Financial Services and General Government:
FY2012 Appropriations
Garrett Hatch
Analyst in American National Government
November 8, 2011
Congressional Research Service
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www.crs.gov
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Financial Services and General Government: FY2012 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 (EOP), the judiciary, the
District of Columbia, and more than two dozen independent agencies. Among those independent
agencies are the General Services Administration (GSA), the Office of Personnel Management
(OPM), the Small Business Administration (SBA), the Securities and Exchange Commission
(SEC), and the United States Postal Service (USPS). The Commodity Futures Trading
Commission (CFTC) is funded in the House through the Agriculture appropriations bill and in the
Senate through the FSGG bill. CFTC funding is included in all FSGG funding tables in this
report.
On February 14, 2011, President Obama submitted his FY2012 budget request. The request
included a total of $48.72 billion for agencies funded through the FSGG appropriations bill,
including $308 million for the CFTC. The President’s request would increase funding $4.03
billion above FY2011 enacted amounts.
On April 14, 2011, the House and the Senate passed H.R. 1473, the Department of Defense and
Full-Year Continuing Appropriations Act of 2011, which the President signed into law (P.L. 112-
10) the following day. The act provides $44.69 billion for FSGG agencies, including $203 million
for the CFTC, for FY2011, a decrease of $1.74 billion below FY2010 enacted amounts.
On July 7, 2011, the House Appropriations Committee reported H.R. 2434, the Financial Services
and General Government Appropriations Act, 2012. H.R. 2434 would provide $42.97 billion for
agencies funded through the House FSGG Appropriations Subcommittee. In addition, the CFTC
would receive $172 million through the FY2012 agriculture appropriations bill, H.R. 2112. Total
FY2012 funding provided by the House would be $43.14 billion, about $5.58 billion below the
President’s FY2012 request and $1.55 billion less than FY2011 enacted amounts. No further
action has been taken by the House.
On September 15, 2011, the Senate Appropriations Committee reported its FY2012 financial
services bill, S. 1573. The committee’s bill would provide $44.64 billion for FSGG agencies,
including $240 million for the CFTC, for FY2012, which would be $4.09 billion below the
President’s FY2012 request and $47.67 million less than FY2011 enacted amounts. No further
action has been taken by the Senate.
On September 30, 2011, President Obama signed a continuing resolution, H.R. 2017 (P.L. 112-
33), that funded the government through October 4, 2011. On October 5, President Obama signed
a second continuing resolution, H.R. 2608 (P.L. 112-36), that funds the government through
November 18, 2011, at a rate of 1.503% below FY2011 enacted levels.
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Financial Services and General Government: FY2012 Appropriations
Contents
Most Recent Developments ............................................................................................................. 1
Introduction...................................................................................................................................... 1
Overview.......................................................................................................................................... 2
FY2012 Appropriations by Title...................................................................................................... 3
Title I: The Department of the Treasury .................................................................................... 3
Brief Summary of FY2011 Appropriations for Treasury Offices and Bureaus................... 6
FY2012 Appropriations for Treasury Offices and Bureaus: President’s Budget
Request and Congressional Action................................................................................... 6
President’s Budget Request................................................................................................. 6
Noteworthy Assessments of the Administration’s Budget Request for the IRS in
FY2012........................................................................................................................... 10
Congressional Action ........................................................................................................ 11
Title II: Executive Office of the President............................................................................... 22
President’s Budget Request and Key Issues...................................................................... 24
House Action..................................................................................................................... 25
Senate Action .................................................................................................................... 28
Title III: The Judiciary............................................................................................................. 31
The Judiciary Budget and Key Issues...................................................................................... 32
Cost Containment Initiatives............................................................................................. 33
Judicial Security ................................................................................................................ 34
Workload and Southwest Border Issues ............................................................................ 35
Judicial Pay ....................................................................................................................... 35
FY2012 Request................................................................................................................ 36
Supreme Court .................................................................................................................. 36
U.S. Court of Appeals for the Federal Circuit................................................................... 37
U.S. Court of International Trade...................................................................................... 37
Courts of Appeals, District Courts, and Other Judicial Services....................................... 37
Administrative Office of the U.S. Courts.......................................................................... 39
Federal Judicial Center...................................................................................................... 39
United States Sentencing Commission.............................................................................. 39
Judiciary Retirement Funds............................................................................................... 39
General Provision Changes ............................................................................................... 40
Title IV: District of Columbia.................................................................................................. 41
The District of Columbia Budget and General Provisions ...................................................... 42
The President’s Budget Request........................................................................................ 42
District’s Budget................................................................................................................ 42
House Appropriations Committee..................................................................................... 42
Senate Appropriations Committee..................................................................................... 43
Title V: Independent Agencies................................................................................................. 43
Civilian Property Realignment Board ............................................................................... 45
Commodity Futures Trading Commission ........................................................................ 45
Consumer Product Safety Commission............................................................................. 46
Election Assistance Commission....................................................................................... 48
Federal Communications Commission ............................................................................. 49
Federal Deposit Insurance Corporation: Office of the Inspector General......................... 51
Federal Election Commission ........................................................................................... 51
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Financial Services and General Government: FY2012 Appropriations
Federal Trade Commission................................................................................................ 52
General Services Administration....................................................................................... 54
Independent Agencies Related to Personnel Management Appropriations....................... 57
Federal Labor Relations Authority.................................................................................... 59
Merit Systems Protection Board ....................................................................................... 59
Office of Personnel Management...................................................................................... 60
Office of Special Counsel.................................................................................................. 61
National Archives and Records Administration ................................................................ 62
National Credit Union Administration .............................................................................. 64
Privacy and Civil Liberties Oversight Board .................................................................... 64
Recovery Accountability and Transparency Board ........................................................... 65
Securities and Exchange Commission .............................................................................. 65
Selective Service System .................................................................................................. 65
Small Business Administration ......................................................................................... 66
United States Postal Service.............................................................................................. 68
United States Tax Court..................................................................................................... 71
General Provisions Government-Wide.................................................................................... 71
Government Procurement........................................................................................................ 72
Cuba Sanctions ........................................................................................................................ 73
Payment Provisions for U.S. Exports to Cuba .................................................................. 74
U.S. Restrictions on Travel and Remittances .................................................................... 75
Tables
Table 1. Status of FY2012 Financial Services and General Government Appropriations............... 1
Table 2. Financial Services and General Government Appropriations, FY2010-FY2012............... 2
Table 3. Department of the Treasury Appropriations, FY2010-FY2012 ......................................... 3
Table 4. Executive Office of the President, FY2010-FY2012....................................................... 23
Table 5. The Judiciary Appropriations, FY2010-FY2012 ............................................................. 31
Table 6. District of Columbia Special Federal Payments, FY2010-FY2012................................. 41
Table 7. Independent Agencies Appropriations, FY2010-FY2012................................................ 43
Table 8. General Services Administration Appropriations, FY2010-FY2012 ............................... 55
Table 9. Independent Agencies Related to Personnel Management Appropriations,
FY2011-FY2012......................................................................................................................... 58
Contacts
Author Contact Information........................................................................................................... 78
Key Policy Staff............................................................................................................................. 78
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Most Recent Developments
On July 7, 2011, the House Appropriations Committee reported H.R. 2434, the Financial Services
and General Government Appropriations Act, 2012.1 H.R. 2434 would provide $42.97 billion for
agencies funded through the House Financial Services and General Government (FSGG)
Appropriations Subcommittee. In addition, H.R. 2112, the Agriculture, Rural Development, Food
and Drug Administration, and Related Agencies Appropriations Bill, 2012, would provide $172
million for the Commodity Futures Trading Commission (CFTC). Total FY2012 funding
provided by the House would be $43.14 billion, about $5.58 billion below the President’s
FY2012 request and $1.55 billion less than FY2011 enacted amounts.
On September 15, 2011, the Senate Appropriations Committee reported its FY2012 financial
services bill, S. 1573. The committee’s bill would provide $44.64 billion for FSGG agencies,
including $240 million for the CFTC, for FY2012, which would be $4.09 billion below the
President’s FY2012 request and $47.67 million less than FY2011 enacted amounts. No further
action has been taken by the Senate.
On September 30, 2011, President Obama signed a continuing resolution, H.R. 2017 (P.L. 112-
33), that funded the government through October 4, 2011. On October 5, President Obama signed
a second continuing resolution, H.R. 2608 (P.L. 112-36), that funds the government through
November 18, 2011, at a rate of 1.503% below FY2011 enacted levels. Table 1, below, reflects
the status of FSGG legislation at key points in the appropriations process.
Table 1. Status of FY2012 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
06/16/11 09/14/11 H.Rept.
—
S.Rept.
— — —
—
—
112-136
112-79
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.”2 In
1 U.S. Congress, House Appropriations Committee, Financial Services and General Government Appropriations Bill,
2012, report to accompany H.R. 2434, 112th Cong., 1st Sess., H.Rept. 112-136, at http://www.gpo.gov/fdsys/pkg/
CRPT-112hrpt136/pdf/CRPT-112hrpt136.pdf.
2 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
(continued...)
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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.3
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.4 Additionally, most of the
agencies that had been under the jurisdiction of the Subcommittee on Transportation, Treasury,
the Judiciary, Housing and Urban Development, and Related Agencies were assigned to the
FSGG Subcommittee.5 As a result of this reorganization, the House and Senate FSGG
Subcommittees have nearly identical jurisdictions.6
Overview
The FSGG appropriations bill includes funding for the Department of the Treasury, the Executive
Office of the President (EOP), the judiciary, the District of Columbia, and more than two dozen
independent agencies. For each title of the regular FSGG appropriations bill, Table 2 lists the
enacted amounts for FY2010 and FY2011, the President’s FY2012 request, and amounts
recommended by the House and Senate appropriations committees for FY2012.
Table 2. Financial Services and General Government Appropriations,
FY2010-FY2012
(in millions of dollars)
FY2012
FY2012
FY2010
FY2011
FY2012
House
Senate
Title
Enacted
Enacted
Request
Committee Committee
Title I: Department of the
$13,465 $13,097 $14,040 $12,168 $12,239
Treasury
Title II: Executive Office of the
772 706
740
640 661
President
Title III: The Judiciary
6,871
6,907
7,294
6,759
6,934
Title IV: District of Columbia
752
699
717
637
658
Title V: Independent Agencies
24,585
23,280
25,937
22,936
24,149
(...continued)
on Homelessness.
3 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).
4 The agencies are the FCC, FTC, SEC, and SBA.
5 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.
6 The Commodity Futures Trading Commission is under the jurisdiction of the FSGG Subcommittee in the Senate but
not in the House.
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Financial Services and General Government: FY2012 Appropriations
FY2012
FY2012
FY2010
FY2011
FY2012
House
Senate
Title
Enacted
Enacted
Request
Committee Committee
Total $46,444
$44,689
$48,727
$43,140
$44,640
Sources: Consolidated Appropriations Act, 2010 (Div. C, P.L. 111-117); Appendix, U.S. Government Budget,
FY2011; S.Rept. 111-238; Appendix, U.S. Government Budget, FY2012; H.R. 1473; H.Rept. 112-136; S.Rept. 112-
79.
Note: Totals include funding for the Commodity Futures Trading Commission (CFTC). The CFTC is funded in
the House through the Agriculture appropriations bill and in the Senate through the Financial Services and
General Government bill. Figures include rescissions and offsetting collections.
FY2012 Appropriations by Title
Title I: The Department of the Treasury7
This section examines FY2012 appropriations for the Treasury Department and its operating
bureaus, including the Internal Revenue Service (IRS). Table 3 lists the enacted amounts for
FY2011, the Obama Administration’s FY2012 request, and the amounts recommended by the
House and Senate appropriations committees for FY2012.
Table 3. Department of the Treasury Appropriations, FY2010-FY2012
(in millions of dollars)
FY2012
FY2012
FY2010
FY2011
FY2012
House
Senate
Enacted
Enacted
Request
Committee
Committee
Departmental Offices
$305
$306
$325
$186
$306
Department-wide Systems and Capital
10 4 0 0
0
Investments
Terrorism and Financial Intelligence
—
—
—
100 —
Office of Inspector General
30
30
30
30
30
Treasury Inspector General for Tax
152 152 158 152
152
Administration
Special Inspector General for TARP
23
36
47
42
42
Community Development Financial
247 227 227 183
200
Institutions Fund
Financial Crimes Enforcement Network
111
111
84
111
111
Financial Management Service
244
233
219
217
218
Alcohol and Tobacco Tax and Trade
103 101 98
97
100
Bureau
Bureau of the Public Debt
182
175
166
164
166
7 This section was authored by Gary Guenther (x7-7742).
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FY2012
FY2012
FY2010
FY2011
FY2012
House
Senate
Enacted
Enacted
Request
Committee
Committee
Payment for Losses in Shipment
2
2
2
2
2
Internal Revenue Service (total)
12,146
12,122
13,284
11,516
11,663
Taxpayer Services
2,279
2,274
2,345
2,166
2,196
Enforcement 4,904
5,493
5,031
5,227
5,229
Enhanced Tax Enforcement
600
0
1,257
0
0
Operations Support Activities
4,084
4,076
4,299
3,794
3,893
Business Systems Modernization
264
264
334
330
330
Health Insurance Tax Credit
16 16 18 0
15
Administration
Rescissions: Treasury Forfeiture Fund
(-90)
(-400)
(-600)
(-630)
(-750)
Total $13,465
$13,097
$14,040
$12,168
$12,239
Sources: Appendix, Budget of the U.S. Government, FY2012, H.Rept. 112-136; S.Rept. 112-79.
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
(particularly money laundering and terrorist financing), collecting tax revenue and enforcing tax
laws, managing and accounting for federal debt, administering the federal government’s finances,
regulating financial institutions, and producing and distributing coins and currency.
At its most basic level of organization, Treasury consists of departmental offices and operating
bureaus. In general, the offices are responsible for formulating and implementing policy
initiatives and managing Treasury’s operations, while the bureaus undertake specific tasks
assigned to Treasury, mainly through statutory mandates. In the past decade or so, the bureaus
have accounted for more than 95% of the agency’s funding and work force.
With one exception, the bureaus and offices can be divided into those engaged in financial
management and regulation and those engaged in law enforcement. In recent decades, the
Comptroller of the Currency, U.S. Mint, Bureau of Engraving and Printing, Financial
Management Service, Bureau of the Public Debt, Community Development Financial Institutions
Fund, and Office of Thrift Supervision have taken on responsibilities related to the management
of the federal government’s finances or the supervision and regulation of the U.S. financial
system. In contrast, law enforcement arguably has been central to the responsibilities handled by
the Alcohol and Tobacco Tax and Trade Bureau, Financial Crimes Enforcement Network, 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. The exception to this
simplified dichotomy is the Internal Revenue Service, 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, FinCEN, ATB, Office
of the Inspector General, Treasury Inspector General for Tax Administration, Special Inspector
General for the Troubled Asset Relief Program, and the Community Development Financial
Institutions Fund. By contrast, funding for the Treasury Franchise Fund, the U.S. Mint, the
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Bureau of Engraving and Printing, Office of the Comptroller of the Treasury, and the Office of
Thrift Supervision stems from the fees they receive for the services and products they provide.
In FY2011, appropriations for the Treasury Department are distributed among 11 accounts, each
of which is described briefly below.
Departmental Offices (DO): 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 (OIG): 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 (TIGTA): 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 (SIGTARP): covers salaries
and other expenses related to the audits and investigations into the management and effectiveness
of TARP conducted by SIGTARP staff. The office was established by the same law that created
TARP: the Emergency Economic Stabilization Act (P.L. 110-343).
Financial Crimes Enforcement Network (FinCEN): 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 (FMS): 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 (ATB): 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
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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 (BPD): 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 (CDFI): 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 (IRS): 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.
Brief Summary of FY2011 Appropriations for Treasury Offices and Bureaus
In FY2011, the Treasury Department is receiving $13.097 billion in appropriated funds, or 2.7%
less than the amount enacted for FY2010. As usual, the vast share (92.5%) of the funds is being
used to finance the operations of the IRS, which is receiving $12.122 billion in FY2011, or 0.2%
less than the amount enacted for FY 2010. The remaining $975 million is distributed among
Treasury’s other main appropriations accounts in the following amounts: DO (which includes the
Office of Terrorism and Financial Intelligence—or TFI—and the Office of Foreign Assets
Control), $306 million; department-wide systems and capital investments, $4 million; OIG, $30
million; TIGTA, $152 million; SIGTARP, $36 million; CDFI, $227 million; FinCEN, $111
million; FMS, $233 million; ATB, $101 million; and the BPD, $175 million.
FY2012 Appropriations for Treasury Offices and Bureaus: President’s Budget
Request and Congressional Action
President’s Budget Request
The Obama Administration is requesting $14.040 billion (including $600 million in recessions) in
appropriations for Treasury in FY2012, or 7.2% more than the amount enacted for FY2011.
Under the budget proposal, the IRS would receive $13.284 billion, or about 95% of the total
amount. The remaining $756 million would be split among Treasury’s 10 other appropriations
accounts in the following amounts: DO, $325 million; departmental systems and capital
investments, $0 million; OIG, $30 million; TIGTA, $158 million; SIGTARP, $47 million; CDFI,
$227 million; FinCEN, $84 million; FMS, $219 million; ATB, $98 million; and BPD, $166
million. All the accounts except FinCEN, FMS, ATB, and BPD would be funded at or above the
amounts enacted for FY2011.
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Relative to FY2011, funding for the IRS would rise by $1.162 billion, while appropriations for all
other Treasury accounts would fall by $219 million.
Treasury’s budget request is intended, in part, to make further progress in accomplishing the same
three “high priority performance” objectives that guided its FY2010 and FY2011 budget requests:
(1) repair and reform the U.S. financial system, (2) increase voluntary tax compliance, and (3)
significantly increase the volume of paperless transactions with the public.8 The ways in which
the proposed budget addresses each objective are examined below.
Repair and Reform the Financial System
According to Treasury budget documents, the FY2012 budget proposal would allow the
Department to take a variety of steps aimed at encouraging the repair and reform of the financial
system. Several deserve brief mention here. One step is the implementation of a few key
provisions of the financial regulatory reform bill enacted in July 2010, the Dodd-Frank Wall
Street Reform and Consumer Protection Act of 2010, which is widely known as the Dodd-Frank
Act. Under the act, Treasury is responsible for managing the creation of two new independent
regulatory agencies (the Consumer Financial Protection Board and the Financial Stability
Oversight Council) and is required to create two new offices (the Office of Financial Research
and the Federal Insurance Office). Another step involves administering two new programs (the
Small Business Lending Fund and the State Small Business Credit Initiative) established by the
Small Business Jobs Act of 2010. They are intended to increase the availability of credit to small
businesses. In addition, repair and reform of the financial system remains a primary objective of
Treasury’s continuing efforts to ensure the viability of government-sponsored enterprises such as
the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation,
promote economic and community development through the CDFI, and manage the TARP
program.
These initiatives provide part of the rationale for the Administration’s request for an additional
$20 million in appropriations for DO and an additional $11 million in appropriations for
SIGTARP. Of the requested increase in DO funding, $5.5 million would be used to acquire the
expertise needed to carry out Treasury’s responsibilities under the Dodd-Frank Act.
Improve Voluntary Tax Compliance
Improving taxpayer compliance remains a top priority for the Treasury Department in FY2012.
As has been the case in recent years, the main concern is the size of the gross federal tax gap,
which is the difference between taxes owed and taxes paid in full and on time, before collection
actions are taken. This gap reached an estimated $345 billion in 2001, the most recent year for
which an estimate is available. Recent sharp rises in the federal budget deficit, coupled with a
strong congressional interest in finding additional sources of revenue as part of an effort to
eliminate projected budget deficits and shrink the burgeoning federal debt, have intensified the
pressure on the Department to do more to collect delinquent taxes.
8 See executive summary of Treasury budget request, p. 2, available at http://www.treasury.gov/about/budget-
performance/budget-in-brief/Documents/FY2012_BIB_Complete_508.pdf.
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The budget request would improve voluntary tax compliance through the enactment of several
changes in the tax code and targeted investments in IRS enforcement activities, taxpayer service,
and business systems modernization. These initiatives are intended to boost tax collections by
strengthening tax administration, improving business compliance, and expanding information
reporting, “with minimum additional burden on taxpayers.” Treasury officials estimate that the
initiatives could increase tax collection by more than $10 billion over the next 10 years.9 Of the
requested $1.162 billion increase in IRS appropriations for FY2012, $795 million (or about 68%
of the total) would be used for new enforcement initiatives.
Significantly Increase Paperless Transactions with the Public
Treasury’s budget request also assigns a high priority to moving the Department closer to the goal
of the paperless processing of all transactions, including payments and collections. Starting in
calendar year 2012, individuals receiving Social Security, Supplemental Security Income,
Veterans Administration, Railroad Retirement Board, Office of Personnel Management, and
Black Lung benefits will be required to receive the payments electronically, through either direct
deposit into a bank account or a Treasury Direct Express debit card. Moreover, Treasury will no
longer issue paper savings bonds after December 31, 2011. Once the goal of the complete
electronic processing of transactions is reached, Treasury expects to save $525 million and 12
million pounds of paper over the following five years.10
While the FY2012 budget request seems to designate no funds for new initiatives to accelerate
the move toward complete paperless transactions, funding remains available for two initiatives
that are supposed to commence in FY2011. Treasury’s budget request for FY2011 included $22
million in added funding for departmental systems and capital investments. The funds were to be
used to create two new programs: Enterprise Content Management (ECM) and the Financial
Innovation and Transformation (FIT).11 ECM is intended to establish a common approach among
Treasury offices and bureaus to modernizing their “document-based business processes.” FIT
seeks to develop and expand shared government-wide solutions to issues in financial
management, such as invoice processing, cash collections, and interagency agreements.
Other Noteworthy Initiatives
The Treasury Department’s budget request for FY2012 would do much more than fund activities
aimed at achieving its three strategic goals. A substantial share of the requested funding is
intended to enable Treasury’s bureaus to meet their statutory responsibilities and core missions
even when budget planning is difficult. Of particular concern are satisfying conflicting demands
to cut costs and improve or enhance services at the same time. The budget request addresses this
concern in two ways: by providing the required services at a reduced cost in some cases, and by
meeting a perceived need for expanded operations through an increase in funding in other cases.
Several notable examples of each approach can be found in the budget request.
For instance, the budget request would allow the Treasury Department to reap about $227 million
in savings from efficiency improvements and program reductions in FY2012, relative to outlays
9 Treasury Department, Budget in Brief, p. 4.
10 Ibid., p. 4.
11 Ibid., p. 17.
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in FY2011.12 Planned process improvements at the IRS could yield $190 million in savings; $10.1
million in savings could come from consolidating the administrative and data centers for the
FMS; a proposed consolidation of information technology resources at the BPD could provide
$6.6 million in savings; consolidating the certification and accreditation operations and data
center at TIGTA could produce $2.6 million in savings; $2.1 million could be saved through
staffing reductions and improved efficiency in the use of information technology at FinCEN; and
planned changes in the departmental offices could provide $15.4 million in savings.
