House GOP budget cuts target IRS, White House
A day after a House spending panel rolled out plans to further reduce spending for the Congress, Republicans have set out a budget plan that slices 24 percent from the Internal Revenue Service and takes a chunk of money out of salaries and expenses at the White House as well.
With Republicans still livid over the targeting of Tea Party groups by the IRS, this spending plan would chop $3 billion in spending at the IRS, and limit spending in other areas until reforms recommended by the IRS watchdog have been approved.
+ The plan holds back 10% of the IRS budget until changes are made to prevent "inappropriate targeting" of groups applying for tax-exempt status
+ Funding for IRS conferences would be put on hold until internal changes are made
+ The plan would ban spending on employee bonuses and awards, as well as the production of IRS videos
The plan would also block the IRS from implementing the Obama health reform law, and block funding to enforce the individual mandate that requires Americans to purchase health insurance.
The cuts were denounced by the main union for IRS and Treasury Department employees.
The same bill, which funds the Treasury Department and a series of other agencies, would also cut $46 million in spending at the White House. Here is a run down from the House Appropriations Committee of what this proposed bill would do:
Executive Office of the President (EOP) –The legislation contains $624 million for the EOP – a reduction of $46 million below the fiscal year 2013 enacted level, bringing the White House budget more in line with the reductions Congress has already taken. This includes funding salaries and expenses accounts at 15% below the fiscal year 2010 level.
The bill also includes a requirement that the Office of Management and Budget submit the President’s budget request on time – or else face a withholding of approximately seven months of their budget until the request is sent – and a prohibition on funding for the EOP to prepare signing statements and Executive Orders that contradict existing law.
General Services Administration (GSA) – The bill allows the GSA to spend $7.5 billion out of the Federal Buildings Fund, a cut of $2.4 billion compared to the request and $476 million below the fiscal year 2013 enacted level. The legislation restructures GSA accounts to separate out administrative expenses, and reduces those costs by 15% compared to the President’s request.
The legislation also helps to save taxpayer dollars by requiring additional reporting on the GSA property inventory, providing funding for space consolidation only if projects will reduce future costs, and reducing funding for operating and leasing existing space.
The bill continues strong oversight measures, including quarterly spending reports, limits on spending from the Working Capital Fund, prohibitions on all travel and conferences that do not comply with the law or regulations, and an increase in funding for the Inspector General to help investigate waste or abuse of tax dollars.
Small Business Administration (SBA) –The bill contains $898 million for the SBA, $147 million (14%) below the fiscal year 2013 enacted level. Small businesses are the drivers of the American economy, and SBA loans and programs play an important part in helping small businesses start and grow. To this end, the bill fully funds business loans at $263 million. Due to a reduction in loan subsidy rates, this level is $222 million below the fiscal year 2013 enacted level, but is sufficient to support expected loan demand. The bill fully funds disaster loan implementation costs at $192 million to allow for a quick and efficient emergency loan process when unexpected natural disasters strike individuals and small businesses.
Judiciary – Included in the bill is $6.5 billion for the Federal Courts – an increase of $12 million above the fiscal year 2013 enacted level and $192 million below the request. This will provide funding for all federal court activities, the supervision of offenders and defendants living in our communities, the maintenance of court security, and the timely processing of federal cases.
District of Columbia –The bill contains a $636 million federal payment to the District of Columbia – $40 million less than the fiscal year 2013 enacted level. Within this amount, the bill targets resources on public safety and security costs, and includes $54 million for the SOAR Act, which provides scholarships to low-income students in DC to attend private schools.
In addition, the legislation maintains a longstanding provision prohibiting federal and local funds from being used for abortion, and prohibitions on federal funds from being used for needle exchange and medical marijuana programs in the District of Columbia.
Securities and Exchange Commission (SEC) – Included in the bill is $1.4 billion for the Securities and Exchange Commission (SEC), which is $50 million above the fiscal year 2013 enacted level and $303 million below the President’s budget request. The legislation includes a prohibition on the SEC from spending any money out of its “reserve fund” – essentially a slush fund for SEC programs that Congress has not approved; therefore, the increase in funding will offset reserve fund spending, and essentially hold the SEC at the current funding level.
The legislation also contains requirements for the Administration to report to Congress on the cost and regulatory burdens of the Dodd-Frank financial law.
