Financial Services and General Government (FSGG): FY2008 Appropriations

Financial Services and General Government
(FSGG): FY2008 Appropriations
Updated March 18, 2008
Garrett L. Hatch
Coordinator
Government and Finance Division



The annual consideration of appropriations bills (regular, continuing, and supplemental) by
Congress is part of a complex set of budget processes that also encompasses the
consideration of budget resolutions, revenue and debt-limit legislation, other spending
measures, and reconciliation bills. In addition, the operation of programs and the spending
of appropriated funds are subject to constraints established in authorizing statutes.
Congressional action on the budget for a fiscal year usually begins following the submission
of the President’s budget at the beginning of each annual session of Congress.
Congressional practices governing the consideration of appropriations and other budgetary
measures are rooted in the Constitution, the standing rules of the House and Senate, and
statutes, such as the Congressional Budget and Impoundment Control Act of 1974.
This report is a guide to one of the regular appropriations bills that Congress considers each
year. It is designed to supplement the information provided by the House and Senate
Appropriations Subcommittees on Defense. For both defense authorization and
appropriations, this report summarizes the status of the bills, their scope, major issues,
funding levels, and related congressional activity. This report is updated as events warrant
and lists the key CRS staff relevant to the issues covered as well as related CRS products.
NOTE: A Web version of this document with active links is
available to congressional staff at [http://apps.crs.gov/cli/cli.aspx?
P RDS_CLI_ITEM_ID=221& f r om=3&f romId=73].



Financial Services and General Government (FSGG):
FY2008 Appropriations
Summary
FY2008 appropriations for Financial Services and General Government (FSGG)
agencies were originally proposed in H.R. 2829. The bill included funding for the
Department of the Treasury, the Executive Office of the President (EOP), the
judiciary, the District of Columbia, and 20 independent agencies. Among the
independent agencies funded by the bill are the General Services Administration
(GSA), the Office of Personnel Management (OPM), the Small Business
Administration (SBA), and the United States Postal Service (USPS).
On June 28, 2007, the House approved $43.8 billion for H.R. 2829, a $3.1
billion increase over FY2007 enacted funding and $101 million above the President’s
FY2008 request. Discretionary spending in the House bill totaled $21.4 billion, a
decrease of $245 million from the President’s request, but $1.9 billion more than was
enacted in FY2007. The Senate appropriations FSGG subcommittee marked up its
version of the bill July 10, and the full committee reported it July 12. The Senate bill
recommended $44.2 billion in appropriations, a $3.4 billion increase over FY2007
enacted funding and $414 million above the President’s FY2008 request.
Discretionary spending in the Senate bill totaled $21.8 billion, approximately $20
million above the President’s request and $2.3 billion more than was enacted in
FY2007. The Senate took no further action on H.R. 2829. The agencies included in
the FSGG appropriations bill were funded from the start of the 2007 fiscal year until
December 31, 2007, by a series of continuing resolutions. Under the continuing
resolutions, FSGG agencies were generally funded at FY2007 rates, although the
District of Columbia had special funding provisions.
FSGG appropriations were ultimately included in a consolidated appropriations
bill, H.R. 2764, which was approved by the Senate, as amended, on December 18,
and passed by the House on December 19. President Bush signed H.R. 2764, the
Consolidated Appropriations Act, 2008 (P.L. 110-161), on December 26, 2007. The
act provides a total of $43.3 billion for FSGG agencies, $2.6 billion more than
enacted in FY2007, but $421 million less than requested by the President. Compared
with H.R. 2829, the act provides $583 million less than the amount approved by the
House, and $829 million less than the amount approved by the Senate. Discretionary
spending in the act totals $20.6 billion, which is $1.1 billion more than enacted in
FY2007, but $1.1 billion less than the amount requested by the President. Compared
with H.R. 2829, discretionary funding in the act is $1.1 billion below the amount
approved by the Senate, and $833 million less than the amount approved by the
House.



Key Policy Staff
Area of ExpertiseName Div.Telephone
Title I: Department of the Treasury
Treasury, Internal Revenue ServiceGary GuentherG&F7-7742
Title II: Executive Office of the President and Funds Appropriated to the President
Executive Office of the PresidentBarbara SchwemleG&F7-8655
Title III: The Judiciary
JudiciaryLorraine TongG&F7-5846
JudiciarySteve RutkusG&F7-7162
Title IV: District of Columbia
District of ColumbiaEugene BoydG&F7-8689
Title V: Other Independent Agencies
GenerallyGarrett HatchG&F7-7822
Commodity Futures Trading CommissionMark JicklingG&F7-7784
Consumer Product Safety CommissionBruce MulockG&F7-7775
Election Assistance CommissionKevin ColemanG&F7-7878
E-Government Fund in GSAHarold RelyeaG&F7-8679
Federal Communications CommissionPatty FigliolaRSI7-2508
Federal Deposit Insurance Corporation: OIGPauline SmaleG&F7-7832
Federal Election CommissionR. Sam GarrettG&F7-6443
Federal Labor Relations AuthorityGerald MayerDSP7-7815
Federal Trade CommissionBruce MulockG&F7-7775
General Services AdministrationStephanie SmithG&F7-8674
Merit Systems Protection BoardBarbara SchwemleG&F7-8655
National Archives and Record AdministrationHarold RelyeaG&F7-8679
National Credit Union AdministrationPauline SmaleG&F7-7832
Office of Personnel ManagementBarbara SchwemleG&F7-8655
Office of Special CounselBarbara SchwemleG&F7-8655
Securities and Exchange CommissionMark JicklingG&F7-7784
Selective Service System David BurrelliFDT7-8033
Small Business AdministrationEric WeissG&F7-6209
U.S. Postal Service Kevin KosarG&F7-3968
General Provisions, Government-Wide
Government-wide General ProvisionsBarbara SchwemleG&F7-8655
Competitive SourcingL. Elaine HalchinG&F7-0646
CubaMark SullivanFDT7-7689
DSP = Domestic Social Policy Division
FDT = Foreign Affairs, Defense, and Trade Division
G&F = Government and Finance Division
RSI = Resources, Science, and Industry Division



Contents
Most Recent Developments..........................................1
In troduction ......................................................2
Overview of FY2008 Appropriations..................................3
Key Issues...................................................5
Title I: Department of the Treasury....................................5
Department of the Treasury Budget and Key Issues...................6
Treasury Offices and Bureaus (Excluding the IRS)................7
Internal Revenue Service (IRS)..............................12
Title II: Executive Office of the President and Funds Appropriated
to the President...............................................19
The Executive Office of the President Budget and Key Issues..........21
Consolidation Proposal....................................21
Transfer Authority Proposal.................................22
Enterprise Services Proposal................................23
P.L. 110-161.............................................28
Title III: The Judiciary.............................................28
The Judiciary Budget and Key Issues.............................29
Cost Containment Initiatives................................31
Judicial Security..........................................31
Workload ...............................................32
Judgeships ..............................................32
Judicial Pay.............................................32
House and Senate Budget Hearings...............................33
FY2008 Request and Congressional Action....................34
Supreme Court...........................................35
U.S. Court of Appeals for the Federal Circuit...................36
U.S. Court of International Trade............................36
Courts of Appeals, District Courts, and Other Judicial Services.....36
Administrative Office of the U.S. Courts (AOUSC)..............39
Federal Judicial Center....................................39
United States Sentencing Commission........................39
Judiciary Retirement Funds.................................39
General Provision Changes.................................39
Administrative Provisions..................................40
Title IV: District of Columbia.......................................41
The District of Columbia Budget and Key Issues....................43
President’s Request.......................................43
District Budget...........................................44
H.R. 2829...............................................44
Enacted Appropriations....................................44



Continuing Resolution and D.C. Budget Autonomy..............47
Title V: Independent Agencies......................................48
Commodity Futures Trading Commission (CFTC)...............49
Consumer Product Safety Commission (CPSC).................50
Election Assistance Commission (EAC).......................50
Federal Communications Commission (FCC)...................51
Federal Deposit Insurance Corporation (FDIC): OIG.............52
Federal Election Commission (FEC)..........................52
Federal Trade Commission (FTC)............................54
General Services Administration (GSA).......................54
Independent Agencies Related to Personnel Management.........57
Federal Labor Relations Authority (FLRA).....................59
Merit Systems Protection Board (MSPB)......................59
Office of Personnel Management (OPM)......................60
Office of Special Counsel (OSC).............................62
National Archives and Records Administration (NARA)..........64
National Credit Union Administration (NCUA).................65
Securities and Exchange Commission (SEC)...................65
Selective Service System (SSS)..............................66
Small Business Administration (SBA)........................67
United States Postal Service (USPS)..........................67
United States Tax Courts (USTC)............................70
General Provisions Government-Wide................................70
Competitive Sourcing.........................................73
Cuba Sanctions...............................................75
List of Tables
Table 1. Status of FY2008 Financial Services and
General Government Appropriations...............................2
Table 2. Financial Services and General Government Appropriations,
by Title, FY2007-FY2008.......................................4
Table 3. Department of the Treasury Appropriations, FY2007 to FY2008......6
Table 4. Executive Office of the President and Funds Appropriated
to the President, FY2007 to FY2008..............................20
Table 5. The Judiciary Appropriations, FY2007 to FY2008...............29
Table 6. District of Columbia Appropriations, FY2007 to FY2008:
Special Federal Payments......................................42
Table 7. Independent Agencies Appropriations,
FY2007 to FY2008...........................................48
Table 8. General Services Administration Appropriations,
FY2007 to FY2008...........................................56
Table 9. Independent Agencies Related to Personnel Management
Appropriations, FY2007 to FY2008..............................58



Financial Services and General Government
(FSGG): FY2008 Appropriations
Most Recent Developments
On June 28, 2007, the House approved $43.8 billion for agencies funded
through the Financial Services and General Government (FSGG) appropriations bill
(H.R. 2829), a $3.1 billion increase over FY2007 enacted funding and $101 million1
above the President’s FY2008 request. Discretionary spending in the bill totaled
$21.4 billion, a decrease of $245 million from the President’s request, but $1.9
billion more than was enacted in FY2007. The Senate appropriations FSGG
subcommittee marked up its version of the bill July 10, and the full committee
reported it July 12. The Senate bill recommended $44.2 billion in appropriations, a
$3.4 billion increase over FY2007 enacted funding and $414 million above the2
President’s FY2008 request. Discretionary spending in the Senate bill totaled $21.8
billion, approximately $20 million above the President’s request and $2.3 billion
more than was enacted in FY2007. The Senate took no further action on H.R. 2829,
and the agencies included in the FSGG appropriations bill were funded until
December 31, 2007, by a series of continuing resolutions. Under the continuing
resolutions, FSGG agencies were generally funded at FY2007 rates.3
FSGG appropriations were ultimately included in a consolidated appropriations
bill, H.R. 2764, which passed the Senate, as amended, on December 18, and passed
the House on December 19, 2007. President Bush signed H.R. 2764, the
Consolidated Appropriations Act, 2008 (P.L. 110-161), on December 26, 2007.
Division D of the act provides a total of $43.3 billion for FSGG agencies, $2.6 billion
more than enacted in FY2007, but $421 million less than requested by the President.
Compared with H.R. 2829, the act provides $583 million less than approved by the
House, and $829 million less than approved by the Senate Appropriations
Committee. Discretionary spending in the act totals $20.6 billion, which is $1.1


1 On June 11, the House Appropriations Committee approved $43.9 billion for the Financial
Services and General Government (FSGG) appropriations bill, but the bill was sent back to
committee before reaching the floor so that earmarks could be added. The amended FSGG
bill, with earmarks, was then approved by the Appropriations Committee June 21.
2 The Senate bill includes funding for the Commodity Futures Trading Commission (CFTC),
which is funded through the agriculture appropriations bill (H.R. 3161) in the House.
3 See the section on the District of Columbia for more information. Section 112 of the
continuing resolution provides that the “amounts made available ... for civilian personnel
compensation and benefits in each department and agency may be apportioned up to the rate
for operations necessary to avoid furloughs.” This authority may be used after the
department or agency “has taken all necessary actions to reduce or defer non-personnel-
related administrative expenses.”

billion more than enacted in FY2007, but $1.1 billion less than the amount requested
by the President. Compared with H.R. 2829, discretionary funding in the act is $1.1
billion below the amount recommended by the Senate Appropriations Committee,
and $883 million less than the amount approved by the House. Table 1 notes the
status of H.R. 2829 and the Consolidated Appropriations Act, 2008 (H.R. 2764).
Table 1. Status of FY2008 Financial Services and General
Government Appropriations
Subco mmit t ee
MarkupHouseHouseSenateSenateConf.Passage Public
(H.R. 2829)ReportPassageReportPassageReport(H.R. 2764)Law
(H.R. (H.R. (H.R. (H.R. (H.R. (H.R.
2829) 2829) 2829) 2829) 2764) 2764)H o use Sena t e H o use Sena t e
H.Rep t. S.Rep t. P.L.110-
06/05/07 07/10/07 110-207 06/28/07 110-129 12/17/07 12/19/07 12/18/07 161
06/11/07 07/12/07 12/26/07
Introduction
In early 2007, the House and Senate Committees on Appropriations reorganized
their subcommittee structures. Each chamber created a new Subcommittee on
Financial Services and General Government (FSGG). 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.”4 In 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.5
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,


4 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 on Homelessness.
5 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).

Justice, Science, and Related Agencies Subcommittee.6 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.7 As a result of this reorganization, the
House and Senate FSGG subcommittees have nearly identical jurisdictions.8
Appropriations provisions relating to FSGG agencies are in Division D of the
Consolidated Appropriations Act, 2008. Division D provides funding through five
titles, each of which is discussed in a separate section of this report.9 In addition,
Division D includes three titles relating to general provisions. The language for
government-wide general provisions was proposed by the Administration in the
appendix to the FY2008 budget request, and was included in Title VII of Division D.
The House Appropriations Subcommittee on Financial Services and General
Government is the primary source of the House funding figures used throughout the
report. Senate funding figures are taken from S.Rept. 110-129, which accompanied
H.R. 2829. Other sources include the President’s FY2008 budget request, the House
Appropriations Committee print of P.L. 110-161 and its accompanying explanatory
statement, and agency budget materials.
Overview of FY2008 Appropriations
On June 28, 2007, the House approved $43.8 billion for FY2008 appropriations
for FSGG agencies. Compared to FY2007 enacted amounts, the House bill, H.R.
2829, would have increased appropriations for each of five titles, with the largest
gains proposed for the District of Columbia (+10.8%) and the smallest for the
Executive Office of the President (+0.25%). The House bill would have also
increased funding for the Department of the Treasury (+5.4%), the Judiciary (+4.7%),
and Independent Agencies (+9.7%). Compared to the President’s FY2008 request,
the House bill would have increased funding for the District of Columbia (+9.5%),
the Department of the Treasury (+1.0%), and Independent Agencies (+1.0%).
Funding under the House bill would have decreased relative to the President’s
request for the Judiciary (-3.9%) and the Executive Office of the President (-2.1%).
On July 12, 2007, the Senate Appropriations Committee reported its version of
the FSGG appropriations bill. Compared to FY2007 enacted amounts, the Senate bill
would have increased funding for each of the five titles, with the largest gains


6 The agencies are the FCC, FTC, SEC, and SBA.
7 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.
8 The Commodity Futures Trading Commission (CFTC) is under the jurisdiction of the
FSGG Subcommittee in the Senate but not in the House.
9 The Christopher Columbus Fellowship Foundation is funded in Title VI; all other federal
agencies are funded in Titles I through V.

proposed for Independent Agencies (+11.0%) and the smallest for the Executive
Office of the President (+0.9%). The Senate bill would have also increased funding
for the Department of the Treasury (+5.4%), the Judiciary (+6.0%), and the District
of Columbia (+3.8%). Compared to the President’s FY2008 request, the Senate bill
would have increased funding for the Department of the Treasury (+0.9%), the
District of Columbia (+2.7%), and Independent Agencies (+2.0%). Funding under
the Senate bill would have decreased relative to the President’s request for the
Executive Office of the President (-1.5%) and the Judiciary (-2.7%).
No further action on H.R. 2829 was taken by the Senate. The agencies included
in the FSGG appropriations bill were funded from the start of FY2007 until
December 31, 2007, by a series of continuing resolutions. Under the continuing
resolutions, FSGG agencies were generally funded at FY2007 rates, although the
District of Columbia had special funding provisions.10 The FSGG agencies were
ultimately funded through H.R. 2764, a consolidated appropriations bill which passed
the Senate on December 18, and passed the House, as amended, on December 19.
The bill was signed by President Bush on December 26, 2007, becoming P.L. 110-

161, the Consolidated Appropriations Act, 2008.


Table 2 lists, by title, the enacted amounts for FY2007, the President’s request
for FY2008, funding levels approved by the House under H.R. 2829, the amounts
reported by the Senate Appropriations Committee under H.R. 2829, and the amounts
enacted.
Table 2. Financial Services and General Government
Appropriations, by Title, FY2007-FY2008
(in millions of dollars)
FY2008 FY2008
House Sena t e FY2008
P a sse d Reported Ena c t e d
FY2007 FY2008 (H.R. (H.R. (H.R.
Tit l e Ena c t e d Request 2829) 2829) 2764)
Title I: Department of the Treasury $11,625$12,137$12,257$12,249$11,996
Title II: Executive Office of the720737722727682
P r esident
Title III: The Judiciary5,9806,5116,2586,3376,246
Title IV: District of Columbia591598655614610
Title V: Independent Agencies21,79723,71823,91124,29923,745
To tal $40,713 $43,701 $43,802 $44,226 $41,996
Sources: Budget authority tables provided by House Appropriations Subcommittee on Financial
Services and General Government, and S.Rept. 110-129. Columns may not equal the total due to
rounding.


10 See the section of this report on the District of Columbia for more information.

Key Issues
The wide scope of FY2008 FSGG appropriations — which provide funding for
two of the three branches of the federal government, a city government, and 20
independent agencies with a range of functions — encompasses a number of
potentially controversial issues, some of which are identified below.
!Department of the Treasury. Did the proposed budget provide
adequate funding for enforcement, taxpayer services, and business
systems modernization at the Internal Revenue Service?
!Executive Office of the President (EOP). Should Congress accept
the President’s proposals to (1) consolidate EOP budget accounts
into a single appropriation, (2) expand the authority of the EOP to
transfer funds among separate appropriations accounts, and (3)
centralize funding for administrative services provided throughout
the EOP in the Office of Administration?
!The Judiciary. What level of funding should Congress provide for
judicial security enhancements and other workforce issues, such as
pay raises for judges, and the hiring of additional staff and creation
of additional judgeships to meet the demands of rising caseloads?
!Independent Agencies. Should Congress enact the President’s
proposed budget for the United States Postal Service (USPS), which
is $64 million less than what USPS had requested and $20 million
below the amount enacted for FY2007?
Title I: Department of the Treasury11
This section examines FY2008 appropriations for the Treasury Department and
its operating bureaus, including the Internal Revenue Service (IRS). Table 3 shows
the FY2007 enacted amount, the President’s FY2008 request, the FY2008 amount
approved by the House, the FY2008 amount recommended by the Senate
Appropriations Committee, and the amount enacted for FY2008.


11 This section was written by Gary Guenther, Analyst in Industry Economics, Government
and Finance Division.

Table 3. Department of the Treasury Appropriations,
FY2007 to FY2008
(in millions of dollars)
FY2008 FY2008
House Sena t e FY2008
P a sse d Reported Ena c t e d
FY2007 FY2008 (H.R. (H.R. (H.R.
Program or AccountEnactedRequest2829)2829)2764)
Departmental Offices$216$250$251$252$248
Department-wide Systems and Capital3019191919
I nve st me nt s
Office of Inspector General1718181818
Treasury Inspector General for Tax133141141141141
Ad mi ni str a tio n
Air Transportation Stabilizationa -4-4-4-4
Program
Community Development Financial55291009094
Institutions Fund
Treasury Building and Annex Repair
and Restoration
Financial Crimes Enforcement7386838686
Netwo r k
Financial Management Service235235234235234
Alcohol and Tobacco Tax and Trade9194949794
Bureau
Bureau of the Public Debt178173173173173
Internal Revenue Service, Total10,59711,09511,14711,14210,892
Taxpayer Services 2,138 2,1032,1552,1492,150
Enforcement 4,686 4,9254,9254,9254,780
Operations Support 3,545 3,7703,7703,7703,680
Business Systems Modernization213282282282267
Health Insurance Tax Credit1515151515
A d min i stra tio n
Total: Department of the Treasury$11,625$12,137$12,257$12,249$11,996
Sources: Budget authority table provided by House Appropriations Subcommittee on Financial
Services and General Government, and S.Rept. 110-129. Columns may not equal the total due to
r o und i ng.
a. The negative appropriation for the Air Transportation Stabilization Program reflects a rescission.
Department of the Treasury Budget and Key Issues
The Treasury Department performs a variety of governmental functions.
Foremost among them are protecting the nation’s financial system against a host of
illicit activities (e.g., money laundering and terrorist financing), collecting tax
revenue, 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 perform specific duties assigned to Treasury, mainly through statutory
mandates. In the past decade or so, the bureaus have accounted for over 95% of the
agency’s funding and work force.
With one possible exception, the bureaus 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 (FMS), Bureau of the Public Debt,
Community Development Financial Institutions Fund (CDFI), and Office of Thrift
Supervision have undertaken tasks related to the management of the federal
government’s finances or the supervision and regulation of the U.S. financial system.
By contrast, law enforcement has been the central focus of the tasks handled by the
Bureau of Alcohol, Tobacco, and Firearms; U.S. Secret Service; Federal Law
Enforcement Training Center; U.S. Customs Service; Financial Crimes Enforcement
Network (FinCEN); and the Treasury Forfeiture Fund. Since the advent of the
Department of Homeland Security in 2002, Treasury’s direct involvement in law
enforcement has shrunk considerably. The possible exception to this simplified
dichotomy is the Internal Revenue Service (IRS), whose main duties encompass both
the collection of tax revenue and the enforcement of tax laws and regulations.
Treasury Offices and Bureaus (Excluding the IRS). Funding for many
bureaus comes largely from annual appropriations. Such is the case for the IRS,
FMS, Bureau of Public Debt, FinCEN, Alcohol and Tobacco Tax and Trade Bureau,
Office of the Inspector General (OIG), Treasury Inspector General for Tax
Administration (TIGTA), and the CDFI. But there are some exceptions to this heavy
reliance on appropriated funds. The Treasury Franchise Fund, U.S. Mint, Bureau of
Engraving and Printing, Office of the Comptroller of the Currency, and the Office of
Thrift Supervision finance their operations largely from the fees they charge for
services and products they provide.
In FY2007, Treasury received $11.624 billion in appropriated funds, or 0.4%
more than it received in FY2006, after allowing for a rescission of 1%. Most of these
funds were used to finance the operations of the IRS, which received $10.597 billion
in FY2007. The remaining $1.027 billion was distributed among Treasury’s other
bureaus and departmental offices in the following amounts: departmental offices
(which include the Office of Terrorism and Financial Intelligence, or TFI, and the
Office of Foreign Assets Control) received $216 million; department-wide systems
and capital investments, $30 million; OIG, $17 million; TIGTA, $133 million; CDFI,
$55 million; FinCEN, $73 million; FMS, $235 million; Alcohol and Tobacco Tax
and Trade Bureau (ATB), $91 million; and Bureau of the Public Debt, $176 million.
FY2008 Budget Proposal. For FY2008, the Bush Administration asked
Congress to approve $12.141 billion in funding for Treasury, or 4.4% more than the
amount enacted for FY2007. Once again, most of the requested funding (91%)
would have gone to the IRS, which would have received $11.095 billion in
appropriated funds. The remaining $1.045 billion would have been distributed
among Treasury’s other bureaus and departmental offices in the following amounts:



departmental offices would have received $250 million; departmental systems and
capital investments, $19 million; OIG, $18 million; TIGTA, $141 million; a
rescission of about $4 million from the Air Transportation Stabilization program;
CDFI, $29 million; no funding for the Treasury building and annex repair and
restoration; FinCEN, $86 million; FMS, $235 million; ATB, $94 million; and
Bureau of the Public Debt, $177 million. Except for department-wide systems and
capital investments and CDFI, all the major accounts would have been funded at the
same level as or at higher levels than the amounts enacted for FY2007. (The Air
Transportation Stabilization program represented something of an anomaly in this
regard, because the Administration asked Congress to rescind about $4 million that
had already been appropriated.)
Under the Administration’s budget proposal, total full-time equivalent
employment at Treasury was projected to rise from 107,734 in FY2006 to 108,965
in FY2008.12 The projected gain of 1,231 employees would have been spread
unevenly among the departmental offices, TIGTA, FinCEN, and the IRS.
Treasury budget documents and congressional testimony by Secretary Henry
Paulson indicate that the Treasury Department’s proposed budget for FY2008 was
intended to support five strategic objectives: (1) promote economic growth, security,
and opportunity; (2) strengthen national security; (3) manage the federal
government’s finances; (4) strengthen financial institutions; and (5) manage
Treasury’s operations effectively.13 In evaluating the Administration’s budget
proposal, one consideration might be the extent to which the proposed budget would
likely support or promote these objectives, and whether other approaches might be
more desirable.
The Administration maintained that the budget proposal would promote the first
objective, in part, by channeling more resources into Treasury’s contribution to
international economic policy coordination and the Committee on Foreign
Investment in the United States, and by eliminating funding for the Bank Enterprise
Awards program, which is administered through the CDFI.14
The Administration claimed the proposal would support the second objective
largely by increasing funding for TFI and FinCEN. TFI collects and analyzes
financial intelligence, formulates and implements measures to combat money
laundering, enforces economic sanctions against foreign entities, and conducts
criminal investigations of alleged financial crimes. The Administration asked
Congress to boost appropriated funds for TFI from $43 million in FY2007 to $56
million in FY2008. Most of the additional money would be used to expand
Treasury’s capacity to “identify potential national security threats and to enforce U.S.
policies to counter those threats,” improve the “information technology and physical
infrastructure of TFI and its component bureaus and offices,” and deepen the