The FY2012 budget request also calls for $92.6 million in appropriations for Treasury’s Office of
Terrorism and Financial Intelligence (TFI), or $7.4 million less than the amount specified for that
purpose 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 goals,
such as arresting the proliferation of nuclear weapons and combating Islamic terrorism. The
proposed reduction in funding for TFI may have little impact on its ability to perform its
functions, as the reduction would stem from savings from a cutback in staff travel, the elimination
of overseas support for its Brussels liaison, and increased efficiency in the procurement of
contracts, information technology licenses, subscriptions, and supplies.13
Appropriations for improving taxpayer services at the IRS would rise by $114 million under the
budget request for FY2012. About $44 million of that amount would be used to raise the level of
customer service provided through the agency’s toll-free telephone services, while $33 million
would be invested in a multi-year effort to upgrade the IRS.gov website so it can handle expected
growth in taxpayer demand for electronic tax information.14
In addition, the budget request would permanently cancel (or withdraw) $600 million and transfer
of $30 million to FinCEN from the unobligated balances of the Treasury Forfeiture Fund (TFF).
The fund serves as the receipt account for the deposit of assets held by criminal enterprises that
have been seized by five federal agencies, including the IRS and the Immigration and Customs
Enforcement Bureau at the Department of Homeland Security. Funds in the account normally are
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
withdrawn from the TFF to pay for other law enforcement activities undertaken by member
bureaus, with the approval of the Secretary of the Treasury. Congress must be notified before
such a withdrawal can be made.
The enactment of several tax bills in 2009 and 2010 has placed new demands on the
administrative capabilities of the IRS. One such law is proving to be especially challenging: the
Patient Protection and Affordable Care Act of 2010 (PPACA; P.L. 111-148). According to the
IRS, the act contains more than 40 provisions that modify different aspects of federal tax law
between 2010 and 2018.15 Some of the provisions needed to be implemented during the 2010 tax
year, including a small business tax credit for health insurance, an expanded adoption credit, and
a credit for qualified therapeutic discoveries. In 2011, the IRS is to take on the added
12 Ibid., p. 6.
13 Ibid., p. 13.
14 Ibid., p. 66.
15 Internal Revenue Service, FY 2012 Budget Request: Congressional Budget Submission (Washington: Feb. 14, 2011),
p. IRS-6. Available at http://www.treasury.gov/about/budget-performance/Documents/CJ_FY2012_IRS_508.pdf.
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responsibilities of administering a 10% excise tax on indoor tanning services, an increased
penalty for unqualified withdrawals from health savings accounts (HSAs), and a new definition of
medical expenses that qualify for flexible spending accounts and HSAs.
To implement and administer the tax provisions in the act, the IRS has determined that additional
resources are needed to construct new information technology systems; change existing tax
processing systems; expand taxpayer services and outreach; enhance notices, collections, and
case management systems to address and resolve taxpayer problems in a timely manner; and
conduct properly focused examinations. Funding for these resources is spread mainly among
three appropriations accounts: taxpayer services, enforcement, and operations support.
In FY2010 and FY2011, the IRS is obtaining funds for implementing PPACA provisions through
transfers from a fund (the Health Insurance Reform Implementation Fund) managed by the
Department of Health and Human Services; a total of $179 million had been transferred through
late July 2011.16 The IRS reportedly has decided that it will not draw upon money in the Fund
after FY2011.17 For FY2012, the IRS is asking Congress for $473 million in appropriations for
PPACA implementation. Most of that amount ($391 million) would go into the budget for
operations support and be used for the acquisition and development of information technology
and infrastructure; about $51 million would come from funds appropriated for enforcement; the
remaining $32 million would come out of funds appropriated for taxpayer services.18
Noteworthy Assessments of the Administration’s Budget Request for the IRS
in FY2012
IRS Oversight Board
The IRS Oversight Board was established by the IRS Reform and Restructuring Act of 1998
mainly to oversee the IRS’s performance in administering the tax laws, managing its operations,
and pursuing its strategic goals. Section 7802(d) of the federal tax code requires the Board to
review and approve the annual budget proposal submitted by the IRS to the Treasury Department.
A critical consideration in the assessment is the extent to which the proposal supports the annual
and long-term strategic objectives of the agency. The same tax code provision requires the
President to submit the Board’s budget recommendation to Congress together with his budget
request for the IRS.
For FY2012, the Board recommends that the IRS receive $13.342 billion in appropriated funds,
or $1.220 billion more than the amount enacted for FY2011, nearly $59 million more than the
budget request for FY2012, and $1.826 billion more than the amount recommended in the
FY2012 appropriations bill (H.R. 2434) reported by the House Appropriations Committee on July
7, 2011.19 In the Board’s view, its budget recommendation is the “minimum imperative for strong
16 Figure obtained through an email exchange with Floyd Williams of the IRS’s congressional liaison office on July 26,
2011.
17 U.S. Government Accountability Office, IRS Budget 2012: Extending Systematic Reviews of Spending Could Identify
More Savings Over Time, GAO-11-547 (Washington: April 2011), p. 36.
18 Ibid., p. 37.
19 IRS Oversight Board, FY2012 IRS Budget Recommendation: Special Report (Washington: Mar. 2011), p. 3.
Available at http://www.treasury.gov/irsob/reports/2011/IRSOB%20FY12%20BUDGET%20REPORT.pdf.
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and responsible tax administration.” Of the recommended amount, $2.35 billion would go to
taxpayer services, $5.97 billion to enforcement, $4.67 billion to operations support, $334 million
to the BSM, and $18 million to the administration of the health insurance tax credit. These
amounts are mostly consistent with the budget request. The primary difference is that the Board
favors putting more resources into upgrading IRS security systems.
Among its budget recommendations, the Board assigns the top priority to boosting funding for
the BSM. This includes any funds in the operations support account used for the development of
the information technology infrastructure needed to support the maintenance of BSM elements
that already have been implemented. In the Board’s view, increased investment in modernizing
the core taxpayer account system for individuals is vital to laying the technological foundation for
future advances in IRS operational efficiency, taxpayer service, and tax law enforcement. Nearly
60% (or $157 million) of the recommended BSM budget would go into the Customer Account
Data Engine 2 (CADE 2) program.20 At the current pace of progress, CADE 2 is expected to
allow for the daily processing of individual taxpayer accounts beginning with the 2012 filing
season. When fully operational, the program will have several tangible benefits for taxpayers,
including more timely account balance information and faster refunds to the tens of millions of
taxpayers who are due a refund each tax year.
Achieving an 80% level of service for IRS’s toll-free telephone lines during FY2012 is the
Board’s second-highest priority. The level of service, or LOS, measures the percentage of calls
that go through to an IRS customer service representative out of all incoming calls over a period.
In FY2008, the LOS reached 53%, but it has been rising ever since and stands at 74% according
to the IRS, in FY2011. In the Board’s estimation, appropriations for taxpayer service should be
increased by at least $23.3 million from the amount enacted for FY2011 in order to reach that
level of service. Tens of millions of taxpayers still depend on the toll-free telephone service to
understand their tax obligations and their eligibility for tax credits and other tax preferences, and
to resolve their account balances. Recent changes to the tax laws have boosted demand for the
service, a trend that is likely to continue in the next few years, as the IRS begins to implement
certain PPACA provisions.
In addition, the Board agrees with the budget request’s estimate that the IRS will require
additional funding of $473 million in FY2012 and a staff of 1,269 full-time equivalent employees
to implement PPACA provisions. About 83% of the funds would come from the operations
support account.21
Congressional Action
House
On July 7, 2011, the House Appropriations Committee reported a bill (H.R. 2434) to fund
financial services and general government accounts in FY2012. H.R. 2434 would provide
$12.168 billion in appropriations (including $630 in rescissions) for the Treasury Department, or
$929 million less than the amount enacted for FY2011 and $1.872 billion less than the amount
requested by the Obama Administration. Details on recommended funding for each account and
20 Ibid., p. 26.
21 Ibid., p. 4.
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selected issues addressed by the House committee in its report (H.Rept. 112-136) on the bill
follow.
Departmental Offices
In its report on H.R. 2434, the House committee recommends that DO receive $186 million in
appropriated funds in FY2012, or $120 million less than the amount enacted for FY2011 and
$139 million less than the budget request. The report specifies that $7 million of those funds be
available until September 30, 2013, for information technology and use by the Office of Critical
Infrastructure Protection and Compliance Policy.22
The House committee also notes that it is creating a separate appropriations account for the
Office of Terrorism and Financial Intelligence from the DO account beginning in FY2012.
Though the report gives no explanation for the change, a likely motive is to give the
appropriations committees more control over how much is spent on TFI operations and how those
funds are used.
On the topic of terrorist financing, the House committee directs the Treasury Secretary to submit
a report (with no specified deadline) to the House and Senate Appropriations Committees, the
House Financial Services Committee, and the Senate Banking Committee on the “potential risks
to U.S. financial markets and economy posed by economic warfare and financial terrorism.”
Office of Terrorism and Financial Intelligence
The House committee recommends an appropriation of $100 million for TFI in FY2012, or the
same amount of appropriated funds that is set aside for the Office in FY2011 and $7.4 million
more than the President’s budget request.23
In its report on H.R. 2434, the House committee directs the Office of Foreign Assets Control
(OFAC ) to submit to the House committee a report (with no specified deadline) on the current
number of pending applications seeking licenses for travel to Cuba related to educational
exchanges not involving academic study, the number of these licenses issued to date, and OFAC’s
plans for speeding up review of applications in the future.
Office of Inspector General
The House committee recommends that the OIG receive $30 million in appropriations in
FY2012, or the same amount that was enacted for FY2011 and $214,000 less than the amount
requested by the Treasury Department.24
Treasury Inspector General for Tax Administration
The House committee recommends an appropriation of $152 million to TIGTA in FY2012, or the
same amount that was enacted for FY2011 and $6 million less than the budget request.
22 U.S. Congress, House Committee on Appropriations, Financial Services and General Government Appropriations
Bill, 2012, report to accompany H.R. 2434, 112th Cong., 1st sess., H.Rept. 112-136 (Washington: GPO, 2011), p. 5.
23 Ibid., p. 7.
24 Ibid., p. 9.
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In its report on H.R. 2434, the House committee directs TIGTA to submit a report to the House
and Senate Appropriations Committees no later than 60 days after the enactment of the bill
examining the extent to which IRS employees use tax preparation software or hire tax preparation
professionals, how much they pay for those services, and how those fees compare to the fees
charged the general public for the same services.
Special Inspector General for the Troubled Asset Relief Program
The House committee recommends that SIGTARP receive $42 million in appropriated funds for
FY2012, or $5.6 million more than the amount enacted for FY2011 but $5.6 million less than the
budget request. According to the report on H.R. 2434, initial funding for the program was
mandated in the legislation creating TARP (P.L. 110-343), but the funds were limited and
decreased over time. Discretionary appropriations have increasingly filled the gap between those
mandatory appropriations and the operating expenses of the program.25
Financial Crimes Enforcement Network
The House committee recommends an appropriation of $111 million for FinCEN in FY2012, or
the same amount that was enacted for FY2011 and $26.5 million more than the budget request.
Of that amount, $20 million is available until September 30, 2014.
In its report on the bill, the House committee says that the recommended funding is intended to
continue the agency’s multi-year effort to modernize its information systems and to ensure that
FinCEN’s information is readily accessible to state and local law enforcement personnel, field
representative, and the intelligence community.26 In its budget request, the Treasury Department
proposes to reduce funding for making that information more accessible by $3 million.
Treasury Forfeiture Fund
The House committee recommends a rescission of $630 million of unobligated balances in the
Fund, or $230 million more than the amount that was enacted for FY2011 and $30 million more
than the budget request.
In its report on H.R. 2434, the House committee points out that the size of the Fund has grown
rapidly in recent years because of the “exceptionally large” seizures of property and assets from
criminal organizations.27
Financial Management Service
The House committee recommends $217 million in appropriations for FMS in FY2012, or $16
million less than the amount enacted for FY2011 and $2 million less than the budget request. Of
that amount, $4 million would be available until September 30, 2014, for upgrading the agency’s
information systems.
25 Ibid., p. 10.
26 Ibid., p. 11.
27 Ibid., p. 12.
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According to the report on H.R. 2434, funding for FMS can be reduced largely because of the
savings in operating costs that FMS expects to realize in FY2012. These savings include greater
use of paperless transactions, “space and data consolidation,” and a “revaluation of new
systems.”28
Alcohol and Tobacco Tax and Trade Bureau
The House committee recommends that ATB receive $97 million in appropriated funds in
FY2012, or $4 million less than the amount that was enacted for FY2011 and $979,000 less than
the budget request. According to the report on H.R. 2434, the reduction in funding should not
affect the agency’s level of service, as recent efforts by ATB to simplify reporting requirements
and reduce overhead expenses have lowered its operating costs.29
Bureau of the Public Debt
The House committee recommends an appropriation of $172 million for the BPD in FY2012, or
$13 million less than the amount enacted for FY2011 and about $2 million less than the budget
request. Of that amount, $10 million would be available until September 30, 2013. H.R. 2434
contains language that reduces total appropriations by up to $8 million as “definitive security
issue fees and Treasury Direct Investor Account Maintenance fees” are collected.30
Planned cost savings in FY2012 make it possible to reduce funding without affecting the level of
service. The savings include greater use of paperless transactions, consolidating the agency’s data
center, and “decommissioning its legacy information systems.”
Community Development Financial Institutions Fund
The House committee recommends that CDFI receive $183 million in appropriated funds in
FY2012, or $43.5 million less than the amount enacted for FY2011 and $44 million less than the
budget request. Of that amount, $12 million would be set aside for grants, loans, technical
assistance, and job training for native American, Alaskan, and Hawaiian communities. No funds
would be provided for two current programs: Bank on USA and the Health Food Financing
Initiative (HFFI).31
In its report on H.R. 2434, the House committee directs the Government Accountability Office to
conduct a study by April 2012 of the extent to which CDFI technical and financial assistance and
New Markets Tax Credits (NMTC) are concentrated in urban areas and the contributions to that
concentration of the design, administration, and history of the CDFI and the NMTC. The report
also directs the Treasury Department to report to the House committee by May 2012 on the
operation and effectiveness of the HFFI, including the criteria and processes used to make grant
awards.
28 Ibid., p. 12.
29 Ibid., p. 13.
30 Ibid., p. 13.
31 Ibid., p. 15.
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Internal Revenue Service
The House committee recommends that the IRS receive $11.516 billion in appropriated funds for
FY2012, or $606 million less than the amount enacted for FY2011 and $1.768 billion less than
the budget request. Funding for the IRS is spread among five accounts: taxpayer services,
enforcement, operations support, BSM, and administration of the health insurance tax credit.
Recommended appropriations for each are discussed here.
Of the $11.516 billion in recommended appropriations for the IRS, $2.166 billion would be used
for taxpayer services. This amount is $108.5 million less than the amount enacted for FY2011 and
$179 million less than the budget request. Several taxpayer service grant programs are funded
through this account.32 Under H.R. 2434, “not less than” $5.1 million would be provided for the
Tax Counseling for the Elderly program, $9.5 million in grants for low-income taxpayer clinics,
and $12 million in grants for Volunteer Income Tax Assistance (VITA). These amounts match the
budget request with the exception of VITA grants, which would receive $4 million less. The
House committee further recommends that funding for the administration of the health insurance
tax credit established by the Trade Act of 2002 (P.L. 107-210) be folded into appropriations for
taxpayer services and that “not less than” $15.5 million be used for that purpose in FY2012. In
addition, the House committee expresses approval of the IRS’s decision not to develop a pre-
filled or simple tax return and makes it clear that it expects the IRS to seek specific authority and
appropriations from Congress before embarking on the development of a simple tax return pilot
program.33
As reported by the House committee, H.R. 2434 would provide $5.227 billion in appropriations
for tax law enforcement in FY2012, or $266 million less than the amount enacted for FY2011 and
$740 million less than the budget request. Of that amount, at least $60 million would be used to
support IRS’s involvement in the Interagency Crime and Drug Enforcement program. In its report
on the bill, the House committee expresses concern over the agency’s recent record of improper
payments to taxpayers while administering the first-time home buyer tax credit and the earned
income tax credit. As a step in the direction of reducing those erroneous payments, the House
committee directs the IRS to submit a report within 180 days of the enactment of the bill on steps
it has taken in the past year to reduce improper payments, and the steps it is planning to take in
the coming year to prevent improper payments related to all refundable tax credits. Another
matter of concern to the House committee is IRS’s role in the implementation of the Patient
Protection and Affordable Care Act of 2010 (PPACA). During FY2010 and FY2011, the agency
has received transfers totaling over $90 million from the Department of Health and Human
Services to implement certain provisions of the act. The House committee prohibits additional
transfers. It also prohibits the IRS from using appropriated funds in FY2012 to verify that
taxpayers have health insurance and to impose a penalty on those who lack coverage.34 These
prohibitions are included in the bill as Sections 107 and 108 of the administrative provisions for
the IRS.
The House committee recommends that the IRS receive $3.793 billion for operations support in
FY2012, or $282 million less than the amount enacted in FY2011 and $827 million less than the
budget request. At least $2 million of that amount is intended for the operating expenses of the
32 Ibid., p. 15.
33 Ibid., p. 16.
34 Ibid., p. 17.
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IRS Oversight Board. In its report on H.R. 2434, the House committee expresses concern about
the security of IRS’s information systems, especially their vulnerability to identity theft by
hackers trying to steal tax refunds.35 To address this concern, it directs the IRS to submit a report
within 30 days of the enactment of the bill on the number of taxpayers who have had their tax
return rejected because someone else improperly used their Social Security numbers to commit
tax fraud. The report should include such details as the average time taken to resolve such cases
and provide a refund, when one is due, and the number of cases that were not resolved within 45
days.
H.R. 2434 would provide $330 million in appropriations for the BSM program in FY2012, or $67
million more than the amount enacted for FY2011 but $4 million less than the budget request.36
As has been the case since the start of the program, the release of those funds is contingent on
approval by the House and Senate Appropriations Committees of expenditure plans that have
been reviewed the GAO. In its report on the bill, the House committee notes the progress the IRS
has made in recent years in developing a new customer account data engine known as CADE 2
and the likely productivity gains among IRS staff that it will make possible. When fully
operational, the system would make it possible to store up to 140 million individual taxpayer
account records and update them daily, if necessary.
Other Issues
In its report on the bill, the House committee expressed concern about two issues related to the
Dodd-Frank Act that do not involve direct appropriations under current law.
One issue is funding in FY2012 for the operations of the Office of Financial Research (OFR),
which was created by the Dodd-Frank Act to collect financial data and analyze financial market
activities in support of the Financial Stability Oversight Council, which was also created by the
act. While OFR’s start-up costs have been covered by transfers of funds from the Federal
Reserve, the Office has the authority to cover its operating expenses after it begins to operate on
July 21, 2011, through assessments on bank holding companies with total consolidated assets of
$50 billion or more and on non-bank financial companies supervised by the Board of Governors
of the Federal Reserve.
The House committee holds the view that the OFR should not have unlimited power to charge
fees and obligate funds for administrative costs. Thus, language is included in H.R. 2434 that
restricts OFR’s obligations to $64.5 million in FY2012.37
A second issue concerns funding in FY2012 for the newly operational Consumer Financial
Protection Bureau (CFPB) established by the Dodd-Frank Act. Under Section 1017 of the act, the
Board receives funds for its start-up and operating costs through transfers from the Federal
Reserve. These transfers are capped at 10% of the total operating expenses of the Federal Reserve
System in FY2011 (or $404 million), 11% of such expenses in FY2012 (or $445 million), and
12% of such expenses in FY2013 and thereafter (or $485 million). The dollar amounts in FY2013
and thereafter are adjusted for any increases in the employment cost index for total compensation
by state and local government workers during the 12 months ending on September 30 of the year
35 Ibid., p. 18.
36 Ibid., p. 19.
37 Ibid., p. 21.
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before the transfer; the index is computed quarterly by the U.S. Department of Labor. Moreover,
funding for the CFPB is not subject to review by the House and Senate Committees on
Appropriations. Between early July 2010 and early March 2011, the CFPB requested three fund
transfers totaling about $60 million from the Federal Reserve. In its budget request for FY2012,
the Treasury Department estimates that the Bureau’s operating budget will amount to $143
million in FY2011 and $329 million in FY2012, as it works to phase in key functions and
construct the necessary technological infrastructure.38
Expressing disappointment that the Bureau has not been not more “forthcoming” about what it
plans to do, how it proposes to accomplish those objectives, and how much it will cost to do so,
the House committee recommends that fund transfers from the Federal Reserve and the Bureau’s
authority to obligate funds be limited to $200 million in FY2012.39 In addition, to gain more
control over the Bureau’s budget and operations in the future, the House committee has added a
provision to H.R. 2434 that would subject funding for the CFPB to the annual appropriations
process beginning in FY2013. The House committee also directs the Bureau to submit an
operating plan to the House committee within 60 days of enactment of the bill that discusses how
the CFPB plans to allocate resources by “type of financial institution, financial product and
service, and consumer.”
A third issue, which is unrelated to the Dodd-Frank Act, deals with funding for Treasury’s Office
of Financial Stability (OFS), which administers the Troubled Assets Relief Program (TARP).
Under the Emergency Economic Stabilization Act of 2008 (P.L. 110-343), which created OFS and
TARP, no limits are placed on appropriations for the Office’s administrative expenses. Since the
House committee holds the view that no federal agency should have “unlimited spending
authority for administrative expenses,” it recommends that OFS’s authority to obligate funds be
limited to $200 million in FY2012.40 According to the report on H.R. 2434, this amount should be
sufficient to meet the Office’s operating costs, as the bill would also terminate a program that
OFS has been administering: the Home Affordable Modification Program.
Senate
The Senate Appropriations Committee recommends $12.237 billion for Treasury in FY2012. This
amount is $859 million less than the amount enacted for FY2011 and $1.801 billion less than the
President’s budget request. In the case of the President’s budget request, 90% of the difference
stems from a lower recommendation for IRS appropriations. Details on recommended funding for
each Treasury account and certain issues addressed in the committee’s report follow.
Departmental Offices
The Senate committee recommends that DO receive $306 million in appropriations in FY2012, or
the same amount that was enacted for FY2011 and $18.5 million less than the President’s budget
request. In its report on S. 1573, the Senate committee endorses a proposal included in the request
that two offices funded through the account be renamed “international affairs and economic
38 See written testimony of Elizabeth Warren, the Special Advisor to the Treasury Secretary for the Consumer Financial
Protection Bureau, at a hearing held by the House Subcommittee on Financial Institutions and Consumer Credit on
Mar. 16, 2011.
