# Financial Services and General Government: FY2013 Appropriations > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/crs%3AR42730 ## Record - **Collection:** Congressional research report - **Document type:** CRS Report - **Published:** June 28, 2013 - **Citation:** R42730 ## Text Financial Services and General Government: FY2013 Appropriations -name redacted-, Coordinator Specialist in American National Government June 28, 2013 Congressional Research Service 7-.... www.crs.gov R42730 CRS Report for Congress Prepared for Members and Committees of Congress Financial Services and General Government: FY2013 Appropriations Summary The Financial Services and General Government appropriations bill provides funding for the Department of the Treasury, the Executive Office of the President (EOP), the judiciary, the District of Columbia, and more than two dozen independent agencies. Among those independent agencies are the General Services Administration (GSA), the Office of Personnel Management (OPM), the Small Business Administration (SBA), the Securities and Exchange Commission (SEC), and the United States Postal Service (USPS). The Commodity Futures Trading Commission (CFTC) is funded in the House through the Agriculture appropriations bill and in the Senate through the FSGG bill. CFTC funding is included in all FSGG funding tables in this report. On February 13, 2012, President Obama submitted his FY2013 budget request. The request included a total of $44.6 billion for agencies funded through the FSGG appropriations bill, including $308 million for the CFTC. The President’s request would increase funding $1.5 billion above FY2012 enacted amounts. On June 20, 2012, the House Appropriations Committee reported H.R. 6020, the Financial Services and General Government Appropriations Act, 2013. H.R. 6020 would provide $42.4 billion for agencies funded through the House FSGG Appropriations Subcommittee. In addition, the CFTC would receive $180 million through the FY2013 agriculture appropriations bill. Total FY2013 funding provided by the House would be $42.5 billion, about $2.1 billion below the President’s FY2013 request and $560 million less than FY2012 enacted amounts. On June 14, 2012, the Senate Appropriations Committee reported its FY2013 financial services bill, S. 3301. The Senate committee’s bill would provide $44.3 billion for FSGG agencies, including $308 million for the CFTC, for FY2013, which would be $337 million below the President’s FY2013 request and $1.2 billion more than FY2012 enacted amounts. Because no regular FY2013 FSGG appropriations bill was enacted before October 1, 2012, Congress included funds for FSGG agencies in a continuing resolution (CR) for FY2013 (P.L. 112-175). For FSGG accounts, the CR generally continued funding through March 27, 2013, at a level that is .612% higher than the FY2012 enacted level. P.L. 112-175 was superseded by a second law, the Consolidated and Further Continuing Appropriations Act, 2013 (P.L. 113-6). Enacted on March 26, 2013, the law provided full-year continuing appropriations through September 30, 2013. Appropriations in the law will be reduced under the sequester order of the President, issued on March 1, 2013. That order implemented an across-the-board cut for (non-exempt, nondefense) discretionary funding, which was calculated based on a reduction of each account of about 5.0%; the accompanying report indicated a dollar amount of budget authority to be canceled from each account pursuant to that across-the-board cut. The effect of these reductions on budgetary resources of FSGG agencies, accounts, and programs remains unclear, pending further guidance from the Office of Management and Budget as to how they will be applied. This report will be updated as needed. Congressional Research Service Financial Services and General Government: FY2013 Appropriations Contents Most Recent Developments ............................................................................................................. 1 Introduction...................................................................................................................................... 2 Overview.......................................................................................................................................... 3 Budget Control Act.............................................................................................................. 3 Continuing Resolution......................................................................................................... 4 FY2013 Appropriations by Title ...................................................................................................... 5 Title I: The Department of the Treasury .................................................................................... 5 Brief Summary of FY2012 Appropriations for Treasury Offices and Bureaus ................... 8 FY2013 Appropriations for Treasury Offices and Bureaus: President’s Budget Request, Required Assessments, and Congressional Action ............................................ 8 President’s Budget Request ................................................................................................. 8 Required Assessments of the Administration’s FY2013 Budget Request for the IRS ................................................................................................................................. 13 Congressional Action ........................................................................................................ 14 Title II: Executive Office of the President ............................................................................... 26 President’s Budget Request and Key Issues ...................................................................... 27 House Action ..................................................................................................................... 29 Senate Action .................................................................................................................... 33 Title III: The Judiciary ............................................................................................................. 36 The Judiciary Budget and Key Issues...................................................................................... 37 Judicial Security ................................................................................................................ 39 Supreme Court .................................................................................................................. 39 U.S. Court of Appeals for the Federal Circuit ................................................................... 40 U.S. Court of International Trade ...................................................................................... 40 Courts of Appeals, District Courts, and Other Judicial Services....................................... 40 Administrative Office of the U.S. Courts .......................................................................... 41 Federal Judicial Center ...................................................................................................... 42 United States Sentencing Commission.............................................................................. 42 Judiciary Retirement Funds ............................................................................................... 42 Administrative Provisions ................................................................................................. 42 Title IV: District of Columbia.................................................................................................. 44 The District of Columbia Budget and General Provisions ...................................................... 45 The President’s Budget Request ........................................................................................ 45 District’s Budget ...................................................................................................................... 45 Congressional Action............................................................................................................... 46 Senate Bill, S. 3301 ........................................................................................................... 46 House Bill H.R. 6020 ........................................................................................................ 47 Title V: Independent Agencies ................................................................................................. 48 Civilian Property Realignment Board ............................................................................... 50 Commodity Futures Trading Commission ........................................................................ 50 Consumer Product Safety Commission............................................................................. 51 Election Assistance Commission....................................................................................... 53 Federal Communications Commission ............................................................................. 53 Federal Deposit Insurance Corporation: Office of the Inspector General ......................... 55 Federal Election Commission ........................................................................................... 55 Federal Trade Commission................................................................................................ 56 Congressional Research Service Financial Services and General Government: FY2013 Appropriations General Services Administration ....................................................................................... 59 Independent Agencies Related to Personnel Management Appropriations ....................... 62 Federal Labor Relations Authority .................................................................................... 64 Merit Systems Protection Board ....................................................................................... 65 Office of Personnel Management ...................................................................................... 65 Office of Special Counsel.................................................................................................. 66 National Archives and Records Administration ................................................................ 67 National Credit Union Administration .............................................................................. 69 Privacy and Civil Liberties Oversight Board .................................................................... 69 Recovery Accountability and Transparency Board ........................................................... 70 Securities and Exchange Commission .............................................................................. 70 Selective Service System .................................................................................................. 71 Small Business Administration ......................................................................................... 71 United States Postal Service .............................................................................................. 73 United States Tax Court..................................................................................................... 75 General Provisions Government-Wide .................................................................................... 76 Government Procurement ........................................................................................................ 77 Tables Table 1. Status of FY2013 Financial Services and General Government Appropriations ............... 2 Table 2. Financial Services and General Government Appropriations, FY2012-FY2013............... 3 Table 3. Department of the Treasury Appropriations, FY2012 and FY2013 ................................... 5 Table 4. Executive Office of the President, FY2012-FY2013 ....................................................... 26 Table 5. The Judiciary Appropriations, FY2012-FY2013 ............................................................. 37 Table 6. District of Columbia Special Federal Payments, FY2012-FY2013 ................................. 44 Table 7. Independent Agencies Appropriations, FY2012-FY2013 ................................................ 49 Table 8. General Services Administration Appropriations, FY2012-FY2013 ............................... 60 Table 9. Independent Agencies Related to Personnel Management Appropriations, FY2012-FY2013 ......................................................................................................................... 63 Contacts Author Contact Information........................................................................................................... 78 Key Policy Staff ............................................................................................................................. 