Financial Services and General Government
(FSGG): FY2011 Appropriations
Garrett Hatch, Coordinator
Analyst in American National Government
January 14, 2011
Congressional Research Service
7-5700
www.crs.gov
R41340
CRS Report for Congress
P
repared for Members and Committees of Congress
Financial Services and General Government (FSGG): FY2011 Appropriations
Summary
The Financial Services and General Government (FSGG) appropriations bill includes funding for
the Department of the Treasury, the Executive Office of the President, the judiciary, the District of
Columbia, and 26 independent agencies. Among the independent agencies funded by the bill are
the Small Business Administration, the Office of Personnel Management, and the United States
Postal Service.
The FSGG FY2010 appropriations were provided through P.L. 111-117, Consolidated
Appropriations Act, 2010. P.L. 111-117 provided $46.265 billion for FSGG agencies in FY2010.
In addition, P.L. 111-80 provided an additional $169 million for the Commodity Futures Trading
Commission—which is under the jurisdiction of the FSGG Subcommittee in the Senate but not in
the House—for a total of $46.434 billion for FSGG agencies in FY2010.
On February 1, 2010, President Obama issued his FY2011 Financial Services and General
Government (FSGG) budget request for $48.219 billion, an increase of $1.785 billion over
FY2010 appropriations. On July 29, 2010, the Senate Appropriations Committee approved, S.
3677, which would provide FSGG agencies with $48.296 billion for FY2011, an increase of
$1.861 billion above FY2010 appropriations. Also on July 29, 2010, the House Appropriations
FSGG Subcommittee marked up a draft appropriations bill, but the draft was neither reported to
the full committee nor made public.
On September 30, 2010, President Obama signed P.L. 111-242, a continuing resolution that
provided funding for federal agencies from October 1 to December 3, 2010, generally at FY2010
levels. President Obama has since signed three continuing resolutions that have further delayed
the expiration of P.L. 111-242, which is currently set to expire on March 4, 2011.
The wide scope of FSGG appropriations—which provide funding for two of the three branches of
the federal government, a city government, and 26 independent agencies—encompasses a number
of potentially controversial issues, some of which are identified below.
• Department of the Treasury. Are the funding and strategy for taxpayer services,
enforcement, and the business systems modernization program under the
proposed budget for the IRS likely to result in a significant improvement in
taxpayer compliance in the next year or two?
• Executive Office of the President. Should Congress approve the President’s
requests for (1) an increased appropriation for the combined National Security
Council and Homeland Security Council to fund the expanded mission of both
councils, and (2) $50 million for a new information technology related account to
be appropriated to the EOP and administered by OMB?
• The Judiciary. What level of funding should Congress provide for judicial
security enhancements and other administrative issues, such as hiring of
additional staff to meet the demands of rising workloads, including increases in
bankruptcy filings and criminal cases?
United States Postal Service. In light of USPS’s financial challenges, should Congress consider
removing the six-day delivery requirement that has appeared in annual appropriations laws?
Congressional Research Service
Financial Services and General Government (FSGG): FY2011 Appropriations
Contents
Most Recent Developments......................................................................................................... 1
Introduction ................................................................................................................................ 1
Overview of FY2011 Appropriations........................................................................................... 2
Key Issues ............................................................................................................................ 3
Department of the Treasury ......................................................................................................... 3
Department of the Treasury: Budget and Policy Issues........................................................... 4
Overview of FY2010 Appropriations for Treasury Offices and Bureaus ........................... 6
FY2011 Appropriations for Treasury Offices and Bureaus: President’s Budget
Request and Congressional Action ............................................................................... 7
President’s Budget Request ............................................................................................. 7
Evaluations of the President’s Budget Request .............................................................. 11
Congressional Action .................................................................................................... 13
Executive Office of the President and Funds Appropriated to the President................................ 18
President’s Budget Request and Key Issues ................................................................... 20
Senate Action................................................................................................................ 21
House Action ................................................................................................................ 23
Transfer Authority......................................................................................................... 23
The Judiciary ............................................................................................................................ 24
The Judiciary Budget and Key Issues .................................................................................. 25
Cost Containment Initiatives ......................................................................................... 26
Judicial Security............................................................................................................ 26
Workload and Southwest Border Issues ......................................................................... 27
Judgeships .................................................................................................................... 29
Judicial Pay................................................................................................................... 29
House Budget Hearings....................................................................................................... 30
FY2011 Request ........................................................................................................... 31
Supreme Court .............................................................................................................. 31
U.S. Court of Appeals for the Federal Circuit ................................................................ 31
U.S. Court of International Trade .................................................................................. 31
Courts of Appeals, District Courts, and Other Judicial Services ..................................... 32
Administrative Office of the U.S. Courts....................................................................... 33
Federal Judicial Center.................................................................................................. 33
United States Sentencing Commission........................................................................... 34
Judiciary Retirement Funds ........................................................................................... 34
General Provision Changes ........................................................................................... 34
District of Columbia.................................................................................................................. 35
The District of Columbia Budget and General Provisions .................................................... 37
The President’s Budget Request .................................................................................... 37
District’s Budget ........................................................................................................... 37
Senate Bill .................................................................................................................... 37
Independent Agencies ............................................................................................................... 38
Commodities Futures Trading Commission ................................................................... 39
Consumer Product Safety Commission.......................................................................... 40
Election Assistance Commission ................................................................................... 40
Congressional Research Service
Financial Services and General Government (FSGG): FY2011 Appropriations
Federal Communications Commission .......................................................................... 41
Federal Deposit Insurance Corporation: Office of the Inspector General ........................ 42
Federal Election Commission........................................................................................ 42
Federal Trade Commission............................................................................................ 43
General Services Administration ................................................................................... 43
Independent Agencies Related to Personnel Management.............................................. 46
Federal Labor Relations Authority................................................................................. 47
Merit Systems Protection Board .................................................................................... 48
Office of Personnel Management .................................................................................. 48
Office of Special Counsel.............................................................................................. 49
National Archives and Records Administration.............................................................. 50
National Credit Union Administration ........................................................................... 52
Privacy and Civil Liberties Oversight Board.................................................................. 52
Securities and Exchange Commission ........................................................................... 53
Selective Service System............................................................................................... 54
Small Business Administration...................................................................................... 54
United States Postal Service .......................................................................................... 55
United States Tax Court................................................................................................. 57
General Provisions Government-Wide....................................................................................... 58
Government Procurement.......................................................................................................... 60
Acquisition Workforce Training Fund ................................................................................. 60
Competitive Sourcing.......................................................................................................... 60
Service Contract Inventory.................................................................................................. 61
Cuba Sanctions ................................................................................................................... 61
Background .................................................................................................................. 61
Legislative Action ......................................................................................................... 62
Tables
Table 1. Status of FY2011 Financial Services and General Government Appropriations............... 1
Table 2. Financial Services and General Government Appropriations, FY2010-FY2011 .............. 2
Table 3. Department of the Treasury Appropriations, FY2010-FY2011 ....................................... 3
Table 4. Executive Office of the President and Funds Appropriated to the President,
FY2010-FY2011 .................................................................................................................... 19
Table 5. Other Federal Drug Control Programs: FY2011 Appropriations for Accounts ............... 21
Table 6. The Judiciary Appropriations, FY2010-FY2011 ........................................................... 24
Table 7. District of Columbia Appropriations, FY2010-FY2011: Special Federal
Payment ................................................................................................................................. 36
Table 8. Independent Agencies Appropriations, FY2010-FY2011 .............................................. 38
Table 9. Independent Agencies Related to Personnel Management Appropriations,
FY2010-FY2011 .................................................................................................................... 46
Table A-1. Financial Services and General Government Appropriations, FY2008-
FY2011.................................................................................................................................. 64
Congressional Research Service
Financial Services and General Government (FSGG): FY2011 Appropriations
Appendixes
Appendix. ................................................................................................................................. 64
Contacts
Author Contact Information ...................................................................................................... 65
Key Policy Staff........................................................................................................................ 65
Congressional Research Service
Financial Services and General Government (FSGG): FY2011 Appropriations
Most Recent Developments
On September 30, 2010, President Obama signed P.L. 111-242, a continuing resolution that
provides funding for federal agencies from October 1 to December 3, 2010, generally at FY2010
levels. President Obama has since signed three continuing resolutions that have further delayed
the expiration of P.L. 111-242, which is currently set to expire on March 4, 2011. Table 1,
below, reflects the status of various FY2011 FSGG appropriations bills at key points in the
appropriations process, and it will be updated as congressional action takes place.
Table 1. Status of FY2011 Financial Services and General
Government Appropriations
Subcommittee
Conference
Markup
Report Passed
House
House
Senate
Senate
Conference
Public
House Senate Report Passage Report Passage
Report
House Senate Law
07/29/10 07/29/10
—
—
S.Rept.
111-238
— — —
—
—
Introduction
The House and Senate Committees on Appropriations reorganized their subcommittee structures
in early 2007. Each chamber created a new FSGG Subcommittee. In the House, the jurisdiction of
the FSGG Subcommittee was formed primarily of agencies that had been under the jurisdiction of
the Subcommittee on Transportation, Treasury, Housing and Urban Development, the Judiciary,
the District of Columbia, and Independent Agencies, commonly referred to as “TTHUD.”1 In
addition, the House FSGG Subcommittee was assigned four independent agencies that had been
under the jurisdiction of the Science, State, Justice, Commerce, and Related Agencies
Subcommittee.2
In the Senate, the jurisdiction of the new FSGG Subcommittee was a combination of agencies
from the jurisdiction of three previously existing subcommittees. The District of Columbia, which
had its own subcommittee in the 109th Congress, was placed under the purview of the FSGG
Subcommittee, as were four independent agencies that had been under the jurisdiction of the
Commerce, Justice, Science, and Related Agencies Subcommittee.3 Additionally, most of the
agencies that had been under the jurisdiction of the Subcommittee on Transportation, Treasury,
the Judiciary, Housing and Urban Development, and Related Agencies were assigned to the
1 The agencies previously under the jurisdiction of the TTHUD Subcommittee that did not become part of the FSGG
subcommittee were the Department of Transportation, the Department of Housing and Urban Development, the
Architectural and Transportation Barriers Compliance Board, the Federal Maritime Commission, the National
Transportation Safety Board, the Neighborhood Reinvestment Corporation, and the United States Interagency Council
on Homelessness.
2 The agencies are the Federal Communications Commission (FCC), the Federal Trade Commission (FTC), the
Securities and Exchange Commission (SEC), and the Small Business Administration (SBA).
3 The agencies are the FCC, FTC, SEC, and SBA.
Congressional Research Service
1
Financial Services and General Government (FSGG): FY2011 Appropriations
FSGG Subcommittee.4 As a result of this reorganization, the House and Senate FSGG
Subcommittees have nearly identical jurisdictions.5
Overview of FY2011 Appropriations
On February 1, 2010, President Obama issued his FY2011 Financial Services and General
Government (FSGG) budget request, which included $48.219 billion, an increase of $1.785
billion over FY2010 appropriations. On July 29, 2010, Senator Durbin introduced, and the Senate
Appropriations Committee approved, S. 3677, the Financial Services and General Government
Appropriations Act, 2011. S. 3677 would provide $48.296 billion for FY2011, an increase of
$1.861 billion above FY2010 appropriations and $76 million above the President’s request. Also
on July 29, 2010, the House Appropriations FSGG Subcommittee marked up a draft
appropriations bill, but the draft has neither been reported to the full committee nor been made
public. Appropriations figures for the House, therefore, are not included in this report but will be
added when they are made available. On September 30, 2010, President Obama signed P.L. 111-
242, a continuing resolution that provides funding for federal agencies from October 1 to
December 3, 2010, generally at FY2010 levels. President Obama has since signed three
continuing resolutions that have further delayed the expiration of P.L. 111-242, which is
currently set to expire on March 4, 2011. Table 2 lists the enacted amounts for FY2010, the
Obama Administration’s FY2011 request, and the amounts recommended for FY2011 by the
Senate Committee on Appropriations.
Table 2. Financial Services and General Government Appropriations,
FY2010-FY2011
(in millions of dollars)
FY2010
FY2011
FY2011
FY2011
FY2011
Enacted
Request
House
Senate
Enacted
Department of the Treasury
$13,465
$13,970
$13,951
Executive Office of the President
772
760
795
The Judiciary
6,861
7,330
7,240
District of Columbia
752
730
739
Independent Agencies
24,585
25,430
25,571
Total $46,434
$48,219
$48,296
Sources: Consolidated Appropriations Act, 2010 (Div. C, P.L. 111-117), and Appendix, U.S. Government
Budget, FY2011, and S.Rept. 111-238.
Notes: All columns include Commodity Futures Trading Commission (CFTC) funding. All figures are rounded,
and columns also may not equal the total due to rounding.
4 The agencies that did not transfer from TTHUD to FSGG were Transportation, HUD, the Architectural and
Transportation Barriers Compliance Board, the Federal Maritime Commission, the National Transportation Safety
Board, the Neighborhood Reinvestment Corporation, and the United States Interagency Council on Homelessness.
5 The Commodity Futures Trading Commission is under the jurisdiction of the FSGG Subcommittee in the Senate but
not in the House.
Congressional Research Service
2
Financial Services and General Government (FSGG): FY2011 Appropriations
Key Issues
The wide scope of FSGG appropriations—which provide funding for two of the three branches of
the federal government, a city government, and more than two dozen independent agencies with a
range of functions—encompasses a number of potentially controversial issues, some of which are
identified below.
• Department of the Treasury. Are the funding and strategy for taxpayer services,
enforcement, and the business systems modernization program under the
proposed budget for the IRS likely to result in a significant improvement in
taxpayer compliance in the next year or two?
• Executive Office of the President (EOP). Should Congress approve the
President’s requests for (1) an increased appropriation for the combined National
Security Council and Homeland Security Council to fund the expanded mission
of both councils, and (2) $50 million for a new information technology related
account to be appropriated to the EOP and administered by OMB?
• The Judiciary. What level of funding should Congress provide for judicial
security enhancements and other administrative issues, such as hiring of
additional staff to meet the demands of rising workloads, including increases in
bankruptcy filings and criminal cases?
• United States Postal Service. In light of the U.S. Postal Service’s financial
challenges, should Congress consider removing the six-day delivery requirement
that has appeared in annual appropriations laws?
Department of the Treasury6
This section examines FY2011 appropriations for the Treasury Department and its operating
bureaus, including the Internal Revenue Service (IRS). Table 3 shows the enacted amounts for
FY2010, the Obama Administration’s budget request for FY2011, and the Senate Committee on
Appropriations FY2011 recommendations.
Table 3. Department of the Treasury Appropriations,
FY2010-FY2011
(in millions of dollars)
FY2010
FY2011
FY2011
FY2011
FY2011
Program or Account
Enacted
Request
House
Senate
Enacted
Departmental
Offices
$305
$346 $335
Department-wide Systems and
10 22 13
Capital Investments
Office of Inspector General
30
30
33
Treasury Inspector General for Tax
152
155 155
Administration
6 This section was written by Gary Guenther, Analyst in Industry Economics, Government and Finance Division.
Congressional Research Service
3
Financial Services and General Government (FSGG): FY2011 Appropriations
FY2010
FY2011
FY2011
FY2011
FY2011
Program or Account
Enacted
Request
House
Senate
Enacted
Special Inspector General for TARP
23
50
50
Community Development Financial
247
250 302
Institutions Fund
Financial Crimes Enforcement
111
100 122
Network
Financial
Management
Service 244
235 235
Alcohol and Tobacco Tax and
103 31 101
Trade Bureaua
Bureau of the Public Debt
182
176
176
Payment of Losses in Shipment
2
2
2
Internal
Revenue
Service,
Total
12,146
12,633 12,508
Taxpayer
Services
2,279
2,322 2,331
Enforcement
4,904
5,007 5,683
Enhanced Tax Enforcement
600
790
NA
Operations Support Activities
4,084
4,108
4,088
Business Systems Modernization
264
387
387
Health Insurance Tax Credit
16 19 19
Administration
Rescissions: Treasury Forfeiture
(90)
(62) (82)
Fund
Total:
Department
of
the
Treasury
$13,465
$13,970 $13,951
Sources: Treasury budget documents, S.Rept. 111-238.
Note: All figures are rounded, and columns also may not equal the total due to rounding.
a. Total budget authority for FY2011 request was $106 million, with $75 million to be collected in fees, leaving
a direct appropriation of $31 million.
Department of the Treasury: Budget and Policy Issues
The Treasury Department performs a variety of critical governmental functions. They can be
summarized as protecting the nation’s financial system against a host of illicit activities (e.g.,
money laundering and terrorist financing), collecting tax revenue, enforcing tax laws, managing
and accounting for federal debt, administering the federal government’s finances, regulating
financial institutions, and producing and distributing coins and currency.
At its most basic level of organization, Treasury consists of departmental offices and operating
bureaus. In general, the offices are responsible for formulating and implementing policy
initiatives and managing Treasury’s operations, whereas the bureaus perform specific tasks
assigned to Treasury, mainly through statutory mandates. In the past decade or so, the bureaus
have accounted for more than 95% of the agency’s funding and work force.
With one exception, the bureaus and offices can be divided into those engaged in financial
management and regulation and those engaged in law enforcement. In recent decades, the
Comptroller of the Currency, U.S. Mint, Bureau of Engraving and Printing, Financial
Congressional Research Service
4
Financial Services and General Government (FSGG): FY2011 Appropriations
Management Service (FMS), Bureau of the Public Debt (BPD), Community Development
Financial Institutions Fund (CDFI), and Office of Thrift Supervision have taken on
responsibilities related to the management of the federal government’s finances or the supervision
and regulation of the U.S. financial system. In contrast, law enforcement arguably has been the
primary focus of the responsibilities handled by the Alcohol and Tobacco Tax and Trade Bureau
(ATB), Financial Crimes Enforcement Network (FinCEN), and the Treasury Forfeiture Fund.
With the advent of the Department of Homeland Security in 2002, Treasury’s direct involvement
in law enforcement has shrunk considerably. An exception to this simplified dichotomy is the
Internal Revenue Service (IRS), whose main responsibilities encompass both the collection of tax
revenue and the enforcement of tax laws and regulations.
The operating budget for most Treasury bureaus and offices comes largely from annual
appropriations. This is the case for the IRS, FMS, Bureau of Public Debt (BPD), FinCEN, ATB,
Office of the Inspector General (OIG), Treasury Inspector General for Tax Administration
(TIGTA), Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the
CDFI. By contrast, funding for the Treasury Franchise Fund, the U.S. Mint, the Bureau of
Engraving and Printing, Office of the Comptroller of the Treasury, and the Office of Thrift
Supervision stems from the fees they receive from the services and products they provide.
In the current fiscal year, appropriations for the Treasury Department are distributed among 11
accounts, each of which is briefly described below.
Departmental Offices: covers the salaries and other expenses of offices in the department that
formulate and implement policies in the areas of domestic and international finance, terrorist
financing and other financial crimes, taxation, international trade, and the domestic economy.
Also provides funding for the department’s financial and personnel management, procurement
operations, and information and telecommunications systems.
Department-wide Systems and Capital Investments: covers salaries and other expenses
associated with the development and operation of new systems to improve the efficiency of
interactions among Treasury bureaus and offices or between Treasury and other federal agencies.
Office of Inspector General: covers the salaries and other expenses related to the audits and
investigations conducted by OIG staff. These evaluations are intended to promote improved
efficiency and effectiveness and prevent waste, fraud, and abuse among departmental operations
and programs, as well as to inform the Treasury Secretary and Congress about problems or
shortcomings in those activities.
Treasury Inspector General for Tax Administration: covers salaries and other expenses related
to the audits and investigations conducted by TIGTA staff. These evaluations are intended to
promote greater efficiency and effectiveness in the administration of tax law, deter or prevent
fraud and abuse in IRS programs and operations, and recommend changes in those activities to
resolve problems or remedy deficiencies.
Special Inspector General for the Troubled Asset Relief Program (TARP): covers salaries and
other expenses related to the audits and investigations into the management and effectiveness of
TARP conducted by SIGTARP staff. The office was established by the same law that created
TARP: the Emergency Economic Stabilization Act (P.L. 110-343).
Congressional Research Service
5
Financial Services and General Government (FSGG): FY2011 Appropriations
Financial Crimes Enforcement Network: covers salaries and other expenses related to the
activities of FinCEN, whose main responsibility is to protect the domestic financial system from
illicit uses, such as money laundering and terrorist financing. The legal basis for this role is the
Bank Secrecy Act (BSA, P.L. 91-508). FinCEN administers the act by developing and
implementing regulations and other guidance and working with private financial institutions and
eight federal agencies to ensure that the financial sector complies with the BSA’s reporting
requirements.
Financial Management Service: covers salaries and other expenses related to the operations of
the FMS, which is responsible for developing and implementing payment policies and procedures
for federal agencies, collecting debts owed to those agencies, and providing financial accounting,
reporting, and financing services for the federal government and its agents.
Alcohol and Tobacco Tax and Trade Bureau: covers salaries and other expenses related to the
activities of ATB, which was established by the Homeland Security Act of 2002 (P.L. 107-296).
The bureau is responsible for enforcing certain laws regarding the domestic sale and production
of alcohol and tobacco products and preventing harm to consumers by ensuring that the products
they regulate comply with federal consumer safety laws.
Bureau of the Public Debt: covers salaries and other expenses related to the conduct of public
debt operations and the promotion of U.S. bonds.
Community Development Financial Institutions Fund: provides funding for the activities of
the CDFI, which makes investments (in the form of loans, grants, and equity acquisitions) in
community development financial institutions. These institutions include community
development banks, credit unions, and venture capital funds and provide financing for affordable
housing projects, small businesses, and community development projects in eligible areas. CDFI
also administers the Black Enterprise Award program and the New Markets tax credit.
Internal Revenue Service: covers salaries and other expenses related to the activities of the IRS,
whose main responsibilities are to administer federal tax laws and collect revenue. Two critical
components of IRS operations and programs are the services it offers to taxpayers to help them
understand and meet their tax obligations and the enforcement activities it uses to improve
voluntary taxpayer compliance and punish those who violate the law. Some appropriated funds
are used to develop or upgrade business operations and information systems, as part of an
ongoing effort to improve the effectiveness of taxpayer services and enforcement activities.
Overview of FY2010 Appropriations for Treasury Offices and Bureaus
Funding for most bureaus comes largely from direct appropriations. This is true for the IRS,
FMS, the BPD, FinCEN, the Alcohol and Tobacco Tax and Trade Bureau (ATB), the Office of the
Inspector General (OIG), the Treasury Inspector General for Tax Administration (TIGTA), and
the CDFI. By contrast, operating funds for the Treasury Franchise Fund, the U.S. Mint, the
Bureau of Engraving and Printing, the Office of the Comptroller of the Currency, and the Office
of Thrift Supervision come largely from the fees they charge for services and products they
provide.
