White House: IRS, OMB appropriations bill increases cyber risk

The White House sounded off about a bill in the House of Representatives to cut funding for the IRS and trim an administration request to expand cybersecurity funding and IT development in the Office of Management and Budget.

The House Appropriations Committee voted 30-20 to approve the fiscal 2016 Financial Services and General Government Appropriations bill on June 17. The $20.2 billion spending measure would fund the Treasury, the Office of Management and Budget, the General Services Administration, the Office of Personnel Management, and an assortment of financial regulators and government-wide operations functions.

Overall, the bill would trim the IRS budget by about $838 million below fiscal 2015 levels for a total appropriation of $10.1 billion. That figure is $2.8 billion below the administration request, and puts overall funding at below 1991 levels in inflation-adjusted dollars, according to OMB Director Shaun Donovan.

The bill tabs $3.3 billion for operations, which includes IT, and dedicates $250 million for business systems modernization. Donovan alluded to the recent hacks of taxpayer data in his opposition to the funding levels in the appropriation bills.

"Maintaining up-to-date technological infrastructure is essential to the protection of taxpayer data, as the IRS is a prime target for cyberattacks. However, on average, the IRS is currently three upgrades behind current software releases. The subcommittee's lack of support for the IRS's technology infrastructure would mean further deferral of cybersecurity and infrastructure upgrades, jeopardizing the strong defenses IRS needs," Donovan wrote in a letter to House Appropriations Chairman Hal Rogers (R-Ky.).

Financial Services Subcommittee Chairman Ander Crenshaw (R-Fla.) said the cuts were necessary given the economic climate.

"While it reflects a very tight budget, this bill makes investments to support economic growth and job creation through our small businesses, and to protect our citizens by strengthening the enforcement of laws and the administration of justice. In addition, the bill reduces funding for nonessential areas, and holds the administration and the Internal Revenue Service more accountable to the taxpayer," Crenshaw said in a statement.

The committee report accompanying the bill noted that the IRS has flexibility to decide how to allocate some of its resources, whether to IT or to call centers that were notoriously understaffed during the most recent tax season.

A March Government Accountability Office report said that the IRS has withstood an overall $1.2 billion cut in appropriations since 2010. "Although resources are constrained, IRS has some flexibility in how it allocates resources to ensure that limited resources are utilized as effectively as possible," including $500 million in user fees that are not subject to appropriations, GAO said. And an April majority staff report from the House Ways and Means Committee argued that funding for "employee bonuses and union activity on the taxpayer's dime" could have been reallocated to serve 10 million taxpayers.

Cybersecurity, FITARA Implementation at risk, White House says

The bill maintains the Information Technology Oversight and Reform budget, which includes the federal CIO and the burgeoning U.S. Digital Service, at $20 million. The administration requested $35.2 million.

In its report, the Appropriations panel said it expects "OMB to improve the processes used to develop information technology systems. Using information technology to engage citizens can be a powerful and efficient tool but only if the systems work and citizens have confidence in them."

The White House complained that the smaller-than-requested funding would limit OMB's ability to combat cybersecurity threats and to implement the new federal IT acquisition law. The additional funding was tagged for expanding an OMB cybersecurity unit by adding to "the number of specialized engineering experts available to assist agencies in implementing new solutions to secure the nation's highest value information targets," Donovan wrote. The funding also was sought for expanding the U.S. Digital Service and implementing the Federal IT Acquisition Reform Act.

"Failure to fund [information technology oversight and reform] at the requested amount represents a missed opportunity to further expand and institutionalize these efforts, which have resulted in over $2.5 billion in cost savings and countless other improvements across government to make federal systems and programs more effective, efficient, and secure," Donovan wrote.