HAC approves spending bill; administration objects

The House Appropriations Committee on Thursday approved a strict regimen for an ailing Tax Systems Modernization (TSM) as part of an $11.1 billion spending bill for the Treasury Department, the U.S. Postal Service and central government agencies.

It came, however, despite vigorous objections from the Clinton administration, the House Ways and Means Committee, the Defense Department and Democratic lawmakers. Rep. David Obey (D-Wis.), the ranking Democrat on the panel, said the bill "is going nowhere" if lawmakers do not make more money available to the Internal Revenue Service.

The White House has not issued a veto threat, but a letter from Office of Management and Budget acting director Jacob Lew said the panel's budget plan for TSM and other IRS programs is "highly objectionable" and "could ultimately impede collection of tax revenue."

Over the past month, the House and Senate began to move 10 of 13 spending bills for fiscal 1997. They are hoping to avoid a showdown with President Clinton so they can adjourn for the year in early October to campaign for the Nov. 8 election.

Job Elimination

The House measure would provide the IRS with $424.5 million for TSM next year - a 40 percent cut - but freeze this funding until the agency produces an adequate blueprint for the program. The House plan calls for the elimination of more than 2,000 jobs and would charge DOD with running any new TSM-related procurements.

DOD also weighed in against the plan last week.

Meanwhile, leaders of the Ways and Means Committee, including chairman Rep. Bill Archer (R-Texas), said $170 million in funds that would be frozen as part of TSM were needed to collect taxes next spring.

The IRS will not have enough money to update its systems for the next filing season, they said, and would have to shutter several TSM programs that are already operating, including Telefile telephone filing, automated fraud detection, toll-free telephone operations and the Service Center Recognition/Image Proc-essing System for digitizing some IRS forms.

In the House Treasury spending bill, legislators urged governmentwide action on the Year 2000 issue, tasking OMB to report by Nov. 1 on how much software code updates might cost, what the administration's strategy will be to ensure that systems agencies buy will operate in 2000 and a timetable for carrying out the strategy.

In other legislative actions, House appropriators:

* Allocated $250 million for the Social Security Administration's Intelligent Workstation/Local-Area Network contract - $50 million less than what President Clinton had requested. SSA officials had warned in May that anything less than the $300 million request for IWS/LAN would seriously delay the program, which needs the money to purchase the 56,500 workstations and 1,700 LANs that will go into the 1,500 SSA offices nationwide. Unisys Corp. last week won the $280 million information technology portion of IWS/LAN.

* Earmarked $211 million for continuing modernization of the House's computer and telecommunications systems, an effort that began when the Republicans took charge of Congress.

* Continued mandatory use of FTS 2000.

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