In FY2010, Treasury received $13.465 billion in appropriated funds, or 6.1% more than the
amount enacted for FY2009. As usual, the vast share of this money was used to finance the
operations of the IRS, which received $12.146 billion in FY2010, or about 90% of total
Congressional Research Service
6
Financial Services and General Government (FSGG): FY2011 Appropriations
appropriations for Treasury. The remaining $1.319 billion was spread among Treasury’s other
main appropriations accounts in the following amounts: departmental offices (which includes the
Office of Terrorism and Financial Intelligence—or TFI—and the Office of Foreign Assets
Control) received $305 million; department-wide systems and capital investments, $10 million;
OIG, $30 million; TIGTA, $152 million; CDFI, $247 million; FinCEN, $111 million; FMS, $244
million; ATB, $103 million; and the BPD, $182 million.
FY2011 Appropriations for Treasury Offices and Bureaus: President’s Budget
Request and Congressional Action
President’s Budget Request
Overall, the Obama Administration is requesting $13.970 billion in direct appropriations for
Treasury in FY2011, or 3.7% more than the amount enacted for FY2010. Under the budget
proposal, the IRS would receive $12.633 billion (or 91% of the total). The remaining $1.137
billion would be split among Treasury’s 10 other appropriations accounts in the following
amounts: departmental offices would receive $346 million; departmental systems and capital
investments, $22 million; OIG, $30 million; TIGTA, $155 million; CDFI, $250 million; FinCEN,
$100 million; FMS, $235 million; ATB, $31 million direct appropriation ($106 million in new
budget authority less offsetting fees of $75 million); and the BPD, $176 million. All the accounts
except FinCEN, FMS, and the BPD would be funded at or above the amounts enacted for
FY2010.
The proposed $487 million increase in funding for the IRS greatly exceeds the proposed increase
in funding for all other Treasury Department accounts ($51 million). Fiscal services operations
would have their FY2011 funding decreased by 3.6% from FY2010 enacted appropriations.
Treasury’s budget proposal is intended in part to make further progress in accomplishing the same
three “high priority performance” objectives that guided the FY2010 budget request: (1) to repair
and reform the U.S. financial system, (2) to increase voluntary tax compliance, and (3) to
“significantly” increase the volume of paperless transactions with the public.7 The ways in which
the proposed budget would address each objective are examined below.
Repair and Reform the Financial System
Progress in meeting the first objective would hinge on how the proposed budget would affect
Treasury’s management of several programs (such as the Troubled Asset Relief Program, or
TARP) put in place in the past year and a half to stabilize financial markets, prevent a recurrence
of the credit crisis that severely disrupted the functioning of those markets in 2008 and 2009, and
promote a recovery in housing sales and prices.
According to Treasury budget documents, several components of the budget proposal for FY2011
would promote the repair and reform of the financial system. One is the requested $41 million
increase in funding for departmental offices. Nearly half of that amount would be used to bolster
the analytical and policymaking capabilities of the Office of Domestic Finance ($17 million), the
7 See executive summary of Treasury budget request, p. 2, available at http://www.treas.gov/offices/management/
budget/budget-documents/cj/2011/Departmental%20Summary%20CJ%20508.pdf.
Congressional Research Service
7
Financial Services and General Government (FSGG): FY2011 Appropriations
Office of Tax Policy ($2 million), and the Office of Domestic Economic Policy ($2 million), with
the overriding aim of preventing another collapse in financial markets on the scale of 2008.
Another element of the budget proposal that might foster repair and reform in the financial
system is Treasury’s management of TARP. Treasury’s authority to manage the program expired
on October 3, 2010. To strengthen oversight of the program, the budget request would more than
double funding for the Special Inspector General for TARP (SIGTARP), from $23.3 million in
FY2010 to $49.6 million in FY2011. SIGTARP’s top priority is to promote the effective and
efficient management and operation of TARP through transparent decision making, coordinated
oversight, and enforcement of statutes prohibiting waste, fraud, and abuse in the use of TARP
funds. Of the requested funding for SIGTARP, $21 million would be used to conduct audits of
Treasury’s management of TARP, and the other $29 million would cover the cost of conducting
criminal and civil investigations of persons and entities inside and outside the federal government
suspected of misusing TARP funds.
Repairing and reforming the financial system are also cited as a rationale for a proposed overhaul
of the CDFI Fund. The proposed budget would boost funding for a merit-based grant program
(known as the CDFI Program) by 30%, in an effort to expand the availability of affordable credit,
financial services, business investment, and technical assistance in economically distressed
communities. It would also create two new CDFI programs: the Bank on USA initiative and the
Healthy Food Financing Initiative. To help defray the cost of the three initiatives, two current
CDFI programs would be dropped: the Capital Magnet Fund and the Bank Enterprise Awards
program. In FY2010, a total of $105 million was provided for both. In addition, the Obama
Administration is asking Congress to grant $5 billion in allocation authority for the New Markets
tax credit in 2010 and in 2011; the credit, which expired at the end of 2009, is designed to
stimulate private investment in low-income communities through a competitive selection process
administered by the CDFI Fund.8
Improve Voluntary Tax Compliance
Taxpayer compliance is a top priority for the Treasury Department in FY2011 largely because of
the gross federal tax gap, which is the difference between taxes owed and taxes paid in full on
time, before collection actions are taken. The gap has reached an estimated $345 billion. Recent
sharp rises in the federal budget deficit and projected increases in it over the next five to 10 years
have intensified the pressure on the department to do more to shrink the tax gap.
The budget request seeks to improve voluntary tax compliance through the enactment of a variety
of legislative proposals and targeted expansions in IRS operations. The proposals are intended to
improve the efficiency of tax collection, “with minimum additional burden on taxpayers.” They
can be placed into four categories: expanding penalties, strengthening tax administration,
improving business compliance, and expanding information reporting. Treasury officials estimate
that if enacted, the proposals could boost tax collection by $26 billion over the next 10 years.9
Most of the requested increase in appropriations for the IRS in FY2011 would be used for
purposes tied directly or indirectly to the objective of improving tax compliance. Of the
8 For more details on the credit, see CRS Report RL34402, New Markets Tax Credit: An Introduction, by Donald J.
Marples.
9 Treasury Department, Budget in Brief, p. 4.
Congressional Research Service
8
Financial Services and General Government (FSGG): FY2011 Appropriations
additional $487 million, $293 million would be channeled into enforcement activities, $123
million into the agency’s business systems modernization (BSM) program, $43 million into
taxpayer services, $24 million into operations support, and $3.5 million into administration of the
health coverage tax credit established by the Trade Act of 2002.
The added funds for enforcement would be used to bolster recent compliance programs aimed at
reducing offshore tax evasion, underreporting of income, and tax evasion by corporations and
upper-income individuals. According to Treasury budget documents, the additional enforcement
officers that could be hired under the expanded budget could generate an additional $2 billion in
enforcement revenue each year, once they “reach their full potential in FY2013.”10
Proposed funding for the BSM program would allow the IRS to complete the new customer
account database engine (CADE 2) in time for the 2012 filing season, and to continue its efforts
to expand electronic filing systems. In its initial application, CADE 2, which is the cornerstone of
IRS’s longstanding information technology modernization program, will be used to expedite
refunds to individual taxpayers and expand online services offered by the IRS.
A key factor shaping taxpayer compliance is the assistance taxpayers receive from the IRS in
understanding their tax obligations and computing their tax liabilities. One widely used avenue
for such assistance is the agency’s toll-free telephone service. About half of the requested $43
million increase in funding for taxpayer services in FY2011 would be used to upgrade this service
by raising the answer rate from a projected 71% of incoming calls in FY2010 to 75% in FY2011.
The $21 million that would be spent for this purpose would come from $12 million in additional
appropriated funds and a transfer of about $9 million in funding for the Taxpayer Advocate
Service (TAS), low-income taxpayer clinic (LITC) grants, the Tax Counseling for the Elderly
(TCE) program, and volunteer income tax assistance (VITA) grants in FY2010.
In addition, the entire proposed increase in funding for operations support would be used to
sustain current efforts to improve the IRS.gov website infrastructure and redesign the website to
meet expected growth in demand for electronic tax services and taxpayer assistance. According to
Treasury budget documents, substantial cost savings could be realized through increased taxpayer
use of electronic filing and the IRS website.
Increase Paperless Transactions with the Public
The budget request also includes several measures to bring the bureaus and offices of the
Treasury Department closer to the goal of paperless processing. Basically, the measures involve
increasing the number of transactions done electronically in FY2011, including benefit payments,
business tax filings, and issuances of savings bonds.11
Of those measures, the one that might do the most to advance department-wide adoption of
paperless processing is the $22 million in added funding requested for departmental systems and
capital investments. Those funds would be used to create two new initiatives: the Enterprise
Content Management (ECM) program and the Office of Financial Innovation and Transformation
(OFIT). The ECM is intended to establish a common approach among all Treasury offices and
bureaus to modernizing their “document-based business processes.” OFIT would coordinate
10 Ibid., p. 66.
11 Ibid., p. 5.
Congressional Research Service
9
Financial Services and General Government (FSGG): FY2011 Appropriations
Treasury Department efforts to develop and expand shared government-wide solutions to issues
in financial management, such as invoice processing, cash collections, and interagency
agreements.
Other Noteworthy Proposals
The Treasury Department’s budget proposal for FY2011 would do more than fund activities
aimed at achieving the three strategic goals. Much of the requested funding is intended to enable
Treasury’s bureaus to meet their statutory responsibilities or core missions in spite of projected
sizable federal budget deficits and expanding demand for their services. In some cases, the budget
request assigns a high priority to providing required services at a reduced cost to taxpayers; in
others, added funding is being sought to satisfy a perceived need for expanded operations.
For instance, the budget request would allow the Treasury Department to reap $315 million in
savings from discretionary spending and added savings from mandatory programs in FY2011.
Some of the savings would come from reduced operating costs. Such is the case with three
bureaus whose funding would be cut: FinCEN would lose $11 million, FMS $9 million, and the
BPD $6 million. FinCEN would receive less money for two reasons: a new source of funding
(i.e., the Treasury Forfeiture Fund) would cover the estimated cost ($8.3 million) of continuing
the bureau’s information technology modernization program, and improved operating efficiencies
would result in $3 million in cost savings. Requested funding for FMS is 3.6% below the amount
enacted for FY2010 because a $5 million increase in employee compensation would be more than
offset by $13 million in improved operating efficiencies. And requested funding for BDP is also
lower because of proposed gains in operating efficiencies.
The proposed budget would also raise funding for Treasury’s Office of Terrorism and Financial
Intelligence (TFI) by 59%, from $65 million in FY2010 to $103 million in FY2011. TFI develops
and implements strategies to counter terrorist financing, money laundering, and other financial
crimes; it also imposes and enforces trade and financial sanctions on designated countries (e.g.,
Burma, Iran, and North Korea) in support of foreign policy aims, such as halting the proliferation
of nuclear weapons and combating terrorism. Some of the requested increase in funding would go
to the Office of Intelligence Analysis under TFI to improve the collection and dissemination of
intelligence in support of the department’s worldwide anti-money laundering and anti-terrorist
financing initiatives.
In a departure from current practice, the requested budget would shift the cost of regulating the
production, distribution, and sale of alcohol and tobacco products from taxpayers to private
companies. Funding for ATB, the bureau that does the regulating, would come entirely from the
collection of annual licensing and registration fees, which would total an estimated $106 million
in FY2011. By contrast, $103 million in appropriated funds was provided to cover the cost of
ATB operations during FY2010.
In addition, the budget request calls for a cancellation (or withdrawal) of $62 million from the
Treasury Forfeiture Fund (TFF). The fund serves as the receipt account for the deposit of assets of
criminal enterprises seized by five federal agencies, including the IRS and the Immigration and
Customs Enforcement Bureau at the Department of Homeland Security. Revenue in the account
normally is used to sustain and improve the capabilities of those agencies to conduct criminal
investigations, seizures, and forfeitures and to cover expenses related to those activities. Still,
money may be taken from the TFF to pay for other law enforcement activities undertaken by
Congressional Research Service
10
Financial Services and General Government (FSGG): FY2011 Appropriations
member bureaus, with the approval of the Secretary of the Treasury. Congress must be notified
before such a withdrawal can be made.
Evaluations of the President’s Budget Request
GAO
In an assessment of the Administration’s FY 2011 budget request for the IRS, GAO made a
number of comments, some of which were critical of the agency’s budget justification.
Among other things, GAO noted that $247 million (or 51%) of the proposed $487 million
increase in appropriations for the agency would go to enforcement initiatives aimed at lowering
the tax gap by about $2 billion, and that $46 million of the proposed increase would be used to
improve the IRS’s website and expand access to the agency’s toll-free telephone service. But
GAO faulted the IRS for not including in its budget justification a measure of the “costs or
resource needs associated with implementing any of the proposals—information that could lead
to more informed congressional decision making.”12
GAO also pointed out that the budget request included $387 million in funding for the BSM, a
47% increase from the amount enacted for FY2010. Of that amount, $152 million would be used
to implement a new CADE, and $39 million would go to the continued development of the
Modernized Electronic Filing project, which is intended in part to give taxpayers more timely
information on the status of their tax returns. While GAO offered no comment on the size of the
requested increase in program funding, it did raise a concern about continued “weaknesses in
internal controls over information security” and the responsiveness of the IRS to those
weaknesses.
The evaluation included a brief discussion of 36 steps that the IRS could take (either through
congressional action or executive action by the IRS) to realize an estimated $3.9 billion in cost
savings or revenue gains over the next 10 years.13
To improve the transparency and usefulness of future budget justifications, GAO recommended
that IRS officials provide additional information on program activities, possible costs associated
with legislative proposals, and projected and actual cost savings for new initiatives during the
first few years after they are implemented. GAO also suggested that future budget justifications
give more details on performance measures, explain “noteworthy” changes in performance goals,
and clarify the linkages between new initiatives in the budget request and “strategic documents.”
IRS Oversight Board
Under section 7802 of the federal tax code, the IRS Oversight Board has the authority to review
and approve IRS strategic plans and annual budget requests, including performance budgets. A
central purpose of these reviews is to determine whether the proposed plans and budgets support
12 U.S. Government Accountability Office, Internal Revenue Service: Assessment of Budget Justification for Fiscal
Year 2011Identified Opportunities to Enhance Transparency, GAO-10-687R (Washington: May 2010), p. 4.
13 Ibid., pp. 23-31.
Congressional Research Service
11
Financial Services and General Government (FSGG): FY2011 Appropriations
the short-term and long-term goals of the IRS. The President is required by law to submit the
board’s budget recommendations to Congress together with his requested budget for the agency.
In its assessment of the FY2011 budget proposal, the board recommended that the IRS have a
budget of $12.914 billion, an amount that is $768 million greater than the amount enacted for
FY2010 and $281 million above the Administration’s request.
There were several areas of agreement between the board’s recommendation and the budget
request. Most notably, both budgets called for spending a total of $5.8 billion on enforcement
initiatives and $387 million on the BSM program in FY2011. The board endorsed the requested
increase of $247 million in funding for enforcement on the grounds that it “allows the IRS to
move forward with its enforcement programs while assimilating new enforcement staff hired
during the last two years.”14 The requested $122 million increase in BSM funding would boost
the budget for the program to a level that the board has long recommended and, in the board’s
judgment, that would allow the IRS to continue the critical task of upgrading its information
systems to better manage the agency’s central database and taxpayer accounts, process electronic
returns, and handle growing demands from taxpayers and Congress on the agency’s resources.
But there were some significant areas of disagreement as well. Specifically, the board argued that
more funds should be directed at taxpayer services and operations support, if the IRS is to meet
the strategic goals set forth in its current five-year strategic plan, which covers the period from
FY2009 to FY2013. The board’s preferred budget would provide $2.374 billion for taxpayer
services (or $52 million more than the amount requested by the Administration) and $4.337
billion for operations support (or $229 million more than the request). On the matter of taxpayer
services, the board recommended that the following steps be taken: spend more than the budget
request to improve the level of service through IRS toll-free telephone assistance; rescind the
proposed $9 million cutback in funding for the TAS, LITC grants, the TCE program, and VITA
grants; and provide $21 million in funding for four new initiatives to improve taxpayer service,
including $8.4 million for research on the complexity of the tax code and its implications for
taxpayer compliance.15 Nearly half of the funding for operations support is used to operate,
maintain, and develop IRS’s “legacy” information technology (IT) systems, which fall outside the
scope of the BSM program. The board endorsed a larger budget for operations support so the
aging IT infrastructure can be upgraded in a manner that would permit the IRS to manage and
keep records more efficiently and effectively.
National Taxpayer Advocate’s Report
Current law requires the NTA to issue two annual reports to the House Ways and Means and the
Senate Finance Committees. The first report, which is due by June 30 of each year, is supposed to
set forth the priorities for the coming fiscal year for the Office of the Taxpayer Advocate. These
aims tend to be closely tied to the IRS’s own goals, initiatives, and challenges for the same
period.
Though the NTA’s report for FY2011 did not offer an assessment of the Administration’s budget
request for the IRS, it did highlight areas of concern related to taxpayer service and compliance
14 IRS Oversight Board, FY 2011 IRS Budget Recommendation: Special Report (Washington: March 2010), p. 3.
15 Ibid., p. 5.
Congressional Research Service
12
Financial Services and General Government (FSGG): FY2011 Appropriations
that might influence congressional consideration of the budget request.16 These concerns, which
the document discussed at length, included shortcomings in taxpayer service (such as declining
levels of telephone service in recent years), the administrative burdens and costs associated with
the new responsibilities (e.g., administering the small business health insurance tax credit)
assumed by the IRS under the Patient Protection and Affordable Care Act (PPAC, P.L. 111-148),
IRS collection practices that have failed to promote voluntary compliance and could harm
economically distressed taxpayers, the key factors determining taxpayer compliance, and the
effectiveness of the IRS’s new initiative to regulate tax return preparers.
Congressional Action
Senate
On July 29, the Senate Appropriations Committee approved a bill (S. 3677) to fund financial
services and general government accounts in FY2011. S. 3677 would provide $13.951 billion in
appropriations for the Treasury Department, or $486 million more than the amount enacted for
FY2010 but $19 million less than the amount requested by the Obama Administration. More
details on recommended funding for each account are provided below.
Departmental Offices: S. 3677 would appropriate $335 million for the functions and operations
of the department, or $30 million above the amount enacted for FY2010 but $11.5 million below
the budget request. While the bill would match the Administration’s requested budget for
terrorism and financial intelligence ($103 million), it recommends that $6 million less than the
request be spent on financial policies and programs, and $2 million less than the request be spent
on economic policies and programs. Still, S. 3677 would provide the requested funding for
additional staff to support the department’s expanded role in federal efforts to prevent future
financial crises on the scale of the meltdown in financial markets in 2007 and 2008. In addition,
the bill recommends that $1 million be spent on a study of the long-term economic consequences
of the aging U.S. population to be undertaken by the National Academy of Sciences, and that
proposed funding for the Office of Financial Education be increased by $1 million for the purpose
of revising the national strategy on increasing financial literacy.
In its report on S. 3677, the committee directed the department to fully implement all economic
sanctions and divestment measures targeted at North Korea, Burma, Iran, Sudan, and Zimbabwe,
and to notify the committee promptly if a lack of resources is hampering these efforts.17 The
committee also ordered the department to do more to reduce the flow of funds into the United
States from “corrupt politicians, terrorists, and those involved in organized crime” through its
involvement in the multinational Financial Action Task Force, and its rule-making authority under
the Bank Secrecy Act and certain other statutes. To monitor the department’s response to this
directive, the report required it to submit a report to the Senate Committees on Appropriations and
Banking, Housing, and Urban Affairs within 180 days of the enactment of the bill that described
the steps taken to prevent the “flow of the proceeds of corruption into the United States,
16 See National Taxpayer Advocate, Fiscal Year 2011 Objectives: Report to Congress (Washington, June 30, 2010),
available at http://www.irs.treas.gov.
17 U.S. Senate, Committee on Appropriations, Financial Services and General Government Appropriations Bill, 2011,
report to accompany S. 3677, 111th Cong., 2nd sess., S.Rept. 111-238 (Washington: GPO, 2010), p. 12.
Congressional Research Service
13
Financial Services and General Government (FSGG): FY2011 Appropriations
specifically including activities related to identifying the beneficial ownership of corporate
vehicles, where appropriate, and participation in FATF activities and initiatives.”18
Department-wide Systems and Capital Investments Programs: S. 3677 would provide $13
million in appropriations for this account in FY2011, or $3.5 million above the amount enacted
for FY2010 but $9 million below the budget request. The recommended funding would match the
$5 million requested for the Enterprise Content Management program and provide $8 million for
the Financial Innovation and Transformation (FIT) program, or $9 million less than the request.
In its report on the bill, the committee noted that while it supported the primary goal of the FIT
program, which is to create government-wide solutions for processing financial transactions, it
could not endorse the requested funding for the program because the budget justification gave too
few details on the program’s design and operation.19 The committee directed the department to
provide a more detailed justification for the program, including the cost estimate for each project,
within 60 days of the enactment of the bill.
Office of Inspector General: S. 3677 would provide $33.3 million in appropriated funds for the
OIG in FY2011, or $3.6 million above the amount enacted for FY2010 and $3 million more than
the budget request. The additional funds are intended to support more audits and investigations of
bank failures than current resources would allow. In its report on the bill, the committee stated
categorically that OIG should give the highest priority to performing an audit of the Bank Secrecy
Act Information Technology Modernization project being undertaken by FinCEN.20 As part of its
oversight of the project, OIG would have to submit a report to the committee by March 31, 2011,
(and every six months thereafter) that assessed contractor performance and the likelihood of cost
overruns. The committee also ordered the office to undertake audits of Treasury’s activities to
prevent or disrupt money laundering and terrorist financing, its capital investments, and the
CDFI.
Treasury Inspector General for Tax Administration: S. 3677 would provide $155 million in
appropriations for TIGTA in FY2011, or $3.5 million more than the amount enacted for FY2010
and the same as the budget request. The added funding is intended to enable TIGTA to monitor
the IRS’s renewed focus on combating foreign tax evasion and closing loopholes in the tax code
that make it more profitable for U.S. companies to relocate their operations abroad. The
committee’s report on the bill identified certain priorities for TIGTA in the coming fiscal year.
Specifically, it urged the bureau to continue its oversight of IRS’s initiatives to reduce the tax gap
to ensure that they strike a reasonable balance between protecting taxpayer rights and enhancing
taxpayer compliance. The committee also recommended that TIGTA examine IRS’s assistance
program for low-income taxpayers, current law regarding the classification of independent
contractors and its effect on the tax gap, various schemes to steal confidential taxpayer
information for the purpose of identity theft, and the best ways to reduce threats to the security of
IRS employees and IRS databases.21
Special Inspector General for the Troubled Asset Relief Program: S. 3677 would provide $50
million in appropriations for SIGTARP in FY2011, or $26 million above the amount enacted for
18 Ibid., p. 12.
19 Ibid., p. 14.
20 Ibid., p. 15.
21 Ibid., p. 17.
Congressional Research Service
14
Financial Services and General Government (FSGG): FY2011 Appropriations
FY2010 and the same as the budget request. The committee expressed satisfaction with the audits
and investigations conducted by the office to date.
