Statement of Administration Policy: H.R. 3756 - Treasury, Postal Service, and General Government Appropriations Bill, FY 1997

(Senate Floor)
(Sponsors: Hatfield (R), Oregon; Shelby (R), Alabama)

This Statement of Administration Policy provides the Administration's views on H.R 3756, the Treasury, Postal Service, and General Government Appropriations Bill, FY 1997, as reported by the Senate Appropriations Committee. While the bill contains several improvements over the Subcommittee bill, for the reasons stated below, the Administration believes that the bill, as reported by the Committee, is unacceptable.

Internal Revenue Service

The Administration strongly opposes the Committee's reduction in funding for the Internal Revenue Service (IRS) — $1. 1 billion below the President's request. Inadequate funding levels for the IRS would severely hinder taxpayer services for millions of Americans and result in unacceptable damage to the immediate collection, of revenue and. the long-term health of voluntary compliance.' The reductions in funding for tax compliance would have an adverse effect on revenue collection. The magnitude of this effect could be as much as four dollars of lost revenue for every dollar of reduced funding, according to IRS estimates. The Administration urges the Senate to provide funding at the level necessary to maintain an efficient and functioning IRS.

The Committee bill includes an appropriation of $26 million for private debt collection that is not required at this time. Until results from the current pilot project can be analyzed, these funds could be much better used to offset some of the Committee's reduction in funding for tax law enforcement.

The Administration appreciates the Committee's restoration of funds necessary to sustain current operating systems that process 200 million tax returns annually and issue timely refunds to over SO million taxpayers; However, language restricting IRS access to some of the Information Systems funding remains objectionable. The Administration is committed to working with the Committee to respond to questions on the needs and priorities for IRS Information Systems.

The Administration strongly opposes the Committee's draconian reduction to the request for Tax Systems Modernization (TSM), a reduction $23 million greater than that made by the House. In addition, the Administration remains strongly opposed to the rescission of prior-year balances included in the Committee bill. Taken together, these reductions would result in a level of funding that would significantly reduce and delay the ability of the IRS to correct the technical and management weaknesses identified by the General Accounting Office; to achieve near-term improvements to critical businesses performance measures; and, to design and implement a fully-integrated, modernized system.

Moreover, the language of the Committee bill would restrict funding solely to the support of 150 full-time equivalent positions (FTE) in FY 1997, thereby requiring a reduction-in-force of 2, 000 FIE. The Administration urges the Senate to eliminate this language and to fund TSM at a level that will allow a staged, moderate approach to FIE reductions over FYS 1997 and 1998, including any necessary termination costs.

Federal Employees Health Benefits Program

The Administration commends the Senate for removing the provision contained in the House bill that would restrict Federal Employees Health Benefits Program (FEHBP) coverage for abortions. The President believes that abortion should be safe, legal, and rare. The Administration believes that the decision to cover abortion should be left to each health plan participating in the FEHBP, and that Federal employees should be allowed to choose such a plan

Anti-Drug Funding

The Administration requested $250 million in FY 1996 supplemental funding for drug law enforcement, treatment, and prevention efforts. As part of last year's agreement to resolve FY 1996 appropriations issues, the Appropriations Committees, in the Conference Report accompanying PJL 104-134, the Omnibus Consolidated Rescissions and Appropriations Act of 1996, expressed their intent to fund these additional requirements through the FY 1997 appropriations bills. To date, Congress has not done so. Of the $250 million requested, $ 118 million was requested to be provided through the Office of National Drug Control Policy. The Committee has provided none of the $118 million component of the request. The Administration urges the Senate to provide full funding of the request.

Bureau of Alcohol Tobacco and Firearms (BATF)

The Administration urges the Senate to work with the Administration to provide funding for the study of explosive taggants (materials placed in explosives to allow them to be traced) and to study certain types of armor-piercing "cop killer" bullets. Funding for both of these studies is necessary to complete an important mandate of Congress in recently enacted anti-terrorism legislation. We urge the Senate to permit the use of taggant study funding for studying black and smokeless powder.

The Administration appreciates the funds provided by the Committee toward the construction of a new laboratory and fire research facility. The Administration urges the Senate to give favorable consideration to the full S62 million request to fund a new laboratory facility and fire research Facility. These facilities which will be co-located are vital to BATFs continued efforts in ensuring the safety of the public.

Infringement on Executive Authority

Language contained in the Financial Management Service (FMS) Salaries and Expenses account would prevent spending the $14 million made available for systems modernization until FMS submits, and the House and Senate Appropriations Committees approve, a report that identifies, evaluates, and prioritizes all computer systems investment planned for FY 1997, and meets other specified requirements. Similarly, language in the Bureau of Alcohol, Tobacco and Firearms Salaries and Expenses account would require that no funds otherwise available in that account for separation incentives could be spent without the advance approval of the House and Senate Appropriations Committees. The Administration will interpret these and similar provisos contained in the bill to require notification only, since any other interpretation would contradict the Supreme Court's ruling in INS vs. Chadha.