The House on Wednesday passed its seventh fiscal 2015 appropriations measure, backing a Financial Services spending bill that would make steep cuts in funding for the Internal Revenue Service.
The $20.2 billion measure (HR 5016) was passed 228-195 in a largely party line vote. It marks the first time since 2007 the House has moved the bill as stand-alone legislation. The White House has threatened to veto the measure due in part to the IRS cuts, other reductions in financial regulatory oversight and policy riders aimed at the District of Columbia.
The IRS would receive $9.8 billion under the measure, a 13 percent cut to current spending levels. Lawmakers adopted amendments that would cut the tax collector’s enforcement budget by nearly 25 percent on voice votes, delivering a slap to an embattled agency that has weathered a series of budget cuts in recent years.
Democrats accused Republicans of tunnel vision when it comes to the IRS, a focus of GOP attacks since revelations surfaced in May 2013 of alleged political targeting at the agency. The bill includes several policy riders aimed at scaling back the reach of the agency. Democrats also opposed the $1.4 billion budget included for the Securities and Exchange Commission. While the spending marks a $50 million increase over fiscal 2014 enacted levels, the increase is narrowly targeted at technology improvements.A Democratic bid to increase the agency’s funding to $1.7 billion, the amount requested by the White House, fell short.
The bill also includes a handful of policy riders directed at the SEC and its implementation of Dodd-Frank overhaul (PL 111-203), including provisions loosening derivatives rules and imposing new reporting requirements.
A separate Democratic amendment that would have blocked a change in how the Consumer Financial Protection Bureau is funded was also rejected. The bill would place the watchdog agency under the annual appropriations process; currently it receives funding transfers from the Federal Reserve.
In a win for marijuana advocates, lawmakers rebuffed, 186-236, a Republican attempt to prohibit funds from being used by the Treasury Department to implement guidance to banks that would allow them to engage in transactions with marijuana-related business.
Supporters of the amendment argued that because the use or sale of marijuana is still illegal under federal law, providing guidance on engaging with businesses that profit from an illegal drug would be contradictory. But Democrats maintained that states where marijuana is legal require important banking decisions and having cash-only businesses can pose a public safety threat.
The House also adopted, 231-192, an amendment that would bar funds from being used to prohibit or penalize a financial institution from providing services to a marijuana-related business that engages in activities permissible under state or local laws.
IRS The biggest punching bag, though, was the IRS. The underlying bill would have given the agency just under $11 billion, already a 3 percent cut from current levels and the lowest IRS budget in more than five years. Then lawmakers approved a series of GOP amendments leading to a $1.15 billion cut to IRS enforcement spending, bringing the enforcement budget down to $3.8 billion.
"This will prevent the IRS from going after tax cheats," said Jose E. Serrano, D-N.Y., the top Democrat on the House Appropriations Financial Services Subcommittee.
The Treasury Department estimates that each dollar spent on enforcement yields about six dollars in revenue collection.
Spending levels are expected to rise when the bill goes to conference with Senate appropriators. The Senate Appropriations Financial Services Committee approved a bill allocating $11.5 billion for the IRS, 2 percent above current levels.
D.C. Provisions The annual spending bill includes appropriations for the District of Columbia, which sparked a flurry of partisan policy riders. Democrats have repeatedly accused Republicans of trying to dictate local policies through the spending process.
Lawmakers adopted, 241-181, an amendment offered by Republican Thomas Massie of Kentucky that would block funds from being used by the District of Columbia to enforce various provisions of DC law related to its handgun ban.
“It’s difficult for D.C. residents to exercise their God-given right to bear arms,” Massie said, adding that “Congress has the right to legislate in this area.”
But Democrat Eleanor Holmes Norton — the sole representative of D.C. — said Massie is “not accountable to the residents of the District of Columbia.” She called the amendment “entirely inappropriate” and pointed to a slew of dangerous scenarios if D.C. citizens were allowed to carry handguns, including bringing firearms into federal buildings.
Also tucked into the underlying measure is a provision that would prohibit federal or local District of Columbia funds from going toward the legalization or decriminalization of marijuana. The D.C. city council voted in March to remove criminal penalties for the possession of small amounts of marijuana, while D.C. residents will vote on legalizing marijuana on the November ballot.