Financial Crimes Enforcement Network: S. 3677 would provide $122 million in funding for
FinCEN in FY2011, or $11 million more than the amount enacted for FY2010 and $21 million
above the budget request. The difference between the amount recommended in the bill and the
request reflected two committee recommendations. First, the committee opposed a proposal by
the Administration to fund a portion of the Bank Secrecy Act Information Technology
Modernization project using about $20 million in uncommitted money from the Treasury
Forfeiture Fund and instead urged that appropriations for FinCEN be increased by the same
amount so the project can be funded entirely through the bureau’s account. Second, the committee
recommended that appropriations be increased by another $1.5 million to expand FinCEN’s
analytical support to a network of more than 300 law enforcement and regulatory authorities” at
the federal, state, and local levels involved in investigating and disrupting illicit financial
transactions.22
The bill would also provide $46 million for the BSA modernization project, which is intended to
revamp the BSA data architecture, update antiquated or obsolete infrastructure needed to
collection and distribute data, implement innovative Web services and enhanced electronic filing,
and provide enhanced analytical tools. Banks, federal, state, and local law enforcement agencies,
and federal intelligence agencies use the system to report, gather, and analyze data in an effort to
detect and thwart instances of money laundering, terrorist financing, tax evasion, and other
financial crimes. The existing BSA data infrastructure is considered outdated and a hindrance to
federal efforts to combat those illegal activities. In its report on S. 3677, the committee directed
FinCEN to submit a semi-annual report to the committee summarizing the progress made on the
modernization project; the report should address “milestones planned and achieved, progress on
cost and schedule, management of contractor oversight, strategies to involve stakeholders, and
acquisition management efforts.”23
Treasury Forfeiture Fund: S. 3677 would rescind $82 million in uncommitted balances in the
fund.
Financial Management Service: S. 3677 would provide $235 million in appropriations for FMS
in FY2011, or about $9 million less than the amount enacted for FY2010 and the same as the
budget request. The report on the bill noted that another estimated $80 million would be available
for the bureau from payments for its debt collection activities in FY2011.
Alcohol and Tobacco Tax and Trade Bureau: S. 3677 would provide $101 million in
appropriations for ATB in FY2011, or $2 million less than the amount enacted for FY2010 and
about $5 million less than the budget request. For the second year in a row, the committee refused
to endorse an Administration proposal to cover bureau operating expenses by assessing fees on
producers, distributors, and retailers of alcoholic products. The difference between recommended
funding and the budget request reflects the estimated cost of implementing the proposal. In
addition, the report noted that enacted funding for ATB in FY2010 included $3 million (to remain
22 Ibid., p. 18.
23 Ibid., p. 19.
Congressional Research Service
15
Financial Services and General Government (FSGG): FY2011 Appropriations
available through the end of FY2011) to hire, train, and equip special law enforcement agents to
combat tobacco smuggling and other such criminal activities.24
Bureau of the Public Debt: S. 3677 would provide $176 million in appropriations for the Bureau
of Public Debt in FY2011, or $6 million less than the amount enacted for FY 2010 and the same
as the budget request. The committee appears to have accepted the Administration’s position that
the bureau could deliver its required services at a lower cost by reducing issuing and paying agent
fees, consolidating its facilities in Parkersburg, WV, cutting back on staff travel, streamlining
procurement operations, and improving operating efficiency in all BPD programs.
Community Development Financial Institutions Fund: S. 3677 would provide $302 million in
appropriations for CDFI in FY2011, or $56 million more than the amount enacted for FY2010
and $52 million more than the budget request. The committee recommended that $52 million be
used for the Bank on USA program, which seeks to improve access to affordable financial
services and consumer credit for households facing high fees for check-cashing services, difficult
obstacles to saving and acquiring lines of credit, and an increased risk of being the victim of fraud
and theft. It also specified that $25 million be used for the Healthy Food Financing Initiative; $7.5
million for qualified community development financial institutions to back additional loans of
$2,500 or less; $12 million for grants, loans, and technical assistance and training programs for
native American, Alaskan, and Hawaiian communities; and $25 million for the Bank Enterprise
Award program.25
Internal Revenue Service: S. 3677 would provide $12.508 billion for the IRS in FY2011, or
$362 million more than the amount enacted for FY2010 and $125 million less than the budget
request. Of this recommended amount, $2.331 billion would be used for taxpayer services ($53
million above the FY2010 amount and $9.5 million above the budget request), $5.683 billion for
enforcement ($779 million above the FY2010 amount and $675 million above the budget
request), $4.088 for operations support ($4 million above the FY2010 amount but $20 million
below the budget request), $387 million for the BSM program ($123 million above the FY2010
amount and the same as the budget request), and $19 million for the administration of the health
insurance tax credit under the Trade Act of 2002 (P.L. 107-210) ($3.5 million above the FY2010
amount and the same as the budget request).
In its report on the bill, the committee stressed that its recommended increase in funding for the
IRS is mainly intended to bolster the agency’s resources and capabilities for reducing the federal
tax gap and improving taxpayer compliance.26 These objectives lay behind recommended
increases in funding for taxpayer services, enforcement, operations support, and, most notably,
the BSM program. In the committee’s view, the FY2011 budget should enable the IRS to pursue
multiple approaches to shrinking the tax gap, including expanded information reporting,
improved taxpayer services, increased research on sources of non-compliance, a strengthened
partnership among the IRS, tax preparers, and practitioners, and greater use of modernized
information systems.
At the same time, with the same objectives in mind, the committee directed the IRS to provide it
with detailed and timely information on planned re-organizations, job reductions, program
24 Ibid., p. 21.
25 Ibid., p. 23.
26 Ibid., p. 25.
Congressional Research Service
16
Financial Services and General Government (FSGG): FY2011 Appropriations
increases, and changes in enforcement activities. Of particular concern was planned cuts in
taxpayer services. The committee made it clear that it would endorse planned reductions in such
services, especially face-to-face assistance, only if they are consistent with the budget
justification and the current Taxpayer Assistance Blueprint, and the IRS can demonstrate to the
committee that the reductions would not adversely affect taxpayer compliance.
On the matter of funding for taxpayer services, the committee recommended matching the budget
request and restoring the proposed $9.5 million reduction in combined spending on the TAS,
LITC and VITA grants, and the TCE program. The report on S. 3677 specified that a minimum of
$6.1 million should be set aside for the TCE program, a minimum of $10 million for LITC grants,
a minimum of $14 million for VITA grants over two years, and a minimum of $213 million for
the TAS.27 The committee backed the Administration’s proposal to increase the budget for
taxpayer services by $46 million in order to channel $25 million into improving the IRS Web site
and $21 million into improving the level of assistance available through the agency’s toll-free
telephone service. It also directed the IRS to identify in its FY2012 budget request any proposed
increases in spending to implement the new health-care mandates under PPAC and submit annual
updates to Congress of its Taxpayer Assistance Blueprint, focusing on changes to its existing
strategic plan for taxpayer services.
On the matter of funding for enforcement activities, the committee expressed support for the
IRS’s current priorities in combating tax evasion and lowering the tax gap. These priorities
include increased audits of high-income individuals and passthrough entities such as S
corporations, and an intensified push to reduce offshore tax evasion by individuals and
companies. In its report on S. 3677, the committee also directed the IRS to provide it with more
details on the actual costs, revenues, and return on investment of new enforcement initiatives in
the years after their implementation, and to undertake more frequent studies of and collect more
frequent data on the nature and size of the tax gap, particularly the portion of the gap attributable
to international transactions.28 Section 105 of the bill would extend through FY2011 a provision
in the law providing appropriations for the Treasury Department in FY2010 that bars the IRS
from re-starting the private tax debt collection program it managed from early March 2006
through early March 2009.
On the matter of funding for operations support, S. 3677 would allow up to $75 million in
recommended funding for information technology to remain available until the end of FY2012.
The committee expressed concern about the IRS’s management and oversight of its non-BSM
information technology projects and said that it expected the agency to monitor those projects
more carefully to ensure that they are properly classified and managed, subject to risk
management and contingency plans in case of missed deadlines for “scheduled deliverables,” and
essential to the operations and needs of IRS business units.29 What is more, the report on the bill
urged IRS management to make sure that contracts for the projects contain adequate penalties and
repayment clauses to address shortcomings in contractor performance, and that contractors have
adequate staff to “fulfill the contract terms and deliverables.” The committee also directed the
IRS to include in its budget request for FY2012 a long-term funding plan within the operations
support account to modernize its aging “legacy information technology infrastructure.”
27 Ibid., p. 27.
28 Ibid., p. 31.
29 Ibid., p. 32.
Congressional Research Service
17
Financial Services and General Government (FSGG): FY2011 Appropriations
And on the matter of funding for the BSM program, the committee reiterated a long-held belief
that the program should be considered the “IRS’s highest management and administrative
priority.”30 It also commended the agency for the progress that has been made in the program over
the past few years. The replacement of the aging individual master file with a new CADE should
allow for daily (rather than weekly) updating of individual taxpayer accounts, leading to better
customer service, faster processing of refunds, and more effective tax law enforcement. Noting
that the program is at a “critical juncture,” the committee endorsed a proposal by the
Administration to appropriate $152 million for the accelerated development of CADE 2, with the
intent of making it available for the 2012 filing season. It also recommended that the following
amounts be spent on certain other key elements of the program: $40 million for completion of
CADE 1, $39 million for Modernized E-file, $38.5 million for Core Infrastructure, $37 million
for Architecture, Integration, and Management, $10 million for Management Reserve, and $70
million for salaries and other labor costs.
House
On July 29, the House Appropriations Subcommittee on Financial Services and General
Government approved a bill (as of now unnumbered) that would provide funding for FSGG
agencies, including Treasury. In a public statement issued the same day, the Chairman of the
Subcommittee, Representative Jose E. Serrano, noted that the measure is intended to achieve five
objectives, one of which relates to the Treasury accounts. That objective is to provide sufficient
funding to allow for the “fair and effective collection of taxes.” In his view, the bill fully funds
new initiatives by the IRS to curb offshore tax evasion and avoidance and offers more funding
than the request for improving taxpayer assistance through IRS’s toll-free telephone service and
through special programs for the elderly and low-income taxpayers.
Executive Office of the President and Funds
Appropriated to the President31
The FSGG appropriations bill provides funding for all but three offices under the EOP32 Table 4
shows appropriations enacted for FY2010, amounts requested by the President for FY2011, and
amounts recommended by the Senate Appropriations Committee for FY2011.
30 Ibid., p. 33.
31 This section was written by Barbara Schwemle, Analyst in American National Government, Government and
Finance Division.
32 Of the three exceptions, the Council on Environmental Quality and the Office of Environmental Quality are funded
in the House and Senate Interior, Environment, and Related Agencies Appropriations Act. The Office of Science and
Technology Policy and the Office of the United States Trade Representative are funded in the House and Senate
Commerce, Justice, Science, and Related Agencies Appropriations Act.
Congressional Research Service
18
Financial Services and General Government (FSGG): FY2011 Appropriations
Table 4. Executive Office of the President and Funds Appropriated to the President,
FY2010-FY2011
(in millions of dollars)
FY2010
FY2011
FY2011
FY2011
FY2011
Office
Enacted
Request
House
Senate
Enacted
The White House (total)
$207.6 $210.1
$210.1
Compensation of the President
0.5 0.5 0.5
The White House Office (salaries
59.1 59.9 59.9
and expenses)
Executive Residence, White House
13.8 14.0 14.0
(operating expenses)
White House Repair and Restoration
2.5 2.0 2.0
Council of Economic Advisers
4.2 4.4 4.4
National Security Council and
12.2 14.1 14.1
Homeland Security Council
Office of Administration
115.3 115.3 115.3
Office of Management and Budget
92.9 92.9 94.9
Government-wide Management
17.0 20.0 17.0
Councils
Federal Drug Control Programs
428.0 401.4 443.8
(total)
Office of National Drug Control
29.6 26.2 29.0
Policy
High Intensity Drug Trafficking Areas
239.0 210.0 239.0
Program
Other Federal Drug Control
154.4 165.3 175.8
Programs
Counterdrug Technology Assessment
5.0 0.0 0.0
Center
Unanticipated Needs
1.0 1.0 1.0
Partnership Fund for Program
37.5 0.0 0.0
Integrity Innovation
Integrated, Efficient and Effective
— 50.0 40.0
Uses of Information Technology
Special Assistance to the President
4.6 4,7 4.7
(salaries and expenses)
Official Residence of the Vice
0.3 0.3 0.3
President (operating expenses)
Total: EOP and Funds
$ 771.9
$760.4
$794.8
Appropriated to the President
Sources: Consolidated Appropriations Act, 2010 (Div. C, P.L. 111-117), FY2011 Budget, Appendix, pp. 1145-1156
and 1267-1269, U.S. Executive Office of the President, Fiscal Year 2011 Congressional Budget Submission
(Washington: February 2010), and S.Rept. 111-238.
Note:: All figures are rounded, and columns also may not equal the total due to rounding.
Congressional Research Service
19
Financial Services and General Government (FSGG): FY2011 Appropriations
President’s Budget Request and Key Issues
The Administration’s FY2011 budget requested an appropriation of more than $760.4 million for
the EOP and funds appropriated to the President, a decrease of $11.5 million or 1.5% below the
$771.9 million appropriated for FY2010. The budget requested the same appropriation as
provided for FY2010 for the Office of Administration, the Office of Management and Budget
(OMB), and the Unanticipated Needs accounts and increased or decreased appropriations for the
following accounts:
• The White House Office (+$716,000 or +1.2%), the Executive Residence
(+$168,000 or +1.2%), White House Repair and Restoration (-$495,000 or
-19.8%), the Council of Economic Advisers (CEA, +$203,000 or +4.8%), and the
National Security Council and Homeland Security Council (NSC/HSC, +$1.9
million or +15.6%).
• Special Assistance to the President (+$53,000 or +1.2%) and the Official
Residence of the Vice President (+$5,000 or +1.5%).
The justification that accompanied the EOP’s budget submission noted that $150,000 of the
CEA’s requested increase is to fund an additional economist and $1.7 million of the NSC/HSC
requested increase is to fund the expanded mission of both councils as recommended by
Presidential Study Directive-1, including new directorates and positions in areas such as
Transborder Security, Information Sharing, Resilience Policy, Global Engagement, and Strategic
Communications.33
The President’s budget requested $50 million for a new account entitled Integrated, Efficient and
Effective Uses of Information Technology (IEEUIT) to be appropriated to the EOP and
administered by the OMB. As appropriate, the funds could be transferred by OMB to agencies to
provide shared services. The account would serve “as a central Government fund to establish
common hosting for central IT services, creating a set of common platforms for universal tasks.”
The IT services could include citizen engagement platforms, collaboration solutions, and
accountability dashboards and are expected to “prevent billions of dollars in increased costs in the
future.”34
Federal Drug Control Programs
For the accounts under the Federal Drug Control Programs, the President’s FY2011 budget
requested an overall reduction in funding of -$26.5 million or -6.2%. The FY2011 budget
justification states that the proposed reduction in funding “reflects a reprioritization of resources
within the Federal Drug Control Program agencies.” Appropriations would be reduced for all but
one of the accounts as follows:
• Office of National Drug Control Policy (ONDCP, -$3.4 million or -11.4%).
• High Intensity Drug Trafficking Areas Program (HIDTAP, -$29 million or
-12.2%). Of the total requested, not less than 51% could be transferred to State
33 U.S. Executive Office of the President, Fiscal Year 2011 Congressional Budget Submission (Washington: February
2010), pp. CEA-3 and NSC&HSC-4.
34 Ibid., p. OMB-13.
Congressional Research Service
20
Financial Services and General Government (FSGG): FY2011 Appropriations
and local entities for drug control activities and be obligated within 120 days
after the act’s enactment and up to 49% of the total could be transferred to federal
agencies and departments as determined by the ONDCP Director, including not
more than $2.7 million for auditing services and associated activities. Each High
Intensity Drug Trafficking Area (HIDTA) designated as of September 30, 2010,
would be funded at not less than the FY2010 base level unless the Director
submits to the House and Senate Committees on Appropriations justification for
changes to those levels based on clearly articulated priorities and published
ONDCP performance measures.
• Other Federal Drug Control Programs (OFDCP, +$10.9 million or +7.1%). Table
5, below, shows the allocation of the funding for the OFDCP accounts.
• Counterdrug Technology Assessment Center (CTAC, no funding requested, a
reduction of $5 million).
Table 5. Other Federal Drug Control Programs: FY2011 Appropriations for Accounts
(in millions of dollars)
Other Federal Drug Control Programs
FY2011
FY2011
FY2011
FY2011
Account
Request
House
Senate
Enacted
National media campaign
$66.50 $66.50
Drug Free Communities Program
85.50 95.00
National Drug Court Institute
0.95 1.00
Anti-Doping Activities
9.00 10.00
World Anti-Doping Agency dues
1.90 1.90
National Alliance for Model State Drug Laws
1.20 1.20
National Drug Control Program performance
0.20 0.20
measuresa
Total
$165.30 $175.80
Source: FY2011 Budget, Appendix, pp. 1267-1268 and S.Rept. 111-238.
Note:: All figures are rounded, and columns also may not equal the total due to rounding.
a. Appropriation is for evaluations and research, and may be transferred to other federal departments and
agencies.
Senate Action
The Senate Committee on Appropriations recommended funding at the levels requested by the
President for each of the accounts, except for OMB, the federal drug control programs, and the
initiative on Integrated, Efficient and Effective Uses of Information Technology.
The appropriation recommended for OMB ($94.9 million) is $2 million or 2.1% more than the
President’s request. The technology initiative is funded at $40 million, $10 million or 20% less
than the budget proposal. Under the WHO account, $1.4 million is provided for the Office of
National AIDS Policy. The report accompanying the Senate bill states that the committee does not
oppose the proposed reorganization of the Homeland Security Council with the National Security
Congressional Research Service
21
Financial Services and General Government (FSGG): FY2011 Appropriations
Council and funds both councils in a new “National Security Council and Homeland Security
Council” account.
The federal drug control accounts would be funded at the following levels compared to the
President’s request:
• ONDCP - $29 million; $2.8 million or 10.7% more. Administrative provisions
require the ONDCP Director to provide Congress with a detailed financial plan
prior to obligating any FY2011 funds (Section 202), allow for transfers of up to
2% among ONDCP programs (Section 203), and establish reprogramming
requirements for ONDCP (Section 204).
• HIDTAP - $239 million; $29 million or 13.8% more.
• OFDCP - $175.8 million; $10.5 million or 6.3% more.
Among the directives included in the committee report for the EOP accounts are the following:
The Committee directs the Administration to coordinate a Government-wide effort to
develop and implement a domestic AIDS strategy, including the development of targets for
improved prevention and treatment outcomes.
The Committee expects officials employed in whole or in part by the Executive Office of the
President, and designated by the President to coordinate policy agendas across executive
departments and agencies, to keep Congress fully and currently informed of such activities.
The Committee directs each official designated by the President to serve in a position not
recognized by statute and who is responsible for interagency development or coordination of
any rule, regulation, or policy to submit a semiannual report describing the activities of the
official and the office of such official, including a detailed explanation of the development or
issuance of any rule, regulation, directive or policy on which that official or the office of
such official participated or assisted. The first such report shall be submitted not later than
March 31, 2011.
The Committee directs the Office of Administration to place a top priority on the
implementation of comprehensive policies and procedures for the preservation of all records,
including electronic records such as e-mails, videos, and social networking communication,
consistent with the requirements of the Presidential Records Act, the Federal Records Act,
and other pertinent laws. .... The Committee expects the Office of Administration to keep the
Committee fully apprised of funding needs related to record preservation and retention.
The Committee expects OMB to provide timely and complete responses to the Committee to
all requests for information, including requests related to the budget request for OMB and
the Executive Office of the President.
The Committee directs OMB to submit a quarterly personnel census to the Committee
specifying the number of full-time and part-time career staff and the number of full-time and
part-time career Presidential appointees. The personnel census shall be arrayed by specific
program activity and include specific detail for each OMB-wide support office, the number
of Federal agency detailees, and the number of contractor staff.
The Committee directs OMB to submit a written report to the Committee within 120 days of
enactment specifying a plan to modernize the Federal Government’s core budgeting system.
.... The report shall specify a timeline and a detailed budget estimate for designing and
implementing the modernized system as well as a description of enhanced capabilities.
Congressional Research Service
22
Financial Services and General Government (FSGG): FY2011 Appropriations
Pursuant to the presidential memorandum regarding disposal of unneeded Federal real estate,
the Committee directs that OMB summarize the results, by agency, of the real property cost
savings and innovation plans in a report due to the Committee not later than 45 days after
enactment of this act.
The Committee directs the Executive Office of the President to continue to include a
budgetary justification for each [government-wide management] council in the annual
budget request and to clearly note in the budget justification any items requested in the
budget for Government-wide initiatives led or coordinated through the councils.35
House Action
The House Subcommittee on Financial Services and General Government (FSGG) marked up the
House version of the FSGG bill on July 29, 2010. A brief summary table is the only information
that is available to date. The appropriations recommended by the House committee will be
included in this report when they are available.
Transfer Authority
The President’s FY2011 budget proposed continuation of the provision that authorizes the
transfer of up to 10% of appropriated funds among the accounts for the White House,36 and the
Special Assistance to the President (Vice President), and the Official Residence of the Vice
President (transfers would be subject to the approval of the Vice President). The OMB Director
(or such other officer as the President designates in writing) may, 15 days after notifying the
House and Senate Committees on Appropriations, transfer up to 10% of any such appropriation to
any other such appropriation. The transferred funds may be merged with, and available for, the
same time and purposes as the appropriation receiving the funds. Such transfers may not increase
an appropriation by more than 50%.37 S. 3677, as reported, includes the provision at Section 201.
35 S.Rept. 111-238, pp. 37-42.
36 The accounts under the White House are Compensation of the President, the White House Office, including the
Office of Policy Development, the Executive Residence at the White House, White House Repair and Restoration, the
Council of Economic Advisers, the National Security Council, and the Office of Administration.
37 Section 533, Title V, Division H of P.L. 108-447, the Consolidated Appropriations Act for FY2005, authorized
transfers of up to 10% of FY2005 appropriated funds among the accounts for the White House Office, Office of
Management and Budget, Office of National Drug Control Policy, the Special Assistance to the President (Vice
President), and the Official Residence of the Vice President. For FY2006, Section 725 of P.L. 109-115, the
Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent
Agencies Appropriations Act, 2006 authorized transfers of up to 10% among the accounts for the White House, the
Special Assistance to the President (Vice President), and the Official Residence of the Vice President. Section 201 of
P.L. 110-161, the Consolidated Appropriations Act for FY2008, Section 201 of P.L. 111-8, the Omnibus
Appropriations Act for FY2009, and Section 201 of P.L. 111-117, the Consolidated Appropriations Act for FY2010,
continued this practice.
