Budget Cuts for Consumer Bureau, IRS Proposed by Republicans
Posted By Admin on June 26, 2011
US House Republicans proposed
limiting the funding for the new Consumer Financial Protection
Bureau and placing the agency under the congressional
appropriations process by 2013.
The House Appropriations Subcommittee on Financial Services
released the measure today, which would limit to $200 million
the amount the Federal Reserve can transfer to the new agency in
fiscal 2012.
The Dodd-Frank Act, enacted in July, created the consumer
bureau and called for it to be funded by a percentage of the
Fed’s budget, as much as $500 million per year, with the
bureau’s director deciding how much is needed. The Republican
bill includes the requirement that, effective Oct. 1, 2012,
appropriations would be made by Congress.
“This bill exemplifies the commitment of the Republican
majority to reduce spending, dig our nation out of record
deficits and rein in unnecessary agency regulation and
interference that obstructs economic growth,” Representative
Hal Rogers of Kentucky, the chairman of the Appropriations
panel, said today in a statement.
Republicans, who almost unanimously opposed the Dodd-Frank
Act, have sparred with Democrats over the new agency’s funding
and mission. The party took power in the House in January and
has pledged budget cuts for federal agencies.
$19.9 Billion
The appropriations measure includes $19.9 billion in
funding for agencies under the panel’s jurisdiction, including
the Treasury Department, the Securities and Exchange Commission
and General Services Administration. That is 9 percent less than
last year and almost $6 billion less than the request of
President Barack Obama.
The Republican-led House Financial Services Committee has
approved a package of bills to change the structure of the
agency, which the lawmakers said will wield too much power in
the financial markets. Senate Republicans have pledged to block
any nominees to run the bureau unless structural changes are
made. Congressional Democrats and the White House have defended
the agency, which is being set up by Elizabeth Warren, the
Harvard University professor appointed as an adviser to the
White House and Treasury Department.
Warren has said in congressional testimony that Congress
followed “more than a century of precedent” in keeping
independent bank supervisors outside the appropriations process.
Obama has not nominated anyone to be the director of the
consumer bureau, which is scheduled to officially begin its work
July 21.
IRS Cuts
The subcommittee also proposed that the Internal Revenue
Service receive $11.5 billion for next year’s budget, or 5
percent below this year’s funding level. The agency would
receive 13.3 percent less than requested for the year.
IRS Commissioner Douglas Shulman has warned that budget
cuts would harm his agency’s ability to go after tax cheats.
The bill would prohibit the IRS from spending any money to
enforce the individual mandate to purchase health insurance that
was included in the health care law in 2010.
Republicans included similar language in their 2011
spending bill. Democrats objected and the language was removed
before the measure became law.
Representative Jo Ann Emerson of Missouri, the chairwoman
of the subcommittee, said the panel will consider the
legislation tomorrow. Republican House leaders have scheduled
the measure for consideration by the full House in mid-July.
The Democrat-controlled Senate and White House would have
to approve the measure for it to become law, which is unlikely.
Overseas Deposits
The bill also includes a requirement that the Treasury
Department report every 30 days on the status of regulations
proposed in January that would require US banks to identify
overseas depositors to the IRS.
Lawmakers and banks such as BAC Florida Bank have objected
to the regulation, because they think the rule would cause them
to lose deposits.
The bill would provide $1.2 billion for the Securities and
Exchange Commission, which would be equal to the fiscal 2011
level and $222 million below the request made by the White
House.
SEC Chairman Mary Schapiro has pushed lawmakers for an
increase in the agency’s budget to help with dozens of
rulemakings and studies required by last year’s financial
regulation overhaul.
“After our financial system came dangerously close to
collapse, Republicans stood with banks and fought tooth-and-nail
to prevent any reform of Wall Street,” Representative Norm Dicks of Washington, the senior Democrat on the Appropriations
Committee, said in a statement. “This bill is a continuation of
the Majority’s effort to obstruct the reform that was enacted
last year.”
To contact the reporter on this story:
Phil Mattingly in Washington at
pmattingly@bloomberg.net;
Richard Rubin in Washington at
rrubin12@bloomberg.net.
To contact the editor responsible for this story:
Lawrence Roberts at
lroberts13@bloomberg.net
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