Less with less: New agency mantra?

Congress’s insistence that agencies do more with less reminds me of the mantra “the beatings will stop when morale improves.” Though Congress is stripping agency budgets, it has not only failed to eliminate agency statutory public service delivery responsibilities; it has actually piled on more responsibilities.

How much more can the legislative branch extract from demoralized executive branch workers? Will they stop before they draw blood?

In my view, it is time for agency leaders to declare they can only do less with less.

Catherine Rampell, in a Washington Post op-ed, pointed out that the Internal Revenue Service’s (IRS) budget has been cut an inflation-adjusted 14 percent since 2010. As a result, its staff has shrunk by 10,400 employees, or 11 percent. And the House Appropriations Committee wants to continue trimming the IRS’s budget by an additional $340 million.

But rather than reducing IRS responsibilities, Congress has added new ones:

• The Affordable Care Act requires the IRS to administer millions of insurance premium tax credits.
• The Foreign Account Tax Compliance Act (FATCA) adds more duties to the IRS. FATCA seeks to reduce illegal tax evasion “by requiring filers and financial institutions to report more information to the IRS about assets held in offshore accounts,” as Chuck Marr and Joel Friedman point out in a new Center on Budget and Policy Priorities paper. “More than 77,000 financial institutions in 70 countries have already registered under FATCA.” That’s a lot of additional information for a reduced workforce to process.

IRS Commissioner John Koskinen put his foot down. He told Congress that while the IRS would continue to fulfill its statutory responsibilities, the service would cut discretionary activities to pay for them. The IRS will be doing less for less.

For example, Koskinen announced, there will be fewer audits. If Congress ignores the IRS’s request for an additional 141 employees in fiscal 2015 to audit “high wealth individuals,” the Treasury will not recover the $11.30 for each dollar the IRS expends on salaries, or close to $850,000 for the Treasury in exchange for hiring one GS-12. Tax cheats will win.

But there will also be losers, including citizens cheated by their employers.

The IRS requested an additional 577 employees in its fiscal 2015 budget to collect Social Security money that employers withhold from employee salaries but fail to forward to the Social Security Administration. For each dollar expended on this activity, $8.30 would be recovered and credited to individual employee Social Security accounts.

Perhaps the biggest losers will be taxpayers who have a simple question they want answered in order to avoid an audit.

Koskinen recently stated at an IRS Nationwide Tax Forum that without funding, “we estimate our level of phone service next year would plunge to 53 percent,” which means that “close to half of those trying to get our help over the phone would not get through.”

This compares to fiscal 2004, when the IRS answered 87 percent of calls from taxpayers and wait time was an average of 2.6 minutes.

The congressional directive that the executive branch “do more with less” to is a transparent attempt to shift the blame for the legislative branch’s failing to make hard political decisions to the executive branch’s “ineffective and inefficient federal employees,” as they put it.

It is time for agencies to be clear with Congress and the public about the impact of cuts in discretionary agency budgets: We will be doing less with less. Agencies should publicize the impact of doing less with less on ordinary citizens.

Congress cannot legitimately have it both ways: directing agencies to do more but providing less funding. The public should be clear about the choices Congress is making.

Tobias is the director of Key Executive Programs at American University.