Order Code RL32905
CRS Report for Congress
.Received through the CRS Web
Transportation, the Treasury, Housing and Urban
Development, the Judiciary, the District of
Columbia, the Executive Office of the President,
and Independent Agencies:
FY2006 Appropriations
Updated June 28, 2005
David Randall Peterman and John Frittelli
Coordinators
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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Appropriations are one part of a complex federal budget process that includes budget
resolutions, appropriations (regular, supplemental, and continuing) bills, rescissions, and
budget reconciliation bills. The process begins with the President’s budget request and is
bound by the rules of the House and Senate, the Congressional Budget and Impoundment
Control Act of 1974 (as amended), the Budget Enforcement Act of 1990, and current
program authorizations.
This report is a guide to one of the regular appropriations bills that Congress considers each
year. It is designed to supplement the information provided by the Subcommittee on
Transportation, Treasury, and Housing and Urban Development, the Judiciary, District of
Columbia of the House Committee on Appropriations, and by the Subcommittee on
Transportation, Treasury, the Judiciary, Housing and Urban Development, and Related
Agencies of the Senate Committee on Appropriations. It summarizes the current legislative
status of the bill, its scope, major issues, funding levels, and related legislative activity. The
report lists the key CRS staff relevant to the issues covered and related CRS products.
This report is updated as soon as possible after major legislative developments, especially
following legislative action in the committees and on the floor of the House and Senate.
NOTE: A Web Version of this document with active links is
available to congressional staff at
[http://www.crs.gov/products/appropriations/apppage.shtml].

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Transportation, the Treasury, Housing and Urban
Development, the Judiciary, the District of Columbia,
the Executive Office of the President, and
Independent Agencies: FY2006 Appropriations
Summary
At the beginning of the 109th Congress, both the House and Senate Committees
on Appropriations reorganized their subcommittee structure, affecting the coverage
of the FY2006 appropriations bills that will be introduced. As a result of this change,
the appropriations bill that formerly provided funding for the Departments of
Transportation and the Treasury, the Executive Office of the President, and
Independent Agencies has been expanded to include funding for the Department of
Housing and Urban Development, the Judiciary, and (in the case of the House, but
not the Senate) the District of Columbia.
The Bush Administration requested $126.1 billion for these programs for
FY2006, a slight decrease from the comparable figure of $127.7 billion for FY2005
(after a 0.83% across-the-board rescission that was included in the FY2005 Omnibus
Appropriations Act, P.L. 108-447). Small increases were proposed for several
agencies. Cuts were proposed for the Department of Housing and Urban
Development ($2.8 billion, or 9%, below the FY2005 level) and the Department of
Transportation ($1.4 billion, or 2%, below the FY2005 level). The reduction in the
request for the Executive Office of the President was largely due to the transfer of the
High Intensity Drug Trafficking Areas program to another agency.
The House Subcommittee on Transportation, Treasury, and Housing and Urban
Development, The Judiciary, District of Columbia was allocated $66.9 billion in
discretionary budget authority, $3.8 billion (6%) above the comparable FY2005
enacted level and $6.2 billion (10%) above the level requested by the President. The
Senate Subcommittee on Transportation, Treasury, the Judiciary, Housing and Urban
Development, and Related Agencies received a discretionary allocation of $65.4
billion, $2.3 billion (4%) higher than the FY2006 Administration request. The
jurisdictions of these Subcommittees vary slightly, so the allocations are not precisely
comparable. The total budget figure for this bill includes discretionary budget
authority, mandatory budget authority, and contract authority.
The House Committee on Appropriations recommended $134.9 billion, $7.2
billion (6%) over comparable FY2005 enacted levels and $8.7 billion (7%) over the
Administration’s request (H.R. 3058). Significant increases were received by
aviation, highway and transit programs, rental subsidies for the poor, and housing for
Native Americans. The Committee recommended $550 million for Amtrak, higher
than the President’s request but $650 million less than the FY2005 level, an amount
that could lead to an Amtrak bankruptcy. The Committee did not support the
President’s proposal to transfer community and economic development programs out
of the Department of Housing and Urban Development (HUD). The Committee also
recommended that the federal civilian workforce receive the same raise (3.1%) as
that requested for the uniformed military for calendar year 2006, and that restrictions
on agricultural exports to Cuba be eased. This report will be updated.

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Key Policy Staff
CRS
Telephone
Area of Expertise
Name
Div.
#
Title I: Department of Transportation
Aviation Safety, Federal Aviation
Administration
Bart Elias
RSI
7-7771
Airport Improvement Program, Transportation
Infrastructure Policy, Transportation Trust
Funds
John Fischer
RSI
7-7766
Federal Railroad Administration; Maritime
Administration; Surface Transportation Board
John Frittelli
RSI
7-7033
Airport Improvement Program, Federal
Highway Administration
Bob Kirk
RSI
7-7769
Amtrak Federal Transit Administration, High-
Speed Rail
Randy Peterman
RSI
7-3267
Federal Motor Carrier Safety Administration,
National Highway Traffic Safety
Administration, Surface Transportation Safety
Paul Rothberg
RSI
7-7012
Title II: Department of the Treasury
Treasury, Internal Revenue Service
Gary Guenther
G&F
7-7742
Financial Center (FINCEN)
William Jackson
G&F
7-7834
Title III: Department of Housing and Urban Development
Housing: Housing issues and legislation,
homeownership, tax-based housing programs
Richard Bourdon
DSP
7-7806
Housing: Section 8, Public Housing,
homeless, AIDS housing, elderly/disabled
Maggie McCarty
DSP
7-2163
Housing: FHA, HOME, Predatory Lending,
RESPA
Bruce Foote
G&F
7-7805
Community Development
Eugene Boyd
DSP
7-8689
Title IV: The Judiciary
Judiciary
Steve Rutkus
G&F
7-7162
Judiciary
Lorraine Tong
G&F
7-5846
Title V: District of Columbia
District of Columbia
Eugene Boyd
G&F
7-8689
Title VI: Executive Office of the President and Funds Appropriated to the President
Executive Office of the President
Barbara Schwemle
G&F
7-8655
Title VII: Independent Agencies
Generally
Virginia McMurtry
G&F
7-8678

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CRS
Telephone
Area of Expertise
Name
Div.
#
Architectural and Transportation Barriers
Compliance Board
Nancy Jones
ALD
7-6976
Consumer Product Safety Commission
Bruce Mulock
G&F
7-7775
Election Assistance Commission
Kevin Coleman
G&F
7-7878
Federal Deposit Insurance Corporation: OIG
Pauline Smale
G&F
7-7832
Federal Election Commission
Joe Cantor
G&F
7-7876
Federal Labor Relations Authority
Gerald Mayer
DSP
7-7815
Federal Maritime Commission
John Frittelli
RSI
7-7033
General Services Administration
Stephanie Smith
G&F
7-8674
National Transportation Safety Board
Bart Elias
RSI
7-7771
Merit Systems Protection Board
Barbara Schwemle
G&F
7-8655
National Archives; E-Government Fund in
GSA
Harold Relyea
G&F
7-8679
Office of Personnel Management; Office of
Special Counsel
Barbara Schwemle
G&F
7-8655
National Credit Union Administration
Pauline Smale
G&F
7-7832
Neighborhood Reinvestment Corporation
Eugene Boyd
G&F
7-8689
Robert Goldich
7-7633
Selective Service Commission
David Burelli
FDT
7-8033
United States Interagency Council on
Homelessness
Maggie McCarty
DSP
7-2163
US Postal Service
Nye Stevens
G&F
7-0208
Title IX: General Provisions, Government-Wide
Government-wide General Provisions
Barbara Schwemle
G&F
7-8655
Competitive Sourcing
L. Elaine Halchin
G&F
7-0646
Cuba
Mark Sullivan
FDT
7-7689
ALD = American Law Division
DSP = Domestic Social Policy Division
FDT = Foreign Affairs, Defense, and Trade Division
G&F= Government & Finance Division
RSI = Resources, Science, and Industry Division.

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Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Title I: Transportation Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Department of Transportation Budget and Key Policy Issues . . . . . . . . . . . . 6
Amtrak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Aviation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Airport Improvement Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Essential Air Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Surface Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Maritime Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Title II: Treasury Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Department of the Treasury Budget and Key Policy Issues . . . . . . . . . . . . . 11
Internal Revenue Service (IRS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Title III: Department of Housing and Urban Development . . . . . . . . . . . . . . . . . 14
Department of Housing and Urban Development Budget and Key Policy
Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Community and Economic Development Programs
Consolidation Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8 Voucher Funding Level and Reform Proposal . . . . . . . . . . . 19
Section 811 Housing for the Disabled . . . . . . . . . . . . . . . . . . . . . . . . . 19
HOPE VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Prisoner Re-entry Initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
FHA Zero Downpayment Homeownership Option . . . . . . . . . . . . . . 20
FHA Payment Incentive Homeownership Initiative . . . . . . . . . . . . . . 20
Title IV: The Judiciary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
The Judiciary Budget and Key Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . 21
FY2006 Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Committee Markup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Supreme Court . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
U.S. Court of Appeals for the Federal Circuit . . . . . . . . . . . . . . . 24
Courts of Appeals, District Courts, and Other Judicial
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Court Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Defender Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Title V: District of Columbia Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
District of Columbia Budget and Key Policy Issues . . . . . . . . . . . . . . . . . . 25
President’s Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
District Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
House Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Title VI: Executive Office of the President and Funds Appropriated to the
President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

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Executive Office of the President Budget and Key Policy Issues . . . . . . . . 27
Title VII: Independent Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Independent Agencies Budget and Key Policy Issues . . . . . . . . . . . . . . . . . 30
Office of Special Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Merit Systems Protection Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Office of Personnel Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Federal Election Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
General Services Administration (GSA) . . . . . . . . . . . . . . . . . . . . . . . 33
Electronic Government Fund (E-gov Fund) . . . . . . . . . . . . . . . . 33
National Archives and Records Administration (NARA) . . . . . . . . . . 33
Postal Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Titles VIII & IX: General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Cuba Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
List of Tables
Table 1. Status of FY2006 Departments of Transportation, the Treasury, and
Housing and Urban Development, the Judiciary, the District of
Columbia, the Executive Office of the President, and Independent
Agencies Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Table 2. Transportation/Treasury et al. Appropriations, by Title,
FY2005-FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Table 3. Funding Trends for Transportation/Treasury et al. Appropriations,
FY2001-FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table 4. Title I: Department of Transportation Appropriations,
FY2005 to FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Table 5. Title II: Department of the Treasury Appropriations,
FY2005 to FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Table 6. Title III: Housing and Urban Development Appropriations,
FY2005 to FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Table 7. Title IV: The Judiciary Appropriations,
FY2005 to FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Table 8. Title V: District of Columbia Appropriations,
FY2005 to FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Table 9. Title VI: Executive Office of the President (EOP) and Funds
Appropriated to the President Appropriations,
FY2005 to FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Table 10. Title VII: Independent Agencies Appropriations,
FY2005 to FY2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

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Transportation, the Treasury, Housing and
Urban Development, the Judiciary, the
District of Columbia, the Executive Office of
the President, and Independent Agencies:
FY2006 Appropriations
Most Recent Developments
On June 21, 2005, the House Committee on Appropriations marked up H.R.
3058, the FY2006 Departments of Transportation, Treasury, and Housing and Urban
Development, The Judiciary, District of Columbia, and Independent Agencies
Appropriations bill. The Committee recommended the funding levels recommended
by the Subcommittee in its markup of the bill the previous week, providing a 6%
increase over comparable FY2005 funding and a 7% increase over the
Administration’s request. One of the most contentious issues in the bill is the
recommendation to provide $550 million for Amtrak, less than half of the $1.2
billion provided in FY2005 and far less than the $1.4 billion the Inspector General
of the Department of Transportation testified was needed in FY2006 to keep Amtrak
solvent. In addition, the Committee recommended providing the same pay raise
(3.1%) to federal civilian workers as that requested for uniformed military personnel
for calendar year 2006, and recommended easing restrictions on U.S. agricultural
exports to Cuba.
On June 9, 2005, the Senate Committee on Appropriations published the
amount of funding each of its subcommittees would have available for FY2006 (i.e.,
their 302(b) allocations). The Senate Subcommittee on Transportation, Treasury, the
Judiciary, Housing and Urban Development, and Related Agencies received a
discretionary allocation of $65.4 billion, $2.3 billion (4%) higher than the FY2006
Administration request (S.Rept. 109-77).1 The House Committee on Appropriations
approved its allocations of funding to their subcommittees on May 10, 2005 (H.Rept.
109-78). The House Subcommittee on Transportation, Treasury, and Housing and
Urban Development, The Judiciary, District of Columbia received an allocation of
$66.9 billion in discretionary budget authority. This is $3.8 billion (6%) above the
comparable FY2005 enacted level and $6.2 billion (10%) above the amount
requested by the President. Due to slightly differing jurisdictions, the allocations to
the two subcommittees are not precisely comparable.
1 The funding level in the bill consists of three parts: discretionary funding, mandatory
funding, and limitations on obligations. Limitations on obligations are paid out of trust
funds, and in this bill are chiefly found in the Department of Transportation and the General
Services Administration.