Consumer Financial Protection Bureau (CFPB) – The bill includes a provision to change the funding source for the CFPB from the Federal Reserve to the congressional appropriations process, starting in fiscal year 2015. Currently, funding for this agency is provided by mandatory spending and is not subject to annual congressional review. This change will allow for increased accountability and transparency of the agency’s activities and use of tax dollars. The legislation also requires extensive reporting on CFPB activities.
Consumer Product Safety Commission (CPSC) –The CPSC is funded at $114 million in the bill, which is $0.5 million below the fiscal year 2013 enacted level and $3 million below the request.
Federal Communications Commission (FCC) – The bill contains $320 million for the FCC – a cut of $19.8 million below the fiscal year 2013 enacted level and $39 million below the request.
Federal Trade Commission (FTC) – The bill provides $295 million for the FTC, which is $16.6 million below the fiscal year 2013 enacted level and $6 million below the request.
Other Legislative Provisions – The legislation contains several policy provisions, including:
- A prohibition against the use of federal funds for abortion;
- A provision prohibiting funding for White House “czars” – specifically prohibiting czars related to health care, climate change, the auto industry, and urban affairs, or any substantively similar positions;
- A prohibition on funding to require that entities applying for federal contracts disclose campaign contributions;
- A prohibition on travel, conferences, and employee awards that are not in compliance with appropriate laws and regulations; and
- A prohibition on travel to Cuba for educational exchanges not involving academic study pursuant to a degree program.
The bill also terminates several unnecessary or lower-priority programs, including the Election Assistance Commission ($11.5 million), the Administrative Conference of the U.S. ($3 million), and Allowances for Former Presidents ($3.7 million).
The text of the bill can be found at http://appropriations.house.gov/uploadedfiles/bills-113hr-sc-ap-fy2014-fservices-subcommitteedraft.pdf
Meanwhile, on the issue of IRS bonuses, the Acting chief of the IRS has told workers that he will move to cancel $70 million in bonuses that are due under a union contract for IRS employees. Here is the email sent by Acting IRS Commissioner Danny Werfel to employees on Tuesday:
Sent: Tuesday, July 09, 2013 12:39 PM
Subject: Update on Furloughs, Budget
Today, I want to announce several important developments with regard to cost-cutting, furlough days and awards.
While we have made significant progress in cutting costs, we must be committed to doing more. To that end, and in this unprecedented budget situation, I do not believe the IRS should pay performance awards this year to employees, managers or executives. This is not a reflection of the quality or performance of the work done by you and your colleagues, but rather an unfortunate byproduct of the difficult budgetary situation we find ourselves in.
Following guidance related to sequestration issued earlier this year, leadership determined that non-bargaining unit employees and managers would not receive awards. I have now instructed my senior leadership team to determine options we can take to eliminate awards for senior executives.
In addition, it is my intention to continue to pursue eliminating award payouts this year to bargaining unit employees. This approach is consistent with government-wide policy, which requires suspension of awards during sequestration to the extent appropriate legal procedures are complied with. We will continue to fulfill our bargaining obligations by working with NTEU.
It's important to note that if awards are eliminated for bargaining unit employees this year, the IRS should be able to cancel the furlough days on July 22 and Aug. 30. We will provide an update on the status of our furlough days shortly. If the IRS cancels the remaining furlough days, all employees would be paid on those days. Even more importantly, it would mean the IRS would remain open on those days to serve taxpayers and meet the needs of the nation's tax system.
These steps are part of a wider effort at the IRS to cut costs. The IRS has taken extraordinary measures over the last several years to become more responsible in our use of taxpayer dollars. We will have absorbed $1 billion in budget reductions through savings and efficiencies between Fiscal Years 2010 and 2013. In recent months and with your assistance, the CFO office and your business units have found even more places to reduce costs.
I believe we are beginning an important new chapter in our efforts to set the IRS on a new path. It is my hope that in the coming weeks and months, we can have a robust public dialogue about the future of the IRS budget. We have demonstrated our commitment to making hard choices to reduce our spending, and we must also make it clear that the IRS needs adequate resources for the necessary investments in services and enforcement that will enable us to continue carrying out our mission to serve the American taxpayer, now and in the years ahead.
Thank you for your service and support during this challenging time.
--Danny Werfel
A day after a House spending panel rolled out plans to further reduce spending for the Congress, Republicans have set out a budget plan that slices 24 percent from the Internal Revenue Service and takes a chunk of money out of salaries and expenses at the White House as well. ...