39 House Committee on Appropriations, report to accompany H.R. 2434, p. 8.
40 Ibid., p. 22.
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policy” and “domestic finance and tax policy,” respectively.41 Expressing concern about the
continuing rash of home mortgage foreclosures, the Senate committee directs the department to
focus its resources on finding more effective ways to convince mortgage servicers to grant
reductions in loan principal to homeowners at risk of foreclosure so they can afford to remain in
their homes, and to make better use of programs like Home Affordable Modification and the
Hardest Hit Fund to lower foreclosure rates among homes financed by Fannie Mae and Freddie
Mac. The Senate committee does not recommend that funding for the Office of Terrorism and
Financial Intelligence be treated as an appropriations account separate from DO, unlike the
House–passed version of H.R. 2434. At the same time, the Senate committee directs the
department to fully implement all sanctions and divestment measures imposed on North Korea,
Belarus, Burma, Iran, Sudan, and Zimbabwe, and to notify the Senate committee if a lack of
resources is hampering the department’s ability to do so. To bolster its oversight of the
department’s management of capital investments, the Senate committee directs it to prepare an
annual report on the steps it is taking to improve its handling of those investments and submit it
to the House and Senate appropriations committees within 30 days of the release of the
President’s annual budget request. The Senate committee also directs the department, in
consultation with the Department of Homeland Security, to submit a written report within 30 days
of the enactment of the bill on the status of a proposed rule to redefine stored value cards as
monetary instruments for the purpose of international transport reporting.
Office of Inspector General
The Senate committee recommends that OIG receive $30 million in appropriations in FY2012, or
the same amount that was enacted for FY2011 and $214,000 less than the budget request. In its
report on S. 1573, the Senate committee directs the office to undertake, when feasible, an audit of
the Bank Secrecy Act Information Technology Modernization project being managed by FinCEN;
it also requires OIG to submit a written report to the Senate committee by March 31, 2012 (and
semi-annually thereafter), n the extent to which contractors for the project are adhering to its
budget and production schedule.42 The committee also urges the office to perform audits, as its
resources permit, of Treasury’s activities to thwart money laundering and terrorist financing, its
management of capital investments, and the investment activities of the CDFI.
Treasury Inspector General for Tax Administration
The Senate committee recommends that TIGTA receive $152 million in appropriations for
FY2012, or the same amount that was enacted for FY2011 and $6 million less than the budget
request. In its report on S. 1573, the committee commends the office for its reviews of IRS’s
BSM program and other technology-improvement projects. At the same time, it urges TIGTA to
carefully monitor the IRS’s efforts to implement 56 tax provisions from the American Recovery
and Reinvestment Act of 2009, as well as the 40 tax provisions in the Patient Protection and
Affordable Care Act of 2010 (PPACA). In the case of the latter law, the Senate committee
expresses an interest in having TIGTA maintain oversight of IRS’s implementation and
administration of new requirements concerning taxpayer education and outreach, new tax credits,
and the development of an information technology base to support the PPACA initiatives.43
41 U.S. Congress, Senate Committee on Appropriations, Financial Services and General Government Appropriations
Bill, 2012, report to accompany S. 1573, 112th Cong., 1st sess. (Washington: GPO, 2011), p. 9.
42 Ibid., p. 13.
43 Ibid., p. 15.
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Provided resources and time allow, the Senate committee would also like TIGTA to undertake
projects in FY2012 that evaluate the newly created Return Preparer Program, examine schemes
like “phishing” that are intended to lure taxpayers into revealing personal information that could
be used to steal their identity and harm tax administration, and identify the best practices and
safeguards for reducing threats to the security of IRS employees and its databases and facilities.
Special Inspector General for the Troubled Asset Relief Program
Commending SIGTARP for the “quality of its audits and investigations” and the written material
it has provided to the general public and Congress, the Senate committee recommends that the
office receive $42 million in appropriations for FY2012, or $5.5 million above the amount
enacted for FY2011, but $5.6 million below the budget request. According to the report on S.
1573, a portion of FY2012 spending could be covered by funds carried over from the current
fiscal year.44
Financial Crimes Enforcement Network
The Senate committee recommends that FinCEN receive $111 million in appropriations in
FY2012, or the same amount that was enacted for FY2011 and $26.5 million above the budget
request. Acting on a request by Treasury, the Senate committee turns down a proposal to fund part
of FinCEN’s budget in FY2012 through a transfer of funds from the Treasury Forfeiture Fund. As
a result, the increase in appropriations relative to the budget request reflects the Senate
committee’s view that the entire FinCEN budget be funded from the account designated for
FinCEN salaries and expenses. In addition, the Senate committee rejects a proposal in the budget
request to cut $2.3 million from the office’s funding by reducing access to BSA information by
state and local law enforcement agencies. In its report on S. 1573, the Senate committee defends
the rejection on the grounds that it makes no sense to restrict the flow of data that “is a critical
tool for investigating serious financial crimes, including money laundering, mortgage fraud, drug
trafficking, and terrorist financing” to those authorities.45 The Senate committee also expresses
support for FinCEN’s efforts to modernize the information technology infrastructure for
collecting and analyzing BSA data. In the Senate committee’s view, the “previous infrastructure is
outdated and limits the capabilities of (these) users.” FinCEN is directed to continue to submit
semi-annual reports to the Senate committee on the status of the modernization project; the
reports should address “milestones planned and achieved, progress on cost and schedule,
management of contractor oversight, strategies to involve stakeholders, and acquisition
management efforts.”
Treasury Forfeiture Fund
The Senate committee recommends a rescission of $750 million of unobligated balances in the
fund for FY2012.
Financial Management Service
The Senate committee recommends that FMS receive $218 million in appropriations for FY2012,
or $15 million less than the amount enacted for FY2011 and $1 million less than the budget
44 Ibid., p. 15.
45 Ibid., p. 16.
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request. In making such a recommendation, the Senate committee notes that the bureau can
expect to have at its disposal an estimated $97 million in FY2012 from the fees it charges
agencies for its debt collection services.46 Under Section 111 of S. 1573, FMS is given the
authority to transfer funds from the salaries and expenses account to the Debt Collection Fund to
cover the costs of debt collection. Those funds should be reimbursed from the amount of debt
collected by FMS.
Alcohol and Tobacco Tax and Trade Bureau
The Senate committee recommends that TTB receive $100 million in appropriations for FY2012,
or $920,000 less than the amount enacted for FY2011 and $2 million more than the budget
request. This amount includes $2 million for the cost of hiring special law enforcement agents to
combat tobacco smuggling and other criminal activities within the jurisdiction of TTB.
Bureau of the Public Debt
For FY2012, the Senate committee recommends appropriations of $166 million for BPD, or $9
million below the amount enacted for FY2011 and the same amount as the budget request.
Community Development Financial Institutions Fund
The Senate committee recommends $200 million in appropriations for the CDFI in FY2012, or
$26.5 million less than the amount enacted for FY2011 and $27 million below the budget request.
Despite the recommended reduction in funding, the Senate committee expresses support for the
basic aims of the fund, especially its role in expanding private investment in community
development projects, such as affordable housing, community centers, and increases in lending to
small firms. Of the $200 million in funding, $36 million would be used for the Bank on USA
program, which promotes improved access to financial services and consumer credit for lower-
income households; the Senate committee directs CDFI to submit a detailed spending plan for the
program within 120 days of enactment of the bill.47 Another $22 million would be used to fund
the Healthy Food Financing Initiative, which is intended to increase the supply of affordable,
wholesome foods in urban and rural communities lacking access to such foods. In addition, the
Senate committee recommends that $12 million be set aside for grants, loans, and technical
assistance and training programs for native American, Alaskan, and Hawaiian communities.
Recognizing the difficulty of attracting private funding in the current economic environment, the
Senate committee favors extending the current waiver of matching fund requirements for CDFI
programs so they can continue to invest in and assist targeted communities. The requirements
would be reinstated “when capital markets return to normal function.”
Internal Revenue Service
The Senate committee recommends that the IRS receive $11.663 billion in appropriations for
FY2012, or $459 million less than the amount enacted for FY2011 and $1.621 billion less than
the budget request. In its report on S. 1573, the Senate committee directs the agency to include
details on planned reorganizations, job cuts or increases, and changes to current service and
46 Ibid., p. 18.
47 Ibid., p. 21.
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enforcement activities in the operating plan the IRS is required to submit along with its annual
budget request. The plan should include comments from the IRS Oversight Board.
One IRS account provides funding for taxpayer services. The Senate committee recommends that
it receive $2.195 billion in FY2012, or $78.5 million less than the amount enacted for FY2011
and $150 million less than the budget request. Of the recommended funding, “not less than” $6.1
million should be used for the tax-counseling for the elderly program, $10 million for low-income
taxpayer clinic grants, and $12 million (over two years) for the community volunteer income tax
assistance matching grant program. Another $208 million would be used to fund the operations of
the Taxpayer Advocate Service (TAS). The Senate committee deems it “imperative” that the IRS
continues to staff TAS Centers in Alaska and Hawaii with collection and examination technical
advisors, along with other needed staff. In addition, the Senate committee expresses concern
about the ability of the agency to handle the added demands placed on its workload by PPACA
without compromising the quality and effectiveness of its service to taxpayers. Reflecting the
continuing controversy over the constitutionality of the health insurance mandates in the act, the
Senate committee directs the IRS to identify in its budget request and operating plan for FY2013
any proposed increases in spending to implement the health care mandates in the law. It also
directs the IRS to submit to the Senate committee within 30 days of the enactment of the bill a
report addressing the amount and use of funds that the Department of Health and Human Services
has transferred to the IRS in order to implement the PPACA provisions, as well as the provisions
in the Health Care and Education Reconciliation Act of 2010 for which it is responsible.
The largest IRS account covers enforcement activities. For FY2012, the Senate committee
recommends that the IRS receive $5.229 billion in appropriations for such activities, or $264
million less than the amount enacted for FY2011 and $738 million less than the budget request.
Of the recommended funding, “not less than” $60 million would be transferred to the Interagency
Crime and Drug Enforcement program. In its report on S. 1573, the Senate committee expresses
support for current initiatives by the IRS to combat offshore tax evasion by companies and
individuals, and to improve income reporting compliance through increased audits of non-
corporate (or passthrough) business and high-income individual tax returns.48 The report also
draws attention to two specific compliance issues that may result in substantial losses of revenue.
One concerns a series of recent TIGTA reports examining “fraudulent and erroneous payments in
the First-Time Homebuyer and Residential Energy tax credit programs.” The Senate committee
directs the IRS to increase its scrutiny of questionable claims for these and other credits. A second
issue is the misclassification of workers as independent contractors. Such an error usually leads to
the underreporting and underpayment of employment and payroll taxes by employers and
workers. To get a better understanding of the extent of the problem, the IRS is undertaking a
three-year study of worker classification and other employment tax issues. Underscoring its
concern about the revenue effects from the misclassification of workers, the Senate committee
urges the IRS to maintain adequate staffing in a program (SS-8) designed to assist employers in
determining a worker’s employment tax status. On the matter of collecting overdue individual tax
debt, the Senate committee extends a ban on using appropriated funds to administer a debt
collection program involving the use of private debt collectors. (See Section 105 of the report.)
The ban was first imposed on FY2010 appropriations and was intended to enforce a decision
announced by the IRS in March 2009 to terminate a controversial private tax debt collection
program that started three years earlier.49
48 Ibid., p. 27.
49 Ibid., p. 31.
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Operations Support
For FY2012, the Senate committee recommends that the IRS receive $3.893 billion for operations
support, or $182.5 million below the amount enacted for FY2011 and $727 million less than the
budget request. Several stipulations apply to the use of these funds. Up to $250 million would be
available for information technology support through the end of FY2013. Another $1 million
would be available for research through the end of FY2014, and not less than $2 million would be
used to fund the activities of the IRS Oversight Board. In its report on S. 1573, the Senate
committee expressed some concerns about IRS’s management of its non-BSM information
technology projects. Of particular concern are the classification of investment projects, oversight,
risk management, contingency planning, and contractor performance and accountability.50 As a
result, the Senate committee directs the IRS to include in its FY2013 budget request a multi-year
funding plan within the Operations Support account for upgrading and modernizing the agency’s
aging information technology infrastructure. In addition, the IRS must include in the budget
justification documents for FY2013 an up-to-date cost and performance schedule for all major
information systems funded through the account.
Business Systems Modernization
A separate account is maintained for funding for the BSM. The Senate committee recommends
that the IRS receive $330 million for the program in FY2012, or $69 million more than the
amount enacted for FY2011 and $3.4 million below the budget request. To augment these funds,
the Senate committee encourages the agency to draw upon user fees collected by the agency from
services it provides. In the Senate committee’s view, BSM is the IRS’s “highest management and
administrative priority.” Completion of the new core taxpayer account database in time for the
2012 filing season would allow for daily processing of taxpayer accounts, leading to faster direct
deposit of refunds for electronic filers, quicker account adjustments, and expedited resolution of
taxpayer issues and transactions.51
Health Insurance Tax Credit Administration
The Senate committee recommends that the IRS receive $15.5 million for administering the
health insurance tax credit in FY2012, or the same amount that was enacted for FY2011 and $2.5
million less than the budget request.
Title II: Executive Office of the President52
The FSGG appropriations bill provides funding for all but three offices under the EOP.53 The
White House, the Office of Management and Budget, and the Office of National Drug Control
Policy are among the EOP offices funded through FSGG appropriations. Table 4 lists the enacted
50 Ibid., p. 29.
51 Ibid., p. 30.
52 This section was authored by Barbara Schwemle (x7-8655).
53 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.
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amounts for FY2010 and FY2011, the President’s FY2012 request, and amounts recommended
by the House and Senate appropriations committees for FY2012.
Table 4. Executive Office of the President, FY2010-FY2012
(in millions of dollars)
FY2012
FY2012
FY2010
FY2011
FY2012
House
Senate
Enacted
Enacted
Request
Committee
Committee
The White House (total)
$208
$207
$207
$195
$205
Compensation of the President
0.5
0.5
0.5
0.5
0.5
The White House Office (salaries
59 58 58 56 58
and expenses)
Executive Residence, White
14 14 14 13 14
House (operating expenses)
White House Repair and
3 2 1 1 1
Restoration
Council of Economic Advisers
4
4
4
4
4
National Security Council and
12 13 13 12 13
Homeland Security Council
Office of Administration
115
115
116
109
115
Office of Management and Budget
93
92
92
83
91
Federal Drug Control Programs
428 406 356 352 359
(total)
Office of National Drug Control
30 27 12 12 15
Policy (net of rescissions)
High Intensity Drug Trafficking
239 239 200 239 239
Areas Program
Other Federal Drug Control
154 141 144 102 106
Programs
Counterdrug Technology
5 0 0 0 0
Assessment Center
Unanticipated
Needs
1 1 1 0 1
Partnership Fund for Program
38 (-5) 20 0
0
Integrity Innovation
Integrated, Efficient and Effective
— 0 60 5
0
Uses of Information Technology
Special Assistance to the President
5 5 4 4 4
(salaries and expenses)
Official Residence of the Vice
0.3 0.3 0.3 0.3 0.3
President (operating expenses)
Total: EOP and Funds
$772 $706 $740 $640 $661
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), FY2012 Budget Appendix, pp. 1107-1118 and pp. 1235-1237, and U.S. Executive
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Office of the President, Fiscal Year 2012 Congressional Budget Submission (Washington: February 2011), H.Rept.
112-136; S.Rept. 112-79.
Note: FY2011 enacted rescission was applied to the Partnership fund for program integrity account. FY2012
rescission for both the President’s request and House committee approved amounts would apply to the Office
of National Drug Control Policy.
President’s Budget Request and Key Issues
The Administration’s FY2012 budget requested an appropriation (discretionary funds) of $739.3
million for the EOP and funds appropriated to the President, an increase of $34.1 million or 4.8%
above the $705.2 million (discretionary funds) enacted for FY2011. The budget requested the
same appropriation as that enacted for FY2011 for the Unanticipated Needs account and
increased or decreased appropriations for the following accounts:
• The White House Office (-$61,000 or -0.1%), the Executive Residence (-$15,000
or -0.1%), the White House Repair and Restoration (-$1.0 million or -50%).
• The Council of Economic Advisers (+$211,000 or +5.0%), the National Security
Council and Homeland Security Council (+$26,000 or +0.2%), and the Office of
Administration (+$799,000 or +0.7%).
• The Office of Management and Budget (-$90,000 or -0.1%).
• The Special Assistance to the President (-$221,000 or -4.9%), and the Official
Residence of the Vice President (-$19,000 or -5.8%).
The justification that accompanied the EOP’s budget submission noted that the increase requested
for the National Security Council and Homeland Security Council “funds requirements
commensurate with supporting the President’s efforts on cybersecurity, Weapons of Mass
Destruction, terrorism, transborder security, information sharing, resilience policy, including
preparedness and response, and global engagement, as outlined in Presidential Study-Directive
1.” According to the justification, the requested funding increase for the Council of Economic
Advisers “supports additional economists required for monitoring the state of the economy for the
President and his staff and assisting the President in developing economic policies promoting the
growth of the economy, creating jobs, and increasing incomes and standards of living for all
Americans.”54 The appropriation requested for the account entitled Integrated, Efficient and
Effective Uses of Information Technology (IEEUIT) would be used “to establish a coherent
Federal strategy for centralized, efficient provision of IT services and infrastructure across the
Government.”55
Federal Drug Control Programs
For the accounts under the Federal Drug Control Programs, the President’s FY2012 budget
requested an appropriation of $355.7 million, a decrease of $50.5 million or 12.4% below the
$406.2 million enacted for FY2011. The FY2012 budget justification states that the proposed
54 U.S. Executive Office of the President, Fiscal Year 2012 Congressional Budget Submission (Washington: February
2011), pp. NSC&HSC-4 and CEA-3.
55 Ibid., p. OMB-12.
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reduction in funding “reflects a reprioritization of resources.”56 Appropriations for all of the
accounts follow.
• Office of National Drug Control Policy (ONDCP, -$3.7 million or -13.5%).
• High Intensity Drug Trafficking Areas Program (HIDTAP, -$38.5 million or
-16.1%).
• Other Federal Drug Control Programs (OFDCP, +$3.0 million or +2.1%).
• Counterdrug Technology Assessment Center (CTAC, a rescission of $11.3
million is requested).
House Action
H.R. 2434, as reported by the House Committee on Appropriations would provide an
appropriation of $639.5 million for the EOP, which is $65.7 million (-9.3%) less than the FY2011
enacted appropriation and $99.8 million (-13.5%) less than the President’s request. The House
report states the House committee’s disappointment “that the Administration’s request did not
propose additional reductions for the EOP” and that “Therefore, the Committee has reduced the
Salaries and Expenses appropriation for each organization.”
The appropriations for each of the EOP accounts, as recommended by the House Appropriations
Committee are as follows:
• The White House Office: $55.5 million; 2.9 million (-5%) less than the FY2011
enacted amount and almost $2.9 million (-4.9%) less than the President’s request.
The House committee report states that this amount includes “sufficient funds”
for the Office of National AIDS Policy.
• Executive Residence, White House: $13 million; $684,000 (-5.0%) less than the
FY2011 enacted amount and $669,000 (-4.9%) less than the President’s request.
• White House Repair and Restoration: $1 million; $1 million (-50%) less than the
FY2011 enacted amount and the same as the President’s request.
• Council of Economic Advisers: $4.0 million; $210,000 (-5.0%) less than the
FY2011 enacted amount and $421,000 (-9.6%) less than the President’s request.
• National Security Council and Homeland Security Council: $12.4 million;
$652,000 (-5%) less than the FY2011 enacted amount and $678,000 (-5.2%) less
than the President’s request.
• Office of Administration: $109.3 million; $5.7 million (-5%) less than the
FY2011 enacted amount and $6.5 million (-5.6) less than the President’s request.
Of the total, $10.7 million would remain available until expended for continued
modernization of the information technology infrastructure within the EOP. The
office is directed to report annually to the House Committee on Appropriations,
at the same time that the President’s budget is submitted, on progress on
modernization of information technology, including the amounts obligated and
56 Ibid. p. ONDCP-7.
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expended and for what purposes, specific milestones achieved, and requirements
and specific plans for further investment.
• Office of Management and Budget: $82.6 million; $9.2 million (-10%) less than
the FY2011 enacted amount and $9.1 million (-9.9%) less than the President’s
request. The House committee encourages OMB and federal agencies to use
business management techniques, including continuous process improvement
methods, to improve the use of resources. OMB is directed to examine and revise
Circular A-94 on cost-benefit analysis, incorporate life-cycle cost analysis, and
report to the House Committee on Appropriations on the status of the review
within 180 days of the act’s enactment.
• Unanticipated Needs: 0.0; $1 million (-100%) less than the FY2011 enacted
amount and the President’s request.
• Partnership Fund for Program Integrity Innovation: 0.0; $20 million less than the
President’s request.
• Integrated, Efficient and Effective Uses of Information Technology: 5.0 million;
$55 million less than the President’s request. The OMB Director could transfer
the funds to one or more agencies to carry out projects and would submit
monthly reports to the House and Senate Committees on Appropriations
identifying the savings achieved by the government-wide information technology
reform efforts.
• Special Assistance to the President: $4.3 million; $227,000 (-5.0%) less than the
FY2011 enacted amount and $6,000 (-0.1%) less than the President’s request.
• Official Residence of the Vice President: $307,000; $19,000 (-5.8%) less than the
FY2011 enacted amount and the same as the President’s request.
H.R. 2434, as reported, would fund the federal drug control accounts at the following levels:
• ONDCP: $23 million; $4.1 million (-15.1%) less than the FY2011 enacted
amount and $413,000 (-1.8%) less than the President’s request. Of the total,
$250,000 would remain available until expended for policy research and
evaluation. ONDCP is expected “to focus resources on the counter-drug policy
development, coordination and evaluation functions which are the primary
mission of the Office and the original reason for its existence.”
• HIDTAP: $238.5 million; the same as the FY2011 enacted amount and $38.5
million (+19.3%) more than the President’s request. Of the total, up to $2.7
million could be used for auditing services and related activities. The ONDCP
Director would notify the House and Senate Committees on Appropriations of
the initial allocation of FY2012 funding among HIDTAs within 45 days after the
act’s enactment and of planned uses of discretionary HIDTA funding within 90
days after the act’s enactment.
• OFDCP : $102.0 million; $38.6 million (-27.5%) less than the FY2011 enacted
amount and $41.6 million (-29%) less than the President’s request. The
appropriation would be allocated as follows: $88.6 million for the Drug-Free
Communities Program, $8.9 million for anti-doping activities, $1.9 million for
the United States membership dues to the World Anti-Doping Agency, and $2.5
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million for competitive discretionary grants. An appropriation is not provided for
the anti-drug media campaign.
Section 628(a)(1) of H.R. 2434, as reported, would provide the mandatory appropriation for the
compensation of the President ($450,000, including $50,000 for expenses). According to the
House Committee on Appropriations report, this is an account “where authorizing language
requires the payment of funds.”
Administrative provisions under the appropriation for the EOP and funds appropriated to the
President are the following:
• Section 201 would continue to authorize the OMB Director (or other official
designated by the President) to transfer up to 10% of appropriations between the
White House, Executive Residence at the White House, White House Repair and
Restoration, Council of Economic Advisers, National Security Council and
Homeland Security Council, Office of Administration, Special Assistance to the
President, and Official Residence of the Vice President accounts, after the House
and Senate Committees on Appropriations are notified at least 15 days in
advance. An appropriation would not be increased by more than 50% by such
transfers. The Vice President would approve transfers from the Special
Assistance to the President or Official Residence of the Vice President accounts.
• Section 202 would rescind $11.3 million in unobligated balances of prior year
appropriations from the Counterdrug Technology Assessment Center.
• Section 203 would prohibit the use of funds to pay the salaries and expenses of
any EOP officer or employee to prepare, sign, or approve statements abrogating
legislation passed by the House of Representatives and the Senate and signed by
the President.
