Congress on the proposal.

SMALL BUSINESS DEVELOPMENT CE

Question. Your budget proposes to reduce appropriati velopment Centers from $73.5 million to $57.5 million. posal? Why is the Defense Transition Program zeroed ou Answer. The SBA is attempting to increase the relian the private sector and make the program more effective ing a portion of the costs of the program on to the clie training (in 1996 SBDC's offset about $4.8 million in t and its own clients value the program at about $686 mi those who use SBDC services should share some of the c The Defense Economic Transition Initiative, which w year 1995 for $3.375 million and continued in fiscal ye always been a Congressional initiative. Based on the li believe the SBDC program could generate greater ecor dedicated to its core responsibility of business manageme We have therefore not sought additional funding for this

SBA FIELD STRUCTURE

Question. For years, this Subcommittee has urged SBA its field structure. In 1995, your predecessor, Phil Lader, he was stopped by the House side. Have you taken a lo assessed SBA's field structure?

Answer. The SBA is continuously looking at its field str the Agency's mission. Over the last 22 years, the distric in FTE's by 17 percent. Although the loan processing an are moving away from the district offices, lender oversigh ities are increasing. In addition, training and technical as business constituents continue to increase.

LOAN GUARANTEE VOLUME

Question. It seems to me that SBA runs the 7(a) progr there is demand for loans then the assumption is that the that demand. Do you agree? How do we know that Go essary? I mean, what incentive does any bank have to knows that the Government will underwrite 80 percent of Answer. SBA believes that it is appropriate to allow re within necessary budget constraints, and has requested funding for fiscal year 1998 to reflect this growth. SBA ha authority to broaden the category of small businesses fo loans. Therefore, for the past several years actual 7(a) mained relatively the same. The last time that SBA aske priations to support the 7(a) program was during fiscal y short of appropriated funds again in fiscal year 1995, SB reducing gross loan size and eliminating refinancing, to da

SBA is well aware that budget constraints make it ne agency to examine its programs to determine whether they use of taxpayer dollars. You may be interested to know th an SBA guaranty on a loan until it certifies that it could the same terms and conditions without the guaranty. Bas and our feedback from small businesses in need of capital, that SBA guarantees are important to the Nation's econo in the commercial marketplace. SBA's guaranty allows when it could not normally do so by allowing longer matu lateral requirements and loans larger than allowed unde By selling the guaranteed portions of their loans on the lending partners are also able to leverage their resources to lend to small businesses.

SUBCOMMITTEE RECESS

Senator GREGG. The subcommittee is recesse [Whereupon, at 2:21 p.m., Tuesday, March 1 was recessed, to reconvene at 10 a.m., Wednesd

EPARTMENTS OF COMMERCE, JUSTICE, AND THE JUDICIARY, AND RELATED

STATE,

AGENCIES
YEAR 1998

APPROPRIATIONS

FOR FISCAL

WEDNESDAY, MARCH 12, 1997

U.S. SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, DC. The subcommittee met at 9:57 a.m., in room SD-138, Dirksen nate Office Building, Hon. Judd Gregg (chairman) presiding. Present: Senators Gregg, Domenici, Hutchison, Hollings, Inouye, d Mikulski.

DEPARTMENT OF JUSTICE

OFFICE OF THE ATTORNEY GENERAL

ATEMENT OF JANET RENO, ATTORNEY GENERAL

COMPANIED BY:

STEPHEN R. COLGATE, ASSISTANT ATTORNEY GENERAL FOR ADMINISTRATION

MICHAEL J. ROPER, DEPUTY ASSISTANT ATTORNEY GENERAL, CONTROLLER

ADRIAN A. CURTIS, DIRECTOR, BUDGET STAFF

OPENING REMARKS

Senator GREGG. I appreciate the Attorney General arriving early the Senator from Hawaii is always early. We are very lucky have such promptness, so we will start a few minutes early ourves. I know the ranking member is going to be joining us in a v minutes. I know the Attorney General's time is in great dend and we appreciate her taking time out of her schedule to ne and testify relative to her budget and other issues. We welne you to the committee. It is always a pleasure to have your ut and thoughts and ideas, and so I will open the floor to you. me first yield to the Senator from Hawaii to see if he has an ning statement.

Senator INOUYE. No, Mr. Chairman.