79 Congressional Research Service Financial Services and General Government: FY2013 Appropriations Most Recent Developments On February 13, 2012, President Obama submitted his FY2013 budget request. The request included a total of $44.6 billion for agencies funded through the Financial Services and General Government (FSGG) appropriations bill, including $308 million for the Commodity Futures Trading Commission (CFTC). The President’s request would increase funding $1.5 billion above FY2012 enacted amounts. On June 20, 2012, the House Appropriations Committee reported H.R. 6020, the Financial Services and General Government Appropriations Act, 2013. H.R. 6020 would provide $42.4 billion for agencies funded through the House FSGG Appropriations Subcommittee. In addition, the CFTC would receive $180 million through the FY2013 agriculture appropriations bill. Total FY2013 funding provided by the House would be $42.5 billion, about $2.1 billion below the President’s FY2013 request and $560 million less than FY2012 enacted amounts. On June 14, 2012, the Senate Appropriations Committee reported its FY2013 financial services bill, S. 3301. The Senate committee’s bill would provide $44.3 billion for FSGG agencies, including $308 million for the CFTC, for FY2013, which would be $337 million below the President’s FY2013 request and $1.2 billion more than FY2012 enacted amounts. Table 1 reflects the status of FSGG appropriations legislation at key points in the appropriations process. Because no regular FY2013 FSGG appropriations bill was enacted before October 1, 2012, Congress included funds for FSGG agencies in a continuing resolution (CR) for FY2013 (P.L. 112-175). For FSGG accounts, the CR generally continued funding through March 27, 2013, at a level that is .612% higher than the FY2012 enacted level. P.L. 112-175 was superseded by a second law, the Consolidated and Further Continuing Appropriations Act, 2013 (P.L. 113-6). Enacted on March 26, 2013, the law provided full-year continuing appropriations through September 30, 2013. Appropriations in the law will be reduced under the sequester order of the President, issued on March 1, 2013. That order implemented an across-the-board cut for (non-exempt, nondefense) discretionary funding, which was calculated based on a reduction of each account of about 5.0%; the accompanying report indicated a dollar amount of budget authority to be canceled from each account pursuant to that across-the-board cut. The effect of these reductions on budgetary resources of FSGG agencies, accounts, and programs remains unclear, pending further guidance from the Office of Management and Budget as to how they will be applied. Congressional Research Service 1 Financial Services and General Government: FY2013 Appropriations Table 1. Status of FY2013 Financial Services and General Government Appropriations Subcommittee Markup House Senate 06/20/12 06/14/12 Conference Report Passed House Report H.Rept. 112-550 House Passage Senate Report S.Rept. 112-177 Senate Passage Conference Report House Senate Public Law P.L. 113-6 Introduction The House and Senate Committees on Appropriations reorganized their subcommittee structures in early 2007. Each chamber created a new FSGG Subcommittee. In the House, the jurisdiction of the FSGG Subcommittee was formed primarily of agencies that had been under the jurisdiction of the Subcommittee on Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies, commonly referred to as “TTHUD.”1 In addition, the House FSGG Subcommittee was assigned four independent agencies that had been under the jurisdiction of the Science, State, Justice, Commerce, and Related Agencies Subcommittee.2 In the Senate, the jurisdiction of the new FSGG Subcommittee was a combination of agencies from the jurisdiction of three previously existing subcommittees. The District of Columbia, which had its own subcommittee in the 109th Congress, was placed under the purview of the FSGG Subcommittee, as were four independent agencies that had been under the jurisdiction of the Commerce, Justice, Science, and Related Agencies Subcommittee.3 Additionally, most of the agencies that had been under the jurisdiction of the Subcommittee on Transportation, Treasury, the Judiciary, Housing and Urban Development, and Related Agencies were assigned to the FSGG Subcommittee.4 As a result of this reorganization, the House and Senate FSGG Subcommittees have nearly identical jurisdictions.5 1 The agencies previously under the jurisdiction of the TTHUD Subcommittee that did not become part of the FSGG subcommittee were the Department of Transportation, the Department of Housing and Urban Development, the Architectural and Transportation Barriers Compliance Board, the Federal Maritime Commission, the National Transportation Safety Board, the Neighborhood Reinvestment Corporation, and the United States Interagency Council on Homelessness. 2 The agencies are the Federal Communications Commission (FCC), the Federal Trade Commission (FTC), the Securities and Exchange Commission (SEC), and the Small Business Administration (SBA). 3 The agencies are the FCC, FTC, SEC, and SBA. 4 The agencies that did not transfer from TTHUD to FSGG were Transportation, HUD, the Architectural and Transportation Barriers Compliance Board, the Federal Maritime Commission, the National Transportation Safety Board, the Neighborhood Reinvestment Corporation, and the United States Interagency Council on Homelessness. 5 The Commodity Futures Trading Commission is under the jurisdiction of the FSGG Subcommittee in the Senate but not in the House. Congressional Research Service 2 Financial Services and General Government: FY2013 Appropriations Overview The FSGG appropriations bill includes funding for the Department of the Treasury, the Executive Office of the President (EOP), the judiciary, the District of Columbia, and more than two dozen independent agencies. For each title of the regular FSGG appropriations bill, Table 2 lists the enacted amounts for FY2012, the President’s FY2013 request, and amounts recommended by the House and Senate appropriations committees for FY2013. Table 2. Financial Services and General Government Appropriations, FY2012-FY2013 (in millions of dollars) FY2012 Enacted FY2013 Request FY2013 House Committee FY2013 Senate Committee $12,215 $13,244 $12,292 $12,904 Title II: Executive Office of the President 659 649 650 698 Title III: The Judiciary 6,970 7,189 6,979 7,164 Title IV: District of Columbia 665 678 667 676 Title V: Independent Agencies 22,581 22,864 21,955 22,844 Total $43,091 $44,623 $42,531 $44,287 Title Title I: Department of the Treasury FY2013 Enacted Sources: H.R. 6020; H.Rept. 112-550; S. 3301, S.Rept. 112-177. Notes: Totals include funding for the Commodity Futures Trading Commission (CFTC). The CFTC is funded in the House through the Agriculture appropriations bill and in the Senate through the Financial Services and General Government bill. Figures include rescissions and offsetting collections. Totals may not add due to rounding. Budget Control Act FY2013 discretionary appropriations were considered in the context of the Budget Control Act of 2011 (BCA, P.L. 112-25), which established discretionary spending limits for FY2012-FY2021. The BCA also tasked a Joint Select Committee on Deficit Reduction to develop a federal deficit reduction plan for Congress and the President to enact by January 15, 2012. Because deficit reduction legislation was not enacted by that date, an automatic spending reduction process established by the BCA was triggered; this process consists of a combination of sequestration and lower discretionary spending caps, initially scheduled to begin on January 2, 2013. The “joint committee” sequestration process for FY2013 requires the Office of Management and Budget (OMB) to implement across-the-board spending cuts at the account and program level to achieve equal budget reductions from both defense and nondefense funding at a percentage to be determined, under terms specified in the Balanced Budget and Emergency Deficit Control Act of 1985, as amended by the BCA. The American Taxpayer Relief Act (ATRA, P.L. 112-240), enacted on January 2, 2013, made a number of significant changes to the procedures in the BCA that will take place in FY2013. First, the date for the joint committee sequester to be implemented was delayed for two months, until Congressional Research Service 3 Financial Services and General Government: FY2013 Appropriations March 1, 2013. Second, the dollar amount of the joint committee sequester was reduced by $24 billion. Third, statutory caps on discretionary spending for FY2013 (and FY2014) were lowered. Pursuant to the BCA, as amended by ATRA, President Obama ordered that the joint committee sequester be implemented on March 1, 2013. The accompanying OMB report indicated a dollar amount of budget authority to be canceled from each account containing non-exempt funds. The sequester will ultimately be applied at the program, project, and activity (PPA) level within each account. Because the sequester was implemented at the time that a temporary continuing resolution was in force, the reductions were calculated on an annualized basis and will be apportioned throughout the remainder of the fiscal year. Although full year FY2013 funding has been enacted, the effect of these reductions on the budgetary resources that are available to Interior, Environment, and Related Agencies at the account and PPA level remains unclear, until further guidance is provided by OMB as to how these reductions should be applied. Continuing Resolution Under P.L. 113-6, most FSGG accounts were funded at the FY2012 level, under the terms and conditions in the FY2012 appropriations law. However, there were exceptions to this general approach, which are often referred to as “anomalies.” Eight anomalies were identified in P.L. 113-6. • Section 1302 provides $24.7 million to the District of Columbia for its “Emergency Planning and Security Costs” account. • Section 1303 provides $98.7 million to the Federal Communications Commission for its “Salaries and Expenses” account. • Section 1305 provides $18.7 million to the Office of Government Ethics for its “Salaries and Expenses” account. • Section 1306 provides $333.6 million to the Small Business Administration for its “Business Loan Program” account. • Section 1307 rescinds $950.0 million from the Department of the Treasury’s “Treasury Forfeiture Fund” account. • Section 1308 permits the Department of Treasury to subsidize up to $500 million in total loan principal through its “Community Development Financial Institutions Fund” account. • Section 1310 specifies that no funds are provided to the Executive Office of the President for its “Partnership Fund for Program Integrity Innovation” account. • Section 1311 provides $1.040 billion to the Judiciary for its “Defender Services” account. Congressional Research Service 4 Financial Services and General Government: FY2013 Appropriations FY2013 Appropriations by Title Title I: The Department of the Treasury6 This section examines FY2013 appropriations for the Treasury Department and its operating bureaus, including the Internal Revenue Service (IRS). Table 3 shows the enacted amounts for FY2012, the President’s FY2013 request, the amounts recommended by the House and Senate appropriations committees for FY2012, and enacted amounts for FY2013. Table 3. Department of the Treasury Appropriations, FY2012 and FY2013 (in millions of dollars) FY2012 Enacted FY2013 Request FY2013 House Committee FY2013 Senate Committee $308 $301 $203 $301 Department-wide Systems and Capital Investments 0 7 0 7 Terrorism and Financial Intelligence — — 102 — Office of Inspector General 30 29 29 30 Treasury Inspector General for Tax Administration 152 154 153 154 Special Inspector General for TARP 42 40 35 40 Community Development Financial Institutions Fund 221 221 221 233 Financial Crimes Enforcement Network 111 102 111 108 Financial Management Service 218 — 208 — Fiscal Servicea — 360 ─ 360 Alcohol and Tobacco Tax and Trade Bureau 100 97 95 100 Bureau of the Public Debt 166 — 147 — Payment for Losses in Shipment 2 2 2 2 Internal Revenue Service (total) 11,817 12,761 11,817 12,519 Taxpayer Services 2,240 2,253 2,240 2,253 Enforcement 5,299 5,425 5,299 5,611 Enhanced Tax Enforcement 0 691 0 0 Operations Support Activities 3,947 4,062 3,947 4,324 Business Systems Modernization 330 330 330 330 Rescissions: Treasury Forfeiture Fund (-950) (-830) (-830) (-950) Departmental Offices 6 FY2013 Enacted This section was authored by (name redacted) (x7-....). Congressional Research Service 5 Financial Services and General Government: FY2013 Appropriations Total FY2012 Enacted FY2013 Request FY2013 House Committee FY2013 Senate Committee $12,215 $13,244 $12,292 $12,904 FY2013 Enacted Sources: Appendix, Budget of the U.S. Government, FY2013, H.Rept. 112-550; and S.Rept. 112-177. a. The Obama Administration’s budget request for FY2013 calls for consolidating the accounts for the Financial Management Service and the Bureau of Public Debt. While the Senate Appropriations Committee endorses the change, the House Appropriations Committee does not. The Treasury Department performs a variety of critical governmental functions. They include protecting the nation’s financial system against a host of illicit activities (particularly money laundering and terrorist financing), collecting tax revenue and enforcing tax laws, managing and accounting for federal debt, administering the federal government’s finances, regulating financial institutions, and producing and distributing coins and currency. At its most basic level of organization, Treasury consists of departmental offices and operating bureaus. In general, the offices are responsible for formulating and implementing policy initiatives and managing Treasury’s operations, while the bureaus undertake specific tasks assigned to Treasury, mainly through statutory mandates. In the past decade or so, the bureaus have accounted for more than 95% of the agency’s funding and work force. With one exception, the bureaus and offices can be divided into those engaged in financial management and regulation and those engaged in law enforcement. In recent decades, the Comptroller of the Currency, U.S. Mint, Bureau of Engraving and Printing, Financial Management Service (FMS), Bureau of the Public Debt (BPD), Community Development Financial Institutions Fund (CDFIF), and Office of Thrift Supervision have taken on responsibilities related to the management of the federal government’s finances or the supervision and regulation of the U.S. financial system. In contrast, law enforcement arguably has been central to the responsibilities handled by the Alcohol and Tobacco Tax and Trade Bureau (ATTB), Financial Crimes Enforcement Network (FinCEN), and the Treasury Forfeiture Fund (TFF). With the advent of the Department of Homeland Security in 2002, Treasury’s direct involvement in law enforcement has shrunk considerably. The exception to this dichotomy is the IRS, whose main responsibilities encompass both the collection of tax revenue and the enforcement of tax laws and regulations. The operating budget for most Treasury bureaus and offices comes largely from annual appropriations. This is the case for the IRS, FMS, BPD, FinCEN, ATTB, Office of the Inspector General (OIG), Treasury Inspector General for Tax Administration (TIGTA), Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and CDFIF. By contrast, funding for the Treasury Franchise Fund, the U.S. Mint, the Bureau of Engraving and Printing, Office of the Comptroller of the Treasury, and the Office of Thrift Supervision stems from the fees they receive for the services and products they provide. In FY2012, appropriations for the Treasury Department are distributed among 10 accounts, each of which is described briefly below. Departmental Offices: covers the salaries and other expenses of offices in the department that formulate and implement policies in the areas of domestic and international finance, terrorist financing and other financial crimes, taxation, international trade, and the domestic economy. It Congressional Research Service 6 Financial Services and General Government: FY2013 Appropriations also provides funding for the department’s financial and personnel management, procurement operations, and information and telecommunications systems. Office of Inspector General: covers the salaries and other expenses related to the audits and investigations conducted by OIG staff. These evaluations are intended to promote improved efficiency and effectiveness and prevent waste, fraud, and abuse among departmental operations and programs, as well as to inform the