Top officials at the Treasury Department and the General Services Administration say budget cuts being considered by House lawmakers — and that have since been adopted by the House Appropriations Committee — would erode their agencies’ missions.
In a sharply divided vote along partisan lines Wednesday, the committee approved the fiscal 2014 Financial Services and General Government appropriations bill.
The bill — setting funding for a host of agencies, including the Internal Revenue Service, the Office of Personnel Management, and some White House offices, among others — clocked in at $17 billion. That’s about $3 billion less than current levels and some $6 billion below the level the Senate has settled on.
IRS cuts — necessary or draconian?
The embattled IRS faces among the steepest cuts proposed by the committee — 24 percent.
“Clearly, the bureaucracy is broken; this past year, we’ve seen absurd spending on lavish employee conferences, questionable bonuses, the mismanagement of personal information and the loss of billions of dollars in improper payments,” committee Chairman Hal Rogers (R-Ky.) said in his prepared opening statement. “But as IRS Commissioner Daniel Werfel said, the answer to these problems isn’t more money; it’s the careful targeting of funding to ensure that the IRS is doing its job and doing its job well.”
The bill also withholds some additional funding until the agency implements new inspector general recommendations stemming from what internal watchdogs cited as the improper singling out for greater scrutiny some conservative groups applying for tax-exempt status.
The funding restrictions are necessary “to ensure that the IRS changes its ways,” House lawmakers wrote in the bill report.
But Nani Coloretti, Treasury’s assistant secretary for management, said the committee’s funding levels would hamper the agency’s tax enforcement activities and lead to significant staffing cuts.
“Put simply, this budget proposal means fewer critical resources to detect and prevent tax fraud,” Coloretti said in a post on the Treasury blog. “And with fewer IRS staff to complete audits, conservative estimates put the resulting revenue loss from the proposed reduction in enforcement capacity at $12 billion per year.
During the debate on the bill, Rep. Jose Serrano (D-N.Y.), ranking member of the Financial Services subcommittee, introduced an amendment, later adopted by a voice vote, that provides $200,000 in additional funding for workforce training.
GSA: Bill would force us to default on rent payments
The bill funds GSA at about $7.5 billion — about $2.4 billion less than what GSA requested and $476 million less than what it was allocated this year. (GSA funding stems from its Federal Buildings Fund, which is essentially rent paid to GSA by other agencies housed in federal buildings. However, Congress must approve GSA’s use of that funding.)
But GSA Administrator Dan Tangherlini said the House committee’s funding levels would likely force GSA to default on rent payments for properties leased from the private sector.
The committee-approved budget provides about $4.7 billion to fund GSA’s lease payments for privately-owned buildings — about $687 million less than GSA’s request.
However, Tangherlini said that would only allow GSA to make 85 percent of its required rent payments.
“The bill includes a funding level that is 15 percent below what is needed for us to meet our rent obligations,” Tangherlini wrote in a post on the GSA blog. “In order to make that work, we may have to default on leases; close facilities; or even, in some extreme cases, breach our contracts, which would result in lessors charging higher leases for federal agencies. Not paying our rent would create uncertainty in the real estate market across the country and it would do so at a time when the national economy is still recovering.”
Bill silent on fed pay raise
The Office of Personnel Management, funded by the bill at about $210 million, would take a $4 million hit to administrative-expenses account. Part of the savings from that cut went toward expanded training for IRS employees.
“The committee expects OPM to make retirement processing a priority and is pleased with OPM’s recent efforts to correct this problem through the implementation of its strategic plan,” the bill report stated.
However, notably absent in the bill is any talk — either for or against — of a pay raise for civilian employees.
The Financial Services bill is typically the vehicle through which Congress expresses its approval or disapproval of an employee pay hike. In his 2014 budget request, President Barack Obama included a 1 percent pay bump, but lawmakers can overrule the increase with legislation.
Last year’s bill was also silent on the issue of a pay raise, and later that year Obama announced feds would get the pay raise — but only after Congress passed a budget. However, as it turned out, when lawmakers finally did agree on the remainder of fiscal 2013 spending, they decided to continue the pay freeze through the end of the year.
House, Senate taking divergent paths on appropriations
The appropriations bill now goes to the full House, but it’s unclear when a vote will take place. The committee also approved Wednesday a $47.4 billion Commerce, Justice and Science appropriations bill. That’s slightly less — about $350 million — than current levels.
The House has moved more slowly than in recent years in adopting the 12 annual appropriations bills — in no small part because of the uncertainty surrounding how to account for the billions in automatic, across-the-board budget cuts known as sequestration.
The House and Senate are taking a divergent path on dealing with sequestration, which has put them about $91 billion apart on a top-line spending number.
The House has settled on a $967 billion plan that takes the total amount of the sequester cuts into account but spares the Defense Department from further reductions. The Senate, on the other hand, has settled on a higher “pre- sequestration” level of $1.058 trillion, operating under the assumption that lawmakers will hammer out an alternative to the automatic cuts, separate from the appropriations process.
The Senate announced Thursday it would bring the first of the 12 bills — funding for the departments of Transportation and Housing and Urban Development — to the floor for a vote there.