12 U.S. Department of the Treasury, FY2008 Budget in Brief (2007), p. 10.
13 See the written testimony of Treasury Secretary Paulson before the House Appropriations
Subcommittee on Financial Services and General Government on March 28, 2007, at
[http://www.ustreas.gov/ press/releases].
14 Treasury, FY2008 Budget in Brief, p. 3.

involvement of TFI in the “broader Intelligence Community.”15 FinCEN is
responsible for protecting the U.S. financial system from a wide range of financial
crimes, including money laundering and terrorist financing. Foremost among its
main tasks is administering the Bank Secrecy Act (BSA). The Administration asked
Congress to increase funding for FinCEN from $73 million in FY2007 to $86 million
in FY2008. A portion of the added funds would be used to upgrade an electronic
filing system for BSA forms and FinCEN’s “critical information technology system,”
and to enhance its project management capabilities.16
In the Administration’s view, the budget proposal supported the third objective
by boosting IRS’s budget for enforcement, taxpayer service, and business systems
modernization, and by implementing several new initiatives intended to improve
taxpayer compliance. (See the next section for more details.)
As the Administration correctly noted in the documents describing its budget
proposal for Treasury, no appropriated funds directly support the fourth objective.
This is because funding for the four Treasury bureaus primarily responsible for
ensuring and sustaining the health and integrity of the U.S. financial institutions —
the Office of the Comptroller, the Office of Thrift Supervision, the U.S. Mint, and
the Bureau of Engraving and Printing — comes mostly from fees they charge for the
services and products they provide.
To support the fifth objective, the Administration asked Congress to approve
funding for the following projects in the following amounts for FY2008: $6 million
to launch a pilot project known as the Enterprise Content Management system, $2
million to operate and maintain the Treasury Secure Data Network, and $4 million
to improve Treasury’s compliance with the requirements of the Federal Information
Security Management Act and the agency’s “overall security posture.”17
House-Passed Version of H.R. 2829. On June 28, the House passed a
spending measure (H.R. 2829) that would have provided $12.257 billion for the
operations of the Treasury Department and its operating bureaus in FY2008. This
amount was $120.5 million more than the amount requested by the Administration.
Under the measure, three Treasury accounts would have received more in
appropriated funds in FY2008 than the Administration has requested. Specifically,
departmental offices would have received $251 million in FY2008 (or $450,000
more than the amount requested by the Administration). Of this amount, $56.5
million would have gone to the Office of Terrorism and Financial Intelligence
($250,000 above the Administration’s budget request) and $900,000 to the Office of
Financial Education ($200,000 above the Administration’s budget request). CDFI
would have received $100 million (or $71 million more than the amount requested
by the Administration). The House Appropriations Committee recommended that
$13.5 million of $100 million be used for administrative costs, and that no less than


15 Ibid., p. 4.
16 Ibid., pp. 38-39.
17 Ibid., p. 6.

another $14 million be set aside for the Bank Enterprise Award program.18 The IRS
would have received $11.147 billion (or $52 million more than the amount requested
by the Administration).
Two Treasury accounts would have been funded at lower levels in FY2008 than
the Administration wanted. Specifically, FinCEN would have received $83 million,
or $2.5 million less than the amount requested by the Administration. The
recommended reduction in spending reflected a concern that FinCEN was not ready
to undertake a planned border wire transfer initiative.19 The FMS would have
received $234 million, or $768,000 less than the amount requested by the
Administration. About $9 million of this amount would have been set aside for
“information systems modernization initiatives” and would have been available until
September 30, 2010.20
Six Treasury accounts would have received the same amount of funding that
was recommended in the Administration’s budget request. They were department-
wide systems and capital investments ($19 million), OIG ($18 million), TIGTA
($140.5 million), the Air Transportation Stabilization program (-$4 million), ATB
($93.5 million), and the Bureau of Public Debt ($173 million).
The version of H.R. 2829 passed by the House would have also required the
Treasury Department to prepare an “operating plan” for FY2008 and submit it to the
House Appropriations Committee within 60 days of the bill’s enactment.21 The plan
was to provide figures on funding and full-time employment for all offices and
operating bureaus in FY2007 and FY2008, and detailed information on any
“initiative, major procurement, and program at the Department.” In addition, the
plan was to indicate the number of full-time employees at OFAC working on Cuba
sanctions and the number of full-time employees working on sanctions programs
targeted at foreign terrorist organizations.22
Members of the House adopted by voice vote a controversial amendment that
would have prevented the Treasury Department from enforcing a rule adopted in
2005 that effectively restricted sales of U.S. agricultural products to Cuba. The rule
would have required payments for such products to be made before a ship left port.
Senate-Reported Version of H.R. 2829. The Senate Appropriations
Committee favorably reported an amended version of H.R. 2829 on July 13. It would
provide $12.249 billion in appropriated funds for Treasury in FY2008, or $112
million more than the amount requested by the Bush Administration but $8 million
less than the amount approved by the House.


18 U.S. Congress, House Committee on Appropriations, Financial Services and General
Government Appropriations Bill, 2008, report to accompany H.R. 2829, H.Rept. 110-207,thst

110 Cong. 1 sess. (Washington: GPO, 2007), p. 23.


19 Ibid., p. 20.
20 Ibid., p. 21.
21 Ibid., p. 14.
22 Ibid., pp. 15-16.

Of this amount, the IRS would have received $11.142 billion (or $6 million less
than the House version of H.R. 2829); departmental offices, $252 million (or $1
million more than the House bill); department-wide systems and capital investments
program, $19 million (the same as the House bill); Office of Inspector General, $18
million (the same as the House bill); TIGTA, $141 million (the same as the House
bill); the Air Transportation Stabilization program, -$4 million (the same as the
House bill); FinCEN, $86 million (or $3 million more than the House bill); FMS,
$235 million (or $1 million more than the House bill); ATB, $97 million (or $3
million more than the House bill); Bureau of the Public Debt, $173 million (the same
as the House bill); and CDFI, $90 million (or $10 million less than the House bill).
The committee endorsed the Administration’s request to spend $56.2 million
(or $11.8 million more than the amount appropriated for FY2007) on the Office
Terrorism and Financial Intelligence in FY2008. Among the departments under the
direction of the Office, the Office of Foreign Assets Control would have received an
additional $1.4 million in funding; the Office of Intelligence Analysis, an additional
$2.0 million; and the Office of Terrorist Financing and Financial Crimes, an
additional $0.6 million. In its report on H.R. 2829, the committee urged Treasury to
“harness [its] unique expertise and assume a stronger leadership role in the
[intelligence community] on illicit finance issues.”23 As a step in that direction, the
committee directed the Department to work with the Director of National Intelligence
to develop a “mission plan for financial intelligence,” and to report to the committee
on the status of this collaborative effort by September 30, 2008.
Like the House-passed version of H.R. 2829, the version reported by the
committee would have appropriated much more money for the CDFI than the amount
requested by the Bush Administration. The committee opposed the proposed
reductions on the grounds that the programs supported by CDFI “play an important
role in providing financial services to underserved communities in both urban and
rural communities across the country.”24 Of the $90 million in funding for CDFI
approved by the committee, $8 million would have been reserved for “grants, loans,
and technical assistance and training programs to benefit Native American, Alaskan
Natives, and Native Hawaiian communities.”
In marking up the bill on July 12, the committee approved a controversial
amendment that would have both limited the ability of Treasury to enforce certain
regulations restricting sales of U.S. agricultural products to Cuba and dismantled
some of the barriers to traveling there to sell agricultural and medical products. The
amendment was broader in scope than a similar one adopted by the House during its
consideration of H.R. 2829.
Consolidated Appropriations Act, 2008 (P.L. 110-161). The
Consolidated Appropriations Act includes $11.996 billion in funding for the Treasury
Department — or $371 million more than the amount enacted for FY2007 but $141
million less than the amount requested by the Bush Administration. Of the total


23 U.S. Congress, Senate Committee on Appropriations, Financial Services and General
Government Appropriations Bill, 2008, report to accompany H.R. 2829, 110th Cong., 1st
sess., July 13, 2007 (Washington: GPO, 2007), p. 12.
24 Ibid., p. 21.

amount appropriated for Treasury in FY2008, $10.892 billion goes to the IRS ($203
million less than the Administration’s budget request), $248 million to departmental
offices ($2 million less than requested), $234 million to the FMS ($1 million less
than requested), $173 million to the Bureau of Public Debt (the same amount as
requested), $141 million to TIGTA (the same as requested), $94 million to ATB (the
same as requested), $94 million to CDFI ($65 million above the Administration’s
request), $86 million to FinCEN (the same as requested), $19 million to department-
wide systems and capital investments (the same as requested), $18 million to OIG
(the same as requested), and a recapture (or rescission) of $4 million in previously
appropriated but unobligated funds for the Air Transportation Stabilization program
(the same as requested).
Treasury is receiving $57 million in appropriated funds in FY2008 (or $13
million more than the amount enacted for FY2007) for its programs dealing with
terrorism and financial intelligence. The act directs the agency to use $300,000 of
this amount to establish within TFI a permanent office to manage TFI’s information
technology systems. In addition, OFAC is to receive $250,000 to bolster its efforts
to reduce OFAC’s backlog of Freedom of Information requests.
The act also attached certain conditions to the use of the funds appropriated for
CDFI in FY2008. Specifically, Treasury may use up to $13.5 million for general
administrative costs, up to $7.5 million for the cost of direct loans, and up to
$250,000 for administrative expenses related to the direct loan program. In addition,
$8 million is to be used to support programs aimed at Native American, Native
Hawaiian, and Native Alaskan communities. The act further directs Treasury to
spend a minimum of $20 million on the Black Enterprise Award program.
Internal Revenue Service (IRS). To help finance its operations and
multitude of spending programs, the federal government levies individual and
corporate income taxes, social insurance taxes, excise taxes, estate and gift taxes,
customs duties, and miscellaneous taxes and fees. The federal agency responsible
for administering and collecting these taxes and fees (except for customs duties) is
the Internal Revenue Service. In discharging this responsibility, the IRS receives and
processes tax returns, related documents, and tax payments; disburses refunds;
enforces compliance through audits and other procedures; collects delinquent taxes;
and provides a host of services to taxpayers with the aim of enabling them to
understand their rights and responsibilities under the federal tax code and resolving
problems without litigation. In FY2006, the agency collected $2.537 trillion before
refunds, the largest component of which was individual income tax revenue of
$1.236 trillion.
The IRS receives funding for its operations from three sources: appropriated
funds, user fees, and so-called reimbursables, which are payments the IRS receives
from other federal agencies and state governments for services it provides. In
FY2006, appropriated funds accounted for 98% of IRS’s operating budget, with user
fees and reimbursables each adding another 1%.
Appropriated funds are distributed among five accounts:



!(1) taxpayer services, which provides resources for pre-filing
taxpayer assistance, filing and account services, administrative
services for IRS employees, and senior IRS management;
!(2) enforcement, which covers the cost of compliance services,
research and statistical analysis, and administration of the earned
income tax credit;
!(3) operations support, which addresses the improvement and
maintenance of the agency’s information and management systems;
!(4) business systems modernization (or BSM), which provides
funds for developing new information systems for tax administration
and acquiring the hardware and software needed to integrate them
into IRS’s operations; and
!(5) health insurance tax credit administration, which covers the
cost of administering the refundable tax credit for health insurance
established by the Trade Adjustment Assistance Reform Act of

2002.


In FY2007, the IRS received $10.597 billion in appropriated funds, or 0.5%
more than it received in FY2006. Of this amount, $2.138 billion was designated for
taxpayer services, $4.686 billion for enforcement, $3.545 billion for operations
support, $213 million for the BSM program, and $15 million for administration of
the health insurance tax credit. The IRS was one of the many federal agencies funded
in FY2007 under a year-long continuing resolution (H.J.Res. 20; P.L. 110-5) enacted
in February 2007. Under the resolution, the “requirements, authorities, conditions,
limitations, and other provisions” that governed the use of FY2006 appropriations
by all affected agencies also governed their use of FY2007 appropriations. As a
result, certain restrictions that applied to funding for IRS operations in FY2006 also
applied to the funding for IRS operations in FY2007. Specifically, the IRS could not
reorganize or reduce its workforce in FY2007 without the consent of the House and
Senate Appropriations Committees. In addition, during FY2007, the IRS was barred
from entering the market for tax return preparation software, and from instituting
reductions in taxpayer service until TIGTA completes a report on the effects of such
reductions on taxpayer compliance.
The Bush Administration asked Congress to appropriate $11.095 billion for IRS
operations in FY2008, or 4.7% more than the amount enacted for FY2007. Of this
amount, $2.103 billion (1.7% less than FY2006) was for taxpayer services, $4.925
billion (5.1% more than FY2007) for enforcement, $3.770 billion (6.3% more than
FY2007) for operations support, $282 million (32.4% more than FY2007) for the
BSM program, and $15 million (the same amount as FY2007) for administering the
health insurance tax credit. Under the budget proposal, total full-time equivalent
employment at the IRS was projected to rise from an estimated 92,404 in FY2007 to25


92,814 in FY2008, a gain of 0.4%.


25 Ibid., p. 10.

Budget documents indicate that the FY2008 budget proposal for the IRS was
intended to support three strategic goals: (1) bolster taxpayer compliance without
imposing additional reporting burdens on taxpayers, (2) continue the agency’s recent
efforts to “increase and improve the delivery of services offered to taxpayers,” and
(3) invest in information technology designed to “give (IRS) employees the tools they
need to administer and improve both taxpayer service and enforcement programs.”26
Guiding the pursuit of these goals was a commitment to “provide quality service to
taxpayers while enforcing America’s tax laws in a balanced manner.”
As part of its budget proposal for the IRS, the Administration also asked
Congress to pass a number of legislative proposals.27 Most were intended to improve
taxpayer compliance through actions such as expanded information reporting,
mandatory electronic filing for “certain large businesses,” and expanded penalties for
fraudulent actions by tax preparers and for erroneous refund claims.
In assessing the Administration’s FY2008 budget proposal for the IRS, it may
be useful to consider the extent to which it supported these objectives and whether
or not the proposed budgets for enforcement, taxpayer service, and BSM were
adequate in light of the many challenges facing the agency. Foremost among those
challenges are improving compliance rates among individuals and businesses without
sacrificing recent gains in taxpayer service, generating more reliable estimates of the
rates of non-compliance among business taxpayers, increasing the share of tax returns
filed electronically, upgrading the agency’s computer systems, managing the agency’s
private tax debt collection program in a way that meets the concerns of critics, and
hiring and training sufficient numbers of enforcement agents to replace those who
have retired or quit in recent years.
Review of Administration’s FY2008 Budget Proposal by the IRS
Oversight Board. The IRS Oversight Board came into existence through the IRS
Restructuring and Reform Act of 1998. Its primary responsibilities are to oversee
IRS’s administration of the federal tax code and to ensure that the agency has the
resources and management needed to carry out its mission and achieve its strategic
objectives. Section 7802 of the Internal Revenue Code (IRC) requires the Board to
review and approve the annual budget requests submitted by IRS to the Treasury
Department, and to assess whether the annual budget request for the IRS submitted
to Congress supports the strategic plans of the agency.
The Board released its assessment of the Administration’s FY2008 budget
request for the IRS in April 2007.28 While the Board took a mostly favorable view
of the Administration’s proposal, it did favor giving the agency a larger budget than
the Administration asked for. The Board commended the Administration for seeking
a 4.7% increase in the IRS’s budget for FY2008 “during a time when discretionary
spending is under great constraints and there is stiff competition among federal


26 Ibid., p. 55.
27 Ibid., p. 64.
28 See IRS Oversight Board, FY2008 IRS Budget Recommendation: Special Report
(Washington: April 2007).

departments and agencies for resources.”29 It also applauded the Administration for
recognizing “the importance of the IRS’ mission to the fiscal well-being of our nation
and (for) proposing these important and much needed investments at this time.” In
the Board’s view, both its budget proposal and the Administration’s were “focused
on improving the ability of the IRS to aggressively pursue its strategic goals in order
to reduce the tax gap.”30 It saw the Administration’s budget proposal as “clearly
aligned with the IRS’ most recent strategic plan.”
At the same time, the Board wanted more funds appropriated for enforcement
and infrastructure than the Administration called for. Specifically, the Board called
for spending $105 million more on a variety of enforcement initiatives than the
Administration’s budget request, and $205 million more on projects related to the
BSM and newly installed information systems.31 In the Board’s view, these added
expenditures were critical to the success of current plans to improve taxpayer
compliance and shrink the tax gap.
House-Passed Version of H.R. 2829. The spending measure (H.R. 2829)
for financial services and general government passed by the House on June 28 would
have provided $11.147 billion in appropriated funds for the IRS in FY2008. This
amount was $52 million more than the amount requested by the Administration.
This entire difference lay in recommended funding for taxpayers services. H.R.
2829 would have provided $2.155 billion for such services in FY2008, or $52 million
more than the amount requested by the Administration. Of this amount, $8 million
would have been for low-income taxpayer clinic grants, up to $4.1 million would
have been funneled into the Tax Counseling for the Elderly program, and no less than
$179.6 million would have funded the operations of the Taxpayer Advocate Service.
In addition, the bill recommended spending $71.5 million for pre-filing services
management ($6.2 million more than the Administration requested), $127.5 million
for taxpayer communications and education (or $12.8 million more than the
Administration requested), $70 million for media and publications ($5.2 million
more than requested), and $165.2 million for account management and assistance
($18.3 million more than requested). In its report on H.R. 2829, the House
Appropriations Committee noted that the recommended increase in spending on
taxpayer services was intended to counter recent reductions in taxpayer services and
give the IRS the resources it needed “to strengthen, improve, and expand taxpayer32
service.”
H.R. 2829 also would have provided the IRS with $4.925 billion for
enforcement (including $116.7 million to examine ways to improve taxpayer
compliance), $3.770 billion for operations support, $282 million for the BSM
program, and $15 million for the administration of the health insurance tax credit.
The Administration requested the same amounts for each account.


29 Ibid., p. 3.
30 Ibid., p. 7.
31 Ibid., p. 14.
32 House Appropriations Committee, report to accompany H.R. 2829, p. 25.

A controversial provision of the bill would have limited funding for the
administration of the private tax debt collection (PDC) program to $1 million. Such
a limitation would have effectively ended the program, which has been embroiled in
controversy since the IRS gained the authority to hire private debt collectors in 2004.
During the floor debate on the bill in the House, Representative Jose Serrano, the
chairman of the House Appropriations Subcommittee on Financial Services, agreed
to drop the provision in the face of opposition from some Republicans.
Representative Jim McCreary raised a budget point of order against the provision on
the grounds that any measure capping funding for the private tax debt collection
program should fall under the jurisdiction of the Ways and Means Committee, and
thus should not be considered as part of an appropriations bill.33 While conceding
the point of order, Representative Serrano disagreed that eliminating the program
would necessarily result in a loss of revenue.
Senate-Reported Version of H.R. 2829. The version of H.R. 2829
reported favorably by the Senate Appropriations Committee on July 13 would have
provided $11.142 billion in appropriated funds for the IRS in FY2008 — or $46
million more than the amount requested by the Bush Administration but about $6
million less than the amount recommended by the House.
Of this amount, $2.149 billion would have been used for taxpayer services ($46
million more than the Administration’s budget request but $6 million less than the
House bill); $4.925 billion would have gone to enforcement (the same as the
Administration’s budget request and the House bill); $3.770 billion would have been
set aside for operations support (the same as the Administration’s budget request and
the House bill); $282 million would have been channeled into the BSM (the same as
the Administration’s budget request and the House bill); and $15 million would have
been spent on administering the health insurance tax credit (same as the
Administration’s request and the House bill).
In its report on H.R. 2829, the committee expressed a variety of concerns about
the IRS’s readiness to address several key issues. One was the tax gap. The gap is
the difference between federal taxes owed and federal taxes paid in a timely manner.
According to the latest estimate by IRS, the gross tax gap amounted to $345 billion
in 2001. In the committee’s view, the IRS “must and can reduce the tax gap if the
IRS is given additional resources and is able to improve its operational capabilities34
(most notably the Business Systems Modernization program).” Yet it could find
no strategy in the Administration’s budget request for the IRS in FY2008 that would
have enabled the agency to achieve the stated goal of raising the voluntary
compliance rate for all taxpayers from its estimated level of 83.7% in 2007 to 85%
by 2009. So the committee added a provision to H.R. 2829 requiring the IRS to
develop such a plan, without specifying a deadline.
Of the $2.149 billion recommended for taxpayer services in the bill, “not less
than” $3 million would have been set aside for the tax counseling program for the


33 Meg Shreve, “Private Debt Collection Survives Appropriation Process,” Tax Notes, July

2, 2007, p. 7.