Treasury Secretary and Congress about problems or shortcomings in those activities. Treasury Inspector General for Tax Administration: covers salaries and other expenses related to the audits and investigations conducted by TIGTA staff. These evaluations are intended to promote greater efficiency and effectiveness in the administration of tax law, deter or prevent fraud and abuse in IRS programs and operations, and recommend changes in those activities to solve problems or remedy deficiencies. Special Inspector General for the Troubled Asset Relief Program: covers salaries and other expenses related to the audits and investigations into the management and effectiveness of TARP conducted by SIGTARP staff. The office was established by the same law that created TARP: the Emergency Economic Stabilization Act (P.L. 110-343). Financial Crimes Enforcement Network: covers salaries and other expenses related to the activities of FinCEN, whose main responsibility is to protect the domestic financial system from illicit uses, such as money laundering and terrorist financing. The legal basis for this role is the Bank Secrecy Act (BSA; P.L. 91-508). FinCEN administers the act by developing and implementing regulations and other guidance and working with private financial institutions and eight federal agencies to ensure that the financial sector complies with the BSA’s reporting requirements. Financial Management Service: covers salaries and other expenses related to the operations of the FMS, which is responsible for developing and implementing payment policies and procedures for federal agencies, collecting debts owed to those agencies and state governments, and providing financial accounting, reporting, and financing services for the federal government and its agents. Alcohol and Tobacco Tax and Trade Bureau: covers salaries and other expenses related to the activities of ATTB, which was established by the Homeland Security Act of 2002 (P.L. 107-296). The bureau is responsible for enforcing certain laws regarding the domestic sale and production of alcohol and tobacco products and preventing harm to consumers by ensuring that the products they regulate comply with federal consumer safety laws. Bureau of the Public Debt: covers salaries and other expenses related to the conduct of public debt operations and the promotion of U.S. bonds. Community Development Financial Institutions Fund: provides funding for the activities of the CDFIs, which make investments (in the form of loans, grants, and equity acquisitions) in community development financial institutions. These institutions include community development banks, credit unions, and venture capital funds. They in turn provide financing for affordable housing projects, small businesses, and community development projects in eligible areas. The CDFIF also administers the Black Enterprise Award program and the New Markets tax credit. Congressional Research Service 7 Financial Services and General Government: FY2013 Appropriations Internal Revenue Service: covers salaries and other expenses related to the activities of the IRS, whose main responsibilities are to administer federal tax laws and collect revenue. Two critical components of IRS operations and programs are the services it offers taxpayers to help them understand and meet their tax obligations and the enforcement tools it uses to improve voluntary taxpayer compliance and punish those who violate the law. Some appropriated funds are used to develop or upgrade business operations and information systems, as part of an ongoing effort to improve the effectiveness and efficiency of taxpayer services and enforcement. Brief Summary of FY2012 Appropriations for Treasury Offices and Bureaus In FY2012, the Treasury Department was appropriated $12.215 billion, or 6.7% less than the amount enacted for FY2011. As usual, the vast share (96.7%) of the funds were provided to finance the operations of the IRS, which was provided $11.817 billion for FY2012, or 2.5% less than the amount enacted for FY2011. The remaining $398 million is to be distributed among the Treasury Department’s other appropriation accounts in the following amounts: DO (which includes the Office of Terrorism and Financial Intelligence (TFI) and the Office of Foreign Assets Control), $308 million; OIG, $30 million; TIGTA, $152 million; SIGTARP, $42 million; CDFIF, $221 million; FinCEN, $111 million; FMS, $218 million; ATTB, $100 million; and the BPD, $166 million. FY2013 Appropriations for Treasury Offices and Bureaus: President’s Budget Request, Required Assessments, and Congressional Action President’s Budget Request The Obama Administration requested $13.244 billion (including the cancellation of $830 million in unobligated balances from the Treasury Forfeiture Fund (TFF)) in appropriations for Treasury in FY2013, or 8.4% more than the amount enacted for FY2012. Under the budget proposal, the IRS would receive $12.761 billion, or 96.3% of the total amount. The remaining $483 million would be split among Treasury’s nine other appropriation accounts in the following amounts: DO, $301 million; Department-wide Systems and Capital Investments Program (DSCIP), $7 million; OIG, $29 million; TIGTA, $154 million; SIGTARP, $40 million; CDFIF, $221 million; FinCEN, $102 million; Fiscal Service Operations (FSO), $360 million (consolidates funding for FMS and BPD); and ATTB, $97 million. Four of the accounts would be funded at or above the amounts enacted for FY2012: IRS, DSCIP, TIGTA, FinCEN, and FMS/BPD via the FSO. Relative to FY2012, funding for the IRS would rise by 8.0%, while combined appropriations for the remaining Treasury accounts would fall by 2.7%. Treasury’s FY2013 budget request is intended to promote the following strategic goals: • repair and reform the U.S. financial system; • support recovery in the housing market; • enhance U.S. competitiveness; • promote international financial stability and balanced global growth; • protect national security through targeted financial sanctions and enforcement of laws again money laundering and terrorist financing; Congressional Research Service 8 Financial Services and General Government: FY2013 Appropriations • pursue comprehensive tax and fiscal reform; and • improve operational efficiency and efficacy in Treasury’s management of federal finances.7 An explanation of the budget request for each Treasury appropriations account follows. The details come from Treasury’s budget documents for FY2013.8 Departmental Offices The Treasury Department requested $301.2 million in budget authority for DO in FY2013, or 2.3% less than the amount enacted for FY2012. Of that amount, $36.7 million would go to executive direction, $55.9 million to international affairs and economic policy, $70.5 million to domestic finance and tax policy, $100 million to TFI, and $38.1 million to Treasury management and related programs. The proposed operating budget would be $308.4 million, which is $7.2 million more than the requested appropriation. This difference would be bridged by proposed program decreases, non-recurring costs from FY2012, and a variety of efficiency savings. TFI’s resources would be supplemented by $18.9 million in reimbursements from federal and state government agencies for services rendered. Department-wide Systems and Capital Investments Treasury requested $7.1 million in budget authority for DSCIP in FY2013. Congress appropriated no funds for the account in FY2012. Of that amount, $2.0 million would be used to bolster the security of Treasury’s information systems, $883 million would fund a program (Enterprise Content Management) aimed at standardizing the agency’s approach to reducing paper-based processes and transactions, $3.0 million would go to the Office of Financial Innovation and Transformation within Treasury for launching four initiatives begun in FY2011, and $1.2 million would pay for needed repairs to the interior rain leaders of the Main Treasury Building. Office of Inspector General Treasury requested $28.6 million in appropriated funds for OIG in FY2013, or 3.5% less than the amount enacted for FY2012. The funds would be used to conduct both mandated audits and audits and investigations of Treasury’s more controversial programs and operations, including material loss reviews, the new regulatory responsibilities taken on by the agency under the DoddFrank Act, Treasury’s funding of low-income housing projects and certain energy properties under the Economic Recovery and Reinvestment Act of 2009, and private-sector compliance with requirements set by the Bank Secrecy Act and the USA Patriot Act. Included in the budget request are $225,000 to maintain FY2012 operating levels, $60,000 to support the Council of Inspectors General on Integrity and Efficiency, and decreases of $549,000 for reduced oversight of mandatory and risky programs and $784,000 for reduced need for material loss reviews. 7 For more details on these goals and the ways in which the budget request would promote them, see http://www.treasury.gov/about/budget-performance/Documents/ 1.%20FY%202013%20Executive%20Summary%20final.pdf. 8 See http://www.treasury.gov/about/budget-performance/Pages/cj-index.aspx. Congressional Research Service 9 Financial Services and General Government: FY2013 Appropriations Office of the Inspector General for the Troubled Asset Relief Program Treasury requested $40.2 million for SIGTARP in FY2013, or 3.8% less than the amount enacted for FY2012. The funds would be used to support the Office’s main functions of promoting transparency in Treasury’s management of TARP programs; advising Treasury managers on matters related to compliance, internal financial controls, and fraud prevention; assessing the effectiveness of TARP; and preventing, investigating, and referring for prosecution instances of waste, fraud, and abuse in the program. Included in the budget request are $333,000 for maintaining FY2012 levels of operation, $84,000 to support the Council of Inspectors General on Integrity and Efficiency, and a decrease of $2.0 million from a reduction in general operating costs from FY2012. Treasury Inspector General for Tax Administration Treasury requested $153.4 million for TIGTA in FY2013, or 1.4% more than the amount enacted for FY2012. The funds would be used to finance the audits, investigations, and evaluations of IRS operations that TIGTA conducts as part of its mission. Among its priorities in FY2013 are overseeing IRS’s efforts to administer the tax provisions of the Patient Protection and Affordable Care Act (P.L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (P.L. 111152),9 and the challenges facing the IRS as it tries to improve voluntary tax compliance. Included in the budget request are $1.5 million to maintain FY2012 operating levels, efficiency savings of $3.8 million from program reductions and lower administrative costs, a $56,000 reduction in TIGTA’s contribution to the Council of the Inspectors General on Integrity and Efficiency, and $4.5 million to oversee IRS’s implementation of the tax provisions in ACA. Community Development Financial Institutions Fund Treasury requested $221.0 million for CDFIF in FY2013, or the same amount that was enacted for FY2012. The Fund is intended to expand opportunities for economic development and promote community development investments in economically distressed communities that are underserved by banks and other financial institutions. Since its creation in 1994, CDFIF has awarded over $1.4 billion to community development financial institutions, community development entities (CDEs), and depository institutions insured by the Federal Deposit Insurance Corporation through the CDFI Program, the Native American CDFI Assistance Program, and the Bank Enterprise Award Program. In addition, the Fund has allocated $29.5 billion in New Markets Tax Credits to CDEs. Included in the budget request are $269,000 to maintain FY2012 operating levels, $780,000 in efficiency savings from lower lease and procurement costs, $300,000 in other savings from non-recurring costs, $22.2 million in program decreases (including $18.1 million less for the CDFI Program and $3.0 million less for the Bank Enterprise Award Program) and $23.0 million in program increases ($20.0 million for the Bank on USA Program and $3 million for the Healthy Food Financing Initiative). 9 Because the two laws were passed as tandem pieces of legislation to make certain changes in the U.S. health insurance system, they will henceforth be referred to jointly in this section of the report as ACA. Congressional Research Service 10 Financial Services and General Government: FY2013 Appropriations Financial Crimes Enforcement Network Treasury requested $102.4 million for FinCEN in FY2013, or 7.6% less than the amount enacted for FY2012. The funds would be used to support the bureau’s mission, which is to ensure secure, more transparent financial transactions through administration of the Bank Secrecy Act (BSA); to provide analytical and other support for investigations and prosecutions of money laundering and other financial crimes; and to serve as the nation’s financial intelligence unit (FIU) by collecting, analyzing, disseminating, and exchanging information on the nation’s laws and regulations concerning money laundering and terrorist financing. Among FinCEN’s priorities in FY2013 are strengthening relationships with state regulatory agencies to enhance BSA compliance and enforcement, expanding the flow of financial intelligence to law enforcement officials and individuals in the private sector in areas where there is a relatively high risk of money laundering and other financial crimes, increasing the number of analytical projects undertaken with foreign FIUs, and refining and utilizing the new information technology (IT) capabilities that are becoming available through the BSA IT modernization project. Included in the budget request are $930,000 for maintaining current levels of operation, $6.2 million in efficiency savings, $9.9 million in program decreases (including $5.9 million less in reimbursements to the IRS for BS compliance), and $6.8 million in reinvestments (including $2.7 million for continuing the transfer of BSA collection and processing activities from the IRS to FinCEN as a result of the modernization project). Alcohol and Tobacco Tax and Trade Bureau Treasury requested $96.8 million for ATTB in FY2013, or 3.1% less than the amount enacted for FY2012. The Bureau has two responsibilities: (1) collecting federal excise taxes on the sale of alcohol, tobacco, firearms, and ammunition; and (2) administering and enforcing the provisions of the Federal Alcohol Administration Act dealing with permits, labeling, and marketing for tobacco and alcohol products made and sold domestically. Included in the budget request are $987,000 to maintain current operating