HON. WILLIAM DALEY, SECRETARY OF COMMERCE Mr. ROGERS. We are pleased to welcome this afternoon William Daley, the Secretary of Commerce, who will testify on behalf of the programs in the 1999 budget request of the Commerce Department. Your budget request for 1999 for discretionary spending totals $4.893 billion, an increase of $637 million, 15 percent above the amount the Congress provided for 1998. A good portion of this requested increase, $466 million, in fact, is to ramp up for the 2000 census. With that in mind, we are pleased to have with us as a guest of this subcommittee Mr. Miller of Florida, who is the chairman of the Census Oversight Subcommittee of the House, who is here to listen and take notes, I am sure. As we continue to honor the commitment to balance the budget, the Subcommittee, as it has in the past, will be looking for you to assist us in developing priorities for the Commerce Department and finding ways to most efficiently allocate the limited resources the Subcommittee will have this year, and we are looking forward to working with you again this year, Mr. Secretary. At this point, we will insert your written statement in the record and the Department's fiscal year 1999 budget in brief will go in the record. You are welcome to make any remarks you would like in summary of your statement. OPENING STATEMENT OF SECRETARY DALEY Mr. DALEY. Great. Thanks very much, Mr. Chairman. As you have stated, we have given you a longer version of the statement and I have before me a statement that probably runs about eight or ten minutes. I would like to cut that down, Mr. Chairman, because I know how busy you and the Committee are and I appreciate the time that you, your staff and the staff of the other members have taken in previous meetings with me and in the time you have spent on helping us through this process. Let me just make a couple of comments. First of all, I do appreciate, after being here one year, the relationship which the Depart (1) ment and the Subcommittee has had. We think we have worked well together. We look forward to this year. This is my first real budget that I have put forward and, therefore, has a mark of mine, for good or for bad, as we go forward, and I am very proud of that. I am proud of the fact that many of the promises that we made to the Subcommittee last year in my testimony, we have followed through on and we have lived up to, whether it was the issues of the trade missions or security or political hirings and a few other issues. So we are extremely proud of that record. The challenges facing the Department of Commerce are basically in three or four different areas. One, of course, is the census, and we are happy to see the Congressman with us today. That is going to be an enormous challenge for all of us. It is the largest peacetime mobilization that the country does. It presents an enormous challenge, forgetting the controversial issue of sampling that hopefully we will solve within the next year, and tremendous management challenge for all of us and we look forward to that challenge and making this the most accurate census in the history of the United States and in a cost-efficient manner. We continue to make trade and the development of our economy the most important piece of the Department. I had the opportunity to come back from Asia ten days ago and the troubles in Asia obviously present new challenges for us, but we are prepared. The ITA is now headed by David Aaron, former Ambassador to the OECD, and he is doing a terrific job. In the area of sustainable development, NOAA and all of our pieces of the Department work well together and we look forward to a continuing strengthening of that to protect the economy in so many parts of our country. So, Mr. Chairman, I would cut short my testimony at this point and once again thank you for the interest and the enthusiasm which you have given our Department. STATEMENT BY WILLIAM M. DALEY BEFORE THE HOUSE SUBCOMMITTEE ON APPROPRIATIONS MARCH 5, 1998 Mr. Chairman and members of the Subcommittee, I am pleased to appear before you today to give a report on our successes of the past year at the Department of Commerce and to present our $4.9 billion budget request for FY 1999. But even before I begin my report and discuss my proposal for the FY 1999 budget, I want you to know what a pleasure it is to be part of a truly historic effort to bring the first balanced budget request before the Congress since C.R. Smith, the 18th Secretary of Commerce. As the 32nd Secretary of Commerce, I have worked hard to assure we are doing more with less, while still providing key investments to help the nation prepare for the next century. Last year, I promised several actions to improve the management and operations of the Department and to respond to past criticisms. I'm pleased to report that we have: Reduced political staffing at the Department by the 100 positions that I