House subcommittee approves 24 percent cut to IRS budget

Tuesday - 7/9/2013, 8:35pm EDT

UPDATED July 10 at 3:15 p.m. to include detail on subcommittee passage

The embattled Internal Revenue Service faces a 24 percent cut to its budget next year, under a spending plan approved by a House Appropriations subcommittee Wednesday.

The bill includes about $9 billion in funding for the IRS, which is about $4 billion less than President Barack Obama proposed in his 2014 budget request and nearly $3 billion less than fiscal 2013.

Another 10 percent of the funding allocated for IRS enforcement activities would be withheld until the agency implements new inspector general recommendations. The funding bill also prohibits the agency from spending money on employee conferences until new IG recommendations are fully implemented and also bars new spending on employee bonuses and performance awards.

The IRS funding was included in the committee's Financial Services and General Government Appropriations bill, which also includes funding for the Treasury Department, the General Services Administration and the Executive Office of the President.

House appropriators say the spending restrictions, which also set in place strict reporting requirements on the use of new funding, will help prevent future abuses at the agency.

In May, the Treasury Inspector General for Tax Administration (TIGTA) reported the agency had improperly targeted conservative groups applying for tax-exempt status. The following month, the IG reported IRS officials spent nearly $50 million on employee conferences between 2010 and 2012.

"This bill right-sizes federal agencies and programs that are simply not working efficiently or effectively, while investing in programs that directly serve the American people," House Appropriations Committee Chairman Hal Rogers (R-Ky.) said in a statement.

However, the National Treasury Employees Union, which represents IRS employees, blasted the proposed funding levels.

"A cut of 24 percent — nearly a quarter of the IRS funding — would take the agency's budget back to just above the level of more than a decade ago, in fiscal 2001," NTEU President Colleen Kelley said in a statement. "In terms of the ability of the IRS to meet its mission on behalf of the American people, such a budget would absolutely devastate the agency."

The IRS budget has declined by nearly $1 billion since 2011, according to NTEU. Congress slashed funding by more than $300 million last fiscal year and across- the-board budget cuts lopped another $600 million from the agency's bottom line this year. All told, the funding reductions have caused the IRS workforce to shrink by about 8,000 employees since the end of fiscal 2010, NTEU says.

GSA, SBA also slated for reductions

The larger appropriations bill includes a total of $17 billion in funding for agencies ranging from the White House and GSA to the Small Business Administration. That's $4.3 billion less than Congress approved for fiscal 2013 and about $3 billion less than the agencies will receive this year, taking into account sequestration.

The committee's bill allocates $624 million to the Executive Office of the President — a $46 million cut from the current year's level. The bill would also require the White House to submit its budget request to Congress on time or have another $45 million in funding withheld until it does so.

This year, amid high-stakes political negotiations surrounding sequestration, the White House was more than two months late in submitting its annual budget outline.

The bill funds GSA at $7.5 billion — about $2.4 billion less than what GSA requested and $476 million less than what it was allocated this year. GSA funding comes from the Federal Buildings Fund, which is essentially rent paid to GSA by other agencies to use federal buildings. However, Congress must approve GSA's use of that funding.

Under the legislation, GSA would be subject to new reporting requirements for its inventory of federal property.

The bill slates $898 million for the SBA — a 14 percent reduction from current-year levels.

RELATED STORIES:

IRS cancels manager bonuses; union employees could be next

IG: IRS violated few policies in spending millions on conferences