levels, $3.1 million in savings from non-recurring costs and improved operating efficiencies, and $1.0 million in program decreases from a repeal of the current bond requirement for alcoholic beverage producers that typically have an annual alcohol excise tax liability of less than $50,000. Fiscal Service Treasury requested that the budgets for FMS and BPD be consolidated into a single appropriation account called Fiscal Service (FS) beginning in FY2013. Under the proposal, FS would receive $360.5 million that year, or 7.9% less than the combined amount enacted for FMS and BPD in FY2012. FS’s main responsibilities would be to improve financial management within the federal government by offering central payment services to federal agencies, manage the federal government’s revenue collections and deposits, deliver accounting and financial reporting services to federal agencies, oversee the collection of delinquent federal government debt, borrow the money needed to finance government operations, and provide reimbursable services to other federal agencies. Congressional Research Service 11 Financial Services and General Government: FY2013 Appropriations Its priorities in FY2013 include continuing the consolidation of the two bureaus by exploiting economies of scale and eliminating overlapping or duplicative operations, supporting Treasury’s paperless initiative through FS’s Payments Program, and improving the collection of delinquent federal debt. Included in the budget request are $3.5 million for maintaining FY2012 operations, $25.7 million in savings from non-recurring costs and improved operating efficiencies, $10.3 million in program decreases (including $5.0 million less from eliminating fees paid to agents who redeem paper savings bonds and $4.0 million less from reductions in administrative services), $1.5 million for a reorganization of FS’s payment management system, and a decrease of $1.0 million from a decline in Legacy Treasury Direct user fees. Treasury Forfeiture Fund Treasury proposed to cancel permanently $830 million in unobligated balances from the TFF in FY2013. This would come on top of a rescission of $950 million in such balances in FY2012. The Fund serves as a receipt account for the deposit of non-tax forfeitures made by the bureaus participating in the TFF. These include the IRS’s Criminal Investigation unit, the U.S. Secret Service, the Bureau of Customs and Border Patrol, and the Bureau of Immigration and Customs Enforcement. The Treasury Executive Office for Asset Forfeiture (TEOAF) manages the Fund, whose main purpose is to disrupt and dismantle criminal enterprises operating within the United States through the sanction of asset seizure. Money in the Fund covers the operating expenses of TEOAF and supports the enforcement activities of the participating bureaus related to the National Money Laundering Strategy, the Southwest Border Strategy, and federal efforts to counter terrorist financing. TEOAF estimates that $553,000 will be deposited in the Fund from asset forfeitures in FY2013, leaving $1.6 billion in resources available for use, or 0.3% more than the amount expected to be available at the end of FY2012. After allowing for $706,762 in administrative expenses and obligatory costs and the proposed cancellation of $830 million in unobligated balances, the net result at the end of FY2013 would be $100 million in such balances, or 3.7% less than the estimated result for FY2012. Internal Revenue Service Treasury requested $12.7 billion for the IRS in FY2013, or 8.0% more than the amount enacted for FY2012. Of this amount, $2.2 billion would be used for taxpayer services, $5.7 billion for enforcement, $4.5 billion for operations support, and $330 million for the ongoing Business System Modernization program. Included in the budget request are $108.4 million to maintain current operations; $70.9 million in savings from increased electronic filing, reduced travel, and certain program reductions; $200.3 million to restore funding for individual audits and tax collection that was lost as part of the enacted appropriation for FY2012; and $706.4 million in increases for a variety of programs, including improving offshore tax compliance, implementing legislative changes such as the tax provisions in ACA, implementing a strategy to prevent erroneous refund payments, expanding the Tax Return Preparer Program, expanding the workforce for Appeals, and building an IT and operational infrastructure to deliver the health insurance premium assistance credit that is scheduled to become available at the beginning of 2014. The budget request also proposes to amend the Balanced Budget and Emergency Deficit Control Act of 1985 in order to raise discretionary budget caps and provide the IRS with an additional $350 million for new tax enforcement initiatives in each fiscal year through 2017; IRS estimates that the initiatives would generate $44 billion in additional tax revenue through 2021. Congressional Research Service 12 Financial Services and General Government: FY2013 Appropriations Required Assessments of the Administration’s FY2013 Budget Request for the IRS IRS Oversight Board The IRS Oversight Board was established by the IRS Reform and Restructuring Act of 1998 to oversee the IRS’s performance in administering the tax laws, managing its operations, and accomplishing its strategic goals. Section 7802(d) of the federal tax code requires the Board to review and approve the annual budget proposal submitted by the IRS to the Treasury Department. A key element of the Board’s assessment is the extent to which the proposal supports the annual and long-term strategic objectives of the agency. The same tax provision requires the President to submit the Board’s budget recommendation to Congress along with his budget request for the IRS. For FY2013, the Board recommended that the IRS receive $13.034 billion in appropriated funds, or 10.3% more than the amount enacted for FY2012 and 2.1% more than the budget request.10 In the Board’s view, the recommendation would counter a recent trend of reduced funding for the IRS, which it deemed “harmful to the long-term national interest.” Of the recommended amount, $2.355 billion would go to taxpayer services, $5.702 billion to enforcement, $4.647 billion to operations support, and $330 million to the BSM. These amounts are consistent with the budget request, for the most part. The main difference between the two proposals is that the Board favored putting more resources into improving taxpayer service for the purpose of arresting the recent decline in the level of toll-free telephone assistance, enhancing the physical security of IRS employees, and upgrading the agency’s workforce development program. Among its funding recommendations, the Board assigned the top priority to restoring the $200 million for enforcement that was lost in the enacted appropriation for FY2012. Doing so, according to the Board’s report, would allow the IRS to “increase its field exam and collection workload to previous levels and … result in a gain of approximately $1.15 billion in direct revenue.”11 Results like these, the Board argued, would bolster public confidence in the fairness of the federal tax system and send a strong message to those who cheat or are tempted to cheat on their tax returns that non-compliance “is unacceptable” and tax laws will be strictly enforced. Achieving an 80% level of service for IRS’s toll-free telephone lines during FY2013 was the Board’s second-highest priority. The level of service (LOS), measures the percentage of taxpayer calls that go through to an IRS customer service representative out of all incoming calls in a period. In FY2008, the LOS dropped to 53%, but it has been rising ever since and stood at 70% according to the IRS, in FY2011. Under the President’s budget proposal for FY2013, the level would drop to 63%. The Board deemed such a prospect unacceptable. To avoid such a result, the Board recommended an appropriation of $100 million to raise the level to 80% in FY2013. Tens of millions of taxpayers depend on the toll-free telephone service to understand their tax obligations and their eligibility for tax credits and other tax preferences, and to resolve their account balances. Recent changes to the tax laws have boosted demand for this service, a trend 10 IRS Oversight Board, FY2013 IRS Budget Recommendation: Special Report (Washington: April 2012), p. 3. Available at http://www.treasury.gov/irsob/reports/2012/IRSOB%20FY13%20BUDGET%20REPORT.pdf. 11 Ibid., p. 6. Congressional Research Service 13 Financial Services and General Government: FY2013 Appropriations that is likely to continue in the next few years, as the IRS continues to implement the remaining tax provisions in the ACA. The third priority is appropriating $346 million for new enforcement initiatives. In the Board’s view, they should target offshore tax evasion and international tax compliance, take advantage of the new tax return preparer program and new information requirements for merchant payment cards and reporting basis in stock transactions to increase overall compliance, and address the growing problem of tax refund fraud through identity theft. According to estimates by the IRS, initiatives such as these could bring in $1.48 billion in additional enforcement revenue.12 A fourth priority cited by the Board in its report involved investing $71 million to lay a technical foundation for substantial improvements in future taxpayer service capabilities. The objective is to shift taxpayer requests for assistance from toll-free telephone calls to more cost-effective electronic media, such as the IRS website. Congressional Action House The House Appropriations Committee (hereinafter referred to as the Committee) reported a bill (H.R. 6020) on June 26, 2012, to fund financial services and general government accounts in FY2013. H.R. 6020 would provide $12.292 billion in appropriations (including $830 million in rescissions) for the Treasury Department, or $77 million more than the amount enacted for FY2012 and $952 million less than the budget request. Details on recommended funding for each account and selected issues the Committee addresses in its report (H.Rept. 112-550) on the bill follow.13 Departmental Offices In its report on H.R. 6020, the Committee recommends that DO receive $202.5 million in appropriated funds in FY2013, or $106 million less than the amount enacted for FY2012 and $99 million less than the budget request. The Committee notes that it is creating an appropriation account TFI that is separate from the DO account beginning in FY2013, although the report gives no explanation for the change. The Committee report also directs Treasury to submit an operating plan for the resources it receives for FY2013 no later than 30 days after the enactment of the bill. The plan should cover all offices and bureaus and include details on planned “program changes and major procurements.” The Committee also directs Treasury’s Office of Tax Policy and the IRS to provide within 30 days of the bill’s enactment a “detailed analysis” of the question of whether the IRS has the statutory authority to require individuals filing tax returns under an individual tax identification number and claiming the Additional Child Tax Credit to provide documentary proof that the child in question meets the eligibility criteria for the credit. 12 13 Ibid., p. 7. For access to the report, see http://www.gpo.gov/fdsys/pkg/CRPT-112hrpt550/pdf/CRPT-112hrpt550.pdf. Congressional Research Service 14 Financial Services and General Government: FY2013 Appropriations Another issue addressed in the report is funding in FY2013 for the operations of the Office of Financial Research (OFR), which was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203, hereinafter referred to as the Dodd-Frank Act) to collect financial data and analyze financial market activities in support of the work of the Financial Stability Oversight Council, which was also created by the act. While OFR’s start-up costs in FY2011 and FY2012 were defrayed by transfers of funds from the Federal Reserve, the Office has the authority to finance its operating expenses through assessments on bank holding companies with total consolidated assets of $50 billion or more and non-bank financial companies supervised by the Board of Governors of the Federal Reserve. The Committee believes OFR should not have unlimited power to charge fees and obligate funds for administrative costs. Thus, language is included in H.R. 6020 requiring OFR and the Office of Financial Stability Oversight (OFSO) to submit quarterly reports on their activities; OFSO is also funded through mandatory sources outside the regular appropriation process. Office of Terrorism and Financial Intelligence The Committee recommended $102.1 million for TFI in FY2013, or $2.1 million more than the amount specified for that purpose within the DO account for FY2012. Office of Inspector General The Committee recommended that the OIG receive $28.5 million in appropriations in FY2013, or $1.1 million less than the amount enacted for FY2012 and $81,000 less than the budget request. In its report on H.R. 6020, the Committee commended OIG for the audit it is conducting of Treasury’s “capital planning and investment control program.” In addition, it urged the Office to issue a report on the proposed merger of FMS and BPD that addresses how current responsibilities for the two would be divided or shared, how their customers would be affected, and how staffing and the management structure for each bureau would change. Within 90 days of the enactment of the bill, OIG would be required to issue a report on the separation of funds and activities between “mandatory-funded offices, such as OFR, and discretionary-funded offices that carry out related or overlapping work, such as the Office of Domestic policy.” Treasury Inspector General for Tax Administration The Committee recommended $153.4 million for TIGTA in FY2013, or $1.7 million more than the amount enacted for FY2012 and $430,000 less than the budget request. In its report on H.R. 6020, the Committee expressed support for the investigations of the links between identity theft and tax fraud that TIGTA has undertaken and recommended that it continue to monitor the issue until the IRS “significantly reduces the incidence of tax fraud through identity theft and significantly improves the quality of assistance it provide to victims” of such theft. The Committee also directed TIGTA to submit a report no later than 90 days after the bill’s enactment examining the extent to which proposed tax enforcement initiatives that end up being implemented collect the revenue the IRS says they will in budget requests. Special Inspector General for the Troubled Asset Relief Program The Committee recommended that SIGTARP receive $35 million