34 Senate Appropriations Committee, report to accompany H.R. 2829, p. 23.

elderly, “not less than” $9 million for low-income taxpayer clinic grants, and “not
less than” $10 million to establish and administer a matching grant program for tax
return preparation assistance involving volunteers from local communities. On other
matters dealing with appropriations for taxpayer service, the committee directed the
IRS, after consulting with the IRS Oversight Board and the National Taxpayer
Advocate, to submit to Congress an annual update of its current five-year strategic
plan for taxpayer services known as the “Taxpayer Assistance Blueprint.” It also
expressed disappointment with the slow progress made by the IRS in increasing the
number of tax returns that are filed electronically and directed the agency to develop
a strategic plan to meet the 80% electronic filing goal it was supposed to reach by
2007. The plan would have been required to be submitted to the House and Senate
Appropriations Committees by March 1, 2008.
On matters related to appropriations for enforcement, the committee directed the
IRS to submit to the House and Senate Appropriations Committees by March 1, 2008
a “detailed research plan” to correct problems with its National Research Program
(NRP).35 The IRS uses data collected through the NRP to generate estimates of the
underreporting of taxable income by individual taxpayers, a major component of the
federal tax gap. But the IRS, Government Accountability Office, and TIGTA, among
others, have expressed concern about the quality of the data from the NRP and gaps
in its coverage. The committee also expressed concern about the loss of tax revenue
arising from the misclassification of workers as independent contractors and directed
the IRS to channel more enforcement resources into “industries where
misclassification is widespread.”36
A controversial provision of the bill would have reduced funding to administer
the PDC program to $1 million. At such a low level of funding, the IRS could have
been forced to suspend the program. One noteworthy aspect of the provision is its
wording. The version of H.R. 2829 reported by the House Appropriations
Committee contained a similar provision, but it was removed during the House floor
debate after facing the threat of a budget point of order tied to a ruling by the Joint
Committee on Taxation that cutting funding for the private tax debt collection
program would result in a loss of revenue. To avoid a similar outcome, the Senate
version was crafted so that the provision would cut direct appropriations for the
program but allow the program to fund itself through the delinquent taxes collected
as a result of it.37
Consolidated Appropriations Act, 2008 (P.L. 110-161). The
consolidated appropriations bill (H.R. 2764) enacted in December 2007 includes
$10.892 billion in funding for IRS operations — or $295 million more than the
amount enacted for FY2007 but $203 million less than the amount requested by the
Administration. Of the total amount of appropriations for the agency in FY2008,
$2.150 billion is intended for taxpayer services ($47 million more than the


35 Ibid., p. 27.
36 Ibid., p. 28.
37 Dustin Stamper, “Senate Appropriators Take Another Stab at Private Debt Collection,”
Tax Notes, July 16, 2007, p. 162.

Administration requested), $4.780 billion for enforcement ($145 million less than the
Administration requested), $3.680 billion for operations support ($89 million less
than the Administration requested), $267 million for BSM ($15 million less than the
Administration requested), and $15 million for administering the heath insurance tax
credit (the same amount as the Administration requested).
Taxpayer Services. The funding for taxpayer services in FY2008 does not
take into account $94.5 million in user fees that the IRS hopes to collect over the
course of that year to supplement its budget for taxpayers services. Congress also
attached certain conditions to IRS’s use of this funding. First, at least $31.2 million
must be used to expand IRS’s efforts to assist and educate individual and business
taxpayers and tax-exempt organizations, and to increase the number of tax returns
prepared at Taxpayer Assistance Centers (TACs). Second, the IRS is to spend a
minimum of $3 million on the Tax Counseling for the Elderly program. Third, at
least $9 million is to be used for low-income taxpayer clinic grants. Fourth, at least
$177 million is designated for the operating costs of the Taxpayer Advocate Service
(TAS). Fifth, $8 million is to be made available through the end of FY2009 to
establish a “matching grant demonstration program for Community Volunteer
Income Tax Assistance programs”; the IRS is directed to administer the
demonstration program in consultation with the TAS. Moreover, the bill uses blunt
language to put the IRS on notice that any proposed reductions in taxpayer service
must “be consistent with the budget justification, operating plan, and Taxpayer
Assistance Blueprint (TAB),” and that the IRS must prove that the proposed
reductions “will not result in a decline in voluntary compliance.”
The IRS released its initial TAB in April 2007, in fulfillment of a mandate
included in the law providing appropriations for the agency in FY2005. Prepared
jointly with the IRS Oversight Board and the National Taxpayer Advocate, the
document set forth a five-year plan to revamp the taxpayer services provided by the
IRS. Among the concerns addressed in the report are the cost-effectiveness of the
services offered at TACs, the challenges facing the agency in improving taxpayer
service, and possible methods for measuring its performance in delivering services.
Enforcement. Of the funds appropriated for enforcement in FY2008, $57.252
million are to be transferred to the Interagency Crime and Drug Enforcement
program. In addition, the act directs the IRS to work with the National Taxpayer
Advocate and the IRS Oversight Board to develop a five-year strategic plan for
research that must be submitted to the Senate and House Appropriations Committees
by September 30, 2008. It also requires the agency to issue two additional reports to
the same committees: one on the factors that influence taxpayer compliance by the
end of September 2008, and one on problems with the NRP by March 1, 2008. No
limit is imposed on how much the IRS can spend to manage its PDC program in
FY2008. But the act does provide IRS with $7.35 million for the purpose of
enlarging its workforce for the Automated Collections Systems (ACS) program.
There is reason to believe that such an expansion might enable the IRS to collect
delinquent individual tax debt with a much higher return on investment than it does
through the PDC program. A recent report by the National Taxpayer Advocate notes
that the estimated cost of operating the PDC program in FY2008 is $7.35 million.
According to the report, if that amount were used to expand the ACS program, the



IRS could collect $146 million in delinquent tax debt, or nearly five times the amount
of gross revenue the agency expects the PDC program to collect in FY2008.38
One question raised by the budget for enforcement in FY2008 approved by
Congress concerns how it will affect several planned initiatives to improve taxpayer
compliance — and thus reduce the federal tax gap. The Administration requested
$246 million in FY2008 to fund seven such initiatives, including $73 million for
increased audits and collection activities aimed at small firms and self-employed
individuals, $28 million for an expansion of the Automated Underreporter program,
and $41 million to conduct research on the compliance behavior of new groups of
taxpayers. But appropriated funds for enforcement are $145 million less than the
amount the Administration requested.
Operations Support. The act imposes no specific conditions on how the IRS
uses its appropriated funds for operations support. But it does direct the agency to
keep Congress informed of any “planned reorganization, job reductions, or increases
to offices or activities within the agency, or modifications to any service or
enforcement activity” by including them in its operation plan. In addition, the act
requires the IRS to give quarterly briefings to the IRS Oversight Board and TIGTA
on the status of its information technology systems, and to report to these
organizations as soon as possible if any information technology project is likely to
experience a cost overrun or a significant delay in its completion.
Title II: Executive Office of the President and Funds
Appropriated to the President39
All but three offices in the Executive Office of the President (EOP) are funded
in the Financial Services and General Government (FSGG) appropriations bill.40
Table 4 shows enacted appropriations for FY2007, and, for FY2008, amounts
requested by the Administration, passed by the House, reported by the Senate, and
as enacted in P.L. 110-161.


38 National Taxpayer Advocate, 2007 Annual Report to Congress: Volume One
(Washington: 2007), p. 414. Available at [http://www.irs.gov/pub/irs-
utl/arc_2007_vol_1_cover_msps].
39 This section was written by Barbara Schwemle, Analyst in American National
Government, Government and Finance Division.
40 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.

Table 4. Executive Office of the President and Funds
Appropriated to the President, FY2007 to FY2008
(in thousands of dollars)
FY2008 FY2008
House Sena t e FY2008
P a sse d Reported Ena c t e d
FY2007 FY2008 (H.R. (H.R. (H.R.
Office Ena c t e d Request 2829) 2829) 2764)
The White House (total)$172,993$187,370$177,089$177,589$176,505
Compensation of the450450450450450
President
The White House Office53,61653,15653,15651,65651,656
(salaries and expenses)
Executive Residence, White12,39812,81412,81412,81412,814
House (operating expenses)
White House Repair and1,6831,6001,6001,6001,600
Restoratio n
Council of Economic4,0324,1184,1184,1184,118
A d v i se rs
Office of Policy Development3,4873,4823,4823,4823,482
Privacy and Civil Libertiesa2,0002,000
Oversight Board
National Security Council8,6848,6408,6408,6408,640
Office of Administration88,643103,11092,82992,82991,745
Office of Management and76,71470,86678,39478,39478,000
Budget
Federal Drug Control Programs464,447473,368460,436464,887421,702
(total)
Office of National Drug26,76623,88326,63625,15226,402
Control Policy
High Intensity Drug224,730220,000226,000235,000230,000
Trafficking Areas Program
Other Federal Drug Control192,951224,485197,800204,735164,300
Programs
Counterdrug Technology20,0005,00010,0001,000
Assessment Center
Unanticipated Needs9901,0001,0001,0001,000
Office of the Vice President4,4324,4324,4324,4324,432
(salaries and expenses)
Official Residence of the Vice322320320320320
President (operating expenses)
Total: EOP and Funds$719,898$737,356$721,671$726,622$681,959
Appropriated to the President
Sources: Budget authority tables provided by House Appropriations Subcommittee on Financial
Services and General Government, Presidents FY2008 budget request, U.S. Executive Office of the
President, Fiscal Year 2008 Congressional Budget Submission (Washington: February 2007), and
S.Rept. 110-129. Columns may not equal the total due to rounding.
a. The FY2007 law, the FY2008 budget request, and the FY2008 House-passed bill included the
appropriation for the Privacy and Civil Liberties Oversight Board under the White House Office
account and provided funding of $1.5 million. Section 801(a) of P.L. 110-53, Implementing
Recommendations of the 9/11 Commission Act of 2007, enacted on August 3, 2007, authorizes
appropriations for the Board as follows: $5,000,000 (FY2008); $6,650,000 (FY2009);
$8,300,000 (FY2010); $10,000,000 (FY2011); and such sums as may be necessary (FY2012
and each subsequent fiscal year).



The Executive Office of the President Budget and Key Issues
The Administration’s FY2008 budget requested an appropriation of more than
$737 million for the EOP and funds appropriated to the President, a 2.4% increase
from the almost $720 million appropriated for FY2007. Within the request, funding
for all “White House” accounts, discussed under “Consolidation Proposal” below,
would have increased 8.3%, but funding for the Office of Management and Budget
(OMB) (-7.6%) and the Office of National Drug Control Policy (ONDCP) (-10.8%)
would have decreased. The proposed OMB and ONDCP funding reductions
primarily resulted from the transfer of monies to the Office of Administration
account for the enterprise services initiative (discussed below).
Unlike the FY2006 and FY2007 budget proposals, when the President requested
that the High Intensity Drug Trafficking Areas Program (HIDTAP, under federal
drug control programs) funding be transferred to the Department of Justice, the
FY2008 budget request continued to include the HIDTAP appropriation under the
EOP, but at a level that would have been 2.1% less than the program’s FY2007
funding. Under federal drug control as well, significant changes in funding were
requested for the Other Federal Drug Control Programs (+16.3%) and the
Counterdrug Technology Assessment Center (-75%). Overall, though, federal drug
control program funding would have increased 2.7%.
Consolidation Proposal. For the seventh consecutive fiscal year, the
President’s FY2008 budget proposed to consolidate and financially realign several
salaries and expenses accounts that directly support the President into a single annual
appropriation, called “The White House.” The eight accounts included in the
consolidated appropriation were the following:
!Compensation of the President,
!White House Office (WHO),
!Executive Residence at the White House,
!White House Repair and Restoration,
!Office of Administration,
!Office of Policy Development,
!National Security Council, and
!Council of Economic Advisers.41
This consolidated appropriation would have totaled more than $187 million in
FY2008 for the accounts proposed to be consolidated, an increase of 8.3% from the
almost $173 million appropriated in FY2007. Within “The White House Office”
account, funding for the Compensation of the President would have remained
unchanged; funding for the Executive Residence at the White House (+3.4%), the
Council of Economic Advisers (+2.1%), and the Office of Administration (+16.3%)
would have increased; and funding for White House salaries and expenses (-0.9%),


41 U.S. Executive Office of the President, Office of Management and Budget, Budget of the
United States Government Fiscal Year 2008, Appendix (Washington: GPO, 2007), pp. 963-

964. (Hereafter referred to as FY2008 Budget, Appendix.)



White House repair and restoration (-4.9%), the Office of Policy Development (-

0.1%), and the National Security Council (-0.5%) would have decreased.


The EOP budget submission stated that consolidation “presents the best means
for the President to realign or reallocate the resources and staff available in response
to changing and emerging needs and priorities.”42 The conference committees on the
FY2002 through FY2006 appropriations acts decided to continue with separate
appropriations for the EOP accounts to facilitate congressional oversight of their
funding and operation. This practice continued for FY2007 under P.L. 110-5, the
Revised Continuing Appropriations Resolution.43 H.R. 2829, as passed by the House
and reported in the Senate, and P.L. 110-161 continued with separate appropriations
for the EOP accounts.
Transfer Authority Proposal. As in the FY2007 budget proposal, the
FY2008 budget requested a general provision in Title VI to continue and expand the
authority for the EOP to transfer 10% of the appropriated funds among several
accounts under the EOP. The proposal was included under the government-wide
general provisions at Section 833 and would have covered the following accounts in
FY2008:
!The White House,44
!Office of Management and Budget,
!Office of National Drug Control Policy,
!Special Assistance to the President and the Official Residence of the
Vice President (transfers would be subject to the approval of the
Vice President),
!Council on Environmental Quality and Office of Environmental
Quality,
!Office of Science and Technology Policy, and
!Office of the United States Trade Representative.45
The OMB Director (or such other officer as the President designates in writing)
would have been able to, 15 days after notifying the House and Senate Committees
on Appropriations, transfer up to 10% of any such appropriation to any other such
appropriation. The transferred funds would have been merged with, and available
for, the same time and purposes as the appropriation receiving the funds. Such
transfers could not have increased an appropriation by more than 50%. According
to the EOP budget submission, the transfer authority would have allowed the


42 U.S. Executive Office of the President, Fiscal Year 2008 Congressional Budget
Submission (Washington: February 2007), p. EOP-14. (Hereafter cited as EOP Budget
Submission.)
43 P.L. 110-5, February 15, 2007,121 Stat. 8.
44 The accounts under the White House are Compensation of the President, White House
Office, Executive Residence at the White House, White House Repair and Restoration,
Office of Administration, Office of Policy Development, National Security Council, and
Council of Economic Advisers.
45 FY2008 Budget, Appendix, p. 964.

President “to address, in a limited way, emerging priorities and shifting demands”
and would have provided the President “with flexibility to improve the efficiency of
the EOP.” The authority was “not intended to be used for new missions or programs,
but to address emerging priorities, shifting demands, and administrative efficiencies
within the currently funded programs.”46
P.L. 108-447, the Consolidated Appropriations Act for FY2005 (Section 533,
Title V, Division H) authorizes transfers of up to 10% of FY2005 appropriated funds
among the accounts for the White House Office, OMB, ONDCP, and the Special
Assistance to the President and Official Residence of the Vice President. For
FY2006, P.L. 109-115, the Transportation, Treasury, Housing and Urban
Development, the Judiciary, the District of Columbia, and Independent Agencies
Appropriations Act, 2006 (Section 725) authorizes transfers of up to 10% among the
accounts for the White House and the Special Assistance to the President and Official
Residence of the Vice President. Section 201 of H.R. 2829, as passed by the House
and reported in the Senate, and, as enacted in P.L. 110-161, continues the current
practice.
Enterprise Services Proposal. The FY2008 budget request, like that for
FY2007, included an enterprise services initiative to simplify and make more
efficient the administration of certain common services that are provided throughout
the EOP. Services included in the initiative would have been expanded to include
burn bag pickup costs, employee transportation subsidies, and Flexible Spending
Account administrative fees. The budgets for these services in the WHO, Executive
Residence at the White House, Office of Policy Development, National Security
Council, Council of Economic Advisers, OMB, ONDCP, Office of Science and
Technology Policy, United States Trade Representative, and the Council on
Environmental Quality would have been moved into the Office of Administration
(OA). In order to “be consistent with other EOP components,” the budgets for health
unit services costs, space-related rent costs, and rent-based Federal Protective Service47
costs in OMB and ONDCP also would have been included in the OA.
House-Passed Bill.48 H.R. 2829, as passed by the House, would have
provided appropriations for the accounts under the EOP and funds appropriated to
the President at the levels requested by the President’s budget except for the OA,
OMB, and the various federal drug control accounts. The House Committee on
Appropriations report that accompanied the bill stated that the reduction of $10.3
million in the OA appropriation resulted from keeping the rental payments to GSA
for OMB ($7.5 million) and ONDCP ($2.8 million) under the salaries and expenses
accounts for these entities. The report noted that “all miscellaneous costs in the
Enterprise Services Program” were provided as requested.


46 EOP Budget Submission, p. EOP-15.
47 EOP Budget Submission, pp. EOP-16 - EOP-17.
48 On June 26, 2007, OMB issued a Statement of Administration Policy on H.R. 2829 that
urged the House of Representatives to adopt the President’s proposals on consolidation,
transfer authority, and Enterprise Services and his request for full funding for the National
Youth Anti-Drug Media Campaign. (pp. 3-4.)

The restoration of the $7.5 million to OMB salaries and expenses for the rental
payments to GSA accounted for the increase in the agency’s appropriation. The
committee report expressed continued concern about OMB using the E-Government
initiative “to force its management priorities on agencies that would otherwise
choose different approaches to serving the public and other government agencies that
are better tailored to meet the needs of their customers and meet their statutory
requirements.” It noted the continuation of the government-wide general provision
at Section 737 that prohibited the use of funds for E-Government without prior
consultation and approval by the committee and urged OMB and the agencies “to
work directly with the individual appropriations subcommittees in advance of
recommending e-Government transfers so that approved worthy initiatives can move
forward without disruption.” The report also directed OMB to report to the
committee within 180 days of the act’s enactment on the implementation and
effectiveness of OMB’s guidance to the agencies on reducing fraud and abuse in the
federal transit benefit program.
The restoration of the $2.8 million to ONDCP salaries and expenses for the
rental payments to GSA accounted for the increase in the agency’s appropriation.
Included in the House report were directives that ONDCP report to the committee
within 90 days of the act’s enactment on the aerial eradication program in Columbia
and on the update of the November 2004 report listing illicit drug prices and purity.
Section 202 of H.R. 2829, as passed by the House, required the President to submit
a financial plan to the House and Senate Committees on Appropriations within 30
days of this act’s enactment and prior to the initial obligation of ONDCP funds for
FY2008. The plan would have been required to be updated every six months and
new projects and changes in funding for ongoing projects are subject to prior
approval by the Appropriations Committees. HIDTAP would have received an
appropriation which was $6 million above the President’s request. The committee
report specified that the HIDTAs for FY2008 “receive funding at least equal” to their
FY2007 “initial allocation level” and that not less than $2.1 million be used for
auditing services and related activities.
The appropriation for the other federal drug control programs account would
have been $26.7 million below the President’s budget request. According to the
committee report, increased funding could not be justified for the National Youth
Anti-Drug Media Campaign because an ONDCP study and a GAO review found that
“there is no clear evidence that the campaign has resulted in a reduction in drug use
among youth.” The report directed ONDCP to provide recommendations to the
committee within 90 days of the act’s enactment “on the development of improved
and meaningful measurements of the effectiveness of the media campaign, including
[those] that would indicate how the campaign influences youth and parent behavior.”
The $197.8 million appropriation for the other federal drug control programs would
have been allocated as follows:
!Drug Free Communities — $90 million
!Training and technical assistance for drug court professionals — $1
million
!Model Acts — $1 million
!Demonstration programs for chronic hard-drug users under
community supervision — $1 million



!National Youth Anti-Drug Media Campaign — $93 million
!United States Anti-Doping Agency — $9.6 million
!World Anti-Doping Agency Dues — $1.7 million
!Performance Measures Development — $500,000
The $5 million increase in the appropriation for the CTAC resulted from the
restoration of funding to the Technology Transfer Program which the President’s
budget had proposed to be terminated.49 Established in 1990 and reauthorized in
1998, the CTAC is to serve as the central counterdrug technology research and
development organization for the United States Government.
The House committee report also addressed two issues under the White House
Office account. First, the report noted that the “account had unobligated balances of
budget authority in excess of $6,500,000, or more than 10 percent of its
appropriation, remaining at the end of fiscal years 2005 and 2006” and stated the
expectation that the committee would “be kept fully informed of the reasons for any
significant differences between actual and budgeted spending.” The report expressed
the committee’s concern about the Administration’s extensive editing of the first
report to Congress by the Privacy and Civil Liberties Oversight Board and stated
“that the Board must have the authority and independence to thoroughly review,
assess, and report accurately on privacy and civil liberties matters.” The House-
passed bill would have provided $1.5 million for the Board.50
Senate-Reported Bill. H.R. 2829, as reported in the Senate, would have
provided appropriations for the accounts under the EOP and funds appropriated to
the President at the levels requested by the President’s budget except for the WHO,
OA, OMB, and the various federal drug control accounts. Unlike the President’s
budget request, which included funding for the Privacy and Civil Liberties Oversight
Board within the WHO account, the Senate Committee on Appropriations report
stated that funding for the board would have been provided in a separate account that
was funded at $2 million. The committee directed the EOP to include detailed
budget information for the board in the FY2009 budget justification and expected the
board’s annual report “to specifically detail how the additional funds provided have
benefited” its work and responsibilities.51 The reasons for the reduction in the OA
appropriation and the increased OMB and ONDCP appropriations were the same as
for the House-passed bill. The Senate committee directed the OMB Director to
report to Congress by March 1, 2009, on “the extent to which executive departments
and agencies that administer directed funding allocate the designated amounts to
intended recipients at a level less than the amount specified in any enacted bill or
accompanying report describing such directed funding.”52
ONDCP’s appropriation of $25.2 million would have included the restoration
of the $2.8 million to ONDCP salaries and expenses for the rental payments to GSA.


