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Statement of Administration Policy: [H.R. 2622] - Treasury Postal Service, and General Government Appropriations Bill, FY 1992

June 12, 1991

STATEMENT OF ADMINISTRATION POLICY

(House Rules)
(Sponsors: Whitten, (D), Mississippi; Roybal (D), California)

This Statement of Administration Policy expresses the Administration's views on the Treasury, Postal Service and General Government Appropriations Bill, FY 1992, as reported by the Committee.

On the basis of OMB's initial scoring, the Administration finds that the bill is within the House 602(b) budget authority allocation but exceeds the outlay allocation by $183 million. In aggregate, the House 602(b) allocations are consistent with the statutory spending limits enacted in the Budget Enforcement Act.

The Administration has strong objections to the Committee bill language that would bar the use of funds appropriated in this act for the implementation of Public Law 101-576, the Chief Financial Officers Act of 1990 (CFOs Act). All of the agencies funded in the eight bills reported from the House Appropriations Committee to date have been prohibited from implementing the CFO legislation. The CFOs Act addresses long-standing Congressional and Administration concerns about serious financial management deficiencies in the Federal Government.

In passing the CFOs Act (by a voice vote without dissent) the Congress found that "[b]illions of dollars...lost each year through fraud, waste, abuse, and mismanagement...could be significantly decreased by improved management." As a remedy, the Act (1) strengthens management capabilities; (2) provides for improved accounting systems, financial management, and internal controls to assure reliable information and deterrence of fraud, waste, and abuse; and, (3) provides for reliable financial information, useful to Congress and the Executive Branch in financing, managing, and evaluating Federal programs. Implementation of the CFOs Act is essential to good government.

The Administration also has serious concerns about a number of funding provisions contained in the bill:

  • IRS Tax System Modernization. The Administration opposes delaying the obligation of $492 million in funding for Tax System Modernization (TSM) and other projects until September 30, 1992. This would seriously delay TSM and would postpone essential procurements to maintain current processing systems. This delay would derail key TSM projects and postpone TSM benefits: reduced taxpayer burden, increased revenue, and lower operating costs. The delay would result in higher total TSM costs. IRS could be forced to furlough some of the 1,700 employees in TSM projects.

  • Financial Management Service. The Administration strongly opposes Committee action that would require the Social Security Trust Funds to pay directly to FMS the full cost of mailing beneficiary checks. This is a scoring technique that seeks to mask the spending increase that it would enable. It is inconsistent with the Budget Enforcement Act of 1990; and, accordingly, would have to be scored as domestic discretionary spending.

  • Federal Bureau of Prisons. The Committee would underfund the President's request for the Federal Bureau of Prisons by providing only a $10 million transfer from the Office of National Drug Control Policy (ONDCP) Special Forfeiture Fund rather than the requested $46 million. The National Drug Control Strategy identifies spending $46 million on prison construction as one of the Administration's drug control strategy priorities for FY 1992.

  • Postal Service Revenue Forgone Appropriation. The Administration opposes the Committee's decision to increase the payment to the Postal Service for revenue forgone from the request of $183 million to $649 million. This action would permit current abuses of the postal rate subsidy to continue.

Additional Administration concerns with the bill are discussed in the attachment.

Attachment


June 12, 1991
(House Rules)

ADDITIONAL CONCERNS
TREASURY, POSTAL SERVICE AND GENERAL GOVERNMENT APPROPRIATIONS BILL, FY 1992

MAJOR PROVISIONS OPPOSED BY THE ADMINISTRATION

A. Funding Levels

Department of the Treasury:

Financial Management Service. The Administration strongly opposes Committee action that would require the Social Security Trust Funds to pay directly to FMS the full cost of mailing beneficiary checks. This is a scoring technique that seeks to mask the spending increase that it would enable. It is inconsistent with the Budget Enforcement Act of 1990; and, accordingly, would have to be scored as domestic discretionary spending. The Administration prefers the current arrangement in which the Social Security Trust Funds pay the General Fund for labor and reconciliation services because it permits more direct Executive and Congressional oversight of government mail management practices.