Congressional Research Service
23
Financial Services and General Government (FSGG): FY2011 Appropriations
The Judiciary38
As a co-equal branch of government, the judiciary presents its budget to the President, who
transmits it to Congress unaltered. Table 6 shows appropriations for the judiciary as enacted for
FY2010, as requested for FY2011, and as reported by the Senate Appropriations Committee for
FY2011.39
Table 6. The Judiciary Appropriations, FY2010-FY2011
(in millions of dollars)
FY2010
FY2011
FY2011
FY2011
FY2011
Budget Groupings and Accounts
Enacted
Request
House
Senate
Enacted
Total: Supreme Court
$88.6 $92.5 $92.5
Salaries and Expenses
74.0 77.8 77.8
Building and Grounds
14.5 14.8 14.8
U.S. Court of Appeals for the Federal
32.6 35.9 33.9
Circuit
U.S. Court of International Trade
21.4 22.3
22.3
Courts of Appeals, District Courts,
6,508.7
6,954.9
6,867.7
and Other Judicial Services (total)
Salaries and Expenses
5,011.0 5,309.8
5,240.1
Court Security
452.6 495.0 495.0
Defender Services
977.7 1,081.2 1,072.3
Fees of Jurors and Commissioners
61.9 64.1 55.6
Vaccine Injury Compensation Trust
5.4 4.8 4.8
Fund
Administrative Office of the U.S.
83.1 87.3 87.3
Courts
Federal Judicial Center
27.3 28.7 28.7
United States Sentencing Commission
16.8 17.6 17.6
Judicial Retirement Funds
82.4 90.4 90.4
Total: The Judiciary
$6,860.7 $7,329.5
$7,240.4
Sources: Consolidated Appropriations Act, 2010 (Division C, P.L. 111-117) for FY2010 budget authority data.
For FY2011, budget authority data are from The Judiciary Fiscal Year 2011 Congressional Budget Summary
(Washington: February 2010). FY2011 Senate committee data are from S.Rept. 111-238.
Notes:: Al figures are rounded. Columns also may not equal the total due to rounding. The FY2010 enacted
figures do not include $10 million in emergency appropriations from P.L. 111-230, for border security and other
purposes.
38 This section was written by Lorraine Tong, Analyst in American National Government, Government and Finance
Division.
39 The House Appropriations Subcommittee on FSGG approved a total of $7.1 billion for the judiciary for FY2011,
details will be forthcoming when available.
Congressional Research Service
24
Financial Services and General Government (FSGG): FY2011 Appropriations
The Judiciary Budget and Key Issues
Appropriations for the judiciary—about two-tenths of 1% (0.2%) of the entire federal budget—
are divided into budget groups and accounts. Two accounts that fund the Supreme Court (salaries
and expenses of the Court and expenditures for the care of its building and grounds) together total
about 1% 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 related judicial
services. The largest account, about 73% 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
of circuit and district judges (including judges of the territorial courts of the United States),
justices and judges retired from office or from regular active service, judges of the U.S. Court of
Federal Claims, bankruptcy judges, magistrate judges, and other officers and employees of the
federal judiciary not specifically provided for by other accounts. It also covers the necessary
expenses of the courts. The remaining 26% of the judiciary budget is disbursed among these
accounts: U.S. Court of Appeals for the Federal Circuit, U.S. Court of International Trade,
Administrative Office of the U.S. Courts, Federal Judicial Center, U.S. Sentencing Commission,
and Judicial Retirement Funds.
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 (funded in the Department of Defense appropriations bill), the
U.S. Court of Appeals for Veterans Claims (funded in the Military Construction, Veterans Affairs,
and Related Agencies appropriations bill), and the U.S. Tax Court (funded under Independent
Agencies, Title V, of the FSGG bill). Federal courthouse construction is funded within the
General Services account under Independent Agencies, Title V, of the FSGG bill.
The judiciary also uses non-appropriated funds to offset its appropriations requirement. The
majority of these non-appropriated funds are from fee collections, primarily from court filing
fees. These monies are used to offset expenses within the Salaries and Expenses account. In some
instances, the judiciary also has funds which may carry forward from one year to the next. These
funds are considered “unencumbered” because they result from savings from the judiciary’s
financial plan in areas where budgeted costs did not materialize. According to the judiciary, such
savings are usually not under its control (e.g., the judiciary has no control over the confirmation
rate of Article III judges and must make its best estimate on the needed funds to budget for
judgeships, rent costs based on delivery dates, and technology funding for certain programs).
The judiciary also has “encumbered” funds—no-year authority funds for specific purposes, which
are used when planned expenses are delayed, from one year to the next (e.g., costs associated
with space delivery, and certain technology needs and projects).40
Judge Julia S. Gibbons, chair of the Budget Committee of the Judicial Conference of the United
States, 41 expressed the judiciary’s recognition that the country had been experiencing very serious
financial difficulties. In her March 18, 2010, written testimony submitted to the House
40 Administrative Office of the U.S. Courts, The Judiciary Fiscal Year 2011 Congressional Budget Summary
(Washington: February 2010), pp. 40-41. Hereafter cited as Judiciary FY2011 Congressional Budget Summary.
41 The Judicial Conference of the United States is the principal policymaking body for the federal courts system. The
Chief Justice is the presiding officer of the conference, which comprises the chief judges of the 13 courts of appeals, a
district judge from each of the 12 geographic circuits, and the chief judge of the Court of International Trade.
Congressional Research Service
25
Financial Services and General Government (FSGG): FY2011 Appropriations
Subcommittee on the judiciary’s FY2011 budget request, Judge Gibbons stated that the FY2011
request reflected the lowest percentage increase requested in more than 20 years. Judge Gibbons
noted that the President had requested increases in programs in some executive branch agencies
(e.g., Department of Justice and Department of Homeland Security) that would have a direct
impact on the judiciary’s workload. She further emphasized that the courts were already feeling
the impact of the deteriorating economy resulting in the significant rise in bankruptcy filings that
have increased the workload of the bankruptcy courts.42
Cost Containment Initiatives
According to Judge Gibbons, the judiciary has adopted a comprehensive strategy since 2004 to
contain costs and allow for more modest budget requests. Judge Gibbons noted that several steps
“have reduced future costs for rent, information technology, compensation of court staff and law
clerks, magistrate judges, law enforcement activities, law books, probation and pretrial services
supervision work, and other areas.” 43 Judge Gibbons identified several areas for further cost
containment.
To control court space costs, the Judicial Conference at its September 2008 biannual meeting
adopted a revised policy under which two senior district judges would share one courtroom in
new courthouses.44 The judiciary is also pursuing the development of a courtroom-sharing policy
for magistrate judges, and studying the feasibility of courtroom-sharing for district judges in large
courthouses as well as in bankruptcy courts. The judiciary has worked with the General Services
Administration (GSA) to limit rent costs through a memorandum of agreement on rent
calculation. Currently, the rent cap is established at 4.9% in annual rate of growth. According to
Judge Gibbons, the projected FY2011 rent will be approximately $1.0 billion in FY2011, or 23%
less than an earlier estimate (projected in FY2005) due in large part to cost containment efforts,
including a national moratorium on courthouse construction from 2004 to 2006, and reducing
office size for chambers and court staff.45 Other initiatives include using information technology
to consolidate computer servers around the country to increase efficiency and cost-effectiveness;
further improve automation of electronic case filing and case management systems; and reducing
personnel compensation costs.46
Judicial Security47
The safe conduct of court proceedings and security of judges in courtrooms and off-site continue
to be a concern. The 2005 Chicago murders of family members of a federal judge; the Atlanta
killings of a state judge, a court reporter, and a sheriff’s deputy at a courthouse; and the 2006
sniper shooting of a state judge in his Reno office spurred efforts to improve judicial security. In
42 Statement of Honorable Julia S. Gibbons, Chair, Committee on the Budget of the Judicial Conference of the United
States, U.S. House, Committee on Appropriations Subcommittee on Financial Services and General Government,
March 18, 2010, p. 2. Hereafter cited as Judge Gibbons’ March 18, 2010, Statement.
43 Judge Gibbons’ March 18, 2010, Statement, p. 5.
44 Ibid., p. 7.
45 Ibid., p. 6.
46 Ibid., pp. 6-7.
47 For an analysis of court security and federal building security in general, see CRS Report R41138, Federal Building
and Facility Security, by Shawn Reese and Lorraine H. Tong.
Congressional Research Service
26
Financial Services and General Government (FSGG): FY2011 Appropriations
the 110th Congress (2007-2008), the President signed into law, the Court Security Improvement
Act of 2007 (P.L. 110-177), which was designed to enhance security for judges and court
personnel as well as courtroom safety for the public. Legislation enacted in the 109th Congress
(P.L. 109-13) included a provision that provided intrusion detection systems for judges in their
homes. Threats against judges and the courts, however, have not abated. On January 4, 2010, a
lone gunman wounded a deputy U.S. marshal and killed a court security officer at the Lloyd D.
George U.S. Courthouse and Federal Building in Las Vegas.48 The judiciary has been working
closely with the U.S. Marshals (USMS) to review the incident to ensure that adequate protective
policies, procedures, and practices are in place. USMS has primary responsibility for the
protection and security of more than 2,000 sitting federal judges, as well as approximately 5,250
other court officials at over 400 court facilities in the United States and its territories. In FY2003,
threats and inappropriate communications against USMS protectees numbered 592.49 In FY2009,
the threats and inappropriate communications increased to more than 1,300.50
The FY2011 budget request would reauthorize a pilot program for the USMS to assume
responsibility for perimeter security at selected courthouses that were previously the
responsibility of the Federal Protective Service (FPS). This pilot was authorized in FY2009 and
FY2010 as a result of the judiciary’s stated concerns that FPS was providing inadequate perimeter
security. After the initial planning phase, USMS implemented the pilot program on January 5,
2009, and assumed primary responsibility for security functions at seven courthouses located in
Chicago, Detroit, Phoenix, New York, Tucson, and two in Baton Rouge. The judiciary and USMS
have been evaluating the program and identifying areas for improvement. The judiciary
reimburses USMS for these services.
Increased court security enhancements may be necessary in the event that more suspects charged
with terrorism are tried in federal courts rather than military tribunals.51
Workload and Southwest Border Issues
Judge Gibbons, in her March 18, 2010, written testimony submitted to the House Appropriations
Subcommittee on Financial Services and General Government, stated that the federal judiciary
does not determine the workload of the courts but must handle the cases that are brought before
the courts. Judge Gibbons said, “Our workload is increasing, nearly across the board, and if
Congress approves the President’s requests for the Department of Homeland Security and the
Department of Justice, and bankruptcy filings remain high, our workload will grow.” She noted
that bankruptcy filings increased 29% in 2008, 35% in 2009, and another 20% increase is
expected in 2010, which would increase filings to nearly 1.6 million.52 In addition to this
anticipated increase, the judiciary based its budget and staffing request for FY2011 on the
48 Steve Friess, “Two Killed in Las Vegas Courthouse,” New York Times, January 4, 2010, available at
http://www.nytimes.com/2010/01/05/us/05vegas.html.
49 In addition to U.S. Supreme Court Justices and other federal judges, USMS may also protect Tax Court judges, U.S.
deputy attorney general, director of the U.S. Office of National Drug Control Policy, U.S. attorneys and assistant U.S.
attorneys, federal public defenders, clerk of courts, probation officers, pre-trial services officers, U.S. trustees, jurors,
witnesses, and USMS employees. For more details about the USMS’s judicial security responsibilities, see
http://www.usmarshals.gov/judicial/index.html.
50 Based on information from USMS, available at http://www.usmarshals.gov/judicial/index.html.
51 Judge Gibbons’ March 18, 2010, Statement, p. 4.
52 Ibid., p 3.
Congressional Research Service
27
Financial Services and General Government (FSGG): FY2011 Appropriations
projected 2010 caseload in the following categories: criminal (+3%), probation (+3%), pretrial
services (+2%), and civil (+6%). However, appellate filings are projected to decrease (-5%), due
in part to changes in federal sentencing guidelines.53
On June 3, 2010, the Judicial Conference of the United States made a request54 to then-Director
Peter Orszag of the Office of Management and Budget (OMB) to transmit to the House its request
for $40 million to be included in an emergency supplemental appropriations bill. The Judicial
Conference expressed its concern about the ability of federal courts to handle the anticipated
growth in caseload associated with the Administration’s request for $700 million for thousands of
border patrol agents; officers and investigators; as well as several hundred additional attorneys
and Federal Bureau of Investigations (FBI), Drug Enforcement Administration (DEA), and
Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) agents to address criminal activity
along the southwest border. According to the judiciary, OMB did not transmit its $40 million
request for additional magistrate judges, probation and pretrial services officers, clerks’ office
staff, fees of jurors, attorneys for indigent defendants, court security, and related expenses
necessary to process the additional criminal case.
On July 29, 2010, the Senate Appropriations Committee reported S. 3677, the FY2011 FSGG
appropriations bill. Committee report language contained $40 million that the Judicial Conference
had requested for additional magistrate judges, probation and pretrial services officers, clerk’s
office staff, fees of jurors, attorneys for indigent defendants, court security, and related expenses
to enable the application of resources in a timely fashion to address the additional workload needs
of the courts to address the immigration and law enforcement initiatives on the southwest
border.55
In August 2010, Congress passed H.R. 6080,56 legislation making FY2010 emergency
supplemental appropriations for border security, to provide $600 million to enhance southwest
border security.57 H.R. 6080 also contained $10 million (to remain available until September 30,
2011) to assist the federal courts along the border with the expected increased workload. The
president signed the bill into law (P.L. 111-230) on August 13, 2010.
53 Ibid., pp. 8, 10.
54 Letter from James C. Duff, Secretary, Judicial Conference of the United States, to Director Peter Orszag, Director,
Office of Management and Budget, June 3, 2010.
55 S.Rept. 111-238, pp. 54-55.
56 The legislation would appropriate funds related to activities along the southwest border to the U.S. Customs and
Border Protection for salaries and expenses related to staffing, construction of up to two border patrol forward
operating bases along the border, and border security fencing, infrastructure, and technology along the southwest
border. Prior to the passage of H.R. 6080, there were earlier versions of the emergency border security supplemental
bill. On July 27, 2010, Representative David E. Price introduced H.R. 5875, the Emergency Border Security
Supplemental Appropriations Act, 2010, which the House passed on July 28, 2010, under suspension of the rules by
voice vote. On August 5, 2010, Senator Charles E. Schumer introduced S. 3721, a similar border security bill which,
among other things, included the $10 million for the judiciary. The bill was referred to the Senate Appropriations
Committee. On the same day, the Senate by unanimous consent passed H.R. 5875 with an amendment in the nature of a
substitute (which, among other things, included $10 million for the judiciary). As the Constitution requires revenue
measures originate in the House, and the bill contained revenue-raising off-sets, the House then introduced and passed
a new bill, H.R. 6080 (identical to the Senate-passed version of H.R. 5875) under suspension of the rules by voice vote
on August 10, 2010. The Senate subsequently passed H.R. 6080 by unanimous consent on August 12, 2010.
57 For more information on southwest border issues, see CRS Report R41075, Southwest Border Violence: Issues in
Identifying and Measuring Spillover Violence, coordinated by Kristin M. Finklea.
Congressional Research Service
28
Financial Services and General Government (FSGG): FY2011 Appropriations
Judgeships
Since the enactment of an omnibus judgeship bill in 1990 (P.L. 101-650), according to the
Judicial Conference, the number of appellate judgeships has remained at 179 whereas appellate
court case filings have increased by 42% over the past 19 years. During this same time period,
Congress enacted legislation that increased the number of district judgeships by 4% (from 645 to
674) whereas district court case filings increased by 34%.
At its biannual meeting on March 17, 2009, the Judicial Conference of the United States voted to
ask Congress to create 63 new federal judgeships: 12 in the courts of appeals (9 permanent and 3
temporary), and 51 in the district courts (38 permanent and 13 temporary).58 The Conference
made a similar request in the 110th Congress. Subsequent legislation was introduced in both the
House and Senate to address this request, but no final action was taken before the 110th Congress
adjourned.
On September 8, 2009, Senator Patrick J. Leahy introduced (for himself and Senators
Dianne Feinstein, Charles E. Schumer, Sheldon Whitehouse, Amy Klobuchar, Edward E.
Kaufman, Al Franken, Tom Harkin, Jeff Bingaman, Patty Murray, Sherrod Brown, Evan Bayh,
Michael Bennet, Barbara Boxer, Jeanne Shaheen, Daniel K. Inouye, John F. Kerry, and Daniel K.
Akaka) S. 1653, the Federal Judgeship Act of 2009, to authorize the establishment of additional
federal circuit and district judges to help reduce backlogs in the nation’s caseload. The bill would
authorize the appointment of 63 permanent and temporary judgeships across the country,
including 12 circuit judgeships. S. 1653 was referred to the Senate Judiciary Committee where it
is pending. Representative Hank Johnson introduced (for himself and Representatives John
Conyers, Silvestre Reyes, Sheila Jackson-Lee, and Robert Wexler), a companion bill, H.R. 3662,
Federal Judgeship Act of 2009, on September 29, 2009. The bill was referred to the House
Judiciary Committee where it is pending.
Several other bills (with more limited scope) have been introduced to create or extend temporary
judgeships. Among them were S. 193, S. 1727, H.R. 191, H.R. 314, H.R. 349, H.R. 1272, H.R.
2961, H.R. 3161, H.R. 4089, and H.R. 4506.
Judicial Pay
Another issue of continuing interest is the judiciary’s advocacy for raising judicial pay. Chief
Justice John G. Roberts, Jr. reaffirmed his support for significant increases in judicial salaries in
his 2008 Year-End Report on the Federal Judiciary. Chief Justice Roberts maintained that the
salary of judges had not kept pace with inflation over the years and led judges to leave the bench
in increasing numbers. However, the judicial pay issue was not mentioned in the Chief Justice’s
2009 Year-End Report on the Federal Judiciary.
During the 110th Congress, legislation was introduced in both the House and Senate to
substantially increase judicial salaries, but no final action was taken on the bills before Congress
adjourned.59 However, federal judges received a salary adjustment in 2009.
58 See http://www.uscourts.gov/Press_Releases/2009/recommendations.pdf for a list of the Conference’s judgeship
recommendations.
59 On June 15, 2007, Senator Patrick Leahy introduced S. 1638, the “Federal Judicial Salary Restoration Act of 2008,”
that, before markup, would have provided a 50% pay adjustment for justices and judges. Representative John Conyers
(continued...)
Congressional Research Service
29
Financial Services and General Government (FSGG): FY2011 Appropriations
Near the end of the first session of the 111th Congress on November 3, 2009, Senator Dianne
Feinstein introduced (for herself and Senators Orrin Hatch, Patrick Leahy, and Lindsey Graham)
S. 2725, the Federal Judicial Fairness Act of 2009. The bill would repeal existing law requiring
that salary increases for federal judges and Supreme Court Justices be specifically authorized by
acts of Congress, and would apply the same automatic annual cost-of-living adjustment to judicial
salaries as takes effect under the General Schedule for civilian federal employees. Although the
Senate Appropriations Committee recommended a 2010 salary adjustment for Justices and judges
under Section 307 (S.Rept. 111-43),60 the enacted FY2010 legislation (P.L. 111-117) did not
provide for the salary adjustment.
In the FY2011 request, the judiciary proposed that federal judges receive the same automatic
cost-of-living adjustments that members of Congress are authorized to receive (Section 307).
House Budget Hearings
On March 18, 2010, the House Appropriations Subcommittee on Financial Services and General
Government held a hearing on the FY2011 judiciary budget request. The subcommittee heard
testimony from Judge Gibbons, and James C. Duff, director of the Administrative Office of the
U.S. Courts (AOUSC). Among issues raised at the hearing were the dramatic increase in
bankruptcy filing, educational assistance the judiciary has been providing citizens considering
bankruptcy, compensation for public defenders, security and crime along the southwest border,
judicial security, rent paid to GSA, judicial workload, and initiatives to contain judicial spending.
The hearing also addressed the unresolved venue of high threat trials, the possible role of the
federal courts in trying individuals charged with terrorism, and the various costs, security, and
other considerations associated with such trials.61
On April 15, 2010, Supreme Court Justices Clarence Thomas and Stephen G. Breyer appeared
before the subcommittee to give testimony on the FY2011 Supreme Court budget request. Among
the issues raised at the hearing were the Supreme Court Building Modernization Project, funding
to provide staff and resources to enhance security, features of the Court’s redesigned public
(...continued)
Jr., chairman of the House Judiciary Committee, introduced a companion bill, H.R. 3753, “Federal Judicial Salary
Restoration Act of 2007,” on October 4, 2007. The House bill, before markup, would have provided for a 41.3% pay
adjustment. As amended in markup, and ordered to be reported by the respective committees, S. 1638 and H.R. 3753,
would authorized pay increases of 28.7% to 28.8% respectively. On November 14, 2007, Senator Richard J. Durbin
introduced S. 2353, the Fair Judicial Compensation Act of 2007, to authorize a 16.5% increase in the annual salaries of
the Chief Justice of the United States, Associate Justices of the Supreme Court, courts of appeals judges, district court
judges, and judges of the United States Court of International Trade, and to increase fees for bankruptcy trustees. S.
2353 was referred to the Senate Judiciary Committee. No further action was taken on any of these bills.
60 For further details about these bills and judicial pay issues, see CRS Report RS20388, Salary Linkage: Members of
Congress and Certain Federal Executive and Judicial Officials, by Barbara L. Schwemle, and CRS Report RL33245,
Legislative, Executive, and Judicial Officials: Process for Adjusting Pay and Current Salaries, by Barbara L.
Schwemle.
61 U.S. Congress, House Appropriations Subcommittee on Financial Services and General Government, President
Obama’s Fiscal 2011 Budget Request for the Federal Judiciary, hearing, 111th Cong., 2nd sess., March 18, 2010,
Congressional Quarterly transcript of the hearing, available by subscription at http://www.cq.com/display.do?dockey=/
cqonline/prod/data/docs/html/transcripts/congressional/111/congressionaltranscripts111-
000003618552.html@committees&metapub=CQ-CONGTRANSCRIPTS&searchIndex=0&seqNum=62.
Congressional Research Service
30
Financial Services and General Government (FSGG): FY2011 Appropriations
website, caseload trends over the years, minority clerk hiring efforts, and possible television
coverage of Supreme Court proceedings.62
FY2011 Request63
For FY2011, the judiciary requested $7.33 billion in total appropriations, an increase of $469
million (6.8%) over the $6.86 billion appropriated in FY2010. Approximately 82% of the increase
was requested to cover pay adjustments, benefits, inflation, and to maintain current services. The
FY2011 request included funding for an additional 1,137 full-time-equivalent (FTE) positions to
meet increased workload requirements. The increase would be 3.3% in the number of FTEs above
the 34,663 FTEs funded in 2010.64
The following summarizes the FY2010 enacted amount, the FY2011 judiciary budget request,
and the FY2011 Senate Appropriations Committee recommendation by account.
Supreme Court
The total FY2011 request for the Supreme Court was $92.5 million contained in two accounts: (1)
Salaries and Expenses: $77.8 million was requested, a $3.7 million (5.0%) increase over the
$74.0 million enacted for FY2010; and (2) Care of the Building and Grounds: $14.8 was
requested, a 0.2 million (1.8%) over the $14.5 million enacted for FY2010. The total budget
FY2011 request was $4.0 million (4.5%) increase over the FY2010 appropriation of $88.6
million. The request included pay and benefits increases to maintain FY2010 services, and 12
additional police officers and associated costs (e.g., training) to enhance the Court’s security to
staff new posts needed after completion of the Supreme Court Building Modernization Project.
The Senate Appropriations Committee recommended the full amount requested for both accounts.
