White House threatens to veto spending bills over pay freeze, cuts

Thursday - 6/28/2012, 10:07pm EDT

The White House has threatened to veto two key House spending bills because of proposed cuts to some agencies as well as federal pay and workforce provisions.

In statements of administration policy, the Office of Management and Budget also said the appropriations bills for both Financial Services and General Government and the Defense Department stray from previously agreed to budgetary caps spelled out in last summer's Budget Control Act.

The bills, which were recently approved by the House Appropriations Committee, await votes in the full House.

WH objects to pay freeze extension, budget cuts

The Financial Services and General Government bill, which supplies funding for a host of agencies, includes $21.15 billion in funding — $376 million less than last year and $2 billion below the President's 2013 budget request.

The administration objected to the bill's recommendation for a continuation of the civilian pay freeze. Federal employees are now nearing the end of a White House-backed two-year freeze. President Barack Obama, in his 2013 budget request, proposed a modest pay increase of 0.5 percent.

The administration also took issue with the steep cuts proposed for some agencies.

The House proposed freezing funding for the IRS, which OMB said would "continue to erode IRS program performance, significantly reduce revenue, and impair taxpayers' ability to access IRS services."

The House bill also calls for OMB's budget to be reduced by nearly 10 percent — from $89.5 million to about $80.5 million. "Absorbing reductions of this magnitude would require OMB to eliminate approximately 90 full time equivalents (FTEs) a staffing reduction of over 17 percent," OMB said in its statement.

The budget for the Selective Service Administration, the small agency responsible for maintaining a military draft system, would be cut nearly in half from FY 2012 levels and would require a reduction-in-force, according to OMB's statement.

The appropriations bill also slashes funding for the General Services Administration's Federal Building Fund. The FBF is not directly allocated by congressional appropriations, however lawmakers set limits on the amount of funding available to GSA through it. The bill would cut the availability of funds by $101 million from 2012 levels — and more than $702 million below the President's request.

The committee signaled that cuts to GSA's budget were necessary to "starve out opulence and frivolity," references to excessive spending at a 2010 training conference that toppled the agency's leadership and led to congressional and public scorn.

The White House said the funding levels will make it difficult to make repairs to buildings and "jeopardizes GSA's ability to pay private lessors, utilities and janitorial services."

White House takes issue with DoD bill

As for the defense appropriations bill, the White House took issue not necessarily with cuts, but with what it called "unnecessary funding," for items and programs DoD did not request.

"This diverts resources from more important defense programs and limits the secretary's flexibility to manage the department efficiently," OMB stated.

The administration also said it was "disappointed," the bill does not contain cost-saving measures for the military's TRICARE health insurance system. The President's budget proposed raising health premiums for working-age retirees over a period of four years to drive down personnel costs.

The administration opposed the committee's recommendation to keep at 2012 levels funding for the Defense Acquisition Workforce Development Fund, which is designed to help DoD fill gaps in its procurement workforce.

The committee proposed $50.2 million in funding for DAWDF, rejecting the administration's proposal to significantly boost the program to $274 million.

However, there are areas where the committee and the administration see eye-to-eye.

The House bill includes $128.5 billion in total spending for military pay, which encompasses a 1.7 percent military pay raise. The committee also fully funded the administration's request for overseas contingency operations, primarily in Afghanistan.

OMB said it "appreciates the Committee's support for those measures."

Earlier this month, the administration issued a veto threat of the House bill setting appropriations for the Homeland Security Department, in part, because it did not include funding for a pay raise for civilian DHS employees. So far, the White House has issued veto threats to eight congressional appropriations bills.

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