• Section 204 would require the OMB Director to submit quarterly reports to the
House and Senate Committees on Appropriations on the implementation of
Executive Order 13563 relating to Improving Regulation and Regulatory Review.
The reports would be submitted on January 2, April 2, July 2, and October 1,
2012, and would include information on increasing public participation in the
rulemaking process and reducing uncertainty; improving coordination across
federal agencies to eliminate redundant, inconsistent, and overlapping
regulations; and identifying existing regulations that have been reviewed and
determined to be outmoded, ineffective, or excessively burdensome.
• Section 205 would require the OMB Director to report to the House and Senate
Committees on Appropriations, within 30 days after the act’s enactment, on the
costs of implementing P.L. 111-203, the Dodd-Frank Wall Street Reform and
Consumer Protection Act. The report would include the estimated mandatory and
discretionary obligations of funds through FY2016, by federal agency and by
fiscal year, including (1) the estimated obligations by cost inputs such as rent,
information technology, contracts, and personnel; the methodology and data
sources used to calculate such estimated obligations; and the specific section of
such act that requires the obligation of funds; and (2) the estimated receipts
through FY2016 from assessments, user fees, and other fees by the federal
agency making the collections, by fiscal year, including the methodology and
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data sources used to calculate such estimated collections; and the specific section
of such act that authorizes the collection of funds.
Section 632 of H.R. 2434, as reported, would prohibit the use of funds for the White House
Director of the Office of Health Reform, the Assistant to the President for Energy and Climate
Change, the Senior Advisor to the Secretary of the Treasury assigned to the Presidential Task
Force on the Auto Industry and Senior Counselor for Manufacturing Policy, and the White House
Director of Urban Affairs.
The House committee continues the provision that would prohibit funding for the EOP to request
an FBI background investigation except with the express consent of the individual involved or in
extraordinary circumstances involving national security at Section 610.
Senate Action
S. 1573, as reported by the Senate Committee on Appropriations, would provide an appropriation
of $660.7 million for the EOP, which is $45 million (-6.4%) less than the FY2011 enacted
appropriation and $79.1 million (-10.7%) less than the President’s request.
The appropriations for each of the EOP accounts, as recommended by the Senate Appropriations
Committee, are as follows:
• The White House Office: $57.8 million; $584,000 (-1%) less than the FY2011
enacted amount and $523,000 (-0.9%) less than the President’s request. The
Senate committee report directs the EOP “to allocate sufficient resources to
continue the robust operation of the Office of National AIDS Policy” and “the
administration to continue to coordinate a Government-wide effort to develop
and implement a domestic AIDS strategy.”
• Executive Residence, White House: $13.5 million; $137,000 (-1.0%) less than
the FY2011 enacted amount and $122,000 (-0.9%) less than the President’s
request.
• White House Repair and Restoration: $990,000; $1 million (-50.5%) less than the
FY2011 enacted amount and $10,000 (-1.0%) less than the President’s request.
• Council of Economic Advisers: almost $4.2 million; the same as the FY2011
enacted amount and $211,000 (-4.8%) less than the President’s request.
• National Security Council and Homeland Security Council: $13 million; the
same as the FY2011 enacted amount and $26,000 (-0.2%) less than the
President’s request.
• Office of Administration: $114.9 million; $141,000 (-0.1%) less than the FY2011
enacted amount and $940,000 (-0.8) less than the President’s request. Of the
total, $10.7 million would remain available until expended for continued
modernization of the information technology infrastructure within the EOP. This
initiative will “refresh the aging information technology infrastructure,
strengthen disaster recovery and information security capabilities, and transition
the [EOP’s] communications architecture to integrate mobile devices while
complying with security and records management requirements.” The office is
directed to “place a top priority on the implementation of comprehensive policies
and procedures” to preserve all records, work closely with the National Archives
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and Records Administration, and fully apprise the committee of funding needed
to preserve and retain records.
• Office of Management and Budget: $90.8 million; $917,000 (-1.0%) less than the
FY2011 enacted amount and $827,000 (-0.9%) less than the President’s request.
The Senate report states that the committee “expects OMB to provide timely and
complete responses ... to all requests for information” and directs the agency to
report to the committee within 120 days after the act’s enactment on “the current
capabilities of and deficiencies in the Federal Government’s core budgeting
system.”
• Unanticipated Needs: $988,000; $10,000 (-1.0%) less than the FY2011 enacted
amount and $12,000 (-1.2%) less than the President’s request.
• Partnership Fund for Program Integrity Innovation: 0.0; $20 million less than the
President’s request. The Administration is directed to leverage the FY2010
funding to continue the initiative. The Senate report reminds the interagency
council that semiannual reports must be submitted to the committees, directs that
the council “be the exclusive decisionmaking body,” and directs the OMB
director, as the council chair, “to seek consensus and input to the maximum
extent possible from council members and participating Federal and State
agencies.”
• Integrated, Efficient and Effective Uses of Information Technology: 0.0; $60
million less than the President’s request. The Administration is directed to
continue the current reform efforts using funding from the EOP and other
sources, to regularly apprise the committee “of how Government-wide IT reform
efforts affect agency-specific projects and missions on a case-by-case basis,” and
to immediately notify the committee of changes in agency spending plans for IT
projects.
• Special Assistance to the President: $4.3 million; $221,000 (-4.8%) less than the
FY2011 enacted amount and the same as the President’s request.
• Official Residence of the Vice President: $307,000; $19,000 (-5.8%) less than the
FY2011 enacted amount and the same as the President’s request.
S. 1573, as reported, would fund the federal drug control accounts at the following levels:
• ONDCP: $26.1 million; $959,000 (-3.5%) less than the FY2011 enacted amount
and $2.7 million (+11.6%) more than the President’s request. The increased
funding “prevents a reduction-in-force of 20 FTE.” Policy research is not funded.
The office is directed to provide an update on the implementation of the National
Academy of Public Administration’s study within 30 days after the act’s
enactment and is urged to ensure that the staff in the Office of Demand Reduction
are experts in drug abuse prevention. The EOP is urged to improve the office’s
responsiveness in providing critical budget information to the committee.
Reports, to be submitted to the committee on a quarterly basis, are to discuss the
“continued efforts to address prescription drug abuse.”
• HIDTAP: $238.5 million; the same as the FY2011 enacted amount and $38.5
million (+19.3%) more than the President’s request. The office is directed to
consult with the HIDTA’s prior to allocating funds. Of the total, up to $2.7
million could be used for auditing services and associated activities and up to
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$500,000 is to be used to continue the operation and maintenance of the
Performance Management System. HIDTA funds are to be expeditiously
transferred to the appropriate drug control agencies and are to be withheld from a
State “until such time as a State or locality has met its financial obligation.”
• OFDCP : $105.9 million; $34.7 million (-24.6%) less than the FY2011 enacted
amount and $37.6 million (-26.2%) less than the President’s request. The
appropriation would be allocated as follows: $92.6 million for the Drug-Free
Communities Support Program (DFCSP), including $2 million for National
Community Anti-Drug Coalition training; $8.9 million for anti-doping activities;
$1.9 million for the United States membership dues to the World Anti-Doping
Agency; $1.1 million for activities related to model State drug laws; and $1.4
million for drug court training and technical assistance. For reasons of fiscal
austerity and mixed reviews of the campaign’s effectiveness, an appropriation is
not provided for the anti-drug media campaign.
Administrative provisions under the appropriation for the EOP and funds appropriated to the
President are the following:
• Section 201 would continue to authorize the OMB Director (or other official
designated by the President) to transfer up to 10% of appropriations between the
White House, Executive Residence at the White House, White House Repair and
Restoration, Council of Economic Advisers, National Security Council and
Homeland Security Council, Office of Administration, Special Assistance to the
President, and Official Residence of the Vice President accounts, after the House
and Senate Committees on Appropriations are notified at least 15 days in
advance. An appropriation would not be increased by more than 50% by such
transfers. The Vice President would approve transfers from the Special
Assistance to the President or Official Residence of the Vice President accounts.
• Section 202 would require the ONDCP Director to submit to the Senate and
House Appropriations Committees, within 60 days after the act’s enactment, and
prior to initially obligating more than 20% of the ONDCP funds, “a detailed
narrative and financial plan on the proposed uses of all funds under the account
by program, project, and activity.” The reports must be updated every six months
and include any changes in the estimates and assumptions of the previous reports.
New projects and changes in the funding for ongoing projects require advance
approval by the committees.
• Section 203 would provide that up to 2% of ONDCP appropriations could be
transferred between appropriated programs within ONDCP with advance
approval by the Senate and House Committees on Appropriations, but such
transfer could not increase or decrease an appropriation by more than 3%.
• Section 204 would provide that up to $1 million of ONDCP appropriations could
be reprogrammed within a program, project, or activity with advance approval by
the Senate and House Appropriations committees.
• Section 205 would rescind $11.3 million in unobligated balances of prior year
appropriations from the Counterdrug Technology Assessment Center.
The Senate committee continues the provision at Section 610 that would prohibit the use of funds
appropriated to the EOP to request an FBI background investigation except with the written
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consent of the individual involved, within six months prior to the date of the request and during
the same presidential administration, or in extraordinary circumstances involving national
security.
Title III: The Judiciary57
As a co-equal branch of government, the judiciary presents its budget to the President, who
transmits it to Congress unaltered. The President’s FY2012 budget request for $7.29 billion is
$423 million more than appropriated for FY2010 and $387 million above FY2011 enacted
amounts. Table 5 lists the enacted amounts for FY2010 and FY2011, the President’s FY2012
request, and amounts recommended by the House and Senate appropriations committees for
FY2012.
Table 5. The Judiciary Appropriations, FY2010-FY2012
(in millions of dollars)
FY2012
FY2012
FY2010
FY2011
FY2012
House
Senate
Enacted
Enacted
Request
Committee
Committee
Total: Supreme Court (total)
$89
$82
$84
$83
$83
Salaries and Expenses
74
74
75
75
75
Building and Grounds
15
8
9
8
8
U.S. Court of Appeals for the
33 33 35 31
32
Federal Circuit
U.S. Court of International Trade
21
21
23
21
21
Courts of Appeals, District
6,519 6,554 6,913 6,403
6,569
Courts, and Other Judicial
Services (Subtotal)
Salaries and Expenses
5,011
5,004
5,236
4,791
4,971
Defender Services
978
1,026 1,099 1,050 1,034
Fees of Jurors and
62 52 60 57
59
Commissioners
Court Security
453
467
513
500
500
Vaccine Injury Trust Fund
5
5
5
5
5
Administrative Office of the U.S.
83 83 88 80
82
Courts
Federal Judicial Center
27
27
29
26
27
United States Sentencing
17 17 18 16c 17
Commission
Judicial Retirement Funds
82
90
104b 99d 104e
Total: The Judiciary
$6,871a $6,907 $7,294 $6,759
$6,934
57 This section was authored by Lorraine Tong (x7-5846).
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Sources: Consolidated Appropriations Act, 2010 (Division C, P.L. 111-117). H.Rept. 112-136, pp. 110-112,
H.Rept. 112-136, and S.Rept. 112-79. The Judiciary Fiscal Year 2012, Congressional Budget Summary (Washington:
February 2011) was also examined. All figures are rounded. Columns also may not equal the total due to
rounding.
Notes: The Judiciary Fiscal Year 2012, Congressional Budget Summary (Washington: February 2011) was also
examined. According to the Summary, the FY2012 request for the Judicial Retirement Funds was $103.8 million,
and the total judiciary request was $7,293.9 million. All figures are rounded. Columns also may not equal the
total due to rounding.
a. Total for the FY2010 enacted amount reflects $10 million (to remain available until September 30, 2011)
to assist the federal courts along the southwest border with increased workload, as part of P.L. 111-230
(FY2010 emergency supplemental appropriations for border security, and for other purposes).
b. According to The Judiciary Fiscal Year 2012, Congressional Budget Summary, the FY2012 request for the
Judicial Retirement Funds was $103.8 million, and the total judiciary request was $7,293.9 million.
c. The United States Sentencing figure for the House recommendation of $16.1 included a $0.1million
rescission.
d. The House did not include appropriations for judicial retirement funds in Title III, as it has in previous
years. Instead, these mandatory funds were included in Section 628 of H.R. 2434. The House provided
an additional $334 million in mandatory funding for other judiciary accounts in Title III. Judicial
retirement funds recommended in H.R. 2434 are counted in Title III totals in this report to be consistent
with prior year calculations.
e. The Senate provided $103.8 million (rounded to $104 million) in Section 628 of S. 1573.
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
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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).58
Judge Julia S. Gibbons, chair of the Budget Committee of the Judicial Conference of the United
States,59 expressed the judiciary’s recognition that the country was undergoing very serious
financial difficulties and the need to reduce federal spending. In her April 6, 2011, written
testimony submitted to the House Subcommittee on the judiciary’s FY2012 budget request, Judge
Gibbons stated that the Judicial Conference proposed a FY2012 budget that reflects the
judiciary’s smallest requested percentage increase on record (an estimated 4.3% over the previous
year). She asked that “Congress take into account the impact of the legislative process and law
enforcement on the jurisdiction and workload of the federal courts, and ensure that the Judiciary
continues to have the resources required to perform its statutory duties and to address a growing
workload.”60 She noted that the workload of the federal courts could further increase if the
budgets of the Department of Justice and Department of Homeland Security are increased. Judge
Gibbons also stated noted that 80% of the judiciary’s costs are spent on salaries and rent, and that
a funding shortfall would see significant staffing reductions in court clerks and probation and
pretrial services nationwide.61
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. At the FY2012 budget hearing, she
stated that one of the biggest cost-containment efforts has been to limit space costs through
process improvements and redesigns so that projected rent payments to the General Services
Administration are “nearly $400 million below the 2012 rent projection made prior to initiating
our cost-containment efforts.”62 The judiciary has also taken steps to control personnel costs by
changing salary and performance policies for court staff in order to reduce future compensation
costs. These policies are estimated to save compensation costs by $300 million through FY2019.
According to Judge Gibbons, containing information technology costs, such as the consolidation
58 Administrative Office of the U.S. Courts, The Judiciary Fiscal Year 2012 Congressional Budget Summary
(Washington: February 2011), p. 33.
59 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.
60 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, April
6, 2011, p. 3. The testimony was given prior to the enactment of the FY2011 FSGG budget.
61 Ibid., pp. 2-3.
62 Ibid., p. 6.
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of computer servers at a single location, is expected to save $65 million in cost avoidance.63
Director of the Administrative Office of the U.S. Courts James Duff, who also testified, stated
that a task force had been formed—comprising representatives from every directorate—to
examine ways to curtail spending while maintaining court services to the public.64
Judicial Security65
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
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.66 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. According
to the USMS, the Marshals Service now “Assesses, mitigates and deters approximately 1,400
threats and inappropriate communications against the judiciary each year.”67
The FY2012 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 first authorized in FY2009
as a result of the judiciary’s stated concerns that FPS was not providing adequate 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 the protective services.
Increased court security enhancements might be necessary should more suspects charged with
terrorism be tried in federal courts rather than military tribunals.
63 Ibid.
64 Statement of James Duff, Director, Administrative Office of the U.S. Courts, U.S. House, Committee on
Appropriations Subcommittee on Financial Services and General Government, April 6, 2011, p. 4.
65 For an analysis of court security and federal building security in general, see CRS Report R41138, Federal Building,
Courthouse, and Facility Security, by Lorraine H. Tong and Shawn Reese.
66 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.
67 U.S. Marshals Service, Fact Sheet, Judicial Security 2011, April 5, 2011, http://www.usmarshals.gov/duties/
factsheets/jsd-2011.pdf.
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Workload and Southwest Border Issues
In her April 6, 2011, written testimony to the subcommittee, Judge Gibbons stated that
bankruptcy filings are at near record levels due to the downturn in the economy. Such filings
increased 29% in 2008, 35% in 2009, and 20% in 2010 to 1,572,597 filings. For 2011, the
judiciary projected an additional 20,000 case filings nationwide.68 She also highlighted the
increase in probation and pretrial services. Convicted offenders under the supervision of federal
probation officers reached a record 126,642 in 2010 and is projected to increase to 131,000 cases
in 2011. Pretrial supervision cases have also grown—110,671 cases in 2010, and a projected
increase to 113,000 in 2011.69
Judge Gibbons also stated at the hearing, “After several years of steady growth, our criminal
workload nationally is projected to decline 2 percent, from 78,213 filings in 2010—an all-time
high—to 76,500 filings in 2011.” Between 2000 and 2010, criminal case filings grew 25%
nationally with immigration prosecutions in the judicial districts along the southwest border
spurring the increase.70 She emphasized that the federal judiciary does not determine the
workload of the courts but must handle the cases that are brought before the courts.71
Judicial Pay
Judicial pay has been an issue of concern to the judiciary for many years. 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 last two year-
end reports 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.72 However, federal judges received a salary adjustment in 2009. In the FY2011
request, the judiciary proposed that federal judges receive the same automatic cost-of-living
68 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, April
6, 2011, pp. 3-4.
69 Ibid., pp. 4-5.
70 Ibid., 4.
71 In August 2010, Congress passed H.R. 6080, legislation making FY2010 emergency supplemental appropriations for
border security, to provide $600 million to enhance southwest border security.71 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.
72 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
Jr. 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 have 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.
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adjustments that Members of Congress are authorized to receive. However, no cost-of-living
adjustment was provided to Members of Congress or judges in FY2011.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 have repealed a law requiring that salary increases
for federal judges and Supreme Court Justices be specifically authorized by acts of Congress, and
would have applied the same automatic annual cost-of-living adjustment to judicial salaries as
takes effect under the General Schedule for civilian federal employees. No further action was
taken prior to the adjournment of the 111th Congress. Although the Senate Appropriations
Committee recommended a 2010 salary adjustment for Justices and judges under Section 307
(S.Rept. 111-43),73 the enacted FY2010 legislation (P.L. 111-117) did not provide for the salary
adjustment.
In the 112th Congress, on March 14, 2011, Senator Dianne Feinstein introduced, S. 569, the
Federal Judicial Fairness Act of 2011, legislation similar to S. 2725. The bill, with nine
cosponsors, has been referred to the Senate Judiciary Committee where it is pending. The
judiciary did not propose a cost-of-living adjustment for federal judges for FY2012.
FY2012 Request74
For FY2012, the judiciary requested $7.29 billion in total appropriations, an increase of $386.9
million over the $6.90 billion enacted FY2011. Approximately 86.1% of the requested increase
would cover pay adjustments, benefits, and inflation to maintain current services. The FY2012
request included funding for an additional 523 full-time-equivalent (FTE) positions, including
264 FTEs to meet increased workload requirements, 16 FTE magistrate judges and staff, and 9
FTE police officers and associated costs for the Supreme Court. A total of 35,695 FTEs were
requested for FY2012, an increase of 1.5% from the estimated 35,172 FTEs in 2011.75
The following summarizes the FY2011 enacted amount, the FY2012 judiciary budget request,
and the amounts recommended by the House and Senate appropriations committees for FY2012.
Supreme Court
The total FY2012 request for the Supreme Court was $84.1 million contained in two accounts: (1)
Salaries and Expenses: $75.6 million was requested, a $1.7 million increase over the $73.9
million enacted for FY2011; and (2) Care of the Building and Grounds: $8.5 was requested, a
$0.3 million increase over the $8.2 million enacted for FY2011. The total budget FY2012 request
was a $2.0 million increase over the FY2011 appropriation of $82.1 million. The request included
pay and benefits increases to maintain FY2011 services, and 9 FTE additional police officers and
associated costs (e.g., training) to enhance the Court’s security to staff new posts needed after
73 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.
74 U.S. Administrative Office of the U.S. Courts, The Judiciary Fiscal Year 2012 Congressional Budget Justification
(Washington: February 2011).
75 The Judiciary Fiscal Year 2012 Congressional Budget Summary, p. 5, and The Judiciary Fiscal Year 2012
Congressional Budget Justification, p. 6.
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completion of the Supreme Court Building Modernization Project. The House committee
recommendation for FY2012 was $74.8 million for the Salaries and Expenses account, and $8.2
million for the Care of Building and Grounds account for a total of $83.0 million, which would
include funds for additional police officers as requested. The Senate committee recommended the
same amounts recommended by the House committee.
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
FY2012 budget request was $35.1 million, which was $2.6 million more than the FY2011
appropriation of $32.5 million. The House committee recommendation for FY2012 was $31.5
million. The Senate committee recommendation for FY2012 was $31.9 million.
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
import transactions and the administration as well as enforcement of federal customs and
international trade laws. The FY2012 request was $22.9 million, a $1.5 million increase over the
FY2011 appropriation of $21.4 million. The budget request would pay for standard pay and other
inflationary adjustments, and to maintain current services. The House committee recommendation
for FY2012 was $20.6 million. The Senate committee recommendation for FY2012 was $21.0
million.
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 FY2012 request was $6,912.7 million, a $359.0 million increase over the
FY2011 appropriation of $6,553.7 million. The House recommendation for FY2012 was $6,402.9
million. The Senate committee recommendation for FY2012 was $6,568.6 million.
The total of this budget group comprised the following accounts:
Salaries and Expenses
The FY2012 request for this account was $5,236.2 million, an increase of $232 million over the
FY2011 appropriation of $5,004.2 million. According to the budget request, this increase is
needed primarily for inflationary and other adjustments to maintain the courts’ current services.
The House recommendation for FY2012 was $4,790.9 million. The Senate committee
recommendation for FY2012 was $4,970.6 million.
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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 FY2012 request
for the Trust Fund account was $5.0 million, a $0.2 million increase from the FY2011
appropriation of $4.8 million. The House committee recommendation for FY2012 was $4.8
million. The Senate committee recommended the same amount as the House committee.
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 FY2012 request was $513.1 million, a $46.4 million increase over the FY2011
appropriation of $466.7 million. The request included 50 additional court security officers for
new and renovated existing space expected to be delivered in FY2012, changes in operating
expenses based on anticipated billings from the Federal Protective Service, and improvements,
and enhancements to security systems and equipment. The House recommendation for FY2012
was $500.0 million. The Senate committee recommendation was the same as the House
recommendation.
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 cost
for this account is driven by the number and type of prosecutions brought by U.S. Attorneys. The
FY2012 request for these services was $1,098.7 million, a $73.0 million increase over the
FY2011 appropriation of $1,025.7 million. The request includes an additional 61 FTE positions to
handle 206,200 defense representations and complex caseloads. The House recommendation for
FY2012 was $1,050 million. The Senate committee recommendation for FY2012 was $1,034.2
million.
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 FY2012 request was $59.7 million, a $7.4 million increase
over the FY2011 appropriation of $52.3 million. The requested increase would be primarily for
adjustments to allow payment for statutory fees and expenses. The House recommendation for
FY2012 was $57.3 million. The Senate committee recommendation for FY2012 was $59.0
million.
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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 FY2012 request for
AOUSC was $88.5 million, a $5.6 million increase over the FY2011 appropriation of $82.9
million. The request would fund adjustments to its base, and maintain current services, including
recurring costs such as travel, communications, service agreements, and supplies. Three new
positions (two FTEs) were requested for a six-month period to address high priority court support
functions (including modernization and consolidation of the judiciary’s nationwide accounting
system). AOUSC also receives non-appropriated funds from fee collections and carry-over
balances to supplement its appropriations requirements. The House recommendation for FY2012
was $80.0 million. The Senate committee recommendation for FY2012 was $82.0 million.
