White House: Budget cuts to president's office hurt debt efforts

Proposed House cuts to the Executive Office of the President's (EOP) budget will hurt administration efforts to cut the deficit, the White House argues. 

The Obama administration made the argument in comments on H.R. 2434, the 2012 Financial Services and General Government Appropriations Act. That bill could be on the House floor as early as next week, and would decrease funding for the EOP from $705 million to $640 million. 

"The level of resources provided in the bill would significantly impact the EOP's role in assisting the president in carrying out his constitutional duties as head of the executive branch, including protecting national security interests, developing policies to address the challenges facing the nation, reducing the deficit and spending taxpayer dollars more cost-effectively, and managing the Federal agencies," the administration said in a statement of administration policy (SAP).

The statement also rejected a proposed cut of $109 million to the IRS, saying that would require 4,200 staff reductions. These cuts, it argued, would cost the government $4 billion in revenues, as tax enforcement efforts would be stunted.

"The level of funding provided for the IRS would seriously degrade the quality of services provided to taxpayers and would increase the deficit," the SAP said.

H.R. 2434 would provide $20 billion in discretionary funding for the Department of Treasury and other agencies, $2 billion less than the Obama administration requested. Nearly $1 billion in these cuts would be taken out of Treasury alone.

Despite the White House protest, these cuts are roughly in line with cuts made to other departments in various House spending bills that have been taken up so far. The only exceptions are spending bills for military construction and the Defense Department; the House proposed spending increases in those two bills.

The White House statement on H.R. 2434 warned that officials would recommend a presidential veto of the bill, particularly due to language that would undermine last year's healthcare law and the Dodd-Frank financial reform law.

On healthcare, Section 107 of the bill would prohibit the use of funds for implementation of the requirement that individuals buy health insurance under the Patient Protection and Affordable Care Act. Section 108 would prohibit funds from being transferred to the IRS to implement the law.

"These sections would prevent both appropriated and transferred funds from the Department of Health and Human Services from being used by the department to administer the law," the SAP said.

And on the Dodd-Frank law, the bill would limit transfers from the Federal Reserve to the Consumer Financial Protection Bureau to $200 million, and cut funding at the Securities and Exchange Commission by $222 million. The administration said these provisions would undermine the implementation of Dodd-Frank.

The SAP also highlighted Section 901 of the bill, which would repeal the administration's 2009 policy change related to family travel to Cuba and the sending of remittances to relatives in that country.

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