Section 501.

TITLE V

This section was adopted by the Committee as a substitute for section 304 in the Administration's draft bill. That section would have provided that the Congress "approved" and "confirmed" certain actions taken by the President following recognition of the People's Republic of China on January 1, 1979; it would, in effect, have placed the Congress on record as agreeing that the President's directive of December 30, 1978, was within the scope of his constitutional authority. That directive was as follows:

Memorandum of December 30, 1978

Relations With the People on Taiwan

Memorandum for All Departments and Agencies

THE WHITE HOUSE,
Washington, December 30, 1978.

As President of the United States, I have constitutional responsibility for the conduct of the foreign relations of the nation. The United States has announced that on January 1, 1979, it is recognizing the government of the People's Republic of China as the sole legal government of China and is terminating diplomatic relations with the Republic of China. The United States has also stated that, in the future, the American people will maintain commercial, cultural and other relations with the people of Taiwan without official government representation and without diplomatic relations. I am issuing this memorandum to facilitate maintaining those relations pending the enactment of legislation on the subject.

I therefore declare and direct that:

(A) Departments and agencies currently having authority to conduct or carry out programs, transactions, or other relations with or relating to Taiwan are directed to conduct and carry out those programs, transactions, and relations beginning January 1, 1979, in accordance with such authority and, as appropriate, through the instrumentality referred to in paragraph D below.

(B) Existing international agreements and arrangements in force between the United States and Taiwan shall continue in force and shall be performed and enforced by departments and agencies beginning January 1, 1979, in accordance with their terms and, as appropriate. through that instrumentality.

(C) In order to effectuate all of the provisions of this memorandum, whenever any law, regulation, or order of the United States refers to a foreign country, nation, state, government, or similar entity, departments and agencies shall construe those terms and apply those laws, regulations, or orders to include Taiwan.

(D) In conducting and carrying out programs, transactions, and other relations with the people on Taiwan, interests of the people of the United States will be represented as appropriate by an unofficial instrumentality in corporate form, to be identified shortly.

(E) The above directives shall apply to and be carried out by all departments and agencies, except as I may otherwise determine.

I shall submit to the Congress a request for legislation relative to nongovernmental relationships between the American people and the people on Taiwan.

This memorandum shall be published in the Federal Register.

[FR Doc. 79-479 Filed 1-2-79; 4:26 pm]

JIMMY CARTER.

The Committee doubts that the power to issue this directive is within the authority conferred upon the President by the Constitution. While it is true that the President has some "constitutional responsibility for the conduct of the foreign relations of the nation," it is not true that he possesses all powers granted by the Constitution to do so; his exclusive authority to recognize and to negotiate with foreign governments has never been construed as having in any way narrowed or diminished the many powers of the Congress over foreign affairs matters, including the power to regulate commerce with foreign nations (art. I, sec. 8, cl. 3), to spend for the general welfare (art. I, sec. 8, cl. 1), and to control Federal expenditures (art. 1, sec. 9, cl. 7). It is these powers upon which many of the provisions of this bill are I based, and it is the Committee's judgment that the enactment of these 1 provisions is legally required-not simply politically desirable, but legally required-if the President is to be enabled to continue to conduct the myriad programs concerning Taiwan. The reason is that the statutes authorizing such programs invariably authorize the President to carry out those programs only with respect to foreign countries, nations, or states, and the President, on December 19, stated that, as of January 1, 1979, "Taiwan will no longer be a nation in the view of our own country."

The Committee has drafted this bill on the premise that the issue of Taiwan's international legal status need not be addressed herein, inasmuch as Taiwan can be treated as a country for domestic juridical purposes whatever its international legal identify. However, the Committee does not believe that the Congress, in enacting the various program authorities applicable to foreign nations, intended that the President be empowered to carry out those programs with respect to - an entity that he does not view as a nation. The question is, in sum, one of Congressional constitutional prerogatives: can the President unilaterally redefine statutory terms and decree a statute to be applicable where he by his own statements has rendered it inapplicable? The Committee does not believe so.

Accordingly, the Committee has, on the motion of Senator Javits, stricken section 304 as proposed by the Administration and, in lieu thereof, made retroactive the effective date of the bill to January 1, 1979. While the juridical effect will be identical-the legality of U.S. relations with Taiwan during the statutory hiatus cannot be questioned a retroactive effective date will make clear that the Congress does not concur in the President's claim of power and that his action does not serve as a precedent for arrogating to himself the authority to conduct programs which can be authorized only by statute. Section 502.

This section, a standard "separability clause", was offered by Senator Javits. It is self-explanatory.

F. COST ESTIMATE

Section 252 (a) (1) of the Legislative Reorganization Act of 1970 requires that Committees' reports on bills and joint resolutions contain an estimate of the costs of carrying out such legislation in the current year and in each of the five years that follow. This estimate is set forth in part 5 of the report of the Congressional Budget Office, set forth below:

Hon. FRANK CHURCH,

CONGRESSIONAL BUDGET OFFICE,

U.S. CONGRESS, Washington, D.C., February 27, 1979.