49 H.Rept. 110-207, pp. 36-40.
50 Ibid., p. 33.
51 S.Rept. 110-129, pp. 35, 38.
52 Ibid., p. 39.

It also would have included $1.5 million for “an independent study and analysis of
ONDCP’s organization and management” to be conducted by the National Academy
of Public Administration (NAPA).53 The office would have been required to contract
with NAPA for the study within two months after the act’s enactment.
LiketheHouse-passed bill, H.R. 2829, as reported in the Senate, included the Section
202 provision on submission of a financial plan prior to the obligation of ONDCP
funds. In addition, the Senate version of the bill included provisions at Sections 203,
204, and 205 that were not included in the House-passed bill. These provisions
related to transfer authority, reprogramming, and budget estimates for ONDCP.
According to the Senate report, the committee did not agree with the office’s
proposal to reorganize 3 of its 12 components. Among the directives included in the
Senate report were requirements that the ONDCP Director submit to the House and
Senate Committee on Appropriations “quarterly reports on travel expenditures,
summarized by office, program, and individual, including dates and purpose of
travel” and “quarterly reports on current staffing levels and plans for future hirings
... includ[ing] office, position title, salary, and job classifications of all persons
employed by ONDCP, including contractors.”54
The appropriation for HIDTAP would have been $15 million more than the
President requested. The committee report included language similar to that in the
House committee report on the funding for existing HIDTAs and directed the
ONDCP Director “to ensure that the HIDTA funds are transferred to the appropriate
drug control agencies expeditiously.” Further, the committee report included specific
directions on the allocation and use of HIDTA funds:
[T]he committee expects the Director of ONDCP to ensure that the entities
receiving these limited resources make use of them strictly for implementing the
strategy for each HIDTA, taking into consideration local conditions and resource
requirements.
The HIDTA funds should not be used to supplant existing support for ongoing
Federal, State, or local drug control operations normally funded out of the
operating budgets of each agency. ONDCP is directed to hold back all HIDTA
funds from a State until such time as a State or locality has met its financial55
obligation.
The other federal drug control programs account would have been funded at
$204.7 million, $19.8 million less than the President’s request. Stating views similar
to those expressed in the House committee report, the Senate report reflected the
committee’s concern “about the direction and efficacy” of the National Youth Anti-
Drug Media Campaign. The appropriation for other federal drug control programs
would have been allocated as follows:
!Drug Free Communities — $90 million


53 H.R. 2829, as reported in the Senate, p. 174.
54 S.Rept. 110-129, p. 41.
55 Ibid., p. 43.

!Training and technical assistance for drug court professionals — $1
million
!Model Acts — $1.5 million
!National Youth Anti-Drug Media Campaign — $100 million
!United States Anti-Doping Agency — $10.3 million
!World Anti-Doping Agency Dues — $1.7 million
!Performance Measures Development — $250,00056
H.R. 2829, as reported in the Senate, did not provide funding for the CTAC. The
committee report stated that “Funding from previous years has remained unexpended
despite congressional direction to reinstate CTAC programs as previously existed,
and congressional intent with regard to this program has been ignored.” It also stated
that the “committee is highly disappointed in the director of this program and is
troubled by his ideas for research and development that appear to have little or no
value.” The unexpended balances in the account, according to the committee, were
“adequate” to fund the program in FY2008.57
With regard to the appropriation for the Official Residence of the Vice
President, the Senate report stated the committee’s expectation that it “be kept fully
apprised by the Vice President’s office of any and all renovations and alterations
made to the residence by the Navy.”58
The Senate version of H.R. 2829, as marked up by the Senate Subcommittee on
Financial Services and General Government on July 10, 2007, included a provision
to reduce the funding for the Office of the Vice President unless the office complied
with Executive Order 12958 on Classified National Security Information.59 The Vice
President’s Office had sought to be exempted from the executive order.60 During
markup of the bill on July 12, 2007, the Senate Committee on Appropriations agreed
by a 15-14 vote to an amendment offered by Senator Sam Brownback to strike the
provision from the bill. The amendment also expressed “the Sense of the Senate that
the President should amend Executive Order 12958 to be consistent with the letter


56 Ibid., p. 44.
57 Ibid., p. 42.
58 Ibid., p. 47.
59 An amendment offered by Senator Sam Brownback to strike this provision from the bill
failed by a 4-5 vote on July 10, 2007. During the House debate on H.R. 2829 on June 28,
2007, Representative Rahm Emanuel offered an amendment (H.Amdt. 480) to include a
general provision in the bill, at Section 901, to prohibit the use of funds for the care,
operation, refurnishing, or improvement of the Vice President’s official residence and any
expenses of the Vice President. The amendment failed by a 209-217 (Roll No. 596) vote.
See, Congressional Record, vol. 153, June 28, 2007, pp. H7365-H7369 and H7402-H7403.
60 See, William Douglas, “Waxman Blasts Cheney’s Refusal to Comply With Order,” Knight
Ridder Tribune News Service, June 21, 2007, p. 1, and Michael Abramowitz, “Cheney Aide
Explains Stance on Classified Material,” Washington Post, June 27, 2007, p. A5. The June
26, 2007, letter from David S. Addington, Chief of Staff, to Senator John Kerry, referred to
in The Washington Post article is available at [http://www.fas.org/sgp/news/2007/06/
ovp062607.pdf].

from his Counsel dated July 12, 2007” which stated that the Office of the Vice
President is exempt from the executive order.61
P.L. 110-161. The law provides an appropriation of $682 million for the
accounts under the EOP and funds appropriated to the President. The accounts are
funded at the levels recommended in H.R. 2829, as passed by the House and reported
in the Senate, except for the WHO, OA, OMB, and the various federal drug control
accounts. For the WHO, the law provides funding of $51.7 million and funds the
Privacy and Civil Liberties Oversight Board in a separate account at $2 million, as
recommended by the Senate. The OA receives an appropriation of $91.7 million,
some $1 million less than the House and Senate recommended. The appropriation
for OMB totals $78 million, $394,000 less than the House and Senate recommended.
Administrative provisions direct OMB to apply appropriations “only to the objects
for which appropriations were made” and allocate them “in accordance with the
terms and conditions set forth in the relevant explanatory statement,” and to “publish
in the annual budget submission the specific reasons why [an information
technology] project is on” the High Risk or Management Watch lists prepared by
OMB. Furthermore, OMB cannot evaluate or determine “if Water Resources Project
reviews are in compliance with laws, regulations, and requirements relevant to the
Civil Works water resource planning process.” The appropriation for the federal drug
control accounts totals $421.7 million and is allocated among the specific accounts
as follow:
!ONDCP — $26.4 million
!CTC — $1 million
!HIDTA — $230 million
!Other federal drug control programs — $164.3 million
The administrative provisions for these accounts include a requirement that the
President submit a financial plan showing ONDCP programs, projects, and activities
(Section 202) and specifying that no more than 2% of ONDCP’s appropriations may
be transferred between appropriated programs with approval in advance from the62
House and Senate Committees on Appropriations. (Section 203).
Title III: The Judiciary63
As a co-equal branch of government, the judiciary presents its budget to the
President, who transmits it to Congress unaltered. Table 5 shows appropriations for
the judiciary as enacted for FY2007, and, for FY2008, amounts requested by the
Administration, passed by the House, reported by the Senate, and enacted.


61 H.R. 2829, as reported in the Senate, p. 178.
62 Congressional Record, daily edition, vol. 153, December 17, 2007, pp. H16050-H16052.
63 This section was written by Lorraine Tong, Analyst in American National Government,
Government and Finance Division.

Table 5. The Judiciary Appropriations,
FY2007 to FY2008
(in millions of dollars)
FY2008 FY2008
House Sena t e FY2008
P a sse d Reported Ena c t e d
FY2007 FY2008(H.R.(H.R.(H.R.
Budget Groupings and AccountsEnactedRequest2829)2829)2764)
Supreme Court (total)$74.0$78.7$78.7$78.7$78.7
Salaries and Expenses62.666.566.566.566.5
Building and Grounds11.412.212.212.212.2
U.S. Court of Appeals for the Federal25.328.628.027.427.1
Cir c uit
U.S. Court of International Trade15.816.716.516.616.6
Courts of Appeals, District Courts, and5,696.46,202.55,954.06,030.55,942.5
Other Judicial Services (total)
Salaries and Expenses 4,476.64,854.54,660.64,710.04,619.3
Court Security378.7421.8396.5412.7410.0
Defender Services776.3859.8830.5840.6835.6
Emergency Defender Services--------10.5
Fees of Jurors and Commissioners60.962.462.463.163.1
Vaccine Injury Compensation Trust 4.0 4.1 4.14.14.1
Fund
Administrative Office of the U.S.72.478.575.778.576.0
Co ur ts
Federal Judicial Center22.924.824.024.524.2
United States Sentencing Commission14.616.215.515.515.5
Judicial Retirement Funds58.365.465.465.465.4
Total: The Judiciary$5,979.7$6,511.5$6,257.8$6,337.2$6,246.1
Sources: Budget authority table provided by House Appropriations Subcommittee on Financial
Services and General Government, and S.Rept. 110-129. Columns may not equal total due to
r o und i ng.
Note: The Administrative Office of the U.S. Courts revised the judiciarys original FY2008 budget
request estimate on March 21, 2007, from the total of $6.51 billion to $6.43 billion.
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 (the salaries and expenses of the Court and the expenditures
for the care of its building and grounds) together make up about 1.2% 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 for
related judicial services. The largest account, about 75% 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 all 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 judiciary budget does not fund three “special
courts” in the U.S. court system: the U.S. Court of Appeals for the Armed Forces,
the U.S. Tax Court, and the U.S. Court of Appeals for Veterans Claims. Federal
courthouse construction also is not funded within the judiciary’s budget.
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. The fees are used to offset expenses within the
Salaries and Expenses account. In some 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 has stated that it will keep Congress apprised throughout the
appropriations cycle on changes in the anticipated non-appropriated funds and adjust
its budget request accordingly. The judiciary also has “encumbered” funds — no-
year authority funds for specific purposes, 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).64
The judiciary was one of the few entities in the federal government that was not
subjected to a hard freeze in the enacted year-long budget continuing resolution for
FY2007 (the Revised Continuing Appropriations Resolution, 2007, P.L. 110-5). The
FY2007 appropriations for the judiciary essentially maintained on-board staffing
levels and addressed the immigration-related caseload. In her March 21, 2007,
testimony before the House and Senate Subcommittees on the judiciary’s FY2008
budget request, Judge Julia S. Gibbons, chair of the Budget Committee of the
Judicial Conference of the United States,65 said that the judiciary recognized the
Administration’s and Congress’s concerns about overall federal spending and budget
deficits. She stated that “every item in our budget request relates to performing the
functions entrusted to us under the Constitution. We have no optional programs;


64 Administrative Office of the U.S. Courts, The Judiciary Fiscal Year 2008 Congressional
Budget Summary (Washington: February 2007), pp. 33-34. Hereafter cited as Judiciary
FY2008 Congressional Budget Summary.
65 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.

everything ultimately contributes to maintaining court operations and preserving the
judicial system that is such a critical part of our democracy.”66
Cost Containment Initiatives. According to Judge Gibbons, the Judicial
Conference has endeavored, through cost containment policies, to reduce costs and
increase productivity in the federal judiciary for many years. For example, to limit
the growth of the court rental fees paid to the General Services Administration
(GSA), which currently constitute about 20% of the entire judiciary budget (projected
to exceed one billion dollars in FY2008), the conference approved a cap of 4.9% on
the average rate of growth for courthouse rent to be paid in FY2009 through FY2016.
Through a rent validation project, the judiciary identified GSA rent overcharges
totaling $30 million over three years, and recently found an additional $22.5 million
in overcharges. It is also working with GSA to change the way courthouse rent is
determined and calculated. Restricting the appointment of new magistrate judges and
using information technology (e.g., consolidating computer servers) to increase
efficiency and cost-effectiveness are among other efforts to contain costs.67
Judicial Security. Judicial security — the safe conduct of court proceedings
and the security of judges in courtrooms and off-site — continues to be an issue of
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 the judge’s office in
Reno spurred efforts to enhance judicial security. Early in the 110th Congress, the
chairmen of Senate and House Judiciary Committees introduced companion bills (S.
378 and H.R. 660, respectively), the Court Security Improvement Act of 2007, to
strengthen security.68 The Senate Judiciary Committee approved S. 378 on March

1, 2007 (following a February 2007 hearing on judicial security and independence),


and reported the bill on March 29, 2007. On April 19, 2007, the Senate passed
S. 378 unanimously. After the House Subcommittee on Crime, Terrorism, and
Homeland Security held a hearing, the House Judiciary Committee amended H.R.

660 on June 13, 2007, and reported the bill on July 10, 2007. On that same day,


under suspension of the rules, the House approved H.R. 660 by voice vote. As
passed in their respective chambers, the Senate and House bills in their key
provisions are essentially the same, but differ in a few areas. Legislation in the 109th
Congress (P.L. 109-13) appropriated $11.9 million to the U.S. Marshals Service
(USMS) to provide intrusion detection systems in the homes of federal judges who
requested them. As of October 26, 2007, installations of alarm systems had been


66 Statement of Honorable Julia S. Gibbons, Chair, Committee on the Budget of the Judicial
Conference of the United States, before the Subcommittee on Financial Services and
General Government of the Committee on Appropriations of the United States Senate,
March 21, 2007, p. 2. Hereafter cited as Judge Gibbons’s March 21, 2007, Statement.
67 Ibid., pp. 3-4.
68 For more details about legislative proposals to enhance judicial security, including S. 378
and H.R. 660, see CRS Report RL33464, Judicial Security: Responsibilities and Current
Issues, by Lorraine H. Tong.

completed in 97% of the homes of federal judges who have requested them.69
According to the judiciary, it has been experiencing problems with perimeter security
functions that the Federal Protective Service (FPS) provides the judiciary at court
facilities, as well as FPS billing problems. On March 13, 2007, the Judicial
Conference endorsed a recommendation to support efforts to transfer to USMS the
security functions that FPS currently provides to court facilities, as well as the
associated funding for these functions.70
Workload. According to Judge Gibbons, the President’s FY2008 budget
request for $13 billion to bolster border security and immigration enforcement would
result in a dramatic increase in the judiciary’s caseload. Immigration-related cases
now make up 25% of the district courts’ criminal caseload. Noting the President’s
funding for 3,000 additional border patrol agents (by the end of 2008, the goal of
achieving the level of 18,000-plus agents will double the number of agents in place
in 2001), Judge Gibbons stated that the judiciary “cannot absorb the additional
workload generated by the homeland security initiatives within current resource
levels.” The workload in the judiciary’s probation and pretrial services programs
also continues to grow — in 2006 there were 113,697 people under supervision, with71
a projected increase to 114,600 in 2007.
Judgeships. The Judicial Conference voted on March 13, 2007, to ask
Congress to create 67 new federal judgeships — 15 for the courts of appeals (13
permanent, 2 temporary) and 52 for the district courts (38 permanent, 14 temporary)
— to make permanent five temporary judgeships, and to extend another temporary
judgeship for five years. According to the judiciary, since the 1990 omnibus
judgeship bill, the number of courts of appeals judges has remained the same, while
federal appellate court case filings increased by 55% over the same 17-year period.
According to the judiciary, the number of district court judgeships increased by 4%,
while case filings increased by 29%, over the same period of time.72
Judicial Pay. Another key issue being discussed is the judiciary’s advocacy
for a significant increase in judicial pay. John G. Roberts Jr., Chief Justice of the
United States, stated in his 2006 End-of-the-Year Report on the Federal Judiciary
that judges’ pay has not kept pace with inflation over the years and has led to judges
leaving the bench in increasing numbers. According to the Chief Justice, retaining
and attracting the best talent to the courts is a serious concern. He stated that failure
to raise judicial salaries has reached the level of a “constitutional crisis that threatens73
to undermine the strength and independence of the federal Judiciary.” On June 15,


69 U.S. Marshals Service, Office of Congressional Affairs, provided the information to the
author on October 26, 2007.
70 Judge Gibbons’s March 21, 2007, Statement, pp. 9-10.
71 Ibid., pp. 4-5.
72 U.S. Courts, News Release, “Federal Judiciary Says New Judgeships Needed,” March

13, 2007, at [http://www.uscourts.gov/Press_Releases/judconf031307.html].


73 U.S. Supreme Court, Chief Justice’s “2006 Year-End Report on the Federal Judiciary,”
(Washington, DC: 2007), at [http://www.supremecourtus.gov/publicinfo/year-end/

2007, Senator Patrick J. Leahy, chairman of the Senate Judiciary Committee,


introduced S. 1638, the “Federal Judicial Salary Restoration Act of 2007,” that would
have provided a 50% pay adjustment for justices and judges.74 Representative John
Conyers Jr., chairman of the House Judiciary Committee, introduced a companion
bill, H.R. 3753, “Federal Judicial Salary Restoration Act of 2007,” on October 4,
2007. The House bill would have provided for a 41.3% pay adjustment to justices
and judges. As amended in markup, and ordered to be reported by the respective
committees, both bills, S. 1638 and H.R. 375375 would authorize pay increases of

28.7% to 28.8%.76


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
is pending in the Senate Judiciary Committee.
House and Senate Budget Hearings
On March 8, 2007, the House Appropriations Subcommittee on Financial
Services and General Government held a hearing on the Supreme Court budget
request for FY2007, and heard testimony from Supreme Court Justices Anthony M.
Kennedy and Clarence Thomas. Issues raised at the hearing included the Supreme
Court building modernization project, workload, technology improvements, judicial
security, minority clerk hiring, and televising Supreme Court proceedings. The
subcommittee held another hearing on March 21, 2007, to hear testimony on the
federal judiciary budget request from Judge Julia S. Gibbons, United States Circuit
Judge for the Sixth Circuit Court of Appeals and chair of the Budget Committee of
the Judicial Conference of the United States, and James C. Duff, director of the
Administrative Office of the U.S. Courts (AOUSC). Among issues raised at the
hearing were judicial security, rent paid to GSA, and workload. The Senate
Appropriations Subcommittee on Financial Services and General Government also
held a hearing on the FY2008 budget request on March 21, 2007. Judge Gibbons and


73 (...continued)

2006year-e ndreport.pdf].


74 Earlier, on January 8, 2007, Senator Leahy introduced S. 197, legislation to authorize a
l.7% salary increase for federal justices and judges for FY2007. The Senate had approved
the bill by unanimous consent on the same day, and it was referred to the House Judiciary
Committee. On February 2, 2007, S. 197 was referred to the Subcommittee on Courts, the
Internet, and Intellectual Property. No further action has been taken.
75 See [http://www.cbo.gov/ftpdocs/89xx/doc8957/hr3753.pdf] for the Congressional Budget
Office cost estimate for H.R. 3753.
76 For further details about these bills and judicial pay issues, see CRS Report RL34281,
Judicial Salary: Current Issues and Options for Congress, by Kevin M. Scott; and also CRS
Report RS20388, Salary Linkage: Members of Congress and Certain Federal Executive and
Judicial Officials, and CRS Report RL33245, Legislative, Executive, and Judicial Officials:
Process for Adjusting Pay and Current Salaries, both by Barbara L. Schwemle.

Director Duff gave testimony at the hearing on the same issues that were discussed
at the House hearing.
Judge Gibbons asked the House and Senate subcommittees to fund fully the
judiciary’s budget request. She stated that, “A funding shortfall for the federal courts
could result in a significant loss of existing staff, cutbacks in the level of services
provided and a diminution in the administration of justice.”
FY2008 Request and Congressional Action.77 For FY2008, the judiciary
requested $6,511.5 million in total appropriations, an 8.9% increase over the78
$5,979.7 million enacted for FY2007. According to the judiciary, about 82% of the
increase would have provided for pay adjustments, inflation, and other adjustments
necessary to maintain current services. The FY2008 request included funding for
33,675 full-time-equivalent (FTE)79 positions — an increase of 2.1% over the
estimated 32,972 FTEs for FY2007.
The House-passed bill would have provided $6,257.8 million for the judiciary
— a $278.1 million increase over the FY2007 enacted amount, but $253.7 million80
below the FY2008 request. The Senate committee recommended $6,337.2 million
for the judiciary, or $79.4 million above the House-passed level for FY2008.
In report language, the House committee expressed its expectation (as it has in
previous years), that the judiciary would submit a financial plan allocating all sources
of available funds, including appropriations, fee collections, and carry-over balances,
within 90 days of enactment of the appropriations act. The plan would have served
as the baseline for determining if reprogramming notification is required. The
committee also expressed interest in increasing the number of minorities in clerkship
positions and encouraged the judiciary to explore ways to increase outreach to81
minority law students.
The Senate committee, in report language, reminded the judicial branch that it
is also “subject to the same funding constraints facing the executive and legislative


77 Administrative Office of the U.S. Courts, The Judiciary Fiscal Year 2008 Congressional
Budget Summary (Washington: February 2007). Hereafter cited as Judiciary FY2008
Congressional Budget Summary.
78 The judiciary revised its request on March 21, 2007, reducing the original budget request
from $6.51 billion to $6.43 billion, or an $80.2 million reduction ($79.7 million of this
amount is a decrease from the Salaries and Expenses account). (The original FY2008
request had been estimated and submitted prior to the enactment of legislation, P.L. 110-5,
to appropriate funds for the judiciary for FY2007.)
79 AOUSC provided a revised FY2008 request for 33,225 FTEs to the author on March 17,

2007.


80 The House-passed bill would provide $173.5 million below the revised budget request of
$6.43 billion that AOUSC submitted on March 21, 2007.
81 U.S. Congress, House Committee on Appropriations, Financial Services and General
Government Appropriations Bill, 2008, report to accompany H.R. 2829, 110th Cong., 1st
sess., H.Rept. 110-207 (Washington: GPO, 2007), p. 42. Hereafter cited as H.Rept. 110-

207.



branches” and urged the judiciary to “devote its resources primarily to the retention
of staff.” In addition, the judiciary was “encouraged to contain controllable costs
such as travel, construction, and other non-essential expenses.”82
The FY2008 total amount enacted for the federal judiciary was $6,246.1 million,
an increase of about $266.4 million (4.5%) over the FY2007 appropriation.
The following are highlights of the FY2008 judiciary budget request, House-
passed amounts and Senate committee-reported amounts, and the FY2008 enacted
amount.83
Supreme Court. For FY2008, the total request for the Supreme Court
(salaries and expenses plus buildings and grounds) was $78.7 million, a 6.4 %
increase over the FY2007 appropriation of $74.0 million. The total request
comprised two accounts: (1) Salaries and Expenses — $66.5 million was requested,
an increase of $3.9 million (6.3%) over the $62.6 million enacted for FY2007; and
(2) Care of the Building and Grounds — $12.2 million was requested, an increase of
$0.8 million (6.8%) over the $11.4 million enacted for FY2007. Most of the
requested increase in salaries and expenses would have funded increases in salary and
benefit costs, and inflationary fixed costs. An additional six FTE were requested.
The House approved the full amount requested for this account. The Senate
committee recommended $66.5 million84 (or $4,000 less than the House amount) for
the Salaries and Expenses account, but the Senate also approved the full amount
requested for the Care of Buildings and Grounds account. The FY2008 enacted
amount was $78.7 million, the full amount requested.
Language in the House committee report directed the Supreme Court to include
in its budget justification materials an annual report providing information on
technology carry-over balances, descriptions of each expenditure made in the
previous fiscal year, and the planned expenditures in the budget year. The House
committee also expressed its expectation to be informed of any changes to the scope
and projected completion date of the Supreme Court’s building modernization
project, and it provided that funds in the Care of Buildings and Grounds account
remain available until expended.85 The Senate report language also directed the
Court to report to the Senate committee the Court’s construction plans and any


82 U.S. Congress, Senate Committee on Appropriations, Financial Services and General
Government Appropriations Bill, 2008, report to accompany H.R. 2829, 110th Cong., 1st
sess., S.Rept. 110-129 (Washington: GPO, 2007), pp. 48. Hereafter cited as S.Rept. 110-

129.


83 Data are rounded, which may result in slight differences when figures are added or
subtracted.
84 According to S.Rept. 110-129 (p. 49), this amount reflects the judiciary’s re-estimate of
its FY2008 requirements.
85 H.Rept. 110-207, p. 43.

changes in construction schedules or budgetary requirements as the Court becomes
aware of such changes.86
U.S. Court of Appeals for the Federal Circuit. This court, consisting of
12 judges, has nationwide jurisdiction and reviews, among other things, lower court
rulings in patent, trademark, and copyright cases. The FY2008 request for this
account was $28.5 million — a $3.2 million (12.7%) increase over the $25.3 million
appropriated for FY2007. The House approved $28.0 million, a $2.7 million
increase over the FY2007 enacted amount, but $0.6 million below the request for this
account. The Senate committee recommended $27.4 million, or $0.5 million less
than the House-passed amount. The FY2008 enacted amount was $27.1 million, a

7.0% increase of $1.8 million over the previous year.


