On July 16th, the House passed the FY 2010 Financial Services Appropriations Act (HR 3170) by a vote of 219 to 208 making key investments in rebuilding regulatory agencies, small businesses, tax fairness, and consumer protections.
Rebuilding Regulatory Agencies to Oversee Financial Markets, Protect Consumers, Taxpayers, and Investors
America is suffering from the deepest economic downturn since the Great Depression in part because of the financial meltdown and housing crisis resulting from the past drive for deregulation of our financial system and economy. This bill is another step forward in cracking down on runaway financial excesses and rebuilding regulatory protections for homeowners, investors and consumers needed to stabilize and restore confidence in the American economy.
- Securities and Exchange Commission (SEC): Provides more than $1 billion, 8 percent above 2009 and $10 million more than the President's request, to strengthen and enforce rules that govern investments and financial markets and to detect and prosecute fraudulent schemes. Funds will allow hiring another 140 investigators, lawyers and analysts, on top of the 140 added this year.
- Federal Trade Commission (FTC): Provides $292 million, 13 percent more than 2009, to strengthen the FTC's capacity to protect consumers and combat anti-competitive behavior. Among other things, the FTC investigates and prosecutes unfair and deceptive practices in areas such as foreclosure rescue and credit repair services, non-bank mortgage brokers, payday lending, and debt collection--all especially serious problems during times of economic hardship.
- Consumer Product Safety Commission (CPSC): Includes $113 million, 8 percent above last year and 6 percent above the budget request. Funds will be used to continue implementing the landmark bi-partisan consumer protection legislation passed in 2008 in response to massive product recalls, including children's toys from China. Funds are included to expand the Import Safety Initiative, which puts CPSC inspectors at key U.S. ports.
- Strengthen Oversight of Key Agencies:
- Treasury Inspector General: Includes $30 million, $4 million more than 2009 and $3 million more than the request; increase above the request is to help the IG perform mandated reviews in cases where bank failures or other circumstances caused losses to the deposit insurance fund.
- FDIC Inspector General: Provides $38 million, $10 million more than 2009, with the increase mainly for investigations related to bank failures.
- SEC Inspector General: Includes$4 million to provide, for the first time, the SEC Inspector General an independent appropriation to safeguard against unwarranted interference.
- TARP Oversight: Requires Treasury Department to report to the Appropriations Committee on matters related to the financial stabilization program, including progress in implementing the recommendations of various oversight bodies and specifics of staffing and resources for enforcing program rules and plans for protecting taxpayers' investments.
Strengthening the Economy by Providing Capital and Other Assistance for Small Businesses and Disadvantaged Communities
- Small Business Administration: Provides $848 million, 39 percent more than 2009 and $69 million above the budget request. Small business is the engine for the American economy, creating 60 to 80 percent of new jobs, and crucial to getting the American economy back on track.
- Overall Lending: Supports $28 billion in new lending for the nation's 25 million small businesses--critically important for firms having trouble borrowing funds in a tight credit market.
- Micro Lending: Supports $25 million in new micro lending and $10 million in microloan technical assistance.
- Small Business Development Centers: Includes $110 million, $13 million above the budget request for these centers, which provide counseling, training, and technical assistance to small businesses.
- PRIME: Provides $8 million, $3 million above 2009 and $5 million above the budget request, for technical assistance to low-income small business owners.
- Veterans and Economically Distressed Areas: Invests $15 million for new initiatives to expand services available to veterans seeking to start a small business and to deploy SBA experts to economically distressed areas to assist in creating new jobs.
- Community Development Financial Institutions (CDFI) Fund: More than doubles funding to $244 million to help supply credit to disadvantaged communities; each dollar invested in the CDFI Fund leverages at least 15 dollars, on average, in non-Federal investment. The appropriation includes $80 million to launch the Capital Magnet Fund, a competitive grant program for development and renovation of low-income housing.
Combating Tax Evasion and Improving Service to Taxpayers
- Combating Tax Evasion: Provides $5.5 billion for IRS tax enforcement, as requested by the President and 8 percent more than 2009, in another step to address the $290 billion tax gap. Among other things, the increase is for the Administration's initiative to target wealthy individuals and businesses who avoid U.S. taxes by parking money in overseas tax havens. Internal Revenue Service (IRS) efforts to address tax fraud are estimated to recoup $5 for every $1 spent.
- Improving Services to Taxpayers: Includes nearly $2.3 billion for taxpayer services.
- Pre-Filing Taxpayer Assistance and Education: Provides $680 million, up $19 million from 2009, including $5.1 million for Tax Counseling for the Elderly, $10 million for low-income taxpayer clinic grants ($500,000 above the request), and $9 million for Volunteer Income Tax Assistance grants ($1 million above the request).
- IRS Taxpayer Advocate: Includes $206 million, $13 million more than 2009, to help individuals solve ongoing tax problems with the IRS.