funds for FY2013, or $6.8 million less than the amount enacted for FY2012 and $5.2 million less than the budget request. In its report on H.R. 6020, the Committee noted that initial funding for the program was included in Congressional Research Service 15 Financial Services and General Government: FY2013 Appropriations the legislation creating but the funds were limited and have decreased over time. To sustain SIGTARP’s required oversight of the remaining TARP amounts, discretionary appropriations have had increasingly to fill the gap between the mandatory appropriations and the operating expenses of the program. As TARP winds down in the next few years, the Committee expects that the requests for discretionary appropriations will also decrease. Financial Crimes Enforcement Network The Committee recommended $110.8 million for FinCEN in FY2013, or the same amount enacted for FY2012 and $8.4 million more than the budget request. In its report on H.R. 6020, the Committee wrote that the funding was intended to continue the agency’s multi-year effort to modernize its information systems; to ensure that FinCEN’s information is readily accessible to state and local law enforcement personnel, field representatives, and the intelligence community; and to enable FinCEN to respond to expected increases in requests for assistance from law enforcement agencies once the BSA Modernization system begins to operate in FY2013. The Committee rejected a proposal by Treasury to reduce funding by $1.6 million for access to BSA information by state and local intelligence agencies. It commended FinCEN for the support it has provided in recent years for efforts by law enforcement agencies at all governmental levels to combat human trafficking and urges it, “whenever possible,” to apply its expertise in analyzing financial crimes to such efforts in the context of “ongoing strategic operations.” Treasury Forfeiture Fund The Committee recommended a rescission of $830 million in unobligated balances in the Fund, or $120 million less than the amount that was rescinded in FY2012 and the same as the budget request. Of the amount to be rescinded, $38 million would be rescinded permanently. In its report on H.R. 6020, the Committee pointed out that the TFF is intended to ensure adequate resources are available to cover the costs of an “effective asset seizure and forfeiture program.” Those costs include expenses related to seizing, evaluating, maintaining, protecting, advertising, forfeiting, and disposing of property. The Committee noted that balances in the Fund should not be used to boost the funds available to participating agencies outside the appropriations process. Nor should the balances in the Fund be considered a “bounty” for participating agencies that should be distributed in proportion to an agency’s seizures of assets or forfeitures or some other formulaic approach. Current law allows surpluses in the TFF to be used to enhance forfeiture capabilities, to be held in reserve, or to be rescinded temporarily or permanently. Proposed rescissions and so-called “super surplus” spending requests, says the Committee, should be based on “programmatic need and funding priorities, not a predetermined formula.” The Committee directed Treasury to submit each month a table showing earned interest, forfeiture revenue, unobligated balances, recoveries, expenses to date, and estimated expenses for the remainder of the fiscal year. Financial Management Service The Committee recommended $208.2 million for FMS in FY2013, or $9.6 million less than the amount enacted for FY2012 and $2.2 million less than the budget request. Of the recommended amount, $4.2 million would be available until September 30, 2015, for modernizing the agency’s information systems. Congressional Research Service 16 Financial Services and General Government: FY2013 Appropriations In its report on H.R. 6020, the Committee acknowledged both the cost savings that FMS has achieved through sharing certain services with BPD and the projected cost savings that could result from the proposed merger of the two agencies called for in the budget request. But because sufficient details on the merger have not been released, the Committee cannot endorse it at the present time. It pledges to continue to monitor the consolidation plan as it emerges and may be willing to back it if “additional information justifying the change is provided.” As noted earlier, the Committee has instructed TIGTA to conduct a study in FY2013 of the costs and benefits of the proposed merger. Alcohol and Tobacco Tax and Trade Bureau The Committee recommended that ATTB receive $95 million in FY2013, or $4.9 million less than the amount enacted for FY2012 and $1.8 million less than the budget request. The Committee report specified that none of the recommended funding may be used to cover the cost of hiring special law enforcement agents. Bureau of the Public Debt The Committee recommended $147.9 million for BPD in FY2013, or $25.7 million less than the amount enacted for FY2012 and $2.2 million less than the budget request. H.R. 6020 contains language that would reduce appropriations by up to $1 million as BDP collects fees for definitive security issues and Treasury Direct Investor Account Maintenance, resulting in a net appropriation of $146.9 million. Community Development Financial Institutions Fund The Committee recommended that CDFIF receive $221 million in FY2013, or the same amount enacted for FY2012 and the same as the budget request. Of that amount, $12 million would be reserved for grants, loans, technical assistance, and job training for Native American, Alaskan, and Hawaiian communities; another $20.5 million would be set aside for the administrative expenses for CDFIF programs. No funds were provided for the Bank on USA program, the Health Food Financing Initiative, and the Bond Guarantee program. In its report on H.R. 6020, the Committee noted that though the CDFIF is supposed to serve the development needs of territories and rural communities, the existing process for setting goals for the Fund does not necessarily take those needs into account. To remedy this shortcoming, the Committee directed the Fund to reserve at least 20% of the assistance it provides for financial institutions located in counties where 20% or more of the population lived in poverty during the previous 30 years. It also directed the Fund to submit a report within 60 days of the bill’s enactment detailing the steps it is taking to clarify the certification process for financial institutions located in territories and rural communities and to make existing certified financial institutions aware of the “unmet capital and financial services needs” of these areas. Internal Revenue Service The Committee recommended that the IRS receive $11.817 billion in FY2013, or the same as the amount enacted for FY2012 and $944.5 million less than the budget request. Funding for the IRS was spread among four accounts: taxpayer services, enforcement, operations support, and BSM. The recommended appropriation for each is discussed below. Congressional Research Service 17 Financial Services and General Government: FY2013 Appropriations Taxpayer Services: Of the recommended appropriations for the IRS, $2.240 billion would be used for taxpayer services, or the same as the amount enacted for FY2012 and $13.4 million less than the budget request. Several taxpayer service grant programs are funded through this account. According to the report on H.R. 6020, the recommended funding for the programs in FY2013 was the same as the amounts enacted for FY2012 and as the budget request: “not less than” $5.6 million for the Tax Counseling for the Elderly program, at least $9.75 million for grants for lowincome taxpayer clinics, and a minimum of $12 million for grants for Volunteer Income Tax Assistance (VITA). In addition, the Committee recommended that not less than $205 million be used for the operating costs of the Taxpayer Advocate Service. Funds were also provided to continue efforts to improve more efficient and effective toll-free telephone service for taxpayers. The Committee commended the IRS for deciding not to develop a pre-filled or simple tax return and wrote that the Committee expected the IRS to seek authority and appropriations from Congress before embarking on the development of a simple tax return pilot program. Another issue addressed by the Committee in its report on the bill concerned the growing number of cases of tax fraud stemming from identity theft. It directed the IRS to submit a report by January 31, 2013, on (1) the number of taxpayers whose tax returns have been rejected because someone stole their Social Security numbers; (2) the average time required to resolve the problem and provide tax refunds when they were owed, the number of cases that were not resolved within 45 days; (3) the number of cases involving the theft of individual taxpayer identification numbers of residents of the territories; and (4) the actions the IRS is planning to take to expedite the resolution of these cases and to prevent similar incidents of identity theft in the future. The Committee also directed the IRS to continue a program to train employees in taxpayer rights, how to deal courteously with taxpayers, and multicultural relations. Enforcement: As reported by the Committee, H.R. 6020 would provide an appropriation of $5.299 billion for tax law enforcement in FY2013, or the same amount that was enacted for FY2012 and $402.3 million less than the budget request. Of that amount, at least $60.3 million would be used to support IRS’s involvement in the Interagency Crime and Drug Enforcement program. The bill specified that none of the recommended funding could be used to implement tax provisions in the ACA. In its report on the bill, the Committee urged the IRS to revise regulations that apply to interest payments made to non-resident aliens after December 31, 2012. The final regulations include a list of countries with which the United States has a tax treaty or information exchange agreement. Every country on the list qualifies for automatic information reporting unless the United States determined that a country should not receive the information because of concerns that it would be misused. To address this concern, the Committee recommended that the IRS publish on its public website a list of countries with which it is actively and automatically exchanging information about interest payments to non-resident aliens living there. In addition, the Committee noted that the IRS received $20 million in FY2010 from the Department of Health and Human Services to implement tax provisions in the ACA, another $168 million in FY2011, and as much as $332 million in FY2012. It recommended that no such transfers be permitted in FY2013. Operations Support: The Committee recommended that the IRS receive an appropriation of $3.947 billion for operations support in FY2013, or the same amount enacted for FY2012 and $528.8 million less than the budget request. Of that amount, at least $2 million was to cover the operating expenses of the IRS Oversight Board. None of the funds could be used to implement tax provisions in the ACA. Congressional Research Service 18 Financial Services and General Government: FY2013 Appropriations BSM: H.R. 6020 would provide $330.2 million for the BSM program in FY2013, or the same amount that was enacted for FY2012 and the same as the budget request. The Committee commended the IRS for the progress that has been made in the past few years with the Customer Account Data Engine 2 (CADE2) program, which was launched in January 2012 and used during the 2012 filing season. As a result, records for 140 million individual taxpayer accounts are now stored in a single, modern database; the records can be updated daily, which makes it possible to issue refunds and communicate with taxpayers about issues with their accounts faster. In its report on the bill, the Committee pointed out that though not all development work on CADE2 is completed, it expects BSM funding requests will begin to decline soon as the “IRS realizes savings from retiring legacy systems.” Senate In a bill (S. 3301) it reported on June 14, 2012, the Senate Appropriations Committee (hereinafter referred to as the Committee) recommended a total appropriation of $12.904 billion for the Treasury Department in FY2013. This amount was $689.0 million more than the amount enacted for FY2012 but $339.6 million less than the budget request. More than 70% of the difference between the requested funding and the Committee’s recommendation was due to the Committee providing a smaller budget for the IRS. Details on the recommended funding for each Treasury account follow. They stem mostly from the Committee’s report (S.Rept. 112-177) on S. 3301.14 Departmental Offices The Committee recommended that DO receive an appropriation of $301.2 million in FY2013, or $7.1 million less than the amount enacted for FY2012 and the same as the budget request. The Committee encouraged Treasury’s Office of Financial Education to assess the effectiveness of current financial literacy programs and develop a set of objectives that the Financial Literacy and Education Commission can use to better serve the needs of U.S. adults, particularly given the low rate of financial literacy among this population. In addition, in its report on S. 3301, the Committee commended Treasury for the improvements it made to the Home Affordable Mortgage Program (HAMP) and the 1.1 million homeowners who were able to remain in their homes because of the program, as of April 2012. It directed the agency to continue its efforts to persuade mortgage servicers and investors (include Fannie Mae and Freddie Mac) to allow principal reductions that could save federal funds, enable more homeowners to remain in their homes, and lower the number of neighborhoods harmed by vacant “real-estate owned properties.” As part of those efforts, the Committee wrote that Treasury should ensure that mortgage servicers comply with their HAMP agreements and inform servicers about their responsibilities under the program. Also on the topic of housing, the Committee urged Treasury to maintain the Group Home Mortgage Program, which provides financing for the creation of affordable small, community-based group homes for individuals unable to live independently. At the same time, the Committee directed the agency to fully implement all sanctions and divestment measures imposed on North Korea, Belarus, Burma, Iran, Sudan, and Zimbabwe, and to notify it if a lack of resources is impeding this process. 