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 (import transactions and
enforcement of federal customs and international trade laws). The FY2008 request
was $16.7 million — a $0.9 million (5.7%) increase over the FY2007 appropriation
of $15.8 million that the judiciary budget submission ascribes largely to increases in
pay and benefits. The House approved $16.5 million, a $0.7 million increase over
the FY2007 enacted amount, but $0.2 million below the request. The Senate
committee recommended $16.6 million for this account, or $0.09 million less than
the House level. The FY2008 enacted amount was $16.6 million, an increase of
$0.8 million (5.1%) over the previous year.
Courts of Appeals, District Courts, and Other Judicial Services.
This budget group includes 12 of the 13 courts of appeals and 94 district judicial
courts located in the 50 states, the District of Columbia, the Commonwealth of
Puerto Rico, the territories of Guam and the U.S. Virgin Islands, and the
Commonwealth of the Northern Mariana Islands. Totaling about 95% of the
judiciary budget, the four accounts in the group — salaries and expenses, court
security, defender services, and fees of jurors and commissioners — fund most of the
day-to-day activities and operations of the federal circuit and district courts. For this
budget group, the FY2008 request was $6,202.5 million, a $506.1 million increase
over the FY2007 enacted amount of $5,696.4 million. The House approved $5,954.1
million, an increase of $257.6 million over the FY2007 enacted amount, but $248.5
million below the request.87 The Senate committee recommended $6,030.5 million,
or $76.5 million above the House-passed amount. The FY2008 enacted amount was
$5,942.5 million, a $246.1 million (4.3%) increase over the previous year.


86 S.Rept. 110-129, p. 49.
87 On June 27, 2007, during House floor consideration of the bill, an amendment (H.Amdt.
455) was introduced — but withdrawn by unanimous consent — to increase funding for the
Court of Appeals, District Courts, and Other Judicial Services account by $10 million. The
amendment also would have decreased by the same amount of funding for the District of
Columbia courts (which is funded under this bill, but not under Title III, the judiciary
account). The intent of the amendment was to increase funding to alleviate the strain of the
workload and backlog of cases for the district courts along the U.S.-Mexican border.

In report language, the Senate committee addressed the issue of judicial rent and
space needs, acknowledging the efforts that the judiciary and GSA have made to deal
with the rent issue. The committee also encouraged the Judicial Conference to
ensure that “checks and balances are in place so that future construction requests and
projects are subject to highest standards of cost-efficiency.” The committee further
directed the Administrative Office of the U.S. Courts (AOUSC) to report to the
committee, no later than 120 days after enactment of the bill, on steps that have been
taken, and are being taken, to achieve more efficient use of space by district and
circuit courts. In addition, the AOUSC was directed to “ensure that current and
projected funding needs are met first with carryover funds before enhancing any
program.” The AOUSC was further directed to separately include in future financial
plans (for approval by the House and Senate Committees on Appropriations) “all
sources of carryover funds and their desired application.”88
The total of this budget group comprises the following accounts:
Salaries and Expenses. The FY2008 request for this account was $4,854.5
million, a $377.9 million increase over the FY2007 level of $4,476.6 million.
According to the budget request, this increase was needed for inflationary and other
adjustments to maintain the courts’ current services. The House approved $4,660.6
million, a $184.0 million increase over the FY2007 enacted amount, but $193.9
million below the request. The Senate committee recommended $4,710.0 million,
or $49.4 million above the House-passed amount. The FY2008 enacted amount was
$4,619.3 million, an increase of $142.7 million (3.2%) over the previous year.
Court Security. This account provides for protective guard services, security
systems, and equipment for courthouses and other federal facilities to ensure the
safety of judicial officers, employees, and visitors. Under this account, a major
portion of the funding is transferred to the U.S. Marshals Service (USMS) for
administering the Judicial Facility Security Program to pay for court security officers.
The FY2008 request was $421.8 million — a $43.1 million (11.4%) increase over
the FY2007 appropriation of $378.7 million. This increase was reportedly driven by
pay and benefit adjustments and other adjustments needed to maintain current
services. Payment to the Federal Protective Service (FPS) is also covered under this
account; $74.6 million requested would be an increase of $6.7 million (10%) over the
FY2007 appropriation of $67.9 million. The House approved $396.5 million, a
$17.8 million increase over the FY2007 enacted amount, but $25.3 million below the
request. The Senate committee recommended $412.7 million,89 or about $16.2
million above the House-passed amount.
The House committee recommendation, as approved by the House, would have
provided for inflationary increases, 52 additional court security officers, as well as
court security officers and screening equipment at probation and pretrial service
offices in leased facilities. Up to $15 million for this account would have remained
available until expended. In report language, the House committee expressed concern


88 S.Rept. 110-129, pp. 51-52.
89 According to S.Rept. 110-129 (p. 54), this amount is $2.0 million below the judiciary’s
re-estimate of FY2008 requirements.

with “the quality of service” the FPS has provided the judiciary, and encouraged the
judiciary to “continue to explore options with other Federal law enforcement
agencies that might be able to provide these security services.”90
In report language, the Senate committee expressed its expectation that USMS
will fully cooperate as the judiciary conducts fiduciary and program oversight
responsibilities for the Judicial Facility Security Funding.91 The Senate bill also
included Section 307, which would have called on the director of USMS to consult
with the director of AOUSC to designate certain courthouses for a pilot program
under which the USMS — rather than the Department of Homeland Security (FPS)
— would have provided building-specific security services. The AOUSC would
have reimbursed the USMS for these services under the pilot.
The FY2008 enacted amount was $410 million, a $31.3 million (8.3%) increase
over the previous year.
Defender Services. This account funds the operations of the federal public
defender and community defender organizations, and the compensation,
reimbursement, and expenses of private practice panel attorneys appointed by the
courts to serve as defense counsel to indigent individuals accused of federal crimes.
The FY2008 request was $859.8 million — an $83.5 million (10.8 %) increase over
the FY2007 appropriation of $776.3 million. The House approved $830.5 million,
a $54.2 million increase over the FY2007 enacted amount, or $29.3 million below
the request. The Senate committee recommended $840.6 million, or $10.1 million
above the House-passed amount. The FY2008 enacted amount was $835.6 million,
a $59.3 million (7.6%) increase over the previous year. In addition, as amended,
$10.5 million was enacted for emergency funding to address anticipated workload
due to increased immigration enforcement along the southwest border.
Fees of Jurors and Commissioners. This account funds the fees and
allowances provided to grand and petit jurors, and the compensation of jury and land
commissioners. The FY2008 request was $62.4 million — a $1.5 million (2.3%)
increase over the FY2007 appropriation of $60.9 million. The increase in the request
was due mainly to inflationary costs associated with expenses paid to jurors. The
House approved the full amount requested. The Senate committee recommended
$63.1 million,92 or $0.7 million above the request. The FY2008 enacted amount was
$63.1 million, a $2.1 million (3.5%) increase over the previous year.
Vaccine injury Compensation Trust Fund. Established to address a
perceived crisis in vaccine tort liability claims, the Vaccine Injury Compensation
Program is a federal no-fault program that protects the availability of vaccines in the
nation. The FY2008 request for this account was $4.1 million, a slight increase of
$0.15 million (3.5%) above the FY2007 enacted amount of $4.0 million. Both the


90 H.Rept. 110-207, p. 45.
91 S.Rept. 110-129, p. 54.
92 According to S.Rept. 110-129 (p. 53), this amount reflects the judiciary’s re-estimate of
its FY2008 requirements.

House and the Senate committees recommended the requested amount. The FY2008
enacted amount was $4.1 million, the full amount requested.
Administrative Office of the U.S. Courts (AOUSC). 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. The
AOUSC also provides support to the Judicial Conference of the United States, and
implements conference policies and applicable federal statutes and regulations. The
FY2008 request for this account was $78.5 million — a $6.1 million (8.5%) increase
over the FY2007 level of $72.4 million. The increase was reportedly for pay
increases and other inflationary adjustments and for the anticipated reduction in non-
appropriated funds. The AOUSC also receives non-appropriated funds from fee
collections and carry-over balances to supplement its appropriations requirements.
The House approved $75.7 million, a $3.3 million increase over the FY2007 enacted
amount, but $2.9 million below the request. The Senate committee recommended
the full amount requested, or $2.9 million above the House-passed amount. The
FY2008 enacted amount was $76.0 million, a $3.7 million (5.1%) increase over the
previous year.
Federal Judicial Center. As the judiciary’s research and education entity,
the 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
FY2008 request was $24.8 million — a $1.9 million (8.6%) increase over the
FY2007 appropriation of $22.9 million. The House approved $24.0 million, a $1.1
million increase over the FY2007 enacted amount, but $0.8 million below the
request. The Senate committee recommended $24.5 million, or $0.5 million above
the House-passed amount. The FY2008 enacted amount was $24.2 million, a $1.3
million (5.7%) increase over the previous year.
United States Sentencing Commission. The commission promulgates
sentencing policies, practices, and guidelines for the federal criminal justice system.
The FY2008 request was $16.2 million — a $1.6 million (10.9%) increase over the
FY2007 appropriation of $14.6 million. The House approved $15.5 million, a $0.9
million increase over the FY2007 enacted amount, but $0.7 million below the
request. The Senate committee recommended the House-passed amount. The
FY2008 enacted amount was $15.5 million, a $0.9 million (6.0%) increase over the
previous year.
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 spouses and dependent children of deceased
judicial officers. The FY2008 request was $65.4 million — a $7.1 million (12.2%)
increase over the FY2007 appropriation of $58.3 million. The House approved and
the Senate committee recommended the requested amount. The FY2008 enacted
amount was $65.4 million, the full amount requested.
General Provision Changes. According to the budget request submission,
the judiciary proposed the following new language under general provisions:



Section 406: which gives the judiciary the same delegated authority as the
executive branch to contract for space alteration projects not exceeding $100,000
(without having to go through GSA involvement).
The judiciary proposed to delete the following provisions:
Section 402: which requires the judiciary to notify Congress of appropriations
transfers and reprogramming requests (change would remove the judiciary’s
reporting requirement).
Section 404: which requires the judiciary to provide a separate, detailed financial
plan for the Judiciary Information Technology fund (change would remove the93
judiciary’s reporting requirement).
Administrative Provisions. The House-passed bill approved the extension
of a temporary judgeship in the U.S. District Court for Northern District of Ohio in
Section 305. It also approved the following provisions (as in previous years):
Sec. 301: which permits funding for salaries and expenses for the employment
of experts and consultant services as stipulated in law (5 U.S.C. 3109).
Sec. 302: which permits up to five percent of any appropriation made for
FY2008 to be transferred between judiciary appropriation accounts provided that
no appropriation shall be decreased by more than five percent or increased by
more than 10 percent by any such transfer except in certain circumstances. It
also provides that such transfers shall be treated as reprogramming of funds and
shall not be available for obligation or expenditure except in compliance with
procedures set forth in sections 605 and 610.
Sec. 303: which authorizes not to exceed $11,000 for official reception and
representation expenses incurred by the Judicial Conference of the United States.
Sec. 304: which requires a financial plan for the judiciary within 90 days of94
enactment of the act.
The Senate committee recommended Sections 301-304 above, and approved the
addition of the following provisions:
Sec. 305: which provides for a salary adjustment for Justices and judges.
Sec. 306: which grants the judicial branch the same tenant alteration authorities
as the executive branch.
Sec. 307: which clarifies that the U. S. Marshals Service has the authority to
provide security services at several designated primary courthouses as part of a
pilot program.


93 Judiciary FY2008 Congressional Budget Summary, p. 7.
94 H.Rept. 110-207, p. 47.

Sec. 308: which adds Vancouver, Washington as a place of holding court.95
As enacted, Sections 301 through 304 (as proposed by both the House and the
Senate) were included. The following sections were also enacted:
Section 305: which authorizes a cost of living adjustment for FY2008 for federal
judges (similar to language the Senate proposed).
Section 306: which extends the authority to contract for repairs of less than
$100,000 to the judiciary for FY2008 (similar to language the Senate proposed).
Section 307: which authorizes a pilot program to allow the Administrative Office
of the U.S. Courts to reimburse the U. S. Marshals Service for some services
currently being performed by the Federal Protective Service (similar to language
the Senate proposed).
Section 308: which adds Vancouver as an eligible place of holding court for the
Western District of Washington (similar to language the Senate proposed).
Section 309: which extends the term of temporary judgeships in Kansas and
Northern Ohio for one year.
Title IV: District of Columbia96
The authority for congressional review and approval of the District’s budget is
derived from the Constitution and the District of Columbia Self-Government and
Government Reorganization Act of 1973 (Home Rule Act).97 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 50 days after receiving a budget proposal
from the mayor. The approved budget must then be transmitted to the President, who
forwards it to Congress for its review, modification, and approval.98 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 the FY2007 enacted amount, the President’s FY2008 request, the amounts
requested by the House of Representatives and the Senate, and the amounts enacted.


95 S.Rept. 110-129, p. 56.
96 This section was written by Eugene Boyd, Analyst in American National Government,
Government and Finance Division, and David Smole, Specialist in Education Policy,
Domestic Social Policy Division.
97 See Article I, Sec. 8, clause 17 of the U.S. Constitution and Section 446 of P.L. 93-198,

87 Stat. 801.


98 87 Stat. 801.

Table 6. District of Columbia Appropriations, FY2007 to FY2008:
Special Federal Payments
(in millions of dollars)
FY2008 FY2008
House Sena t e FY2008
P a sse d Reported Ena c t e d
FY2007 FY2008 (H.R. (H.R. (H.R.
Enacted Request2829)2829)2764)
Resident Tuition Support$32.9$35.1$35.1$33.0$33.0
Emergency Planning and8.53.03.43.43.4
Security
District of Columbia Courts216.7213.9256.4217.3223.9
Defender Services43.543.552.543.548.0
Court Services and Offender
Supervision Agency179.6190.3190.3190.8190.3
Public Defender Service31.132.732.732.732.7
Criminal Justice
Coordinating Council1.31.31.31.31.3
Water and Sewer Authority6.912.012.012.08.0
Anacostia Waterfront3.0 __ a
I nitiative
Transportation Assistance1.0
Foster Care Improvements2.0
Office of the Chief Financial20.0 6.1 5.5b
O ffi c e r
Executive Office of the14.05.0
Mayor
— Anacostia River Water[5.0][1.0]
Quality Initiative
— Public Education[2.2][2.0]
I n itia tive
— Marriage Initiative[1.8]____C
— Pediatric Health Care[1.0][1.0]
Initiative
— Historic Preservation[1.0][1.0]
Education Improvements39.640.840.840.840.8
— Public Schools[12.8][13.0][13.0][13.0][13.0]
— Public Charter Schools[12.8][13.0][13.0][13.0][13.0]
— Education Vouchers[14.0][14.8][14.8][14.8][14.8]



FY2008 FY2008
House Sena t e FY2008
P a sse d Reported Ena c t e d
FY2007 FY2008 (H.R. (H.R. (H.R.
Enacted Request2829)2829)2764)
Consolidated Laboratory5.010.010.010.05.0
Facility
Central Library and Branches 10.010.010.09.0
FBI Reimbursement 5.04.05.04.0
Special Federal Payments$591.1$597.6$654.6$613.7$609.9
(total)
Sources: Budget authority table provided by House Appropriations Subcommittee on Financial
Services and General Government and S.Rept. 110-129. Columns may not equal the total due to
r o und i ng.
a. This activity will be funded as a $1 million earmark awarded to the Executive Office of the Mayor.
b. The conference report accompanying H.R. 2764 (P.L. 110-161) directs the CFO to award fundsto
17 specific organizations and activities: ARISE Foundation — $282,000; Barracks Row
$500,000; Bright Beginnings $100,000; Catalyst HOPE VI $132,000; Center for Inspired
Teaching — $52,500; Earth Conservation Corps — $282,000; Marriage Development Account
— $1,800,000; Eastern Market — $131,000; Everybody Wins — $100,000; Excel Institute
$300,000; Congressional Cemetery $625,000; Community-based Dental Education
$52,500; International Youth Service and Development Corps $600,000; MenzFit Career
Development $23,500; Sitar Arts Center — $22,500; Southeastern University $300,000;
STEED Youth Program $150,000.
c. Marriage Initiative is included as a $1.8 million earmark administered by the CFO.
The District of Columbia Budget and Key Issues
President’s Request. The Administration’s proposed FY2008 budget
included $597.6 million in federal payments to the District of Columbia. The
funding request for the courts and criminal justice system (court operations, defender
services, offender supervision, and criminal justice coordinating council) totaled
$481.7 million, or 80.6%, of the request. The President’s budget also included $75.9
million in special federal payments for specific education initiatives, including $35.1
million for college tuition assistance, $13 million for public school enhancements,
$13 million for public charter schools, and $14.8 million for the school choice
(school voucher) program, which awards grants to eligible students to attend private
schools.
In addition to recommending $597.6 million in federal payments to the District
of Columbia, the President’s budget also contained a number of general provisions,
including a number of so-called “social riders.” Consistent with provisions in
previous appropriations acts, the budget included provisions that would have:
!prohibited the use of federal and District funds to finance or
administer a needle exchange program intended to reduce the spread



of AIDS and HIV among intravenous drug abusers and their
partners;
!provided abortion services except in instances of rape or incest, or
when the health of the mother is threatened;
!prohibited the city from decriminalizing the use of marijuana for
medical purposes; and
!limited the city’s ability to use District funds to lobby for
congressional voting representation or statehood.
District Budget. On March 23, 2007, the mayor submitted a proposed budget
to the District’s city council for consideration and approval. The proposed budget
included $597.6 million in special federal payments, which was consistent with the
amount included in the President’s proposed budget for FY2008.
During the first session of the 110th Congress, the District Delegate to Congress
introduced legislation, H.R. 733, that would eliminate congressional review of the
District’s budget, granting the city budget autonomy over locally raised revenues.
For several years, District officials have complained that delays in congressional
review and approval of the city’s budget have hampered the city’s ability to
efficiently plan and manage its resources. The bill, which was reported out of the
House Subcommittee on the Federal Workforce, the District of Columbia, and Postal
Service on June 21, 2007, was forwarded to the House Committee on Oversight and
Government Reform. Though the full Committee held a markup session on August

2, 2007, it postponed a vote to report the measure out of committee.


H.R. 2829. The House-passed FSGG bill included $654.6 million in special
federal payments for the District of Columbia. This was $63.6 million more than
appropriated in FY2007 and $57 million more than requested by the Administration
or the District for FY2008. Specifically, the House version of H.R. 2829
recommended substantially increased funding for District of Columbia court
operations, defender services, and offender supervision compared to that
appropriated for FY2007 or requested by the Administration (see Table 6). In
addition, the bill included additional federal funds to support enhancements to the
public library system.
The Senate Appropriations Committee recommended an appropriation of $613.7
million in special federal payments for the District of Columbia, which is $40.9
million less than approved by the House, but $16.1 more than requested by the
Administration or the city. The Committee-passed bill deviated from its House
counterpart by recommending $39.1 million less in funding for court operations. The
bill, consistent with the FY2007 funding level and the Administration’s request, also
recommended $43.5 million for defender services, which is $9 million less than the
$52.5 million recommended by the House. Like its House counterpart, the Senate
measure also included $10 million to support enhancements to the city’s public
library system. Although placed on the Senate calendar on July 13, 2007, the Senate
took no further action on the bill before the end of the first session.
Enacted Appropriations. The Consolidated Appropriations Act includes
$609.9 million in federal funding for the District of Columbia. This is $3.8 million
less than recommended by the Senate Appropriations Committee, $44.7 million less



than recommended by the House, $12.3 million more than requested by the
Administration, and $18.8 million more than appropriated in FY2007. The act
includes $223.9 million for court operations, which is $6.6 million more than
recommended by the Senate and $32.5 million less than approved by the House. It
also provides $10.5 million in funds to be administered by the mayor ($5 million)
and the chief financial officer (CFO) ($5.5 million). In addition, the act provides
$13 million to fund a new public library initiative ($9 million) and to reimburse the
FBI for DNA analysis of evidence associated with the District’s cold case backlog
($4 million). These activities were not funded in FY2007, but were included in the
Administration’s budget request and House and Senate versions of H.R. 2829.
P.L. 110-161, like the House and Senate versions of H.R. 2829:
!eliminates funding for transportation assistance and foster care, both
of which were funded in FY2007; and
!reduces funding for emergency planning and security activities by
$5.1 million, from $8.5 million appropriated in FY2007 to $3.4
million for FY2008.
The act also reduces funding for grants administered by the city’s CFO from the $20
million appropriated in FY2007 to $5.5 million in FY2008. The House version of
H.R. 2829 recommended an appropriation of $6.1 million in CFO-administered funds
whereas the Senate Appropriations Committee version of the bill did not include
funding for the CFO to administer such activities. Instead, the Senate version of H.R.
2829 recommended appropriating $14 million to the Executive Office of the Mayor
to fund environmental, education, health, and financial initiatives, including a $5
million earmark for the Anacostia River waterfront initiative. P.L. 110-161 includes
$1 million for the Executive Office of the Mayor to support an Anacostia water
quality initiative. The act continues funding of the resident tuition support for post-
secondary education and K-12 school improvement programs. This is consistent
with recommendations included in the House and the Senate versions of H.R. 2829.
These education initiatives are further discussed below.
District of Columbia General Fund. In addition to appropriating $609.9
million in special federal payments to the District, P.L. 110-161 completed
congressional review and approval of the District’s General Fund budget for FY2008.
The act authorizes the District to spend $9.974 billion for operating expenditures and
$1.608 billion for capital construction projects, including $150 million for a
consolidated forensic laboratory facility and $42.2 million for baseball stadium
construction.
Resident Tuition Support. The District of Columbia Tuition Access Grant
(DCTAG) program provides tuition support through grants to institutions of higher
education (IHEs) for eligible residents of the District of Columbia, by paying the
difference between in-state and out-of-state tuition (up to $10,000) at public IHEs;
and up to $2,500 per year for tuition at private non-profit IHEs that are either located
in the Washington, DC, metropolitan area, or are Historically Black Colleges and
Universities (HBCUs). The DCTAG program is authorized through FY2012; and
funding has been provided for the program annually beginning with FY2000. Under
P.L. 110-161, $33.0 million is provided for the DCTAG program to remain available



until expended. P.L. 110-161 provides that grants awarded to students under the
DCTAG program may be prioritized on the basis of their academic merit, their
income and need, and other authorized factors.
School Improvement. Each fiscal year since the enactment of the DC
School Choice Incentive Act of 2003, under P.L. 108-199, federal funding has been
provided to the District of Columbia for three types of school improvement activities:
for the improvement of the District of Columbia Public Schools (DCPS); for the
expansion of public charter schools; and for opportunity scholarships (school
vouchers) under the D.C. School Choice Incentive Program. For FY2008, $40.8
million is provided for school improvement programs in the District of Columbia.
Funding in the amount of $13.0 million is provided to DCPS to support the
improvement of public education; $13.0 million is provided to the State Education
Office to expand quality public charter schools; and $14.8 million is provided to the
Secretary of the U.S. Department of Education for the operation of the D.C. School
Choice Incentive program (of which $1.8 million may be used to administer and fund
assessments). The D.C. School Choice Incentive program enables children from
families with incomes not exceeding 185% of the poverty line to apply to receive
opportunity scholarships valued at up to $7,500 to cover the costs of tuition, fees, and
transportation expenses associated with attending participating private elementary
and secondary schools located in the District of Columbia. Scholarship recipients
remain eligible to continue to participate in the program in subsequent years, so long
as their family income does not exceed 300% of the poverty level. The D.C. School
Choice Incentive program has been funded annually beginning with FY2004, and is
authorized through FY2008.
General Provisions. P.L. 110-161 includes language that modifies several
general provisions included in previous appropriations acts. The act:
!allows the use of District funds for a needle exchange program
aimed at reducing the spread of AIDS and HIV among users of
illegal drugs; and
!prohibits the city from using federal funds to support or defeat
legislation before the Congress or any state legislature.
The provision allowing the use of District funds to support a needle exchange
program is consistent with language included in the House and Senate versions of
H.R. 2829, but is a departure from previous appropriations acts which prohibited the
use of both District and federal funds in support of a needle exchange program.99 In
addition, the explanatory statement accompanying the act encourages the Bush
Administration to include federal funding to help the city address its HIV/AIDS
health crisis. The provisions allowing the use of District, but not federal, funds for
lobbying activities is also consistent with language included in the House and Senate
versions of H.R. 2829, but is a departure from language included in previous


99 During House floor debate on H.R. 2829 Representative Souder unsuccessfully offered
two amendments (H.Amdt. 465 and H.Amdt. 466) that would have prohibited the use of
federal and District funds for a needle exchange program.

appropriations statutes which strictly prohibited the city from using both District and
federal funds to support lobbying activities aimed at securing congressional voting
representation for District residents.
P.L. 110-161 includes language that continues the prohibitions against the use
of federal and District funds:
!for abortion services, except in instances where the life or health of
the mother was in jeopardy; and
!to regulate or decriminalize the use of marijuana for medical
purposes.
The act also continues the $4,000 cap on attorney fees in actions brought under the
Individuals with Disabilities Education Act (IDEA). The cap applies to attorneys
who represent parties in the actions as well as attorneys representing the District.
Continuing Resolution and D.C. Budget Autonomy. As signed by the
President on September 29, 2007, the continuing resolution for FY2008(H.J.Res. 52,
P.L. 110-92) included a provision (Section 128) that temporarily released the
District’s FY2008 General Fund budget, which is financed with local revenues, from100
further congressional review and approval. Specifically, the District was allowed
to spend local funds at a rate consistent with amounts identified in the District’s
Fiscal Year 2008 Proposed Budget and Financial Plan, which was first submitted to
Congress on June 7, 2007. This action was taken in order to allow the city to
undertake locally funded activities because Congress had not yet approved the FSGG
bill before the end of the city’s 2007 fiscal year. The release of the District’s General
Fund budget was consistent with a legislative proposal (H.R. 733) that would allow
the District to forgo congressional review and approval of that portion of its operating
and capital budgets financed with local revenues. The city’s elected leaders have
consistently asserted that Congress has repeatedly delayed passage of the
appropriations act for the District well beyond the October 1 start of its fiscal year.
City leaders contend that the delay in Congress’s approval of the city’s budget
hinders their ability to manage the District’s financial affairs and negatively affects
the delivery of public services.101


100 Sec. 128 of P.L. 110-92 (121 Stat. 993) 52 states, “Notwithstanding any other provision
of this joint resolution, except section 106, the District of Columbia may expend local funds
for programs and activities under the heading District of Columbia Funds for such programsth
and activities under title IV of H.R. 2829 (110 Congress), as passed by the House of
Representatives, at the rate set forth under “District of Columbia Funds — Summary of
Expenses” as included in the Fiscal Year 2008 Proposed Budget and Financial Plan
submitted to the Congress by the District of Columbia on June 7, 2007, as amended on June

29, 2007.”


