IRS, GSA bear brunt of spending cuts in House bill

The IRS would face even greater financial constraints and federal building construction would grind nearly to a halt under a fiscal 2016 spending bill approved Wednesday by the House Appropriations Committee.

The panel voted along party lines for a $20.2 billion financial services and general government funding bill that adheres to the caps known as sequestration. Overall, the included agencies would take a 6-percent cut compared to this year.

But the IRS and General Services Administration would bear the brunt of it.  The IRS stands to lose $838 million, a sign that the Republican majority is not yet willing to forgive the agency for its treatment of  conservative groups that applied for tax- exempt status in 2010 and 2012. The agency would be worse off than it was in 2004, when it had fewer responsibilities.

Committee Chairman Hal Rogers (R-Ky.) said the funding cuts would help correct “improper behavior.”

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“It ensures that the agency streamlines operations and pares back waste. It continues strong oversight and prohibits unseemly, inappropriate and illicit activities,” he said. “They’ve got to understand that they report to Congress and the American public.”

At the same time, the committee expects the IRS to improve its customer service, said Rep. Ander Crenshaw (R-Fla.), who chairs the Subcommittee on Financial Services and General Government. The IRS says this year’s budget cuts forced it to pare back taxpayer services.

The bill would devastate the IRS, said the National Treasury Employees Union, which represents many IRS employees. The money transferred to customer-service programs from other parts of the agency’s budget would be “woefully inadequate” to help taxpayers and fight identity theft, said NTEU President Colleen Kelley.

Before the vote, the White House issued a sternly worded letter to Rogers warning that the IRS would have to reduce enforcement activities and delay technology projects that could thwart future cyber attacks.

“The IRS is currently three upgrades behind current software releases,” Office of Management and Budget Director Shaun Donovan wrote, adding that the bill “would mean further deferral of cybersecurity and infrastructure upgrades, jeopardizing the strong defenses IRS needs.”

No money for GSA to construct new buildings

Like the IRS, GSA has a recent history of inappropriate behavior, Crenshaw said.

The bill would strip the agency — known as the government’s landlord for its management of federal buildings — of money for new construction. It would also provide less than half the amount the agency has requested for building repairs. Yet it would be sufficient, Crenshaw said.

“We think the administration should do a better job of making use of what they have and taking care of what they have before they get some new space,” he said.

That would continue a dangerous pattern of funding GSA’s Federal Buildings Fund at levels billions below what the agency collects in rent from the rest of government, Donovan warned in his letter.

“Underfunding renovation is particularly damaging, as the Government must be a good steward of its own assets, able to take advantage of opportunities to save money over the long term and maintain its buildings adequately to avoid more costly failures in the future,” he said. With regard to new construction, the government would miss out on long-term savings from projects that include the Homeland Security Department’s planned consolidated headquarters at St. Elizabeths in Southeast Washington, he added.

In all, the spending bill covers nearly two dozen agencies, the Judiciary and the District of Columbia. Here are some other highlights:

Federal Communications Commission

The FCC receives its funding from fees and auction proceeds, rather than appropriations. But the bill would cut the commission’s budget by $25 million. That would hinder the agency’s work on public safety, wireless spectrum and universal service, Donovan said.

In addition, the bill contains provisions that would make it hard for the commission to enforce net neutrality, the principle that requires Internet service providers to treat all data equally.

Office of Personnel Management 

OPM would get $21 million to upgrade the cybersecurity of its networks following multiple security breaches that have endangered the personal information of millions of federal employees, retirees and job applicants.

“OPM must take all steps to secure the personally identifiable information and material relating to security clearances of all current, former, and prospective federal government employees,” the legislation states.

In return for fully funding the agency’s request, the committee expects OPM to be transparent with Congress about its cybersecurity problems, Crenshaw said. Some lawmakers have called for OPM Director Katherine Archuleta to resign following the hacks.

The bill lauds OPM for chipping away at a backlog of federal employees’ retirement applications, but it directs the agency to adopt an e-filing system.

“The Committee is astounded by the continued use of outdated paper processing,” the draft report says.

Small Business Administration

The SBA is the winner in this spending bill. It would get $853 million for fiscal 2016, which comes within $8 million of the President’s request. The agency would receive more money for its entrepreneurial development and business loans program than it has this year. The committee’s draft directs the SBA to quickly fill vacancies at its loan-processing centers.

U.S. Postal Service

While the Postal Service relies on sales, rather than appropriations, to fund its operations, the committee included an amendment that would undo the Postal Service’s recent changes to its delivery standards, which are part of the agency’s efforts to cut costs.

Congress should have a say in the Postal Service’s decisions, argued the amendment’s sponsor, Rep. Chaka Fattah (D-Pa.).

“The constitutional requirement for the Congress to make sure that the mail can be delivered is  a clear burden on us to do our jobs. If we’re going to let the standards slip, let’s do that consciously and be held accountable for it,” he said.

The amendment garnered bipartisan support.

“Just last evening at a dinner, someone got up and, in talking about the mail service and standards, said they received Christmas cards in March,” said Rep. David Joyce (R-Ohio). “If we’re going to have standards, let’s have standards of excellence.”

The bill now goes to the full House for a vote.

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