Internal Revenue Service — Information Systems. The bill delays obligation of $492 million until September 30, 1992, with at least $432 million of the delay borne by Tax System Modernization (TSM) projects. This action would seriously delay TSM and would postpone procurements that are essential to maintaining current processing systems. Specifically:

  • The resulting delay in implementing TSM would derail projects and postpone the system's benefits, i.e., reduced taxpayer burden, increased revenue, and lower Operating costs. Delays in project schedules would result in higher total TSM costs.

  • Delays in procurements to maintain and modernize current systems would place those systems at significant risk of failure, with consequent jeopardy to a successful filing season as well as to automated enforcement functions.

  • Because the delay would affect at least 88 percent of the TSM budget, IRS would likely be forced to furlough some of the almost 1,700 employees engaged in TSM projects.

Delaying the availability of $492 million would not reduce outlays by anything approaching the $394 million projected by the Committee. The IRS would most likely delay procurement obligations that already have a low outlay rate. Remaining expenditures, primarily salary and benefits, have high outlay rates. Consequently, the outlay rate for the balance of the appropriation not subject to the Committee's proposed delay is estimated to be 90 percent, rather than the 66.5 percent rate associated with the entire account. Thus, FY 1992 outlays would be reduced by only $138 million.

By use of a transfer, the bill increases funds for Tax System Modernization (TSM) from $427 million to $492 million without changing the overall funding level for the Information Systems appropriation. This $65 million transfer to TSM would come at the cost of initiatives to maintain current processing capability. These initiatives are necessary to avoid breakdowns during the filing season.

Tax Law Enforcement. The Committee reduced tax law enforcement by $26 million. This would result in 513 fewer staff years being added to the Collection Program for accounts receivable work, with the consequent loss of about $500 million in collections over five years if the reduction were to be permanent. This reduction would undermine the Administration's efforts to improve IRS accounts receivable, which has been identified as one of the Federal government's High Risk areas.

U.S. Customs Service: Salaries and Expenses. The Committee level for Customs' S&E account incorporates a reduction of $41.3 million below the President's request, partially offset by a $21 million transfer from the ONDCP Special Forfeiture Fund. The potential effects of this reduction include:

  • the elimination of an initiative that is intended to remedy customs internal controls problems

  • the reduction or elimination of a $7 million initiative to provide additional staffing for Customs Commercial Services

Bureau of Alcohol, Tobacco, and Firearms. The bill directs the ONDCP's Special Forfeiture Fund to transfer $15 million to ATF "for drug-related expenses." The Committee has fully funded the President's request, and additional funding is unnecessary. Furthermore if used to fund staffing increases, the additional funding would have to be incorporated into the funding base to avoid disruptive staffing cuts in future years. This would require correspondingly higher out-year appropriations.

Treasury: Office of Inspector General. The Committee's $5 million reduction would eliminate all Office of Inspector General (OIG) proposed initiatives for FY 1992. The cut would reduce the number of audits and investigations the OIG would perform and preclude the OIG from meeting its three-year review cycle of internal investigations of Treasury law enforcement Bureaus.

ONDCP. The purpose of the Office of National Drug Control Policy's (ONDCP) Special Forfeiture Fund is to provide resources for priorities identified in the National Drug Control Strategy. For FY 1992, those priorities have been identified as prison construction ($46 million) and drug treatment capacity expansion ($31 million). The Committee has provided the full amount requested for the Special Forfeiture Fund ($77 million) but has identified a different set of priorities. While $31 million is provided for treatment expansion, only $10 million is provided for prison construction. Without the transfer of the additional $36 million, the Federal Bureau of Prisons (BOP) would not be able to expand detention space to address the ever-increasing number of individuals arrested for violating Federal drug control and other laws. The $10 million level for BOP is inconsistent with report language accompanying the Commerce, Justice, State Committee bill. The report notes that the transfer of the entire $46 million is assumed in the mark for the BOP Buildings and facilities account.

Payment to Postal Service Revenue Forgone Fund. The Committee increased the payment for revenue forgone from a request of $183 million to $649 million. This increased funding would allow current abuses of the postal rate subsidy to continue at an increased level.

General Services Administration:

Federal Buildings Fund. The President requested $444 million for construction of new headquarters offices of the Department of Transportation (DOT) in Washington, D.C. The Committee would provide only $239 million. This level of funding is inadequate to construct the facilities. While providing inadequate funding for the DOT project, the bill includes funds for a number of new construction projects that are not priority needs at this time. The Administration urges the Committee to delete funding for nine projects not contained in the President's request and to restore the funds for DOT headquarters to enable this project to proceed as scheduled.