101 For additional discussion of District of Columbia budget autonomy, see CRS Report
RL34032, District of Columbia Budget Autonomy: An Analysis of H.R. 733, 110th Congress,
by Eugene Boyd, Nonna Noto, and Jason Delaney.

Title V: Independent Agencies
In addition to funding for the Department of the Treasury, the Executive Office
of the President, the Judiciary, and the District of Columbia, a collection of 20
independent entities are slated to receive funding through this appropriations bill in
FY2008. Table 7 lists appropriations as enacted for FY2007, and, for FY2008, it
lists the amounts requested by the President, approved by the House, reported by the
Senate Appropriations Committee, and enacted, for each of the agencies.
Table 7. Independent Agencies Appropriations,
FY2007 to FY2008
(in millions of dollars)
FY2008 FY2008
House Sena t e FY2008
P a sse d Reported Ena c t e d
FY2007 FY2008 (H.R. (H.R. (H.R.
Agency Ena c t e d Request 2829) 2829) 2764)
Commodity Futures Tradinga $116
C o mmi s s i o n
Consumer Product Safety6363677080
C o mmi s s i o n
Election Assistance Commission161531617142
Federal Communicationsb11111
C o mmi s s i o n
Federal Deposit Insurance
Corporation: Office of Inspectorc(31)(27)(27)(27)(27)
General (by transfer)
Federal Election Commission5559595959
Federal Labor Relations Authority2524242424
Federal Trade Commissionb5982887782
General Services Administrationd -38442179738175
Merit Systems Protecion Board3940404040
o K. Udal Fudat41466
National Archives and Records331369388396400
Ad mi ni str a tio n
National Credit Union11111
Ad mi ni str a tio n
Office of Government Ethics1112121212
Office of Personnel Management19,59421,09821,11021,11121,110
(total)
Salaries and Expenses112102102102102
Government Payments for
Annuitants, Employees Health8,7808,8848,8848,8848,884
Ben e fits
Government Payments for
Annuitants, Employee Life3941414141
I n su ra n c e
Payment to Civil Service10,53211,94111,94111,94111,941
Retirement and Disability Fund
Office of Special Counsel1616161617



FY2008 FY2008
House Sena t e FY2008
P a sse d Reported Ena c t e d
FY2007 FY2008 (H.R. (H.R. (H.R.
Agency Ena c t e d Request 2829) 2829) 2764)
Securities and Exchangee868875867864843
C o mmi s s i o n
Selective Service System2522222222
Small Business Administration572464582568569
United States Postal Service1098989118118
nited Staes Tax Court4845454545
Total: Independent Agencies$21,797$23,718$23,911$24,299e $23,746
Sources: Budget authority table provided by House Appropriations Subcommittee on Financial
Services and General Government, and S.Rept. 110-129. Columns may not equal the total due to
r o und i ng.
a. The Commodity Futures Trading Commission (CFTC) is funded through the FSGG bill in the
Senate for FY2008, but in prior fiscal years it was funded through the agriculture and related
agencies appropriations bill. In the House, the CFTC remains part of the agriculture
appropriations bill (H.R. 3161) for FY2008.
b. The amounts listed in Table 7 for the FCC and the FTC only represent direct appropriations and do
not include fees collected by the agencies that are also used to fund agency activities.
c. Budget authority transferred to FDIC is not included in total appropriations for Title V; it is counted
as part of the budget authority in the appropriation account from which it came.
d. Budget authority for GSA is calculated as the net value of appropriations, including limitations on
the availability of revenues, plus the redemption of debt payments, minus anticipated revenues
from rents paid into Federal Buildings Fund. In FY2007, anticipated revenues exceeded the sum
of appropriations plus redemption of debt payments, resulting in negative net obligational
authority.
e. The amounts listed in Table 7 for the SEC include fees collected by the agency. This is not
consistent with the treatment of fees for the FCC and the FTC, but it follows the source
documents for Table 7.
f. The amount listed in Table 7 for total FY2008 Senate funding of independent agencies includes
appropriations for the Commodity Futures Trading Commission (CFTC), which is funded in the
Senate bill but not the House bill. According to S.Rept. 110-129, the FY2007 enacted amount
for the CFTC was just under $98 million, and the President requested $116 million for the
agency for FY2008, which the Senate fully funded.
Commodity Futures Trading Commission (CFTC). The 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 agricultural committees because of the
market’s historical origins as an adjunct to agricultural trade.
In the Senate, FY2008 CFTC appropriations were proposed in H.R. 2829. In
the House, FY2008 CFTC appropriations were proposed in H.R. 3161, the



Agriculture, Rural Development, Food and Drug Administration, and Related
Agencies Appropriations Act of 2008. In the Consolidated Appropriations Act,

2008, the CFTC was funded in Division A, Agriculture and Related Agencies.


Consumer Product Safety Commission (CPSC).102 The CPSC is an
independent federal regulatory agency whose enabling legislation is the Consumer
Product Safety Act of 1972. The Commission’s primary responsibilities include
protecting the public against unreasonable risks of injury associated with consumer
products; developing uniform safety standards for consumer products and minimizing
conflicting state and local regulations; and promoting research and investigation into
the causes and prevention of product-related deaths, illnesses, and injuries.
For FY2008, the House passed the Committee on Appropriation’s
recommendation of $66.8 million, $3.6 million above the Administration’s request.
Subsequently, the Senate recommended $70 million for CPSC for FY2008. In the
end, however, following widespread publicity about unsafe exports from China,
particularly dangerously defective toys, the consolidated appropriations bill provides
the agency with $80 million.
Consumer groups and others continue to express concerns over the CPSC’s
staffing level, especially in light of recent news stories about unsafe exports (notably
including toys) from China. In 1977, three years after the Commission opened its
doors, it had a staff of 900. The staffing level has inexorably declined over the past
three decades. The budget for FY2007 culminated a two-year reduction of full-time
positions (FTEs) from 471 to 420. The Commission’s request for FY2008
anticipated a decrease of an additional 19 FTEs. All indications are that the CPSC
will substantially increase its staffing level over the next few years. In the House,
H.R. 4040, the Consumer Product Safety Commission Modernization Act, passed
unanimously (407-0) in December 2007. That bill provides authorizations of $80
million for FY2009, $90 million for FY2010, and $100 million for FY2011.
Election Assistance Commission (EAC).103 The EAC provides grant
funding to the states to meet the requirements of the Help America Vote Act
(HAVA), 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 requirements in the act. The commission was
not given rule-making authority under HAVA, although the law transferred
responsibilities for the National Voter Registration Act (NVRA) from the Federal
Election Commission to the EAC; these responsibilities include NVRA rule-making
authority. The Department of Justice is charged with enforcement responsibility.
The President’s FY2008 budget request included $15.5 million for the EAC
(with $3.25 million for the National Institute of Standards and Technology, NIST),
as well as $4.83 million for protection and advocacy programs and $10.89 million


102 This section was written by Bruce Mulock, Specialist in Business and Government
Relations, Government and Finance Division.
103 This section was written by Kevin Coleman, Analyst in American National Government,
Government and Finance Division.

for accessibility grants administered by HHS. H.R. 2829 passed the House on June
28, 2007, with the requested amounts for the EAC and NIST as well as $300 million
for requirements payments and $950,000 for high school and college programs. The
Senate-reported version eliminated the requirements payments while increasing
funding for the EAC to $16.5 million, with $1.05 million for school and college
programs. Funding for the EAC and election reform programs ultimately was
provided by the Consolidated Appropriations Act, 2008, enacted on December 16,
2007 (P.L. 100-161). The act provides $16.53 million for the EAC, of which $3.25
million is for NIST, and $200,000 is for the high school mock election program. It
also provides $115 million for requirements payments and $10 million for data
collection grants under the Help America Vote College Program.
Federal Communications Commission (FCC).104 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 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.
For FY2008, the Consolidated Appropriations Act provides $313 million (a
direct appropriation of $1 million and the remainder to be collected through
regulatory fees), $21.7 million above FY2007 and the same as the President’s budget105
request. Specifically, the act allows:
!up to $4,000 for official reception and representation expenses;
!purchase and hire of motor vehicles;
!special counsel fees;
!collection of $312 million in Section 9 fees;
!the sum appropriated to be reduced as Section 9 fees are collected.
The act further:
!transfers $21,480,000 from the Universal Service Fund to the Office
of Inspector General;


104 This section was written by Patricia Moloney Figliola, Specialist in Internet and
Telecommunications Policy, Resources, Science, and Industry Division.
105 For FY2007, the FCC will receive funding at the FY2006 level, $289 million (a direct
appropriation of $1 million and the remainder to be collected through regulatory fees).

!provides $2,500,000 for the digital television consumer education
and outreach initiative to prepare for the digital television transition
scheduled for February 2009;
!prohibits the FCC from changing rules governing the Universal
Service Fund regarding single connection or primary line restrictions
as proposed by the Senate; and
!extends the Universal Service Antideficiency Temporary Suspension
Act until December 31, 2008.
Federal Deposit Insurance Corporation (FDIC): OIG.106 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.
In FY2007, a budget of $31 million for the OIG was appropriated, and the
President requested $27 million for FY2008. The Consolidated Appropriations Act
of 2008 provided a budget of $27 million for the OIG, which is a 13% decrease from
FY2007.
Federal Election Commission (FEC).107 The FEC administers, and
enforces civil compliance with, the Federal Election Campaign Act (FECA)108
through educational outreach, rulemaking, litigation, and advisory opinions. The
agency also administers the presidential public financing system.
The President’s FY2008 budget request included an appropriation of $59.2
million for the FEC, an 8.6% increase above the enacted FY2007 appropriation of
$54.5 million. In its FY2008 budget justification document, the FEC emphasized
efforts to contain costs by restructuring the agency’s internal processes and using
technology to improve efficiency.109 The agency did not request any additional staff
despite anticipated “[i]ncreased workloads associated with [2008] Presidential
elections.”110 The FEC stated that much of its FY2008 budget request would have
been used to cover a $1.6 million rent increase and to fund “mandated pay increases”


106 This section was written by Pauline Smale, Economic Analyst, Government and Finance
Division.
107 This section was written by Sam Garrett, Analyst in American National Government,
Government and Finance Division.
108 2 U.S.C. §431 et seq.
109 See, for example, Federal Election Commission, Fiscal Year 2008 Performance Budget
for the Federal Election Commission, Congressional Submission, February 5, 2007, at
[http://www.fec.gov/pages/budget/fy2008/fy2008cbj_final.pdf], pp. 2-3.
110 Ibid., p. 3.

for employees.111 The FEC also proposed legislative language that would have
allowed the agency to collect fees for educational conferences.112
The House-passed version of the FSGG bill provided $59.2 million for FY2008
— the same amount the agency requested and the House Appropriations Committee
recommended. The committee report did not contain instructions for the FEC.
Under a unanimous consent agreement regulating floor consideration of the bill,
amendments limiting presidential public campaign financing could have been
offered.113 However, the Legislative Information System and Congressional Record
show no record of those amendments actually being offered on the floor. In fact, the
FEC was the subject of limited discussion during FSGG floor consideration. The
version of the bill passed by the House specified minimum and maximum levels of
the appropriation to be used for FEC data automation and “reception and
representation” expenses.114
The FEC portion of the FSGG bill reported by the Senate Appropriations
Committee was identical to the language passed by the House. This included the
same recommendation of $59.2 million in funding and specified minimum and
maximum funding levels for data automation and reception and representation
expenses.115 The report accompanying the bill did not contain instructions for the
FEC, but directed the Government Accountability Office (GAO) to report to
Congress on two campaign finance matters. First, the committee report directed
GAO to provide information on “the 10-year trend in the cost of House and Senate
campaigns as well as the percentage of those costs that are incurred due to rising
broadcast advertising rates.” Second, the report directed GAO to “revisit and update”
a previous report on public campaign financing in the states.116 Both issues were the
subject of a June 20, 2007, Senate Rules and Administration Committee hearing.117
The FY2008 consolidated appropriations law provides $59.2 million for the
FEC and specifies minimum and maximum funding levels for data automation and


111 Ibid., p. 2.
112 Ibid., p. 4.
113 See Honorable José Serrano. “Providing for Further Consideration of H.R. 2829,
Financial Services and General Government Appropriations Act, 2008.” Remarks in the
House. Congressional Record, daily edition, vol. 153 (June 27, 2007), p. H7296.
114 H.R. 2829 as passed by the House, Title V.
115 H.R. 2829 as reported by the Senate Appropriations Committee, Title V.
116 On the committee report language, see U.S. Congress, Senate Committee on
Appropriations, Financial Services and General Government Appropriations Bill, 2008,thst
report to accompany H.R. 2829, 110 Cong., 1 sess., S.Rept. 110-129 (Washington: GPO,
2007), pp. 72-73. The GAO report is Campaign Finance Reform: Early Experiences of Two
States That Offer Full Public Funding for Political Candidates, GAO-03-453, May 2003.
117 The Government Printing Office (GPO) website indicates that the committee print for
the hearing has not yet been released. For additional information about the hearing, public
financing in the states, and potential public financing of congressional campaigns, see CRS
Report RL33814, Public Financing of Congressional Elections: Background and Analysis,
by R. Sam Garrett.

reception and representation expenses.118 As noted above, all those provisions were
included in the FSGG appropriations bill passed by the House and reported by the
Senate Appropriations Committee. (The full Senate did not consider the FSGG bill.)
The explanatory statement accompanying the consolidated bill contains no
instructions for the FEC.119 It also does not address the Senate Appropriations
Committee instructions regarding GAO’s research on campaign costs and public
financing (discussed above).
Federal Trade Commission (FTC).120 The Federal Trade Commission
(Commission or FTC) is an independent agency. It seeks to protect consumers and
enhance competition by eliminating unfair or deceptive acts or practices in the
marketing of goods and services and by ensuring that consumer markets function
competitively.
Following the recommendation of the Appropriations Committee, the House
approved a total program level of $247.5 million for the FTC for FY2008, an
increase of $7.2 million over the Administration’s request. More specifically, $139
million is to come from pre-merger filing fees, $20 million from Do-Not-Call fees,
and a direct appropriation of $88.5 million. The comparable figures for the Senate-
reported version were: a total program level for the agency of $240.2 million (the
same as the Administration’s request), a figure comprising of $144.6 million from
pre-merger filing fees, $19 million from Do-Not-Call fees, and a direct appropriation
of $76.6 million. The Consolidated Appropriations Act for FY2008 provides the
FTC with a total program level of $243.9 million, with $139 million of that amount
to come from pre-merger filing fees, $23 million from Do-Not-Call fees, and $81.9
million as a direct appropriation.
Appropriators, in recent years, have moved away from the practice followed at
the turn of the century (FY2000 through FY2002) wherein zero ($0) direct
appropriations were required, because the entire program level was covered by a
combination of fees and prior-year collections.
General Services Administration (GSA).121 The General Services
Administration 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.
Typically, only about 1% of GSA’s total budget is funded by direct appropriations.


118 P.L. 110-161; see also U.S. Congress, House Committee on Appropriations, Consolidated
Appropriations Act, 2008, committee print, book 1 of 2, 110th Cong., 1st sess., January 2008,

39-564 (Washington: GPO, 2008), p. 825.


119 See U.S. Congress, House Committee on Appropriations, Consolidated Appropriations
Act, 2008, committee print, p. 894, for the explanatory statement.
120 This section was written by Bruce Mulock, Specialist in Business and Government
Relations, Government and Finance Division.
121 This section was written by Stephanie Smith, Analyst in American National Government,
Government and Finance Division.

As indicated in Table 8, for FY2008, the President requested $144 million for
policy and operations, $47 million for the Office of Inspector General, $3 million for
allowances and office staff for former Presidents, and $18 million to be deposited
into the Federal Citizen Information Center Fund.
The House approved $135 million for GSA policy and operations, $53 million
for the Office of Inspector General, $3 million for allowances and office staff for
former Presidents, and $16 million to be deposited into the Federal Citizen
Information Center Fund.
The Senate Appropriations Committee recommended $65 million for
government-wide policy and $90 million for operating expenses, $53 million for the
Office of Inspector General, $3 million for allowances and office staff for former
Presidents, and $18 million to be deposited into the Federal Citizen Information
Center Fund.
P.L. 110-161 provides $52.9 million for government-wide policy and $85.9
million for operating expenses, $48.4 million for the Office of Inspector General,
$2.5 million for allowances and office staff for former Presidents, and $17.3 million
to be deposited into the Federal Citizen Information Center Fund.
Federal Buildings Fund (FBF). Most GSA spending is financed through
the Federal Buildings Fund. Rent assessments from agencies paid into the FBF
provide the principal source of its funding. Congress may also provide direct funding
into the FBF. Congress directs the GSA as to the allocation or limitation on spending
of funds from the FBF in provisions found accompanying GSA’s annual
appropriations.
As indicated in Table 8, for FY2008, the President requested that an additional
amount of $345 million be deposited in the FBF, and that the total limitation for the
FBF be set at $8,091 million. The President’s budget further requested that $615
million remain available until expended for new construction projects from the FBF,
and $804 million remain available until expended for repairs and alterations.
The House provided that an additional amount of $88 million be deposited in
the FBF, and that the total limitation for the FBF be set at $7,835 million. The House
further provided that $525 million remain available until expended for new
construction projects from the FBF, and $733 million remain available until
expended for repairs and alterations.
The Senate Appropriations Committee recommended that an additional amount
of $625 million be deposited in the FBF, and that the total limitation for the FBF be
set at $8,371 million. The Senate bill further provided that $895 million remain
available until expended for new construction projects from the FBF, and $804
million remain available until expended for repairs and alterations.
P.L. 110-161 provides for an additional amount of $84 million to be deposited
in the FBF, and sets the total limitation for the FBF at $7,830 million. The enacted
legislation further provides that $531 million remain available until expended for
new construction projects from the FBF — with $225 million of that amount set



aside for “emergency” construction projects relating to homeland security initiatives
— and that $722.2 million remain available until expended for repairs and
alterations.
Table 8. General Services Administration Appropriations,
FY2007 to FY2008
(in millions of dollars)
FY2008 FY2008
House Sena t e FY2008
P a sse d Reported Ena c t e d
FY2007 FY2008 (H.R. (H.R. (H.R.
F und/O f f ice Ena c t e d Request 2829) 2829) 2764)
Federal Buildings Fund (FBF)
Total Limitations on
Availability of Revenues$7,555$8,091$7,835$8,371$7,830
(new obligational authority)
Limitations on Obligation: 701615525895531a
New Construction Projects
Limitations on Obligation:618804733804722
Repairs and Alterations
Limitation on Obligation:
Installment Acquisition164156156156156
Payments
Limitation on Obligations:4,0684,3834,3164,3834,315
Rental of Space
Limitation on Obligations:
Building Operations2,0042,1322,1052,1322,105
Direct Appropriations
Federal Buildings Fund $94$344 $88$625$84
Electronic Govt (E-Gov)35353
Fund
General Activities (total)206212207229207
Policy and Operations 014413500
Government-wide Policy52006553
Operating Expenses83 009086
Office of Inspector General5347535348
Allowances and Office Staff 33333
for Former Presidents
Federal Citizen Information1518161817
Center Fund
Direct Appropriations Total$303$561$298$859$294



Sources: Budget authority table provided by House Appropriations Subcommittee on Financial
Services and General Government, S.Rept. 110-129. Columns may not equal the total due to rounding
a. The explanatory statement that accompanied the Consolidated Appropriations Act, 2008, states that
the enacted total of $531 million for this account includes $306 million for new construction
projects and an additional $225 million for “emergency construction related to a homeland
security initiative.
Electronic Government Fund (E-Gov Fund).122 Originally unveiled in
advance of the President’s proposed budget for FY2002, the E-Gov Fund and its
appropriation have been a somewhat contentious matter between the President and
Congress. The President’s initial $20 million request 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, and FY2007. Created to support interagency
e-gov initiatives approved by the Director of OMB, the fund and the projects it funds
have been subject to close scrutiny by, and accountability to, congressional
appropriators. The President requested $5 million for FY2008, but the House
approved $3 million, as recommended by the House Appropriations Committee.
Senate appropriators recommended $5 million, the requested amount. The
Consolidated Appropriations Act, 2008, provides $3 million for the E-Gov Fund.
Independent Agencies Related to Personnel Management. The
FY2008 budget included information on the portfolios of each of the agencies
involved in 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 9 shows
appropriations as enacted for FY2007, as requested for FY2008, as passed by the
House for FY2008, as reported in the Senate for FY2008, and as enacted in P.L. 110-

161 for each of these agencies.


