Republicans Look to Restrict How Agencies Spend Billions in Collected Fees and Penalties

House Republicans are looking to restrain federal agencies’ latitude in spending money they collect in fees and penalties following their investigation that found the government took in $83 billion from fines and settlements between 2010 and 2015.

The House Oversight and Government Reform Committee’s Government Operations panel examined at a hearing Thursday a solution in the form of legislatively requiring all non-tax, non-appropriated revenue be deposited into the Treasury Department’s General Fund, where Congress could then re-appropriate it back out to agencies with more oversight. The 2016 Agency Accountability Act would carve out fees collected only by the U.S. Postal Service and the Patent and Trademark Office.

Rep. Mark Meadows, R-N.C., the subcommittee’s chairman, said Congress should always have a say in how federal agencies spend money.

“Without a complete picture of the funds that are flowing into the government, Congress is limited in their ability to appropriate funds accurately and prevent waste, fraud, abuse and mismanagement,” Meadows said. He accused the Obama administration of ramping up “backdoor spending,” and using it to fund “administrative priorities” without congressional approval.  

The oversight committee’s report, titled “Restoring the Power of the Purse,” said the freedom agencies have to pursue penalties and settlements allows the administration to serve as “judge, jury and regulator.” The Justice Department most frequently pursued those types of collections, accounting for nearly $64 billion of the government’s $83 billion haul since 2010. Agencies deposited most of the money back into the General Fund, the report found, but Republican lawmakers said they do not properly track how much they collect or where the funds go.

Congress has legislated various rules for what agencies must do with collected fees and fines, which include requiring agencies to deposit the funds directly into the General Fund, allowing the money to supplement funding for the program related to the collection or creating an entirely self-sustaining, self-funded program. Those options involve “different tradeoffs and implications,” Heather Krause, the Government Accountability Office’s acting director for strategic issues, testified to the panel, such as increased congressional oversight versus allowing agencies to respond “more quickly to customers or changing conditions.”

She also noted Congress can at any point place limitations on how agencies spend the money they collect from fees, fines, penalties and settlements.

Rep. Gerry Connolly, D-Va., the government operations subcommittee’s ranking member, said agency collection of fees was “not a new concept.”

“It was not invented by Barack Obama,” Connolly said, noting the federal government has collected customs fees since the nation’s founding.

He said agencies use fees to fund rewards for whistleblowers and victim compensation, which should not be tied up in the appropriations process. Allowing agencies to self-fund programs through fees is good government, he added.

“In all cases, Congress allows agencies to maintain collections and self sustain certain programs in order to make government more efficient,” he said. Connolly called the proposal to move all fees and fines collected by agencies into the General Fund “the antithesis of efficiency.”

He said increasing transparency on government spending was a “laudable goal,” but the specific bill was a “sweepingly broad and radical proposal” that would “seriously impair the ability of government to function.”