Letter From The Director Of OMB To The President on Emergency Funding Request

The President

The White House

Submitted for your consideration are emergency funding
requests, totaling $20.0 billion, for various Federal
Departments and agencies, as well as the Legislative and
Judicial Branches. Also included are several language proposals,
including legislation for the Department of Defense, the U.S.
Agency for International Development, and the Small Business
Administration.

P.L. 107-38, the Emergency Supplemental Appropriations Act
for Recovery from and Response to Terrorist Attacks on the
United States, FY 2001, provided $40.0 billion to the Emergency
Response Fund in the Executive Office of the President. The Act
provides that $10 billion would be available without any further
congressional action. Of that amount, you have made available to
date a total of $7.2 billion. In addition, P.L. 107-38 included
$10.0 billion that would be available 15 days after OMB has
submitted proposed allocations to the House and Senate
Committees on Appropriations. The $20.0 billion proposed for
your consideration today would not be available for obligation
until enactment in a subsequent emergency appropriations bill.

The $40 billion in emergency expenses enacted in P.L. 107-38
was provided to assist victims of the attacks and to deal with
other consequences of the attacks, including the costs of: (1)
providing Federal, State, and local preparedness for mitigating
and responding to the attacks; (2) providing support to counter,
investigate, or prosecute domestic or international terrorism;
(3) providing increased transportation security; (4) repairing
public facilities and transportation systems damaged by the
attacks; and (5) supporting national security. Further, pursuant
to the Act, not less than one half of the $40 billion is to be
for “disaster recovery activities and assistance related to the
terrorist attacks in New York, Virginia, and Pennsylvania.”

The requests in this transmittal follow an extensive review
of individual agency proposals to identify those requirements
that are immediate and near-term. The current proposals support
identified requirements and represent the crucial initial steps
toward recovery. We will not seek additional supplemental
funding for either domestic or defense needs for the remainder
of this session of Congress. If further requirements become
clear, we will work with the Congress on additional needs that
may arise during the Second Session of the 107th Congress.

As described below and in more detail in the enclosures, the
requests include the following:

Department of Agriculture (USDA)

The funding proposed for USDA would support: enhanced
security for USDA facilities ($17.2 million); design and
construction of a facility in Ames, Iowa to store and conduct
research on biohazardous material ($14.1 million); technical
assistance to State, local, Federal, and private sector entities
to improve the identification and response to a bioterrorist
attack ($5.0 million); and training to improve response to food
supply threats, implement countermeasures, improve data
collection and dissemination, and other bioterrorism protection
activities ($8.9 million).

Department of Commerce (DOC)

The $26.9 million in funding proposed for DOC would largely
be used for emergency grants to assist public broadcasters in
restoring facilities and capabilities that were destroyed in the
collapse of the World Trade Center towers and to support
departmental security enhancements, both at home and abroad.

Department of Defense (DOD)

A total of $7.4 billion is now requested to support DOD’s
crisis and recovery operations and national security
responsibilities. These resources include: $2,938.0 million for
increased worldwide posture; $1,735.0 million for increased
situational awareness; $925.0 million for repair and upgrade of
the Pentagon; $881.0 million for enhanced force protection;
$545.0 million for offensive counterterrorism; $219.0 million
for improved command and control; and $106.0 million for initial
crisis response.

Department of Education

This proposal would provide $10.0 million to enable the
Department of Education to provide crisis recovery services in
New York and other jurisdictions for students, educators, and
their families under the Safe and Drug-Free Schools and
Communities National Programs Project SERV (School Emergency
Response to Violence).

Department of Energy (DOE)

Of the $117.7 million requested for DOE, $106.0 million
would be used to improve the security of the Nation’s nuclear
stockpile and infrastructure, including $91.0 million for
additional on-site security measures and plant reconfiguration
at defense-related national laboratories and production plants
and $15.0 million for additional transportation safeguards and
security to protect and prevent sabotage of stockpile components
and material while in transit.