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CRS-2
Overview
The President’s FY2006 request for the programs covered by this appropriations
bill is $126.0 billion. This is $1.6 billion (1%) below the FY2005 enacted level of
$127.6 billion (after a 0.83% rescission). The FY2006 request includes cuts from the
FY2005 funding level for the Department of Housing and Urban Development ($2.8
billion, a 9% reduction) and the Department of Transportation ($1.4 billion, a 2%
reduction). The FY2006 request for the Executive Office of the President is $300
million less than the FY2005 figure; that reduction is largely due to the proposed
transfer of the High Intensity Drug Trafficking Areas Program ($227 million in
FY2005) from the Executive Office of the President to the Department of Justice, and
to an FY2005 supplemental appropriation of $70 million to the Executive Office of
the President (P.L. 108-324) for unanticipated needs (for hurricane disaster relief
assistance through the American Red Cross).
The President’s FY2006 budget request proposes several cuts to and changes
to the current (i.e. FY2005) appropriations bill, including:
! zeroing out of funding for Amtrak, the provider of intercity
passenger rail service, which received $1.2 billion in FY2005;
! reducing funding for the Federal Aviation Administration’s Airport
Improvement Program (AIP) to $3.0 billion, $600 million below its
‘guaranteed’ authorization level, which would make the entire
appropriations bill subject to a point of order. The proposed level is
also below the AIP formula threshold of $3.2 billion, which could
result in a halving of most AIP formula distributions;
! eliminating the community and economic development programs
under the Department of Housing and Urban Development (HUD),
along with those of several other agencies, and replace them with a
new program administered by the Department of Commerce. The
proposed funding for the new program is $1.9 billion (34%) less
than the aggregate FY2005 funding for the programs proposed for
elimination (reduced from $5.6 billion for FY2005 to $3.7 billion for
FY2006);
! reducing the funding for housing for disabled persons under HUD
by $118 million (50%), from $238 million for FY2005 to $120
million for FY2006;
! eliminating the annual $29 million payment to the United States
Postal Service for revenue forgone, as well as the absence of any
funding requested for Postal Service security measures.
The House Committee on Appropriations did not support most of these
proposed changes. The Committee recommended $134.9 billion, $7.2 billion (6%)
over comparable FY2005 enacted levels and $8.7 billion (7%) over the
Administration’s request. The Committee did recommend cutting Amtrak’s funding
by over half from its FY2005 level (from $1.217 billion in FY2005 to $550 million
for FY2006).

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CRS-3
In early 2005 the House and Senate Committees on Appropriations reorganized
their subcommittee structures. The House Committee on Appropriations reduced its
number of subcommittees to ten. This change combined the Transportation,
Treasury, and Independent Agencies subcommittee with the District of Columbia
subcommittee; to the resulting subcommittee, jurisdiction over appropriations for the
Department of Housing and Urban Development and the Judiciary as well as several
additional independent agencies was also added.
The Senate Committee on Appropriations reduced its number of subcommittees
to twelve. The Senate also added jurisdiction over appropriations for the Department
of Housing and Urban Development and the Judiciary to the Transportation,
Treasury, and Independent Agencies subcommittee; the Senate retained a separate
District of Columbia Appropriations subcommittee. As a result, the area of coverage
of the House and Senate subcommittees with jurisdiction over this appropriations bill
are almost, but not quite, identical; the major difference being that in the Senate the
appropriations for the District of Columbia are in a separate bill. This report will
follow the organization of the House Subcommittee on Transportation, Treasury, and
Housing and Urban Development, The Judiciary, District of Columbia.
Table 1 notes the status of the FY2006 Transportation, the Treasury, et al.
appropriations bill.
Table 1. Status of FY2006 Departments of Transportation, the
Treasury, and Housing and Urban Development, the Judiciary,
the District of Columbia, the Executive Office of the President,
and Independent Agencies Appropriations
Conference
Subcommittee
Report
Markup
House
House
Senate
Senate
Conf.
Public
Report Passage
Report
Passage Report
Approval
Law
House
Senate
House Senate
H.Rept.
6/15/05
109-153
6/21/05
Table 2 lists the total funding provided for each of the nine titles in the bill (the
last two titles cover general provisions affecting this bill and general provisions
affecting the entire federal government) for FY2005 and the amount requested for
that title for FY2006.
Table 2. Transportation/Treasury et al. Appropriations, by Title,
FY2005-FY2006
(millions of dollars)
FY2005
FY2006
FY2006
Title
Enacted*
Request
House Com
Title I: Department of Transportation
$59,724
$58,297
$62,758
Title II: Department of the Treasury
11,213
11,649
11,555

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CRS-4
FY2005
FY2006
FY2006
Title
Enacted*
Request
House Com
Title III: Housing and Urban
31,915
29,147
33,462
Development
Title IV: The Judiciary
5,426
5,975
5,768
Title V: District of Columbia
556
573
603
Title VI: Executive Office of the
President
834
525
754
Title VII: Independent Agencies
19,756
19,948
19,985
Title VIII-IX: General Provisions
(125)
—
—
Total
127,659
126,141
134,890
Source: Budget table provided by the House Committee on Appropriations. “Total” is from “Net grand total
budgetary resources” line in budget table and reflects scorekeeping adjustments. Totals may not add due to
rounding and scorekeeping adjustments.
*The FY2005 Omnibus appropriations bill contained an across-the-board rescission of 0.83%; that rescission
is reflected in these figures.
Table 3 shows funding trends over the five-year period FY2001-FY2005, and
the amounts requested for FY2006, for the titles in the bill. All of the agencies
generally experienced funding increases during the period FY2001-FY2005.
Table 3. Funding Trends for Transportation/Treasury et al.
Appropriations, FY2001-FY2006
(billions of current dollars)
FY2006
Department
FY2001 c
FY2002
FY2003 d
FY2004 e
FY2005f
Request
Title I: Transportation a
$51.9
$57.4
$55.7
$58.4
$59.6
$58.2
Title II: Treasury b
9.9
10.5
10.8
11.1
11.2
11.6
Title III: Housing and
Urban Development
28.5
30.2
31.0
31.2
31.9
29.1
Title IV: Judiciary
4.3
4.7
5.4
5.2
5.4
6.0
Title V: District of
Columbia
0.5
0.4
0.5
0.5
0.6
0.6
Title VI: Executive
0.7
0.8
0.8
0.8
0.8
0.5
Office of the President
Title VII: Independent
—
—
—
—
19.8
19.9
Agencies
Source: United States House of Representatives, Committee on Appropriations, Comparative Statement of
Budget Authority tables from fiscal years 2001 through 2006.
a. Figures for Department of Transportation appropriations for FY2001-FY2003 have been adjusted for
comparison with FY2004 and later figures by subtracting the United States Coast Guard, the
Transportation Security Administration, the National Transportation Safety Board, and the Architectural
and Transportation Barriers Compliance Board, and by adding the Maritime Administration.
b. Figures for Department of the Treasury appropriations for FY2001-FY203 have been adjusted for comparison
with FY2004 and later figures by subtracting the Bureau of Alcohol, Tobacco, and Firearms; the Customs
Service; the United States Secret Service; and the Law Enforcement Training Center.
c. FY2001 figures reflect 0.22% across-the-board rescission.
d. FY2003 figures reflect 0.65% across-the-board rescission.
e. FY2004 figures reflect 0.59% across-the-board rescission.
f. FY2005 figures reflect 0.83% across-the-board rescission.

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CRS-5
Title I: Transportation Appropriations
Table 4. Title I: Department of Transportation Appropriations,
FY2005 to FY2006
(in millions of dollars — totals may not add)
Department or Agency
FY2005
FY2006
FY2006
(Selected Accounts)
Enacteda
Request
House Com
Office of the Secretary of Transportation
$238
211
292
Essential Air Serviceb
52
—
54
Federal Aviation Administration (FAA)
13,814
13,779
14,976
Operations (trust fund & general fund)
7,713
8,201
8,193
Facilities & Equipment (F&E) (trust fund)
2,525
2,448
3,053
Grant-in-aid Airports (AIP) (trust fund) (limit.
on oblig.)
3,517
3,000
3,600
Research, Engineering & Development (trust
fund)
130
130
130
Federal Highway Administration (FHWA)
35,909
35,339
37,026
(Limitation on Obligations)
34,265
34,700
36,287
(Exempt Obligations)
639
639
739
Additional funds (trust fund)
735
—
—
Additional funds (general fund)
113
—
—
Federal Motor Carrier Safety Administration
(FMCSA)
444
465
501
National Highway Traffic Safety Administration
(NHTSA)
454
696
782
Federal Railroad Administration (FRA)
1,432
552
732
Amtrak
1,207
—
550
Federal Transit Administration (FTA)
7,646
7,813
8,482
General Funds
956
1,115
1,272
Trust Funds
6,691
6,698
7,210
St. Lawrence Seaway Development Corporation
16
16
16
Maritime Administration (MARAD)
305
294
291
Pipeline and Hazardous Materials Safety
Administration
83
117
131
Pipeline safety program
69
73
73
Emergency preparedness grants
14
—
14
Research and Innovative Technology Administration
47
6
4
Office of Inspector General
59
62
62
Surface Transportation Board
20
23
25
Total, Department of Transportation
59,724
58,297
62,758
Note: Figures are from a budget authority table provided by the House Committee on Appropriations. Because
of differing treatment of offsets, the totals will not always match the Administration’s totals. The figures within
this table may differ slightly from those in the text due to supplemental appropriations, rescissions, and other
funding actions. Columns may not add due to rounding or exclusion of smaller program line-items.
a. These figures reflect the 0.83% across-the-board rescission included in P.L. 108-447.
b. These amounts are in addition to the $50 million annual authorization for the Essential Air Service program;
thus, the total FY2005 funding would be $102 million ($50 million + $52 million).

---

CRS-6
Department of Transportation Budget and Key Policy Issues
The President’s budget proposes $58.3 billion for the Department of
Transportation (DOT). This is $1.4 billion (2%) less than the $59.7 billion enacted
for the current year (FY2005). The major funding changes requested from FY2005
are in the requests for Amtrak ($1.2 billion (100%) below FY2005) and in the
Federal Aviation Administration’s Airport Improvement Program ($500 million
(14%) below FY2005).
The House Committee on Appropriations recommended $62.8 billion for DOT,
$4.4 billion (8%) above the Administration request and $3.0 billion (5%) above
FY2005 funding. The primary changes from the President’s request were additional
funding for the Federal Aviation Administration ($1.2 billion), the Federal Highway
Administration ($1.6 billion), and Federal Transit Administration ($700 million). In
the case of the Federal Aviation Administration, the increase brought the Airport
Improvement Program and Facilities and Equipment Program up to their FY2006
authorized funding levels. In the case of the highway and transit programs, the
increase brought those administrations up to the funding levels authorized in the
House’s version of surface transportation authorization legislation, which is currently
in conference. The Committee also recommended $550 million in passenger rail
funding, more than the Administration requested but less than the $1.2 billion
enacted in FY2005.
The Administration’s budget for DOT identifies three agency-specific goals
influencing the budget request: improving aviation and surface transportation safety
through increased funding for safety programs, improving transportation mobility
through investments in additional infrastructure and through investments in
technology to increase the effective capacity of the transportation systems, and
improving passenger rail services between cities by restructuring federal intercity
passenger rail policy and its provider, Amtrak.
Amtrak. Amtrak is a quasi-governmental corporation that operates and
maintains rail infrastructure in the northeast and operates passenger rail service
throughout the country. It operates at a deficit and requires federal support to
continue operations. The President’s budget did not request any funding for Amtrak
for FY2006; Amtrak received $1.2 billion in FY2005. The Administration did,
however, request $360 million for the Surface Transportation Board to maintain
commuter rail service that depends on Amtrak services in the event that Amtrak
ceases operations during FY2006. The Administration’s proposal received bipartisan
criticism in both the House and the Senate. The Administration asserts that their
reauthorization plan for Amtrak (S. 1501/H.R. 3211) received little attention from
the 108th Congress, so they requested no FY2006 money for Amtrak in order to spur
congressional reauthorization action.2 Their budget request notes that “with no
subsidies, Amtrak would quickly enter bankruptcy, which would likely lead to the
elimination of inefficient operations and the reorganization of the railroad through
2 Norman Mineta, Secretary, United States Department of Transportation, in transcript of
the Senate Committee on Appropriations Subcommittee on Transportation, Treasury, the
Judiciary, and Housing and Urban Development, Hearing on FY2006 Appropriations.

