Press Center

 "TREASURY SECRETARY PAUL H. O'NEILL TESTIMONY BEFORE THE HOUSE APPROPRIATIONS COMMITTEE SUBCOMMITTEE ON TREASURY, POSTAL SERVICE AND GENERAL GOVERNMENT"


5/3/2001

Chairman Istook, Representative Hoyer and Members of this Subcommittee, I appreciate this opportunity to discuss Treasury's Fiscal Year 2002 budget request. With me today is Jim Flyzik, the Acting Assistant Secretary for Management.

This is my first time before this Subcommittee. I look forward to continuing the tradition of cooperation between the Treasury and Members of this Subcommittee.

The Treasury Department's FY 2002 budget supports the Administration's major goals: providing tax relief, moderating recent rapid growth in spending, while funding national priorities, paying down the debt, and protecting Social Security surpluses. Our budget request for FY 2002 totals $14.631 billion and balances fiscal accountability with the need for the resources required to maintain Treasury's operations and implement the President's priorities.

We have provided the Committee with a detailed breakdown of Treasury's entire FY 2002 budget request. Let me highlight three important areas of focus.

  • First, improving service to taxpayers and ensuring compliance with the tax laws.
  • Second, continuing our efforts to fight drugs and crime.
  • And third, improving management and performance.

I will address each of these items in turn.

First, Improving Service to Taxpayers and Ensuring Compliance with the Tax Laws

, Improving Service to Taxpayers and Ensuring Compliance with the Tax Laws

In its mission statement, the IRS has pledged to focus on two core priorities: "Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities, and apply the tax law with integrity and fairness to all."

Like President Bush, I believe strongly that the IRS should enforce the tax code fairly and evenly with the least imposition on the taxpayer. And consistent with that goal, the President has requested adequate resources to fund necessary IRS improvements. This budget represents a 6.7 percent increase over the 2001 budget, and recognizes the investments needed to modernize the IRS.

Commissioner Rossotti and the IRS have made progress implementing the 1998 reforms mandated by Congress, and the IRS has a plan to improve service and enforcement, while protecting taxpayer rights. But clearly there is much more to accomplish.

The Administration's budget request includes close to $400 million in investments to modernize the IRS' outdated computer systems. This multi-year project will help provide the IRS with better tools to improve both customer service to America's taxpayers and compliance programs designed to administer the tax code in a fair manner. The Committee has shown its support for this program in past years by making available needed funds, and we ask you to continue to support this critical program.

The President's budget also includes follow-on funding for the STABLE initiative to complete the hiring of almost 4,000 staff to address these same issues. This investment is important for the integrity of the tax system, which depends heavily on maintaining voluntary compliance, and to provide the service the American taxpayers deserve.

The amount in the President's budget will allow the IRS to provide America's taxpayers better quality service and help to enforce the tax laws with integrity and fairness.
Second, Continuing Our Efforts to Fight Drugs and Crime

Treasury's law enforcement bureaus perform critical roles in implementing the Administration's anti-drug and anti-crime policies. Treasury's budget request continues to support our responsibilities in law enforcement and oversight, including efforts: (1) to reduce the smuggling and trafficking of drugs while facilitating lawful trade; (2) to deter firearms violence; (3) to combat financial crimes and money laundering; (4) to protect our nation's leaders; and (5) to provide quality law enforcement training. Although the range of involvement in law enforcement issues across the Department is broad, I want to highlight some specific examples of Treasury efforts that support the President's priorities of combating crime and drug abuse and that emphasize improved public safety and enhanced security for our citizens.

In recognition of the President's promise to increase spending to implement the Western Hemisphere Drug Elimination Act, the Customs Service, in coordination with the United States Coast Guard, requests $35 million for acquisition of selected air and water craft and surveillance and safety equipment to improve interdiction efforts against illegal drugs.

The budget recognizes the need for Customs to modernize its automated systems. Continued rapid growth in trade transactions has magnified both the urgency of proceeding with the overall modernization effort and the critical need to maintain viability of the existing Automated Commercial System, which, until recently, had been subject to an increasing number of system outages.

