FY16 FSGG Subcommittee Markup Bill Summary

Subcommittee Mark:  July 22, 2015
Washington, D.C.–The fiscal year 2016 Financial Services and General Government Appropriations bill provides a total of $20.7 billion, including $159 million in disaster emergency funds.  This bill’s discretionary funding level is $1.1 billion below the fiscal year 2015 enacted level and nearly $4 billion below the President’s requested level. 
The bill includes unacceptable funding cuts, significant policy riders, and a controversial 236 page banking reform authorization bill that would hamper the ability of bank regulators to protect market users and investors against unscrupulous practices, undermine the independence of the Consumer Financial Protection Bureau (CFPB), and otherwise roll back Wall Street reform efforts.
The appropriations bill includes numerous objectionable legislative riders related to campaign finance law, net neutrality and coal power generation that have no business on an appropriations bill.
The Subcommittee’s allocation conforms to the post-sequester caps under the Budget Control Act.  Not one Senate Democrat voted for these austere spending levels because they do not provide adequate resources to protect America, build infrastructure, create opportunity, and spur economic growth.  We need a new budget deal, in the spirit of Murray-Ryan, that stops hollowing out investments in America’s future.
The funding levels recommended for the Internal Revenue Service (IRS) are woefully inadequate, will proliferate the ongoing erosion of timely and responsive services for taxpayers, and continue to cripple tax law enforcement.  The funding shortfalls will poise the IRS – the accounts receivable department of our government – for significant setbacks.   
U.S. Senator Chris Coons (D-Del.), Ranking Member of the Financial Services and General Government Subcommittee, said:
“We should work together to strengthen the financial rules of the road that support our economy and protect American families. Instead, through harmful funding cuts and policy riders, this bill does just the opposite.
“I’m particularly disappointed that this bill tries to dismantle Wall Street reforms that have helped protect consumers and stop reckless risk-taking. By underfunding regulators and undermining the Consumer Financial Protection Bureau’s independence, this bill would take a dangerous step backward for the safety and soundness of our markets and our economy’s security. This bill also includes policy riders that would do everything from hurting our efforts to combat climate change to continuing to open the floodgates of money in our politics.
“Though there are certain elements of this bill that are positive, I cannot support it without significant changes. There is no reason we can't work together to find a way forward, and I plan to work with my colleagues to do just that.”
Key Points & Highlights 
The bill provides funding for the Department of Treasury, the Executive Office of the President, the Judiciary, the District of Columbia and more than two dozen independent federal agencies. 
Internal Revenue Service (IRS).  The bill recommends $10.475 billion for the IRS.  This is a $470 million (four percent) cut from the fiscal year 2015 level, $1.79 billion (15 percent) less than the base request, and  $2.46 billion (19 percent) less than the enhanced request, which includes a program integrity budget cap adjustment. 
During the most recent filing season, the IRS answered only 37 percent of taxpayer calls routed to customer service representatives, and the hold time for taxpayers who got through averaged 23 minutes.  This is a sharp drop-off in service from the 2014 filing season when the IRS answered 71 percent of its calls and hold times averaged about 14 minutes.  The number of disconnected calls skyrocketed to about 8.8 million, up from about 544,000 in 2014, this is an increase of more than 1,500 percent.  Because a majority of Americans expect a well-functioning accounts receivable department, and support extra funding to help honest taxpayers comply with a complex tax, continuing to shortchange the IRS is intolerable and irresponsible.
  • For Taxpayer Services, the Senate level of $2.246 billion is $90 million more than fiscal year 2015, but $162 million less than the base request. 
  • For Enforcement, the Senate level of $4.5 billion is $360 million less than fiscal year 2015 and $548 million less than the base request.
  • For Operations Support, the Senate level is $170 million less than fiscal year 2015 and $960 million less than the base request.
  • For Business Systems Modernization, the Senate level is $30 million a cut from the fiscal year 2015 level and $119 million less than the base request.
Community Development Financial Institutions (CDFI) Fund.  The bill provides only $221 million for CDFI investments to promote economic and community development, a $9.5 million, or four percent, cut from the fiscal year 2015 enacted level.  This would reduce the CDFI Fund’s ability to expand the availability of financial services and affordable credit for underserved populations, including distressed urban, rural, Native American, Native Hawaiian and Alaska Native communities.
