Senate, House at odds over IRS funding

July 23, 2013

A Senate subcommittee on Tuesday approved a bill to fund the IRS and several other agencies at substantially higher levels in the upcoming fiscal year than would be allowed under a House counterpart bill.

The Senate bill would provide $23.2 billion in spending authority for various agencies, up $1.8 billion from 2013 levels, including $12 billion for the IRS, up nearly $280 million.

(Susan Walsh/AP)
(Susan Walsh/AP)

“The IRS has endured major funding reductions in each of the past three years,” said Sen. Tom Udall (D-N.M.), chairman of the Appropriations subcommittee on financial services and general government. “Our approach is a constructive one. Slashing resources by nearly 20 percent as the House has done, I believe is counterproductive. Our bill will push the IRS to remedy the serious management shortcomings and fix internal controls as recently identified by the inspector general.”

Other agencies that would receive funding boosts include the Commodity Futures Trading Commission, the Securities and Exchange Commission and the Consumer Product Safety Commission.

Ranking Republican Sen. Mike Johanns (Neb.) said the bill “virtually guarantees another battle over top-line numbers” and that the embattled IRS would be one of the “winners.”

The House Appropriations Committee last week passed a counterpart providing for $17 billion total–$9 billion of that for the IRS, a cut of nearly a quarter from the enacted 2013 level. The House bill also would impose a series of new restrictions on the IRS including withholding some funds for enforcement activities until the agency carries out recommendations of an inspector general report on targeting of applicants for tax-exempt status, and a ban on conferences until recommendations of a separate report on them have been carried out.

A summary of the Senate bill says that “it is counterintuitive to shortchange the very agency responsible for collecting 92 percent of the revenues needed for the operations of our Federal Government, with a return on investment of $4 for every $1 spent.”

Colleen M. Kelley, president of the National Treasury Employees Union, which represents many IRS employees, called the Senate funding level “welcome recognition of the serious impact on taxpayers of current underfunding from budget cuts and sequestration. The current critical lack of resources undercuts the agency’s ability to perform its mission.”

The summary makes no mention of a potential raise for federal employees in January 2014; the general government bill is the most common vehicle for setting a raise figure. President Obama has proposed an across the board increase of 1 percent, which would be the first such raise following the salary rate freeze of 2011-2013.

Other appropriations bills emerging from both the House and Senate have either been silent on the raise or have said that if an increase is paid, agencies would have to absorb the cost out of other accounts. The White House has issued a series of statements as those bills have reached floor voting, urging Congress to support a 1 percent raise and saying “a permanent pay freeze is neither sustainable nor desirable.”

The full Senate Appropriations Committee is set to consider the bill Thursday.

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Eric Yoder · July 23, 2013