The House

After debate that spread over five days, the House approved a fiscal 1996 Interior Appropriations Bill (H.R. 1977). The bill includes appropriations for the cultural agencies as shown in Table 2 below.

While a 42 percent reduction for the National Endowment for the Humanities (NEH) is extraordinarily sharp and clearly indicates that the NEH and its sister agencies were singled out for much greater reductions than most other agencies in the Interior budget, several positive points stand out. First, although the NEH is not formally authorized, it has survived the budget process through a floor vote in the House. Second, the NEH, the Institute of Museum Services (IMS), and numerous other unauthorized programs such as the Bureau of Land Management can continue in fiscal 1996 without formal authorization because of a waiver provided by the Rules Committee. Unfortunately, as a result of the House voting down the Rules Committee plan—a first in the 104th Congress—the National Endowment for the Arts (NEA) is specifically required to be authorized in order to spend fiscal 1996 funds unless the requirement is lifted in negotiations with the Senate, the formal reauthorization is completed, or the House Republican leadership changes its mind. Third, despite the almost unanimous opposition by the House Republican leadership, supporters of the endowments in Congress managed to steer through many parliamentary and other impediments, such as the rule against funding unauthorized programs.

The Senate

Labor and Human Resources Committee

In mid-July the Labor and Human Resources Committee reauthorized the NEH and the NEA by a strong bipartisan vote of 12 to 4. The reauthorization bill (S. 856) was cosponsored by James Jeffords (R-Vt.), Nancy Kassebaum (R-Kans.), Christopher Dodd (D Conn.), Edward Kennedy (D-Mass.), Claiborne Pell (D-R.I.), and Alan Simpson (R-Wyo.). S. 856 reauthorizes the endowments for five years with 5 percent cuts each year as shown in Table 1 above.

Of the sums appropriated for each fiscal year, 30 percent shall be reserved for state humanities councils as partnership grants (5 percent of which will go to elementary and secondary education in the humanities), 35 percent for national grants, and 35 percent for research and scholarship grants. S. 856 also stipulates that the endowments may not spend more than 12 percent of their budgets on administrative costs, such as rent for office space and personnel, and must merge a number of administrative functions. The NEH has been thinking for some time about how to make adjustments to various budget levels. No one doubts that there will be personnel reductions.

The endowments received solid support from all of the committee's Democrats and the handful of moderate Republican members, particularly Jeffords. Slade Gorton (R-Wash.) made a surprise move by casting a vote in favor of reauthorizing the endowments. Gorton's support may have been influenced by a bipartisan sign on letter sent by Simpson and Dodd that urged Gorton and his Democratic colleague Robert Byrd (D-W.Va.) to follow the labor committee's funding recommendations. Thirty four senators signed on, including eight Republicans. Nonetheless, Bill Frist (R-Tenn.), who had offered assurances of support, joined Dan Coats (R-Ind.), John Ashcroft (R-Mo.), and Spencer Abraham (R-Mich.) to oppose reauthorization.

Subcommittee on Interior Appropriations

Chair Slade Gorton followed the House mark and put $99.5 million into each agency for fiscal 1996. The NEH, however, got a boost when Dale Bumpers (D-Ark.) successfully maneuvered a $15 million increase. The support of Thad Cochran (R-Miss.) was an important factor in the NEH's success.

Committee on Appropriations

Late in July the committee approved $114.5 million for the NEH (a reduction of 34 percent from current levels), while keeping the arts endowment at $99.5 million. The difference may reflect the increasing distinction being drawn between the NEH and the NEA on Capitol Hill. An amendment by Patrick Leahy (D-Vt.) and Robert Bennett (R-Utah) proposed to transfer $25 million to the endowments from the Naval Petroleum Reserve. The Leahy Bennett amendment was defeated by a vote of 13 to 14. The narrow margin of defeat is an encouragement, since some of the endowments' staunchest critics, such as Phil Gramm (R-Tex.), sit on the committee. Leahy plans to introduce an amendment to the full Senate, where arts and humanities advocates hope to capture enough moderate Republican votes to tilt the balance in favor of giving the endowments a modest increase. Bennett will likely join Leahy again in a bipartisan effort. The appropriations committee filed its final interior report (H.R. 1977) on July 31. The bill is unlikely to reach the floor before the August 11 break.

Istook Amendment to Muzzle Nonprofits

In recent years Congress has approached something near consensus on the need to curtail inappropriate lobbying. Of course, current laws cover a variety of aspects of lobbying, but improvement is needed. For example, the act of lobbying under current law is extraordinarily narrow, involving actions toward legislators but mostly not congressional staff. At this juncture, the executive branch is not covered. Congress has not enacted workable law because it cannot agree on what is wrong and what is needed. Some of the disagreements run along party lines.