Information Technology Oversight and Reform (ITOR).  The bill provides $25 million for ITOR, a $5 million boost to the fiscal year 2015 enacted funding, but $10.2 million less than the President’s request.  These funds are needed to enhance integrated, efficient, secure and effective uses of information technology (IT) by the federal government.  Through ITOR, the Administration established a new OMB team – the E-Gov Cyber and National Security Unit – dedicated to improving and strengthening federal cybersecurity performance.  This effort is aimed at protecting IT assets and information by improving oversight of federal cybersecurity practices to advance the cybersecurity defenses of government systems.  President Obama has identified the cybersecurity threat as one of the most serious national security, public safety and economic challenges we face as a nation.   Recent events underscore the need to accelerate the Administration’s cyber strategy and confront the aggressive, persistent and malicious actors that continue to target our nation’s cyber infrastructure.
Office of Management and Budget (OMB).  The bill freezes OMB funding at the fiscal year 2015 level of $91.75 million, which is $5.7 million, or six percent, less than the President’s request.
Office of National Drug Control Policy (ONDCP).   The bill includes a total of $372.9 million for anti-drug programs, which restores the Administration’s requested cut of $64 million to anti-drug programs (20.7 percent increase).  The High Intensity Drug Trafficking Areas (HIDTA) Program is funded at last year’s level of $245 million and the Drug-Free Communities program is funded at the fiscal year 2015 level of $93.5 million.
The bill includes $6.86 billion in discretionary funding for the U.S. Courts, $162.9 million, or two percent, more than fiscal year 2015.  This represents a $101.6 million cut to the President’s request, but is in line with the Judiciary’s latest estimates of its budgetary needs.  This level of funding will help the Courts recover from sequestration and will permit investments in new or upgraded program initiatives that are needed to support judicial operations. 
The bill recommends $689 million in federal payments for over a dozen distinct purposes relating to the District of Columbia.  This is $9 million, or one percent, more than fiscal year 2015 and $71 million, or nine percent, less than the President’s request. 
  • Of the total, $246 million is for the salaries and expenses of the local courts; $91 million is for defender services; and $242 million is for pre-trial and post-conviction offender supervision.  All of these accounts are fully dependent on federal funds for their operations and are independent of the local government.  The Senate level for the Courts is slightly above a freeze and $28 million below the President’s request.
  • The remaining $110 million is designated for the District government.  Of this $110 million, $75 million is for education-related functions, including $42 million for elementary and secondary school improvement and $30 million for the D.C. Tuition Assistance Grants (TAG) for post-secondary education.  The TAG level is a freeze and $10 million (25 percent) below the $40 million requested level.  The bill provides $14 million for the Clean Rivers Project, the same as fiscal year 2015 and $10.3 million less than the request, to remediate combined sewer overflow into waterways of the nation’s capital, and $5 million for prevention and treatment to address the HIV/AIDS epidemic. 
  • In addition to the federal payments, the bill approves the District’s annual $12 billion local operating budget.   
  • Title VIII of the bill includes nearly 20 general provisions applicable only to the District. 
Commodity Futures Trading Commission (CFTC).  The bill freezes CFTC funding at the fiscal year 2015 level of $250 million, which is $72 million, or 22 percent, less than the President’s request.  This will impact the CFTC’s ability to fully oversee the futures, options and swaps markets.  CFTC oversight helps to encourage competitiveness and efficiency, ensure market integrity and protect market participants against manipulation, abusive trading practices, fraud and other unscrupulous activities. 
Consumer Product Safety Commission (CPSC).  The bill freezes CPSC funding at the fiscal year 2015 level of $123 million, which is $6 million below the President’s request level.  CPSC is the independent regulatory agency responsible for protecting the public against unreasonable risks of injury from consumer products.  Requested funding is not included for a proposed nanotechnology research center or for immediate security needs.   The bill also does not include the requested authorization for proposed consumer product import fees to be paid by importers to support the expansion of CPSC’s import surveillance activities.
Federal Communications Commission (FCC).  The bill funds the FCC at $364 million.  This is an increase of $24 million, or seven percent, from the fiscal year 2015 level and $49 million, or twelve percent, less than the President’s request.  The FCC requires additional funding in fiscal year 2016 for a headquarters transition necessitated by the expiring lease; for essential IT upgrades; and to support the Public Safety Answering Point Do-Not-Call Registry that ensures our nation’s first responders do not receive unsolicited telemarking calls that tie up essential phone lines.  FCC’s budget is fully offset by fees and has no impact on the federal deficit.