U.S. Court of Appeals for the Federal Circuit
This court, consisting of 12 judges, has jurisdiction and reviews, among other things, certain
lower court rulings on patents and trademarks, international trade, and federal claims cases. The
FY2011 budget request was $35.9 million, a $3.3 million (10.1%) increase over the FY2010
appropriation of $32.6 million. The Senate Appropriations Committee recommended $33.9
million for this account.
U.S. Court of International Trade
This court has exclusive jurisdiction nationwide over the civil actions against the United States,
its agencies and officers, and certain civil actions brought by the United States arising out of
62 U.S. Congress, House Appropriations Subcommittee on Financial Services and General Government, President
Obama’s Fiscal 2011 Budget Request for the Supreme Court, hearing, 111th Cong., 2nd sess., April 15, 2010,
Congressional Quarterly transcript of the hearing, available by subscription at http://www.cq.com/display.do?dockey=/
cqonline/prod/data/docs/html/transcripts/congressional/111/congressionaltranscripts111-
000003642813.html@committees&metapub=CQ-CONGTRANSCRIPTS&searchIndex=0&seqNum=23.
63 U.S. Administrative Office of the U.S. Courts, The Judiciary Fiscal Year 2010 Congressional Budget Justification
(Washington: February 2010).
64 The Judiciary Fiscal Year 2010 Congressional Budget Summary, p. 5.
Congressional Research Service
31
Financial Services and General Government (FSGG): FY2011 Appropriations
import transactions and the administration as well as enforcement of federal customs and
international trade laws. The FY2011 request was $22.3 million, a $0.9 million (4.3%) increase
over the FY2010 appropriation of $21.4 million. The budget request would pay for standard pay
and other inflationary adjustments, and to maintain current services. The Senate Appropriations
Committee recommended $22.3 million for this account.
Courts of Appeals, District Courts, and Other Judicial Services
The FY2011 funding request for this budget group covers 12 of the 13 courts of appeals and 94
district judicial courts located in the 50 states, District of Columbia, Commonwealth of Puerto
Rico, territories of Guam and the U.S. Virgin Islands, and the Commonwealth of the Northern
Mariana Islands. The appropriations requested for this budget group comprises about 90% of the
judiciary budget for salaries and expenses, court security, defender services, and fees of jurors
and commissioners which fund most of the day-to-day activities and operations of the circuit and
district courts. The FY2011 request was $6.95 billion, a $446 million (6.9%) increase over the
FY2010 appropriation of $6.51 billion. The Senate Appropriations Committee recommended
$6.87 billion for this budget group.
The total of this budget group comprised the following accounts:
Salaries and Expenses
The FY2011 request for this account was $5.31 billion, an increase of $299 million (5.9%) over
the FY2010 level of $5.01 billion. According to the budget request, this increase is needed
primarily for inflationary and other adjustments to maintain the courts’ current services. Of this
total, 33% was for court support personnel salaries; 21% for judges and chambers staff salaries
and benefits; 17% for rent; 11% for court support personnel benefits; 10% for operations and
maintenance; and 7% for information technology. The Senate Appropriations Committee
recommended $5.24 billion for this account.
Vaccine Injury Compensation Trust Fund
Established to address a perceived crisis in vaccine tort liability claims, the Vaccine Injury
Compensation Program funds a federal no-fault program that protects the availability of vaccines
in the nation by diverting substantial number of claims from the tort arena. The FY2011 request
for the Trust Fund account was $4.8 million, a $0.6 million (12.5%) decrease from the FY2010
appropriation of $5.4.million. The decrease is due to a one-time cost in tenant alterations resulting
from relocation to new space. The Senate Appropriations Committee recommended the full
amount requested for this account.
Court Security
This account provides for protective guard services, security systems, and equipment needs in
courthouses and other federal facilities to ensure the safety of judicial officers, employees, and
visitors. Under this account, the majority of funding for court security is transferred to the U.S.
Marshals Service to pay for court security officers under the Judicial Facility Security Program.
The request would fund salary adjustments and inflationary increases to maintain current
services. The FY2011 request was $495.0 million, a $42.4 million (9.4%) increase over the
Congressional Research Service
32
Financial Services and General Government (FSGG): FY2011 Appropriations
FY2010 appropriation of $452.6 million. The request included 30 additional court security
officers for anticipated new and renovated existing space, changes in operating expenses based on
anticipated billings from the Federal Protective Service, and improvements, and enhancements to
security systems and equipment. The Senate Appropriations Committee recommended the full
amount requested for this account.
Defender Services
This account funds the operations of the federal public defender and community defender
organizations, and compensation, reimbursements, and expenses of private practice panel
attorneys appointed by federal courts to serve as defense counsel to indigent individuals. The
FY2011 request for these services was $1.08 billion, a $103 million (10.6 %) increase over the
FY2010 appropriation of $978 million. The request includes additional 59 FTE positions to
handle increased and complex caseloads. The request also raises non-capital panel attorneys’
hourly rates from $125 to $141 per hour. The Senate Appropriations Committee recommended
$1.07 billion for this account.
Fees of Jurors and Commissioners
This account funds the fees and allowances provided to grand and petit jurors, and compensation
for jury and land commissioners. The FY2011 request was $64.1 million, a $2.2 million (3.6%)
increase over the FY2010 appropriation of $61.9 million. The requested increase would be
primarily for adjustments to allow payment for statutory fees and expenses. The Senate
Appropriations Committee recommended $55.6 million for this account.
Administrative Office of the U.S. Courts
As the central support entity for the judiciary, the AOUSC provides a wide range of
administrative, management, program, and information technology services to the U.S. courts.
AOUSC also provides support to the Judicial Conference of the United States, and implements
conference policies and applicable federal statutes and regulations. The FY2011 request for
AOUSC was $87.3 million, a $4.1 million (5.0%) increase over the FY2010 appropriation of
$83.1 million. The request would fund adjustments to its base, and maintain current services,
including recurring costs such as travel, communications, service agreements, and supplies. Four
new positions (two FTEs) were requested for a six-month period to address high priority court
support functions. AOUSC also receives non-appropriated funds from fee collections and carry-
over balances to supplement its appropriations requirements. The Senate Appropriations
Committee recommended the full amount requested for this account.
Federal Judicial Center
As the judiciary’s research and education entity, the Federal Judicial Center undertakes research
and evaluation of judicial operations for the Judicial Conference committees and the courts. In
addition, the center provides judges, court staff, and others with orientation and continuing
education and training. The center’s FY2011 request was $28.7 million, a $1.4 million (5.0%)
increase over the FY2010 appropriation of $27.3 million. The request would cover standard pay
and other inflationary adjustments, the hiring of two FTEs, and enhanced education and training
Congressional Research Service
33
Financial Services and General Government (FSGG): FY2011 Appropriations
initiatives. The Senate Appropriations Committee recommended the full amount requested for
this account.
United States Sentencing Commission
The commission promulgates sentencing policies, practices, and guidelines for the federal
criminal justice system. The FY2011 request was $17.6 million, an $0.8 million (4.5%) increase
over the FY2010 appropriation of $16.8 million. The increase would cover pay and other
inflationary adjustments. The Senate Appropriations Committee recommended the full amount
requested for this account.
Judiciary Retirement Funds
This mandatory account provides for three trust funds that finance payments to retired bankruptcy
and magistrate judges, retired Court of Federal Claims judges, and the spouses and dependent
children of deceased judicial officers. The FY2011 request was $90.4 million, an $8.0 million
(9.7%) increase over the FY2010 appropriation of $82.4 million. The Senate Appropriations
Committee recommended the full amount requested for this account.
General Provision Changes
According to the FY2011 budget request submission, the judiciary proposed the following new
language under general provisions:
• Section 307, which would allow federal judges to receive the same automatic
annual cost-of-living adjustments (currently authorized under Title 28, section
461) that members of Congress are authorized to receive.
The following proposed provisions were reauthorizations and extensions:
• Section 305, which would continue to give the judiciary the same tenant
alteration authorities as the executive branch to contract directly for space
alteration projects not exceeding $100,000 without having to go through GSA.
• Section 306, which would reauthorize the pilot program for the USMS to provide
perimeter security at selected primary courthouses for FY2011.
The judiciary proposed deletion of a provision (Section 307 under the Consolidated
Appropriations Act, 2010) that extended temporary judgeships in the District of Kansas,
the Northern District of Ohio, and the District of Hawaii because the judiciary expressed
its hope that a judgeship bill would be enacted in FY2010.
The Senate Appropriations Committee recommended the following provisions:
• Section 301, which would allow the judiciary to expend funds for the
employment of experts and consultative services.
• Section 302, which would allow the judiciary, subject to the committee’s
reprogramming procedures, to transfer up to 5% between appropriations, but
limits to 10% the amount that may be transferred into any one appropriation.
Congressional Research Service
34
Financial Services and General Government (FSGG): FY2011 Appropriations
• Section 303, which would limit official reception and representation expenses
incurred by the Judicial Conference of the United States to no more than
$11,000.
• Section 304, which would require the Administrative Office to submit an annual
financial plan for the judiciary within 90 days of enactment of this act.
• The committee also recommended Sections 305 and 306, as requested by the
judiciary (see above).
District of Columbia65
The authority for congressional review and approval of the District of Columbia’s budget is
derived from the Constitution and the District of Columbia Self-Government and Government
Reorganization Act of 1973 (Home Rule Act).66 The Constitution gives Congress the power to
“exercise exclusive Legislation in all Cases whatsoever” pertaining to the District of Columbia. In
1973, Congress granted the city limited home rule authority and empowered citizens of the
District to elect a mayor and city council. However, Congress retained the authority to review and
approve all District laws, including the District’s annual budget. As required by the Home Rule
Act, the city council must approve a budget within 56 days after receiving a budget proposal from
the mayor.67 The approved budget must then be transmitted to the President, who forwards it to
Congress for its review, modification, and approval.68
On April 1, 2010, the mayor of the District of Columbia submitted a proposed $10.4 billion
general operating fund budget, including enterprise funds, to the District of Columbia Council.
Also, on April 1, 2010, the mayor forwarded to the council for its approval a proposed plan
intended to address a projected $230 million budget shortfall for FY2010.69
Both the President and Congress may propose financial assistance to the District in the form of
special federal payments in support of specific activities or priorities. Table 7 shows details of the
District’s special federal payments, including the FY2010 enacted amounts, the amounts included
in the President’s FY2011 budget request, and the amounts recommended by the Senate
Appropriations Committee for FY2011.
65 This section was written by Eugene Boyd, Analyst in American National Government, Government and Finance
Division, and Erin Lomax, Analyst in Education Policy, Domestic Social Policy Division.
66 See Article I, Sec. 8, clause 17 of the U.S. Constitution and Section 446 of P.L. 93-198, 87 Stat. 801.
67 120 Stat. 2028.
68 87 Stat. 801.
69 Government of the District of Columbia, Executive Office of the Mayor, FY2010 Proposed Gap-Closing Plan ,
Washington., DC, April 1, 2010, p. 3, http://grc.dc.gov/grc/lib/grc/budget/fy2010_mayor_proposed_gap-
closing_plan.pdf.
Congressional Research Service
35
Financial Services and General Government (FSGG): FY2011 Appropriations
Table 7. District of Columbia Appropriations, FY2010-FY2011:
Special Federal Payment
(in millions of dollars)
FY2010
FY2011
FY2011
FY2011
FY2011
Enacted
Request
House
Senate
Enacted
Resident Tuition Support
$35.1
$35.1
$35.1
Emergency Planning and Security
15.0
15.0
15.0
District of Columbia Courts
261.2
247.4
258.4
Defender Services
55.0
55.0
55.0
Court Services and Offender
212.4 217.8
217.8
Supervision Agency
Public Defender Service
37.3
40.7
40.7
Criminal Justice Coordinating
2.0 1.8
1.8
Council
Judicial Commissions
0.5
0.5
0.5
St. Elizabeth Hospital Campus
0.0
2.0
2.0
HIV/AIDS Prevention
0.0
5.0
3.0
Water and Sewer Authority
20.0
25.0
25.0
Office of the Chief Financial
1.9 0.0
1.0
Officer
Living Classrooms
0.1
0.0
0.0
Nat. Building Museum
0.15
0.0
0.0
Samaritan Ministry
0.1
0.0
0.0
Washington Center
0.13
0.0
0.0
Wash. Hosp. Center
0.05
0.0
0.0
Whitman-Walker Clinic
0.1
0.0
0.0
Children’s National Medical
1.0 0.0
1.0
Center
Safe Kids
0.12
0.0
School Improvement
75.4
52.4
52.4
Public Schools
42.2
23.0
23.0
Public Charter Schools
20.0
20.0
20.0
Education Vouchers
13.2
9.4
9.4
Jump Start Public School Reform
0.0
20.0 20.0
Consolidated Laboratory Facility
15.0
0.0
0.0
D.C. National Guard
0.38
2.0
1.4
Perm. Supportive Housing
17.0
10.0
10.0
Disconnected Youth
4.0
0.0
0.0
Total: Special Federal
$752.2 $729.7
$739.0
Payments
Congressional Research Service
36
Financial Services and General Government (FSGG): FY2011 Appropriations
Sources: FY2010 Enacted, figures are taken from the H.Rept. 111-202 accompanying H.R. 3170, the Financial
Services and General Government Appropriations Act, FY2010. FY2011 budget request figures are taken from
U.S. Government Budget Appendix Fiscal Year 2011. Senate figures are taken from S.Rept. 111-238.
Note: All figures are rounded, and columns also may not equal the total due to rounding.
The District of Columbia Budget and General Provisions
The President’s Budget Request
On February 1, 2010, the Obama Administration released its detailed budget requests for FY2011.
The Administration’s proposed budget requested $729.7 million in special federal payments to the
District of Columbia. Approximately three-quarters ($563.2 million) of this budget request would
be targeted to the courts and criminal justice system. The President’s budget also requested $89.4
million in support of education, including $52.4 million to support elementary and secondary
education, $2 million for a National Guard retention and college access program, and $35.1
million for college tuition assistance. This comprises 12% of the Administration’s budget request.
The President’s total budget request of $729.7 million represents a 3% decrease from the FY2010
appropriations of $752.2 million.
District’s Budget
On April 1, 2010, the mayor of the District of Columbia submitted a proposed budget to the
District of Columbia Council. The mayor proposed a general fund operating budget of $8.9
billion, and an additional $1.5 billion in proposed enterprise fund spending. After its review, the
council revised and approved the District’s budget on May 26, 2010 and forwarded it to the
mayor for his signature.
In addition, the mayor submitted for the council’s review a revised plan intended to close a
projected $230 million budget shortfall for FY2010. Much of the funding gap was caused by the
decline in revenue projections related to the current economic recession and reported spending
pressures70 according to February 19, 2010 testimony of the District’s Deputy Chief Financial
Officer.71 This included $35 million in revenue shortfalls, $185 million in overspending, and $10
million in repayment to the District’s reserve fund. The mayor’s plan addresses the projected
shortfall by a combination of debt restructuring, spending controls, and revenue enhancements
(increased taxes and fees).72
Senate Bill
The Senate bill includes approximately $743 million in special federal payments to the District of
Columbia. It recommends approval of the District of Columbia operating budget of $10.3 billion
70 During his testimony the Deputy Chief Financial Officer defined spending pressure as the potential overspending of
an agency’s appropriations, if corrective action is not taken.
71 Government of the District of Columbia, Office of the Chief Financial Officer, Testimony of Gordon McDonald,
Deputy Chief Financial Officer, before the Committee of the Whole, Council of the District of Columbia, Washington,
D.C., February 19, 2010, http://newsroom.dc.gov/file.aspx/release/19280/021910%20DCFO%20Testimony%20-
%20%20FY%202010%20Spending%20Pressures.pdf.
72Ibid. p. 3.
Congressional Research Service
37
Financial Services and General Government (FSGG): FY2011 Appropriations
as submitted to Congress on July 1, 2010. The Senate bill continues provisions prohibiting the use
of federal funds for needle exchange, medical marijuana, and restricting the use of federal funds
for abortions except in instances of incest, rape, or a threat to the woman’s health.
Independent Agencies
In FY2011 a collection of more than two dozen independent entities are slated to receive funding
through the FSGG appropriations bill.
Table 8 lists appropriations as enacted for FY2010, as requested by the President, and as
recommended by the Senate Committee on Appropriations for FY2011.
Table 8. Independent Agencies Appropriations, FY2010-FY2011
(in millions of dollars)
FY2010
FY2011
FY2011
FY2011
FY2011
Agency
Enacted
Request
House
Senate
Enacted
Administrative Conference of the United
$2 $3 $3
States
Christopher Columbus Fel owship
1 0 1
Foundation
Commodity Futures Trading
169 261 286
Commissiona
Consumer Product Safety Commission
118 119 119
Election Assistance Commission
93 17 17
Federal Communications Commissionb
— 1 —
Federal Deposit Insurance Corporation:
38 48 48
Office of Inspector General (by transfer)c
Federal Election Commission
67 69 71
Federal Labor Relations Authority
25 26 26
Federal Trade Commissiond
169 199 197
General Services Administration
653 675 647
Harry S. Truman Scholarship Foundation
1 0 1
Merit Systems Protection Board
43 44 44
Morris K. Udall Foundation
6 6 7
National Archives and Records
457 446 433
Administration
National Credit Union Administration
1 2 2
Office of Government Ethics
14 14 14
Office of Personnel Management (total)
20,378 20,834 20,836
Salaries and Expenses
103 96 96
Government Payments for Annuitants,
9,814 10,467 10,467
Congressional Research Service
38
Financial Services and General Government (FSGG): FY2011 Appropriations
FY2010
FY2011
FY2011
FY2011
FY2011
Agency
Enacted
Request
House
Senate
Enacted
Employee Health Benefits
Government Payments for Annuitants,
48 50 50
Employee Life Insurance
Payment to Civil Service Retirement and
10,276 10,076
10,076
Disability Fund
Office of Special Counsel
18 19 19
Postal Regulatory Commission
14 14 14
Privacy and Civil Liberties Oversight
2 2 2
Board
Securities and Exchange Commissione
1,095 1,258 1,300
Selective Service System
24 25 25
Smal Business Administration
824 994 1,103
United States Postal Service
363 348 348
United States Tax Court
49 52 55
Total: Independent Agencies
$24,585 $25,430
$25,571
Sources: Consolidated Appropriations Act, FY2010 (Div. C, P.L. 111-117), Appendix, Budget of the U.S.
Government, FY2011, H.Rept. 111-181, and S.Rept. 111-238.
Notes: All figures are rounded, and columns also may not equal the total due to rounding.
a. The CFTC is funded in the House through the Agriculture appropriations bill and in the Senate through
the Financial Services and General Government bill. FY2011 Request includes $45 million in funds
contingent on financial reform legislation.
b. Amount represents only direct appropriations and does not include fees col ected that are also used to
fund agency activities.
c. Budget authority transferred to FDIC is not included in total FSGG appropriations; it is counted as part of
the budget authority in the appropriation account from which it came.
d. Amount represents only direct appropriations and does not include fees col ected that are also used to
fund agency activities.
e. Amounts listed in Table 8 for the SEC include fees collected by the agency. This is not consistent with
the treatment of fees for the FCC and the FTC, but it fol ows the source documents. FY2011 request also
includes $24 million in funds contingent on financial reform legislation.
Commodities Futures Trading Commission73
The Commodities Futures Trading Commission (CFTC) is the independent regulatory agency
charged with oversight of derivatives markets. The CFTC’s functions include oversight of trading
on the futures exchanges, registration and supervision of futures industry personnel, prevention of
fraud and price manipulation, and investor protection. Although most futures trading is now
related to financial variables (interest rates, currency prices, and stock indexes), congressional
oversight remains vested in the agriculture committees because of the market’s historical origins
as an adjunct to agricultural trade. Appropriations for the CFTC are under the jurisdiction of the
73 This section was written by Mark Jickling, Specialist in Financial Economics, Government and Finance Division.
Congressional Research Service
39
Financial Services and General Government (FSGG): FY2011 Appropriations
Agriculture Subcommittee in the House, and the Financial Services and General Government
(FSGG) Subcommittee in the Senate. In the Consolidated Appropriations Act, 2008, the CFTC
was funded in Division A, Agriculture and Related Agencies. In the Omnibus Appropriations Act,
2009, the CFTC was funded in Division A, Financial Services and General Government. For
FY2010, CFTC was provided $169 million through the Agriculture appropriations division of
P.L. 111-80. For FY2011, the President has requested $261million, including $45 million in
contingent funding tied to enactment of financial regulatory reform. The Senate Committee on
Appropriations has recommended $286 million, which is $117 million more than FY2010 enacted
amounts and $25 million more than the President requested. The committee wrote that it
“supports the need for significantly increased resources for the CFTC to ensure appropriate
oversight of the futures markets.”74
Consumer Product Safety Commission75
The Consumer Product Safety Commission (CPSC) is an independent federal regulatory agency
whose primary responsibilities include protecting the public against unreasonable risks of injury
associated with consumer products; developing uniform safety standards for consumer products
and minimizing conflicting state and local regulations; and promoting research and investigation
into the causes and prevention of product-related deaths, illnesses, and injuries.
For FY2011, the Administration has requested, and the Senate Committee on Appropriations has
recommended, $118.6 million in funding for the CPSC, $0.4 million more than Congress
provided the agency for the FY2010. The relatively small increase comes after several years of
quite substantial growth in CPSC funding. As recently as FY2007, the largest appropriation
CPSC ever received (in nominal dollars) was $62.3 million. In fiscal years 2008 through 2010,
appropriators provided significantly increased funding for the agency to support major reforms
initiated by passage of the Consumer Product Safety Improvement Act of 2008 (CPSIA). The
110th Congress enacted the CPSIA largely in response to a series of highly publicized recalls of
imported products, particularly unsafe toys and other items manufactured for children.
Election Assistance Commission76
The Election Assistance Commission (EAC) was established under the Help America Vote Act of
2002 (HAVA; P.L. 107-252). The commission provides grant funding to the states to meet the
requirements of the act and election reform programs, provides for testing and certification of
voting machines, studies election issues, and promulgates voluntary guidelines for voting systems
standards and issues voluntary guidance with respect to the act’s requirements. The commission
was not given express rule-making authority under HAVA, although the law transferred
responsibilities for the National Voter Registration Act (NVRA; P.L. 103-31) from the Federal
Election Commission to the EAC; these responsibilities include NVRA rule-making authority.
The Department of Justice is charged with enforcement responsibility.
74 S.Rept. 111-238, p. 81.
75 This section was written by Garrett Hatch, Analyst in American National Government, Government and Finance
Division.
76 This section was written by Kevin Coleman, Analyst in American National Government, Government and Finance
Division.
Congressional Research Service
40
Financial Services and General Government (FSGG): FY2011 Appropriations
For FY2011, the President’s budget request includes $16.8 million for the EAC, of which $3.25
million is to be transferred to the National Institute of Standards and Technology (NIST). It
includes Election Assistance Commission “election reform grants” among programs to be
terminated, and therefore provides no funding for requirements payments, research and pilot
program grants, the Help America Vote Act college program (to recruit pollworkers), and the
high school mock election program. As justification, it points out that about $1 billion in EAC
payments to states remains unspent and claims that states have accrued significant interest on
previously appropriated payments. (It also includes $5.26 million for protection and advocacy
programs and $12.15 million for accessibility payments administered by the Department of
Health and Human Services.) The Senate Appropriations Committee, in its report to accompany
S. 3677 (S.Rept. 111-238), recommends $16.8 million for the EAC, of which $3.25 million must
be transferred to NIST. These amounts are the same as the budget request. The committee
recommends no additional funding for election reform programs, also consistent with the budget
request.