---

CRS-7
bankruptcy proceedings.”3 Others are less certain of the outcome of an Amtrak
bankruptcy proceeding.4 The Administration also notes that it would support
increased funding for intercity passenger rail in the future if significant reforms are
enacted. Some Members of Congress have questioned where that additional money
would come from, given the competing demands from other transportation modes
and from other agencies in the appropriations bill that funds DOT. Meanwhile, the
House Committee on the Budget has encouraged the House to continue funding
Amtrak5, and the House Committee on Transportation and Infrastructure has marked
up H.R. 1630, the Amtrak Reauthorization Act of 2005, that would authorize $2
billion annually for three years for Amtrak as it is currently structured. Similar
legislation was marked up by the Committee during the 108th Congress, but was not
acted upon.
The House Committee on Appropriations recommended $550 million for grants
to Amtrak for FY2006. The Committee also recommended $50 million for the
Secretary of Transportation to make capital grants for repairs to the Northeast
Corridor, and to consult with Amtrak in selecting the projects most critical to help
bring the Corridor into a state of good repair. The Committee also recommended $20
million to be held in reserve for the Surface Transportation Board to carry out
directed service should Amtrak cease operations, and $10 million to support the
orderly discontinuation of Amtrak’s mail and express service.
In addition, the Committee established a threshold subsidy figure for federal
support to Amtrak’s individual routes. Routes with a federal subsidy greater than
$30 per passenger would no longer be eligible for federal support. The Committee
noted that the states served by these routes could provide the funding needed to
support the routes; otherwise, the routes would be eliminated.
In the preprint of the Committee’s report on the appropriations bill, the
Committee wrote that “While the Committee agrees that reform is critical, it is also
equally important to sustain passenger rail service in geographic regions where this
service is viable.”6 In a press release describing the bill’s Amtrak provisions, the
Committee wrote that the bill “fully supports rail service for ... 80 percent of
Amtrak’s ridership.”7 Whether the bill actually does that is not clear. Amtrak
3 Office of Management and Budget, Budget for Fiscal Year 2006, p. 243.
4 Government Accountability Office, Intercity Passenger Rail: Potential Financial Issues
in the Event that Amtrak Undergoes Liquidation, GAO-02-871, September 2002; CRS
Report RL31550, Railroad Reorganization Under the U.S. Bankruptcy Code: Implications
of a Filing by Amtrak.
5 H.Rept. 109-17, on the FY2006 Budget Resolution (H.Con.Res. 95), 30.
6 Committee on Appropriations, House of Representatives, United States Congress, prepint
of committee report on the FY2006 Transportation, Treasury, and Housing and Urban
Development, the Judiciary, District of Columbia, and Independent Agencies Appropriations
Bill distributed at the markup session, p. 44.
7 House of Representatives, United State Congress. Smarter, More Effective Funding for
A m t r a k . P r e s s R e l e a s e i s s u e d J u n e 1 5 , 2 0 0 5 . A va i l a b l e a t

---

CRS-8
testified that it would need $278 million for debt service for FY2006, $560 million
for operations, $787 million for capital investment (including funding for multi-year
capital projects already underway), $175 million for working capital, and $20 million
for reform initiatives. In testimony before a Senate Appropriations Subcommittee
in May 2005, the Inspector General of the Department of Transportation testified
that Amtrak needed between $1.4 and $1.5 billion in federal funding for FY2006, and
noted that even a federal funding level of $1.2 billion, equal to the FY2005 level,
would almost certainly lead to very significant cuts in service.8 The Inspector
General also testified concerning the idea of eliminating Amtrak’s long-distance
trains as a way of reducing the amount of funding needed,
It’s important to appreciate that while they are highly subsidized and often
inefficient, their total elimination will not come close to making ends meet.
Savings ultimately would be in the neighborhood of around $300 million, and the
savings would not be immediate due to the need for labor severance payments.9
Thus, there is a possibility that funding Amtrak at the level recommended by the
House Committee on Appropriations would force Amtrak into bankruptcy. While
the Administration’s budget request implied that bankruptcy might be a route to
reorganizing Amtrak, the Inspector General describes an Amtrak bankruptcy as a
complex and risky undertaking.10 In part this is because an Amtrak bankruptcy
would be handled under a different set of laws than, for example, the recent
bankruptcies of several airlines.11
There is also the issue of the impact on commuter rail service operated by
several states along the Northeast Corridor. Since the Corridor is owned and
operated by Amtrak, in the event of an Amtrak bankruptcy operation of the Northeast
Corridor may cease. The Administration requested $360 million for the Surface
Transportation Board in order to continue a level of operation of the Northeast
Corridor sufficient to support those commuter rail services, in the event that Amtrak
ceased operations. The House bill recommends $20 million be held in reserve for the
Surface Transportation Board for that eventuality.
7 (...continued)
[http://appropriations.house.gov/index.cfm?FuseAction=PressReleases.Detail&PressRele
ase_id=492&Month=6&Year=2005]
8 Kenneth Mead, Inspector General, United States Department of Transportation, in
transcript of Senate Appropriations Subcommittee on Transportation, Treasury, the
Judiciary and Housing and Urban Development, Hearing on FY2006 Appropriations, May
1 2 , 2 0 0 5 , p u b l i s h e d b y C Q . A v a i l a b l e a t
[http://www.cq.com/display.do?prod=4&dockey=/cqonline/prod/data/docs/html/transcri
pts/congressional/109/congressionaltranscripts109-000001677392.html@committees&m
etapub=CQ-CONGTRANSCRIPTS&binderName=com.cq.oc.biz.BudgetTrackerNewsW
idget%3Fsection%3Dhearings%26group-id%3D1695&rthu=budgettrackerbill.do%23bth
earhits]
9 Ibid.
10 Ibid.
11 See references cited in footnote 5.

---

CRS-9
Aviation. The Federal Aviation Administration (FAA)’s budget provides both
capital and operating funding for the nation’s air traffic control system, as well as
providing federal grants to airports for airport planning, development, and expansion
of the capacity of the nation’s air traffic infrastructure. The President’s budget
requests $13.8 billion for FY2006, roughly the same as was enacted for FY2005 (a
proposed rescission of FY2005 in unused contract authority allows the budget total
to be scored as $12.7 billion, which would be an $839 million reduction from the
FY2005 level). The President’s request includes $25 million to hire 1,249 air traffic
controllers in FY2006. This is expected to result in a net gain of 595 controllers,
since 645 controllers are expected to leave through attrition.
The House Committee recommended $15.0 billion for FY2006, $1.1 billion
over the level enacted for FY2005 and $1.2 billion over the Administration request.
The increases brought the FAA’s capital programs up to their FY2006 authorized
funding levels.
Airport Improvement Program. The President’s budget proposes a cut to
the Airport Improvement Program (AIP), from $3.5 billion in FY2005 to $3.0 billion
for FY2006. The House Committee on Appropriations recommended $3.6 billion,
the FY2006 authorized level.
AIP funds are used to provide grants for airport planning and development, and
for projects to increase airport capacity (such as building new runways) and other
facility improvements. Some Members of Congress have questioned AIP cuts at a
time when aviation traffic is finally returning to pre-September 11th volumes and is
expected to continue to grow. Construction of new runways is seen by many as the
best way to alleviate airport congestion. The Administration’s requested $3 billion
for FY2006 is $600 million below the funding level “guaranteed” for FY2006 in the
Century of Aviation Reauthorization Act (VISION 100, P.L. 108-176). Section 104
of Vision 100 (49 USC 48114(c)(2)) provides that “it shall not be in order” for
Congress to consider any bill appropriating funding for FAA Operations or Research
and Development accounts if the combined funding for the Grants-in-Aid to Airports
and Facilities and Equipment accounts is below their combined authorization level
for that year. The proposed FY2006 funding level for the Facilities and Equipment
program is $500 million below the level “guaranteed” for FY2006; the combined
FY2006 proposal for the AIP and Facilities and Equipment programs is $5.45 billion,
$1.2 billion below their combined authorized level of $6.65 billion. In addition, the
proposed AIP funding level of $3 billion is below the $3.2 billion threshold set under
AIP distribution formulas in VISION 100; due to a provision in the authorizing
legislation, this shortfall could result in cutting most AIP formula distributions in
half.
The Administration asserts that airports can compensate for the reduction in AIP
funding by increasing their use of passenger facility charges. The Administration
estimates that airports could raise an additional $350 to $400 million annually by
increasing passenger facility fees to the maximum allowed by law. Some Members
of Congress have questioned the wisdom of imposing fee increases on an airline
industry struggling with the impact of high fuel costs.

---

CRS-10
Essential Air Service. The President’s budget proposes a $52 million (51%)
reduction in funding for the Essential Air Service program, from $102 million
(FY2005) to $50 million. The House Committee on Appropriations recommended
$104 million.
This program seeks to preserve air service to small airports in rural communities
by subsidizing the cost of that service. Supporters of the Essential Air Service
program contend that preserving airline service to rural communities was part of the
deal Congress made in exchange for deregulating airline service in 1978, which was
expected to reduce air service to rural areas. Some Members of Congress have
expressed concern that this proposed cut in funding for the Essential Air Service
program could lead to a reduction in the transportation connections of rural
communities. Previous budget requests from the current Administration, as well as
budget requests from the previous Administration, have also proposed reducing
funding to this program.
Surface Transportation. The President’s budget requests $35.3 billion for
federal highway programs, slightly less than the $35.7 billion provided for FY2005,
and $7.8 billion for federal transit programs, slightly more than the $7.6 billion
provided for FY2005. The House Committee on Appropriations recommended $37.0
billion for federal highway programs and $8.5 billion for federal transit programs.
The funding authorization for federal highway and transit programs was
scheduled to expire on October 1, 2003, and has been extended repeatedly as
Congress debates reauthorization of these programs. Congressional debate over
reauthorizing these programs has focused on overall funding levels and the
distribution of funding among the states. The House Committee’s recommended
figures reflect the authorization levels proposed in the House’s version of the surface
transportation authorization legislation, which is currently in conference.
Maritime Administration. The Administration requested $220 million for the
Maritime Administration for FY2006, $85 million (28%) below the $305 million
enacted for FY2005. The major difference was in the National Defense Tanker
Vessel Construction Program; the Administration not only did not request any new
funding for this program, but requested that the $74 million Congress appropriated
in FY2005 for this program be rescinded. The House Committee on Appropriations
recommended $291 million; the Committee did not provide any new funding for the
Tanker Vessel Construction Program, but did not rescind the FY2005 funding.
This program is intended to decrease the Department of Defense’s reliance on
foreign-flag oil tankers by supporting the construction of up to five privately-owned
product-tanker vessels in the United States. It would provide up to $50 million per
vessel for the construction, in U.S. shipyards, of commercial tank vessels that are
capable of carrying militarily useful petroleum products and that would be available
for the military’s use in time of war.