Department of Health and Human Services (HHS)

An additional $1.6 billion is proposed for HHS’ Public
Health and Social Services Emergency Fund. These emergency
resources include expenses necessary to support activities
related to countering potential biological, disease, and
chemical threats to civilian populations.

Among the funds now requested, $643.6 million would be used
to acquire medicines, supplies, and equipment for the National
Pharmaceutical Stockpile to treat an additional 10 million
persons exposed to anthrax and other bacterial infections, as
well as providing an enhanced ability to treat victims of
chemical attacks; $509.0 million would be used to accelerate
production of the smallpox vaccine; and $61.0 million to enhance
the frequency and quality of imported food inspections, and
modernize the import data system.

Department of the Interior (DOI)

A total of $85.5 million is proposed for DOI largely to
increase security and enhance preparedness for attacks against:
key national park sites ($53.0 million); Bureau of Reclamation
dams, power plants, and other critical facilities ($30.3
million); and DOI headquarters buildings ($2.2 million).

Department of Justice (DOJ)

A total of $1.1 billion is now requested to support DOJ’s
responsibilities arising from the September 11th terrorist
attacks. The funds include: $538.5 million for extraordinary
expenses incurred by the Federal Bureau of Investigation; $399.4
million for operations of the Immigration and Naturalization
Service; $101.7 million for U.S Attorneys, U.S. Marshals, and
other legal activities, including the Office of the Special
Master; $68.1 million for the Office for Victims of Crime; and
$4.4 million for a grant to the Utah Olympic Public Safety
Command for the 2002 Winter Olympics.

Department of Labor (DOL)

The funding proposed for DOL would provide $2.0 billion for
National Emergency Grants, authorized under section 173 of the
Workforce Investment Act, to States to assist workers who were
dislocated by the attacks of September 11, 2001. The
Administration will request an additional $1.0 billion for the
National Emergency Grants with the FY 2003 Budget submission.
Grants may provide employment and training assistance, including
assistance in paying to continue health coverage to dislocated
workers, as authorized under the Consolidated Omnibus Budget
Reconciliation Act (COBRA), if the Governor certifies in the
grant application to the Secretary of Labor that the attacks of
September 11th contributed importantly to closures or layoffs.
An additional $12.6 million would support needs of various DOL
bureaus in recovering from damage incurred in the attacks in New
York, as well as other security measures.

Department of Transportation (DOT)

Of the $733.5 million now requested for DOT, $408.5 million
is proposed for the Federal Aviation Administration to fund
upgrades to airplane cockpit security and permit the accelerated
purchase of planned security equipment for airport baggage and
passenger screening; $203.0 million is proposed for the Coast
Guard to fund reservists activated to support national defense
and homeland security functions, and increased port security;
$85.0 million is proposed for the Federal Highway
Administration, including funding that would fund repairs and
reconstruction of Federal-aid highways, which were damaged or
destroyed by the collapse of the World Trade Center buildings;
$23.5 million is proposed for the Federal Transit
Administration, including funds to replace buses and transit
kiosks that were destroyed by the collapse of the World Trade
Center; and $13.5 million for rail and other security-related
measures.

Department of the Treasury

The $315.2 million in funding proposed for the Treasury
Department would provide: $114.2 million for the Customs Service
to improve and expand airport and aviation security as well as
increase efforts of inspectors at high-risk seaports and land
borders; $104.8 million for the Secret Service to fund
necessary, additional expenses incurred due to the attacks, and
$96.2 million for other Treasury Department emergency expenses,
including $37.2 million for the Internal Revenue Service to
replace damaged equipment in their New York offices.

Corps of Engineers

An additional $139.0 million is requested to support
increased security at over 300 critical Army Corps of Engineers
owned and operated infrastructure facilities (e.g., dams and
navigation facilities), including enhanced physical security and
facility vulnerability assessments to determine further facility
security needs.

Environmental Protection Agency (EPA)

A total of $76.0 million is proposed for EPA and would
support activities such as drinking water assessments,
replacement of equipment destroyed in New York, and various
security enhancements.

