet with Members and staff. And, gee whiz, with the amounts at stake, having stand-ins is very cost effective. "Corrections Day," House Speaker Gingrich's New Form of Legislative Veto. Never a fan of regulations or rulemakers, Newt Gingrich has arrived at a solution for "self-evidently stupid," "profoundly dumb," "stupidly legal," and "silly" regulations flowing from federal agencies. He has entitled it: "Corrections Day." His effort to stem what he called "bureaucratic tyranny" would be to set aside times in the House, and if he can persuade them, the Senate, "to set errant or brazen rule-makers straight by passing corrective, noncontroversial legislation with bipartisan supermajorities in both house." Apparently, all legislative action would take place on Corrections Day, itself. He has set up a Republican task force to study how to implement Corrections Day, which he suggested might be held either weekly or monthly. There is still the problem of the presentment clause which led to the Chadha decision's invalidation of legislative vetoes. It will be interesting to see whether Newt's colorful suggestion can get around the need for presentment of any measure to the President before its enactment. Aside from circumventing congressional committee hearings and consideration, a proposition that might not sit well with newly appointed Republican chairs, a major consideration would be whether the President would go along with such congressional control of executive branch prerogatives. Maybe we are into a period when parliamentary government will be the norm. Two "Hot Potatoes," Denial of Benefits to Noncitizens and Eliminating Government Affirmative Action Programs, Such as Minority Set-Asides, Likely to Take Center Stage Soon. Governor Wilson in California has attempted to bolster his presidential ambitions by taking actions within his state to eliminate benefits to noncitizens and curtail affirmative action to redress past racial discrimination. Senator Packwood of Oregon, Finance Committee chair, would give states the option of barring even legal immigrants who have not yet become citizens from the central welfare program, Aid to Families with Dependent Children. The House passed a bill in March that would cutoff most benefits to noncitizens. The Senate bill, as would that passed in the House, would replace dozens of federal welfare programs with block grants to the states. The Senate bill, however, would not restrict payments to unwed mothers under eighteen, as would the House version, or deny additional benefits to welfare mothers who bear children while receiving aid. The Packwood bill avoids the controversial House provision which would replace federal school lunch assistance with a block grant to states. Recipients would be required to enter work programs after two years, benefits would be cut off after five years, and states would be authorized to cut off aid even sooner. Increasing numbers of recipients would have to be put to work under both bills. While child support requirements would be tightened, the House provision requiring revocation of nonpaying parents drivers' licenses was not included. Administration comments are that both Republican-sponsored bills are "weak on work and tough on kids." Environmental Law Truly at Risk. Another candidate for a Clinton veto is the current Republican bill that would eliminate many protections provided under the existing Clean Water Act of 1972. The battle is still being fought in images, not reality. Undercutting environmental measures has been characterized as "deregulation," "protecting property rights," or as "necessary" under current budget limitations to reduce the deficit. The House bill would ease pollution controls for industries and cities, shift regulatory responsibilities to states, and lift wetland protections. Under regulatory reform, the House-passed bill would require regulators to justify costs under a risk assessment approach. Senator Dole supports similar legislation in the Senate. Other environmental concerns would be endangered under other legislation. Accelerated logging in national forests had already been passed by both houses as part of the now-vetoed rescission bill. The Arctic National Wildlife Refuge may become subject to oil exploration, justified by over $1 billion in receipts from leases. Existing wetlands, water quality, and endangered species protections would generate requirements for compensating property owners, whose property's value is reduced because of federal environmental protections. The specter of high costs entailed in protecting environmental interests is likely to reduce those interests the federal government is willing to protect. High hopes for environmental protections are likely to fall quickly. How long ago was the Rio conference? How times change. Otto J. Hetzel is a professor of law at Wayne State University and also practices law in Washington, DC, with the firm of Pepper, Hamilton & Scheetz.