122 This section was written by Harold Relyea, Analyst in American National Government,
Government and Finance Division.

Table 9. Independent Agencies Related to Personnel
Management Appropriations,
FY2007 to FY2008
(in millions of dollars)
FY2008 FY2008
House Sena t e FY2008
P a sse d Reported Ena c t e d
FY2007 FY2008 (H.R. (H.R. (H.R.
Agency Ena c t e d Request 2829) 2829) 2764)
Federal Labor Relations$25.4$23.7$23.6$23.7$23.6
Autho r ity
Merit Systems Protection Board 38.740.140.140.140.1
(total)
Salaries and expenses36.137.537.537.537.5
Limitation on administrative2.62.62.62.62.6
expenses
Office of Personnel Management19,593.821,097.721,109.721,111.821,110.3
(total)
Salaries and Expenses111.6101.8101.8101.8101.8
Limitation on administrative112.5111.9123.4124.4123.9
expenses
Office of Inspector General2.11.51.51.51.5
(salaries and expenses)
Office of Inspector General
(limitation on administrative16.316.517.017.117.1
expenses)
Government Payments for
Annuitants, Employeesa8,780.38,884.08,884.08,884.08,884.0
Health Benefits
Government Payments for
Annuitants, Employee Lifea39.041.041.041.041.0
I n su ra n c e
Payment to Civil Service
Retirement and Disabilitya10,532.011,941.011,941.011,941.011,941.0
Fund
Office of Special Counsel15.516.416.416.417.5
Sources: Budget authority table provided by House Appropriations Subcommittee on Financial
Services and General Government, S.Rept. 110-129, and the Presidents FY2008 budget request.
Columns may not equal the total due to rounding.
a. The annual appropriations act provides “such sums as may be necessary” for the health benefits, life
insurance, and retirement accounts. The Office of Personnel Managements Congressional
Budget Justification for FY2008 states the FY2008 amounts for these accounts as $9,138
million (health benefits), $41 million (life insurance), and $10,523 million (retirement) at pp.
87-89. These are the same amounts that are stated in the FY2008 Budget Appendix at pp. 1003-
1004.



Federal Labor Relations Authority (FLRA).123 The FLRA is an
independent federal agency that administers and enforces Title VII of the Civil
Service Reform Act of 1978. Title VII, on Federal Service Labor-Management
Relations, 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. The statute excludes specific agencies (e.g., the Federal
Bureau of Investigation and the Central Intelligence Agency) and gives the President
the authority to exclude other agencies for reasons of national security.
The FLRA consists of a three-member authority, the Office of General Counsel,
and the Federal Services Impasses Panel (FSIP). 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 FY2008 budget proposed an appropriation of $23.7 million for
the FLRA, almost $1.7 million below the agency’s FY2007 appropriation of $25.4
million.124 The House recommended an appropriation of $23.6 million, which is
$77,000 below the President’s request. The amount proposed by the Senate
Appropriations Committee is the same as the Administration’s request of $23.7
million, and $77,000 more than the amount approved by the House. The amount
agreed to by Congress in the Consolidated Appropriations Act was $23.6 million.
The amount appropriated for FY2008 is $1.7 million less than the amount enacted
for FY2007.
Merit Systems Protection Board (MSPB).125 The President’s budget
requested, H.R. 2829, as passed by the House and reported in the Senate, and P.L.
110-161 provided for an FY2008 appropriation of just over $40 million for the
MSPB. The authorization for the agency expires on September 30, 2007. In its
budget submission, MSPB projected a 2.4% increase in decisions issued for cases
related to retirement, adverse action appeals, and reduction-in-force appeals in
FY2008. The House committee report states that the funding to be provided to the
agency covers “mandatory pay raises, training, information technology
improvements, and increased rent payments.” According to the Senate committee
report, the trust fund transfer would provide “appropriate funding for MSPB to
continue as arbitrator for the additional appeals cases” from the Departments of
Defense and Homeland Security.126


123 This section was written by Gerald Mayer, Analyst in Public Finance, Domestic Social
Policy Division.
124 In its budget submission, the agency reported a decline of 32% in the workload at its
seven regional offices between 2001 and 2004, and anticipated that the trend may increase.
125 This section was written by Barbara Schwemle, Analyst in American National
Government, Government and Finance Division.
126 S.Rept. 110-129, p. 86.

Legislation that would reauthorize the MSPB for three years and includes
provisions to enhance the agency’s reporting requirements is currently pending in the
Senate and the House of Representatives. Senator Daniel Akaka and Representative
Danny Davis introduced the Federal Merit System Reauthorization Act of 2007, S.
2057 and H.R. 3551, on September 17, 2007, and it was referred to the Senate
Committee on Homeland Security and Governmental Affairs and the House
Committee on Oversight and Government Reform.
Office of Personnel Management (OPM).127 The President’s budget
requested, and H.R. 2829, as passed by the House and reported in the Senate, and
P.L. 110-161 all provided an FY2008 appropriation of almost $102 million for
salaries and expenses for OPM. This amount includes funding of almost $6 million
for the Enterprise Human Resources Integration project, more than $1.3 million for
the Human Resources Line of Business project, $340,000 for the E-payroll project,
and $170,000 for the E-training program. Among the initiatives that OPM stated that
it will undertake for FY2008 are these: demonstration projects on pay-for-
performance “to replace the current General Schedule ... with a modern classification,
pay, and performance management system that is both results-driven and market-
based”; continued development of the “prescription drug audit program, which
includes audits of pharmacy benefit managers” by the OPM Inspector General; and
legislation to make technical changes in the retirement annuities of individuals with
part-time service under the Civil Service Retirement System (CSRS) and to transition
employees working in non-foreign areas (e.g., Alaska and Hawaii) from non-foreign
cost of living allowances to locality pay.128
The House committee report noted that an increased amount ($1 million) is
authorized to be transferred from trust funds, $26.5 million of which is for retirement
systems modernization. The committee directed OPM to provide the committee with
quarterly reports on the program’s implementation beginning on January 31, 2008.
With regard to the Federal Human Capital Survey, the committee report directed
OPM to “continue to make agencies’ survey data publicly available in a consistent
and consolidated format, and in a timely manner.”
The committee report also urged OPM to work with the authorizing committees
“to consider changes in law to bring Federal prevailing rate [blue collar] employees
currently working in the Narragansett Bay, Rhode Island Wage Area within the
coverage of the Boston, Massachusetts Wage Area” and to report progress made on
this issue to Congress within 90 days of the act’s enactment. The report noted that
white-collar federal employees in Southeastern Massachusetts and Rhode Island are
included in the Boston Wage Area and that “[t]here is no reason for different
treatment between the two categories of employees.” According to the committee
report, the additional funding ($500,000) provided to the Office of Inspector General
(OIG) at OPM through trust fund transfer was intended “to maintain audit and


127 This section was written by Barbara Schwemle, Analyst in American National
Government, Government and Finance Division.
128 FY2008 Budget Appendix, pp. 1080 (FLRA), 1091 (MSPB), 1115 (OSC), and 999, 1002,
and 1007 (OPM).

investigative staff at the current level and avoid deterioration of the OIG’s audit
capabilities.”
Several directives were included in the Senate committee report as follow:
!OPM must report to the committee within 120 days after the act’s
enactment “on its human resources products and services,” including
actions taken to address agency concerns about choice and
flexibility, and “indicating which products and services OPM has
identified as not reasonably available from private sector providers.”
Within the same time period, OMB must report to the committee
“on how the human resources products and services that OPM
provides to Federal agencies meet established standards, and on the
demonstrable steps OPM has taken to avoid any potential conflicts
between [its] role[s] as a human resources IT products and services
provider and ... the designated lead agency of the Human Resources
Line of Business.”
!OPM must work with and through the Chief Human Capital Officers
Council to ensure that the results of the survey on federal dependent
care programs are used by agencies to assess their current and future
needs with regard to dependent care and to determine ways to
communicate with employees about the availability of dependent
care programs. Agencies, in reviewing their workplace flexibilities,
are to “determine whether opportunities exist to use flexible work
options to address any recruitment and retention challenges.”129
The Senate report also addressed two issues included in the House report. With
regard to the Narragansett Bay, Rhode Island, wage area, the committee directed the
FPRAC to make this wage area “the immediate order of business” as the employees
within the wage area “have waited 3 years for the FPRAC to address their concerns.”
As for retirement systems modernization, the committee report noted the February
2008 date for operations to commence and “encourages OPM to continue to work
cooperatively with GAO to minimize potential risks and project delays.”130 The
explanatory statement that accompanied the consolidated appropriations act that was
enacted as P.L. 110-161, directs OPM to report to the House and Senate Committees
on Appropriations by April 30, 2008, on the wage area criteria being developed by
a working group of the FPRAC. Further, the statement directs OPM to submit a
report to the House and Senate Committees on Appropriations and GAO by February
20, 2008, on the test results for, the status of efforts to resolve any defects in, and a
reliable cost estimate for the retirement modernization system. GAO must provide
comments on the OPM report to the appropriations committees.131


129 S.Rept. 110-129, p. 95.
130 Ibid., pp. 95-96.
131 Congressional Record, daily edition, vol. 153, December 17, 2007, p. H16056.

H.R. 2829, as reported in the Senate, would have provided limitations on
administrative expenses of $124.4 million under salaries and expenses and $17.1
million under the OIG which are greater than those requested in the President’s
budget. These funds would have been for the retirement and insurance programs,
including retirement systems modernization, and to “help restore the OIG’s budget
to previous levels,” respectively.132 With regard to these limitations on
administrative expenses, P.L. 110-161 authorizes the transfer of $123.9 million under
salaries and expenses and $17.1 million under the OIG. Almost $27 million of the
former amount funds the automation of the system for keeping retirement records.
The OIG amount supports audits and investigations.133
The Government Managers Coalition, comprising the Senior Executives
Association, the Federal Managers Association, the Professional Managers
Association, the Federal Aviation Administration Managers Association, and the
National Council of Social Security Management Associations, has suggested that
unused sick leave be made creditable service for retirement for federal employees
under the Federal Employees Retirement System (FERS). An analysis by the
Congressional Research Service and a study by OPM found that employees under
FERS are using more sick leave than federal employees covered by the Civil Service
Retirement System, under which unused sick leave is creditable service for
retirement.134 Reportedly, legislation on sick leave is expected to be introduced in
the second session of the 110th Congress.135
Office of Special Counsel (OSC).136 The President’s budget requested, and
H.R. 2829, as passed by the House and reported in the Senate, provided an FY2008
appropriation of $16.4 million for the OSC. OSC projected a continued increase in
the number of prohibited personnel practice cases and disclosure cases received in
its budget submission. Noting the investigations recently undertaken by the OSC, the
House committee report urged the agency “to carefully evaluate the need for
additional appropriations” and formally request from OMB any additional funds137
necessary through a budget amendment. During House consideration of H.R. 2829
on June 27, 2007, Representative Tom Davis offered an amendment (H.Amdt. 460)
to decrease OSC’s appropriation by $1 million. The amendment was not agreed to
by a 146-279 (Roll No. 587) vote on June 28, 2007.138 P.L. 110-161 provides an


132 S.Rept. 110-129, pp. 96-97.
133 Congressional Record, daily edition, vol. 153, December 17, 2007, p. H16056.
134 See CRS Report RL32596, Sick Leave: Usage Rates and Leave Balances for Employees
in Major Federal Retirement Systems, by Curtis W. Copeland.
135 Stephen Losey, “Deal Reached on Bill to Compensate Feds for Unused Sick Leave,”
Federal Times, January 29, 2008.
136 This section was written by Barbara Schwemle, Analyst in American National
Government, Government and Finance Division.
137 H.Rept. 110-207, pp. 59, 71, 76-77, 79.
138 See, Congressional Record, daily edition, vol. 153, June 27, 2007, pp. H7321-H7322 and
June 28, 2007, pp. H7396-H7397. See also, Shawn Zeller, “Investigative Drama: Special
(continued...)

appropriation of $17.5 million to the OSC, $1.1 million more than the House and
Senate proposed. The explanatory statement accompanying the Consolidated
Appropriations Act states that the additional funding is “to assist OSC with computer
forensics in connection with its Special Task Force investigations.”139
The Senate committee report urged the OSC “to work with whistleblower
advocacy organizations to promote the highest level of confidence in the
Whistleblower Protection Act and the OSC,” reiterated the House committee
language related to the need for additional appropriations, and specified that the
agency’s FTE total “should not be below 102 or above 116.”140 According to the
report, the staffing should range from 70 to 75 FTEs at headquarters, 6 to 8 FTEs at
the Midwest field office, 9 to 11 FTEs at the Dallas field office, 8 to 10 FTEs at the
Oakland field office, and 9 to 12 FTEs at the District of Columbia field office. OSC
was directed to communicate with the Committee 45 days in advance of any
organizational change that would affect these staffing numbers.
On October 10, 2007, the legal director of the Government Accountability
Project and the executive directors of Public Employees for Environmental
Responsibility and the Project on Government Oversight sent letters to the chairman
and ranking members of the Senate Committee on Homeland Security and
Governmental Affairs and the House Committee on Oversight and Government
Reform; the Senate Subcommittee on Oversight of Government Management, the
Federal Workforce, and the District of Columbia and the House Subcommittee on the
Federal Workforce, Postal Service, and the District of Columbia; and the Senate and
House Appropriations Subcommittees on Financial Services and General
Government, urging them to deny the Special Counsel’s request for an additional
appropriation of $3 million for FY2008, until an investigation of the Special Counsel
being conducted by OPM’s inspector general is completed. The OSC requested the
additional amount to fund investigations of allegations that the White House
conducted political briefings at federal agencies in violation of the Hatch Act.
Among the concerns expressed in the letter were that “there is no guarantee that any
additional monies provided to OSC would be used for [the] intended purpose” and
“OSC simply cannot take on any more responsibilities without further abandoning
its primary constituency: government whistleblowers.”141
The Federal Merit System Reauthorization Act of 2007, S. 2057 and H.R. 3551,
is currently pending in the Senate Committee on Homeland Security and
Governmental Affairs and House Committee on Oversight and Government Reform.


138 (...continued)
Counsel’s Crusade,” CQ Weekly, August 6, 2007, p. 2353.
139 Congressional Record, daily edition, vol. 153, December 17, 2007, p. H16056.
140 S.Rept. 110-129, pp. 99-100.
141 Letter from Tom Devine, Jeff Ruch, and Danielle Brian to Senators Joseph Lieberman
and Susan Collins, Representatives Henry Waxman and Tom Davis, Senators Daniel Akaka
and George Voinovich, Representatives Danny Davis and Kenny Marchant, Senators
Richard Durbin and Sam Brownback, and Representatives Jose Serrano and Ralph Regula.
The letter is available on the Internet at [http://www.whistleblower.org].

The legislation, introduced by Senator Daniel Akaka and Representative Danny
Davis, would reauthorize the OSC for three years and includes provisions to enhance
the agency’s reporting requirements. The OSC has revised its policies governing
requests and appeals under the Freedom of Information Act and access to agency
records under the Privacy Act.142
National Archives and Records Administration (NARA).143 The
custodian of the historically valuable records of the federal government since
NARA’s establishment in 1934, NARA also prescribes policy and provides both
guidance and management assistance concerning the entire life cycle of federal
records. It also administers the presidential libraries system; publishes the laws,
regulations, and presidential and other documents; and assists the Information
Security Oversight Office (ISOO), which manages federal security classification and
declassification policy; the Public Interest Declassification Board; and the National
Historical Publications and Records Commission (NHPRC), which makes grants
nationwide to help nonprofit organizations identify, preserve, and provide access to
materials that document American history.
As indicated in Table 7, the President’s FY2008 request for NARA was almost
$369 million, which was about $37 million more than was appropriated for FY2007.
Of this requested amount, almost $313 million was sought for operating expenses,
an increase of $34 million over the FY2007 appropriation for this account. For the
electronic records archive, $58 million was sought, a $13 million increase over the
previous fiscal year allocation; for repairs and restoration, a little less than $9 million
was sought, which was slightly below the FY2007 appropriation; and for the
NHPRC, no appropriation was requested, which was the President’s request for
FY2007, although Congress allocated $7 million. NARA’s FY2007 budget
justification indicated that no funding for the NHPRC grants program was sought in
order to focus funding on operations that directly affect management, access, and the
preservation of federal records.
The House approved the amounts recommended by appropriators for NARA,
totaling a little more than $388 million, which was almost $20 million more than the
President’s request. Of this amount, $315 million was provided for operating
expenses, an increase of a little more than $2 over the requested amount; $58 million
was allocated for the electronic records archive, which was the same as the requested
amount; and $16 million was appropriated for repairs and restoration, which was
almost twice the amount requested. While no funds had been requested for the
NHPRC grants program, the House approved $10 million as recommended by
appropriators, allocating $8 million for grants and $2 for NHPRC operating
expenses.


142 U.S. Office of Special Counsel, “Freedom of Information Act; Implementation,” Federal
Register, vol. 72, no. 142, July 25, 2007, pp. 40711-40716. U.S. Office of Special Counsel,
“Privacy Act; Implementation,” Federal Register, vol. 72, no. 192, October 4, 2007, pp.

56617-56618.


143 This section was written by Harold Relyea, Analyst in American National Government,
Government and Finance Division.

The Senate Appropriation Committee recommended $396 million for NARA,
about $8 million more than the House-approved allotment and about $27 million
more than the amount requested. Of the amount recommended by Senate
appropriators, almost $314 million was provided for operating expenses, an increase
of about $1 million over the requested amount; $58 million was allocated for the
electronic records archive, which was the same as the requested amount, and a little
more than $25 million was recommended for repairs and restoration, which was
approximately $16 million more than the amount requested. While the President had
not requested any funds for the NHPRC, Senate appropriators recommended $10
million.
In the Consolidated Appropriations Act, 2008, NARA receives a little over $400
million, which is approximately $31 million more than the President’s request, about
$12 million more than the House-approved appropriation, and $4 million more than
the total amount recommended by Senate appropriators. Of the amount appropriated,
$315 million is provided for operating expenses; $58 million is allocated for the
electronic records archive; $28.6 million is appropriated for repairs and restoration;
and $9.5 million is provided for the NHPRC.
National Credit Union Administration (NCUA).144 The NCUA is an
independent federal agency funded entirely by the credit unions that the agency
charters, insures, and regulates. Two entities managed by the NCUA are addressed
by the Financial Services and General Government bill. One of these, the
Development Revolving Loan Fund (CDRLF), makes low-interest loans and
technical assistance grants to low-income credit unions. In FY2007, the CDRLF
received an appropriation of $941,000, and the President requested $950,000 for
FY2008. The Consolidated Appropriations Act provides $975,000 for FY2008.
The other entity managed by NCUA, the Central Liquidity Facility (CLF),
provides a source of seasonal and emergency liquidity for credit unions. The CLF
can finance loans using its assets, and it can also borrow from the Federal Financing
Bank. Provisions in the appropriations bill set a borrowing limit for the CLF each
fiscal year. Congress also determines the level of CLF operating expenses, which are
not funded through appropriations, but by earned income. For FY2007, Congress
approved a $1.5 billion limitation on direct loans from the CLF, and the President
requested the same amount for FY2008. The Consolidated Appropriations Act of

2008 provides a $1.5 billion limitation for FY2008.


Securities and Exchange Commission (SEC).145 The 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,
new issues of stocks and bonds, corporate mergers, and other securities market


144 This section was written by Pauline Smale, Economic Analyst, Government and Finance
Division.
145 This section was written by Mark Jickling, Specialist in Public Finance, Government and
Finance Division.

transactions. When the fees are collected, they go to a special offsetting account
available to appropriators, not to the Treasury’s general fund. The SEC is required
to adjust the fee rates periodically in order to make the amount collected
approximately equal to the agency’s budget.
For FY2008, the Administration requested $905.3 million, an increase of 1.4%
over FY2007. Of that amount, $875 million was to come from current-year
offsetting fee collections, and the remaining $30.3 million from prior-year
unobligated balances. In FY2007, the enacted budget authority was $892.6 million,
of which $25.0 million was prior-year unobligated balances. There was no direct
appropriation from the general fund.
The House Appropriations Committee recommended, and the House approved,
$908.4 million, $15.9 million (1.8%) above the FY2007 budget, and $3.1 million
(0.3%) above the Administration’s FY2008 request. Of that amount, $867.0 million
would have come from current-year fee collections and $41.4 from prior year
balances. The Senate Appropriations Committee approved $905.3 million, with an
identical $41.4 million to come from prior year fee collections. The Consolidated
Appropriations Act of 2008 provides $906.0 million, $0.7 million, or 0.08% above
the Administration’s original request. Of that amount, $63.3 million is to come from
prior year unobligated balances, and the remainder from current-year collections.
There will be no direct appropriation from the general fund.
Selective Service System (SSS).146 The SSS is an independent federal
agency operating with permanent authorization under the Military Selective Service
Act (50 U.S.C. App.§451 et seq.). 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.147 All males ages 18 through
25 and living in the United States are required to register with the SSS. The
induction of men into 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.
Since 1972, Congress has not renewed any President’s authority to begin
inducting (i.e., drafting) anyone into the armed services. Recent efforts to provide148
the President with induction authority have been rejected.
Funding of the Selective Service has remained relatively stable over the last
decade. For FY2008, the enacted amount, $22 million, is the same as the House
approved, the Senate reported, and the President requested. FY2008 funding is about
$3 million less than the FY2007 appropriation.


146 This section was written by David Burrelli, Specialist in National Defense, Foreign
Affairs, Defense, and Trade Division.
147 See [http://www.sss.gov/].
148 See H.R. 163, October 5, 2004, failed by Yeas and Nays: (2/3 required): 2 - 402 (Roll no.

494).