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 FY2012 request was $29.0 million, a $1.7 million increase
over the FY2011 appropriation of $27.3 million. The request would cover standard pay and other
inflationary adjustments, the hiring of one FTE (two positions), and enhanced education and
training initiatives. The House recommendation for FY2012 was $26.3 million. The Senate
committee recommendation for FY2012 was $27.0 million.
United States Sentencing Commission
The commission promulgates sentencing policies, practices, and guidelines for the federal
criminal justice system. The FY2012 request was $17.9 million, an $0.8 million increase over the
FY2011 appropriation of $16.8 million. The increase would cover pay and other inflationary
adjustments. The House recommendation for FY2012 was $16.1 million (which included a
rescission of $0.1 million). The Senate committee recommendation for FY2012 was $16.5
million.
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. According to the House report, the FY2012 request was
$99.0 million,76 an $8.6 million increase over the FY2011 appropriation of $90.4 million. The
House recommendation for FY2012 was $99.0 million. The Senate recommendation for FY2012
was $103.8 million.
76 According to The Judiciary Fiscal Year 2012, Congressional Budget Summary, the FY2012 judiciary request was for
$103.8 million.
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General Provision Changes
The House committee recommended new and continuing language under general provisions. The
recommended continuing language contained in Sections 301-Section 305 were as follows.
• Section 301, which would continue language to permit funds for salaries and
expenses to be available for employment of experts and consultant services (as
authorized by 5 U.S.C. 3109). (The judiciary also proposed this section.)
• Section 302, which would continue language to permit up to 5% of any
appropriation made available for FY2012 to be transferred between judiciary
appropriations accounts, provided that no appropriation shall be decreased by
more than 5% or increased by more than 10% by any such transfer except in
certain circumstances. In addition, the language would provide that any such
transfer shall be treated as a reprogramming of funds under Sections 604 and 608
of the bill and shall not be available for obligation or expenditure except in
compliance with the procedures set forth in those sections. (The judiciary also
proposed this section.)
• Section 303, which would continue language authorizing not to exceed $11,000
to be used for official reception and representation expenses incurred by the
Judicial Conference of the United States. (The judiciary also proposed this
section.)
• Section 304, which would continue language enabling the judiciary to contract
for repairs under $100,000.
• Section 305, which would continue language to authorize a court security pilot
program. (The judiciary also proposed this section.)
The House Committee added new language for Sections 306-308, as follows.
• Section 306, which would extend a temporary judgeship in Kansas.
• Section 307, which would rescind $100,000 of prior year unobligated balances
from the United States Sentencing Commission.
• Section 308, which would require that the President submit to Congress, without
change, proposed supplemental appropriations submitted to the President by the
legislative branch and the judicial branch.
The Senate committee recommended the same provisions (Sections 301, 302, 303, and 305, listed
above). In addition, it recommended the following:
• 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.
• Section 305, which would grant the judicial branch the same tenant alteration
authorities as the executive branch.
• Section 307, which would extend for one year the authorization of a temporary
judgeship in Hawaii and a temporary judgeship in Kansas.
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Title IV: District of Columbia77
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).78 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.79 The approved budget must then be transmitted to the President, who forwards it to
Congress for its review, modification, and approval.80
On April 1, 2011, the mayor of the District of Columbia submitted a proposed $9.6 billion general
operating fund budget, including enterprise funds, to the District of Columbia Council. The
mayor’s budget includes a proposed plan intended to address a projected $322 million budget
shortfall for FY2012.81
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 6 shows details of the
District’s special federal payments, including the FY2011 enacted amounts, the amounts included
in the President’s FY2012 budget request, and the amounts recommended by the House and
Senate appropriations committees for FY2012.
Table 6. District of Columbia Special Federal Payments, FY2010-FY2012
(in millions of dollars)
FY2012
FY2010
FY2011
FY2012
FY2012 House
Senate
Enacted
Enacted
Request
Committee
Committee
Resident Tuition Support
$35
$35
$35
$30
$30
Emergency Planning and
15 15 15 15 15
Security
District of Columbia Courts
261
243
229
224
230
Defender Services
55
55
55
55
55
Court Services and Offender
212 212 217 213 213
Supervision Agency
Public Defender Service
37
37
42
37
37
Criminal Justice Coordinating
2 2 2 2 2
Council
77 This section was authored by Eugene Boyd (x7-8689).
78 See Article I, Sec. 8, clause 17 of the U.S. Constitution and Section 446 of P.L. 93-198, 87 Stat. 801.
79 120 Stat. 2028.
80 87 Stat. 801.
81 Government of the District of Columbia, Executive Office of the Mayor, FY2012 Budget Overview, Washington.,
DC, April 1, 2011, p. 3, http://budget.dc.gov/budget-overview.
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FY2012
FY2010
FY2011
FY2012
FY2012 House
Senate
Enacted
Enacted
Request
Committee
Committee
Judicial Commissions
0.5
0.5
0.5
0.3
0.5
St. Elizabeth Hospital Campus
0
0
18
0
0
HIV/AIDS Prevention
0
0
5
0
0
Water and Sewer Authority
20
11
25
0
15
Office of the Chief Financial
2 0 0 0 0
Officer
School Improvement
75
78
67
60
60
D.C. National Guard
0.4
0.4
2
0.4
0.4
Perm. Supportive Housing
17
10
0
0
0
Arts and Humanities
0
0
5
0
0
Total: Special Federal
$752 $699 $717 $637 $658
Payments
Sources: H.Rept. 111-202; Appendix, Budget of U.S. Government Budget, Fiscal Year 2011; S.Rept. 111-238;
Appendix, Budget of the U.S. Government, FY2012, H.Rept. 112-136; S.Rept. 112-79.
The District of Columbia Budget and General Provisions
The President’s Budget Request
On February 14, 2011, the Obama Administration released its detailed budget requests for
FY2012. The Administration’s proposed budget requested $716.7 million in special federal
payments to the District of Columbia. Approximately three-quarters ($544.7 million) of this
budget request would be targeted to the courts and criminal justice system. The President’s budget
also requested $104.1 million in support of education, including $67 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 14.5% of the
Administration’s budget request. The President’s total budget request of $716.7 million represents
a 2.4% increase from the FY2011 appropriations of $700.1 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 $9.6
billion. After its review, the council revised and approved the District’s budget on May 25, 2011,
and forwarded it to the mayor for his signature. The mayor signed the measure on June 29, 2011,
and it was transmitted to Congress for its review on July 8, 2011.
House Appropriations Committee
The Financial Services and General Government Appropriations Act of FY2012, as reported by
the House Appropriations Committee (H.Rept. 112-136) includes $592.3 million in special
federal payments to the District of Columbia. This is $107.9 million less than appropriated in
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FY2011, and $124.4 million less than requested by the President. The bill would reduce federal
support for court operations by $19 million below the amount appropriated for FY2011. It would
continue to support elementary and secondary education initiatives in the District, including
school vouchers, but at a level $17.7 million less than the amount appropriated for FY2011.
The bill would prohibit the use of federal funds for a needle exchange program, or to enact rules
governing medical marijuana, or to support efforts to achieve congressional voting representation
for residents of the District. In addition, it would restrict the use of District and federal funds for
abortion services except in cases of incest, rape, or the life of the mother was threatened.
Senate Appropriations Committee
S. 1573, as reported, includes $658 million in special federal payments to the District of
Columbia. This is $41 million less than appropriated in FY2011, and $59 million less than
requested by the President, but $21 million more than recommended by the House committee bill.
The bill would reduce federal support for court operations by $13 million below the $243 million
appropriated for FY2011. Like its House counterpart, the bill would continue to support
elementary and secondary education initiatives in the District, including school vouchers, but at a
level $18 million less than the amount appropriated for FY2011.
The Senate committee bill would continue several controversial general provisions included in
previous years’ appropriations acts that are also included in the House version of the bill. These
include provisions that would prohibit the use of federal funds for a needle exchange program, or
to enact rules governing medical marijuana, or to support efforts to achieve congressional voting
representation for residents of the District. In addition, it would restrict the use of District and
federal funds for abortion services except in cases of incest, rape, or if the life of the mother was
threatened. The bill also includes two new general provisions. One would allow the Public
Defender Service to purchase liability insurance for its attorneys, staff, and board members. The
other provision would change, from 2 years to 5 years, the frequency that the Government
Accountability Office would conduct management audits of the entities charged with chartering
District of Columbia public charter schools.
Title V: Independent Agencies
Title V provides funding for more than two dozen independent agencies which perform a wide
range of functions, including the management of federal real property (GSA), the regulation of
financial institutions (SEC), and mail delivery (USPS). Table 7 lists the enacted amounts for
FY2010 and FY2011, the President’s FY2012 request, and amounts recommended by the House
and Senate appropriations committees for FY2012.
Table 7. Independent Agencies Appropriations, FY2010-FY2012
(in millions of dollars)
FY2012
FY2012
FY2010
FY2011
FY2012
House
Senate
Enacted
Enacted
Request
Committee Committee
Administrative Conference of the
$2 $3 $3 $3 $3
United States
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FY2012
FY2012
FY2010
FY2011
FY2012
House
Senate
Enacted
Enacted
Request
Committee Committee
Christopher Columbus Fel owship
1 0.5 0 0 0.5
Foundation
Civilian Property Realignment Board
— — 88 0 0
Commodity Futures Trading
169 203 308 172 240
Commissiona
Consumer Product Safety Commission
118
115
122
111
115
Election Assistance Commission
93
16
14
7
15
Federal Communications Commissionb (356) (336) (359)
(319)
(354)
Federal Deposit Insurance
(38) (43) (45) (45) (45)
Corporation: Office of Inspector
General (by transfer)c
Federal Election Commission
67
66
67
66
66
Federal Labor Relations Authority
25
25
26
24
25
Federal Trade Commission
169
175
199
155
142
General Services Administration
653
-986d 617 -1,758d -850d
Harry S. Truman Scholarship
1 1 0 1 1
Foundation
Merit Systems Protection Board
43
43
44
42
43
Morris K. Udal Foundation
6
6
6
3
6
National Archives and Records
457 417 408 360 383
Administration
National Credit Union Administration
1
1
2
0.5
1
Office of Government Ethics
14
14
14
14
14
Office of Personnel Management (total) 20,378 20,828 21,151
21,128
21,128
Office of Special Counsel
18
18
19
18
19
Postal Regulatory Commission
14
14
14
14
14
Privacy and Civil Liberties Oversight
2 1 2 -1e 0
Board (net of rescissions)
Recovery and Accountability
—
— 32 25 28
Transparency Board
Securities and Exchange Commission
1,095
1,185
1,407
1,185
1,407
Selective Service System
24
24
25
24
24
Smal Business Administration
824
730
985
978
955
United States Postal Service
363
331
323
316
320
United States Tax Court
49
52
60
51
51
Total: Independent Agencies
$24,585
$23,280
$25,937
$22,936
$24,149
Sources: Consolidated Appropriations Act, FY2010 (Div. C, P.L. 111-117); Appendix, Budget of the U.S.
Government, FY2011; H.Rept. 111-181; S.Rept. 111-238; Appendix, Budget of the U.S. Government, FY2012,
H.Rept. 112-136; S.Rept. 112-79.
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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.
b. The FCC received all of its funding through the collection of regulatory fees in FY2010 resulting in no
direct appropriation. The FCC is expected to be funded entirely by regulatory fees in FY2011 and
FY2012 as well. Therefore, the amounts shown for the FCC represent budgetary resources made
available to the agency but those amounts are not included in the table totals.
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. GSA’s real property activities are funded through the Federal Buildings Fund (FBF), a multi-billion dol ar
revolving fund into which rental payments from federal agencies that lease GSA space are deposited.
Revenue in the FBF is then made available by Congress each year to pay for GSA’s real property
activities. A negative total for the FBF occurs when the amount of funds made available for expenditure
in a fiscal year is less than the amount of new revenue expected to be deposited. GSA funding levels for
FY2011 as enacted and FY2012 as approved by the House Committee on Appropriations are negative
because, in each instance, rent paid into the FBF exceeded the amount of new budget authority provided
to GSA.
e. Rescission of prior year unobligated balances.
Civilian Property Realignment Board82
The President requested $88 million for a new Civilian Property Realignment Board (CPRB),
which would develop recommendations for the President as to which civilian federal properties
should be consolidated, reconfigured, redeveloped, leased, sold, or conveyed. In the House, a
similar body would be established under H.R. 1473, the Civilian Property Realignment Act of
2011.83 House appropriators recommended no funding for the CPRB, but wrote that “the
Committee believes a Civilian Property BRAC is a meritorious idea deserving of serious
consideration. Should the Congress move forth with legislation to create a Civilian Property
BRAC, the Committee will lend its support as able.”84 The Senate Appropriations Committee also
recommended no funding for the Board.
Commodity Futures Trading Commission85
The Commodity 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
Agriculture Subcommittee in the House, and the Financial Services and General Government
82 This section was authored by Garrett Hatch (x7-7822).
83 H.R. 1473 was introduced on May 4, 2011, and was reported by the House Committee on Transportation and
Infrastructure, Subcommittee on Economic Development, Public Buildings, and Emergency Management on May 25,
2011. No further action has been taken. For more information on H.R. 1473, see CRS Report R41830, Civilian
Property Realignment Act of 2011 (H.R. 1734): Analysis of Key Provisions, by Garrett Hatch.
84 U.S. Congress, House Committee on Appropriations, Financial Services and General Government Appropriations
Bill, 2012, report to accompany H.R. 2434, 112th Cong., 1st sess., H.Rept. 112-136 (Washington: GPO, 2011), p. 48.
85 This section was written by Mark Jickling (x7-7784).
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Subcommittee in the Senate. P.L. 112-10 provides $203 million for the CFTC for FY2011. The
President requested $308 million for the CFTC for FY2012, which would be $105 million more
than FY2011 enacted appropriations. The House Appropriations Committee recommended $172
million for FY2012, which would be $136 million less than the President’s request and $31
million below FY2011 enacted appropriations.
The Senate Appropriations Committee has recommended $240 million, an increase of about $37
million from FY2011, but $38 million below the Administration’s request. The House
Appropriations Committee recommended $172 million for FY2012, which would be $136
million less than the President’s request and $31 million below FY2011 enacted appropriations.
Consumer Product Safety Commission86
The Consumer Product Safety Commission (CPSC) is an independent federal regulatory agency
whose mission is to reduce the risk of injury from using consumer products. It endeavors to do so
by developing safety standards for consumer products; promoting uniformity between state and
local regulations; and conducting or encouraging research into the causes of product-related
deaths, illnesses, and injuries and ways to prevent them in the future.
For FY2011, the CPSC is receiving $115 million in appropriated funds, or about $3 million less
than the amount enacted for FY2010. The decrease follows several years of substantial growth in
CPSC funding. As recently as FY2007, the largest appropriation CPSC ever received (in nominal
dollars) was about $62 million. But in fiscal years 2008 through 2010, Congress approved
significant increases in funding for the agency, largely to support major reforms initiated by
Consumer Product Safety Improvement Act of 2008 (CPSIA, P.L. 110-314). The 110th Congress
passed the act largely in response to a series of highly publicized recalls of imported products,
particularly unsafe toys and other items manufactured for children.
Section 1574 of the Department of Defense and Full-Year Continuing Appropriations Act, 2011
(P.L. 112-10) directs the Government Accountability Office to conduct a study of the usefulness
and reliability of the information on consumer product safety collected by the CPSC through a
publicly accessible database that has been up and running since March 11, 2011; the study must
be submitted to the House and Senate Committees on Appropriations no later than October 12,
2011. The database was established by Section 6A of the CPSIA and is intended to provide a
mechanism for consumers to both report problems with consumer products and investigate the
risk of harm associated with specific products. In addition, the database is designed to help the
CPSC identify trends in particular product hazards more quickly and efficiently.
For FY2012, the Obama Administration has requested $122 million in appropriations for the
CPSC. Such a level of funding would allow the agency to hire an additional 34 full-time
equivalent employees (FTEs), bringing the total size of FTE staff to about 584.87 Relative to the
FY2011 budget request, the FY2012 proposal would reduce the budget for information
technology capital and development by $3.1 million. But it would increase funding for data
intake, incident review and investigation by $3.1 million to hire 20 new FTEs; the added funds
represent the estimated cost of operating the new public database on consumer product hazards in
86 This section was written by Gary Guenther (x7-7742).
87 See written testimony by Inez Tenenbaum, the Chairman of the Consumer Product Safety Commission, for a hearing
held by the House Appropriations Subcommittee on Financial Services and General Government on March 31, 2011.
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FY2012. Under the budget request, funding for the replacement of information technology
equipment and software would rise by $0.5 million to $1.5 million. In addition, the proposal
would allocate $400,000 to the creation of an Office of Education, Global Outreach, and Small
Business Ombudsman and set aside $665,000 to hire three FTEs to support financial management
oversight.88
Action in the House.
In its report on H.R. 2434, the House Appropriations Committee recommends an appropriation of
$111 million for the CPSC in FY2012, or $4 million less than the amount enacted for FY2011
and $11 million less than the budget request. Of that amount, $0.5 million would be available
until September 30, 2013, for the pool and spa grants program established by the Virginia Graeme
Baker Pool and Spa Safety Act (P.L. 110-140).89
The House committee has “strong concerns” about the accuracy and reliability of the information
that is being collected through the new public database for consumer product safety information.
More specifically, it believes the database is “of little value to consumers and manufacturers”
because the information needed to file a report about harm associated with a product through the
database is “insufficient.” So until changes are made in the reporting requirements to improve the
reliability and accuracy of reports of harm, the House committee wants the $3 million that has
been requested to cover expenses linked to the database in FY2012 to be used for other, more
effective purposes, such as risk assessment and enforcement. Section 622 of the bill would
prohibit the use of appropriated funds to manage the database in FY2012.90
In addition, the House committee has misgivings about the application of Section 101 of the
CPSIA to youth off-road vehicles. Section 101(a) of the act sets declining limits on the lead
content of products designed or intended for children 12 years of age or younger. But Section
101(b) authorizes the CPSC to exclude specific products that exceed the lead limits from those
limits if it determines on the basis of sound scientific evidence that the lead in such products will
not harm the health of children or have an adverse effect on public health or safety. In early 2009,
the Specialty Vehicle Institute of America filed a petition to exclude certain parts used in youth
motorized recreational vehicles from the lead limits under Section 101(b). Though the CPSC
denied the petition, it decided to issue a stay of enforcement that lasted from March 11, 2009, to
May 1, 2011. In its report on H.R. 2434, the House committee expresses concern that
enforcement of the limits under Section 101(a) would lead to greater use of adult off-road
vehicles by children, and that such an outcome would pose a greater risk of harm to children than
exposure to the lead in the components of such vehicles. Section 630 of the bill would exclude
youth off-road vehicles and bicycles from the lead limits in the CPSIA.91
88 Ibid.
89 House Appropriations Committee, report to accompany H.R. 2434, p. 41.
90 Ibid., p. 71.
91 Ibid., p. 72.
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Action in the Senate
The Senate Appropriations Committee recommends in its report (S.Rept. 112-79) to accompany
S. 1573 that the CPSC receive $114.5 million in appropriations for FY2012, or $288,000 less than
the amount enacted for FY2011 and $7.5 million less than the budget request.
One issue the report addresses is the performance of the Consumer Product Safety Information
Database during the six months following its launch in March 2011. The committee asserts that
SaferProducts.gov has been “quite successful in its first 6 months, even resulting so far in a recall
of a children’s product in July that was demonstrated to have caused serious laceration injuries to
children.”92
The committee also directs the commission to submit drywall reports quarterly in FY2012, rather
than monthly, and encourages it to collect and report data annually on playground injuries and
deaths.
Section 502 of the bill gives the CPSC the authority to “compel” foreign manufacturers to
provide it with requested information on product defects. A lack of such authority is seen to have
hindered the commission’s investigations in the recent past into reported problems with some
imported products, such as drywall imported from China.
Section 503 requires the CPSC to issue a safety standard for button cell batteries, which are used
in many consumer products and pose a health hazard to small children who swallow them. The
committee asserts in the report that the standard should require the batteries to be securely
enclosed in compartments and the products containing them to display a warning label.
Section 506 mandates that the CPSC issue a rule eliminating the risk of strangulation from the
cords of window coverings. The commission has identified the cords as one of the top five hidden
household hazards. In recent years, it has recalled tens of millions of window coverings for this
reason. In the committee’s view, though a voluntary standard is in place for window blinds, it has
not eliminated the risk of strangulation from their cords.93
Election Assistance Commission94
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.
92 U.S. Congress, Senate, Committee on Appropriations, Financial Services and General Government Appropriations
Bill, 2012, report to accompany S. 1573, 112 Cong., 1st sess. (Washington: GPO, 2011), p. 72.
93 Ibid., p. 73.
94 This section was written by Kevin Coleman (x7-7878).
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For FY2011, the President’s budget request included $16.8 million for the EAC, of which $3.25
million was to be transferred to the National Institute of Standards and Technology (NIST). P.L.
112-10, the Department of Defense and Full-Year Continuing Appropriations Act, 2011, provided
$16.3 million for the EAC, of which $3.25 million was to be transferred to NIST.
For FY2012, the President’s budget request includes $13.7 million for the EAC, of which $3.25 is
to be transferred to NIST for its work to support the development of testing guidelines for voting
equipment. The House Committee on Appropriations recommends $6.9 million for the EAC and
notes that the amount is $9.4 million less than in FY2011 and $6.9 million less than the budget
request. The House committee recommends the transfer of $1.6 million to NIST, which is $1.8
million less than in FY2011 and $1.6 less than the request. The House committee also expresses
its concern about the EAC’s high management operating costs and the effectiveness of the
agency. The Senate Appropriations Committee recommends $14.8 million for the EAC, $1
million above the budget request, of which $3.25 million is to be transferred to NIST.
Federal Communications Commission95
The Federal Communications Commission, 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 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, as is the case for FY2012, there is no direct appropriation.
For FY2012, the House Appropriations Committee approved $319,004,000 for agency salaries
and expenses with no direct appropriation (all funding will be obtained through the collection of
regulatory fees). This level is $16,790,000 less than FY2011 and $39,797,000 less than the
administration requested.
The House committee recommendation includes bill language, similar to that included in
previous Appropriations Acts, which allows
• collection of $319,004,000 in Section 9 (regulatory) fees;
• a prohibition on amounts collected in excess of $319,004,000 from being
available for obligation;
• a prohibition on remaining offsetting collections from prior years from being
available for obligation;
• retention of $85,000,000 of proceeds from the use of a competitive bidding
system;
95 This section was written by Patricia Moloney Figliola (x7-2580).
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• up to $4,000 for official reception and representation expenses;
• purchase and hire of motor vehicles; and
• special counsel fees.
The House committee wrote that it remains concerned with the Commission’s decision to begin
regulating the Internet, specifically the precedent that this decision sets and its impact on future
innovation. Therefore, the House committee included Section 621 to prohibit funds for
implementation of the Commission’s net neutrality order.
