18 Sec. 4045.—This section would repeal the deficit authorizations contained in section $(d) of Public Law 95-348. The Committee had originally authorized $20 million a yearto offset anticipated deficits in the Virgin Islands based onthe results of the audit by the Federal comptroller that the Virgin Islands was facing hankruptcy unlessit began to better manage its fiscal affairs. On the assurance of then Te Me i ee Congressman Ron de Lugo that the Virgin Islands would endeavor foreseen occurrences. oe eEEENGBn Baek Ge to reform its operations, and in order to avoid dificulties in obtaining the necessary budget waivers should a deficit occur, the Committee authorized the funds. The effort to protect the Virgin Islands, however, proved counter-productive as the Virgin Islands took little action to improve its economy, Increase revenues, or decrease expenditures.Conversely, the Virgin Islands government immediately enacted salary increases so large that the Administration itself had to protest the massive violation of wage and price guidelines. Apparently the Virgin Islands understood the authorization as an invitation to increase its deficit rather than as a protection from unavoidable or un- x TITLE V--AMERICAN SAMOA - Deseription—American Samoa is an unincorporated, unorganized (lacking an Organic Act territory of the United States. It consists of seven islands, most of which he approximately 2,300 miles southwest of Hawaii. The principal islands are Tutuila (where the capital, Pago Pago, is located}, Aunw’u, and three islands of the Manu’s group— Tau, Olosega, and Ofu. Swains Island, also a part of American Samoa, lics 280 miles to the northwest. Rose Atoll is a national wildlife refuge and lies 250 miles east of Tutuila. The total land area is 76.2 square miles with a population of 30,000 of which approximately 13,000 are long term residents from Western Samoa. Samoa was acquired by two treaties of cession in 1900 and 1904 which were ratified in 1929. Samoa is administered by the Secretary of the Interior and enjoys local self government with an elective Gov- ernor and lower house of the legislature. The upper house members are chosen according to Samoan custom. Section Analysis and Discussion of Amendments See. 501.—This section states the existing policy of the Department of the Interior of assuming all costs of the government comptroller. 8 sac. as, So hyMat araAY Hated i bas Lem ba tee wat aR Aimee ip Dees edt ae ee ie a a, 96.0 million were past due. So Potential sources of increased revenues do exist in amounts sufficient to reverse the trend of deficit spending. Accordingly, to encourage the Virgin Islands governmentto take affirmative action to reverse the trend of deficit spending, the Committee has approved the repeal of the deficit authorization. =< mee mae deficit was $35.5 million. In addition, mortgages and notes of Tesmel ‘The most recent report of the Federal Comptroller (July 1979) states in part: , The financial condition of the Territorial Government continues to worsen at a rapid pace and is nowat a point where a virtual bankruptcysituation could exist in the near future. At June 30, 1978, the accumulated uncovered General Fund