For FY2010, the President’s budget request included $16.5 million for the EAC and $106 million
for requirements payments to the states and other election reform programs. The proposed
Financial Services and General Appropriations Act, 2010 (H.R. 3170), which passed the House
on July 20, 2009, called for $17.9 million for the EAC, of which $3.5 million would have been
transferred to NIST for election reform activities, $750,000 would have been for the Help
America Vote College Program, and $300,000 would have been for a competitive grant program
to support student and parent mock elections. That amount was $1.4 million more than the budget
request. The bill also would have provided $100 million for requirements payments to the states,
$4 million for research grants to support voting technology improvements, and $2 million to
continue a pilot program to provide grants to states and localities for pre-election logic and
accuracy testing and post-election voting systems verification. The Senate companion bill (S.
1432) called for $16.5 million for the EAC, of which $3.3 would have been transferred to NIST,
and $52 million would have been for requirements payments to the states.
The conference report to H.R. 3288 (H.Rept. 111-366) included $17.9 million for the EAC, of
which $3.5 million was to be transferred to NIST, $750,000 was for the Help America Vote
College Program, and $300,000 was for a competitive grant program to support student and
parent mock elections. It also included $75 million for election reform programs, with $70
million of that amount for requirements payments, $3 million for research grants to improve
voting technology with respect to disability access, and $2 million for grants to states and
localities for voting system logic and accuracy testing.
Federal Communications Commission77
The Federal Communications Commission (FCC), created in 1934, is an independent agency
charged with regulating interstate and international communications by radio, television, wire,
satellite, and cable. The FCC is also charged with promoting the safety of life and property
through wire and radio communications. The mandate of the FCC under the Communications Act
is to make available to all people of the United States a rapid, efficient, nationwide, and
worldwide wire and radio communications service. The FCC performs five major functions to
fulfill this charge: spectrum allocation, creating rules to promote fair competition and protect
77 This section was written by Patricia Moloney Figliola, Specialist in Internet and Telecommunications Policy,
Resources, Science, and Industry Division.
Congressional Research Service
41
Financial Services and General Government (FSGG): FY2011 Appropriations
consumers where required by market conditions, authorization of service, enhancement of public
safety and homeland security, and enforcement. The FCC obtains the majority—and sometimes
all—of its funding through the collection of regulatory fees pursuant to Title I, Section 9, of the
Communications Act of 1934; therefore, its direct appropriation is considerably less than its
overall budget; sometimes, there is no direct appropriation.
For FY2011, FCC is requesting a budget of $352.5 million with all but $1 million to be collected
through assessment of regulatory fees. The requested budget includes funding to (1) support the
Commission’s cyber-security role; (2) implement the National Broadband Plan; (3) overhaul the
Commission’s data systems and processes; and (4) modernize and reform the FCC. The Senate
Committee on Appropriations recommends $355.5 million for the FCC for FY2011, with all of it
to be collected through regulatory fees.
Federal Deposit Insurance Corporation: Office of the Inspector General78
The FDIC’s Office of the Inspector General is funded from deposit insurance funds; the OIG has
no direct support from federal taxpayers. Before FY1998, the amount was approved by the FDIC
Board of Directors; the amount is now directly appropriated (through a transfer) to ensure the
independence of the OIG.
The Consolidated Appropriations Act for FY2010 (P.L. 111-117) provided for a FY2010 budget
of $37.9 million. The President requested $47.9 million for FY2011, an increase of 26% from the
FY2010 appropriation. The Senate Committee on Appropriations recommended $47.9 million for
FY2011.
Federal Election Commission79
The FEC administers, and enforces civil compliance with, the Federal Election Campaign Act
(FECA) and campaign finance regulations. The agency does so through educational outreach,
rulemaking, and litigation, and by issuing advisory opinions.80 The FEC also administers the
presidential public financing system.81 In recent years, FEC appropriations have generally been
noncontroversial and subject to limited debate in committee or on the House and Senate floors.82
For FY2011, the President requested $68.8 million for the FEC (of which no more than $5,000 is
to be for “reception and representation,” language that has long been included in FEC
appropriations provisions). The President’s budget submission does not discuss the FEC request
in detail, but the Commission’s budget justification document, submitted concurrently to the
Office of Management and Budget and Congress, notes the agency’s heavy reliance on
78 This section was written by Pauline Smale, Economic Analyst, Government and Finance Division.
79 This section was written by Sam Garrett, Analyst in American National Government, Government and Finance
Division.
80 FECA is 2 U.S.C. §431 et seq. The FEC can refer criminal cases to the Justice Department.
81 The Treasury Department and IRS also have administrative responsibilities for presidential public financing.
However, Congress does not appropriate funds for the program. For additional discussion, see CRS Report RL34534,
Public Financing of Presidential Campaigns: Overview and Analysis, by R. Sam Garrett.
82 For additional discussion of current campaign finance issues, see CRS Report R40091, Campaign Finance: Potential
Legislative and Policy Issues for the 111th Congress, by R. Sam Garrett.
Congressional Research Service
42
Financial Services and General Government (FSGG): FY2011 Appropriations
information technology.83 In 2009, the Commission initiated an effort to improve its website to
provide greater public access to campaign finance data. In addition to supporting those continuing
efforts, requested appropriations would fund hardware and software upgrades. The budget request
would also fund personnel salaries and benefits, which are typically a major component of the
agency’s budget.84
The Senate Appropriations Committee recommended an FY2011 appropriation of $70.8 million,
$2 million more than the President’s requested amount. The committee noted that the additional
funds, if appropriated, should be used to support additional technology and personnel expenses.85
Federal Trade Commission86
The Federal Trade Commission (FTC) is an independent agency. Its mission is to protect
consumers and enhance competition by eliminating unfair or deceptive acts or practices in the
marketing of goods and services and by ensuring that consumer markets function competitively.
The Administration has requested a total budget authority of $314 million for the FTC for
FY2011. More specifically, it has recommended $96 million would be derived from Hart-Scott-
Rodino pre-merger filing fees, $19 million from Do-Not-Call fees, and the remaining
amount―$199 million—would be provided by a direct appropriation. The Senate Committee on
Appropriations has recommended new budget authority of $314 million for the FTC, with $96
million to come from filing fees, $21 million to come from Do-Not-Call fees, and the remaining
$197 million to be provided by a direct appropriation.
P.L. 111-117 provided the FTC with $291.7 million for FY2010, of which $110 million will come
from pre-merger filing fees, $19 million from Do-Not-Call fees, and $162.7 from a direct
appropriation.
General Services Administration87
The General Services Administration (GSA) 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. Typically, only about 1%
of GSA’s total budget is funded by direct appropriations.
For FY2011, the President has requested $85.1 million for government-wide policy, and $72.2
million for operating expenses, $62.9 million for the Office of Inspector General (OIG), $3.9
83 Federal Election Commission, FY2011 Congressional Budget Justification, Washington, DC, February 1, 2010, pp.
6-7, http://www.fec.gov/pages/budget/fy2011/FY_2011_CJ_2_1_10_final.pdf.
84 Ibid., pp. 8-9.
85 U.S. Congress, Senate Committee on Appropriations, Financial Services and General Government Appropriations
Bill, 2011, report to accompany S. 3677, 111th Cong., 2nd sess., July 29, 2010, Report 111-238 (Washington: GPO,
2010), p. 86.
86 This section was written by Garrett Hatch, Analyst in American National Government, Government and Finance
Division.
87 This section was written by Garrett Hatch, Analyst in American National Government, Government and Finance
Division.
Congressional Research Service
43
Financial Services and General Government (FSGG): FY2011 Appropriations
million for allowances and office staff for former presidents, and $36.8 million to be deposited
into the Federal Citizen Information Center Fund (FCICF). In addition, the President’s request
includes $25 million for the federal acquisition workforce initiatives fund. The Senate Committee
on Appropriations has recommended $77.6 million for government-wide policy, $72.2 million for
operating expenses, $61.0 million for the OIG, $3.9 million for office staff for former presidents,
$36.8 million for the FCICF, and $17.0 million for the federal acquisition workforce initiatives
fund.
For FY2010, P.L. 111-117 provided $59.7 million for government-wide policy, $72.9 million for
operating expenses, $59 million for the OIG, $3.8 million for former presidents, and $36.5 million
for the FCICF.
Federal Buildings Fund
Most GSA spending is financed through the Federal Buildings Fund (FBF). Rent assessments
from agencies paid into the FBF provide the principal source of its funding. Congress may also
provide direct funding into the FBF. Congress directs the GSA as to the allocation or limitation on
spending of funds from the FBF in provisions found accompanying GSA’s annual appropriations.
For FY2011, the President has requested that an additional amount of $292 million be deposited
in the FBF, and that $676 million of FBF revenues be made available for construction and
acquisition of facilities. The Senate Committee on Appropriations has recommended that an
additional amount of $297 million be deposited into the FBF, and that $768 million be made
available for construction and acquisition of facilities. P.L. 111-117 provided an additional $538
million for the FBF and makes $894 million available for construction and acquisition of facilities
for FY2010.
Electronic Government Fund88
Originally unveiled in advance of the President’s proposed budget for FY2002, the Electronic
Government Fund (E-Government Fund) and its appropriation have been a somewhat contentious
matter between the President and Congress. The E-Government Fund was created to support
interagency e-government initiatives approved by the Director of OMB.89 The fund and the
projects it sustains historically have been subject to close scrutiny by, and accountability to,
congressional appropriators. The President’s initial $20 million request for FY2002 was cut to $5
million, which was the amount provided for FY2003, as well. Funding thereafter was held at $3
million for FY2004, FY2005, FY2006, FY2007, and FY2008. In FY2009, President George W.
Bush requested $5 million for the E-Government Fund. Congress, however, provided no
appropriation to the E-Government Fund in FY2009.90
88 This section was written by Wendy Ginsberg, Analyst in American National Government, Government and Finance
Division.
89 Pursuant to 44 U.S.C. § 3604, the E-Government Fund projects “may include efforts to make Federal Government
information and services more readily available to members of the public (including individuals, businesses, grantees,
and State and local governments); make it easier for the public to apply for benefits, receive services, pursue business
opportunities, submit information, and otherwise conduct transactions with the Federal Government; and enable
Federal agencies to take advantage of information technology in sharing information and conducting transactions with
each other and with State and local governments.”
90 The E-Gov Fund, in previous years, was not spending its full appropriation. For FY2009, therefore, House
(continued...)
Congressional Research Service
44
Financial Services and General Government (FSGG): FY2011 Appropriations
For FY2010, President Obama requested $33 million—$28 million more than former President
Bush’s FY2009 request, and $33 million more than the Omnibus Appropriations Act, 2009, which
did not appropriate any funding to the E-Government Fund.
House appropriators recommended the same funding level as requested by President Obama for
FY2010. In accompanying report language, House appropriators recommended that GSA “submit
a detailed expenditure plan prior to obligation of funds under [the E-Government Fund] account.
The plan should describe projects selected, and the budget, timeline, objectives and expected
benefits for each project.”91
Senate appropriators recommended $35 million for the E-Government Fund, $2 million more
than both the President and House appropriators. In detailed report language, the Senate
appropriators included the following:
The Committee strongly supports the activities of the Federal [Chief Information Officer]
Council related to ‘cloud computing’ and encourage the council to continue to assess and
address the escalating costs, inefficiencies, and stove-piping related to the management of
Federal data.92
P.L. 111-117 provided $34 million for the E-Government Fund for FY2010, splitting the
difference between the House and Senate recommendations.93 The appropriation was $1 million
more than was requested by President Obama and recommended by the House. The conference
report did not include Senate language that recommended funds be directed toward particular
projects. The law did, however, include language similar to the House recommendation that
allowed funds to “be transferred to other Federal agencies … but only after a spending plan and
explanation for each project has been submitted to the Committees on Appropriations.”94
President Obama’s FY2011 budget request included $35 million for the E-Government Fund and
“support of interagency electronic government or E-Gov initiatives, i.e., projects that will use the
Internet or other electronic methods to provide individuals, businesses, and other government
agencies with simpler and more timely access to Federal information, benefits, services, and
business opportunities.”95 The budget appendix said the funding would be used to “further the
Administration’s implementation of the Government Paperwork Elimination Act (GPEA) of
1998, which calls upon agencies to provide the public with optional use and acceptance of
electronic information, service, and signatures, when practicable.”96 The President’s FY2011
recommendation also included language similar to that placed in P.L. 111-117, which prohibited
the transfer of any funding to specific agency projects “until 10 days after a proposed spending
(...continued)
appropriators recommended no additional funding for the account, and Senate appropriators recommended $1 million
for the fund. The consolidated continuing appropriations act temporarily returned the E-Gov Fund to a $3 million
appropriation for FY2009. The omnibus budget, however, eliminated all FY2009 E-Gov Fund appropriations. The E-
Gov Fund received no FY2009 appropriations.
91 H.Rept. 111-202, p. 72.
92 S.Rept. 111-43, p. 95.
93 Ibid. p. 919.
94 Ibid.
95 The Office of Management and Budget, The Budget for FY2011: Appendix, Washington , DC, February 2010, p.
1166, http://www.whitehouse.gov/omb/budget/fy2011/assets/appendix.pdf.
96 Ibid.
Congressional Research Service
45
Financial Services and General Government (FSGG): FY2011 Appropriations
plan and explanation for each project to be undertaken has been submitted to the Committees on
Appropriations of the House of Representatives and the Senate.”97
Senate appropriators recommended $20 million for the FY2011 E-Government Fund, $14 million
less than was appropriated in 2010 and $15 million less than the President requested for 2011.98
In report language, Senate appropriators said they were
supportive of the concepts contemplated in the e-gov account … namely, moving agencies to
cloud-computing through pilots and development of shared services, improving [f]ederal IT
efficiency and effectiveness through an efficient [f]ederal workforce, and improving
Government-public interactions through improving transparency and participation. However,
due to funding constraints as well as lack of detail and clearly defined information regarding
spending requests, the Committee reduces funding for the E-Gov programs.99
The report language also stated the appropriation committee’s concern “that the electronic
government initiative does not provide sufficient guidance regarding consolidation of [f]ederal
agency data centers into data facilities with multiple [f]ederal tenants.” The report requests that
GSA report back to the committee, within 120 days of enactment of the appropriations legislation,
on the “feasibility” of such a consolidation.
Independent Agencies Related to Personnel Management
The FSGG appropriations bill includes funding for four agencies with personnel management
functions: the Federal Labor Relations Authority (FLRA), the Merit Systems Protection Board
(MSPB), the Office of Personnel Management (OPM), and the Office of Special Counsel (OSC).
Table 9 shows appropriations as enacted for FY2010, amounts requested by the President for
FY2011, and amounts recommended by the Senate committee for FY2011, for each of these
agencies.
Table 9. Independent Agencies Related to Personnel Management Appropriations,
FY2010-FY2011
(in millions of dollars)
FY2010
FY2011
FY2011
FY2011
FY2011
Agency
Enacted
Request
House
Senate
Enacted
Federal Labor Relations Authority
$24.8 $26.0
$26.0
Merit Systems Protection Board
42.9 44.2
44.2
(total)
Salaries and Expenses
40.3 41.6
41.6
Limitation on Administrative
2.6 2.6
2.6
Expenses
Office of Personnel Management
20,378.1 20,833.7
20,836.4
(total)
97 Ibid.
98 S.Rept. 111-238, p. 96.
99 Ibid., p. 97.
Congressional Research Service
46
Financial Services and General Government (FSGG): FY2011 Appropriations
FY2010
FY2011
FY2011
FY2011
FY2011
Agency
Enacted
Request
House
Senate
Enacted
Salaries and Expenses
103.0 96.4
96.4
Limitation on Administrative
112.7 121.7
121.7
Expenses
Office of Inspector General (salaries
3.1 2.1
3.3
and expenses)
Office of Inspector General
21.2 20.4
21.9
(limitation on administrative
expenses)
Government Payments for
9,814.0 10,467.0
10,467.0
Annuitants, Employee Health
Benefitsa
Government Payments for
48.0 50.0
50.0
Annuitants, Employee Life
Insurancea
Payment to Civil Service Retirement
10,276.0 10,076.0
10,076.0
and Disability Funda
Office of Special Counsel
$18.5 $19.5
$19.5
Sources: Consolidated Appropriations Act, FY2010 (Div. C, P.L. 111-117), and FY2011 Budget, Appendix, pp.
1272, 1284-1285, 1187-1190, and 1311, and S.Rept. 111-238.
Note: All figures are rounded, and columns also may not equal the total due to rounding.
a. The annual appropriations act provides “such sums as may be necessary” for the health benefits, life
insurance, and retirement accounts. The Office of Personnel Management’s Congressional Budget Justification
for FY2011 states the FY2011 amounts for these accounts as $10,118.0 million (health benefits), $48
million (life insurance), and $10,468.0 million (retirement) at pp. 143-145. The FY2011 Budget Appendix, at
pp. 1189-1190, states the same amounts as the budget justification, except for $10,550.0 million
(retirement). S.Rept. 111-238, at p. 171, states the amounts as requested by the President and
recommended by the committee as the same: $10,467.0 million (health benefits), $50 million (life
insurance), and $10,076.0 million (retirement) and these are the amounts that are shown in the table.
Federal Labor Relations Authority100
The FLRA is an independent federal agency that administers and enforces Title VII of the Civil
Service Reform Act of 1978. Title VII gives federal employees the right to join or form a union
and to bargain collectively over the terms and conditions of employment. Employees also have
the right not to join a union that represents employees in their bargaining unit. The statute
excludes specific agencies (e.g., the Federal Bureau of Investigation and the Central Intelligence
Agency) and gives the President the authority to exclude other agencies for reasons of national
security.
The FLRA consists of a three-member authority, the Office of General Counsel, and the Federal
Services Impasses Panel (FSIP). The authority resolves disputes over the composition of
bargaining units, charges of unfair labor practices, objections to representation elections, and
other matters. The General Counsel’s office conducts representation elections, investigates
100 This section was written by Gerald Mayer, Analyst in Public Finance, Domestic Social Policy Division and Barbara
L. Schwemle, Analyst in American National Government, Government and Finance Division.
Congressional Research Service
47
Financial Services and General Government (FSGG): FY2011 Appropriations
charges of unfair labor practices, and manages the FLRA’s regional offices. The FSIP resolves
labor negotiation impasses between federal agencies and labor organizations.
The President’s FY2011 budget proposed an appropriation of $26.0 million for the FLRA, about
$1.2 million or 5.0% above the agency’s FY2010 appropriation of $24.8 million. The agency’s
full-time equivalent (FTE) employment level is estimated to be 146 for FY2011, 5 more than the
estimated FTE level of 141 for FY2010.
S. 3677, as reported, recommended the same funding as the President requested. The report
accompanying the bill states that the committee is pleased with FLRA’s efforts to reduce the case
backlog and its planned initiative for electronic filing of public records.
Merit Systems Protection Board101
The President’s budget requested an FY2011 appropriation of $44.2 million, including $41.6
million for Merit Systems Protection Board (MSPB) salaries and expenses, an amount that is
almost $1.3 million or 3.2% above the FY2010 funding for salaries and expenses ($40.3 million).
The agency’s FTE employment level is estimated to be 211 for FY2011, the same as that
estimated for FY2010.
Unlike previous submissions in the Budget Appendix document prior to FY2010, MSPB’s request
for FY2011 did not include data on the actual number of decisions made and the projected
number of decisions anticipated to be made by the agency. MSPB’s authorization expired on
September 30, 2007.102 The 110th Congress considered, but did not act upon, legislation (S. 2057,
H.R. 3551) that would have reauthorized the MSPB for three years and enhanced the agency’s
reporting requirements. Legislation to reauthorize the agency has not yet been introduced in the
111th Congress.
S. 3677, as reported, recommended the same funding as the President requested.
Office of Personnel Management103
The President’s budget requested an FY2011 appropriation of $20.833 billion, an increase of
$455 million over FY2010 appropriations. The request included $96.4 million for salaries and
expenses (S&E) for OPM, an amount that is $6.5 million or 7% less than the FY2010 funding of
$102.9 million. This amount includes funding of more than $6 million for the Enterprise Human
Resources Integration (HRI) project and more than $1.4 million for the Human Resources Line of
Business (HRLOB) project. The agency’s FTE employment level is estimated to be 5,018 for
FY2011, 166 more than the FTE level of 4,852 for FY2010.
OPM’s budget submission states that the budget “will permit OPM to pursue long-term human
resources strategies that deliver results and enhance the values of the civil service,” and includes
101 This section was written by Barbara L. Schwemle, Analyst in American National Government, Government and
Finance Division.
102 5 U.S.C. §5509.
103 This section was written by Barbara L. Schwemle, Analyst in American National Government, Government and
Finance Division.
Congressional Research Service
48
Financial Services and General Government (FSGG): FY2011 Appropriations
“funding to maintain timely processing of retirement claims and provide services to
annuitants.”104 In addition, it allows the Office of Inspector General to “continue to develop its
prescription drug audit program, which includes audits of pharmacy benefit managers,” and to
continue the Federal Employees’ Health Benefits Program (FEHBP) data warehouse initiative
that “streamlines and enhances the various administrative and analytical procedures involved in
the oversight of FEHBP.”105
S. 3677, as reported, recommended the same funding as the President requested, except for the
OIG salaries and expenses ($3.3 million; $1.2 million or 57.1% more), and the OIG transfers
from trust funds ($21.9 million; $1.5 million or 7.3% more). The report accompanying the bill
includes a directive related to the inappropriate use of temporary hiring authority by executive
agencies. The report language would require OPM
to report on options and recommendations to remedy the inequity no later than 90 days after
the act’s enactment. The report will identify agencies and types of positions where
continuous and sustained inappropriate use of temporary hiring authority is occurring and
include options to provide competitive status to employees performing regular and recurring
work of a permanent nature under a series of temporary appointments and actions that can be
taken to ensure that federal agencies use appropriate hiring authorities in the future.106
The House Subcommittee on Financial Services and General Government (FSGG) marked up the
House version of the FSGG bill on July 29, 2010. A brief summary table is the only information
that is available to date.
Office of Special Counsel107
The President’s budget requested an FY2011 appropriation of $19.5 million for the Office of
Special Counsel (OSC), an amount that is just under $1 million more or 5.4% above the FY2010
funding of $18.5 million. The agency’s FTE employment level is estimated to be 111 for FY2011,
the same as that estimated for FY2010. The agency’s budget submission projected a continued
increase in the number of Hatch Act, prohibited personnel practice, and disclosure cases received.
According to OSC, it will continue to focus on improved performance in the timely handling of
cases, the quality of agency products and decisions, and fulfilling responsibilities for education
and outreach.