14 For access to the report, see http://www.gpo.gov/fdsys/pkg/CRPT-112srpt177/pdf/CRPT-112srpt177.pdf. Congressional Research Service 19 Financial Services and General Government: FY2013 Appropriations To improve Treasury’s management of its capital investments, the Committee directed it to prepare an annual Capital Investment Plan to be submitted to the House and Senate Appropriations Committees within 30 days of the release of the President’s annual budget request. The Plan should include estimates of the funding needed over the lifetime of the current and planned capital projects and a summary of the projects by type. It would be the responsibility of Treasury’s Office of the Chief Information Officer to determine if adequate resources are being channeled into the projects listed in the plan and the maintenance and modernization of existing systems, and to ensure that all projects are “properly tracked and completely described” in the plan. Department-Wide Systems and Capital Investments Programs The Committee recommended that DSCIP receive and appropriation of $7.1 million in FY2013, or the same amount as the budget request. There was no funding for the account in FY2012. Office of Inspector General The Committee recommended $29.6 million for OIG in FY2013, or the same amount that was enacted for FY2012 and $1.0 million more than the budget request. In its report on S. 3301, the Committee directs the office to undertake, “when practical,” an audit of the Bank Secrecy Act Information Technology Modernization project being managed by FinCEN. OIG should submit a written report to the Committee by March 31, 2013, addressing the extent to which contractors for the project have been adhering to its budget and production schedule. The Committee also urges the Office to perform audits, as its resources permit, of Treasury’s efforts to combat money laundering and terrorist financing, its management of capital investments, the investments of the CDFIF, and “areas identified by the Inspector General as presenting a high risk to taxpayerfunded spending.” Treasury Inspector General for Tax Administration The Committee recommended that TIGTA receive $153.8 million for FY2013, or the $2.1 million above the amount enacted for FY2012 and the same amount as the budget request. In its report on S. 3301, it commended the office for its ongoing reviews of IRS’s BSM program and other IT projects. The Committee also encouraged TIGTA, if resources and time permit, to undertake evaluations in FY2013 of the newly created Return Preparer Program; the capability of the IRS to detect fraudulent tax returns, resolve the claims of innocent taxpayers in a timely manner, and reduce the incidence of erroneous refunds; and the security of IRS employees and its databases and facilities. Special Inspector General for the Troubled Asset Relief Program The Committee commended SIGTARP for the “quality of its audits and investigations” as well as the written material it has provided to the general public and Congress, and recommended that the office receive $40.2 million in FY2013, or $1.6 million below the amount enacted for FY2012 but $20 above the budget request. A portion of FY2013 spending would be covered by funds carried over from the current fiscal year. Financial Crimes Enforcement Network The Committee recommended $108.3 million for FINCen for FY2013, or $2.5 million less than the amount enacted for FY2012 but $5.9 million above the budget request. In its report on S. Congressional Research Service 20 Financial Services and General Government: FY2013 Appropriations 3301, the Committee that the added funds would allow the bureau to continue to offer “full intelligence support” to federal, state, and local law enforcement agencies and federal intelligence agencies involved in combating serious financial crimes, including money laundering, mortgage fraud, drug trafficking, and terrorist financing. Section 608 of the bill would require all agencies funded under it to obtain the approval of the House and Senate Appropriations Committees before using appropriated funds to create or reorganize offices, programs, or other activities. The Committee reminded Treasury that any “reimbursable agreements and other similar funding mechanisms” used to reallocate approved funding are considered a “reprogramming” of funds under the section and thus subject to the prior-approval rule. In addition, the Committee expressed support for FinCEN’s ongoing effort to modernize the IT infrastructure for administering the BSA. The effort entails a re-design of the BSA data architecture, an update of the IT needed to acquire and disseminate data, and the addition of innovative web services, enhanced electronic filing, and improved analytical tools. Banks, federal, state, and local law enforcement agencies, and federal intelligence agencies use the system to report, gather, and analyze data to identify financial crimes. The Committee directed FinCEN to take the following steps in FY2013: (1) map BSA data in a way that meshes with the data system used by the IRS; (2) continue to submit semi-annual reports to the Committee summarizing the bureau’s progress in implementing the modernization project; and (3) improve the accuracy, reliability, and timeliness of BSA data in accordance with the recommendations made by TIGTA and GAO in recent reports. Treasury Forfeiture Fund The Committee recommended a rescission of $950 million in unobligated balances in the fund for FY2013, or the same amount that was rescinded for FY2012 and $120 million more than the budget request. Financial Management Service The Committee endorsed a proposal by Treasury that the appropriations for FMS and BPD be combined into a single appropriation account entitled “Fiscal Service” (FS). It also recommended that FS receive $360.5 million in appropriated funds for FY2013, or the same as the budget request. Compared to the combined appropriations for FMS and BPD in FY2012, the recommended funding represents a decrease of $30.9 million. In its report on S. 3301, the Committee commended Treasury for planning to consolidate the functions of the two bureaus. Both bureaus provide financial management services for federal agencies, and in recent years they have collaborated on several cost-saving projects, including a shared data center and shared human resource services. According to an estimate by Treasury, the proposed merger would result in a savings of $36 million over five years. The Committee directed FS to keep it informed about developments in the consolidation process. Section 111 of the bill would authorize Treasury to transfer funds from the salaries and expenses account for FS to the Debt Collection Fund to cover expenses related to debt collection. Any such transfer would be reimbursed to account from debt payments deposited in the Fund. Alcohol and Tobacco Tax and Trade Bureau Congressional Research Service 21 Financial Services and General Government: FY2013 Appropriations The Committee recommended that ATTB receive an appropriation of $100.4 million in FY2013, or $500,000 above the amount enacted for FY2012 and $3.6 million above the budget request. Contrary to the recommendation of the House Appropriations Committee in its report on H.R. 6020, the recommended funding included $2 million for the cost of hiring special law enforcement agents to combat tobacco smuggling and other criminal activities within the jurisdiction of ATTB. In addition, the Committee rejected Treasury’s proposal to transfer the enforcement of federal excise taxes on alcohol and tobacco products to the IRS on the grounds that ATTB has sole jurisdiction over the enforcement of laws governing the production and distribution across state lines of those products. Bureau of the Public Debt See the entry below for Financial Management Service. Community Development Financial Institutions Fund The Committee recommended $233.0 million in appropriations for the CDFIF in FY2013, or $12.0 million more than the amount enacted for FY2012 and the same as the budget request. In its report on S. 3301, the Committee expressed support for the basic aims of the Fund, especially its role in both leveraging private investment in community development projects such as affordable housing, community centers, and retail development and expanding lending to small firms in areas underserved by banks and other financial institutions. Of the recommended funding, $20 million would be used for the Bank on USA program, which promotes improved access to financial services and consumer credit by lower-income households; this amount is consistent with the budget request. The Committee directed CDFIF to submit a detailed spending plan for the program within 120 days of enactment of the bill and to assign a greater priority to distributing funding to underserved rural areas. Another $25 million would be used to support the Healthy Food Financing Initiative, which is intended to increase the supply of affordable, wholesome foods in urban and rural communities that currently have no or limited access to such foods. In the Committee’s view, the recommended funding should increase the availability of financing for the construction of grocery stores, supplies and equipment for qualified food production, and improvements to the food distribution network in affected communities. In addition, consistent with the budget request, the Committee recommended that $12 million be set aside for grants, loans, and technical assistance and training programs for Native American, Alaskan, and Hawaiian communities. The funds are intended to increase access to equity capital and loans for development activities in those communities. S. 3301 also included a provision allowing the Treasury Secretary to guarantee up to $1 billion in bonds in FY2013 to support lending and investments by CDFIs in underserved communities. The bond guarantees, which are authorized under the Small Business Jobs Act of 2010 (P.L. 111-240), would be intended to open up new sources of long-term capital. Funds raised through the bonds could be used to back new loans or refinance existing ones. And the recommended funding for CDFIF included $2 million for the purpose of enhancing the ability of CDFIs to support the development of “entrepreneurial” businesses. Internal Revenue Service Congressional Research Service 22 Financial Services and General Government: FY2013 Appropriations The Committee recommended that the IRS receive an appropriation of $12.519 billion in FY2013, or $702.4 million above the amount enacted for FY2012 and $242.1 million less than the budget request. In its report on S. 3301, the Committee expressed support for a variety of approaches to reducing the federal tax gap, including improved information reporting and taxpayer assistance. It also commended the research on taxpayer compliance that is being done by the National Taxpayer Advocate and the IRS Office of Research. Furthermore, the Committee directed the IRS to include details on planned reorganizations, job cuts or increases, and changes to current service and enforcement activities in the operating plan the agency is required to submit along with its annual budget request. The submission should include comments on the plan from the IRS Oversight Board. Taxpayer Services: The Committee recommended that the IRS receive an appropriation of $2.253 billion in FY2013, or $13.4 million above the amount enacted for FY2012 and the same as the budget request. Of the recommended funding, “not less than” $5.6 million should be used for the tax-counseling for the elderly program, $10 million for low-income taxpayer clinic grants, and $12 million (available for two consecutive fiscal years) for the community volunteer income tax assistance (VITA) matching grant program. The Committee urged the IRS to “make every effort” to increase the number and size of VITA grants to local non-profit organizations offering tax preparation services to disabled individuals. Among the options for doing so cited by the Committee is to allow national coalitions that coordinate the activities of such organizations to apply for VITA matching grants. Another $209.5 million of the recommended appropriation would fund the operations of the Taxpayer Advocate Service (TAS). In its report on S. 3301, the Committee commended the IRS for the steady rise in the number of taxpayers filing their returns electronically with no additional costs. For the 2011 tax years, 67% of so-called major returns were e-filed, up from 59% for 2010. There are considerable cost savings from e-filing: according to an IRS estimate, the cost of processing an electronic return is one-twentieth the cost for a paper return. At the same time, the Committee “strongly urges” the IRS to update its measure of refund timeliness using recommendations from the GAO and the IRS Oversight Board. The Committee also directed the IRS, IRS Oversight Board, and National Taxpayer Advocate to continue to submit annual updates to the Taxpayer Assistance Blueprint that was first issued in FY2006. The updates should identify any changes to the five-year strategic plan for taxpayer services, discuss the findings of any new research, and point out any “open issues requiring additional research.” Section 104 of the bill specified that funding is available in FY2013 for improving the toll-free telephone assistance the IRS offers to taxpayers. Among the recommended improvements was speeding up correspondence with “victims of tax crimes.” Expressing concern about the availability of satisfactory taxpayer service in Alaska and Hawaii, the Committee directed the IRS to ensure that Taxpayer Advocate Service Centers in those states are fully staffed (including a collection technical advisor and an examination technical advisor at each Center) and able to resolve even the most complex of taxpayer problems. Enforcement: The largest Treasury account, and one of the largest accounts among all the appropriation accounts for financial services and general government, covers tax enforcement activities. For FY2013, the Committee recommended the IRS receive $5.611 billion for such activities, or $312.2 million above the amount enacted for FY2012 but $90.1 million less than the Congressional Research Service 23 Financial Services and General Government: FY2013 Appropriations budget request. Of the recommended funding, “not less than” $60.3 million would be available for use in the Interagency Crime and Drug Enforcement program. In its report on S. 3301, the Committee noted that the recommended funding for FY2013 was intended to restore the resources for audits and collection work that were lost in the appropriation for FY2012. It was also intended to enable the IRS to undertake the new enforcement initiatives it calls for in the budget request. According to the IRS, every dollar spent on these initiatives in FY2013 is expected to yield an estimated $4.90 in new revenue by the time those hired to work on them reach their “full potential” in FY2015. In addition, the Committee supported recent measures adopted by the IRS to combat