Supporting Equitable, Efficient Administration of Justice in Federal Courts
- Federal Judiciary: Provides nearly $7 billion, 7 percent more than 2009 and $94 million less than requested, to keep up with costs and growing workloads.
- Funds 142 additional staff for the bankruptcy courts, to help deal with the 28 percent increase in bankruptcy filings over the past 12 months.
- Also adds 118 staff for probation and pretrial services, to handle increased caseloads.
- Implements recommendation from the Federal courts to increase payment rates for attorneys appointed to represent criminal defendants who cannot afford a lawyer.
Meeting our Responsibilities to the Nation's Capital City
- Assisting D.C. Students: Includes $109 million, including $35 million for college tuition support, $62 million for improvements to public and charter schools, and $12 million for continuation of the school voucher program for students already enrolled in the program.
- New Initiatives for Priority Needs: Provides $19 million for housing for the homeless, $5 million to help youth disconnected from school or work, and $4 million for HIV/AIDS prevention.
- Protecting Water Quality: Invests $20 million to alleviate combined sewer overflows and the water pollution they cause; $400,000 for testing for lead in drinking water.
- Removing Special Restrictions on the District of Columbia: Eliminates prohibition on use of local tax funds for abortion, thereby putting the District in the same position as the 50 states. Also discontinues ban on use of funds in the bill for domestic partnership registration and benefits, and allows the District to implement a referendum on use of marijuana for medical purposes as has been done in other states.
Other Key Programs
- Office of National Drug Control Policy:
- Drug-Free Communities Grants: Includes $98 million, $8 million above 2009, for grants to local community based coalitions to develop and implement plans to reduce drug abuse among youth.
- High-Intensity Drug Trafficking Areas: Invests $248 million, $14 million more than 2009 and $28 million above the budget request, for joint Federal-state-local efforts to address drug production and trafficking and drug-related violence.
- Anti-drug media activities: Eliminates funds for the national ad campaign directed at youth, because of evaluations showing that it has not been effective; part of the savings was redirected to Drug-Free Communities and HIDTA programs.
- Financial Crimes Enforcement Network: Provides $103 million, $11 million above 2009, to safeguard the financial system against drug traffickers, money launderers, terrorism financiers, tax evaders, and others involved in criminal activity.
- Election Assistance Commission: Invests $124 million, the same as 2009 and $55 million above the request. Includes $100 million for grants to states to improve voting systems and election administration; $4 million for research to improve accessibility for voters with disabilities; and $2 million for pilot programs for pre- and post-election testing and audit of voting systems.
Key Policy Items
- Auto Dealers: Requires automobile companies who have taken federal funding to reinstitute agreements with dealerships they have dropped in recent bankruptcy proceedings.
- “In-Sourcing”: Requires civilian agencies to create an annual inventory of services contracted out and then review whether it makes sense to bring the work back in-house. Last year's Defense Authorization Act required the Defense Department to do the same thing, and the Army says it has already saved $50 million from the process.
- Agricultural Exports to Cuba: Clarifies, for 2010, language contained in last year's Act regarding the requirement for payment of “cash in advance” for sale of farm products to Cuba, in order to remove unnecessary obstacles to trade.
- The 12 Appropriations Bills Are Fiscally Responsible -- $10 Billion Below the President's Proposed Budget: The budget conference report adopted by the Congress in April required a cut in discretionary spending in FY 2010 of $10 billion below the funding requested by President Obama in his budget. As a result, the 12 FY 2010 appropriations bills overall must be $10 billion below the President's budget.
- This Bill Eliminates 9 Programs and Cuts Funding below 2009 For Another 15 Programs - Achieving Savings of nearly $600 million: The Financial Service bill is fiscally responsible, targeting dollars to high-priority needs, while eliminating 9 programs and cutting funding below 2009 for another 15 programs. For example, the bill cuts funds for General Services Administration construction and repairs.
- Unprecedented Earmark Reform: Since taking control of Congress in January 2007, Democrats have reformed an earmark process that had grown out of control, spent too much money, fostered corruption, and offered no accountability to the American taxpayer.
- Significant reductions in the total dollar amount earmarked for non-projected-based accounts in appropriations -totaling 43 percent below the 2006 level in the 2008 bills, reducing further in the 2009 bills, and reducing down to 50 percent this year.
- Unprecedented rules for transparency initiated in 2007, so the American people know which Member of Congress requested earmarks included in the bill, the entity that will receive the funds and their address, what the earmark does, and that neither the requesting member nor their spouse will benefit from it financially.
- Requiring all Members' earmark requests to be publicly disclosed this year on their websites at the time of their request explaining the purpose of the earmark and why it is a valuable use of taxpayer funds. And the earmark disclosure tables are now public immediately -- the same day as the House or Senate Subcommittee reports the bill.