OSC’s authorization expired on September 30, 2007.108 The 110th Congress considered, but did
not act upon legislation (S. 2057, H.R. 3551) that would have reauthorized the agency for three
years and included provisions to enhance OSC’s reporting requirements. Legislation to
reauthorize the agency has not yet been introduced in the 111th Congress.
S. 3677, as reported, recommended the same funding as the President requested. In the report
accompanying the bill, the committee strongly urges the agency to work with organizations that
104 FY2011 Budget, Appendix, pp. 1188-1189.
105 Ibid.
106 S.Rept. 111-238, pp. 110-111.
107 This section was written by Barbara L. Schwemle, Analyst in American National Government, Government and
Finance Division.
108 5 U.S.C. §5509.
Congressional Research Service
49
Financial Services and General Government (FSGG): FY2011 Appropriations
advocate for whistleblowers “to promote the highest level of confidence in the Whistleblower
Protection Act and the OSC.”109
National Archives and Records Administration110
In his FY2011 budget, President Obama requested $348.7 million for general National Archives
and Records Administration (NARA) operating expenses,111 $8.9 million more than the $339.8
million both requested by the President and appropriated to the National Archives in FY2010.
Unlike previous budget requests, the FY2011 request did not include a more detailed breakdown
of how portions of the requested operating expenses should be allocated. According to the
National Archives, some of the increase in operating expenses would be used to hire “57 new
full-time staff members to support a variety of programs.”112
In addition to the operating expenses, the President’s budget recommendation included $4.3
million for the NARA OIG, $0.2 million more than the FY2010 appropriation. The President also
recommended $85.5 million for “development of the electronic records archives … a system that
will allow NARA to manage records electronically and ensure the preservation of and access to
Government electronic records.”113 The President’s recommendation is the same amount
appropriated to the electronic records archive in FY2010. According to the President’s budget
appendix, the “[r]equested funding for 2011 will enhance the functionality to handle restricted
and classified information, extend preservation capabilities, expand search capabilities,
implement more efficient storage mechanisms, and support ongoing maintenance and operations
of deployed systems.”114 $61.8 million of the electronic records archives funding is to remain
available until September 30, 2013.
In his FY2011 budget, President Obama requested $10 million for the National Historical
Publications and Records Commission and Grants Program (NHPRC), which “provides funding
for grants to preserve and publish non-Federal records that document American history.”115 In
FY2010, $13 million, or $3 million dollars more than President Obama is requesting for FY2011,
was appropriated to the NHPRC. President George W. Bush had requested no funding for the
NHPRC for the previous three fiscal years, although Congress appropriated $7 million for
FY2007, more than $9 million for FY2008, and more than $11 million in FY2009.
The President’s FY2011 request recommends $11.8 million “[f]or the repair, alteration, and
improvement of archives facilities, and to provide adequate storage and holding.”116 The FY2011
request is $15.7 million less than the FY2010 appropriation of $27.5 million. The budget request
appendix specifically states that the “2011 [repairs and restoration] Budget provides funding for
the National Archives and Records Administration’s Capital Improvement Plan. The top priority
109 S.Rept. 111-238, p. 114.
110 This section was written by Wendy Ginsberg, Analyst in American National Government, Government and Finance
Division.
111 The Budget for 2011: Appendix, p. 1288.
112 The National Archives and Records Administration, “President Requests $460M for National Archives FY11
Budget,” press release, February 1, 2010, http://www.archives.gov/press/press-releases/2010/nr10-55.html.
113 The Budget for 2011: Appendix, p. 1288-1289.
114 Ibid., p. 1289.
115 Ibid., p. 1290.
116 Ibid., p. 1289.
Congressional Research Service
50
Financial Services and General Government (FSGG): FY2011 Appropriations
of the plan is the renovation project for the National Archives Experience.”117 Archives facilities
also include the Presidential Libraries. In addition to the repairs and restoration appropriation, the
National Archives Trust Fund Board may receive and solicit gifts and bequests and other financial
assistance for “the benefit of NARA activities.”118 For FY2011, the budget appendix said the trust
fund received $4 million from the George H.W. Bush Library Foundation and $7.2 million from
the Clinton Foundation to help “offset a portion of each Library’s operational costs.”119
Senate appropriators recommended the same funding level as requested by the President ($348.7
million).120 The Senate report accompanying the appropriations bill said that the appropriation
recommendation included funds to “establish and staff the National Declassification Center in
accordance with Executive Order 13526.”121 Within the operating expenses, the Senate
Committee recommended a $3 million appropriation for the Office of Government Information
Services (OGIS), an entity created within the Open Government Act of 2007 to address agency
compliance with the Freedom of Information Act (FOIA).122 Senate report language said that
FY2012 appropriations should “specifically address the resource needs of OGIS.”123 OGIS began
operations in September 2009 and was appropriated $1 million for FY2009 as a line-item in the
FSGG appropriation legislation.124 The FSGG 2010 appropriation provided no line-item for
OGIS, but the office received $1.4 million from the overall NARA appropriation.
Senate appropriators also recommended $4.3 million for the OIG, the same amount recommended
by the President. The accompanying Senate report said that the committee supported a “distinct
account for the OIG in order to clearly identify the resources necessary to staff and operate the
expanding mission-critical oversight and accountability functions performed by the OIG to ensure
responsible NARA stewardship over public records.”125 The committee report states that the
likely future acquisition of the George W. Bush presidential library and the establishment of both
OGIS and the Controlled Unclassified Information Office will increase the OIG’s audit and
investigative responsibilities. According to the Senate report, “[t]he increase funds will support an
additional auditor to help increase audit coverage.”126
Senate appropriators recommended $72 million for the Electronic Records Archive (ERA), $13.5
million less than was enacted for FY2010 and also $13.5 million less than the President’s FY2011
request. In detailed report language, the committee expressed its support of ERA, calling the
project “of utmost importance.” The report language, however, requests NARA “identify and
clearly explain the outcomes that NARA expect from the funding made available.”127 The report
stated that NARA has historically “not clearly identified the specific functions to be delivered
117 Ibid.
118 Ibid, p. 1291
119 Ibid., p. 1291.
120 S.Rept. 111-238, p. 103.
121 Ibid.
122 Ibid.
123 Ibid.
124 P.L. 111-8.
125 S.Rept. 111-238, p. 104.
126 Ibid.
127 Ibid.
Congressional Research Service
51
Financial Services and General Government (FSGG): FY2011 Appropriations
through specific spending,” and such actions have “hampered the Committee’s ability to assess
the extent of progress on the ERA that should be expected as a result of the spending.”128
Senate appropriators recommended $10 million for the NHPRC and $11.8 million for repairs and
restoration. Both of these amounts were identical to the President’s budget request. Within the
repairs and restoration appropriation, the committee recommended $6.8 million for “base
requirements” and $5 million for the “top priority project in the Capitol Improvements Plan, the
National Archive Experience, Phase II.”129
National Credit Union Administration130
The NCUA is an independent federal agency funded entirely by the credit unions that the agency
charters, insures, and regulates. Two entities managed by the NCUA are addressed by the
Financial Services and General Government bill. One of these, the Community Development
Revolving Loan Fund (CDRLF), makes low-interest loans and technical assistance grants to low-
income credit unions. Earnings generated from the CDRLF are available to fund technical
assistance grants in addition to funds provided for specifically in appropriations. The
Consolidated Appropriations Act for FY2010 (P.L. 111-117) provided $1.25 million, for technical
assistance grants, for FY2010. The President’s budget proposal includes $2 million for FY2011.
The Senate Committee on Appropriations also recommended $2 million for FY2011.
The other entity managed by the NCUA, the Central Liquidity Facility (CLF), provides a source
of seasonal and emergency liquidity for credit unions. Provisions in the appropriations bill set a
borrowing limit for the CLF each fiscal year. To provide the NCUA with increased flexibility to
assist with credit unions’ financial liquidity during the recent economic downturn, the limit for
FY2009, was set by P.L. 111-8, at the maximum level authorized by the Federal Credit Union Act
(12 U.S.C. 1795f(a)(4)(A)). The limit is 12 times the subscribed capital stock and surplus of the
CLF. This increase is equivalent to a cap of about $41 billion. P.L. 111-117 continued to provide
the CLF with the ability to lend up to the maximum level provided for by the Federal Credit
Union Act for FY2010. The President’s budget proposal would extend the authority to lend up to
the maximum level for FY2011.The administrative expenses of the CLF were limited to $1.25
million in FY2009, this limit was also imposed on FY2010 expenses, and $1.25 million is the
limit the President has proposed for FY2011. The Senate Appropriations Committee
recommendations would also extend the authority to lend up to the maximum level for FY2011
and would limit CLF administrative expenses for FY2011 to $1.25 million.
Privacy and Civil Liberties Oversight Board131
Originally established in 2004 by the Intelligence Reform and Terrorism Prevention Act as an
agency within the EOP,132 the Privacy and Civil Liberties Oversight Boar (PCLOB) was
reconstituted as an independent agency within the executive branch by the Implementing
128 Ibid., p. 105.
129 Ibid., p. 106.
130 This section was written by Pauline Smale, Economic Analyst, Government and Finance Division.
131 This section was written by Garrett Hatch, Analyst in American National Government, Government and Finance
Division.
132 118 Stat. 3638 at 3684.
Congressional Research Service
52
Financial Services and General Government (FSGG): FY2011 Appropriations
Recommendations of the 9/11 Commission Act of 2007 (P.L. 110-53).133 The board assumed its
new status on January 30, 2008; its FY2009 appropriation was its first funding as an independent
agency.134 Among its responsibilities, the five-member board is to (1) ensure that concerns with
respect to privacy and civil liberties are appropriately considered in the implementation of laws,
regulations, and executive branch policies related to efforts to protect the nation against terrorism;
(2) review the implementation of laws, regulations, and executive branch policies related to
efforts to protect the nation from terrorism, including the implementation of information sharing
guidelines; and (3) analyze and review actions the executive branch takes to protect the nation
from terrorism, ensuring that the need for such actions is balanced with the need to protect
privacy and civil liberties. The board advises the President and the heads of executive branch
departments and agencies on issues concerning, and findings pertaining to, privacy and civil
liberties. The board provides annual reports to Congress detailing its activities during the year,
and board members appear and testify before congressional committees upon request.
The President’s FY2011 request for the PCLOB is $1.6 million, which is $100,000 above FY2010
enacted appropriations of $1.5 million. The Senate Committee on Appropriations recommends
$1.5 million for FY2011. President Obama has not yet nominated anyone to sit on the board,
which ceased operations January 2008; and Senate appropriators wrote that they are “seriously
concerned that now, 30 months later, the new PCLOB has not yet been reconstituted and staffed
as required by P.L. 110-53.”135 Senate appropriators further “urge(d) the Administration” to
nominate members to the PCLOB “as expeditiously as possible” and then “promptly provide a
detailed budget justification to the Committee.”136 In addition, in a letter dated March 29, 2010,
22 members of Congress asked President Obama to “immediately nominate qualified individuals”
to the PCLOB, because it was “imperative that the Board be fully operational to evaluate and
advise the Executive Branch” on privacy and civil liberties issues.137
Securities and Exchange Commission138
The Securities and Exchange Commission (SEC) administers and enforces federal securities laws
to protect investors from fraud, to ensure that sellers of corporate securities disclose accurate
financial information, and to maintain fair and orderly trading markets. The SEC’s budget is set
through the normal appropriations process, but funds for the agency come from fees that are
imposed on sales of stock, new issues of stocks and bonds, corporate mergers, and other securities
market transactions. When the fees are collected, they go to a special offsetting account available
to appropriators, not to the Treasury’s general fund. The SEC is required to adjust the fee rates
periodically to make the amount collected approximately equal to target amounts set in statute.
For FY2011, the Administration has requested $1.258 billion (including $24 million contingent
on enactment of regulatory reform legislation), an increase of $205 million over FY2010
133 121 Stat. 266 at 352.
134 See CRS Report RL34385, Privacy and Civil Liberties Oversight Board: New Independent Agency Status, by
Garrett Hatch.
135 S.Rept. 111-238, p. 116.
136 Ibid.
137 U.S. House of Representatives, Committee on Homeland Security, “Chairman Thompson and Members Write
President Obama on Privacy and Civil Liberties Nominations,” press release, March 29, 2010, p. 1, at
http://hsc.house.gov/SiteDocuments/20100409170157-37944.pdf.
138 This section was written by Mark Jickling, Specialist in Public Finance, Government and Finance Division.
Congressional Research Service
53
Financial Services and General Government (FSGG): FY2011 Appropriations
appropriations. The Senate Committee on Appropriations recommends $1.300 billion for
FY2011. For both the budget request and the Senate recommendation, fees collected during the
fiscal year would account for the entire amount, so there would be no FY2011 appropriation from
the general fund. P.L. 111-117 provided $1.111 billion for the SEC, $16 million of which will
come from prior-year unobligated balances and the remaining $1.095 billion will come from
offsetting collections, so that there will be no appropriation from the general fund for FY2010.
Selective Service System139
The Selective Service System (SSS) is an independent federal agency operating with permanent
authorization under the Military Selective Service Act.140 It is not part of the Department of
Defense, but its mission is to serve the emergency manpower needs of the military by
conscripting personnel when directed by Congress and the President.141 All males ages 18 through
25 and living in the United States are required to register with the SSS. The induction of men into
the military via Selective Service (i.e., the draft) terminated in 1972. In January 1980, President
Carter asked Congress to authorize standby draft registration of both men and women. Congress
approved funds for male-only registration in June 1980.
Since 1972, Congress has not renewed any President’s authority to begin inducting (i.e., drafting)
anyone into the armed services. In 2004, an effort to provide the President with induction
authority was rejected.142
Funding of the Selective Service has remained relatively stable over the last decade. P.L. 111-117
provided $24.28 million for FY2010, an increase of $2.28 million over FY2009 enacted
appropriations. The President has requested, and the Senate Committee on Appropriations
recommends, $25 million for FY2011.
Small Business Administration143
The Small Business Administration (SBA) administers a number of programs intended to assist
small firms. Arguably, the SBA’s four most important functions are to guarantee—principally
through the agency’s Section 7(a) general business loan program—business loans made by banks
and other financial institutions; to make long-term, low-interest loans to small businesses,
nonprofit organizations, and households that are victims of hurricanes, earthquakes, floods, other
physical disasters, and acts of terrorism; to finance training and technical assistance programs for
small business owners, and to serve as an advocate for small business within the federal
government.
For FY2011, the Senate Committee on Appropriations recommended the appropriation of $1.103
billion for the SBA, an increase of 9.8% above the Administration’s FY2011 request, an increase
139 This section was written by David Burrelli, Specialist in National Defense, Foreign Affairs, Defense, and Trade
Division.
140 50 U.S.C. App. §451 et seq.
141 See http://www.sss.gov/.
142 See H.R. 163, October 5, 2004, failed by Yeas and Nays (Roll no. 494).
143 This section was written by Oscar Gonzalez, Analyst in Economics, Government and Finance Division, and Robert
Dilger, Senior Specialist in American National Government, Government and Finance Division.
Congressional Research Service
54
Financial Services and General Government (FSGG): FY2011 Appropriations
of 26.6% above the FY2010 regular appropriations of $824 million. SBA also received $265
million in FY2010 through a series of extensions of SBA fee subsidies and loan modifications
originally funded by P.L. 111-5, the American Recovery and Reinvestment Act of 2009, for total
FY2010 funding of $1.089 billion.
The Senate bill would provide $464.0 million for salaries and expenses. Included in that amount
is $194.7 million for non-credit programs, such as Small Business Development Centers, Drug-
free Workplace Grants, the Service Corps of Retired Executives (SCORE), Women’s Business
Centers, the National Women’s Business Council, Microloan Technical Assistance, Veterans
Programs, PRIME, Native American Outreach, 7(j) Technical Assistance, Historically
Underutilized Business Zones (HUBZones), Hispanic Business Centers, the Entrepreneurial
Development Initiative, and Emerging Leaders Program. The Senate bill would also provide
$18.0 million for the SBA’s Office of Inspector General (not including $1.0 million to be
transferred from the Disaster Loans Program account), $1.0 million for the SBA’s surety bond
guarantees revolving loan fund, $356.4 million for the SBA’s business loan programs (including
$195.4 million to subsidize the 7(a) guaranteed loan program), and $203.0 million for the SBA’s
disaster loan program. The Senate bill would also provide $60.6 million for small business
development and entrepreneurship initiatives, including programmatic and construction activities.
Finally, the Senate bill would support up to $28 billion in loan guarantees, including guarantees
up to $17.5 billion of 7(a) loans, up to $7.5 billion for the 504/CDC (certified development
company) loans, up to $3.0 billion for Small Business Investment Company debentures, as well
as up to $12.0 billion for the secondary market guarantee program. These are the same levels as
in FY2010.
For FY2011, President Obama requested $994.1 million for the SBA, an increase of 21% over the
FY2010 enacted amount of $824 million (P.L. 111-117). The Administration requested $446.0
million for salaries and expenses. Included in that amount is $173.7 million for non-credit
programs, such as Historically Underutilized Business Zones (HUBZones), Microloan Technical
Assistance, the National Women’s Business Council, Native American Outreach, the Service
Corps of Retired Executives (SCORE), Small Business Development Centers, Veteran’s Business
Development, and Women’s Business Centers. The Administration also requested $18.0 million
for the SBA’s Office of Inspector General (not including $1.0 million to be transferred from the
Disaster Loans Program account), $1.0 million for the SBA’s surety bond guarantees revolving
loan fund, $326.1 million for the SBA’s business loan programs, and $203.0 million for the SBA’s
disaster loan program. Finally, the Administration’s budget request for the SBA is expected to
support up to $28 billion in loan guarantees, including guarantees up to $17.5 billion of 7(a)
loans, up to $7.5 billion for the 504/CDC (certified development company) loans, up to $3.0
billion for Small Business Investment Company debentures, as well as up to $12.0 billion for the
secondary market guarantee program. These are the same levels as in FY2010.
United States Postal Service144
The U.S. Postal Service (USPS) generates nearly all of its funding—about $70 billion annually—
by charging users of the mail for the costs of the services it provides.145 However, Congress does
144 This section was written by Kevin Kosar, Analyst in American National Government, Government and Finance
Division. Also see CRS Report RS21025, The Postal Revenue Forgone Appropriation: Overview and Current Issues,
by Kevin R. Kosar.
145 U.S. Postal Service, United States Postal Service Annual Report 2010 (Washington: USPS, 2010), p. 3.
Congressional Research Service
55
Financial Services and General Government (FSGG): FY2011 Appropriations
provide an annual appropriation to compensate the USPS for revenue it forgoes in providing free
mailing privileges to the blind146 and overseas voters.147 Congress authorized appropriations for
these purposes in the Revenue Forgone Reform Act of 1993 (RFRA).148 This act also permitted
Congress to provide the USPS with a $29 million annual reimbursement until 2035 to pay for the
costs of postal services provided at below-cost rates to not-for-profit organizations in the early
1990s.149 Funds appropriated to the USPS are deposited in the Postal Service Fund, a revolving
fund at the U.S. Department of the Treasury.
The Postal Accountability and Enhancement Act (PAEA), which was enacted on December 20,
2006, first affected the postal appropriations process in FY2009.150 Under the PAEA, both the
U.S. Postal Service Office of Inspector General (USPSOIG) and the Postal Regulatory
Commission (PRC) must submit their budget requests to Congress and to the Office of
Management and Budget (120 Stat. 3240-3241), and the agencies must be paid from the Postal
Service Fund. The law further requires USPSOIG’s budget submission to be treated as part of
USPS’s total budget, while the PRC’s budget, like the budgets of other independent regulators, is
treated separately.151
For FY2011, the USPS requested a $102.2 million appropriation to the Postal Service Fund. Of
this amount, $73.2 million would be for revenue forgone, and $29 million would be for the
annual RFRA reimbursement.152 (In FY2010, Congress appropriated $118.3 million to the USPS.)
For FY2011, the USPSOIG requested a $244.4 million appropriation,153 and the PRC requested a
$14.5 million appropriation.154 (In FY2010, Congress appropriated $244.3 million to the USPOIG
and $14.3 million to the PRC.)
The President’s FY2011 budget proposes $103.9 million for the USPS (with $74.9 million
appropriated for revenue forgone and $29 million for the annual RFRA reimbursement), $244.4
million for the USPSOIG; and $14.5 million for the PRC.155
146 84 Stat. 757; 39 U.S.C. 3403. See also USPS, Mailing Free Matter for Blind and Visually Handicapped Persons:
Questions and Answers, Publication 347 (Washington: USPS, May 2005), available at http://www.usps.com/cpim/ftp/
pubs/pub347.pdf.
147 Members of the Armed Forces and U.S. citizens who live abroad are eligible to register and vote absentee in federal
elections under the provisions of the Uniformed and Overseas Citizens Absentee Voting Act of 1986 (42 U.S.C.
1973ff-ff-6). See CRS Report RS20764, The Uniformed and Overseas Citizens Absentee Voting Act: Overview and
Issues, by Kevin J. Coleman.
148 P.L. 103-123, Title VII; 107 Stat. 1267, 39 U.S.C. 2401(c)-(d).
149 See CRS Report RS21025, The Postal Revenue Forgone Appropriation: Overview and Current Issues, by Kevin R.
Kosar.
150 P.L. 109-435; 120 Stat. 3198. On PAEA’s major provisions, see CRS Report R40983, The Postal Accountability
and Enhancement Act: Overview and Issues for Congress, by Kevin R. Kosar.
151 While the PAEA did not authorize any additional appropriations to the Postal Service Fund, it did alter the budget
submission process for the USPS’s Office of Inspector General (USPSOIG) and the Postal Rate Commission (PRC). In
the past, the USPSOIG and the PRC submitted their budget requests to the USPS’s Board of Governors. Accordingly,
past presidential budgets did not include the USPOIG’s or PRC’s funding requests or appropriations therefore.
152 Office of Management and Budget, Appendix: Budget of the U.S. Government Fiscal Year 2010, p. 1313, at
http://www.whitehouse.gov/omb/budget/fy2011/assets/oia.pdf.
153 U.S. Postal Service Office of Inspector General, FY 2010 Budget (Washington: 2010), p. OIG-3, at
http://www.uspsoig.gov/OIG_Budget_FY2011.pdf.
154 Postal Regulatory Commission, Performance Budget Plan Fiscal Year 2011, p. 3, at http://www.prc.gov/Docs/66/
66770/Performance%20Budget%20Plan%20FY2011_561.pdf.
Congressional Research Service
56
Financial Services and General Government (FSGG): FY2011 Appropriations
On July 29, 2010, the Senate Appropriations Committee recommended appropriations of $103.9
million for the USPS, $244.4 million for the USPSOIG, and $14.5 million for the PRC (S.Rept.