The House committee also wrote that it is aware of concerns related to possible interference to
Global Positioning System (GPS) devices due to terrestrial broadband service. The House
committee wrote that it remains engaged on this issue and awaits the final report by the Technical
Working Group. The House committee approved an amendment introduced by Representatives
Austria and Yoder that would prohibit funding for the FCC to remove conditions on or permit
certain commercial broadband operations until the FCC has resolved concerns of interference by
these operations on GPS devices. The amendment was adopted on a voice vote.
The House committee wrote that it believes that FCC involvement in cybersecurity should not
result in regulations or activities that duplicate or contradict the multi-agency cybersecurity
mitigation and response efforts being lead by the Departments of Defense and Homeland
Security.
The House committee also wrote that it understands the FCC is promulgating a rule to address
abuses in intercarrier compensation related to the modernization of the Universal Service Fund. In
addition, the House committee wrote it believes that the service that local exchange carriers
provide to rural Americans was “important” and encouraged the Commission to maintain a
reasonable intercarrier compensation system for rural local exchange carriers.
The House committee wrote that it is concerned about the disparity in access to broadband
between Puerto Rico and the 50 states. It cited recent studies that have found that only 31–37
percent of residents of Puerto Rico have adopted broadband measured at the lowest speed tracked
by the Commission. The House committee encouraged the Commission to implement policies
that increase broadband accessibility and adoption in Puerto Rico.
For FY2012, the Senate Appropriations Committee approved the FCC’s requested budget of
$354,181,000,96 all of which is to be derived from the collection of fees. This budget level is
$18,387,000 above the FY2011 enacted level and $35,177,000 more than what was approved by
the House committee.
The Senate committee recommendation includes bill language, similar to that included in
previous appropriations acts, which would
• extend FCC’s exemption from the Anti-deficiency Act until December 31, 2013.
96 The FCC’s original budget request specified an estimate of $358,801,000. The FCC subsequently notified the
committee that its original estimate had been erroneous and that the correct estimate is $354,181,000.
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• prohibit the FCC from enacting certain recommendations regarding universal service that
were made to it by the Universal Service Joint Board. The Joint Board’s recommendation
would limit universal support to one line, which the Committee believes would be
harmful to small businesses, especially in rural areas, which need a second line for a fax
or for other business purposes.
• encourage the FCC to maintain a reasonable intercarrier compensation system for rural
local exchange carriers as it prepares to promulgate a rule to address compensation rates
from the Universal Service Fund.
Federal Deposit Insurance Corporation: Office of the Inspector General97
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.
P.L. 112-10 provides $43 million for the FDIC OIG for FY2011. The President requested, and the
House and Senate appropriations committees both recommended $45 million for FY2012, an
increase of $2 million from FY2011 enacted appropriations.
Federal Election Commission98
The FEC is an independent agency that 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.99 The
FEC also administers the presidential public financing system.100 In recent years, FEC
appropriations have generally been noncontroversial and subject to limited debate in committee
or on the House and Senate floors.101
For FY2012, the President requested $67.0 million for the FEC. As in recent years, personnel and
information technology (IT) expenses are expected to consume much of the agency’s budget in
FY2012.102 The Commission requested no new full-time equivalent positions over the current
allocation of 375.103 Among other points, the IT budget is expected to cover ongoing
improvements to the FEC website and additional hardware and software to manage and publicly
disclose campaign finance data.
97 This section was written by Darryl Getter (x7-2834).
98 This section was written by Sam Garrett (x7-6443).
99 FECA is 2 U.S.C. §431 et seq. The FEC can refer criminal cases to the Justice Department.
100 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.
101 For additional discussion of current campaign finance issues, see CRS Report R41542, The State of Campaign
Finance Policy: Recent Developments and Issues for Congress, by R. Sam Garrett.
102 Federal Election Commission, FY2012 Congressional Budget Justification, Washington, DC, February 14, 2011, pp.
5-6, http://www.fec.gov/pages/budget/fy2012/FY_2012_Cong_Budget_Justification_final.pdf.
103 Ibid., p. 5.
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The House Appropriations Committee recommended an FY2012 appropriation of $66.4 million,
$0.65 million less than the President’s requested amount and the same amount appropriated in
FY2011. The House committee report and legislative language contain no additional instructions
except a $5,000 limit on “reception and representation,” a prohibition that has long been included
in FEC appropriations provisions.
A separate section of the FSGG bill also addresses campaign finance issues. Section 738 of the
FY2012 bill (concerning government-wide provisions) contains a prohibition on requiring
government contractors to provide information about their or their employees’ federal campaign
contributions, electioneering communications, or independent expenditures as a condition of
receiving the contract. As CRS has noted elsewhere, the Obama Administration has reportedly
considered issuing an executive order to require additional disclosure of government contractors’
political expenditures. Similar language to that in the FSGG bill has also appeared in other
legislation currently before Congress.104
The Senate Appropriations Committee also recommended a $66.4 million appropriation with a
$5,000 cap on reception and representation expenses. The Senate committee bill and committee
report do not contain additional instructions for the agency. The Senate committee bill appears not
to contain the House committee bill’s provisions concerning contractor disclosure.
Federal Trade Commission105
The Federal Trade Commission (FTC) is an independent agency whose mission is to protect
consumers and maintain or enhance competition in a wide range of industries. It does so mainly
by enforcing laws that prohibit anticompetitive, deceptive, or unfair business practices, and by
educating consumers and business owners to foster informed consumer choices, compliance with
the law, and a better understanding of the competitive process.
Operating funds for the agency come from three sources, listed here in descending order of
importance: (1) appropriations, (2) pre-merger filing fees under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, and (3) Do-Not-Call registry fees.
In FY2011, appropriations for the FTC totaled $291 million, or $23 million less than the amount
requested by the Administration for that year. Pre-merger filing fees are expected to bring in
another $93 million, while fees for the Do-Not-Call registry should contribute $21 million.
According to an FTC budget document, the agency is allocating 57% of its FY2011 operating
funds (or $231 million) to the goal of protecting consumers; the remaining $174 million goes to
the goal of maintaining and enhancing competition.106
For FY2012, the Obama Administration is requesting $326 million in appropriations for the FTC,
or $37 million more than the amount enacted for FY2011. The additional funds would be used to
pay for mandatory contract and building replacement costs, hire 25 new full-time equivalent
employees, support increased demand for the FTC’s Consumer Response Systems and Services,
104 For additional discussion, see the “Potential Policy Considerations for Congress” section of CRS Report R41542,
The State of Campaign Finance Policy: Recent Developments and Issues for Congress, by R. Sam Garrett.
105 This section was written by Gary Guenther (x7-7742).
106 Federal Trade Commission, Fiscal Year 2012 Congressional Budget Justification Summary, p. 44. Available at
http://www.ftc.gov/ftc/oed/fmo/budgetsummary12.pdf.
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improve its ability to investigate and litigate complex cases, acquire up-to-date data on the
pharmaceutical industry for use in agency cases and reports, and streamline and modernize the
agency’s information systems.107 It is assumed in the budget request that pre-merger filing fees
will provide $110 million in added funds, and that Do-Not-Call fees will contribute another $19
million, giving the FTC a total budget in FY2012 of $455 million.
Action in the House
The House Appropriations Committee recommends in the report on H.R. 2434 that the FTC
receive $284 million in appropriations in FY2012, or $7 million less than the amount enacted for
FY2011 and $42 million less than the budget request. This amount would be supplemented by an
estimated $108 million in pre-merger filing fees and $21 million in Do-Not-Call fees, giving the
agency an operating budget of $413 million.
Though the House committee’s report says little about the use of the recommended appropriated
funds, it does direct the FTC not to issue “principles or guidelines” concerning food marketed to
children, unless a “peer-reviewed scientific study” conclusively proves that the most effective
way to alter eating habits and reduce the obesity rate is to regulate the marketing of food to
children.108 The House committee also expressed the view that the FTC should not rely on any
guidance issued by the federal Interagency Working Group on Food Marketed to Children “to
engage in enforcement actions under the (Commission’s) existing authority.”
Action in the Senate
The Senate Appropriations Committee recommends in its report (S.Rept. 112-79) on H.R. 1573
that the FTC receive $312 million in funding in FY2012, or $20 million more than the amount
enacted for FY2011 and $14 million below the budget request. Of the recommended funds, $149
million would come from Hart-Scott-Rodino pre-merger filing fees and $21 million from Do-
Not-Call fees, leaving a direct appropriation of $142 million.109
Slightly more than $20 million of the proposed budget is set aside to replace two “satellite office
buildings” in Washington, D.C., that the FTC occupies. Funding is also provided to continue the
Do-Not-Call initiative in FY2012. The cost of implementing a related initiative, the
Telemarketing Sales Rule, should be covered from the collection of fees.
Expressing concern about the potential for anti-competitive behavior by oil and gas companies,
the committee directs the FTC to keep it informed about any findings from investigations of gas
prices and other aspects of competition in the oil and gas industries.
The FTC is responsible for enforcing the provisions in Section 1075 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act that concern payment card network companies. In
essence, its role is to prevent larger companies in the industry from undermining the small issuer
exemption and other benefits for consumers in that section of the act. Mindful of this
107 Ibid., pp. 37-41.
108 House Appropriations Committee, report to accompany H.R. 2434, p. 46.
109 U.S. Congress, Senate, Committee on Appropriations, Financial Services and General Government Appropriations
Bill, 2012, report to accompany S. 1573, 112th Cong., 1st sess. (Washington: GPO, 2011), p. 77.
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responsibility, the committee directs the FTC to submit a report one year after the enactment of
the bill that discusses the steps it has taken to enforce compliance by payment card network
companies with Section 1075 and related regulations. Of particular concern to the committee is
evidence that those companies are engaging in practices that diminish the ability of small banks
and credit unions to compete with large financial institutions in the debit card market.
A legislative proposal to transfer control of the FTC’s headquarters building to the National
Gallery of Art (NGA) is also addressed in the report. The committee expresses concern that the
transaction would deprive taxpayers of a valuable asset without compensation. Under the
proposal, private money would be raised to pay for renovation of the building, but federal money
would be needed to cover the cost of maintenance and repairs. As noted in the report, significant
costs could be incurred in building a new facility, or leasing commercial space, for the FTC staff
that would be displaced, moving the staff to another facility, and the continuing expenses
associated with NGA’s use of the headquarters building. To address these concerns, Section 623
of the bill prohibits the transfer of ownership of the headquarters building to another entity unless
the federal government receives fair market value for the property.110
General Services Administration111
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.
GSA’s real property activities are funded through the Federal Buildings Fund (FBF). The FBF is a
revolving fund, into which rental payments from federal agencies that lease GSA space are
deposited. Revenue in the fund is then made available by Congress each year to pay for specific
activities: construction or purchase of new space, repairs and alterations to existing space, rental
payments for space that GSA leases, installment payments, and other building operations
expenses. These amounts are referred to as “limitations” because GSA may not obligate more
funds from the FBF than permitted by Congress, regardless of how much revenue is available for
obligation. Certain debts may also be paid for with FBF funds. A negative total for the FBF
occurs when the amount of funds made available for expenditure in a fiscal year is less than the
amount of new revenue expected to be deposited. A negative total does not mean that no funds are
available from the FBF, only that there is a net gain to the fund under the proposed spending
levels.
GSA’s operating accounts are funded through direct appropriations, separate from the FBF. The
total amount of funding for GSA is calculated by adding the amount of FBF funds made available
to the amount of direct appropriations provided. Table 7 shows GSA appropriations as enacted
for FY2010 and FY2011, as requested by the President for FY2012, and as recommended by the
House and Senate appropriations committees for FY2012.
110 Ibid., p. 79.
111 This section was written by Garrett Hatch (x7-7822).
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Table 8. General Services Administration Appropriations, FY2010-FY2012
(in millions of dollars)
FY2012
FY2012
FY2010
FY2011
FY2012
House
Senate
Account
Enacted
Enacted
Request
Committee
Committee
Federal Buildings Fund
$387 -$1,227 $286 -$1,999 -1,078
Limitations on Availability of
8,544 7,598 9,509 7,224 8,145
Revenue
Construction and Acquisition
894 82 840
0
65
Repairs and Alterations
414 280 869 280 280
Installment Payments
141 136 127 127 127
Rental of Space
4,805 4,830 5,285 4,700 5,285
Building Operations
2,290 2,270 2,388 2,117 2,388
Repayment of Debt
66 71 80 80 80
Rental Income to Fund
-8,223 -8,871 -9,303 -9,303 -9,303
Rescission
0 -25 0
0
0
Operating Accounts
$263 $242 $332 $241 $228
Government-wide Policy
60 67 105 65 62
Operating Expenses
73 70 70 68 70
Office of Inspector General
59 59 62 59 58
e-Government Fund
34 8 34 0
0
Acquisition Workforce Fund
— 0 17 0
0
Federal Citizens Info. Center
37 34 40
0
0
Former Presidents
4 4 4 4 4
Citizen Information and
— — — 50 39
Engagement
Rescission
— — — -5
-5
Grand Total
$653 -$985 $618 -$1,758 -850
Sources: S.Rept. 111-238, H.R. 1, H.R. 1473, and H.Rept. 112-136.
Note: Figures in columns may not equal totals due to rounding.
The President proposed a limit of $9.509 billion from the FBF’s available revenue for GSA’s real
property activities in FY2012, $1.911 billion more than was provided in FY2011. The President
also requested $332 million for GSA’s operating accounts, an increase of $90 million from
FY2011 enacted levels.
The House Appropriations Committee has recommended $7.224 billion from the FBF be made
available to GSA for FY2012, $2.285 billion less than the President’s request and $374 million
below the amount provided for FY2011. The House committee has also recommended $241
million for GSA’s operating accounts, $1 million less than FY2011 enacted amounts and $91
million less than the President requested. The House committee would establish an Information
and Engagement for Citizens account, which would replace the e-Government fund and the
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Federal Citizens Information Center accounts. The House committee wrote that the new account
would “provide access and understanding of Federal information, benefits, and services to
citizens, businesses, other government, and the media.”112
The Senate Appropriations Committee has recommended $8.145 billion from the FBF be made
available to GSA for FY2012, $1.364 billion less than the President requested and $547 million
more than was enacted for FY2011. The Senate committee also recommended $228 million for
GSA’s operating accounts, $104 million less than the President requested and $14 million less
than was enacted for FY2011. The Senate committee, like the House committee, would replace
the e-Government fund and the Federal Citizens Information Center accounts with an Information
and Engagement for Citizens account.
Electronic Government Fund113
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.114 The fund and the
projects it sustains historically have been closely scrutinized by 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, appropriated no appropriation to the E-Government
Fund in FY2009.115
For FY2012, President Obama requested $34 million for the Electronic Government Fund, $24
million more than the $8 million that was appropriated for FY2011. House appropriators,
however, recommended that the Electronic Government Fund be combined with the Federal
Citizen Services Fund and renamed the “Information and Engagement for Citizens” account and
be appropriated $50 million.116 House appropriators’ said that “[t]he Committee expects the funds
provided for these activities, combined with efficiency gains and resource prioritization, will
result in increased delivery of information to the public and in the ease of transaction with the
112 H.Rept. 112-136, p. 51.
113 This section was written by Wendy Ginsberg (x7-3933).
114 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.”
115 The E-Gov Fund, in previous years, was not spending its full appropriation. For FY2009, therefore, House
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.
116 H.Rept. 112-136, p. 52. According to S.Rept. 111-238, the Federal Citizen Services Fund provides salaries and
expenses for the Office of Citizen Services, which “provides citizens, businesses, other governments, and the media
with access points to easily obtain Government information and services,” including USA.gov. See U.S. Congress,
Senate Committee on Appropriations, Financial Services and General Government Appropriations Bill, 2011, 111th
Cong., 2nd sess., July 29, 2010, S.Rept. 111-238 (Washington: GPO, 2010), p. 98.
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government.”117 In FY2011, the Federal Citizen Services Fund was appropriated $34 million. The
combined appropriation for both the Electronic Government Fund and the Federal Citizen
Services Fund in FY2011 was $42 million, or $8 million less than House appropriators’ FY2012
recommendation.
Senate appropriators also recommended combining the Electronic Government Fund and the
Federal Citizen Services Fund to make the Information and Engagement for Citizens account.
According to the Senate report accompanying the bill, the two existing funds “share a common
objective—making it easier for citizens to understand and interact with their Government.”118 The
report added, “[t]he purpose of this new office is to provide electronic or other methods of
providing access and understanding of Federal information, benefits, and services to citizens,
businesses, other governments, and the media.” Senate appropriators recommended nearly $39.1
million be appropriated to the new account, which was roughly $10.9 million less than was
recommended by House appropriators—and $3.0 million less than was appropriated in FY2011 to
the Electronic Government Fund and the Federal Citizens Services Fund combined ($42.1
million).119
At a September 21, 2011, hearing before the House Committee on Science, Space, and
Technology’s Subcommittee on Technology and Innovation, David McClure, associate
administrator at the General Services Administration—the federal agency that serves as a steward
for many E-Gov Fund projects—testified that a reduction in the agency’s appropriation could
force the federal government to limit work to “existing projects rather than fueling new creative
ways to save money for the government.”120
Independent Agencies Related to Personnel Management Appropriations
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 8 shows appropriations enacted for FY2011, amounts requested by the President for
FY2012, and amounts recommended by the House and Senate appropriations committees for
FY2012, for each of these agencies.
117 H.Rept. 112-136, p. 52.
118 S.Rept. 112-79, p. 86.
119 Ibid.
120 U.S. Congress, House Committee on Science, Space, and Technology, Subcommittee on Technology and
Innovation, The Next IT Revolution?: Cloud Computing Opportunities and Challenges, 112th Cong., 1st sess.,
September 21, 2011. A webcast of the hearing is available at the House Science, Space, and Technology’s website:
http://science.house.gov/hearing/technology-and-innovation-subcommittee-hearing-cloud-computing. Mr. McClure’s
comment was made during the question and answer period of the hearing, soon after the 1 hour, 8 minute mark.
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Table 9. Independent Agencies Related to Personnel Management Appropriations,
FY2011-FY2012
(in millions of dollars)
FY2012
FY2012
FY2010
FY2011
FY2012
House
Senate
Agency
Enacted
Enacted
Request
Committee
Committee
Federal Labor Relations
$24.8 $24.7 $26.4 $24.1 $24.7
Authority
Merit Systems Protection Board
42.9 42.8 44.5 41.8 42.6
(total)
Salaries and Expenses
40.3 40.3 42.1 39.4 40.3
Limitation on Administrative
2.6 2.6 2.3 2.3 2.3
Expenses
Office of Personnel Management
20,378.1
20,827.6 21,151.0 21,128.0 21,128.0
(total)
Salaries and Expenses
103.0 97.8 100.0 97.8
97.8
Limitation on Administrative
112.7 112.5 132.5 112.5
112.5
Expenses
Office of Inspector General
3.1 3.1 3.8 3.1
3.1
(salaries and expenses)
Office of Inspector General
21.2 21.2 21.5 21.2
21.2
(limitation on administrative
expenses)
Government Payments for
9,814 10,467.0
10,862.0 10,862.0b
10,862.0
Annuitants, Employee Health
Benefitsa
Government Payments for
48.0 50.0 52.0 52.0b
52.0
Annuitants, Employee Life
Insurancea
Payment to Civil Service
10,276.0 10,076.0 9,979.0 9,979.0b 9,979.0
Retirement and Disability Funda
Office of Special Counsel
$18.5 $18.5 $19.5 $19.5 $19.0
Sources: H.Rept. 112-136, S.Rept. 112-79, FY2012 Budget, Appendix,, pp. 1241-1242, 1252-1253, 1149-1160, and
1279-1280, and the respective agency FY2012 congressional budget submissions were examined, but the House
report numbers were used in the table.
Note: All figures are rounded, and columns also may not equal the total due to rounding.
a. Mandatory appropriations. For FY2011, the 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 FY2012 states the FY2012 amounts for these accounts as $10,817.0
million (health benefits), $47 million (life insurance), and $10,978.0 million (retirement) at pp. 161-163.
The FY2012 Budget Appendix, at pp. 1151-1153, states the same amounts as the budget justification.
b. In FY2012, the House Appropriations Committee did not include funding for three OPM accounts—health
benefits, life insurance, and retirement—in Title V of the FSGG bill, as it has in previous years. Instead,
funding for these accounts—which are mandatory—was provided in Section 628 of H.R. 2434. In this
report, funding for health benefits, life insurance, and retirement is included in Title V to be consistent
with prior year calculations. According to the House Committee on Appropriations report, “These are
accounts where authorizing language requires the payment of funds.” The report states that the
Congressional Budget Office estimates the following costs: $10,862.0 million for the Government Payment
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for Annuitants, Employee Health Benefits; $52 million for the Government Payment for Annuitants,
Employee Life Insurance; and $9,979.0 million for Payment to the Civil Service Retirement and Disability
Fund.
Federal Labor Relations Authority121
The FLRA is an independent federal agency that administers and enforces Title VII of the Civil
Service Reform Act of 1978. Title VII is also called the Federal Service Labor-Management
Relations Statute (FSLMRS). The FSLMRS 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 and gives the President the authority to exclude other agencies for
reasons of national security. Agencies that are excluded from the statute include the Federal
Bureau of Investigation (FBI), Central Intelligence Agency (CIA), Government Accountability
Office (GAO), National Security Agency (NSA), Tennessee Valley Authority (TVA), Federal
Labor Relations Authority (FLRA), Federal Service Impasses Panel (FSIP), and the Secret
Service.
The FLRA consists of a three-member authority, the Office of General Counsel, and the FSIP.
The three members of the authority and the General Counsel are appointed to five-year terms by
the President with the advice and consent of the Senate.
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 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 FY2012 budget proposed an appropriation of $26.4 million for the FLRA, about
$1.7 million, or 6.9%, more than the agency’s FY2011 appropriation of $24.7 million.
H.R. 2434 would provide the FLRA with $24.1 million in funding for FY2012, which is $0.6
million less than the FY2011 appropriation and $2.3 million less than the amount requested by
the President.
S. 1573, as reported, would provide an appropriation of $24.7 million, which is the same as the
FY2011 appropriation and $1.7 million (-6.5%) less than the amount requested by the President.
Merit Systems Protection Board122
The Merit Systems Protection Board (MSPB) is an independent, quasi-judicial agency established
to protect the civil service merit system. The MSPB adjudicates appeals primarily involving
personnel actions, certain federal employee complaints, and retirement benefits issues.
The President’s budget requested an FY2012 appropriation of $44.5 million, including $42.1
million for Merit Systems Protection Board (MSPB) salaries and expenses, an amount that is $1.7
121 This section was written by Gerald Mayer (x7-7815).
122 This section was written by Barbara L. Schwemle (x7-8655).
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million or 4.0% above the FY2011 funding of $42.8 million. The agency’s FTE employment level
is estimated to be 217 for FY2012, six more than the estimated FTE level of 211 for FY2011.
MSPB’s authorization expired on September 30, 2007.123 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
was not introduced in the 111th Congress and has not been introduced in the 112th Congress.
H.R. 2434, as reported, would provide an appropriation of $41.8 million, including $39.4 million
for salaries and expenses, that is $1.1 million (-2.5%) less than the FY2011 enacted amount and
$2.7 million (-6.1%) less than the President’s request.