General Services Administration (GSA).  The bill slashes funding for the GSA’s Federal Buildings Fund, including critical construction and repair projects.  The bill includes $181.5 million for only one construction project, 86 percent less than the President’s request of $1.2 billion for ten requested construction projects.  The bill includes $357 million for two repair projects, a decrease of 71 percent from the budget request of $1.2 billion for repairing federal buildings.  The lack of funding means that the space needs of tenant agencies will not be met and agencies will pay rent for unaddressed improvements or for inadequate space.  GSA will be unable to capitalize on opportunities to make smart investments that result in greater efficiencies and lower operating costs, and the backlog of projects will continue to escalate.
Office of Personnel Management (OPM).  The bill provides $264.5 million for OPM (discretionary funding), $7.5 million less than the budget request and $24.3 million above the fiscal year 2015 enacted level.
Securities and Exchange Commission (SEC).  The bill freezes SEC funding at the fiscal year 2015 level of $1.5 billion, which is $222 million (13 percent) below the $1.722 billion request level.  Funds appropriated for the SEC are fully offset with transaction fee receipts.  Fewer resources impacts the ability of the SEC to administer and enforce federal securities laws that protect investors; maintain fair, honest and efficient markets; and promote capital formation. 
Small Business Administration (SBA).  The bill provides $849 million for SBA, $39 million or four percent, below the fiscal year 2015 enacted level and $11 million, or one percent, less than the President’s request.  Cuts to the SBA Salaries and Expenses account would create severe setbacks to the agency’s efforts to modernize and enhance their customer service by providing smart, bold and accessible services to entrepreneurs.
Objectionable Policy Riders
  • Financial Regulatory Authorizing Bill.  The bill includes the entire text of S.1484 reported to the Senate on June 2, 2015 by the Senate Committee on Banking, Housing, and Urban Affairs.  This would roll-back some of the most fundamental protections implemented after the 2008 financial crisis.  It would grant exemptions from key systemic risk protections that directly respond to the very problems that spawned the financial meltdown, such as abusive mortgage lending, poor risk management at large multi-hundred billion dollar banks and lack of regulatory oversight for large non-bank financial institutions.
  • CFPB Appropriations.  The bill includes new language changing the source of Consumer Financial Protection Bureau (CFPB) funding from Federal Reserve System transfers to annual appropriations beginning in fiscal year 2017.  CFPB is purposefully funded outside of the discretionary appropriations process so it can stay insulated from political pressures while focusing on its mission to protect consumers and supervise previously unregulated companies.
  • CFPB Leadership Structure.  The bill includes new legislative language altering the CFPB leadership structure from a single director to a five-member commission. Altering the leadership structure of the CFPB would fundamentally contravene the original intent of Congress in establishing the agency.
  • CFPB Funding Review.  The bill includes new language that repeals the prohibition on Congress reviewing transfers from the Federal Reserve System to the CFPB.
  • CFPB Transfer Requests. The bill continues a provision that requires CFPB to notify Congress of requests for transfers of funds, and adds a new requirement that funding justification information must be included in the request and that the notification be posted to the CFPB website.
  • CFPB Reporting.  The bill includes new language requiring CFPB to submit quarterly reports on its activities and testify on its activities when requested.
  • Campaign Finance.  The bill includes new legislative language relaxing campaign finance coordination rules between candidates and political parties. This would create a loophole that effectively overrides existing spending limits for coordinated spending between political parties and candidates.
  • Net Neutrality.  The bill includes new language that bans the FCC from using funds to regulate prices or related terms to implement the Open Internet rules.  It is written so broadly it could potentially undermine central net neutrality protections and tie the FCC’s hands on a slew of other consumer abuses.  It could, for example, inhibit the FCC’s ability to enforce transparency rules or ensure that broadband providers do not prioritize content and services of their affiliates.
  • Universal Service for Mobile Broadband.  The bill includes new language that undercuts FCC efforts to expand the mobile broadband network.  If enacted, this provision would freeze broadband support to existing recipients and their current geographic locations.  This would prevent the FCC from using these limited funds to support new broadband rollouts where service is needed the most – unserved and underserved areas.
  • Coal Power Generation.  The bill includes new language that prohibits the Department of the Treasury from using funds to implement guidance for U.S. positions on multilateral development banks that engage with developing countries on coal-fired power generation.
  • Vehicle Safety Standards.  The bill includes new language preventing the Consumer Product Safety Commission (CPSC) from setting minimum mandatory safety standards for recreational off-highway vehicles (ROV) for up to two years.  A proposed rulemaking has been in process for the past six years.  ROV use has resulted in at least 69 deaths since January 2014.

Press Contact

Mara Stark-Alcalá w/Appropriations: (202) 224-2667

Sean Coit w/Coons: (202) 224-5042