Therefore, the budget seeks (1) additional investments in the Customs automation modernization program to facilitate and manage its trade operations ($130 million) through the Automated Commercial Environment and to provide for a government-wide trade data interface through the International Trade Data System ($5.4 million); and (2) sufficient funding to maintain the existing Automated Commercial System while the modernization effort is underway.

This budget provides for the Bureau of Alcohol, Tobacco and Firearms to continue its ongoing efforts in the following programs: the Integrated Violence Reduction Strategy, the Youth Crime Gun Interdiction Initiative, nationwide crime gun tracing, and the National Integrated Ballistics Information Network.

Enforcement of money laundering laws also contributes to stemming the flow of drugs, weapons and other contraband. This budget request maintains support for the Financial Crimes Enforcement Network to strengthen anti-money laundering efforts and enforce regulatory compliance of the Money Services Business industry, as required under the Money Laundering Suppression Act.

The threat of global terrorism, whether conventional or cyber, has intensified the demands on Treasury's enforcement bureaus to formulate innovative protective strategies that seek to integrate cyber security with traditional physical security. The budget request maintains support for the Secret Service to continue to address their complex workload and multiple mission requirements. This includes protecting our nation's leaders and our financial payment infrastructures, protecting the integrity of our currency in light of global dollarization, and safeguarding the public against terrorist acts, both conventional and cyber in nature.

Ensuring the physical protection of our nation's leaders and visiting world leaders in an environment of increased threats to political leaders remains one of Treasury's top priorities. We are requesting funding for pay reform for the U.S. Secret Service Uniformed Division (authorized in December 2000) to provide adequate incentive to attract highly qualified recruits and retain skilled and seasoned personnel.

The Department will ensure that specialized funding sources to support unique programmatic requirements are spent wisely. The Department will continue the practice of supplementing selected Treasury law enforcement bureaus' non-recurring operations and investments through the Treasury Forfeiture Fund. Another fund, the Counterterrorism Fund, supports emergency efforts across the Department. Treasury will rely on this fund to assist in covering of costs associated with, among other priorities, Treasury's role in the upcoming Salt Lake City Winter Olympics.
Third, Improving Management and Performance

This budget request also provides resources to sustain the programmatic oversight and technical support provided by Treasury Departmental Offices. This oversight and support is essential to our overall leadership role in law enforcement, tax administration, international and domestic economic and tax policy, and financial management. The request includes funding required to sustain previously approved staffing levels, with no increase in staffing levels being proposed in this request.

Throughout the Department, I am taking a keen interest in performance and the budget, viewing them as integral to our efforts to establish goals and measure results. Part of this process will require us to improve our performance measures to make them more useful in and relevant to the decision-making process, as well as the improving the timeliness and accuracy of the information systems that capture and report performance data. This is an opportunity to fundamentally review what we do and why we do it. Therefore, the FY 2001 and FY 2002 Performance Plans presented in the budget may be revised pending completion of this review. Treasury will notify Congress of any such revisions in a timely manner.

Good stewardship of taxpayer resources is a responsibility I take seriously. We must provide the taxpayers with real value for the hard-earned tax dollars they entrust to the Treasury.

Treasury has a rich reputation for leadership and quality and I want to be a part of continuing that tradition. My notion of leadership centers on excellence.

I am thoroughly convinced that if your organization is not striving to be the best in the world at everything you do, then you are unlikely to be truly excellent as an organization. Let me take this down from the lofty to the concrete. In the organization that I left in December, it took us 2-1/2 days to close our financial books at more than 300 locations in 36 countries. It takes the Federal Government five months to close our books; and then the auditors give us a qualified opinion. This is not the stuff of excellence.

Let me hasten to add, this is not the fault of the workforce. They can deliver what the leadership asks for. I proved in my previous work life that it is possible to build an organization that is known for excellence, based on a foundation of dignity and respect for every individual. Caring about the health and safety of the 150,000 people in Treasury who depend on me for leadership is important, and it will continue to be important as I lead a Department with such a rich heritage
Conclusion.

In summary, Mr. Chairman, I believe that Treasury's $14.6 billion request for Fiscal 2002 will enable us to continue the important initiatives underway throughout the Department, as well as advance those key priorities set out by the President. I ask for your support of our FY 2002 budget request so that the Treasury Department can fulfill its wide range of responsibilities in serving the American people.
Thank you very much.

 

Bookmark and Share