promised. Revised our trade mission criteria to assure open selection of participating Addressed long standing security issues throughout the Department, in response Moved aggressively to address issues on the IG's top ten list of weaknesses. Four have been dropped from the IG's most recent list, including NOAA satellite programs, the National Marine Fisheries Service Seafood Inspection Performance -Based Organization (PBO), the NOAA Vessel Buyout Program and the Advanced Technology Program's (ATP) commercial pricing and incremental funding. -2 Made progress on several remaining weaknesses identified by the IG, including reforming the NWS based on General Kelly's study, NIST's capital improvements facilities program, and Departmental management of procurement deficiencies, information technology, property management and oversight functions, and financial management systems. FY 1999 BUDGET The FY 1999 budget I'm presenting is $4.9 billion, $701 million over FY 1998 and a 16.7 percent increase. Fully two-thirds of the increase funds the costs of the 2000 Census. Without the Census, our budget increases by 5.6 percent, to cover inflation and key investment programs that I will describe in a minute. The Department has not set off on a path of growth - we continue to be the smallest cabinet agency and have 3,300 fewer employees on board today than at the start of this administration. Setting aside the Patent Office staffing, which is paid for by fees, and the Decennial Census, we will not grow overall in employment through the end of FY 1999. Our Strategic Plan, submitted last September under the provisions of Government Performance and Results Act (GPRA), focuses on three themes: economic infrastructure; science/technology/information; and resource and asset management and stewardship. The materials I have submitted to support this budget our Annual Performance Plan, our Budgetin-Brief, and bureau budget justifications build from the plan. Performance measures in each document provide the annual slice of outcomes we anticipate will occur with the funding of the budget request. Through our plans, we are helping to grow the economy, without growing ourselves. We may be small, but we will keep doing the big work that will expand opportunities for American workers and American businesses. If you look at how American corporations have done well in the last decade - they got leaner. But they also invested in new products and factories that are their future. So, this budget manages in a way that invests in our future. Our future is trade; it is making government work better in a new economy, where technology is the engine for growth; it is fostering what we call sustainable development; and it is conducting the best Census ever. ECONOMIC INFRASTRUCTURE First is the area of trade. The President talked at length about this in his State of the Union address. Today record high exports account for fully one-third of our economic growth. The President wants to keep it that way. Government-wide, we will be strengthening trade advocacy, trade promotion, and the Trade Promotion Coordinating Committee. -3 In FY 1999, ITA's budget will allow us to: provide advocacy support to U. S. firms for 700 overseas projects, with a total project value of $145 billion. Gross exports derived from advocacy will reach $12 billion; create a minimum of 10,500 New-to-Export firms and 36,800 New-to-Market firms; increase the number of firms receiving export assistance through the U.S. and Foreign Commercial Service from 11,500 to 14,000; and review 15 more applications for free trade zones to support an increase of 25,000 jobs. Let me highlight these changes in outputs proposed in our FY 1999 budget with an example of the work of our U.S. Export Assistance Centers (USEAC). The Deep South Bowling Pro Shop, Inc., has increased its international sales from $75,000 in 1995 to $850,000 in 1996. By seven months into 1997, Deep South Bowling had exceeded 1996 sales and had entered five international markets. Since March 1996, the Delta USEAC has been providing trade statistics, trade leads, contacts, and market research and trade finance services to Deep South Bowling. With the advice of the Delta USEAC, the company has also implemented a new marketing tool an Internet website - that has generated a tremendous response, with approximately 35 percent of all inquiries originating outside the United Sates. These types of experiences are repeated each working day through out the country. Likewise, we will move to provide for compliance with our trade laws by: expanding the Trade Compliance Center's activities and developing a database for use in monitoring compliance; increasing staff to initiate 130 Antidumping/Countervailing Duties (AD/CVD) Sunset Reviews; implementing the National Defense Authorization Act of 1988, Chemical decreasing export licensing processing time from 35 days in FY 1997 to 33 days |