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Treasury Notes

  Treasury's Lapse in Appropriations Contingency Plan

By: Dan Tangherlini
12/15/2011

As Congress continues to consider a year-end spending bill and an extension of the payroll tax cut and unemployment insurance, the Treasury Department needs to be prepared for a possible lapse in government funding. Americans are understandably concerned about how a potential government shutdown might affect them. To help answer important questions related to Treasury services, today we're releasing the updated contingency plans for the Department and its bureaus. We want to make sure that Americans have the most up to date and clear information about how the Treasury Department will function in the event that a budget agreement is not reached. Below is a summary of the Treasury's Department’s Lapse in Appropriations Contingency Plans and links to plans for each bureau.

 

Department of the Treasury
Department-wide Lapse in Appropriations Contingency Plan Summary
 

Treasury is comprised of Departmental Offices (DO) and the bureaus.  Each bureau under the Treasury has discrete functions, and has prepared lapse plans to meet bureau-specific needs consistent with the relevant guidance.  The DO plan, and the following bureau plans, are posted on this site: the Office of the Inspector General (OIG), the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Treasury Inspector General for Tax Administration (TIGTA), the Financial Crimes Enforcement Network (FinCEN), the Alcohol and Tobacco Tax and Trade Bureau (TTB), the Financial Management Service (FMS), the Bureau of Public Debt (BPD) Administrative Resources Center (ARC), and the Internal Revenue Service (IRS).  The DO plan includes functions of the Community Development Financial Institutions (CDFI) Fund.  

Lapse plans have not been drafted for the following bureaus: the Office of the Comptroller of the Currency (OCC), the United States Mint, and the Bureau of Engraving and Printing (BEP). Operations of these bureaus are funded from sources other than annual appropriations, and therefore are not impacted by a lapse in appropriated funding. Additionally, BPD functions, with the exception of ARC, are authorized to continue in the absence of annual appropriations by the Second Liberty Loan Act (31 USC 3129), and therefore no plan is provided for it. Specific programs within DO and certain bureaus that are funded from other than annual appropriations are addressed within the individual plans (e.g., the Office of Financial Stability within the DO plan).  

Excepted and Non-Excepted Activities

Below are examples of how a lapse in appropriations would impact Treasury’s functions.  

  • Treasury DO would continue to provide certain critical functions in a limited capacity, such as economic analysis, implementation of tax policies and programs, management of the Government's cash position, and the continuation of borrowing/debt programs.  It would continue to oversee operations of the Exchange Stabilization Fund (ESF). DO’s Terrorism and Financial Intelligence office would continue collection, analysis and reporting of intelligence as well as the administration of the Specially Designated Nationals (SDN) list.  Functions not funded from annual appropriations would continue, including the Office of Financial Stability, the CFPB, the Small Business Lending Fund, International Affairs Office of Technical Assistance, and the Treasury Department Executive Office of Asset Forfeiture (TEOAF). However, most policy and support functions, such as tax policy development, reviews by the Committee on Foreign Investment in the United States, and regulation would be halted.  In addition, the ability to address policy and financial market issues would be reduced and the analysis of global economic issues, macroeconomic rebalancing, and international banking reform would be discontinued. The CDFI Fund would halt its grant and other support programs.

  • IRS would halt non-automated collections and tax processing activities, but would continue activities necessary for the protection of government property. These continued activities include but are not limited to processing tax returns that include remittances; computer operations necessary to prevent loss of data in process and revenue collections; maintaining minimal personnel to maintain safe conditions for essential personnel; maintaining criminal law enforcement and undercover operations; and the protection of statute expiration, bankruptcy, liens and seizure cases. The IRS would halt taxpayer services such as responding to taxpayer questions, including telephone customer service functions.

  • If the government is closed, people with appointments related to examinations (audits), collection, Appeals or Taxpayer Advocate cases should assume their meetings are cancelled.  IRS personnel would reschedule those meetings at a later date.

  • FMS would maintain payments, collections, and daily cash management and processing of essential authority/appropriation transactions. This includes resources to support disbursements of interest on the debt, disbursements to Social Security and other benefit recipients, and maintaining critical government-wide accounting activities, as well as activities related to borrowing and tax collection.

  • TTB would ensure that all tax remittances are processed.  TTB would halt its regulatory functions, non-criminal investigative activities and audit functions.

  • FinCEN would provide some support for its domestic and foreign law enforcement customers but would halt other Bank Secrecy Act regulatory and foreign and domestic law enforcement support functions.

  • TIGTA and OIG would halt audit activities but retain some investigative only law enforcement functions necessary to protect life, property and continue felony criminal investigations. 

  • SIGTARP, in order to provide oversight of offices and agencies that are continuing their operations, plans to use available no year funds during a short lapse of appropriations. In the event of a longer-term lapse, SIGTARP would re-evaluate based upon a range of factors, including funds availability.

Departmental Offices

The Alcohol and Tobacco Tax and Trade Bureau (TTB)

Financial Crimes Enforcement Network (FinCEN)

Financial Management Service (FMS)

Internal Revenue Service

Special Inspector General, Troubled Asset Relief Program (SIGTARP)

Treasury Inspector General for Tax Administration (TIGTA)

Treasury Franchise Fund

Treasury Office of Inspector General

Dan Tangherlini is Assistant Secretary of the Treasury for Management, Chief Financial Officer and Chief Performance Officer.

Posted in:  Management
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