offshore tax evasion and recommends the IRS undertake more frequent studies of the tax gap, particularly the portion of the gap that can be attributed to international financial transactions. At the same time, the Committee would like to see the agency develop new measures of the effectiveness of several enforcement programs, including tax preparer regulation, information reports for merchant payment cards and the basis of stock in transactions involving capital gains and losses, and the Compliance Assurance Process and the Offshore Voluntary Disclosure programs. Another enforcement issue addressed by the Committee in its report was the misclassification of workers as independent contractors. Such an error usually leads to the underreporting and underpayment of employment and payroll taxes by employers and workers. To get a better grasp of the extent of the problem, the IRS is undertaking a three-year study of worker classification and other employment tax issues. It has also formed a team to assist taxpayers on tax issues related to the classification of workers. Underscoring its concern about the revenue losses from the misclassification of workers, the Committee urged the IRS to maintain adequate staffing in a program (SS-8) designed to assist employers in determining a worker’s employment tax status. According to the report on S. 3301, staffing in the program has failed to grow at the same pace as SS-8 filings in the past three filing seasons. To bolster its influence over IRS’s SS-8 staffing decisions, the Committee directed the agency to submit a report that examines staffing levels, employee productivity, and SS-8 receipts and explains the rationale for any proposed staff changes, before reducing staffing at any SS-8 processing office. On the matter of collecting overdue individual tax debt, Section 105 of the bill would extend through FY2013 a ban on using appropriated funds to “enter into, renew, extend, administer, implement, enforce, provide oversight of, or make any payment related to” a debt collection program involving the use of private debt collectors. The ban was first imposed on FY2010 appropriations for the IRS; it was intended to reinforce a decision announced by the IRS in March 2009 to terminate a controversial private tax debt collection program that began three years earlier. Operations Support: For FY2013, the Committee recommended that the IRS receive an appropriation of $4.324 billion for operations support, or $376.8 million above the amount enacted for FY2012 but $152.0 million less than the budget request. Up to $250 million of the recommended funds would be available for IT support through the end of FY2014; another $1 million would be available for research through the end of FY2015; and at least $2 million would be used to cover the expenses of the IRS Oversight Board. In its report on S. 3301, the Committee noted that the recommended funding was intended to support ongoing, multi-year initiatives to upgrade the IT infrastructure in order to implement recent changes in tax law, especially the tax provisions in the ACA. It directed the IRS to keep the Congressional Research Service 24 Financial Services and General Government: FY2013 Appropriations Committee informed of any updated cost estimates for the initiatives, and to ensure that the estimates adhere to the guidelines for best practices in GAO’s Cost Estimating and Assessment Guide so they can be regarded as “comprehensive, well-documented, accurate, and credible.”15 On a related matter, the Committee directed the IRS to submit within 30 days of the enactment of the bill a “table and explanatory information” regarding the amounts, uses, and dates of receipt of funds transferred to the IRS from the Health Insurance Reform Implementation Fund established by the ACA to cover administrative expenses incurred by federal agencies involved in implementing the act. Another issue addressed in the report on S. 3301 related to IRS’s management and oversight of its non-BSM information technology projects. The Committee agreed with the concern expressed in recent reports by TIGTA and GAO that the IRS lacks the data needed to evaluate the performance, productivity, and costs of its IT programs. Of particular concern is the lack of a quantitative measure for determining the functional gains made during each stage of a project’s development. As a result, the Committee “strongly encourages” the IRS to develop such a measure and to apply it to all of its major non-BSM information systems so “key stakeholders” can get a more accurate picture of the extent to which the investments are generating the desired results. Moreover, the security of IRS’s information systems remains a serious problem, according to recent reports by TIGTA and GAO. To address the problem, the Committee urged the IRS to continue its efforts to eliminate vulnerabilities in its security system in accordance with recommendations made by TIGTA and GAO. To bolster its oversight of non-BSM information technology improvement projects, the Committee directed the IRS to include in its budget request for FY2014 a multi-year strategy and timetable within the Operations Support account for modernizing IRS’s aging “legacy” IT infrastructure. The agency must also submit to the House and Senate Appropriations Committees and GAO quarterly reports on certain major projects that discuss the costs and schedules for the previous three months and the anticipated costs and schedules for the next three months. The projects include IRS.gov, Returns Remittance Processing, EDAS/IPM, and E-services. Business Systems Modernization A separate account is maintained for funding BSM. The Committee recommended that the IRS receive $330.2 million for the program in FY2013, or the same amount enacted for FY2012 and the same as the budget request. To augment these funds, the Committee encouraged the agency to draw upon user fees collected by the IRS from services it provides to taxpayers and federal agencies. Of the recommended funding, $252.3 million was designated for supporting two important capital investments: (1) the CADE 2 Transition State 2 project, which is focused on developing a single information system for managing individual taxpayer accounts that has applications for financial management and the security of IRS’s IT systems; and (2) improvements to the Modernized e-File platform (MeF) that will allow it to handle the Form 94X family of tax forms for employment taxes and Form 1041 for estates and trusts, as well as additional unspecified forms in the future. The Committee wrote that it expects the IRS to continue to submit quarterly BSM reports during FY2013; GAO should receive a copy of each. The reports should explain in “plain English” the 15 U.S. Government Accountability Office, GAO Cost Estimating and Assessment Guide: Best Practices for Estimating and Management Costs, GAO-09-3SP, March 2009, at http://www.gao.gov/new.items/d093sp.pdf. Congressional Research Service 25 Financial Services and General Government: FY2013 Appropriations costs and schedules for CADE2 and MeF in the previous three months and their anticipated costs in the next three months. Title II: Executive Office of the President16 The FSGG appropriations bill provides funding for all but three offices under the EOP.17 The White House, the Office of Management and Budget, and the Office of National Drug Control Policy are among the EOP offices funded through FSGG appropriations. Table 4 lists the enacted amounts for FY2012, the President’s FY2013 request, and amounts recommended by the House and Senate appropriations committees for FY2013. Table 4. Executive Office of the President, FY2012-FY2013 (in millions of dollars) FY2012 Enacted FY2013 Request FY2013 House Committee FY2013 Senate Committee $202 $204 $192 $204 Compensation of the President 0.5 0.5 0.5 0.5 The White House Office (salaries and expenses) 60 57 54 57 Executive Residence, White House (operating expenses) 13 13 13 13 White House Repair and Restoration 1 1 1 1 Council of Economic Advisers 4 4 4 4 National Security Council and Homeland Security Council 13 13 13 13 Office of Administration 113 115 107 115 Office of Management and Budget 89 92 81 92 Federal Drug Control Programs (total) 357 342 368 392 Office of National Drug Control Policy (net of rescissions) 13 23 23 25 High Intensity Drug Trafficking Areas Program 239 200 239 239 Other Federal Drug Control Programs 106 119 106 129 Counterdrug Technology Assessment Center 0 0 0 0 The White House (total) FY2013 Enacted 16 This section was authored by Barbara Schwemle (x7-....). Of the three exceptions, the Council on Environmental Quality and the Office of Environmental Quality are funded in the House and Senate Interior, Environment, and Related Agencies Appropriations Act. The Office of Science and Technology Policy and the Office of the United States Trade Representative are funded in the House and Senate Commerce, Justice, Science, and Related Agencies Appropriations Act. 17 Congressional Research Service 26 Financial Services and General Government: FY2013 Appropriations FY2012 Enacted FY2013 Request FY2013 House Committee FY2013 Senate Committee Unanticipated Needs 1 1 0 1 Partnership Fund for Program Integrity Innovation 0 1 0 1 Integrated, Efficient and Effective Uses of Information Technology 5 5 5 5 Special Assistance to the President (salaries and expenses) 4 4 4 4 Official Residence of the Vice President (operating expenses) 0.3 0.3 0.3 0.3 Total: EOP and Funds Appropriated to the President $659 $649 $650 $698 FY2013 Enacted Sources: Appendix, Budget of the U.S. Government, FY2013, H.Rept. 112-550; and S.Rept. 112-177. Note: FY2012 rescission for both the President’s request and House committee approved amounts would apply to the Office of National Drug Control Policy. President’s Budget Request and Key Issues The Administration’s FY2013 budget requested an appropriation (discretionary funds) of $649 million for the EOP and funds appropriated to the President, a decrease of more than $10 million (-1.5%) from the $659.1 million (discretionary funds) enacted for FY2012. The budget requested the same appropriation as that enacted for FY2012 for these accounts: White House Office, White House Repair and Restoration, Council of Economic Advisers, National Security Council and Homeland Security Council, Special Assistance to the President, Official Residence of the Vice President, and Integrated, Efficient and Effective uses of Information Technology. For the Unanticipated Needs account, an appropriation that was $12,000 more than the FY2012 enacted amount was requested. Increased or decreased appropriations were requested for the following accounts: • the Executive Residence (-$225,000 or -1.7%); • the Office of Administration (+$2 million or +1.8%); and • the Office of Management and Budget (+$2.1 million or +2.3%). The justification that accompanied the EOP’s budget submission noted that the increase requested for the Office of Administration would fund salaries and benefits resulting from “the conversion of cybersecurity information technology contractors to full-time government staff” and “improvements to information technology services,” including “Ensuring the full-time Operation of the Disaster Recovery Data Center and Continuity of Operations Center” and “Improving the stability and reliability of messaging systems through the proactive management of e-mail systems, handheld devices, and electronic records archiving systems.”18 According to the justification, the requested increase for the Office of Management and Budget would fund the anticipated January 2013 pay adjustment ($380,000), health benefit costs ($206,000), an increase 18 U.S. Executive Office of the President, Fiscal Year 2013 Congressional Budget Submission (Washington: February 2012), pp. OA-4 - OA-5. Congressional Research Service 27 Financial Services and General Government: FY2013 Appropriations of six full-time equivalent employees ($775,000), an increase for rent payments to the General Services Administration ($202,000), costs of information technology contractors ($343,000), and partial restoration of budget reductions for staff travel ($80,000) and training ($100,000).19 The reduction in the appropriation requested for the Executive Residence resulted from decreases for personnel compensation and benefits and supplies and materials.20 The President’s budget request proposed an administrative provision for the EOP and funds appropriated to the President at Section 201 that would continue to authorize the OMB Director (or other official designated by the President) to transfer up to 10% of appropriations between the White House, Executive Residence at the White House, White House Repair and Restoration, Council of Economic Advisers, National Security Council and Homeland Security Council, Office of Administration, Special Assistance to the President, and Official Residence of the Vice President accounts, provided the House and Senate Committees on Appropriations are notified at least 15 days in advance. An appropriation could not be increased by more than 50% by such transfers. The Vice President would approve transfers from the Special Assistance to the President or Official Residence of the Vice President accounts.21 Federal Drug Control Programs For the accounts under the Federal Drug Control Programs account, the President’s FY2013 budget requested a total appropriation of $342 million, a decrease of more than $15 million or 4.3% below the $357.2 million (after the rescissions of $11.3 million were applied) enacted for FY2012. Increased or decreased appropriations were requested for each of the following accounts: • Office of National Drug Control Policy (ONDCP, +$10.2 million or +77% more than the FY2012 enacted amount, after the rescissions of $11.3 million were applied);22 • High Intensity Drug Trafficking Areas Program (HIDTAP, -$38.5 million or -16.2%); • Other Federal Drug Control Programs (OFDCP, +$13 million or +12.4%); and • Counterdrug Technology Assessment Center (CTAC, no funding was requested). The FY2013 budget justification stated that the ONDCP funding would enable the agency “to continue to pursue” the National Drug Control Strategy’s “goals of reducing drug use and its consequences and ensuring improvements in fostering healthier individuals and safe communities.” The requested reduction in the HIDTAP appropriation would occur in the grants to state, local, and tribal agencies, and transfers to federal agencies participating in the 28 HIDTAs. The OFDCP appropriation would be allocated to the Youth Drug Prevention Media Program ($20 19 Ibid., p. OMB-6. Ibid., p. EXR-5. 21 FY2013 Budget, Appendix, p. 1217. 