---

CRS-11
Title II: Treasury Appropriations
Table 5. Title II: Department of the Treasury Appropriations,
FY2005 to FY2006
(millions of dollars)
FY2005
FY2006
FY2006
Program or Account
Enacted*
Request
House Com
Departmental Offices
$156
$195
187
Office of Foreign Asset Control
22
—
Department-wide Systems and Capital
Investments
32
24
21
Office of Inspector General
16
17
17
Treasury Inspector General for Tax
Administration
128
133
133
Air Transportation Stabilization Program
2
3
3
Community development financial institutions
fund program account
55
8
55
Treasury Building and Annex Repair and
Restoration
12
10
10
Financial Crimes Enforcement Network
72
74
74
Financial Management Service
229
236
236
Alcohol and Tobacco Tax and Trade Bureau
82
62
91
Bureau of the Public Debt
174
177
177
Internal Revenue Service, Total
10,236
10,460
10,549
Processing, Assistance and Management
4,057
—
4,182
Tax Law Enforcement
4,364
—
4,541
Information Systems
1,578
—
1,607
Business Systems Modernization
203
199
199
Health Insurance Tax Credit Administration
35
20
20
Total Appropriations, Dept. of the Treasury
11,218
11,648
11,553
Source: Figures are from a budget authority table provided by the House Committee on Appropriations. Because
of differing treatment of offsets, the totals will not always match the Administration’s totals. The figures within
this table may differ slightly from those in the text due to supplemental appropriations, rescissions, and other
funding actions. Columns may not add due to rounding or exclusion of smaller program line-items.
*FY2005 figures reflect an across-the-board rescission of 0.83%.
Department of the Treasury Budget and Key Policy Issues12
In FY2005, Treasury is receiving $11.2 billion in appropriated funds, or 1.3%
more than it received in FY2004. Most of these funds (about 92%) are being used
to finance the operations of the Internal Revenue Service (IRS), whose budget is
12 For more information on the proposed budget for the Treasury, see CRS Report RL32898,
Appropriations for the Treasury Department and Internal Revenue Service in FY2006:
Issues for Congress.

---

CRS-12
$10.2 billion. The remaining $929 million is being distributed in the following
manner among Treasury’s other bureaus and departmental offices: departmental
offices (which includes the Office of Terrorism and Financial Intelligence), $158
million; Office of Foreign Assets Control (OFAC), $22 million; department-wide
systems and capital investments, $32 million; Office of Inspector General, $17
million; Treasury Inspector General for Tax Administration (TIGTA), $129 million;
Air Transportation Stabilization program, $2 million; Treasury building and annex
repair and restoration, $12 million; Financial Crimes Enforcement Network
(FinCEN), $73 million; Financial Management Service, $231 million; Alcohol and
Tobacco Tax and Trade Bureau, $83 million; and Bureau of the Public Debt, $175
million. These amounts do not reflect an 0.83% across-the-board cut (or rescission)
in non-defense discretionary spending.
For FY2006, the Bush Administration is asking Congress to provide $11.649
billion in appropriated funds, or 3.8% more than the amount enacted for FY2005
(after allowing for the rescission). Once again, the vast share of this budget request
would be channeled to the IRS, whose budget would total $10.679 billion. The
remaining funding would be distributed as follows: departmental offices, $195
million; departmental systems and capital investments, $24 million; Office of
Inspector General, $17 million; TIGTA, $133 million; Air Transportation
Stabilization program, $3 million; Treasury building and annex repair and
restoration, $8 million; FinCEN, $74 million; Financial Management Service, $236
million; Alcohol and Tobacco Tax and Trade Bureau, $91 million; and Bureau of the
Public Debt, $177 million. Each account except those for departmental systems and
capital investments, and Treasury building and annex repair and restoration, would
be funded at a higher level than in FY2005. The Administration also wants funding
for OFAC to be treated not as a separate account but as an element of its budget
request for departmental offices.
According to budget documents released by the Treasury Department, its
FY2006 budget request is built around the achievement of numerous strategic
objectives. The most important include improving taxpayer compliance with tax
laws; modernizing IRS’s computer and management systems; enhancing Treasury’s
capability to analyze and disrupt terrorist financing and other financial crimes;
maintaining and safeguarding the integrity of federal finances and the U.S. financial
system; and increasing opportunities for economic development through policy
initiatives such as fundamental tax reform. Recent congressional testimony by
Treasury officials indicates that two of the highest priorities are improving tax
compliance and disrupting (and reducing) the flow of funds to terrorist groups.
On June 21, 2005, the House Committee on Appropriations approved a measure
providing funding for Treasury and a handful of other executive agencies in FY2006.
Six days earlier, the House Appropriations Subcommittee on Transportation,
Treasury, Housing and Urban Development, Judiciary, and the District of Columbia
had approved a similar measure by voice vote. Under the bill passed by the full
committee, the Treasury Department would receive $11.6 billion in appropriated
funds in FY2006. According to preliminary information released by the Committee,
this amount is $336 million more than the Department’s budget in FY2005 but $94
million less than the level of funding requested by the Bush Administration. Not
surprisingly, proposed funding for the IRS accounts for most of these differences.

---

CRS-13
The bill passed by the Committee would grant the agency $10.548 billion in
appropriated funds, or $229 million more than its budget in FY2005 but $131 million
less than the level of funding requested by the Administration. It also would raise
funding relative to the current fiscal year for the following accounts: departmental
offices, +$31.1 million; Office of Inspector General, +$0.6 million; TIGTA, +$5.2
million; FinCEN, +$1.7 million; Alcohol and Tobacco Tax and Trade Bureau, +$8.8
million; Bureau of Public Debt, +3.2 million; and the Financial Management Service,
+$7.2 million. Two accounts would have their budgets in FY2006 reduced relative
to FY2005: department-wide systems and capital investments, -$10.6 million; and
Treasury building and annex repair and restoration, -$2.2 million.
Internal Revenue Service (IRS). In FY2005, the IRS is receiving $10.2
billion in appropriated funds, or 1.3% more than it received in FY2004. Of this
amount, $4.090 billion is intended for processing, assistance, and management;
$4.399 billion for tax law enforcement; $1.590 billion for information systems
management; $205 million for business systems modernization; and $35 million to
administer the health insurance tax credit established by the Trade Act of 2002. Of
the funds appropriated for processing, assistance, and management, Congress has
specified that $4.1 million be used to operate the Tax Counseling for the Elderly
program and $7.5 million be reserved to pay for grants for low-income taxpayer
clinics. None of the funds appropriated for the business systems modernization
program may be spent without the consent of the House and Senate Appropriations
Committees. In addition, the IRS Commissioner must submit quarterly reports in
FY2005 on the agency’s activities aimed at improving taxpayer compliance to both
committees.
The Bush Administration is requesting that IRS operations be funded at $10.679
billion in FY2006, or 4.3% more than the amount enacted for FY2005 after allowing
for the rescission. To bring its budget request into closer alignment with IRS’s major
programs and most recent strategic plan, the Administration wants to revamp the
agency’s budget beginning in FY2006. Under the Administration’s proposal, the
number of accounts in the IRS budget would be reduced from six to three: tax
administration and operations (TAO), business systems modernization, and
administration of the health insurance tax credit. TAO would be equivalent to the
existing accounts for tax law enforcement; processing, assistance, and management;
and information systems. For FY2006, the Administration wants to spend $10.46
billion on TAO, or 4.6% more than is being spent for this purpose in FY2005; $199
million on business systems modernization, or 2.3% less than the amount enacted for
FY2005; and $20 million on administration of the health insurance tax credit, or
41.5% less than the amount enacted for the current fiscal year. Compared to the
FY2005 budget, the Administration is seeking $500 million more for enforcement
but $38 million less for taxpayer service and $4 million less for the ongoing effort
to upgrade IRS’s business systems. Some are concerned that a cutback of that
amount in taxpayer service could end up exacerbating compliance problems among
those taxpayers who rely heavily on taxpayer assistance centers (TACs) and IRS toll-
free phone assistance centers.13
13 Allen Kenney, “Deja Vu? Bush Wants $500 Million for IRS to Toughen Up in 2006,”
(continued...)

---

CRS-14
According to budget documents issued by the IRS, this budget request is
intended to achieve the three main goals guiding the agency’s current five-year
strategic plan, which was issued in July 2004: (1) continued improvement of
taxpayer service; (2) strengthened enforcement of the tax laws; and (3) continued
modernization of IRS’s information systems.
Under the appropriations bill approved by the House Committee on
Appropriations on June 21, 2005, the IRS would receive $10.548 billion in
appropriated funds in FY2006. This amount is about $229 million more than the
agency’s budget in the current fiscal year but $131 million less than the level of
funding requested by the Bush Administration. It is difficult to compare the bill
passed by the Committee with the Administration’s budget request for the IRS
because the Administration wants the agency’s budget to be revised so that the
existing accounts for tax law enforcement and for processing, assistance and
management are merged into a single account for taxpayer service and enforcement.
The Committee rejected this proposal. But it is possible to compare the bill’s
recommended funding for IRS operations with the budget for this purpose for
FY2005. Of the $10.548 billion in funding for the IRS, $4.181 billion (or $124.7
million above the level for FY2005) would go to processing, assistance, and
management; $4.541 billion (or $ 177.9 million above the level for FY2005) would
be set aside for tax law enforcement; $1.607 billion (or $29.1 million above the level
for FY2005) for information systems; $199 million (or $4.4 million below the level
for FY2005) for business systems modernization; and about $20 million (or $14.3
million below the level for FY2005) for administering the health insurance tax credit.
According to a draft report on the bill made available by the Committee, the IRS
would be barred from using any of the funds appropriated by the bill to close TACs
in FY2006 until TIGTA has completed a “thorough, scientific review of the impact
this initiative would have on individual taxpayers.” In late May 2005, the IRS
announced that it planned to close 68 of the 400 existing TACs by the end of
FY2005.
13 (...continued)
Tax Notes, Feb. 14, 2005, p. 748.

---

CRS-15
Title III: Department of Housing and Urban
Development
Table 6. Title III: Housing and Urban Development
Appropriations,
FY2005 to FY2006
(budget authority in $ billions)
FY2005
FY2006
FY2006
Program
enacted
request
House Com
Tenant-based rental assistance (Sec. 8 vouchers)
(includes advanced appropriation)
14.766
15.845
15.531
Project-based rental assistance (Sec.8)
5.298
5.072
5.088
Public housing capital fund
2.579
2.327
2.600
Public housing operating fund
2.438
3.407
3.600
HOPE VI
0.143a
0.000a
0.000
Native American housing block grants
0.622
0.583b
0.600k
Native Hawaiian Block Grant
c
0.009
0.009
Housing for Persons With AIDS (HOPWA)
0.282
0.268
0.285
Rural Housing Economic Development
0.024
0.000d
0.010
Empowerment Zones; Enterprise Communities
(EZ/EC)
0.010
0.000d
0.000
Community Development Block Grant/Fund
(including supplemental funding)
4.852e
0.000d
4.152
Brownfields redevelopment
0.024
0.000d
0.000
HOME Investment Partnerships
1.900
1.941
1.900
Homeless Assistance Grants
1.241
1.440
1.340
Self Help Homeownership
f
0.030
0.061l
Housing for the elderly (Sec. 202)
0.741
0.741
0.741
Housing for the disabled (Sec. 811)
0.238
0.120
0.238
Housing Counseling Assistance
g
0.040
m
Rental Housing Assistance
0.000
0.026
0.026
Research and technology
0.045
0.070h
0.061h
Fair housing activities
0.046
0.039
0.039
Office, lead hazard control
0.167
0.119
0.119
Salaries and expenses
0.543
0.579
0.579
Working capital fund
0.268
0.265
0.165
Inspector General
0.079
0.079
0.079

