SUMMARY: The House Appropriations Subcommittee on Financial Services and General Government passed its FY 2024 spending bill which includes significant funding cuts for several NTEU agencies and follows the President’s proposal for an average 5.2 percent pay increase for federal employees in 2024.

Today, Republicans on the House Appropriations Subcommittee on Financial Services and General Government (FSGG), which determines funding for the Treasury Department, including the IRS, SEC, and other NTEU-represented agencies and has jurisdiction over government-wide employee issues, approved their FY 2024 FSGG appropriations bill.  Democrats on the subcommittee all opposed the bill due to, among other things, the significant funding cuts included in the bill that go beyond the cuts agreed to in the debt limit deal earlier this month.  The bill now moves to the full Appropriations Committee for further consideration.

As you know, the President has proposed a 5.2 percent pay increase for federal employees for 2024, but his budget request was silent as to whether any amount is allocated for locality pay.  According to the Federal Employee Pay Comparability Act of 1990, federal employees should receive a 4.7 percent pay increase in 2024 before locality pay is added.  The Subcommittee bill is silent on the amount of the pay increase, thus deferring to the President’s proposal of 5.2 percent.  NTEU will continue to work with Congress and the administration in support of the FAIR Act (H.R. 536/S. 124), which provides an average 8.7 percent increase consisting of a 4.7 percent across-the-board increase and an average 4.0 percent for locality pay. 

The bill also continues the ban on funding new outsourcing activities under Office of Management and Budget (OMB) Circular A-76, which is important given recent renewed calls by some in Congress to outsource additional federal jobs.

            However, there are several government-wide provisions in the bill that are strongly opposed by NTEU.  First is a provision that prohibits funding for federal agencies until they return to the level of telework and remote work as was the practice before the lessons learned during the pandemic.  The bill makes no provision to fund the significant amount of additional taxpayer-leased office space that would be needed to implement this ill-advised requirement.  Second, it prohibits the implementation of President Biden’s Executive Orders related to


diversity, equity and inclusion in the federal workplace, setting back efforts to advance equal opportunity.  Third, the bill includes new language prohibiting funds for federal employees’ salaries if they unjustifiably refuse to comply with a valid congressional subpoena.  And finally, the bill would make drastic changes to the Thrift Savings Plan’s (TSP) mutual fund window (MFW) investment option by prohibiting MFW participants from investing in funds that use so-called “ESG investing” strategies (i.e., those that use environmental, social, and governance factors designed to promote societal good).  According to the TSP, such a change would require them to eliminate the MFW and deprive participants of a viable retirement investment tool that is available in the private sector.       

With regard to specific agency funding, many agencies would see significant cuts under the bill.  The IRS, for example, would receive a total of $11.2 billion for FY 2024, $1.1 billion less than the current level, and $2.9 billion less than the President’s FY 2024 request.  In particular, the bill provides $4.1 billion for operations support, equal to the current level but
$420 million less than the President’s request.  Funding for enforcement would be slashed by $1.3 billion below the current level, while $150 million would be provided for business systems modernization.  Funding for taxpayer services account would remain at the current FY 2023 level, but more than $640 million below what the President requested for FY 2024.

The bill also continues language carried in previous bills that would prohibit the IRS from paying bonuses or awards to employees or hiring former employees without considering conduct and compliance with federal tax law.  It also continues language providing direct hire authority for positions to process backlogged tax returns and return information.

               In addition to slashing funding for the IRS in FY 2024 by more than $1 billion, the House bill would rescind almost $10.2 billion of funding provided to the agency under the Inflation Reduction Act (IRA) as required by the agreement to lift the debt ceiling earlier this month.  As you know, while we don’t expect the loss of IRA funding or cuts proposed in this bill to have an impact on the IRS’s modernization plans in the short term, we know any further reductions in funding would jeopardize the recent progress the agency has made in restoring taxpayer services, undermine its’ ability to ensure all taxpayers comply with their tax responsibilities, and hamper efforts to generate revenue that can be used to reduce the deficit or pay for critical services.

In addition to the cuts at the IRS, the bill slashes funding at other NTEU-represented workplaces, which, if implemented, could force furloughs or RIFs.  The Bureau of Fiscal Service would be provided with $368 million, a decrease of $4 million below the current level and more than $30 million below the President’s FY 2024 request.  Treasury Departmental Offices would suffer a cut of more than 10 percent, down $25.8 million from FY 2023 and $84 million less than the President’s FY 2024 request. 

               Under the bill, the Securities & Exchange Commission (SEC) would have
$149.3 million less than in FY 2023 for salaries and expenses which is $436.2 million less than the President’s FY 2024 request.  It should be remembered that the SEC is funded by trader-paid fees and not by taxpayer dollars, hence the cut does nothing to reduce the federal budget deficit but will have a huge and negative impact in preventing fraud and cheating in the securities market. 

               Further hurting consumers from protection against fraud, cheating and scams will be the cuts to the Federal Communication Commission (FCC).  The $8.2 million cut from FY 2023, which is $28.8 million below the President’s FY 2024 request, will harm the FCC’s ability to combat robocalls and scams against the elderly.  And for the Consumer Financial Protection Bureau (CFPB), the bill takes away the non-appropriated financing of the agency, instead requiring taxpayer dollars to fund CFPB for the first time and providing the agency with
$2 million less than its funding in FY 2023.

               Please be assured as Congress continues consideration of FY 2024 funding legislation, NTEU will continue to fight for a fair pay raise and adequate funding to properly staff federal agencies while opposing these harmful policy riders.  I will update you on further developments.

                                                                                    Anthony M. Reardon

                                                                                    National President