S. 1573, as reported, would provide an appropriation of $42.6 million, including $40.3 million for
salaries and expenses, which is the same as the FY2011 enacted amount, and $1.9 million (-4.4%)
less than the President’s request.
Office of Personnel Management124
The President’s budget requested an FY2012 appropriation of $100 million for OPM salaries and
expenses, an increase of $2.2 million or 2.3% above the FY2011 enacted appropriation of $97.8
million. This amount includes funding of $6 million for the Enterprise Human Resources
Integration (HRI) project and $1.4 million for the Human Resources Line of Business (HRLOB)
project. The budget also requested appropriations of $132.5 million for trust fund transfers; $3.8
million for Office of Inspector General (OIG) salaries and expenses; and $21.5 million for OIG
trust fund transfers for FY2012. These amounts are $20 million (+17.8%), $662,000 (+21.1%),
and $385,000 (+1.8%), respectively, above the FY2011 enacted appropriations. The agency’s FTE
employment level is estimated to be 5,405 for FY2012, one more than the estimated FTE level for
FY2011.
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
“funding to maintain timely processing of retirement claims and provide services to
annuitants.”125 In addition, it allows the Office of Inspector General to “continue to advance its
prescription drug audit program, which includes audits of pharmacy benefit managers,” and to
continue the Federal Employees’ Health Benefits Program (FEHBP) “claims data warehouse
initiative” that “streamlines and enhances the various administrative and analytical procedures
involved in the oversight of the FEHBP.”126
H.R. 2434, as reported, would provide appropriations (at the same levels as the FY2011 enacted
amounts) of $97.8 million for OPM salaries and expenses, $112.5 million for trust fund transfers,
$3.1 million for OIG salaries and expenses, and $21.2 million for OIG trust fund transfers. These
amounts are, respectively, $2.2 million, $20 million, $662,000, and $385,000 less than the
President’s request.
123 5 U.S.C. §5509.
124 This section was written by Barbara L. Schwemle (x7-8655).
125 FY2012 Budget, Appendix, pp. 1149-1150.
126 Ibid, p. 1151.
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Section 628(a)(3)(4)(5) of H.R. 2434 would provide the mandatory appropriations for the health
benefits, life insurance, and retirement accounts. According to the House Committee on
Appropriations report, “These are accounts where authorizing language requires the payment of
funds.” The report states that the Congressional Budget Office estimates the following costs:
$10,862.0 million for the Government Payment for Annuitants, Employee Health Benefits;
$52 million for the Government Payment for Annuitants, Employee Life Insurance; and $9,979.0
million for Payment to the Civil Service Retirement and Disability Fund.
The House committee report directs OPM to provide a report on the ongoing activities to promote
diversity among the workforce and managers and executives to the House and Senate Committees
on Appropriations within 180 days after the act’s enactment. The report also states that the House
committee encourages federal agencies to increase recruitment efforts within the United States
territories.
S. 1573, as reported, would provide appropriations (at the same levels as the FY2011 enacted
amounts) of $97.8 million for OPM salaries and expenses, $112.5 million for trust fund transfers,
$3.1 million for OIG salaries and expenses, and $21.2 million for OIG trust fund transfers. These
amounts are, respectively, $2.2 million (-2.2%), $20 million (-15.1%), $662,000 (-17.4%), and
$385,000 (-1.8%) less than the President’s request.
The Senate report requests that the committee be kept apprised of developments as they occur
with regard to the expedited processing of retirement claims and receive quarterly reports and
briefings on developments related to modernization of the retirement records system. Updates are
to be provided every six months on OPM efforts to use the Intergovernmental Personnel Act
Mobility Program to address shortages in nurses and nurse faculty members. The committee also
directs OPM to submit a report on options and recommendations to remedy inappropriate use by
federal agencies of temporary hiring authority, within 90 days after the act’s enactment; to report
on the agency’s pilot program on wellness, within 90 days after the act’s enactment; and to
provide quarterly updates on the operation of the Consolidated Business Information System for
managing OPM’s trust funds.
Office of Special Counsel127
The President’s budget requested an FY2012 appropriation of $19.5 million for the Office of
Special Counsel (OSC), an amount that is $1 million, or 5.6% above, the FY2011 funding of
$18.5 million. The agency’s FTE employment level is estimated to be 112 for FY2012, three
more than the estimated FTE level of 109 for FY2011. The agency’s budget submission projected
a continued increase in the number of whistleblower disclosure, Hatch Act, and prohibited
personnel practice 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, 2007.128 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
127 This section was written by Barbara L. Schwemle (x7-8655).
128 5 U.S.C. §5509.
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reauthorize the agency was not introduced in the 111th Congress and has not been introduced in
the 112th Congress.
H.R. 2434, as reported, would provide an appropriation of $18.0 million that is $461,000 (-2.5%)
less than the FY2011 enacted amount and $1.5 million (-7.6%) less than the President’s request.
S. 1573, as reported, would provide an appropriation of $19.0 million that is $514,000 (+2.8%)
more than the FY2011 enacted amount and $514,000 (-2.6%) less than the President’s request.
The Senate report states that the agency “continues to experience dramatic growth in its caseload”
and expresses the committee’s concern that the unit administering the Uniformed Services
Employment and Reemployment Rights Act (USERRA) requires two additional staff to ensure
that the pilot demonstration program is “minimally viable.”
National Archives and Records Administration129
President Obama requested $422.5 million in FY2012 operating expenses for the National
Archives and Records Administration (NARA), which is slightly more than its FY2011
appropriation.130 Unlike previous recommendations from the Administration, President Obama
combined his requests for operating expenses and the Electronic Records Archive (ERA) because
development of ERA was largely completed.131 The Administration recommended that
appropriators provide $430.7 million for operations and ERA. In FY2011, the President
recommended $348.7 million for operating expenses and $85.5 million for the ERA, for a total of
$434.2 million—or 7.5% more than his FY2012 recommendation. According to NARA, the ERA
will sustain most of the decrease in appropriations because NARA said it cut costs in other areas
by “reducing or eliminating a variety of programs.”132 The President also recommended reduction
from FY2011 appropriation levels for NARA’s inspector general (a 3.3% decrease, from $4.2
million in FY2011 to $4.1 million in FY2012), repairs and restorations (an 18.3% decrease, from
$11.8 million in FY2011 to $9.7 million in FY2012), and the National Historic Publications and
Records Commission (NHPRC) (a 28.4% decrease, from $7.0 million in FY2011 to $5.0 million
in FY2012).
House appropriators recommended NARA receive $360.0 million in FY2012, $57.0 million or
13.7% less than the $417.0 million appropriated in FY2011.133 The House committee
recommended that NARA receive $361.0 million in operating expenses, which would include
operation of the ERA. This recommendation is $57.0 million (16.8%) less than the FY2011
129 This section was written by Wendy Ginsberg (x7-3933).
130 The Budget for 2012: Appendix, p. 1255
131 Appropriation levels for the ERA were reduced in FY2011. In FY2010, the ERA was appropriated $85.5 million. In
FY2011, the appropriation was reduced to $71,856,000. The reduction in ERA appropriation levels for FY2011
followed the release of two Government Accountability Office (GAO) reports that raised serious concerns about the
implementation of the ERA. One report said that NARA’s oversight of the acquisition processes related to creating the
Electronic Record Archive had “weaknesses … in most areas.” See U.S. Government Accountability Office, Electronic
Records Archive: National Archives Needs to Strengthen Its Capacity to Use Earned Value Techniques to Manage and
Oversee Development, GAO 11-86, January 2011, Highlights, http://www.gao.gov/new.items/d1186.pdf; and U.S.
Government Accountability Office, Electronic Government: National Archives and Records Administration’s Fiscal
Year 2011 Expenditure Plan, GAO 11-299, March 4, 2011, Highlights, http://www.gao.gov/new.items/d11299.pdf.
132 The National Archives and Records Administration, “President Requests $423M for National Archives FY12
Budget,” press release, February 1, 2010, http://www.archives.gov/press/press-releases/2011/nr11-78.html.
133 H.Rept. 112-136, p. 55.
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appropriation for both operating expenses and ERA combined and $47.7 million (11.1%) less
than the President’s FY2012 request.
House appropriators recommended the same funding level as requested by the President for
NARA’s Office of the Inspector General ($4.1 million). The appropriators, however,
recommended $8.7 million for repairs and restoration, $3.1 million (26.5%) less than the FY2011
appropriation and $1.0 million (10.0%) less than the President’s request. Appropriators also
recommended that NARA direct cost savings from construction projects at the John F. Kennedy
Library and the Military Personnel Records Center “toward priorities in NARA’s Capital
Improvement Plan for the critical repairs, alterations, and improvements to Archives facilities and
Presidential Libraries nationwide.”134 Appropriators recommended $1 million in appropriations
for the NHPRC, which is $6.0 million (85.7%) less than appropriated in FY2011 and $4.0 million
(80.0%) less than the President’s FY2012 recommendation. The House committee report does not
provide a reason for the reduction.
Senate appropriators recommended more than $378.8 million for NARA operating expenses in
FY2012, which is roughly $24.9 million (6.2%) less than was requested by the President—but
nearly $17.9 million (5.0%) more than was recommended by House appropriators. The
recommendation is also nearly $39.8 million (11.7%) more than was appropriated for operating
expenses in FY2011. Like the President’s request, the Senate appropriation recommendation
includes appropriations for the ERA, which was previously appropriated as a separate line-
item.135
Senate appropriators matched both the President’s request and House appropriators’
recommendations for the OIG at $4.1 million. Senate appropriators matched the President’s
nearly $9.7 million request for repairs and restorations, which is $966,000 (11.1%) more than was
recommended by House appropriators. The Senate recommendation is nearly $2.2 million less
than was appropriated in FY2011 (18.3%). According to the Senate report accompanying the
recommendation, the Senate reiterated House appropriators’ recommendation to remove
restrictions on more than $6.3 million from projects at the John F. Kennedy Presidential Library
and Museum and the Military Personnel Records Center so the money can be used for “other
capitol endeavors, particularly the top priority National Archives Experience Phase II project.”136
The Senate matched the President’s $5.0 million request for the NHPRC, which is $4.0 million
(400%) more than the House appropriators’ recommendation. The $5.0 million request is almost
$2.0 million (28.4%) less than was appropriated in FY2011.
134 Ibid., p. 56.
135 Senate appropriators wrote the following of concerns that consistently surrounded the creation of the ERA:
… NARA and [the Office of Management and Budget] mutually decided to discontinue the
contractual developmental component at the close of fiscal year 2011. This will allow NARA to
focus its attention on promoting Federal agency use of the current system’s functionalities rather
than making further investments in building a system that encountered cost increases, schedule
slippage, and strategic management challenges.
S.Rept. 112-136, p. 95.
136 Ibid.
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National Credit Union Administration137
The NCUA is an independent federal agency funded entirely by the credit unions that the agency
charters, insures, and regulates. The NCUA manages the Community Development Revolving
Loan Fund Program (CDRLF). Established in 1979, the CDRLF assists officially designated
‘‘low-income’’ credit unions in providing basic financial services to low-income communities.
Low-interest loans and deposits are made available to assist these credit unions. Loans or deposits
are normally repaid in five years, although shorter repayment periods may be considered.
Technical assistance grants are also available 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 acts. Grants are available for improving operations as well as
addressing safety and soundness issues. P.L. 112-10 provides $1.25 million for technical
assistance grants for FY2011. The President’s budget proposal includes $2 million for FY2012,
an increase of $750,000 over FY2011 enacted appropriations. The House Committee on
Appropriations has recommended $500,000 for FY2012, which would be $1.5 million below the
President’s request and $500,000 less than FY2011 enacted appropriations. The Senate
Appropriations Committee has recommended $1.25 million for FY2012, the same as enacted in
FY2011 and $750,000 less than the President’s request.
Privacy and Civil Liberties Oversight Board138
Originally established in 2004 by the Intelligence Reform and Terrorism Prevention Act as an
agency within the EOP,139 the Privacy and Civil Liberties Oversight Board (PCLOB) was
reconstituted as an independent agency within the executive branch by the Implementing
Recommendations of the 9/11 Commission Act of 2007 (P.L. 110-53).140 The board assumed its
new status on January 30, 2008; its FY2009 appropriation was its first funding as an independent
agency.141 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 is to advise the President and the heads of executive branch
departments and agencies on issues concerning, and findings pertaining to, privacy and civil
liberties. The board is to provide annual reports to Congress detailing its activities during the
year, and board members appear and testify before congressional committees upon request. The
PCLOB is currently without members, although President Obama has nominated two people to
serve on the board.
137 This section was written by Darryl Getter (x7-2834).
138 This section was written by Garrett Hatch (x7-7822).
139 118 Stat. 3638 at 3684.
140 121 Stat. 266 at 352.
141 See CRS Report RL34385, Privacy and Civil Liberties Oversight Board: New Independent Agency Status, by
Garrett Hatch.
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The President’s FY2012 request for the PCLOB is $1.7 million, which is $700,000 above FY2011
enacted appropriations of $1.0 million. The House Committee on Appropriations has
recommended no new appropriations for FY2012 and a rescission of the $1.0 million
appropriated for FY2011. The Senate Appropriations Committee has recommended $1.0 million
for the PCLOB for FY2012 and a rescission of $1.0 million of funds appropriated for FY2011.
Recovery Accountability and Transparency Board
The Recovery Accountability and Transparency Board (Recovery Board) was established by the
American Recovery and Accountability Act of 2009 (P.L. 111-5) to provide oversight and
transparency in the expenditure of Recovery Act funds. The Recovery Board is funded through
the FSGG appropriations bill for the first time in FY2012. In previous fiscal years, the board was
funded by a Recovery Act appropriation which is now exhausted. The President requested $31.5
million for the Recovery Board for FY2012. The House Appropriations Committee has
recommended $25.0 million, which is $6.5 million less than the President’s request. The Senate
Appropriations Committee has recommended $28.4 million, which is $3.1 million less than the
President’s request.
Securities and Exchange Commission142
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 on sales of
stock and certain other securities transactions. Under the Dodd-Frank Act (P.L. 111-203), these
transaction fees are divided between an offsetting account available to appropriators, from which
funds for the SEC are drawn, and the Treasury’s general fund.
For FY2012, the Administration has requested $1.407 billion, an increase of $222 million over
FY2011 appropriations, which were $1.185 billion (and included a supplementary appropriation
of $41 million under P.L. 112-10). The House Appropriations Committee has recommended that
the SEC’s FY2012 budget remain at FY2011 levels, that is, $1.185 billion, or $222 million (16%)
below the Administration’s request. The Senate Appropriations Committee recommended $1.407
billion, the amount of the Administration’s request.
Selective Service System143
The Selective Service System (SSS) is an independent federal agency operating with permanent
authorization under the Military Selective Service Act.144 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.145 All males ages 18 through
25 and living in the United States are required to register with the SSS. The induction of men into
142 This section was written by Mark Jickling (x7-7784).
143 This section was written by David Burrelli (x7-8033).
144 50 U.S.C. App. §451 et seq.
145 See http://www.sss.gov/.
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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. Efforts are underway to allow women to
serve in combat units which may lead to the modification of registration to include women.
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.146
Funding of the Selective Service System has remained relatively stable over the years in terms of
absolute dollars, but has decreased in terms of inflation adjusted funding. P.L. 111-117 provided
$24.28 million for FY2010, an increase of $2.28 million over FY2009 enacted appropriations.
For FY2011, it received $24.23 million. For FY2012, the Senate Appropriations Committee
recommended a Selective Service System appropriation of $23.98 million.
Small Business Administration147
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) and 504/Certified Development Company general business
loan programs—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.
The SBA’s FY2011 appropriation was $729.7 million (after an across-the-board rescission of
0.2%), a reduction of $94.3 million from the FY2010 appropriated amount of $824.0 million (P.L.
112-10, the Department of Defense and Full-Year Continuing Appropriations Act, 2011). The
SBA’s FY2011 appropriation included $433.4 million for salaries and expenses, $16.3 million for
the SBA’s Office of Inspector General (not including $1.0 million to be transferred from the
Disaster Loans Program account), $236.0 million for business loans ($3.0 million for microloan
subsidy costs, $80.0 million for other loan subsidy costs, and $153.0 million for administrative
costs), and $45.5 million for the disaster loans program account.
The SBA’s FY2011 appropriation supported up to $28.0 billion in business loan guarantees (up to
$17.5 billion for 7(a) loans, up to $7.5 billion for 504/Certified Development Company loans, and
up to $3.0 billion for Small Business Investment Company debentures) and up to $12.0 billion in
guarantees of trust certificates for the secondary market guarantee program.
For FY2012, the Obama Administration requested that the SBA receive an appropriation of
$985.4 million, an increase of $255.7 million (35%) over the FY2011 enacted amount of $729.7
million (P.L. 112-10, the Department of Defense and Full-Year Continuing Appropriations Act,
2011). The Administration recommended an appropriation of $427.3 million for salaries and
expenses. Included in that amount is $160.2 million for non-credit programs, such as Historically
Underutilized Business Zones (HUBZones), Microloan Technical Assistance, the National
146 See H.R. 163, October 5, 2004, failed by Yeas and Nays (Roll no. 494).
147 This section was written by Robert Dilger (x7-3110).
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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 $18.4 million for the SBA’s Office of Inspector General (not
including $1.0 million to be transferred from the Disaster Loans Program account), $9.1 million
for the SBA’s Office of Advocacy, $0.0 for the SBA’s surety bond guarantees revolving loan fund
(the Administration indicated that there are sufficient funds in reserve to cover the cost of claim
defaults), $363.3 million for the SBA’s business loan programs ($3.765 million for microloan
subsidy costs, $211.6 million for other loan subsidy costs, and $147.9 million for administrative
costs), and $167.3 million for the SBA’s disaster loan programs.
The Administration’s budget request would also support up to $27.0 billion in business loan
guarantees (up to $16.5 billion for 7(a) loans, up to $7.5 billion for 504/Certified Development
Company loans, and up to $3.0 billion for Small Business Investment Company debentures) and
up to $12.0 billion in guarantees of trust certificates for the secondary market guarantee program.
The House Committee on Appropriations recommended that the SBA receive a FY2012
appropriation of $978.3 million, a $248.6 million (34.1%) increase over the FY2011 enacted
amount of $729.7 million and a decrease of $7.1 million (-0.7%) from the Administration’s
request of $985.4 million.
The House committee also recommended that the SBA receive an appropriation of $422.3 million
for salaries and expenses ($5.0 million less than the Administration’s request). Included in that
amount is $170.75 million for non-credit programs ($10.5 million more than the Administration’s
request), 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 House committee recommended $16.3 million for the SBA’s Office of Inspector General (not
including $1.0 million to be transferred from the Disaster Loans Program account), $9.1 million
for the SBA’s Office of Advocacy, $0.0 for the SBA’s surety bond guarantees revolving loan fund
(the Administration indicated that there are sufficient funds in reserve to cover the cost of claim
defaults), $363.3 million for the SBA’s business loan programs ($3.765 million for microloan
subsidy costs, $211.6 million for other loan subsidy costs, and $147.9 million for administration),
and $167.3 million for the SBA’s disaster loan programs. The Administration had requested $18.4
for the SBA’s Office of Inspector General (not including $1.0 million to be transferred from the
Disaster Loans Program account) and the amounts the House Committee on Appropriations
recommended for the remaining accounts.
The House committee’s recommendation would support up to $28.0 billion in business loan
guarantees (up to $17.5 billion for 7(a) loans, up to $7.5 billion for 504/Certified Development
Company loans, and up to $3.0 billion for Small Business Investment Company debentures) and
up to $12.0 billion in guarantees of trust certificates for the secondary market guarantee program.
The Administration had recommended up to $27.0 billion in business loan guarantees (up to
$16.5 billion for 7(a) loans, up to $7.5 billion for 504/Certified Development Company loans, and
up to $3.0 billion for Small Business Investment Company debentures) and up to $12.0 billion in
guarantees of trust certificates for the secondary market guarantee program.
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The Senate Committee on Appropriations recommended that the SBA receive a FY2012
appropriation of $955.4 million, a $225.7 million (30.9%) increase over the FY2011 enacted
amount of $729.7 million, a decrease of $30.0 million (-0.3%) from the Administration’s request
of $985.4 million, and a decrease of $22.9 million (-2.3%) from the House Committee on
Appropriations’ recommendation of $978.3 million.
The Senate committee also recommended that the SBA receive an appropriation of $404.2 million
for salaries and expenses ($23.1 million less than the Administration’s request). Included in that
amount is $165.7 million for non-credit programs ($5.5 million more than the Administration’s
request), 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 Senate committee also recommended $16.3 million for the SBA’s Office of Inspector General
(not including $1.0 million to be transferred from the Disaster Loans Program account), $9.1
million for the SBA’s Office of Advocacy, $0.0 for the SBA’s surety bond guarantees revolving
loan fund, $358.5 million for the SBA’s business loan programs ($3.678 million for microloan
subsidy costs, $206.8 million for other loan subsidy costs, and $148.0 million for administration),
and $167.3 million for the SBA’s disaster loan programs. The Administration had requested $18.4
million for the SBA’s Office of Inspector General (not including $1.0 million to be transferred
from the Disaster Loans Program account), $363.3 million for the SBA’s business loan programs,
and the amounts the Senate Committee on Appropriations recommended for the remaining
accounts.
The Senate committee’s recommendation would support up to $28.0 billion in business loan
guarantees (up to $17.5 billion for 7(a) loans, up to $7.5 billion for 504/Certified Development
Company loans, and up to $3.0 billion for Small Business Investment Company debentures) and
up to $12.0 billion in guarantees of trust certificates for the secondary market guarantee program.
The Administration had recommended up to $27.0 billion in business loan guarantees (up to
$16.5 billion for 7(a) loans, up to $7.5 billion for 504/Certified Development Company loans, and
up to $3.0 billion for Small Business Investment Company debentures) and up to $12.0 billion in
guarantees of trust certificates for the secondary market guarantee program.
United States Postal Service148
The U.S. Postal Service (USPS) generates nearly all of its funding—about $67 billion annually—
by charging users of the mail for the costs of the services it provides.149 However, Congress does
provide an annual appropriation to compensate the USPS for revenue it forgoes in providing free
mailing privileges to the blind150 and overseas voters.151 Congress authorized appropriations for
148 This section was written by Kevin Kosar (x7-3968). Also see CRS Report RS21025, The Postal Revenue Forgone
Appropriation: Overview and Current Issues, by Kevin R. Kosar.
149 U.S. Postal Service, United States Postal Service Annual Report 2011 (Washington: USPS, 2010), p. 3.
150 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.
151 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
(continued...)
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these purposes in the Revenue Forgone Reform Act of 1993 (RFRA).152 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.153 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 FY2009.154 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.155
For FY2012, the
• USPS has requested $130 million, with $101 million for revenue forgone, and
$29 million for the annual RFRA reimbursement.156 The President requested
$78.2 million and no $29 million RFRA reimbursement, and both the House
Appropriations Committee and the Senate Appropriations Committee have
concurred with the President’s request;157
• PRC and the President have requested $14.5 million. The House Appropriations
Committee has authorized $13.9 million; and the Senate Appropriations
Committee has authorized $14.3 million;158 and
• USPSOIG and the President have requested $244.4 million. The House
Appropriations Committee has authorized $237.8 million and the Senate
Appropriations Committee has authorized $241.5 million.159
The President’s budget proposes terminating the $29 million annual RFRA reimbursement
payment,160 and it would direct the Office of Personnel Management to refund to the USPS $6.9
(...continued)
Issues, by Kevin J. Coleman.
