House panel backs 4.1 percent federal pay raise

After squabbling over issues like crackdowns on Earned Income Tax Credit cheats and funding for taxpayer-subsidized bank accounts, the House Appropriations Subcommittee on Treasury, Postal Service and General Government approved a $18.5 billion spending bill, nearly a quarter of which will go to homeland security expenditures.

At the end of day of scheduling conflicts and closed-door meetings that stretched a 90-minute markup over many hours, Maryland Democrat Steny Hoyer proposed an amendment that would provide a 4.1 percent pay raise for civilian federal employees, bringing their raise into line with that of the military. President Bush had proposed a 2.6 percent pay raise for civilians.

Committee spokesman John Scofield said Hoyer's provision is estimated to cost $1.3 billion in fiscal 2003. It is not clear if that money will come from additional appropriations, or come out of the agencies' budgets.

The full committee's senior Democrat, David Obey of Wisconsin, argued that the money is likely to end up coming out of agencies' budgets, thereby debiting programs. "Until the budget resolution is adjusted, we're just sort of chasing our tails," Obey complained.

Nonetheless, the measure passed by voice vote.

The $4.2 billion that the subcommittee earmarked for homeland security spending includes $439.3 million to modernize Customs Service information systems, which the subcommittee chairman, Ernest Istook, R-Okla., called "the backbone" of the information systems needed for border security.

Funding for the Customs Service will total nearly $2.5 billion, including money for staff increases, infrastructure enhancements and technology improvements on the borders and at maritime ports. This is $24.2 million above the fiscal 2002 spending levels.

The markup started at 10:45 in the morning and discussion featured questions of whether increased enforcement to combat fraud in the Earned Income Tax Credit program, a program designed to benefit the working poor, is a worthwhile use of additional government resources.

Obey answering the tax enforcement question with a resounding and slightly crusty "no," argued that there are more important tax issues for the government to worry about -- such as evasions by wealthy citizens.

"We ought to be looking at the big boys at the upper end of the scale," Obey told the subcommittee. Instead, with the increased EITC enforcement provisions in this bill, the committee is sending the message that "those who shop at Kmart are a much bigger threat than those who shop at Neiman Marcus," Obey said.

Istook and Hoyer, though, had a different view, with Hoyer casting it in terms of making sure "every American pays their fair share."

In a similar vein, Florida Democrat Carrie Meek and Istook went back and forth over the costs of a program designed to help low- and moderate-income people set up bank accounts.

Istook argued that the program is too expensive per subsidized bank account. "If we're going to say that we're going to use taxpayers' money to induce people to open bank accounts," more structure is needed in the program to keep per-capita costs down, Istook told Meek across the oval conference table.

Meek countered that the program will help low- and moderate-income people attain "financial literacy" and prevent them from having to "to go a corner store, where they are charged exorbitant fees, to cash a check."

Obey sided with Meek, charging that the program has not been cost-effective because of a lack of support for it within Treasury. "By their actions, [Treasury officials] are helping to torpedo a program they're not enthusiastic about," he said.

Istook sought to publicly smooth over differences with the Democrats, telling Meek and Obey that there was room for more discussion on these issue.

Other highlights of the bill include:

• $246.4 million for the High Intensity Drug Trafficking Areas program.
• $2.9 million for programs to identify, disrupt and seize financing for terrorist organizations and activity ($2.5 million of this will come from forfeiture funds).
• $30 million for training costs for new homeland security law enforcement personnel.
• $24 million for the Office of Homeland Security.
• $606 million for the General Services Administration's construction program, including $309 million for site acquisition, design and/or construction of 11 courthouses.
• $436 million for continued upgrades to the Internal Revenue Service's information technology systems.
• $978 million for repairs to federal buildings.