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CRS-16
FY2005
FY2006
FY2006
Program
enacted
request
House Com
Loan Guaranteesi
0.013
0.004
0.004
Appropriations Subtotal
36.318
33.003
37.226
Sec. 8 recaptures (rescission)
-1.557
-2.500
-2.494
HOPE VI rescissiona
0.000
-0.143
0.000
Other rescissions
-0.764j
0.000
0.000
Rescissions Subtotal
-2.321
-2.494
-2.494
Federal Housing Administration (net)
-1.724
-0.856
-0.913
GNMA (net)
-0.357
-0.357
-0.357
Offsets Subtotal
-2.082
-1.213
-1.271
Total
$31.915
$29.147
$33.462
Source: Prepared by CRS based on information provided by the House Committee on Appropriations
and HUD’s Congressional Budget Justifications. FY2005 figures are adjusted to reflect the 0.83%
across-the-board rescission enacted in P.L. 108-447.
Note: This table does not include two accounts whose costs are equal to their offsetting receipts:
Manufactured Housing Fees Trust Fund ($12.9 million in FY2005 and $13 million in FY2006) and
the Office of Federal Housing Enterprise Oversight ($58.7 million in FY2005 and $60 million in
FY2006).
a. The Administration has proposed that in FY2006, Congress rescind the HOPE VI funding provided
in FY2005.
b. Includes $58 million for Indian community and economic development activities, which, in
FY2005, received $68 million as a set-aside within the Community Development Fund.
c. In FY2005, $8.928 million was provided for this program (Hawaiian Homelands Homeownership)
as a set-aside within the Community Development Fund.
d. For FY2006, the Administration proposes to eliminate these programs and replace them with a new
program funded in the Commerce Department.
e. The CDBG appropriation includes $180.8 million in CDBG supplemental funding for FY2005,
including $30.8 million appropriated under Section 424 of P.L. 108-447 and $150 million
appropriated under P.L. 108-324.
f. In FY2005, $24.8 million was provided for this program as a set-aside within the Community
Development Fund.
g. In FY2005, $41.7 million was provided for this program as a component of HOME.
h. Includes $29 million requested for University Partnerships, which, in FY2005, received a total of
$33 million as set-asides within the Community Development Fund.
i. This category includes Section 108 ($7 million in FY2005, $0 in FY2006), Native Hawaiian
housing ($992,000 in FY2005 and $882,000 in FY2006) and Indian housing loan guarantees ($5
million in FY2005 and $2.6 million in FY2006). For FY2006, the Administration proposes to
eliminate Section 108 loan guarantees and replace them with the new larger program in the
Commerce Department. The House Appropriations Committee bill does not include funding for
Section 108 loan guarantees.
j. Includes one-time rescissions of unobligated balances from the following accounts: Public Housing
Drug Elimination grants, Title VI credit subsidy, Urban Development Action Grants, rental
housing assistance and GI/SRI credit subsidy.
k. Includes $45 million for Indian community and economic development activities, which, in
FY2005, received $68 million as a set-aside within the Community Development Fund.
l. The Committee bill would rename this account Self-Help and Assisted Homeownership and transfer
to it funding for several set-asides that were formerly funded under the Community Development

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CRS-17
Fund, including $24 million for the Self-Help Homeownership Program (SHOP), $28 million for the
National Community Development Initiative, $3 million for the Housing Assistance Council, $1
million for Special Olympics, and $1 million for the Native American Indian Housing Council. The
account also includes $4 million for a one-time grant to the Housing Partnerships Network, which was
not previously funded under CDBG.
m. The Committee provided $41.7 for Housing Counseling Assistance as a set-aside within the
HOME program.
Department of Housing and Urban Development Budget and
Key Policy Issues14
The President’s proposed HUD budget of $29.1 billion for FY2006 represents
a decline of 8.75% from the FY2005 enacted level of $31.9 billion. This decrease
is the result of several factors including the proposed transfer of the Community
Development Block Grant program (CDBG) to the Department of Commerce and the
reduction or elimination of other HUD programs. Several program increases are
proposed, including a $1.1 billion increase for HUD’s largest program, the $14.8
billion Section 8 voucher program, and a $200 million increase for Homeless
Assistance Grants. Proposed cuts to the major HUD programs are discussed below.
Proposed cuts to smaller programs include reductions in the Lead-Based Paint
Hazard Reduction program — down 29%; Native American Block Grants, that
would be cut 6%; Fair Housing programs, reduced 15%; and Housing for Persons
with AIDS, proposed to be cut 5%.
On June 21, 2005, the House Appropriations Committee passed its version of
the FY2006 HUD funding bill, providing over $4 billion more for the Department
than the President requested. The bill would continue funding CDBG within HUD
and would maintain or increase funding for several programs slated for cuts in the
President’s budget.
Community and Economic Development Programs Consolidation
Proposal. The Bush Administration budget recommendations for FY2006 include
a proposal that would consolidate the activities of at least 18 existing community and
economic development programs into a two-part grant proposal called the
“Strengthening America’s Communities Initiative.” As outlined by the
Administration, the proposal would realign several, but not all, federal economic and
community development programs. The most prominent of these programs is the
Community Development Block Grant program. Other HUD programs that would
be eliminated under the Administration proposal include Empowerment Zones,
Brownfield Economic Development Initiatives, CDBG Section 108 loan guarantees,
and Rural Housing and Economic Development Grants. The Department of
Commerce would be responsible for administering the new program that would
replace the 18 existing programs that are currently administered by five federal
agencies.
14 For more details on the proposed HUD budget, see CRS Report RL32869, The
Department of Housing and Urban Development (HUD): Fiscal Year 2006 Budget. For a
similarly detailed examination of the FY2005 budget, see CRS Report RL32443, The
Department of Housing and Urban Development: FY2005 Budget.

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CRS-18
The Administration proposal would reduce aggregate funding from $5.6 billion
in FY2005 for the programs proposed for consolidation to $3.7 billion in FY2006 for
the new program. The Administration has offered a general outline of the new
programs, but it has not yet submitted a detailed realignment proposal for
congressional consideration. It has stated that the new program will emphasize
flexibility, will be results oriented, and will be targeted to communities based on
need. The Administration is seeking this realignment, in part, because many of the
18 programs recommended for elimination have been judged by the Administration
to be ineffective, unable to demonstrate results, or duplicative of the efforts of other
federal programs.
The agency that would be most affected by the proposal is HUD; programs
administered by HUD account for nearly 81% of the $5.6 billion in FY2005 funding.
The agency’s Community Development Block Grant formula grants represent 74%
of the total. The consolidation proposal is being opposed by groups representing state
and local officials including the U.S. Conference of Mayors, the National Governors
Association, National League of Cities, and National Association of Counties. The
House and Senate-passed budget resolutions for FY2006 both included language that
would support the continuation of the CDBG program. The House version of
H.Con.Res. 95 included language that would increase funding for the community and
regional development budget function by $1.1 billion to $4.8 billion. It also included
language supportive of the continued funding of the CDBG program. The Senate
version of the budget resolution would restore $2 billion that would be cut under the
Administration’s “Strengthening America’s Communities Initiative” and stipulated
that the funds were to be used to support CDBG and the other 17 programs targeted
for elimination by the Administration. The conference agreement on the FY2006
budget resolution (H.Rept. 109-62) includes language that supports the continuation
of the CDBG program. It assumes $1.5 billion more than the President requested for
Community and Economic Development purposes and the accompanying Joint
Statement of Managers indicates that the increase is intended to maintain economic
and community development programs such as CDBG at FY2005 levels.
On June 21, the House Appropriations Committee completed consideration of
an unnumbered TTHUD appropriations bill for FY2006. The measure rejects the
Administration’s proposed “Strengthening America’s Communities Initiative” and
recommends $4.15 billion for the CDBG program and Economic Development
Initiative (EDI) grants. This includes $3.86 billion for CDBG formula grants awarded
to entitlement communities and states, which is $250 less than appropriated in
FY2005. The Committee also included $290 million for EDI grants for
congressional earmarked projects, which is $30 million more than was made
available in FY2005.
Under the bill a number of CDBG set-asides and related program would not be
funded in FY2006 including YouthBuild, Empowerment Zones, Brownfields, and
Section 108 loan guarantees. In addition, the bill would transfer funding for several
CDBG-related set-asides to other accounts within HUD. A new self-help and
assisted homeownership account would provide $23 million for the Self-Help
Homeownership Program (SHOP), $28 million for the National Community
Development Initiative, $3 million for the Housing Assistance Council and $1
million each for the Special Olympics and the Native American Indian Housing

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CRS-19
Council. Indian CDBG would be funded as a set-aside of $45 million within the
Native American Housing Block Grants account. The Committee also recommends
transferring to HUD’s Office of Policy Development and Research $29 million in
funding for university programs previously included as CDBG set-asides under
Section 107 — including assistance to historic black colleges and universities,
institutions serving Hispanic populations, and a community development work study
program.
For additional information on the Administration’s proposal see CRS Report
RL32823, An Overview of the Administration’s Strengthening America’s
Communities Initiative.
Section 8 Voucher Funding Level and Reform Proposal. The
President’s FY2006 request for the Section 8 tenant based rental assistance program,
also called the Section 8 voucher program, represents a 7% increase in funding over
FY2005. These funds would be used to renew existing subsidies, rather than create
new subsidies. The President’s budget proposes to continue and expand the practice
of funding public housing authorities (PHAs) on the basis of fixed costs, rather than
on actual costs (as was the practice prior to FY2004) and on the basis of fixed
utilization rates, rather than on all available vouchers (as was the practice prior to
FY2005). This “budget-based” funding structure has been controversial among some
PHAs, who argue it does not provide them with sufficient funding to meet their local
needs.
Beyond funding levels, the budget request also states that the President intends
to introduce a new proposal to reform the tenant-based voucher program. One
purpose for this reform proposal is to contain, if not reduce costs. According to the
President’s budget summary, “Section 8’s program costs are cannibalizing every
HUD program — at the same time waiting lists of families seeking housing continue
to grow.” The FY2006 HUD Congressional Budget Justifications state that this new
proposal will provide additional flexibility to PHAs which will enable them to run
their programs more effectively and efficiently. The Administration’s reform
proposal was introduced in the Senate (S. 771) on April 13 and in the House (H.R.
1999) on April 28, 2005. Reform proposals were also submitted as a part of the
FY2004 and FY2005 budgets; no congressional action was taken on either proposal.
The House Appropriations Committee version of the FY2006 HUD funding bill
includes $15.5 billion for tenant based rental assistance, which is $765 million more
than was provided in FY2005 but $314 million less than the President requested.
The funding would be allocated to agencies based on the amount they received in the
previous year, plus inflation. The $15.5 billion includes a set-aside of funds that the
Secretary could use to adjust the budgets of agencies that were negatively impacted
by the FY2005 formula due to anomalous circumstances, such as an increase in
voucher holders moving to more expensive areas. For additional information, see
CRS Report RL31930 Section 8 Housing Choice Voucher Program: Funding and
Related Issues.
Section 811 Housing for the Disabled. The President’s FY2006 request
for the Section 811 housing for the disabled program would be a 50% cut in funding
from FY2005. Further, the funding provided would not be available for capital

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CRS-20
grants to build housing units for the disabled — as in the past — rather, the full
amount would be used to provide vouchers to persons with disabilities. HUD budget
documents do not provide a rationale for the reduction or restriction on use for capital
grants. In testimony on March 17, 2005 before the House Appropriations
Subcommittee on Transportation, the Treasury, HUD, the Judiciary, and the District
of Columbia, the Secretary of HUD referred to the need to make unpopular cuts in
programs such as Section 811 in order to maintain adequate funding for Section 8
and programs for the homeless.
The House Appropriations Committee-passed version of the FY2006 HUD
funding bill maintains Section 811 funding at the FY2005 level of $238 million and
permits the funds to be used to provide capital subsidies.
HOPE VI. For the third year, the President’s budget requests no new funding
for the HOPE VI revitalization of distressed public housing program. HOPE VI
provides grants to local public housing administrators (PHAs) to help fund major
redevelopment of troubled public housing projects. The Administration claims that
the program has met its mandate and that program funds are spent too slowly;
however, the program has been popular with many local communities and Members
of Congress. Despite the President’s request, in FY2004 and FY2005, Congress
funded HOPE VI, but at a lower level than in FY2003 when over $570 million was
provided to the program. In addition to requesting no new funding for the program
in FY2006, the President’s budget requests that Congress rescind the funds it
provided to the program in FY2005.
The House Appropriations Committee-passed version of the HUD funding bill
does not provide any FY2006 funding for the HOPE VI program, but does not accept
the President’s request to rescind FY2005 funding. For more information, see CRS
Report RL32236, HOPE VI Public Housing Revitalization Program: Background,
Funding, and Issues.
Prisoner Re-entry Initiative. The Administration, for the second year, has
proposed that $25 million from the Homeless Assistance Grants account at HUD be
transferred to the Department of Justice for a Prisoner Re-entry Initiative. The funds
would be used to help individuals exiting prison successfully transition to community
life and employment. The initiative was not adopted in FY2005 and the House
Appropriations Committee-passed version of the HUD funding bill does not include
a transfer of funding for it in FY2006.
FHA Zero Downpayment Homeownership Option. First-time buyers
with strong credit records would be allowed to finance 100% of their home purchase
price and settlement costs. Insurance premiums would be increased to cover the
higher risks and costs involved. HUD estimates this would generate 204,000 loans
and $230.5 million in net revenue. The House Committee on Appropriations did not
assume these revenues in their re-estimate of the President’s budget, resulting in a
larger proposed budget than HUD’s request.
FHA Payment Incentive Homeownership Initiative. As proposed in the
FY2005 Budget, HUD would amend its underwriting guidelines in order to attract
borrowers who would otherwise seek loans in the subprime market. According to