Senator GREGG. I open the floor to the Attorney General.

ATTORNEY GENERAL RENO'S OPENING REMARKS

Ms. RENO. Chairman Gregg and Senator Inouye, thank you very

ch for this opportunity appreciate your strong support that

with the crime problems in this country. Duri constraint and steadily decreasing amounts of ing, please know that I recognize the tremen been made by this subcommittee to carve out partment during the past 4 years. I know it I appreciate the difficult choices that you have

PREPARED STATEMENT

For fiscal year 1998, we are seeking a bud billion, an $800 million, or 4.9 percent, incre funding over 1997 levels. These new resourc marily to escalate our fight against drugs, yo ism, and illegal immigration. I appreciate your to many issues, Mr. Chairman, and I appreciat that you addressed the issues facing the Dep forward to working with you and the entire would be happy to try to answer any questions. [The statement follows:]

PREPARED STATEMENT OF JANET RE

Mr. Chairman and Members of the Subcommittee: C Gregg, Senator Hollings, members of the Subcommittee, it pear before you to present the President's budget request f tice. This Subcommittee, under both your leadership, has portive of our efforts at the Department, and I look forwar you in this, my fifth year.

For fiscal year 1998, the President is seeking a budget for the Department of Justice, including $5.2 billion in re Crime Reduction Trust Fund, and $2 billion in funding thr fines.

During these times of continued fiscal constraint and the fiscal year 1998 budget request demonstrates the Adm calate our nation's fight against drugs, youth violence, ter gration, by providing the Department with an $800 millio in discretionary funding over 1997 levels.

MANAGEMENT INITIATIVES

If the budget I present to you today is approved, it wi crease in Justice Department funding during my tenure as know that I recognize the tremendous efforts that have be tee to carve out the resources that you have made availa Justice during this time. I know it has been no easy task.

I know, too, of your deep concern over the managemen let me say that I share them. In fact, as a result of the with border patrol officers and our shared concern ove projects such as IAFIS and NCIS 2000, I instituted a mana ing process within the Department early last year. The p Like you, I am interested in what has been accomplished major organizations are implementing critical initiatives, i by the budgets approved by this Committee.

Under the process I have in place, the components and the subject areas to be tracked, as well as the measures a to demonstrate that a task is completed, on the right cours tion. I am told this is the first time in over twenty years review process by senior level Department of Justice offic The components report on their status to me monthly, unl quent update-as is the case with the INS and the FBI. uled face-to-face meetings to discuss progress and actions tives on track.

I will continue with this close management oversight to are properly used and that intended results are achieved. strengthen our internal program monitoring and evaluation

gency. And, your recent approval of the INSpect reprogramming is one example of provements we are attempting to make in this regard. Another is our request for creased resources to enhance the Office of the Inspector General. In the coming onths, I hope we can work together to match audit and monitoring capabilities nsistent with the Department's significant growth in funding.

I want to assure you that I am making every effort to use the resources provided this Committee in the most efficient and cost-effective manner possible.

FISCAL YEAR 1998 REQUEST

FIGHTING CRIME AND YOUTH VIOLENCE

The budget I present to you today builds on the commitment made consistently this Committee over the past four years to strengthen our fight against crime, rticularly crimes of violence. Our efforts to work with communities and local poe forces, through programs like Community Oriented Policing Services (COPS), e achieving positive results. Serious and violent crime dropped for the fifth year a row in 1996, marking the longest period of decline in 25 years. And, the numr of youths arrested for violent crime dropped by nearly 3 percent-the first deme in seven years.

NEW INITIATIVES

However, while overall crime rates are dropping, young people are increasingly e perpetrators and victims of some of society's most violent crimes. To address the tinuing problem of youth violence, the budget before you seeks more than $230 llion in additional resources to target gangs and youth violence, hire new gang secutors, establish anti-truancy and anti-school violence programs, and develop w initiatives to get young people back on the right track after they have broken law and before they stray too far.