Office of Personnel Management (OPM): Office of the Inspector General. The Committee would appropriate $3.1 million in general funds for OPM's Office of the Inspector General, compared to the President's Budget request of $4.1 million. The Committee is urged to provide the level of resources requested in the Budget.

B. Language Provisions

Department of the Treasury:

Bureau of Alcohol, Tobacco, and Firearms. The Administration objects to the earmarking of funds for activities in support of the Federal Alcohol Administration Act. This would reduce the Bureau's flexibility in carrying out its mission. The bill requires a staffing floor of 4,073 FTEs. Staffing floors reduce needed flexibility; and without the ONDCP transfer mentioned above, to which the Administration objects, reaching this staffing floor in FY 1992 would be impossible.

U.S. Customs Service: Salaries and Expenses. Section 525 of the General Provisions would provide unnecessary protection to the Front Royal Customs port of entry. The language of this section would require Customs to keep this port open even if the benefits of keeping it open would not justify the expense. This language should be deleted.

Section 613 of the General Provisions imposes unnecessary restrictions on Customs ability to plan for or implement any cost-saving consolidation or centralization activities. This kind of micro- management does not promote optimization of services, nor does it facilitate management efficiencies.

Bureau of the Public Debt. Language of the Committee bill would unduly restrict the Executive Branch's ability to manage the Bureau's move to the Parkersburg, West Virginia facility by prohibiting Treasury from separating those employees who will not accept reassignment outside of the Washington metropolitan area. The Administration supports the Committee's objective of assisting affected employees through a transition period. However, this can most appropriately be accomplished by deleting the bill language and allowing the Bureau to plan how best to provide the transition services specified in the report accompanying the Committee bill.

NOAA. The Administration opposes the Committee's report language directing OMB to transfer review of NOAA programs from the Economics and Government to the Natural Resources, Energy and Science program areas of OMB. The President should have discretion to organize the OMB without Congressional interference. Appropriate scientific and technological review of NOAA is dependent upon the examiners themselves, not the division within which the examiners reside. Separating review of NOAA from the remainder of the Department of Commerce would create serious management complications without any benefit in terms of improved evaluation.

Office of Personnel Management (OPM):

Section 517 would prohibit OPM from closing or consolidating executive seminar centers. The Administration objects to this provision because it would prevent OPM from exercising its managerial discretion in deciding how best to use its training resources.

Section 528 would prohibit the use of funds to reduce the rank or rate of pay of a career appointee in the SES upon reassignment or transfer. The Administration objects to this provision because it would restrict flexibility in managing senior executive personnel effectively and efficiently.

Salaries and Expenses. The bill requires that OPM spend not less than $400,000 for Federal health promotion and disease prevention programs for Federal employees. While this is a worthy program, the mandated funding level is unwarranted. Funding this program beyond the level actually needed could result in funds being diverted from higher-priority functions.

Other:

President's Commission on Executive Exchange. Language limiting entertainment expenses of the Commission is no longer necessary. This commission has been abolished pursuant to Executive Order 12760 (signed May 2, 1991).

Section 619. Section 619 would require any agency to procure any product or service for the FTS2000 project through GSA. This proposed legal requirement is unnecessarily restrictive and could slow down current, continuing agency procurement outside of GSA. Implementation of the FTS2000 project would certainly be forestalled. Furthermore, the language would give GSA literal control of the FTS2000 project and would restrict any innovative ideas that the agencies have in implementing FTS2000.

Official Residence of the Vice President. As currently drafted, the language for the Official Residence of the Vice President does not reflect the changes proposed in the FY 1992 Budget, which proposed deleting the following four words: "maintenance, repair and alteration," and in their place inserting the word "operation." This editorial change was proposed to reflect the fact that the Navy is resuming its role as landlord for the Residence and the associated grounds, including the responsibility for maintenance and renovation of the structure.

George Bush, Statement of Administration Policy: [H.R. 2622] - Treasury Postal Service, and General Government Appropriations Bill, FY 1992 Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/330811