Small Business Administration (SBA).149 The SBA is an independent
federal agency created by the Small Business Act of 1953.150 Although the agency
administers a number of programs intended to assist small firms, arguably its three
most important functions are: (1) to guarantee — principally through the agency’s
Section 7(a) general business loan program — business loans made by banks and
other financial institutions; (2) to make long-term, low-interest disaster loans to small
businesses, nonprofits, and households that are victims of hurricanes, earthquakes,
other physical disasters, and acts of terrorism; and (3) to serve as an advocate for
small business within the federal government.
The Consolidated Appropriations Act provides a budget of $569 million for the
SBA in FY2008. The Senate Appropriations Committee had recommended $568
million in new budget authority compared to the House’s approval of $582 million
for FY2008.151 The Senate Committee recommended amount was $4 million below
the FY2007 enacted amount and $104 million more than the Administration
requested. The Senate Committee had recommended, and the House agreed, to
appropriate $2 million for business loan subsidies. The original House-passed bill
included $82 million for this purpose; the Administration requested no funds for
business loan subsidies.
The act includes $344 million for the salaries and expenses account. The Senate
Appropriations Committee had recommended $412 million for salaries and expenses,
compared to $347 million originally approved by the House, and $310 million
requested by the Administration.
The Senate Appropriations Committee recommended agreeing with the House-
passed bill and the Administration request that there be no new budget authority for
the disaster loan program in FY2008. In FY2007, the program received $113
million. According to the act, up to $156 million in unused budget authority that
carried over from previous years could be used to operate the program in FY2008.
Lending authority stays the same for all loan programs.
United States Postal Service (USPS).152 The U.S. Postal Service generates
nearly all of its funding — about $73 billion annually — by charging users of the
mail for the costs of the services it provides.153 However, Congress does provide an
annual appropriation to compensate USPS for revenue it forgoes in providing free


149 This section was written by Eric Weiss, Analyst in Economics, Government and Finance
Division.
150 P.L. 83-163, as amended. 62 Stat. 262.
151 The House later approved an additional $62 million for “small business development and
entrepreneurship initiatives.” The explanatory that accompanied P.L. 110-161 identified
these funds as congressionally directed spending items and earmarks.
152 This section was written by Kevin Kosar, Analyst in American National Government,
Government and Finance Division. Also see CRS Report RS21025, The Postal Revenue
Forgone Appropriation: Overview and Current Issues, by Kevin Kosar.
153 United States Postal Service Annual Report 2006 (Washington: USPS, 2006), p. 3.

mailing privileges to the blind154 and overseas voters.155 Appropriations for these
purposes were authorized by the Revenue Forgone Reform Act of 1993 (RFRA).156
This act also authorized Congress to reimburse USPS $29 million each year until
2035 for postal services provided at below-cost rates to not-for-profit organizations
in the early 1990s.157
In its FY2008 budget submission, USPS requested a $153.4 million
appropriation.158 Of this amount, $29 million would be for the annual reimbursement
under RFRA; $83.5 million would be for revenue forgone; and $40.9 million would
be for reconciliation adjustments for underestimated revenue forgone in FY2005 and
FY2006.
In its FY2008 budget, the Administration proposed a total appropriation of
$88.9 million,159 $20 million less than was enacted for FY2007. Of this, $64.5
million would have been for revenue forgone in FY2008, and $24.4 million would
have been for a reconciliation adjustment for underestimated revenue forgone in
FY2005. The Administration’s FY2008 budget not only recommended less revenue
forgone funding than USPS requested, but also would have eliminated the $29
million annual reimbursement authorized by RFRA.160 Additionally, the
Administration’s budget would not have permitted any of the $88.9 million
appropriation to be obligated until October 1, 2008, which is in FY2009. (Since
FY1994, Congress has made the RFRA reimbursement portion of the USPS
appropriation available for obligation in the upcoming fiscal year and delayed the
availability of the revenue forgone portion of the appropriation to the following fiscal
year.)
On June 11, 2007, the House Appropriations Committee considered a bill (H.R.

2829; H.Rept. 110-207) that recommended a USPS appropriation of $117.9 million.


154 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), at [http://www.usps.com/cpim/ftp/pubs/pub347.pdf].
155 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: Background and Issues, by
Kevin J. Coleman.
156 107 Stat. 1267, 39 U.S.C. §2401(c)-(d). See also CRS Report RS21025, The Postal
Revenue Forgone Appropriation: Overview and Current Issues, by Kevin R. Kosar.
157 See CRS Report RS21025, The Postal Revenue Forgone Appropriation: Overview and
Current Issues, by Kevin Kosar, pp. 3-4.
158 USPS, “Fiscal Year 2008 Appropriation Request,” December 6, 2006, at
[http://www.usps.com/financials/ _pdf/Appropriations-2008_Public.pdf].
159 Office of Management and Budget, President’s Budget FY2008 — Appendix
(Washington: GPO, 2007), p. 1116.
160 The Administration also proposed termination of the annual reimbursement in FY2005,
FY2006, and FY2007, but Congress chose to provide the funding, as it has each year since
FY1994.

Of this amount, $29 million would have been for the RFRA reimbursement and
$88.9 million would have been for revenue forgone. As in previous years, the
committee recommended making the RFRA reimbursement available for obligation
in the upcoming fiscal year (FY2008) and the revenue forgone payment available in
the following fiscal year (FY2009). Before approving the bill, however, the
committee approved an amendment offered by the chairman of the committee that
struck the $29 million RFRA reimbursement funds.
On June 21, the House Appropriations Committee approved a version of the bill
that did not include the $29 million RFRA reimbursement payment. In its report on
the bill, the committee did not state why it had not approved the $29 million RFRA
reimbursement payment. The committee did express its concerns over USPS’s
possible closure of postal facilities in the Bronx borough of New York City,
Pasadena, California, and elsewhere. The committee also expressed its concerns over
the quality of mail delivery service in Chicago, Illinois, and directed USPS to report
to Congress on USPS efforts to “take into consideration the views of local postal
management in the development of appropriate staffing levels to ensure that postal
customers receive the quality mail service that they expect and deserve.”
The Senate Appropriations Committee recommended a postal appropriation of
$117.9 million, $29 million more than the $88.9 million recommended by the
Administration and approved by the House. Of this amount, $29 million would have
been for the RFRA reimbursement and $88.9 million would have been for revenue
forgone. As in the past, the committee would have the RFRA reimbursement paid
to USPS in the upcoming fiscal year (FY2008) and the revenue forgone payment
would have become available to USPS in the following fiscal year (FY2009). The
Senate Committee report expressed concern regarding mail delivery delays in
Chicago and the consolidation of mail facilities.161 It directed USPS to not
implement consolidation decisions affecting facilities in Sioux City, Iowa, Aberdeen,
South Dakota, and Alexandria, Louisiana, until it “implements the recommendations
of the GAO162 and develops a mechanism to evaluate potential and actual impacts on
delivery.” The Committee also urged USPS to “take into consideration the views of
local postal management in the development of appropriate staffing levels to ensure
that postal customers receive the quality mail service that they expect and deserve.”
Finally, the Committee commended USPS on its issuance of a “Forever Stamp,” and
directed GAO to produce a study of USPS’s screening of mail addressed to federal
agencies for biological threats.
Ultimately, Congress included $29 million for the RFRA reimbursement,
appropriating a total of $117.9 million for USPS for FY2008 (P.L. 110-161, Title V).


161 U.S. Congress, Senate Committee on Appropriations, Financial Services and General
Government Appropriation Bill, 2008, 110th Cong., 1st sess., S.Rept. 110-129 (Washington:
GPO, 2007), pp. 106-108.
162 U.S. Government Accountability Office, U.S. Postal Service: Mail Processing
Realignment Efforts Underway Need Better Integration and Explanation, GAO-07-717
(Washington: GAO, 2007).

United States Tax Courts (USTC).163 A court of record under Article I of
the Constitution, the United States Tax Court is now an independent judicial body
in the legislative branch and 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.
The President requested $45.3 million for FY2008, about $2.3 million below the
USTC’s FY2007 appropriation. The House approved $45.1 million for the USTC
for FY2008, and the Senate Appropriations Committee recommended $45.3 million,
the same as the President’s request. The Consolidated Appropriations Act provides
$45.3 million for FY2008.
General Provisions Government-Wide164
The Financial Services and General Government appropriations language
includes general provisions which apply either government-wide or to specific
agencies or programs. There are also be general provisions at the end of an
individual title within the appropriations act which relate only to agencies and
accounts within that specific title. The Administration’s proposed language for
government-wide general provisions was included in the FY2008 Budget,
Appendix.165 Most of the provisions continue language that has appeared under the
General Provisions title for several years. For various reasons, Congress has
determined that reiterating the language is preferable to making the provisions
permanent. Presented below are some of the government-wide general provisions
that were included in P.L. 109-115, the Transportation, Treasury, Housing and Urban
Development, the Judiciary, the District of Columbia, and Independent Agencies
Appropriations Bill for FY2006,166 but that are not included in the FY2008 budget
proposal. (The section numbers refer to the provisions as they appeared in P.L. 109-
115. H.R. 5576, the FY2007 Transportation, Treasury, Housing and Urban
Development, the Judiciary, the District of Columbia, and Independent Agencies
Appropriations Bill, as passed by the House and reported in the Senate, was not
enacted.) Inclusion of the provisions in H.R. 2829, as passed by the House and
reported in the Senate, and in P.L. 110-161 is noted.167
!Section 809, which prohibits payment to political appointees who
are filling positions for which they have been nominated, but not


163 This section was written by Garrett Hatch, Analyst in American National Government,
Government and Finance Division.
164 This section was written by Barbara Schwemle, Analyst in American National
Government, Government and Finance Division.
165 FY2008 Budget, Appendix, pp. 9-12.
166 P.L. 109-115, November 30, 2005, 119 Stat. 2495-2507.
167 The general provisions included in P.L. 110-161 are listed in the Congressional Record,
daily edition, vol. 153, December 17, 2007, pp. H16064-H16065.

confirmed. Included as Section 709 of the bill as passed by the
House and reported in the Senate, and of P.L. 110-161.
!Section 819, which prohibits the obligation or expenditure of
appropriated funds for employee training that (1) does not meet
identified needs for knowledge, skills, and abilities bearing directly
upon the performance of official duties; (2) contains elements likely
to induce high levels of emotional response or psychological stress
in some participants; (3) does not require prior employee notification
of the content and methods to be used in the training and written end
of course evaluation; (4) contains any methods or content associated
with religious or quasi-religious belief systems or “new age” belief
systems; or (5) is offensive to, or designed to change, participants’
personal values or lifestyle outside the workplace. Included as
Section 718 of the bill as passed by the House and reported in the
Senate, and of P.L. 110-161.
!Section 820, which prohibits the use of appropriated funds to
implement or enforce employee non-disclosure agreements if they
do not contain whistleblower protection clauses. Included as Section

719 of the bill as passed by the House and reported in the Senate,


and of P.L. 110-161.
!Section 823, which requires that the Committees on Appropriations
approve the release of any “non-public” information, such as mailing
or telephone lists, to any person or any organization outside the
federal government. Included as Section 722 of the bill as passed by
the House and reported in the Senate, and of P.L. 110-161.
!Section 834, which states that Congress recognizes the United States
Anti-Doping Agency as the official anti-doping agency for Olympic,
Pan American, and Paralympic sports in the United States. Included
as Section 733 of the bill as passed by the House and reported in the
Senate, and of P.L. 110-161.
!Section 836, which prohibits the use of appropriated funds to
implement or enforce restrictions or limitations on the Coast Guard
Congressional Fellowship Program or to implement OPM’s
proposed regulations limiting the detail of executive branch
employees to the legislative branch. Included as Section 735 of the
bill as passed by the House and reported in the Senate, and of P.L.

110-161.


!Section 837, which would have required agencies to report to
Congress on the amount of the acquisitions made from entities that
manufacture the articles, materials, or supplies outside the United
States. This provision is not included in the bill as passed by the
House or reported in the Senate, or as enacted in P.L. 110-161.



!Section 839, which requires appropriate executive department and
agency heads either to transfer funds to, or reimburse, the Federal
Aviation Administration to ensure the uninterrupted, continuous
operation of the Midway Atoll airfield. This provision is not
included in the bill as passed by the House, but is included as
Section 737 of the bill as reported in the Senate, and is included as
Section 738 of P.L. 110-161.
!Section 840, which would have provided certain requirements for
conducting a public-private competition for the performance of an
activity that is not inherently governmental for executive agencies
with less than 100 full-time employees. This provision is not
included in the bill as passed by the House or reported in the Senate,
or as enacted in P.L. 110-161.
!Section 842, which prohibits the use of funds to convert an activity
or function of an executive agency to contractor performance if more
than 10 federal employees perform the activity, unless the analysis
reveals that savings would exceed 10 percent of the most efficient
organization’s personnel-related costs for performance of the activity
or function by federal employees, or $10 million, whichever is
lesser. Included as Section 738 of the bill as passed by the House
and Section 739 of the bill as reported in the Senate, and as enacted
in P.L. 110-161.
!Section 845, which precludes contravention of the Privacy Act.
Included as Section 741 of the bill as passed by the House and
Section 742 of the bill as reported in the Senate, and as enacted in
P.L. 110-161. The law also includes a provision on reviews by
agency Inspectors General of privacy and data protection policies
and procedures.
The FY2008 budget proposed a new Section 834 to provide a 3.0% pay (annual
and locality pay combined) adjustment for federal civilian employees. Section 739
of H.R. 2829 as passed by the House, and Section 740 of the bill as reported in the
Senate, and as enacted in P.L. 110-161, provides a 3.5% pay adjustment for federal
civilian employees, including employees in the Department of Homeland Security
and employees in the Department of Defense (DOD) who are represented by a labor
organization. DOD employees who are eligible to be represented by a labor
organization, but are not so represented, will receive the pay adjustment unless pay
for their positions is adjusted under 5 U.S.C. §9902.168 Since the inception of locality
pay in 1994, pay areas with the largest pay gaps receive the largest locality pay
increases. Applying that principle, and under Executive Order 13454 issued by


168 The Statement of Administration Policy on H.R. 2829 issued by OMB on June 27, 2007,
expressed strong opposition to the 3.5% pay adjustment, stating that it “would cost agencies
over $600 million in FY2008 and would not target any specific recruitment or retention
challenges.” The statement also urged that the provision related to a pay adjustment for DHS
and DOD employees be deleted, saying that it “backs away from the concept of pay-for-
performance and is ambiguous as to how the increase would be applied.” (p. 4.)

President Bush on January 4, 2008, federal white-collar employees received net
(annual and locality) pay adjustments of 4.49% in the Washington, DC pay area and

2.99% in the “Rest of the United States” pay area in January 2008.169


A new provision, included as Section 743 of the bill as passed by the House, and
as Section 744 of P.L. 110-161 (but not included in the bill as reported in the Senate),
requires the Office of Management and Budget to submit a report on budget
information relating to activities to restore the health of the Great Lakes ecosystem.
Another new provision, included as Section 746 of the bill as reported in the Senate,
and as enacted in P.L. 110-161 (but not included in the bill as passed by the House),
requires the home pages of departments and agencies to provide a direct link to their
respective Inspectors General (IG), and requires the IG websites to post any public
report or audit and to include a direct link through which employees can
anonymously report waste, fraud, and abuse. P.L. 110-161 also includes a new
provision at Section 747 that provides that none of the funds available under the act
or any other act can be used to conduct a public-private competition or a direct
conversion under OMB Circular A-76, or any successor directive, related to the
Human Resources Lines of Business (LOB) initiative until a reporting requirement
is met. Funds cannot be used until 60 days after the Director of OMB submits a
report to the Senate and House Committees on Appropriations on the use of
public-private competitions and direct conversions as part of the Human Resources
LOB. The law describes the information to be included in the report and requires
that a copy of the report be submitted to GAO.
Section 901 of the House-passed bill also would have prohibited the use of
funds to implement Executive Order 13422 related to the authority of the President
over executive agency rulemaking.170 During markup of the bill by the Senate
Appropriations Committee, an amendment, offered by Senator Richard Durbin and
agreed to by voice vote, struck this provision from the Senate version of the bill. The
provisions is not included in P.L. 110-161.
Competitive Sourcing171
Although the Bush Administration coined the term “competitive sourcing” in
2001, public-private competition began in 1966, with the publication of Office of
Management and Budget (OMB) Circular A-76. Circular A-76 provides policy and
guidance for conducting competitions involving government employees and
contractors. For many years, OMB continued to be the exclusive source of guidance
on public-private competitions. The late 1990s witnessed a notable change, with the


169 U.S. President (Bush), “Adjustments of Certain Rates of Pay,” Executive Order 13454,
Federal Register, vol. 73, January 8, 2008, pp. 1480-1492.
170 See Congressional Record, daily edition, vol. 153, June 27, 2007, pp. H7322-H7323. For
an analysis of the Executive Order, see CRS Report RL33862, Changes to the OMB
Regulatory Review Process by Executive Order 13422, by Curtis W. Copeland.
171 This section was written by L. Elaine Halchin, Analyst in American National
Government, Government and Finance Division.

advent of competitive sourcing legislation, and, in particular, the passage of bills
containing competitive sourcing provisions.172
Section 739(a) of the Consolidated Appropriations Act, 2008, (P.L. 110-161)
prohibits the use of funds for converting an agency activity involving 11 or more
federal employees to contractor performance unless certain conditions are met.
Public-private competitions that meet this size criterion will have to include a
staffing plan known as a most efficient organization (MEO); show that the cost of
contractor performance would result in a savings of at least $10 million or 10% of
the MEO’s personnel costs, whichever amount is lesser; and not provide a contractor
with an advantage by permitting the company to provide health and retirement
benefits to the employees performing the government activity that are less than what
federal employees receive.173 The first two conditions appear designed to address
two distinctions between standard competitions and streamlined competitions. Under
Circular A-76, agencies are required to develop an MEO and apply the conversion
differential (that is, $10 million or 10% of the MEO’s personnel costs) for standard
competitions. (An agency is required to use a standard competition when a public-
private competition involves more than 65 full-time equivalents (FTEs).174) In
streamlined competitions, an agency may develop an MEO but is not required to do
so, and the conversion differential is not calculated.175 (An agency may use a
streamlined or a standard competition when a public-private competition involves 65
or fewer FTEs.) The third condition may be seen as an effort to ensure that a
contractor does not gain a cost advantage in competitions by paying less for benefits
than the government does, thus lowering the cost of his or her proposal.
Alternatively, others may see this condition as a restriction on the ability of a
contractor to prepare a competitive proposal. Certain organizations and procurement
activities, such as the Department of Defense and depot maintenance contracts, are
exempt from Section 739(a).
Although Circular A-76 does not appear to prohibit conducting a public-private
competition for work that is being performed by a contractor, some of the language
in the circular seems to emphasize holding competitions for work being performed
by federal employees. For example, the circular’s policy statement says, in part:
“The longstanding policy of the federal government has been to rely on the private
sector for needed commercial services.... Identify all activities performed by
government personnel as either commercial or inherently governmental.... Perform
inherently governmental activities with government personnel.... Use a streamlined
or standard competition to determine if government personnel should perform a


172 See CRS Report RL32833, Competitive Sourcing Statutes and Statutory Provisions, by
L. Elaine Halchin.
173 A most efficient organization is the staffing plan of the agency tender, which is the
government’s response to a solicitation.
174 A full-time equivalent (FTE) is “[t]he staffing of Federal civilian employee positions,
expressed in terms of annual productive work hours (1,776 [hours]) rather than annual
available hours that includes non-productive hours (2,080 hours).” (U.S. Office of
Management and Budget, Circular No. A-76 (Revised), May 29, 2003, p. D-5.)
175 Ibid., pp. B-4 and C-2.

commercial activity.”176 Section 739(b) notes that the circular does not prevent
holding competitions for working being performed by contractors, and it also requires
that Circular A-76 include procedures and policies for these types of competitions.
Section 739(c) allows a protest to be filed for any competition (that is,
streamlined as well as standard) conducted under Circular A-76, and for any decision
made without benefit of an A-76 competition to convert an agency function from
employee performance to contractor performance. This section also permits an
individual selected by a majority of the affected employees to represent the
employees in a protest involving an A-76 competition or a decision to outsource
work without a competition. The ATO retains the authority to file a protest on behalf
of the employees. Section 739(c) permits the ATO or the individual selected by the
employees to represent them to intervene in a civil action brought before the U.S.
Court of Federal Claims or a U.S. district court by an interested party from the
private sector. Additionally, this section permits protests and civil actions that
challenge the selection of a provider (that is, government employees or a contractor)
at the conclusion of a competition.
Currently, an ATO is not required to file a protest: he or she “shall file a protest
in connection with ... [a] public-private competition unless the [agency tender]
official determines that there is no reasonable basis for the protest.”177 Some have
been concerned that agency employees’ interests may not be adequately represented
since an ATO determines unilaterally whether there is a basis for a protest. Hence,
supporters of this view might argue that another individual, such as a union
representative, would be a better choice for representing the affected employees. In
response, the private sector might argue that allowing the ATO to file a protest is
sufficient protection for agency employees. Additionally, contractors might note that
their employees cannot band together and select someone to represent them in a
protest.
The final substantive provision in this section prohibits the use of funds made
available by this act for certain purposes. That is, none of the funds appropriated by
this act can be used by OMB for directing or requiring an agency to take any action
related to a public-private competition, or a direct conversion of a government
activity from one sector to another. Similarly, none of the funds can be used by
another agency to take an action that was directed or required by OMB. This section
applies to FY2008 and succeeding fiscal years.
Cuba Sanctions178
Since the early 1960s, U.S. policy toward Communist Cuba has consisted
largely of efforts to isolate the island nation through comprehensive economic


176 Ibid., p. 1.
177 31 U.S.C. §3351(2); Sec. 326(b)(1) of P.L. 108-375.
178 This section was written by Mark Sullivan, Specialist in Latin American Affairs, Foreign
Affairs, Defense, and Trade Division. For additional information, see CRS Reportth
RL33819, Cuba, Issues for the 110 Congress, by Mark P. Sullivan.

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). Restrictions on travel have been a key
and often contentious component of U.S. efforts to isolate the Cuban government.
The regulations do not ban travel itself, but place restrictions on any financial
transactions related to travel to Cuba. Pursuant to the CACR, certain categories of
travelers may travel to Cuba under a general license, which means that there is no
need to obtain special permission from OFAC. In addition, a variety of travelers may
be eligible to apply for specific licenses, which are reviewed and granted by OFAC
on a case by case basis. This includes travelers engaging in family visits;
educational, religious or humanitarian activities; or activities related to the marketing,
sale, delivery or servicing of authorized exports to Cuba.
Some U.S. commercial agricultural exports to Cuba have been allowed since
2001 under the terms of the Trade Sanctions Reform and Export Enhancement Act
of 2000 or TSRA, but with numerous restrictions and licensing requirements.
Exporters are denied access to U.S. private commercial financing or credit, and all
transactions must be conducted in cash in advance or with financing from third
countries. U.S. exports to Cuba since 2001 have been valued at over $1.9 billion, the
overwhelming majority in agricultural products. U.S. exports to Cuba rose from
$146 million in 2002 to a high of $404 million in 2004, and then declined to $369
million in 2005 and $340 million in 2006. In the first 11 months of 2007, U.S.
exports amounted to $377 million, the majority in agricultural products.179
In February 2005, the Administration tightened sanctions against Cuba by
further restricting how U.S. agricultural exporters may be paid for their sales. 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 differs from the practice of being paid before the actual
delivery of the goods, a practice that had been utilized by most 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 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. OFAC Director
Robert Werner maintained that the clarification “conforms to the common
understanding of the term in international trade.”180
Since 2000, either one or both houses have approved provisions in the annual
Treasury Department appropriations bill that would ease U.S. economic sanctions on
Cuba (especially on travel and on U.S. agricultural exports) but none of these
provisions have ever been enacted. The Administration regularly threatened to veto
legislation if it included provision weakening sanctions on Cuba.
In 2007, both the House-passed and Senate Appropriations Committee-reported
versions of the FY2008 Financial Services and General Government appropriations


179 World Trade Atlas. Department of Commerce Statistics.
180 U.S. Department of the Treasury, Testimony of Robert Werner, Director, OFAC, before
the House Committee on Agriculture, March 16, 2005.

bill, H.R. 2829, contained a provision that would have prevented Treasury
Department funds from being used to implement the February 2005 regulation that
requires the payment of cash in advance prior to the shipment of U.S. agricultural
goods to Cuba. The House adopted the provision, contained in Section 903 of the
bill, during June 28, 2007 floor consideration when it approved H.Amdt. 467 (Moran,
Kansas) by voice vote. In the Senate version, the provision was included in Section
619 of the bill. The Senate version also contained a provision, in Section 620, that
would have authorized travel to Cuba under a general license for the marketing and
sale of agricultural and medical goods. The Administration’s statement of policy on
the bill maintained that the President would veto the measure if it contained a
provision weakening current restrictions against Cuba.181
Ultimately, Congress dropped these provisions easing Cuba sanctions in the
Consolidated Appropriations Act for FY2008 (P.L. 110-161).


181 Executive Office of the President, Office of Management and Budget, “Statement of
Administration Policy, H.R. 2829 — Financial Series and General Government
Appropriations Act, 2008,” p. 1.