22 Calculated as $24.5 million (FY2012 enacted) minus $11.3 million (FY2012 rescission) equals $13.2 million (FY2012 appropriation after rescission); $23.4 million (FY2013 request) minus $13.2 million (FY2012 appropriation after rescission) equals $10.2 million, divided by $13.2 million (FY2012 appropriation after rescission) equals 77% difference. 20 Congressional Research Service 28 Financial Services and General Government: FY2013 Appropriations million), Drug Free Communities Support Program ($88.6 million), Anti-Doping activities ($8.1 million), and World Anti-Doping Agency membership dues ($1.9 million).23 House Action H.R. 6020, as reported by the House Committee on Appropriations would provide an appropriation of $650 million for the EOP, which is some $9 million (-1.4%) less than the FY2012 enacted appropriation and almost $1 million (+0.14%) more than the President’s request. The House report stated that “all of the salaries and expenses accounts within the Executive Office of the President” were reduced to pay for the funding priorities of the House committee.24 The appropriations for each of the EOP accounts, as recommended by the House Appropriations Committee, were as follows: • The White House Office: $54.1 million; $2.8 million (-5%) less than the FY2012 enacted amount and the President’s request. The House committee report states that this amount includes “sufficient funds” for the Office of National AIDS Policy. • Executive Residence, White House: $12.8 million; $671,000 (-5.0%) less than the FY2012 enacted amount and $446,000 (-3.4%) less than the President’s request. • White House Repair and Restoration: $713,000; $37,000 (-4.9%) less than the FY2012 enacted amount and the President’s request. • Council of Economic Advisers: $4.1 million; $42,000 (-1.0%) less than the FY2012 enacted amount and the President’s request. • National Security Council and Homeland Security Council: $12.9 million; $65,000 (-0.5%) less than the FY2012 enacted amount and the President’s request. • Office of Administration: $107.3 million; $5.6 million (-5%) less than the FY2012 enacted amount and $7.6 million (-6.6) less than the President’s request. Of the total, up to $10.4 million would remain available until expended for continued modernization of the information technology infrastructure within the EOP. The office is directed to report annually to the House Committee on Appropriations, at the same time that the President’s budget is submitted, on progress on modernization of information technology, including the amounts obligated and expended and for what purposes, specific milestones achieved, and requirements and specific plans for further investment. • Office of Management and Budget: $80.5 million; $8.9 million (-10%) less than the FY2012 enacted amount and $11 million (-12%) less than the President’s request. The report stated that the House committee looks forward to the submission of the examination of Circular A-94 on “government-wide efficiencies and proper anticipation of the cost of major infrastructure projects.” 23 U.S. Executive Office of the President, Fiscal Year 2013 Congressional Budget Submission Executive Office of the President Office of National Drug Control Policy (Washington: February 2012), pp. 12, 50, 53, and 27. 24 H.Rept. 112-550, p. 3. Congressional Research Service 29 Financial Services and General Government: FY2013 Appropriations OMB is directed “to continue the effort to improve cost-benefit analyses and practices government-wide by incorporating life-cycle cost analysis,” and report to Congress “on the status of further development of tools and materials” for implementing this cost analysis in federal department and agencies, within 180 days after the act’s enactment. The report directed OMB to report to the committee on how the agency will ensure that all executive branch agencies are in compliance with laws and regulations on travel, conferences, and employee awards. • Unanticipated Needs: No funding for FY2013, $988,000 (-100%) less than the FY2012 enacted amount and $1 million (-100%) less than the President’s request. • Partnership Fund for Program Integrity Innovation: No funding for FY2013, the same as the FY2012 enacted amount and $1 million less than the President’s request. • Integrated, Efficient and Effective Uses of Information Technology: $5.0 million, the same as the FY2012 enacted amount and the President’s request. The OMB Director could transfer the funds to one or more agencies to carry out projects and would submit quarterly reports, not later than 30 days after the end of each quarter, to the House and Senate Committees on Appropriations identifying the savings achieved by the government-wide information technology reform efforts by fiscal year, agency, and appropriation. • Special Assistance to the President: $4.1 million; $216,000 (-5%) less than the FY2012 enacted amount and the President’s request. • Official Residence of the Vice President: $292,000; $15,000 (-4.9%) less than the FY2012 enacted amount and the President’s request. H.R. 6020, as reported, would fund the federal drug control accounts at the following levels: • ONDCP: $23.3 million; $10.1 million (+76.5%) more than the FY2012 enacted amount of $13.2 million, after the rescissions of $11.3 million were applied, and $117,000 (-0.5%) less than the President’s request. The agency is expected “to focus resources on the counter-drug policy development, coordination and evaluation functions which are the primary mission of the Office and the original reason for its existence.” • HIDTAP: $238.5 million; the same as the FY2012 enacted amount and $38.5 million (+19.3%) more than the President’s request. Not less than 51% of the funds would be transferred to State and local entities for drug control activities and would be obligated within 120 days after the act’s enactment. Up to 49% of the funds could be transferred to federal agencies and departments as determined by the ONDCP Director, of which up to $2.7 million could be used for auditing services and associated activities (including up to $500,000 for the continued operation and maintenance of the Performance Management System). The ONDCP Director would notify the House and Senate Committees on Appropriations of the initial allocation of FY2013 funding among HIDTAs within 45 days after the act’s enactment and of planned uses of discretionary HIDTA funding, determined in consultation with the HIDTA Directors, within 90 days after the act’s enactment. Congressional Research Service 30 Financial Services and General Government: FY2013 Appropriations • OFDCP: $105.9 million; $350,000 (+0.3%) more than the FY2012 enacted amount and $12.7 million (-10.7%) less than the President’s request. The appropriation would be allocated as follows: $92 million for the Drug-Free Communities Program, $1.3 million for drug court training and technical assistance, $9.5 million for anti-doping activities, $1.9 million for the United States membership dues to the World Anti-Doping Agency, and $1.2 million for competitive discretionary grants. An appropriation is not provided for the antidrug media campaign. Section 626(a)(1) of H.R. 6020, as reported, would provide the mandatory appropriation for the compensation of the President ($450,000, including $50,000 for expenses). According to the House Committee on Appropriations report, this is an account “where authorizing language requires the payment of funds.”25 The House Appropriations Committee print included the following EOP administrative provisions: 25 • Section 201 would continue to authorize the OMB Director (or other official designated by the President) to transfer up to 10% of appropriations between the White House, Executive Residence at the White House, White House Repair and Restoration, Council of Economic Advisers, National Security Council and Homeland Security Council, Office of Administration, Special Assistance to the President, and Official Residence of the Vice President accounts, provided the House and Senate Committees on Appropriations are notified at least 15 days in advance. An appropriation could not be increased by more than 50% by such transfers. The Vice President would approve transfers from the Special Assistance to the President or Official Residence of the Vice President accounts. • Section 202 would require the OMB Director to submit a report by April 1, 2013, to the House and Senate Committees on Appropriations, on the implementation of Executive Order 13563 relating to Improving Regulation and Regulatory Review and Executive Order 13610 relating to Identifying and Reducing Regulatory Burdens. The reports would include information on increasing public participation in the rulemaking process and reducing uncertainty; improving coordination across federal agencies to eliminate redundant, inconsistent, and overlapping regulations; and identifying existing regulations that have been reviewed and determined to be outmoded, ineffective, or excessively burdensome. • Section 203 would require the OMB Director to report to the House and Senate Committees on Appropriations, within 60 days after the act’s enactment, on the costs of implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203). The report would include the estimated mandatory and discretionary obligations of funds through FY2017, by federal agency and by fiscal year, including (1) the estimated obligations by cost inputs such as rent, information technology, contracts, and personnel; the methodology and data sources used to calculate such estimated obligations; and the specific section of such act that requires the obligation of funds; and (2) the estimated receipts H.Rept. 112-550, p. 83. Congressional Research Service 31 Financial Services and General Government: FY2013 Appropriations through FY2017 from assessments, user fees, and other fees by the federal agency making the collections, by fiscal year, including the methodology and data sources used to calculate such estimated collections; and the specific section of such act that authorizes the collection of funds. • Section 204 would prohibit the use of funds to pay the salaries and expenses of any EOP officer or employee to prepare, sign, or approve statements abrogating legislation passed by the House of Representatives and the Senate and signed by the President. • Section 205 would require the OMB Director to submit a report to the House and Senate Committees on Appropriations and the Budget on a sequestration under Section 251(a) of the Balanced Budget and Emergency Deficit Control Act of 1985. The report would list each account that would be subject to such a sequestration, each account that would be subject to such a sequestration but subject to a special rule under Section 255 or 256 of such act (and the citation to such rule), and each account that would be exempt from such a sequestration. The report would categorize and group the listed accounts by the appropriations act covering such accounts. Within the OMB salaries and expenses account, $5.0 million could not be obligated until the OMB Director submits the report which is due within 60 days after the act’s enactment date. • Section 206 would require the President to submit a detailed report to Congress on the sequestration required by Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 for January 2, 2013. For discretionary appropriations, the report would include an estimate for each category of the sequestration percentages and amounts necessary to achieve the required reduction and an identification of each account to be sequestered. It would also include estimates of the level of budgetary resources covered by sequestration and resulting outlays and the amount of budgetary resources to be sequestered and resulting outlay reductions at the program, project, and activity level. Enacted levels of appropriations would be used for accounts funded pursuant to an enacted regular appropriations bill for FY2013, and estimates pursuant to a current rate continuing resolution would be used for accounts not funded through an enacted appropriations measure for FY2013. For direct spending, the report would include an estimate for the defense and nondefense functions based on current law of the sequestration percentages and amount necessary to achieve the required reduction; a specific identification of the reductions required for each nonexempt direct spending account at the program, project, and activity level; and a specific identification of exempt direct spending accounts at the program, project, and activity level. It would also include any other data and explanations that enhance public understanding of the sequester and actions to be taken under it. The report would be submitted within 30 days after the act’s enactment date. Section 622 of H.R. 6020, as reported, would continue the provision prohibiting the use of funds to pay the salaries and expenses for the Director of the White House Office of Health Reform, the Assistant to the President for Energy and Climate Change, the Senior Advisor to the Secretary of the Treasury assigned to the Presidential Task Force on the Auto Industry and Senior Counselor for Manufacturing Policy, and the White House Director of Urban Affairs, or any substantially similar positions. Congressional Research Service 32 Financial Services and General Government: FY2013 Appropriations The House committee continued the provision at Section 610 that would prohibit the EOP from using funds to request an FBI official background investigation report on any individual except with the express written consent of the individual involved, within six months prior to the date of such request and during the same presidential administration, or when required because of extraordinary circumstances involving national security. Senate Action S. 3301, as reported by the Senate Committee on Appropriations, would provide an appropriation of $698.3 million for the EOP, which is $39.2 million (+5.9%) more than the FY2012 enacted appropriation and $49.6 million (+7.6%) more than the President’s request. The appropriations for each of the EOP accounts, as recommended by the Senate Appropriations Committee, were as follows: • The White House Office: almost $57.0 million; the same as the FY2012 enacted amount and the President’s request. The Senate committee report directed the EOP “to allocate sufficient resources to continue the robust operation of the Office of National AIDS Policy” and “the administration to continue to coordinate a Government-wide effort to develop and implement a domestic AIDS strategy, including the development of targets for improved prevention and treatment outcomes.” • Executive Residence, White House: $13.2 million; $225,000 (-1.7%) less than the FY2012 enacted amount and the same as the President’s request. • White House Repair and Restoration: $750,000; the same as the FY2012 enac [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3AR42730. 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