These resources include $100 million to establish the Prosecutorial Initiatives rgeting Gang Crime and Violent Juveniles Program, designed to provide grants ectly to State and local prosecutors' offices for new local prosecutors and anting initiatives designed to pursue, prosecute, and punish dangerous gang members their crimes. Another $75 million is requested for the "At-Risk Children Initiae." Grants will be made to local communities, through the States, for anti-trucy, school violence, and other, similar initiatives aimed at getting or keeping high xjuveniles on the track to success. And, $50 million is requested to establish a uth Violence Court Program that will provide funding for specialized, court-based ivities like juvenile gun and drug courts to more effectively handle violent thful offenders as they proceed through the justice system.

'he changing profile of juvenile crime to a more violent and destructive phenomedemands that we develop an aggressive, national strategy to effectively address The Anti-Gang and Youth Violence Act of 1997, which was transmitted to the ngress on February 25, contains that blueprint. I believe these new initiatives are first step in developing a coordinated system to stem the rising tide of youth ence in America. I urge you to support them.

COMMUNITY-ORIENTED POLICING SERVICES (COPS]

ur budget request for fiscal year 1998 also includes $1.4 billion to continue our rt to put even more police on the streets of communities throughout America. s funding will be used to hire approximately 17,000 additional police officers, ging the total number of officers funded to nearly 80,000.

olice chiefs and sheriffs from across the country are telling us the good news— munity policing is working. Just two weeks ago, the President and I traveled Boston and saw firsthand what a difference community policing can make. We st maintain and strengthen the partnerships that we have built with local law

orcement.

nd, we are requesting resources to enhance State and local law enforcement retment, retention, and education. The budget includes $20 million each for the ce Corps program and for law enforcement scholarships to increase significantly number of police officers with advanced education and training. The budget also udes $5 million for police recruitment.

PROSECUTIONS IN THE DISTRICT OF COLUMBIA

n increase of $16.6 million is included to provide enhanced support for the Unit

of the District, and to investigate and prosecute unsolved i

VIOLENCE AGAINST WOMEN

Violence against women continues to be a significant crime, the fiscal year 1998 budget includes an increase State and local assistance under the 1994 Violence Agains lion.

A coordinated, aggressive, and thoughtful criminal justic enforcement and prosecution, coupled with victim services of violence and reduce subsequent incidents of domestic v these programs will enable States to enhance their effor violence, sexual assault, and stalking, and further exp under-served American Indian and other minority populati

VICTIM WITNESS ASSISTANCE

Responding to the growing concern of Congress and th guard the rights of crime victims, and to ensure the prop ment of government witnesses, the Department is also victim-witness coordinators and advocates to be placed in offices throughout the Nation.

KEEPING CRIMINALS OFF THE STREE

For fiscal year 1998, the budget includes $710 millionunearmarked-for State grants to build new prisons and ja Offender Incarceration and Truth in Sentencing Grant pro support the construction of up to 9,000 new prison beds to on populations.

Of the $185 million in earmarked State prison monies, $ Marshals Service's Cooperative Agreement Program (CAP) ment of approximately 700 beds provided through agreeme to purchase additional beds to support the projected unsentenced detention population. The remaining $150 m $350 million provided for the State Criminal Alien Assista bringing the total available to reimburse States for the cos nal aliens to $500 million in fiscal year 1998.

To address the steadily increasing federal inmate popul 116,762 in 1998, the budget includes program increases of eral Prison System. These resources will permit the activa beds in 1998, the construction of another 1,216 beds, an mitory style housing into single cells at two U.S. Penitentia

These resources include $3.6 million to support the activ rity facility at the Federal Correctional Complex in Beau cludes $120.6 million to build a high security facility with a at Castle Air Force Base, California, and $16.7 million to housing into single cells at the U.S. Penitentiaries at Lewi Lompoc, California.

And finally, $1.4 million is included to enhance the Bur identify the background of inmates entering the Federal Pr tive will improve prison management by collecting inform groups coming into BOP institutions and coordinating its i forts with other law enforcement organizations.

FIGHTING DRUG TRAFFICKING AND DRUG A

Drug abuse and drug-related crime cost our society an year and destroy the lives and futures of our most precious The budget I present to you today seeks to step up our ef of illegal drugs with $288 million in new resources target interdiction, methamphetamine production and distribution ecution of drug offenses, and successful drug treatment prog

With these additional funds, the DEA will be able to hire tify and assist in the prosecution of major Mexican drug operating along the Southwest border; expand its anti-me and continue implementing its five-year strategy that ta within the United States.