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CRS-21
HUD, the borrowers would obtain better terms from FHA than would be possible on
the subprime market. The increased risk of default and the higher costs associated
with these borrowers would be offset by requiring more owner equity and higher
insurance premiums, although after a period of on-time payments, the premiums
would be reduced. HUD estimates this program would generate 64,000 loans a year
and increase net revenues by $37.4 million. The Committee also did not include
these revenue projections in their re-estimate of the President’s budget.
Title IV: The Judiciary
The Judiciary Budget and Key Policy Issues
Title IV covers funding for the Judiciary. As a co-equal branch of government,
the Judiciary presents its budget to the President, who transmits the proposed judicial
branch budget to Congress unaltered. Table 7 shows the FY2005 enacted amount,
the FY2006 requested funding, and the House Appropriations Committee
recommendations for the accounts in the Judiciary budget
Table 7. Title IV: The Judiciary Appropriations,
FY2005 to FY2006
(millions of dollars)
FY2005
FY2006
House
Court, Agency, or Program
Enacteda
Request
Reported*
Supreme Court — Salaries and Expenses
$57.4
$60.7
$60.7
Building and Grounds
9.8
5.6
5.6
U.S. Court of Appeals for the Federal Circuit
21.5
26.5
24.6
U.S. Court of International Trade
14.7
15.5
15.5
Courts of Appeals, District Courts, and Other
Judicial Services — Salaries & Expenses
4,125.2
4,460.9
4,348.8
Vaccine Injury Act Trust Fund
3.3
3.8
3.8
Defender Services
667.3
768.1
721.9
Fees of Jurors and Commissioners
60.7
71.3
60.1
Court Security
327.6
389.6
379.5
Administrative Office of the U.S. Courts
67.3
72.2
70.3
Federal Judicial Center
21.4
22.9
22.2
Retirement Funds
36.7
40.6
40.6
U.S. Sentencing Commission
13.1
14.7
14.0
Total
5,426.0
5,952.5
5,767.7
Sources: U.S. Senate and U.S. House Committees on Appropriations, and the Administrative Office
of the U.S. Courts. All figures have been rounded.
a. Amounts enacted for FY2005 reflect a 0.83% across-the-board rescission (P.L.108-447).
*Amounts are based on the House Committee on Appropriations draft budget documents.

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CRS-22
The two accounts that fund the Supreme Court — the salaries and expenses of
the Supreme Court of the United States and the expenditures for the care of its
building and grounds — together make up less than 1.2% of the total Judiciary
budget. The structural and mechanical care of the Supreme Court building, and care
of its grounds, are the responsibility of the Architect of the Capitol. The rest of the
Judiciary’s budget provides funding for the “lower” federal courts and for related
judicial services. The largest account, making up 75% of the total budget — the
Salaries and Expenses account for the U.S. Courts of Appeals, District Courts and
Other Judicial Services — covers the salaries, benefits and operating expenses of
circuit and district judges (including judges of the territorial courts of the United
States), and those of retired justices and judges, U.S. Court of Federal Claims,
bankruptcy and magistrate judges, and all other officers and employees of the federal
Judiciary not specifically provided for by other accounts. The Judiciary budget does
not fund three “special courts” in the U.S. court system: the U.S. Court of Appeals
for the Armed Forces, the U.S. Tax Court, and the U.S. Court of Appeals for
Veterans Claims. Construction of federal courthouses also is not funded within the
Judiciary’s budget.
In his 2004 year-end annual report, released on January 1, 2005, Chief Justice
William H. Rehnquist stated that the Judiciary was facing a “funding crisis.” The
Chief Justice expressed concern about rising fixed costs to the Judiciary that have
resulted in hiring freezes, furloughs, and reductions in force while the workload
continues to increase. The Judicial Conference, the principal policy-making body for
the federal court system, has devised a cost containment strategy and has
implemented measures to reduce costs and to make operations more efficient. To
alleviate budget pressures that could lead to more staff cuts, the Chief Justice
suggested that there be a reassessment of the rent (which constitutes about 20% of
the total budget) paid to the General Services Administration (GSA). In January
2005, the Judiciary asked GSA for a partial rent exemption for the federal courts.
Court security has become an increasingly critical issue since the bombing of
a federal building in Oklahoma City, the September 11 terrorist attacks, and threats
of anthrax contamination. The February 28, 2005, murders of family members of a
U.S. District Court judge in Chicago and, on March 11, 2005, of a state judge, a court
reporter, and a sheriff’s deputy in an Atlanta courthouse elevated federal judiciary
security to an even higher priority. Congress planned a series of hearings on security
protection for the federal judiciary. On April 26, 2005, the House Judiciary
Subcommittee on Crime, Terrorism and Homeland Security held a hearing on the
Secure Access to Justice and Court Protection Act, H.R. 1751. On May 18, 2005,
the Senate Committee Judiciary held a hearing on federal Judiciary security. Review
of security procedures, processes, and programs could result in remedies that have
budgetary implications.
On March 2, 2005, the Judiciary submitted an FY2005 emergency supplemental
appropriations request for $101.8 million for the Court of Appeals, District Courts,
and Other Judicial Services, Salaries and Expenses Account, to fund costs associated
with anticipated workload resulting from recent Supreme Court rulings on sentencing
guidelines and class action suits. The Senate provided $65 million in its version of

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CRS-23
the FY2005 supplemental (H.R. 1268), but the conference agreement (H.Rept. 109-
72) did not include any funding for the Judiciary.15
FY2006 Request. For FY2006, the Judiciary has requested $5.95 billion in
total appropriations, a 9.7% increase over the $5.43 billion approved for FY2005.
Of the total increase of $526.5 million, $408.3 million (78%) would be for mandatory
pay adjustments, inflation and other adjustments to the base required to maintain
current services. The remaining $118.2 million (22%) would be for workload
increases and program enhancements. In requesting an additional 1,211 FTEs to the
32,902 FTEs funded for FY2005, the Judiciary seeks to continue restoring staff
positions that were cut in FY2004 due to insufficient funding and to cope with the
increased workload. Current staff levels are below FY2001 levels. During the period
2001 to 2005 there has been a 9% increase in released felons who are supervised by
federal probation officers and a 12% increase in criminal cases. Staff reductions
have affected 87 of the 94 judicial districts nationwide.
Committee Markup. On June 21, 2005, the House Appropriations
Committee recommended a 6% funding increase for the Judiciary at $5.8 billion —
$341 million above the FY2005 funding level, and $185 million below the FY2006
request. The amount would “fully fund the court’s revised request for security
improvements at federal judicial facilities, and enable the courts to effectively
process priority criminal, civil and bankruptcy cases.”16 The committee adopted,
without objection, Representative Todd Tiahrt’s amendment directing the U.S.
Marshals Service to provide for the security for homes of federal judges as well as
managing judicial facility security. The House Committee also expressed its
expectation that the Judiciary, as it has in previous years, will submit a financial plan
within 45 days of the enactment of the FY2006 appropriations Act. The plan would
provide information on available funds including appropriations, fee collections, and
carry-over balances, and would set the baseline for determining if reprogramming
notification is required.
Following are highlights of funding for FY2006:
Supreme Court. For FY2006, the total request for the Supreme Court is
$66.4 million, a 1.3% decrease over the previous year. Funding would be for two
accounts: (1) Salaries and Expenses — $60.7 million requested, compared with the
FY2005 enacted amount of $57.4 million, and (2) Care of the Building and Grounds
— $5.6 million requested, compared with $9.8 million enacted for FY2005. Most
of the requested increase is to fund mandatory increases in salary and benefit costs
and inflationary fixed costs. An additional 12 FTEs are requested for new protection
and emergency procedures to enhance the Court’s overall security. The House
Committee recommended the same total amount as the FY2006 budget request.
15 Senate Committee on Appropriations, “Senate and House Conferees Agree to FY2005
Supplemental,” Press Release, May 3, 2005.
16 House Committee on Appropriations, “Full Committee Reports FY06 Transportation,
Treasury, Housing, and Urban Development Bill,” Press Release, June 21, 2005.

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CRS-24
U.S. Court of Appeals for the Federal Circuit. The FY2006 request is
$26.5 million, a 23% increase over the $21.5 million for FY2005. In addition to
providing for pay and other inflationary adjustments, the requested increases build
on the court’s efforts to improve security. These improvements would include new
perimeter security barriers and enhanced information technology systems. The
House Committee recommended $24.6 for FY2006 — an increase of $3.4 million
above the FY2005 funding level, and $1.8 million less than the FY2006 request.
Courts of Appeals, District Courts, and Other Judicial Services.
Salaries and Expenses This account, making up the largest share of the Judiciary
budget at almost 75% of the total request, funds most of the day-to-day activities and
operations of the federal courts. The FY2006 request totals $4.5 billion, an increase
of 8.1%, over the FY2005 level of $4.1 billion. The House Committee recommended
$4.3 billion — an increase of $223.5million above the FY2005 funding level, and
$112.2 million less than the FY2006 request.
Court Security. This account provides funds for the court security officers
and for Federal Protective Service (FPS) security charges for FY2006. Congress in
FY2005 approved a transfer of funding from the Salaries and Expenses and the
Defender Services accounts to the Court Security account for FPS security charges.
The FY2006 request is $389.6 million, an increase of 19% over the $327.6 million
enacted for FY2005. The increase is mainly due to the Federal Protective Service
charges, court security officer hourly wage adjustments, and security systems and
equipment costs. The House Committee recommended $379.5 million — an increase
of $51.9 million above the FY2005 funding level, and $10.2 million less than the
FY2006 request.
Defender Services. This account funds the operations of the federal public
defender and community defender organizations, and the compensation,
reimbursement, and expenses of private practice “panel attorneys” appointed by the
courts to serve as defense counsel to indigent individuals accused of federal crimes.
FY2006 request is $768.l million, an increase of 15.1% over the $667.3 million
appropriated for FY2005. The increase is to provide for pay and inflationary costs
and to fund potential workload increase arising from recent Supreme Court rulings.
The House Committee recommended $721.9 million — an increase of $54.6 million
above the FY2005 funding level, and $46.1 million less than the FY2006 request.

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CRS-25
Title V: District of Columbia Appropriations17
Table 8. Title V: District of Columbia Appropriations,
FY2005 to FY2006
(millions of dollars)
FY2006
FY2006
FY2005*
Request
House Com
Total Federal Payments
$555.5
$573.4
$603.4
Source: Figures are from a budget authority table provided by the House Committee on
Appropriations.
*FY2005 figure reflects an across-th-board rescission of 0.83%.
District of Columbia Budget and Key Policy Issues
President’s Request
On February 8, 2005, the Bush Administration released its FY2006 budget
recommendations. The Administration’s proposed budget includes $573.3 million
in federal payments to the District of Columbia. A major portion of the proposed
federal payment to the District involves the courts and criminal justice system. Three
functions (court operations, defender services, and offender supervision) represent
$470.1 million, or 82%, of the President’s proposed $573.3 million in federal
payments to the District of Columbia.
District Budget
On June 2, 2005, the District’s city council approved the city’s $8.8 billion
operating budget for FY2005, and $2.7 billion in capital outlays including $534
million to finance a new baseball stadium. The District’s budget also includes a
request for $635 million in special federal payments, which is $62 million more than
the $573 million proposed by the President and $32 million more than the amount
recommended by the House Appropriations Committee.
House Bill
An unnumbered appropriations bill approved by the House Appropriations
Committee on June 21, 2005, would continue to provide $75 million in special
federal payments in support of elementary, secondary, and post-secondary education
initiatives. This includes $13.525 million in special federal assistance to improve the
city’s public schools, $13.525 million in support of public charter schools, and
17 Prior to the reorganization of House and Senate Committee on Appropriations
subcommittee structures at the beginning of the 109th Congress, both houses of Congress had
a separate Appropriations Subcommittee for the District of Columbia appropriations.
Appropriations for the District of Columbia are now included in the responsibilities of the
House Committee on Appropriations Subcommittee on Transportation, Treasury, and
Housing and Urban Development, The Judiciary, District of Columbia, while in the Senate,
there is still a separate Appropriations Subcommittee on the District of Columbia.