Executive Office of the President

This proposal would provide $50.0 million to enable the
Executive Office of the President to meet additional
requirements in response to the September 11th terrorist attacks
and to ensure the continuity of support and services to the
President and Vice President of the United States.

Federal Emergency Management Agency (FEMA)

Of the $5.5 billion now requested for FEMA, $4.9 billion
would support additional disaster relief efforts in New Jersey,
New York, and Virginia, and would be used to help individual
victims, remove debris from the World Trade Center site, and
assist in the rebuilding of critical public infrastructure. An
additional $0.6 billion would enable FEMA to provide equipment
and training grants to States and localities to improve
terrorism and chemical-biological response capabilities, as well
as support the Office of National Preparedness in its efforts to
improve terrorism preparedness coordination and liaison between
Federal, State, and local governments.

General Services Administration

A total of $200.5 million is requested for the Federal
Buildings Fund to increase security services nationwide at
Federal buildings, for replacement space costs in New York City,
for additional security equipment nationwide, and other security
costs.

National Aeronautics and Space Administration (NASA)

An additional $93.1 million is proposed for NASA in order to
maintain a heightened state of security at 10 field centers and
at NASA headquarters in FY 2002. These funds will provide
resources for the costs of: additional security personnel and
overtime compensation; modifications to security perimeters;
construction of additional checkpoints; additional security
monitoring and communications equipment; relocation of critical
functions and personnel; and increased air and sea patrols at
the Kennedy Space Center in Florida.

Small Business Administration (SBA)

This proposal would provide $150.0 million for SBA’s
disaster loan program to support $600.0 million in low interest
loans to businesses impacted by the terrorist attacks. In an
accompanying request in this transmittal, the Administration
proposes to raise the $1.5 million aggregate cap on loans to a
single borrower to $10.0 million for businesses directly
impacted by the disasters in New York, Virginia, and
Pennsylvania. In addition, the Administration would allow
non-profit organizations and non-depository financial companies
to receive economic injury loans from SBA.

Other Agencies

For costs associated with reconstruction of offices
destroyed during the attacks, increased security measures, and
certain investigative activities, the following amounts are
requested: $1.0 million for the Department of Housing and Urban
Development; $2.0 million for the Department of Veterans
Affairs; $0.3 million for the National Science Foundation; $7.5
million for the Social Security Administration; $6.5 million for
the Commodity Futures Trading Commission; $25.0 million for the
District of Columbia; $1.3 million for the Equal Employment
Opportunity Commission; $7.0 million for the National Archives
and Records Administration; $0.8 million for the National
Capital Planning Commission; $0.2 million for the National Labor
Relations Board; $0.8 million for the National Transportation
Safety Board; $20.7 million for the Securities and Exchange
Commission; and $28.2 million for the Smithsonian Institution,
including the John F. Kennedy Center for the Performing Arts and
the National Gallery of Art.

Legislative Branch

This proposal would provide $256.1 million to the
Legislative Branch to enhance the security posture of the
Capitol Hill complex, the Government Printing Office, and the
General Accounting Office, and to perform actions that can be
taken to reduce the risk and potential damage to life and
property caused by future terrorist events.

Judicial Branch

Of the $31.5 million proposed for the Judicial Branch, $17.5
million would cover the costs of additional court security
officer hours; $10.0 million would be used to enhance the
security posture of the Supreme Court building; and $4.0 million
would support a Supervisory Deputy Marshal responsible for
coordinating security in each judicial district and circuit.

I have carefully reviewed these proposals and am satisfied
that they are necessary at this time. Therefore, I join the
heads of the affected Departments and agencies in recommending
that you transmit the proposals to the Congress. In addition, I
recommend that you designate the funds in the individual
proposals enclosed as emergency funding requirements pursuant to
section 251(b)(2)(A) of the Balanced Budget and Emergency
Deficit Control Act of 1985, as amended. In addition, I
recommend that you designate the funds in or credited to the
Defense Cooperation Account during FY 2002 as emergency
requirements pursuant to section 251(b)(2)(A) of such Act.

Sincerely,
 

Mitchell E. Daniels, Jr.
Director