Constructive lobby reform is difficult to achieve because such "reform" can be used as a tool to weaken political opponents. Many nonprofit groups and Independent Sector (IS), the national organization of nonprofits, believe that a major factor in the legislation developed by Congressmen Jim Istook (R-Okla.), David McIntosh (R-Ind.), and Robert Ehrlich (R-Md.) is a perception that nonprofits largely oppose the goals of congressional conservatives. The three congressmen describe their legislation (hereinafter the "Istook bill") as a "bill to stop taxpayer-funded political advocacy." Sponsors of the bill include for-profit organizations that receive grants, but specifically exempt federal contractors from the provisions, although serious charges have been raised against defense contractors and others for using federal funds to lobby.

Last week the Istook bill was approved as an amendment to the fiscal 1996 Labor, Health and Human Services, and Education Appropriation bill. Speaker Newt Gingrich (R-Ga.) supports this legislation. The Labor, Health and Human Services, and Education Appropriation bill was scheduled for the House floor on August 3, with completion expected before the August recess that begins on August 4. Whether or not the Istook amendment is included in the final bill, President Clinton has threatened a veto because it contains unacceptable cuts to education programs.

The Istook bill contains four basic prohibitions. First, no federal grant money can be used to fund lobbying efforts, the definition of which the bill vastly expands to include any attempt to influence legislation or agency action at all levels of government, as well as participation in political campaigns on behalf of or in opposition to any candidate for public office, participation in judicial litigation (including as a "friend of the court") or agency proceedings in which federal, state, or local governments are parties, and donation of funds or in-kind support to any organization (e.g., coalitions or federations) whose lobbying for the previous year exceeded 15 percent of its total budget. Second, no applicant can receive grant money if its lobbying for the past five years exceeds the allowable limit (the limit is 5 percent of an organization's annual budget, minus federal grants, and 1 percent for that portion of the budget that exceeds $20 million). Third, when grant money is received, the recipient may not exceed its allowable lobbying limit from the prior year (using any funds whatsoever). Last, no grant money may be used to "purchase goods or services" (including membership) from any organization that spent more than 15 percent of its budget lobbying in the prior year.

Enforcement is through the General Accounting Office and Inspector General audits, and the burden of proof (by clear and convincing evidence) is on the organization. Also "private" attorneys general (bounty hunters) are authorized to sue in the name of the federal government and collect between 10 and 30 percent of the fines. Fines for violation of these provisions are payable by treble (triple) damages, plus a penalty ranging from $5,000 to $10,000 for each violation. Also, any federal employee who fails to enforce these rules may be suspended without pay or terminated. In effect, this is a far reaching gag order that constrains small groups more sharply than large ones. It could potentially remove 501(c)(3)s as well as (c)(4)s and (c)(6)s from expressing views on legislation or rule making.

The legislation seeks to fix a problem that barely exists. The overarching concept is that money is fungible. Therefore, despite the lack of evidence that nonprofits are spending federal funds to lobby (or perhaps because of the lack of evidence), the sponsors believe that Congress has the authority to place special limits on how federal grantees spend their own nonfederal funds because receipt of the federal funds freed the private money. The legislation also violates historic partnership between nonprofits and government at all levels. It also adds burdensome paperwork; nonprofits are already reporting to the Internal Revenue Service, and current Office of Management and Budget rules make grantees subject to stringent audit requirements. Perhaps most important, the bill is unconstitutional in its efforts to curtail the expenditure of private monies in freedom of speech activities. Congress can and has prohibited use of federal funds for lobbying. It is probably unconstitutional for Congress to seek to limit a grantee's right to lobby using private funds. Rep. Steny Hoyer (D-Md.) characterized the bill as "Orwellian."

Finally, the bill redefines lobbying to include "political advocacy," which goes far beyond the Internal Revenue Code. The new definitions are so broad that nonprofit cooperation with the local newspaper on an article supporting the NEH can be considered "political advocacy" because it could win public support for the NEH's programs.

If the Istook bill fails to survive as an amendment to the Labor, Health and Human Services, and Education Appropriation bill, many observers anticipate that it will continue to be attached to other bills or offered as a freestanding legislation at least through the end of the 104th Congress.

Note

1. Figures include fiscal 1995 recisions that reduced each endowment by $5 million. The president vetoed the original recisions bill but later accepted a revised bill in late July after Republicans restored some cuts to education and job programs the president has championed.

John Hammer is executive director of the National Humanities Alliance; Cuc Vu is executive associate. The NHA's Washington News Memos are posted weekly on the Association of Research Libraries' (ARL) gopher site. For instructions, contact the NHA at (202) 296 4994, or at nhainfo@cni.org. Enter "subscribe nha" as message.