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CRS-26
$14.566 million in assistance in support of scholarships to private and religious
schools. In addition, the House bill would appropriate $33.2 million for the District’s
college tuition assistance program, a proposed increase of $7 million more than
appropriated in FY2005.
The bill approved by the House Appropriations Committee would also provide
$20 million in special federal payments to the District’s Chief Financial Officer for
various, but unspecified, education; economic development, health and social
service activities.
In addition to recommending $603 million in special federal payments to the
District of Columbia, the bill also contains a number of general provisions, including
a number of so-called “social riders.” Consistent with provisions included in previous
appropriations acts, the bill would prohibit the use of federal and District funds to
finance or administer a needle exchange program intended to reduce the spread of
AIDS and HIV; or provided abortion services except in instances of rape, incest, or
the health of the mother is threatened. The bill would also prohibit the city from
decriminalizing the use of marijuana for medical purposes, and limit the city’s ability
to use District funds to lobby for congressional voting representation or statehood.

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CRS-27
Title VI: Executive Office of the President and Funds
Appropriated to the President
Table 9. Title VI: Executive Office of the President (EOP) and
Funds Appropriated to the President Appropriations,
FY2005 to FY2006
(millions of dollars)
FY2005
FY2006
House
Office
Enacted*
Request
Reported
Compensation of the President
$0.5
$0.5
$0.5
The White House Office
(salaries and expenses)
62.0
53.0
53.8
Executive Residence,White House
(operating expenses)
12.7
12.4
12.4
White House Repair and Restoration
1.9
1.7
1.7
Council of Economic Advisors
4.0
4.0
4.0
Office of Policy Development
2.3
3.5
3.5
National Security Council
8.9
8.7
8.7
Office of Administration
91.5
98.6
89.3
Office of Management and Budget
67.9
68.4
76.9
Office of National Drug Control Policy
(salaries and expenses)
26.8
24.2
26.9
Office of National Drug Control Policy
Counterdrug Technology Assessment Center
41.7
30.0
30.0
Federal Drug Control Programs:
High Intensity Drug Trafficking Areas Program
226.5
—
227.0
Federal Drug Control Programs: Other
Programs
212.0
213.3
213.3
Office of the Vice President
(salaries and expenses)
4.5
4.5
4.5
Official Residence of the Vice President
(operating expenses)
0.3
0.3
0.3
Total, EOP and Funds Appropriated to the
President
833.9
525.0
753.9
Source: Figures are from the President’s budget request and a budget authority table provided by the
House Committee on Appropriations. Because of differing treatment of offsets, the totals will not
always match the Administration’s totals. The figures within this table may differ slightly from those
in the text due to supplemental appropriations, rescissions, and other funding actions. Columns may
not add due to rounding or exclusion of smaller program line-items.
*FY2005 figures reflect an across-the-board rescission of 0.83%.
Executive Office of the President Budget and Key Policy
Issues
All but three offices in the Executive Office of the President (EOP) are funded
in the same appropriations act entitled the Departments of Transportation, Treasury,
and Housing and Urban Development, the Judiciary, District of Columbia, and

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CRS-28
Independent Agencies (House) and the Transportation, Treasury, the Judiciary,
Housing and Urban Development, and Related Agencies (Senate).18
For the fifth consecutive fiscal year, the President’s FY2006 budget proposes
to consolidate and financially realign several salaries and expenses accounts that
directly support the President into a single annual appropriation, called “The White
House.” This consolidated appropriation would total $183.3 million in FY2006 for
the accounts proposed to be consolidated, an increase of 0.05% from the $183.2
million appropriated in FY2005 (after the 0.83% rescission).19 The nine accounts
included in the consolidated appropriation would be the following:
! Compensation of the President,
! White House Office (including the Homeland Security Council),
! Executive Residence at the White House,
! White House Repair and Restoration,
! Office of Policy Development,
! Office of Administration,
! Council of Economic Advisers,
! Privacy and Civil Liberties Oversight Board (authorized by P.L. 108-
458), and
! National Security Council.20
The EOP budget submission states that consolidation would permit “the
President to immediately realign or reallocate the resources and staff available in
response to changing needs and priorities or emergent national needs.”21 The
conference committees on the FY2002 through FY2005 appropriations act decided
to continue with separate appropriations for the EOP accounts to facilitate
congressional oversight of their funding and operation.
The FY2006 budget, for the third consecutive year, proposes a general provision
in Title VI that would provide authority for the EOP to transfer 10% of the
appropriated funds among the following accounts:
18 Of the three exceptions, the Council on Environmental Quality and Office of
Environmental Quality are funded in the House Interior, Environment, and Related Agencies
Act and the Senate Interior and Related Agencies Act. The Office of Science and
Technology Policy and the Office of the United States Trade Representative are funded
under the same appropriations act entitled Science, State, Justice, and Commerce, and
Related Agencies (House) and Commerce, Justice, and Science (Senate).
19 P.L. 108-447, the Consolidated Appropriations Act for FY2005, at Division J, Title I,
Section 122, required a 0.83% across-the-board rescission in non-defense discretionary
spending accounts. The FY2005 appropriation for the EOP accounts proposed to be
consolidated totaled $187.126 million before the rescission.
20 U.S. Executive Office of the President, Office of Management and Budget, Budget of the
United States Government Fiscal Year 2006, Appendix (Washington: GPO, 2005), p. 980.
(Hereafter referred to as FY2006 Budget, Appendix.)
21 U.S. Executive Office of the President, Fiscal Year 2006 Congressional Budget
Submission (Washington: GPO [Feb. 2005]), p. 12. (Hereafter referred to as EOP Budget
Submission.)

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CRS-29
! The White House,22
! Office of Management and Budget (OMB),
! Office of National Drug Control Policy (ONDCP),
! Special Assistance to the President and the Official Residence of the
Vice President (transfers would be subject to the approval of the
Vice President),
! Council on Environmental Quality and Office of Environmental
Quality,
! Office of Science and Technology Policy,
! Office of the United States Trade Representative.23
According to the EOP budget submission, the transfer authority would “allow
the President to address, in a limited way, emerging priorities and shifting demands”
and would “provide the President with flexibility, improve the efficiency of the EOP,
and reduce administrative burdens.”24 The Consolidated Appropriations Act for
FY2005 (Section 533, Title V, Division H) authorized transfers of up to 10% of
FY2005 appropriated funds among the accounts for the White House Office, OMB,
ONDCP, and the Special Assistance to the President and Official Residence of the
Vice President.
The House Committee on Appropriations recommends that separate
appropriations for the EOP accounts be continued. Section 941 under the
government-wide general provisions continues the authorized transfers of up to 10%
among the accounts for the White House, Special Assistance to the President and
Official Residence of the Vice President, Council on Environmental Quality and
Office of Environmental Quality, Office of Science and Technology Policy, and
Office of the United States Trade Representative.
Notable among the House Committee’s funding recommendations for the EOP
accounts are the following. Under the White House Office, $750,000 is included for
the Privacy and Civil Liberties Oversight Board and the funding for the White House
Communications Agency is transferred to DOD’s Defense Information Agency. For
OMB, the committee increases the funding and full-time equivalents and directs that
the increases be applied in the areas of Defense, Homeland Security, Natural
Resources, and Human Resources “to emphasize that the principal responsibility for
which funds are being provided is the development and the execution of the Federal
budget.” With regard to the Performance Assessment Rating Tool (PART), OMB is
required to:
include a detailed description of each program or activity or project that OMB
intends to subject to its [PART] study process for the 2007 and 2008 budgets ...
[including] the specific methodology that will be used to conduct each study, the
22 The accounts under the White House are Compensation of the President, White House
Office (including the Homeland Security Council), Executive Residence at the White House,
White House Repair and Restoration, Council of Economic Advisers, Office of Policy
Development, National Security Council, Office of Administration.
23 FY2006 Budget, Appendix, p. 13.
24 EOP Budget Submission, p. 13.

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CRS-30
data that will be used in the analysis for each program studied, and office
responsible for providing OMB with information and analysis.
Under the Counterdrug Technology Assessment Center account, the committee
instructs ONDCP to submit, with its FY2007 budget request, “an analysis of options
and recommendations for the future course of counter drug technology research.” The
committee recommends that the High Intensity Drug Trafficking Areas Program
continue to be funded under the EOP (rather than under the Department of Justice,
as requested in the FY2006 budget) and fully funds the account (rather than reducing
it by 50%, as the FY2006 budget requested).
Title VII: Independent Agencies
Independent Agencies Budget and Key Policy Issues
In addition to funding for the aforementioned Departments and agencies, a
collection of 21 independent agencies receive funding through this appropriations
bill. Table 10 lists appropriations for FY2005 as enacted and for FY2006 as
requested in the President’s Budget, for each agency. The accompanying discussion
covers budget and policy issues of selected agencies.

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CRS-31
Table 10. Title VII: Independent Agencies Appropriations,
FY2005 to FY2006
(in millions of dollars)
FY2005
FY2006
FY2006
Agency
Enacted*
Request
House Com
Architectural and Transportation Barriers
Compliance Board
$6
$6
$6
Consumer Product Safety Commission
62
62
62
Election Assistance Commission+
14
18
16
Federal Deposit Insurance Corporation: Office of
Inspector General
30
30
30
Federal Election Commission
52
55
55
Federal Labor Relations Authority
25
25
25
Federal Maritime Commission
19
20
20
General Services Administration
216
219
217
Merit Systems Protection Board
34
34
36
Morris K. Udall Foundation
3
1
4
National Archives and Records Administration
311
315
325
National Credit Union Administration
Limitation on direct loans
1,500
1,500
1,500
Community Development Revolving Loan
Fund
1
1
1
National Transportation Safety Board
75
77
77
Neighborhood Reinvestment Corporation
114
118
118
Office of Government Ethics
11
11
11
Office of Personnel Management (total)
18,212
18,743
18,742
Salaries and Expenses
124
125
120
Government Payments for Annuitants,
Employees Health Benefits
8,135
8,393
8,393
Government Payments for Annuitants,
Employee Life Insurance
35
36
36
Payment to Civil Service Retirement and
Disability Fund
9,772
10,072
10,072
Office of Special Counsel
15
15
15
Selective Service System+
26
26
24
United States Interagency Council on
Homelessness
1
2
1
United States Postal Service
630
149
178
United States Tax Court
41
49
49
Total, Independent Agencies
19,756
19,948
19,985
General notes: Figures for FY2005 enacted and FY2006 are from a budget authority table dated provided by
the House Committee on Appropriations. Because of differing treatment of offsets, the totals will not always
match the Administration’s totals. The figures within this table may differ slightly from those in the text due to
supplemental appropriations, rescissions, and other funding actions. Columns may not add due to rounding or
exclusion of smaller program line-items.
*FY2005 figures reflect an across-the-board rescission of 0.83%.
+Selective Service System is included in House bill; in Senate, this agency is in the Military Construction and
Veterans Affairs appropriations bill.

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CRS-32
The Department of Homeland Security (DHS) and the Department of Defense
(DOD) are in the midst of implementing new human resources management systems
for their federal civilian employees. A significant issue for the human resources
management-related federal agencies during this appropriations cycle will be the
impact of the DHS and DOD changes on the labor-management relations and the
adverse actions and appeals workloads of the Federal Labor Relations Authority,
Merit Systems Protection Board, and Office of Special Counsel and on the workforce
management policies of OPM.
Office of Special Counsel. This office investigates federal employee and
applicant allegations of prohibited personnel practices and, when appropriate,
prosecutes matters before the Merit Systems Protection Board. The agency provides
a safe channel for whistle blowing by federal employees, enforces the Uniformed
Services Employment and Reemployment Rights Act, and advises on and enforces
the Hatch Act.
Merit Systems Protection Board. The House Committee on
Appropriations report states that the increased funding recommended for MSPB is
to accommodate additional appeals cases resulting from the decisions of DHS and
DOD to maintain MSPB as an arbitrator and to accommodate relocation expenses.
Office of Personnel Management. Several directives for OPM are
included in the House Committee on Appropriations report as follows. OPM is to
continue to implement and refine the new DHS and DOD personnel systems before
“bringing the system” to other agencies and departments. An FY2006 operating plan,
signed by the OPM Director, must be submitted to the House and Senate
Appropriations Committees within 60 days and include funding levels for the various
offices, centers, programs, and initiatives in the budget justification. OPM is to
include “clear, detailed, and concise” information in its budget justification on the
funding and measurement of programs. OPM and OMB must submit a report to
Congress within 90 days after the act’s enactment on:
how many veterans and disabled veterans are employed in the Federal
Government by department and agency, including in the Executive Office of the
President, the barriers that exist to hiring veterans and disabled veterans, and
ways to increase the number of veterans and disabled veterans employed in the
Federal Government to the level employed at the time of the Civil Service
Reform Act of 1978.
Notable among the funding recommended by the committee is $680,000 for
OPM to partner with the Partnership for Public Service “to identify successful
recruitment models across different college campuses” for application to the federal
government and a reduction of $3 million from the Center for Financial Services
because the budget request did not support costs related to performance management,
program evaluation, and research projects.
Federal Election Commission. The FEC administers federal campaign
finance law, including overseeing disclosure requirements, limits on contributions
and expenditures, and the presidential election public funding system; the agency
retains civil enforcement authority for the law.