152 P.L. 103-123, Title VII; 107 Stat. 1267, 39 U.S.C. 2401(c)-(d).
153 See CRS Report RS21025, The Postal Revenue Forgone Appropriation: Overview and Current Issues, by Kevin R.
Kosar.
154 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.
155 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.
156 U.S. Postal Service, “Fiscal Year 2012 Budget Congressional Submission,” undated, pp. I-2-I-4.
157 The USPS received an appropriation of $115.7 million in FY2011, $86.7 million for revenue forgone, and the
annual $29 million RFRA reimbursement.
158 The PRC received an appropriation of $14.3 million in FY2011.
159 The USPSOIG received an appropriation of $243.9 million in FY2011.
160 Office of Management and Budget, Terminations, Reductions, and Savings: Budget of the U.S. Government
(continued...)
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billion in Federal Employees Retirement System overpayments. These funds would be transferred
to the USPS over a 30-year period and would provide it with $550 million in FY2011. The
President’s budget also has advocated revising the USPS’s Retiree Health Benefits Fund payment
schedule to reduce the USPS’s required FY2011 payment of $5.5 billion (due September 30,
2011) by $4 billion.161 In his subsequent deficit reduction plan, the President has proposed
• restructuring Retiree Health Benefit pre-funding schedule;
• refunding to the USPS approximately $6.9 billion in overpayments to the Federal
Employee Retirement System;
• allowing the USPS to move to five-day mail delivery;
• allowing the USPS to expand its product and service offerings; and
• increasing the USPS’s authority to raise postage rates.162
The House Appropriations Committee’s legislation (H.R. 2434; H.Rept. 112-136) would require
“that 6-day delivery and rural delivery of mail shall continue at not less than the 1983 level.” The
Committee’s report also “commends the efforts of the USPS to be fiscally responsible,” but
strongly urges the USPS to hold public meetings, take into consideration the input of
residents, and provide fiscal justification before any major changes in delivery service are
made. The USPS is one of the few Federal government entities that every American depends
on a daily basis and it is important that their service is reflective of the world’s premier mail
delivery organization. The Committee urges the USPS to continue its efforts at achieving
cost reductions without compromising services.
Similarly, the Senate Appropriations Committee’s legislation (S. 1572; S.Rept. 112-79) states
“that 6-day mail delivery is one of the most important services provided by the Federal
Government to its citizens. Especially in rural and small-town America, this critical postal service
is the linchpin that serves to bind the Nation together.” The committee report also expresses
concerns regarding the USPS’s closure of mail sorting plants.
While the Committee acknowledges that it may be costly for the Postal Service to continue
to operate all of these large plants in its network given declining mail volume, the Committee
has serious concerns about the potential impact on mail delivery service, jobs, and the local
economy of the affected communities of the proposed shuttering of these facilities. The
Committee directs the Postal Service to suspend any consolidations, closings, or job
reductions at area mail processing facilities that have not had the benefit of a full AMP study
and those where previous Postal Service analyses have found that no significant cost savings
or efficiencies would be gained by such action. The Committee directs the Postal Service to
include an economic impact assessment in its analyses.163
(...continued)
FY2012, p. 60.
161 Office of Management and Budget, Appendix: Budget of the U.S. Government Fiscal Year 2012, pp. 1282 and 1285.
On the RHBF, see CRS Report R41024, The U.S. Postal Service’s Financial Condition: Overview and Issues for
Congress, by Kevin R. Kosar, pp. 3-5.
162 Office of Management and Budget, Living Within Our Means and Investing in the Future: The President’s Plan for
Economic Growth and Deficit Reduction (OMB: September 2011), p. 23.
163 Section 302 of the Postal Accountability in Enhancement Act of 2006 (120 Stat. 3219) found the USPS had “more
facilities than it needs” and directed the USPS to expeditiously reduce their number. On the USPS and non retail
(continued...)
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United States Tax Court164
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.
H.R. 1473 provides $52 million for the USTC for FY2011. The President has requested $60
million for FY2012, an increase of $8 million increase over FY2011 enacted appropriations. The
House Committee on Appropriations has recommended $51 million for FY2012, which would be
$9 million less than the President’s request and $1 million less than FY2011 enacted
appropriations. The Senate Appropriations Committee has recommended $51 million for the
USTC for FY2012, the same as the House committee recommendation and $9 million less than
the President requested.
General Provisions Government-Wide165
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.166 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.
Selected Government-wide General Provisions for FY2012
• Prohibits the use of funds to implement, administer, enforce, or apply the rule
entitled “Competitive Area” published by the Office of Personnel Management in
the Federal Register on April 15, 2008. (Section 732 of the budget proposal and
Section 740 of S. 1573, as reported. Not included in H.R. 2434, as reported.)
• During FY2012, for each employee who retires under the Civil Service
Retirement System or the Federal Employees Retirement System during
workforce restructuring or receives a payment as an incentive to separate, the
separating agency would remit to the Civil Service Retirement and Disability
Fund an amount equal to the Office of Personnel Management’s average unit cost
of processing a retirement claim for the preceding fiscal year. (Section 733 of the
budget proposal and Section 743 of S. 1573, as reported. Not included in H.R.
2434, as reported.)
• Funds made available and used for Pay for Success projects in this or any other
Act would support performance-based awards that are designed to promote
(...continued)
facility closures, see CRS Report R40983, The Postal Accountability and Enhancement Act: Overview and Issues for
Congress, by Kevin R. Kosar.
164 This section was written by Garrett Hatch (x7-7822).
165 This section was written by Barbara L. Schwemle (x7-8655).
166 For FY2012, the provisions are listed in the Budget, Appendix at pp. 9-13.
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innovative strategies to reduce the aggregate level of government investment
needed to achieve successful outcomes and impose minimal administrative
requirements on service providers, so as to allow for maximum flexibility to
improve efficiency and effectiveness. The OMB Director would issue guidance
to federal agencies on carrying out such projects. (Section 734 of the budget
proposal. Not included in H.R. 2434, as reported or S. 1573, as reported.)
• Prohibits the use of funds to require any entity submitting an offer for a federal
contract to disclose political contributions. (Section 738 of H.R. 2434, as
reported. Not included in the budget proposal or in S. 1573, as reported.)
• Beginning with FY2012, federal employees in each agency would be managed
solely on the basis of, and consistent with, the workload required to carry out the
functions and activities of the agency and the funds made available to the agency.
The management of federal employees would not be subject to any limitation in
terms of work years, full-time equivalent positions [FTE], or maximum number
of federal employees, and an agency could not be required to make a reduction in
the number of FTE positions, unless such is necessary due to a reduction in funds
available to the agency or required under a statute that is enacted after the
enactment date of this act and specifically refers to this section. The head of each
agency would ensure that federal workers are employed in the number and with
the combination of skills and qualifications that are necessary to carry out the
functions within the applicable budget activity for which funds are provided. Not
later than February 1 of each year, the OMB Director would submit a report to
the Senate and House Appropriations Committees on the management of the
federal workforce. (Section 744 of S. 1573, as reported. Not included in the
budget proposal or in H.R. 2434, as reported.)
Government Procurement167
The financial services appropriations bill often contains provisions that relate to government
procurement. With regard to FY2012, the Senate bill includes three such provisions. Section 734
of the Senate bill would prohibit the use of any funds appropriated by this act, or any other
appropriations act, to begin or announce a public-private competition for the same fiscal year
(FY2012).168 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.”169 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.
167 This section was authored by Elaine Halchin (x7-0646).
168 Section 734 states: “[n]one of the funds appropriated or otherwise made available by this act or any other Act may
be used.... ” (Sec. 734 of S. 1573.) (Italics added for emphasis.) The words in this phrase—“or any other act”—are “not
words of futurity. They merely refer to any other appropriations 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.)
169 Sec. 734 of S. 1573.
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Section 741 of the Senate bill would amend Section 743 of P.L. 111-117, Consolidated
Appropriations Act for FY2010, which requires agencies subject to the Federal Activities
Inventory Reform (FAIR) Act (P.L. 105-270), except for the Department of Defense, 170 to prepare
and submit annual inventories of their service contracts to OMB. Section 741 would expand the
scope of the inventory requirement to include task orders associated with service contracts, and
specify certain data to be provided by and about contractor and subcontractor employees.171
Currently, Section 743(e)(2)(B) of P.L. 111-117, requires agencies to give “special management
attention” to agency functions that are closely associated with inherently governmental functions
(“closely associated”). If enacted, Section 741 would strike this text and replace it with language
that would require agencies to ensure, to the maximum extent practicable, that contracts exclude
“closely associated” functions.172 Finally, Section 741, if enacted, would create a reporting
requirement. Before an agency could begin, plan for, or announce a public-private competition
involving converting an agency function to contractor performance, it would have to submit a
report to OMB that contains information about actions taken to convert work from contractor to
federal employee performance.
Under Section 742 of the Senate bill, OMB would be required to issue guidance, consistent with
several statutory provisions,173 that prohibits the use of direct conversions for work performed by
federal employees.174 The guidance would address agency activities or functions that have been
reengineered, upgraded, or expanded, and activities or functions “performed by Federal
employees … who have retired or been reassigned.”175 The guidance would also prohibit
modifying, reorganizing, or changing any agency function or activity for the purpose of avoiding
the prohibition against direct conversions.176
Cuba Sanctions177
The House Appropriations Committee-approved and Senate Appropriations Committee-approved
versions of the FY2012 Financial Services and General Government Appropriations bills, H.R.
2434 and S. 1573 respectively, have several provisions regarding Cuba sanctions. Both bills have
a provision, in Section 618 of the House committee bill and Section 620 of the Senate committee
bill, that would continue to clarify during FY2012 the definition of “payment of cash in advance”
for U.S. agricultural and medical sales to Cuba to “be interpreted as payment before the transfer
170 Section 807 of P.L. 110-181, National Defense Authorization Act for FY2008, requires the Department of Defense
to prepare and submit inventories of the department’s service contracts to Congress.
171 A task order is “an order for services placed against an established contract or with Government sources.” (48
C.F.R. § 2.101(b).)
172 Office of Federal Procurement Policy Policy Letter 11-01, at http://www.gpo.gov/fdsys/pkg/FR-2011-09-12/pdf/
2011-23165.pdf, provides guidance to agencies on, among other things, how to handle functions that are closely
associated with inherently governmental functions.
173 Sec. 735 (Division D) of P.L. 111-8, Omnibus Appropriations Act FY2009; Sec. 739(a)(1) (Division D) of P.L. 110-
161, Consolidated Appropriations Act FY2008; and Sec. 327 of P.L. 110-181, 2008 National Defense Authorization
Act.
174 A direct conversion is a method used to convert work from government performance to contract, or contract to
government performance, without conducting a public-private competition.
175 Sec. 742 of S. 1573.
176 Ibid.
177 This section was written by Mark P. Sullivan (x7-7689). For additional information, see CRS Report RL31139,
Cuba: U.S. Restrictions on Travel and Remittances, and CRS Report R41617, Cuba: Issues for the 112th Congress.
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of title to, and control of, the exported items to the Cuban purchaser.” Such a provision had first
been included in the FY2010 omnibus appropriations measure (P.L. 111-117, Section 619 of
Division C) and was continued in FY2011 in the full-year continuing appropriations measure
(P.L. 112-10).
The Senate bill has another Cuba provision, in Section 624, related to payment for U.S. exports to
Cuba. The provision prohibits restrictions on direct transfers from a Cuban financial institution to
a U.S. financial institution in payment for licensed agricultural and medical exports to Cuba. The
provision was added during the Senate Appropriations Committee’s markup on September 15,
2011, when the committee approved an amendment offered by Senator Jerry Moran by a vote of
20-10.
The House bill has a Cuba provision in Section 901 that would roll back President Obama’s
easing of restrictions on family travel and remittances in 2009 and the President’s easing of
restrictions on remittances for non-family members and religious institutions in 2011. This
provision became part of the bill during the House Appropriations Committee’s markup on June
24, 2011, when the House committee approved an amendment offered by Representative Mario
Diaz-Balart by voice vote.
Payment Provisions for U.S. Exports to Cuba
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
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.”178
Since 2002, the United States has been one of Cuba’s largest suppliers of food and agricultural
products, although the level of U.S. exports has declined in the past two years. Cuba has
178 U.S. Department of the Treasury, Testimony of Robert Werner, Director, OFAC, before the House Committee on
Agriculture, March 16, 2005.
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purchased over $3.6 billion in products from United States since the enactment of TSRA. 179 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, and in 2010, they fell again to $368
million, a 31% drop from 2009. In the first half of 2011, U.S. exports to Cuba amounted to about
$174 million, almost a 20% drop from the same period in 2011. Analysts cite Cuba’s shortage of
hard currency as the main reason for the decline.
As noted above, Congress took action in FY2010 and FY2011 appropriations measures to define
“payment of cash in advance” as used in TSRA as payment before the transfer of title to, and
control of, the exported item to the Cuban purchaser. This overturned OFAC’s February 2005
clarification that payment had to be received before vessels could leave U.S. ports. Both H.R.
2434 (Section 618) and S. 1573 (Section 620) would continue this interpretation of the term
“payment of cash in advance” for agricultural and medical exports to Cuba under TSRA in
FY2012.
S. 1573 would go further with a provision (Section 624) that would prohibit restrictions on direct
transfers from a Cuban financial institution to a U.S. financial institution in payment for licensed
agricultural and medical exports to Cuba. In the 111th Congress, such a provision was included in
H.R. 4645, a measure reported by the House Agriculture Committee in September 2010 that also
would have made permanent the clarification of the definition of “payment of cash in advance”
and also would have prohibited restrictions on U.S. travel to Cuba. The House Agriculture
Committee held a hearing reviewing U.S. agricultural sales to Cuba in March 2010 in which U.S.
agricultural exporters argued that a prohibition on direct transfers between Cuban and U.S.
financial institutions for payments for U.S. exports made sales transactions more complicated and
costly for U.S. businesses.180 These views were echoed during September 15, 2011, debate on the
provision at the markup of the bill by the Senate Appropriations Committee. Supporters of the
direct transfers provision also argued that U.S. exports to Cuba have declined, while those
opposed maintained that the United States should not open up such direct financial linkages while
Cuba is on the State Department’s list of states sponsoring international terrorism.181
U.S. Restrictions on Travel and Remittances
Restrictions on travel to Cuba have been a key and often contentious component in U.S. efforts to
isolate Cuba’s communist government since the early 1960s. Under the George W. Bush
Administration, restrictions on travel and on private remittances to Cuba were tightened. In 2003,
the Administration eliminated travel for people-to-people educational exchanges unrelated to
academic coursework. In 2004, the Administration further restricted family and educational
travel, eliminated the category of fully-hosted travel, and restricted remittances so that they could
only be sent to the remitter’s immediate family. Initially there was mixed reaction to the
179 U.S. trade statistics are from Global Trade Atlas, which uses Department of Commerce Statistics.
180 U.S. Congress, House Committee on Agriculture, Hearing to Review U.S. Agricultural Sales to Cuba, 111th Cong.,
2nd sess., March 11, 2010, Serial No. 111-44 (Washington: GPO, 2010), available at http://agriculture.house.gov/
testimony/111/111-44.pdf.
181 Charlene Carter, “Financial Services Spending Bill Advanced by Senate Panel,” CQ Markup & Vote Coverage,
September 15, 2011.
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Administration’s 2004 tightening of Cuba travel and remittance restrictions, but opposition to the
policy grew, especially within the Cuban American community regarding the restrictions on
family travel and remittances.
Under the Obama Administration, Congress took action in 2009 to ease some restrictions on
travel to Cuba by including two provisions in the FY2009 omnibus appropriations measure (P.L.
111-8), which President Obama signed into law on March 11, 2009. The first provision eased
restrictions on family travel, which the Treasury Department implemented by issuing a general
license for such travel as it existed prior to the Bush Administration’s tightening of family travel
restrictions in 2004. The second provision eased travel restrictions related to the marketing and
sale of agricultural and medical goods to Cuba, and required the Treasury Department to issue a
general license for such travel. Subsequently, in April 2009, President Obama announced that his
Administration would go further and allow unlimited family travel and family remittances.
Regulations implementing these changes were issued in September 2009. The new regulations
also included the authorization of general licenses for travel transactions for telecommunications-
related sales and for attendance at professional meetings related to commercial
telecommunications.
In January 2011, the Obama Administration announced policy changes further easing restrictions
on travel and remittances. The measures (1) increase purposeful travel to Cuba related to
religious, educational, and people-to-people exchanges; (2) allow any U.S. person to send
remittances to non-family members in Cuba (up to $500 per quarter) and make it easier for
religious institutions to send remittances for religious activities; and (3) permit all U.S.
international airports to apply to provide services to licensed charter flights. These new measures,
with the exception of the expansion of eligible airports, are similar to policies that were
undertaken by the Clinton Administration in 1999, but subsequently curtailed by the Bush
Administration in 2003-2004.
The Obama Administration maintains that the policy changes will increase people-to-people
contact, help strengthen Cuban civil society, and make Cuban people less dependent on the Cuban
state.182 The changes are being taken at the same time that the Cuban government is laying off
thousands of state workers and increasing private enterprise through an expansion of the
authorized categories for self-employment.
Policy groups in favor of increased U.S. engagement with Cuba largely praised the
Administration’s action as a significant step forward in reforming U.S.-Cuban relations and as an
important means to expand the flow of information and ideas to Cuba and to increase the income
of Cubans working in the expanding private sector. The Miami-based Cuban American National
Foundation (CANF) strongly supported the Administration’s policy changes. According to CANF
President Francisco “Pepe” Hernández: “A greater ability to send remittances in conjunction with
increased contact and communication with those on the island will help to break the chains of
dependency that the Castro regime has used to oppress those inside Cuba.”183
In contrast, policy groups opposed to easing U.S. sanctions have criticized the Administration,
maintaining that the policy changes will help prop up Cuba’s repressive government when it is
182 Mary Beth Sheridan, “Obama Loosens Travel Restrictions to Cuba,” Washington Post, January 15, 2011.
183 Cuban American National Foundation, Press Release, “Cuban American National Foundation Supports New Cuba
Policy Measures,” January 14, 2011.
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most vulnerable because of the difficult economic situation. Opponents of the policy changes
argue that sending dollars via increased travel by Americans and increased remittances will
actually help the Cuban government maintain in place its repressive policies. They also argue that
easing the restrictions on travel and remittances will not bring about respect for human rights in
Cuba.
As noted above, Section 901 of H.R. 2434 would roll back President Obama’s easing of
restrictions on family travel and remittances, remittances for non-family members, and
remittances for religious institutions. (S. 1573 does not contain a similar provision.) Specifically,
the House provision would repeal any amendments to certain sections of the Cuban Assets
Control Regulations relating to family travel (31 CFR 515.560(a)(1) and 31 CFR 515.561),
carrying remittances to Cuba (31 CFR 515.560(c)(4)(i)), and sending remittances to Cuba (31
CFR 515.570) made since January 2009. According to the provision, such regulations would be
restored and carried out as in effect on January 19, 2009, “notwithstanding any guidelines,
opinions, letters, Presidential directives, or agency practices relating to such regulations issued or
carried out after such date.” If the measure were enacted: family travel would again be limited to
once every three years for a period of up to 14 days to visit immediate family members only, and
would require a specific license from OFAC; licensed travelers would be allowed to carry just
$300 in remittances compared to the $3,000 currently allowed; family remittances would be
limited to $300 per quarter compared to no limits today; non-family remittances restored by the
Obama Administration in 2011, up to $500 per quarter, would not be allowed; and the general
license for remittances to religious organizations would be eliminated, although such remittances
would still be permitted via specific license on a case-by-case basis.184
The White House’s Statement of Administration Policy on H.R. 2434, issued July 13, 2011, stated
that the Administration opposes Section 901 because it would reverse the President’s policy on
family travel and remittances, and that the President’s senior advisors would recommend a veto if
the bill contained the provision. According to the statement, Section 901 “would undo the
President’s efforts to increase contact between divided Cuban families, undermine the
enhancement of the Cuban people’s economic independence and support for private sector
activity in Cuba that come from increased remittances from family members, and therefore isolate
the Cuban people and make them more dependent on Cuban authorities.”185
The House Appropriations Committee report to the bill (H.Rept. 112-136) requires a report from
OFAC on the current number of pending applications seeking specific licenses to conduct people-
to-people exchanges, i.e. educational exchanges not involving academic study pursuant to a
degree program under the auspices of an organization that sponsors and organizes such programs
to promote people-to-people contact. The report would also require information on the number of
these licenses that OFAC has approved to date, its plan for getting through the current queue of
license applications, and its plan for expeditiously reviewing those applications in the future. This
reporting requirement was added to the report via an amendment offered by Representative Jeff
Flake approved by voice vote during the House committee’s June 24, 2011, markup of the bill. In
184 For activities authorized under a general license, there is no need to obtain special permission from OFAC, while for
those activities requiring a specific license, OFAC reviews applications on a case-by-case basis.
185 Executive Office of the President, Office of Management and Budget, Statement of Administration Policy, H.R.
2434 – Financial Services and General Government Appropriations Act, 2012, July 13, 2011.
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early July 2011, OFAC confirmed that it had approved the first licenses for U.S. people-to-people
organizations to bring U.S. visitors to Cuba, and the first such trips began in August 2011.186
Author Contact Information
Garrett Hatch
Analyst in American National Government
ghatch@crs.loc.gov, 7-7822
Key Policy Staff
Area of Expertise
Name
Phone
E-mail
Department of the Treasury
Gary Guenther
7-7742
gguenther@crs.loc.gov
Executive Office of the President
Barbara L. Schwemle
7-8655
bschwemle@crs.loc.gov
Judiciary Lorraine
Tong
7-5846
ltong@crs.loc.gov
District of Columbia
Eugene Boyd
7-8689
eboyd@crs.loc.gov
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
Darryl Getter
7-2834
dgetter@crs.loc.gov
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
Federal Trade Commission
Gary Guenther
7-7742
gguenther@crs.loc.gov
General Services Administration
Garrett Hatch
7-8674
ghatch@crs.loc.gov
Merit Systems Protection Board
Barbara Schwemle
7-8655
bschwemle@crs.loc.gov
National Archives and Records
Wendy Ginsberg
7-3933
wginsberg@crs.loc.gov
Administration
National Credit Union Administration
Darryl Getter
7-2834
dgetter@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
186 Peter Orsi, “U.S. Licensing Travel Operators to Start Up Legal Cuba Trips, Treasury Department Says,” Associated
Press, July 1, 2011; Mimi Whitefield, “People-to-People Tours to Cuba Take Off Thursday,” Miami Herald, August
10, 2011; and Jeff Franks, “Purposeful Cuba Trips Resume,” Chicago Tribune, August 18, 2011.
Congressional Research Service
78
Financial Services and General Government: FY2012 Appropriations
Area of Expertise
Name
Phone
E-mail
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
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
79