Chairman, Committee on Foreign Relations, U.S. Senate, Room 4229, Dirksen Senate Office Building, Washington, D.C.

DEAR MR. CHAIRMAN: Pursuant to section 403 of the Congressional Budget Act of 1974, the Congressional Budget Office has prepared the attached cost estimate for S. 245, a bill to promote the foreign policy of the United States by authorizing the maintenance of commercial, cultural, and other relations with the people on Taiwan on an unofficial basis, and for other purposes.

Should the Committee so desire, we would be pleased to provide further detail on the attached cost estimate.

Sincerely,

ROBERT A. LEVINE,

(For Alice M. Rivlin, Director).

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

1. Bill number: S. 245.

FEBRUARY 27, 1979.

2. Bill title: A bill to promote the foreign policy of the United States by authorizing the maintenance of commercial, cultural, and other relations with the people on Taiwan on an unofficial basis, and for other purposes.

3. Bill status: As ordered reported by the Senate Foreign Relations Committee on February 23, 1979.

4. Bill purpose: This legislation outlines the policy of the United States vis-a-vis Taiwan and authorizes the United States to maintain commercial, cultural and other relations with the people on Taiwan on an unofficial basis. It further describes the manner by which activities of the U.S. Government shall be carried out by or through the American Institute on Taiwan. Specifically, the bill:

Authorizes any department or agency of the U.S. Government:

1. To sell, loan, or lease properties and to provide administrative and technical support functions and services to the Institute; 2. To acquire and accept services from the Institute;

3. To transfer alien personnel employed in Taiwan and their accrued allowances, benefits and rights to the Institute;

4. To separate from government service for a specified period any employee who accepts employment with the Institute; Authorizes the President:

1. To extend privileges and immunities comparable to those provided to missions of foreign countries to the instrumentality established by the people on Taiwan;

2. To prescribe such rules and regulations as he may deem appropriate to carry out the purposes of this Act;

Authorizes to be appropriated to the Secretary of State for fiscal year 1980 such funds as may be necessary to carry out the purposes of this act; and,

Authorizes the Secretary of State to use funds made available to carry out this act to further the maintenance of commercial, cultural, and other relations with the people on Taiwan on an unofficial basis. 5. Cost estimate:

6. Basis for estimate: For fiscal year 1979, this estimate assumes that the cost of the American Institute of Taiwan will be met by the reprograming of amounts which were previously appropriated to cover operating expenses of the U.S. Embassy in Taiwan for fiscal year 1979. Assuming that the Institute begins operations on March 1, 1979, the amount of funds requiring reprograming from the State Department and other agencies is approximately $3 million. The enactment of this bill will have no net budget impact in fiscal year

1979.

The fiscal year 1980 estimate is the authorization level requested in the President's budget for each U.S. government department and/or agency which currently plans to operate through the American Institute of Taiwan in fiscal year 1980. Since submission of the budget request, some agencies have decided to transfer their activities out of Taiwan. No estimate was included in the authorization level for these agencies.

When these activities were funded on a reimbursable basis through the U.S. Embassy in Taiwan, they were authorized in separate Acts and fell under separate budget functions. This bill authorizes aggregate Institute activities.

Because the sections dealing with employee benefits simply restate existing law and provide no new benefits, there is no net budget cost associated with the employee sections. The estimate assumes full appropriation of the authorization estimate. Because the size and nature of the Institute have not yet been fully determined, this estimate is subject to considerable uncertainty.

Costs in 1980 were estimated by applying historical outlay rates to the amounts assumed to be appropriated.

7. Estimate comparison: None.

8. Previous CBO Estimate: None.

9. Estimate prepared by: Rita J. Seymour (225–4844).

10. Estimate approved by:

C. G. NUCKOLS,

(For James L. Blum,

Assistant Director for Budget Analysis).

G. EVALUATION OF REGULATORY IMPACT

In accordance with Rule XXIX of the Standing Rules of the Senate, the Committee has evaluated the regulatory impact of the bill. Because the bill preserves the substance of commercial, cultural and other relations with the people on Taiwan through continued application of laws relating to foreign countries, no substantive regulatory activity should result from the bill's enactment. Procedural rules concerning the relationships between Government agencies and the American Institute in Taiwan are foreseen.

However, since this bill affects the entire range of unofficial programs, transactions and relations with the people on Taiwan, and because implementing procedures for each of the myriad affected activities have not yet been devised, it is impracticable to estimate the numbers and identify the categories of individuals that would be affected. Nor can the economic impact or amount of additional paperwork be determined. It is clear that the situation that would exist if the bill were not enacted would have a substantial adverse economic impact that the bill will avoid. The bill will not create any impact on the privacy of individuals.

H. CHANGES IN EXISTING LAW

In compliance with paragraph 4 of Rule XXIX of the Standing Rules of the Senate, the Committee reports that no changes in existing law are made by this bill.