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CRS-33
The President’s fiscal 2006 budget proposed an appropriation of $54.6 million
for the FEC, a 5.5% increase above the fiscal 2005 appropriation of $51.7 million.
The increase reflects adjustments for inflation and salary and benefit increases, but
no additional funds or staff for new programs. The House Appropriations Committee
recommended an appropriation of $54.7 million, with at least $4.7 million designated
for internal automated data systems and $5,000 for representational and reception
expenses.
General Services Administration (GSA). The General Services
Administration administers federal civilian procurement policies pertaining to the
construction and management of federal buildings, disposal of real and personal
property, and management of federal property and records. It is also responsible for
managing the funding and facilities for former Presidents and presidential transitions.
Only about 1% of GSA’s total proposed budget for FY2006 — $219 million for
general activities accounts — is funded by direct appropriations. Most GSA
spending is financed through the Federal Buildings Fund. The House Committee on
Appropriations recommended $217 million in direct appropriations ($2 million less
than requested) and $7.8 billion for the Federal Buildings Fund (the amount
requested).
Electronic Government Fund (E-gov Fund). Originally unveiled in
advance of the President’s proposed budget for FY2002, the E-gov Fund and its
appropriation has been a somewhat contentious matter between the President and
Congress. The President’s initial $20 million request was cut to $5 million, which
was the amount provided for FY2003, as well. Funding thereafter was held at $3
million for FY2004 and FY2005. Created to support interagency e-gov initiatives
approved by the Director of OMB, the fund and the projects it funds have been
subject to close scrutiny by, and accountability to, congressional appropriators.
House appropriators recommended $3 million for FY2006.
National Archives and Records Administration (NARA). The custodian
of the historically valuable records of the federal government since its establishment
in 1934, NARA also prescribes policy and provides both guidance and management
assistance concerning the entire life cycle of federal records. It also administers the
presidential libraries system; publishes the laws, regulations, and presidential and
other documents; and assists the Information Security Oversight Office (ISOO),
which manages federal security classification and declassification policy; and the
National Historical Publications and Records Commission (NHPRC), which makes
grants nationwide to help nonprofit organizations identify, preserve, and provide
access to materials that document American history.
House appropriators recommended $333.5 million for NARA, which is
approximately $10 million more than the amount requested for the agency in the
President’s budget. Of this recommended amount, distributions would be as follows:
$283.9 for operating expenses, with $2.9 million of these funds designated for the
anticipated receipt, and initial operation, of the now privately maintained Nixon
presidential library; $35.9 for the electronic records archive; and almost $6.2 million
for repairs and restoration. For the NHPRC account, $7.5 million was recommended,
$2 for operations and the remainder for grants.

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CRS-34
For FY2006, the President had requested $323 million for NARA, a modest
increase over the $264.8 million appropriated for the agency for FY2005. Of this
requested amount, the following distributions were specified: $280.9 for operating
expenses, a modest increase over the $266.9 appropriated for FY2005; $36.0 for the
electronic records archive; $6.1 million for repairs and restoration, a significant
reduction from the $13.4 appropriated for this account for FY2005; and no requested
funds for the NHPRC, which had received $5 million in FY2005.
Postal Service.25 The U.S. Postal Service (USPS) is self-supporting; it
generates nearly all of its funding — about $69 billion annually — by charging users
of the mail for the costs of the services it provides. Congress does provide a regular
appropriation, however, to compensate USPS for revenue it forgoes in providing, at
congressional direction, free mailing privileges for the blind and for overseas voting.
Congress has also provided funds in recent years for bio-terrorism detection in the
wake of the anthrax events of 2001.
Under the Revenue Forgone Reform Act of 1993, Congress is authorized to
reimburse USPS $29 million each year until 2035, for services provided below cost
to non-profit organizations at congressional direction in the 1990s, but not paid for
at the time. For the past 12 years, the Postal Service appropriation has consisted of
that amount, plus an estimate of the amount needed to pay for mail for the blind and
overseas voters for the current year.
In its FY2006 Budget, the Administration proposed an appropriation of $87.4
million, including $58.8 million for revenue forgone in FY2006 and a reconciliation
adjustment for underestimated mail volume in FY2003 of $28.6 million. The Postal
Service estimated that the FY2006 amount would be $79.9 million, or $21.2 million
more than OMB requested, and asked Congress to appropriate that amount. Either
amount would be supplemented by a $28.6 million reconciliation adjustment
reflecting that actual use of the subsidy in FY2003 was underestimated by that
amount. The Administration’s budget proposed that the $87.4 million would not be
available for obligation until October 1, 2006, which is in FY2007.
The Administration’s FY2006 budget also proposes to eliminate the usual $29
million annual payment for revenue forgone in past years that is set forth in the
Revenue Forgone Reform Act. USPS argues that cancelling the payment could result
in the whole 29-year obligation, totaling $870 million, being written off as a bad debt
and charged to current postal ratepayers.
In its detailed justification of its FY2006 budget request, USPS asked Congress
for an additional $51 million in emergency response funds to protect the safety of
employees and customers from threats such as the 2001 anthrax attack. The
Administration’s FY2006 Budget does not include any additional funds for
emergency preparedness for the Postal Service.
25 Also see CRS Report RS21025, The Postal Revenue Forgone Appropriation: Overview
and Current Issues, by Nye Stevens.

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CRS-35
The House bill as approved by committee adopted the Administration’s
recommendation by providing $87.4 million for the current year’s revenue forgone.
It departed from the budget, however, in holding only $73 million of that until
FY2007, and in providing the annual $29 million for revenue forgone in the past.
The USPS request for $51 million to carry out the latter stages of the emergency
preparedness plan was not granted.
Titles VIII & IX: General Provisions
The Transportation, Treasury, et al. Appropriations Act customarily includes
general provisions which apply either government-wide or to specific agencies or
programs. There also may be general provisions at the end of each individual title
within the appropriations act which relate only to agencies and accounts within that
specific title. The Administration’s proposed language for government-wide general
provisions is included in the FY2006 Budget, Appendix.26 Most of the provisions
continue language which has appeared under the General Provisions title for several
years. For various reasons, Congress has determined that reiterating the language is
preferable to making the provisions permanent. Presented below are some of the
government-wide general provisions that are proposed for elimination in the FY2006
budget. The recommendations of the House Committee on Appropriations are noted.
! Section 609, which prohibits payment to political appointees functioning in jobs
for which they have been nominated, but not confirmed. Included as Section 909
of the House bill, as reported.
! Section 619, which prohibits the obligation or expenditure of appropriated funds
for employee training when it (1) does not meet identified needs for knowledge,
skills, and abilities bearing directly upon the performance of official duties; (2)
contains elements likely to induce high levels of emotional response or
psychological stress in some participants; (3) does not require prior employee
notification of the content and methods to be used in the training and written end-
of-course evaluation; (4) contains any methods or content associated with religious
or quasi-religious belief systems or “new age” belief systems; or (5) is offensive
to, or designed to change, participants’ personal values or lifestyle outside the
workplace. Included as Section 919 of the House bill as reported.
! Section 620, which prohibits the use of appropriated funds to require and execute
employee non-disclosure agreements without those agreements having whistle-
blower protection clauses. Included as Section 920 of the House bill as reported.
! Section 623, which requires that the Committees on Appropriations approve the
release of any “non-public” information, such as mailing or telephone lists, to any
person or any organization outside the federal government. The Administration
also requested repeal of this requirement in its FY2003 and FY2005 budget
requests. Included as Section 923 of the House bill as reported.
! Section 628, which prohibits using appropriated funds to contract independently
with private companies to provide online employment applications and processing
services. The Administration also proposed eliminating this prohibition in its
FY2005 budget request. Included as Section 928 of the House bill as reported.
26 FY2006 Budget, Appendix, pp. 9-14.

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CRS-36
! Section 635, which states that Congress recognizes the United States Anti-Doping
Agency as the official anti-doping agency for Olympic, Pan American, and
Paralympic sports in the United States. Included as Section 935 of the House bill
as reported.
! Section 637, which prohibits the purchase of a product or service offered by the
Federal Prison Industries, Inc., unless the agency making such purchase
determines that such product or service provides the best value. The
Administration also proposed repealing this prohibition in its FY2005 budget
request. Included as Section 937 of the House bill as reported.
The House committee includes new government-wide general provisions on (1)
public-private competitions for activities not inherently governmental, (2)
requirements for transfers or reimbursements to the E-Government Initiatives, and
(3) a 3.1% pay adjustment for federal civilian employees.
Cuba Sanctions27
Since the early 1960s, U.S. policy toward Communist Cuba under Fidel Castro
has consisted largely of efforts to isolate the island nation through comprehensive
economic sanctions, including prohibitions on U.S. financial transactions — the
Cuban Assets Control Regulations (CACR) — that are administered by the Treasury
Department’s Office of Foreign Assets Control (OFAC). Restrictions on travel have
been a key and often contentious component of U.S. efforts to isolate the Cuban
government. The regulations have not banned travel itself, but have placed
restrictions on any financial transactions related to travel to Cuba. In 2004, the Bush
Administration significantly tightened restrictions on travel, and there was
considerable reaction to the Administration’s tightening of restrictions for family
visits and educational travel.
Under U.S. sanctions, commercial agricultural exports to Cuba have been
allowed since 2001 under the terms of the Trade Sanctions Reform and Export
Enhancement Act of 2000 or TSRA, but with numerous restrictions and licensing
requirements. Exporters are denied access to U.S. private commercial financing or
credit, and all transactions must be conducted in cash in advance or with financing
from third countries. Earlier this year, the Administration tightened U.S. economic
sanctions against Cuba by further restricting how U.S. agricultural exporters may be
paid for their sales. On February 22, 2005, OFAC amended the CACR to clarify that
the term “payment of cash in advance” for U.S. agricultural sales to Cuba means that
the payment is to be received prior to the shipment of the goods. This differs from
the practice of being paid before the actual delivery of the goods, a practice that had
been utilized by most U.S. agricultural exporters to Cuba since such sales were
legalized in late 2001. U.S. agricultural exporters and some Members of Congress
strongly objected that the action constituted a new sanction that violated the intent
of TSRA, and could jeopardize millions of dollars in U.S. agricultural sales to Cuba.
27 Prepared by Mark P. Sullivan, Specialist in Latin American Affairs, Foreign Affairs,
Defense, and Trade Division.

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CRS-37
OFAC Director Robert Werner maintains that the clarification “conforms to the
common understanding of the term in international trade.”28
Since late 2001, Cuba has purchased over $900 million in agricultural products
from the United States. Overall U.S. exports to Cuba amounted to about $7 million
in 2001, $146 million in 2002, $259 million in 2003, $400 million in 2004, and $132
million in the first four months of 2005, the majority in agricultural products. U.S.
exports to Cuba for January to April 2005 declined about 25% from the same time
period in 2004.29
Since 2000, either one or both houses have approved provisions in the annual
Treasury Department appropriations bill that would ease U.S. economic sanctions on
Cuba (especially on travel and on U.S. agricultural exports) but none of these
provisions was enacted. This year, the House version of the FY2006 Transportation-
Treasury-Housing appropriations bill includes a provision that would prevent funds
from being made available to enforce the February 25, 2005 amendment to the
CACR clarifying that “cash in advance” for U.S. agricultural exports means that the
payment is to be received prior to the actual delivery of the goods.
For additional information, see CRS Report RL32730, Cuba: Issues for the
109th Congress; CRS Issue Brief IB10061, Exempting Food and Agriculture
Products from U.S. Economic Sanctions: Status and Implementation; and CRS
Report RL31139, Cuba: U.S. Restrictions on Travel and Remittances.
28 U.S. Department of the Treasury, Testimony of Robert Werner, Director, OFAC, before
the House Committee on Agriculture, March 16, 2005.
29 World Trade Atlas. Department of Commerce Statistics.

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