111-238). The committee reiterated its support for six-day mail delivery, and noted that it believes
no reduction in delivery days should be made until the PRC has delivered its study of the matter
in autumn 2010.156 The committee also stated that it
has significant concerns about the fiscal health of the Postal Service and questions whether
the existing postal facility network is sustainable. The Committee directs the Postal
Regulatory Commission to report to the Committees on Appropriations not later than April
1, 2011, on the potential economic impacts if restrictions on the consolidation or closure of
small rural and other small post offices were removed, including an assessment of the
benefits and drawbacks of potential closures on access to services, the postal workforce,
affected communities, and the fiscal health of the Postal Service. The report should also
include an assessment of how the Postal Service’s efforts to co-locate postal services in
grocery stores and other existing retail locations enhances customer access, improves Postal
Service revenue, and reduces facility costs.157
Additionally, the committee urged the USPS to coordinate with Office of Personnel Management
[OPM], the Postal Service Inspector General, the Postal Regulatory Commission, and the Office
of Management and Budget to identify a fair and equitable methodology to calculate the amount
the Postal Service should be contributing to the Civil Service Retirement System [CSRS] pension
fund. In recent reports, the Postal Service Inspector General and the Postal Regulatory
Commission conclude that OPM’s methodology in calculating the pension cost allocations
between the former taxpayer-supported Post Office Department and the new ratepayer-supported
Postal Service resulted in the Postal Service overpaying its share of the CSRS pension fund.
Although both the Board of Actuaries and the Government Accountability Office concluded in
2004 that OPM’s methodology is consistent with congressional intent of the 1974 law that
established the CSRS pension fund, the OPM Director stated during a March 2010 appropriations
subcommittee hearing that in light of the methodology being called into question again, OPM
would be willing to coordinate with the Postal Service Inspector General and other stakeholders
to revisit OPM’s current methodology.158
United States Tax Court159
A court of record under Article I of the Constitution, the United States Tax Court (USTC) is an
independent judicial body that has jurisdiction over various tax matters as set forth in Title 26 of
the United States Code. The court is headquartered in Washington, DC, but its judges conduct
trials in many cities across the country.
(...continued)
155 Office of Management and Budget, Appendix: Budget of the U.S. Government Fiscal Year 2010, pp. 1313, 1314,
1316, and 1317.
156 S.Rept. 111-238, p. 130. On six-day mail delivery, see CRS Report R40626, The U.S. Postal Service and Six-Day
Delivery: Issues for Congress, by Wendy R. Ginsberg.
157 Ibid., pp. 115-116. On the USPS’s proposed closure of retail postal facilities, see CRS Report R40719, Post Office
and Retail Postal Facility Closures: Overview and Issues for Congress, by Kevin R. Kosar.
158 Ibid., p. 131. On the USPS’s CSRS pension obligation, see CRS Report R41024, The U.S. Postal Service’s
Financial Condition: Overview and Issues for Congress, by Kevin R. Kosar.
159 This section was written by Garrett Hatch, Analyst in American National Government, Government and Finance
Division.
Congressional Research Service
57
Financial Services and General Government (FSGG): FY2011 Appropriations
The President has requested $52.2 million for the USTC for FY2011, a $3 million increase over
the amount provided by P.L. 111-117 for FY2010. The Senate Committee on Appropriations has
recommended $54.6 million for FY2011, a $5 million in increase over FY2010 enacted amounts
and $2 million more than the President has requested.
General Provisions Government-Wide160
The Financial Services and General Government appropriations language includes general
provisions which apply either government-wide or to specific agencies or programs. An
Administration’s proposed government-wide general provisions for a fiscal year are generally
included in the Budget Appendix.161 Most of the provisions continue language that has appeared
under the General Provisions title for several years because Congress has decided to reiterate the
language rather than making the provisions permanent. The FY2011 budget proposed, however,
discontinuing some of the government-wide general provisions that were included in P.L. 111-
117, the Consolidated Appropriations Act for FY2010. The provisions proposed to be
discontinued (the section numbers refer to the provisions as they were included in P.L. 111-117)
and whether they are included in S. 3677, as reported, are listed below.
Provisions Proposed to Be Discontinued in FY2011 Budget Request
• Communication with Congress. Section 714 of P.L. 111-117, which prohibits
the payment of any employee who prohibits, threatens, prevents, or prevents
another employee from communicating with Congress. (Section 714 of S. 3677).
• Employee Training. Section 715 of P.L. 111-117, which prohibits federal
training not directly related to the performance of official duties. (Section 715 of
S. 3677).
• Publicity or Propaganda. Section 717 of P.L. 111-117, which prohibits other
than for normal and recognized executive-legislative relationships, propaganda,
publicity and lobbying by executive agency personnel in support or defeat of
legislative initiatives. Section 720, which prohibits the use of funds for
propaganda and publicity purposes not authorized by Congress. (Sections 717
and 720 of S. 3677).
• Release of Non-public information. Section 719 of P.L. 111-117, which
prohibits funds to be used to provide non-public information such as mailing or
telephone lists to any person or organization outside the government without the
approval of the House and Senate Committees on Appropriations. (Section 719 of
S. 3677).
• E-Government. Section 733 of P.L. 111-117, which concerns transfers or
reimbursements for E-Government initiatives. (Section 732 of S. 3677).
• Midway Atoll Airfield. Section 734 of P.L. 111-117, which provides funds for
the Midway Atoll Airfield. (Section 733 of S. 3677).
160 This section was written by Barbara Schwemle, Analyst in American National Government, Government and
Finance Division.
161 For FY2011, the provisions are listed in the Budget, Appendix at pp. 9-17.
Congressional Research Service
58
Financial Services and General Government (FSGG): FY2011 Appropriations
• Privacy Act. Section 737 of P.L. 111-117, which prohibits use of funds in
contravention of the Privacy Act and implementing regulations. (Section 736 of
S. 3677).
• Great Lakes Restoration. Section 739 of P.L. 111-117, which requires OMB to
submit a report on budget information relating to Great Lakes restoration
activities. (Section 738 of S. 3677).
Selected New General Provisions Proposed in the FY2011 Budget Request
• Pay for Top Officials. This section would prohibit pay adjustments in calendar
year 2011 for the Vice President; individuals serving in Executive Schedule (EX)
positions or in positions whose rate of pay is fixed by statute at an EX level and
serving at the pleasure of the President or other appointing official; a chief of
mission or ambassador at large; a noncareer appointee in the Senior Executive
Service; and any employee whose rate of basic pay (including locality payments)
is at or above EX level IV who serves at the pleasure of the appointing official.
(Section 734) (Section 744 of S. 3677).
• Administrative Expenses Related to Retirement. For each employee who
retires during FY2011 under 5 U.S.C. §8336(d)(2) on immediate retirement or 5
U.S.C. §8414(b)(1)(B) on early retirement, or retires under the Civil Service
Retirement System or the Federal Employees Retirement System and receives a
payment as an incentive to retire, the separating agency would remit to the Civil
Service Retirement and Disability Fund an amount equal to OPM’s average unit
cost of processing a retirement claim for the preceding fiscal year. Such amounts
would be available until expended to OPM and be deemed to be an
administrative expense. (Section 735) (Not included in S. 3677).
• Overpayments From Discretionary Appropriations. Overpayments that are
made from discretionary amounts appropriated in this fiscal year in this or any
other Act, that are subsequently recovered through audits conducted under the
Recovery Auditing Act would be credited to agency appropriations from which
the overpayment was made and available for the same purpose and time period
originally appropriated. (Section 736) (Not included in S. 3677).
• Federal Real Property Management. A public database of federal real property,
and a pilot program to expedite the disposal of surplus property would be
established. Agencies would be permitted to retain the net proceeds resulting
from the sale or transfer of surplus property. (Section 737) (Not included in S.
3677).
• Section 742 of S. 3677 would authorize a 1.4% pay adjustment for federal
civilian white-collar employees, as requested by the President’s budget.
Congressional Research Service
59
Financial Services and General Government (FSGG): FY2011 Appropriations
Government Procurement
Acquisition Workforce Training Fund
If enacted, Section 517 of S. 3677 would clarify the authorized purposes of the Acquisition
Workforce Training Fund.162 Currently, the authorized purpose is to “support the training of the
acquisition workforce of the executive agencies.”163 By implementing Section 517, the authorized
purposes of the fund would change to include fostering and promoting the development of the
federal government’s acquisition workforce, collecting and analyzing acquisition workforce data,
and, as directed by the head of the Office of Federal Procurement Policy, performing other
research or career management functions.164
Competitive Sourcing165
Section 728, as it appears in the President’s FY2011 budget request, would prohibit the use of any
funds appropriated by this act, or any other appropriations act for the same fiscal year (FY2011),
to begin or announce a public-private competition.166 The prohibition would apply to a “public-
private competition regarding the conversion to contractor performance of any function
performed by Federal employees pursuant to Office of Management and Budget Circular A-76 or
any other administrative regulation, directive, or policy.”167 That is, this section apparently would
apply only to competitions that involve work being performed by federal employees, but it would
not apply to public-private competitions involving work being performed by contractor
employees. Conversion to contractor performance is only one of the possible outcomes of a
public-private competition, however, which might lead some observers to conclude that the
provision is somewhat ambiguous. This provision is the same as Section 735 of P.L. 111-117.
While details are not yet available, the Senate Appropriations Committee’s report on S. 3677
suggests that Section 734 contains a prohibition similar to the one found in Section 728 (see
above).168
162 Ibid., p. 100.
163 41 U.S.C. § 433(h)(3)(A).
164 U.S. Congress, Senate Committee on Appropriations, Financial Services and General Government Appropriations
Bill, 2011, p. 152; 41 U.S.C. § 405(d)(5)(A), (C), and (J).
165 This section was written by L. Elaine Halchin, Analyst in American National Government, Government and Finance
Division.
166 Section 728 states: “[n]one of the funds appropriated or otherwise made available by this act or any other Act may
be used.... ” (U.S. Office of Management and Budget,” Budget of the U.S. Government, Appendix, Fiscal Year 2011,
(Washington, DC: U.S. Government Printing Office, 2010) p. 12.) (Italics added for emphasis.) The words in this
phrase—“or any other act”—are “not words of futurity. They merely refer to any other appropriation act of the same
fiscal year.” ( U.S. Government Accountability Office, Principles of Federal Appropriations Law, Third Edition,
Volume I, GAO-04-261SP, January 2005, p. 2-36, at http://www.gao.gov/special.pubs/d04261sp.pdf.)
167 U.S. Office of Management and Budget, Budget of the U.S. Government, Appendix, Fiscal Year 2011, p. 12.
168 U.S. Congress, Senate Committee on Appropriations, Financial Services and General Government Appropriations
Bill, 2011, report to accompany S. 3677, 111th Cong., 2nd sess., July 29, 2010, p. 138.
Congressional Research Service
60
Financial Services and General Government (FSGG): FY2011 Appropriations
Service Contract Inventory
Section 741 of S. 3677 would, if implemented, make technical modifications to Section 743 of
P.L. 111-117, which requires executive agencies to compile inventories of their service contracts.
Technical changes to Section 743(a)(3) and Section 743(a)(3)(G), respectively, would do the
following: expand the inventory contents to include task orders awarded pursuant to service
contracts, and specify how to determine the number and work location of contractor and
subcontractor employees. Whereas Section 743(e)(2)(B) of P.L. 111-117 directs each agency to
give “special management attention to functions closely associated with inherently governmental
functions,” the technical change effected by Section 741 would require each agency to ensure that
service “contracts exclude to the maximum extent practicable functions that are closely associated
with inherently governmental functions.”169
Finally, Section 741 would establish a requirement for a new report. An executive agency could
not begin, plan for, or announce a public-private competition involving the conversion of a
function performed by government employees to contractor performance until after it has
submitted a report to OMB. The report would include “actions taken to convert from contractor to
Federal employee performance functions that are not inherently governmental, closely associated
with governmental functions, critical, or should not otherwise be reserved for performance by
Federal employees.”170
Cuba Sanctions171
Background
Since the early 1960s, U.S. policy toward communist Cuba 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).
Despite current U.S. economic sanctions policy, some U.S. commercial agricultural exports to
Cuba have been allowed since 2001 pursuant to the Trade Sanctions Reform and Export
Enhancement Act of 2000, or TSRA (Title IX of P.L. 106-387). However, there are numerous
restrictions and licensing requirements for these exports. For instance, exporters are denied access
to U.S. private commercial financing or credit, and all transactions must be paid for in cash in
advance or with financing from third countries. The Bush Administration tightened sanctions on
Cuba in February 2005 by further restricting how U.S. agricultural exporters may be paid for their
product. 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 differed from the practice of being paid before the actual delivery of the goods, a
practice that had been utilized by many U.S. agricultural exporters to Cuba since such sales were
legalized in late 2001. U.S. agricultural exporters and some Members of Congress strongly
169 Ibid., p. 155. (Italics in original.)
170 Ibid., p. 156. (Italics in original.)
171 This section was written by Mark P. Sullivan, Specialist in Latin American Affairs, Foreign Affairs, Defense, and
Trade Division. For additional information, see CRS Report R40193, Cuba: Issues for the 111th Congress, by Mark P.
Sullivan.
Congressional Research Service
61
Financial Services and General Government (FSGG): FY2011 Appropriations
objected to this “clarification” on the grounds 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. Then OFAC Director Robert Werner maintained that the clarification “conforms to the
common understanding of the term in international trade.”172
Since 2002, the United States has been one of Cuba’s largest suppliers of food and agricultural
products. Cuba has purchased over $3.5 billion in agricultural products from the United States
since late 2001.173 Overall U.S exports to Cuba rose from about $7 million in 2001 to $404
million in 2004 and to a high of $712 million in 2008, far higher than in previous years, in part
because of the rise in food prices and because of Cuba’s increased food needs in the aftermath of
several hurricanes and tropical storms that severely damaged the country’s agricultural sector. In
2009, however, U.S. exports to Cuba declined to $533 million, 25% lower than the previous year.
The decline was largely related to Cuba’s shortage of hard currency.174 In 2010, U.S. agricultural
exports to Cuba have continued to fall. From January through October 2010, U.S. exports to Cuba
amounted to $311 million, down almost 31% from the same period in 2009. Analysts again cite
Cuba’s shortage of hard currency as the main reason for the decline.175
Legislative Action
In December 2009, Congress took action in the FY2010 omnibus appropriations measure
(Section 619 of Division C of the Consolidated Appropriations Act, 2010, P.L. 111-117) to define,
during FY2010, “payment of cash in advance” as used in TSRA as payment before the transfer of
title to, and control of, the exported items to the Cuban purchaser. This overturned OFAC’s
February 2005 clarification that payment had to be received before vessels could leave U.S. ports.
Supporters of the provision maintained that it restored congressional intent on the matter, and
would make it easier for U.S. agricultural producers to export to Cuba, while opponents
maintained that the provision constituted a foreign policy change included in a must-pass
spending bill without appropriate congressional consideration.176 The Administration issued
regulations implementing this provision in early March 2010. The regulations maintained that the
definition applied to items delivered by September 30, 2010, or delivered pursuant to a contract
entered into by September 30, 2010, and shipped within 12 months of the signing of the
contract.177
For FY2011, the Senate Appropriations Committee-reported version of the Financial Services and
General Government Appropriations bill, S. 3677 (S.Rept. 111-238) included, in Section 621, a
provision that would continue to define during fiscal year 2011 “payment of cash in advance”
under TSRA as payment before the transfer of title to, and control of, the exported items to the
Cuban purchaser. No further action was taken on the bill. While the House Appropriations
Committee version of the bill was not officially introduced, it reportedly would have included a
172 U.S. Department of the Treasury, Testimony of Robert Werner, Director, OFAC, before the House Committee on
Agriculture, March 16, 2005.
173 U.S. trade statistic are from Global Trade Atlas, which uses Department of Commerce Statistics.
174 Larry Luxner. “Cash-Strapped Cuba Cut U.S. Food Imports by 26% in ’09,” CubaNews, February 2010, p. 2.
175 Juan Tamayo, “Big Drop in U.S. Agricultural Sales to Cuba,” Miami Herald, July 29, 2010,
176 “New Law Lets Cuba Pay U.S. Suppliers Directly,” CubaNews, December 2009; Rosella Brevetti, “Agriculture:
Senate OKs Provision Facilitating U.S. Agricultural Exports to Cuba,” International Trade Reporter, December 17,
2009.
177 Federal Register, March 10, 2010, pp. 10996-10997.
Congressional Research Service
62
Financial Services and General Government (FSGG): FY2011 Appropriations
provision similar to that in the Senate bill that would continue to clarify the requirement for
payment of cash in advance for agricultural goods sold to Cuba under TSRA.178
While the 111th Congress did not complete action on the FY2011 Financial Services and General
Government Appropriations measure, it approved a series of short-term continuing resolutions
(P.L. 111-242, as amended), the last of which provided funding for federal agencies through
March 4, 2011, under conditions provided in enacted FY2010 appropriations measures. This
essentially continued the “payment of cash in advance” provision until early March 2011, leaving
additional congressional action to be taken by the 112th Congress on FY2011 appropriations for
the remainder of the fiscal year.
Several legislative initiatives introduced in the 111th Congress would have permanently changed
the definition of “payment of cash in advance” for export sales to Cuba under TSRA, but no
action was completed on these measures.179 Most notably, on June 30, 2010, the House
Agriculture Committee reported out H.R. 4645 (Peterson), which would have permanently
changed the definition of “payment of cash in advance,” allowed direct transfers between U.S.
and Cuban financial institutions for payment for products sold to Cuba under TSRA, and also
would have lifted all restrictions on travel to Cuba. The House Committee on Foreign Affairs was
scheduled to hold a markup of the bill on September 29, 2010, but postponed its consideration,
and in the aftermath of the November 2010 U.S. legislative elections no further action was taken.
178 House Committee on Appropriations, Subcommittee on Financial Services and General Government, “Statement of
Chairman José E. Serrano, FY2011 Financial Services and General Government Appropriations Bill,” July 29, 2010.
179 For a broader discussion and listing of bills that would ease restrictions on U.S. agricultural exports to Cuba, see
CRS Report R40193, Cuba: Issues for the 111th Congress, by Mark P. Sullivan.
Congressional Research Service
63
Financial Services and General Government (FSGG): FY2011 Appropriations
Appendix.
Table A-1. Financial Services and General Government Appropriations,
FY2008-FY2011
(in millions of dollars)
FY2008
FY2009
FY2010
FY2011
Enacted
Enacted
Enacted
Requested
Department of the Treasury
$12,263
$12,687
$13,465
$13,970
Executive Office of the President
680
728
772
760
The
Judiciary
6,246
6,481 6,861 7,330
District
of
Columbia
610 742 752 730
Independent Agencies
24,840
23,942
24,585
25,430
Total $44,639
$44,582
$46,434
$48,219
Sources: Financial Services and General Government Appropriations Act, 2009 (P.L. 111-8), House
Appropriations Committee Print, Consolidated Appropriations Act, 2010 (P.L. 111-117), Appendix, U.S.
Government Budget, FY2011.
Notes: Figures include Commodity Futures Trading Commission (CFTC) funding. All figures are rounded, and
columns also may not equal the total due to rounding.
Congressional Research Service
64
Financial Services and General Government (FSGG): FY2011 Appropriations
Author Contact Information
Garrett Hatch, Coordinator
Gerald Mayer
Analyst in American National Government
Analyst in Labor Policy
ghatch@crs.loc.gov, 7-7822
gmayer@crs.loc.gov, 7-7815
Gary Guenther
Mark Jickling
Analyst in Public Finance
Specialist in Financial Economics
gguenther@crs.loc.gov, 7-7742
mjickling@crs.loc.gov, 7-7784
Barbara L. Schwemle
David F. Burrelli
Analyst in American National Government
Specialist in Military Manpower Policy
bschwemle@crs.loc.gov, 7-8655
dburrelli@crs.loc.gov, 7-8033
Lorraine H. Tong
Wendy R. Ginsberg
Analyst in American National Government
Analyst in Government Organization and
ltong@crs.loc.gov, 7-5846
Management
wginsberg@crs.loc.gov, 7-3933
Eugene Boyd
Oscar R. Gonzales
Analyst in Federalism and Economic Development
Analyst in Economic Development Policy
Policy
ogonzales@crs.loc.gov, 7-0764
eboyd@crs.loc.gov, 7-8689
Erin D. Lomax
Kevin R. Kosar
Analyst in Education Policy
Analyst in American National Government
elomax@crs.loc.gov, 7-9447
kkosar@crs.loc.gov, 7-3968
Kevin J. Coleman
Robert Jay Dilger
Analyst in Elections
Senior Specialist in American National Government
kcoleman@crs.loc.gov, 7-7878
rdilger@crs.loc.gov, 7-3110
Pauline Smale
L. Elaine Halchin
Analyst in Financial Economics
Specialist in American National Government
psmale@crs.loc.gov, 7-7832
ehalchin@crs.loc.gov, 7-0646
Patricia Moloney Figliola
Mark P. Sullivan
Specialist in Internet and Telecommunications
Specialist in Latin American Affairs
Policy
msullivan@crs.loc.gov, 7-7689
pfigliola@crs.loc.gov, 7-2508
R. Sam Garrett
Analyst in American National Government
rgarrett@crs.loc.gov, 7-6443
Key Policy Staff
Area of Expertise
Name
Phone
E-mail
Election Assistance Commission
Kevin Coleman
7-7878
kcoleman@crs.loc.gov
E-Government Fund in GSA
Wendy Ginsberg
7-3933
wginsberg@crs.loc.gov
Executive Office of the President
Barbara Schwemle
7-8655
bschwemle@crs.loc.gov
Federal Communications Commission
Patty Figliola
7-2508
pfigliola@crs.loc.gov
Federal Deposit Insurance
Pauline Smale
7-7832
psmale@crs.loc.gov
Congressional Research Service
65
Financial Services and General Government (FSGG): FY2011 Appropriations
Area of Expertise
Name
Phone
E-mail
Corporation: OIG
Federal Election Commission
R. Sam Garrett
7-6443
rgarrett@crs.loc.gov
Federal Labor Relations Authority
Gerald Mayer
7-7815
gmayer@crs.loc.gov
General Services Administration
Garrett Hatch
7-8674
ghatch@crs.loc.gov
Judiciary Lorraine
H.
Tong
7-5846
ltong@crs.loc.gov
Merit Systems Protection Board
Barbara Schwemle
7-8655
bschwemle@crs.loc.gov
National Archives and Records
Administration
Wendy Ginsberg
7-3933
wginsberg@crs.loc.gov
National Credit Union Administration
Pauline Smale
7-7832
psmale@crs.loc.gov
Office of Personnel Management
Barbara Schwemle
7-8655
bschwemle@crs.loc.gov
Office of Special Counsel
Barbara Schwemle
7-8655
bschwemle@crs.loc.gov
Privacy and Civil Liberties Oversight
Board
Garrett Hatch
7-7822
ghatch@crs.loc.gov
Securities and Exchange Commission
Mark Jickling
7-7784
mjickling@crs.loc.gov
Selective Service System
David Burrelli
7-8033 dburrelli@crs.loc.gov
Smal Business Administration
Oscar Gonzalez
7-0764
ogonzales@crs.loc.gov
Robert Dilger
7-3110
rdilger@crs.loc.gov
U.S. Postal Service
Kevin Kosar
7-3968
kkosar@crs.loc.gov
Government-wide General Provisions
Barbara Schwemle
7-8655
bschwemle@crs.loc.gov
Competitive Sourcing
L. Elaine Halchin
7-0646
ehalchin@crs.loc.gov
Cuba Mark
Sullivan
7-7689 msullivan@crs.loc.gov
Congressional Research Service
66