OTHER AGENCIES
COMMODITY FUTURES TRADING COMMISSION
Price Manipulation in Energy Markets
Since December 2002, CFTC filed charges against a total of
30 companies and individuals and assessed over $267 million
in civil monetary penalties for illegal activity in the energy
markets. In 2004, CFTC actions resulted in a $35 million civil
monetary penalty against Enron. Among other claims, the
CFTC alleged that Enron and a natural gas trader engaged in
a manipulative scheme to buy an extraordinarily large amount
of natural gas in a short period of time. The complaint alleged
Enron’s actions had a direct and adverse effect on the New
York Mercantile Exchange natural gas futures contract, including
causing prices to become artificial. In announcing the
penalty, Gregory G. Mocek, the Director of Enforcement for
the CFTC stated, “This settlement demonstrates the CFTC’s
exhaustive efforts to identify and root out manipulation of the
natural gas and energy markets.”
The Commodity Futures Trading
Commission (CFTC) protects the
integrity and effectiveness of the
U.S. futures and options markets.
It protects investors by preventing
fraud and abuse and ensuring
adequate disclosure of information.
Major activities of the agency
include: promulgating regulations
governing commodities futures
markets; detecting and prosecuting
investor fraud; and monitoring the
markets in order to prevent illegal
price manipulation efforts. In
2004, CFTC filed 83 enforcement
actions against suspected violators
of commodity trading laws. The
2006 Budget provides $99 million
to fund CFTC’s activities.
CONSUMER PRODUCT SAFETY COMMISSION
Safety helmets are one of 15,000 types of consumer products under
CPSC’s jurisdiction.
The Consumer Product Safety Commission
(CPSC) is the Federal agency responsible
for protecting families from hazards related
to consumer products under its jurisdiction.
CPSC collects data to monitor injuries and
deaths resulting from consumer products,
works with industry to develop voluntary
standards to make products safer, and
educates consumers on potentially dangerous
products. Where these steps are insufficient
to protect Americans from unnecessary risks,
CPSC develops mandatory rules and conducts
product recalls. The President’s Budget
includes $62 million for CPSC to sustain
existing safety efforts and continue providing
national consumer product safety leadership.
325
326 OTHER AGENCIES
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
Each year, the Corporation for National and Community Service (CNCS) engages more than 2.5
million Americans in service opportunities. Through AmeriCorps, Senior Corps, and Learn and Serve
America, CNCS helps Americans answer the President’s Call to Service. The 2006 Budget proposes
$921 million for CNCS to support 75,000 AmeriCorps members, provide service opportunities for
some 500,000 Senior Corps members, and engage over one million youth in service learning through
Learn and Serve America. The Corporation’s programs work with community- and faith-based organizations
to meet local needs. Its programs support activities ranging from tutoring and mentoring
children, assisting the elderly, preserving the environment, building homes for low-income families,
and mobilizing volunteers to respond to disasters.
Strengthening AmeriCorps for the Future
Helping the Hurricane-weary
Reeling from one of the worst hurricane seasons in its history,
Florida needed a rapid, flexible response. In 2004, more than
700 AmeriCorps, Senior Corps, and Learn and Serve America
members were deployed to help Floridians survive the storms
and repair the damage. For example, teams of AmeriCorps
National Civilian Community Corps members from all five campuses
were deployed to cover approximately 1,500 roofs with
plastic sheeting to protect storm-damaged homes in Tallahassee
from the weather until permanent repairs could be made.
Senior Corps volunteers worked with Orlando’s Emergency
Operations Center and the Red Cross to create a volunteer
reception center to help special needs residents who did not
evacuate during the storms.
Launched 10 years ago, the
AmeriCorps program has enabled
more than 400,000 Americans to
address pressing community needs
while earning an education award
to help finance college or re-pay
student loans. In 2003, AmeriCorps
members tutored nearly a half
million children, helped build
and rehabilitate more than 3,300
homes for low-income families,
and helped restore and conserve
more than 41,000 acres of public
lands. In 2004, CNCS launched
a comprehensive rulemaking
process to implement AmeriCorps
grantmaking reforms, program
management improvements, and
long-term financial sustainability. The final rule will be published in 2005 and will promote
long-term growth as well as sustainability of national service programs by local communities and
the private sector. The 2006 Budget requests $421 million to support the President’s goal of 75,000
AmeriCorps members, including $146 million in the National Service Trust to support member
education awards.
Fostering a Culture of Service
In conjunction with the USA Freedom Corps, a White House office created by President Bush
following the attacks of September 11th, CNCS is helping Americans of all ages and backgrounds
answer the President’s Call to Service to dedicate at least 4,000 hours, or two years, of their lives in
service. The 2006 Budget will enable an estimated 500,000 older Americans to volunteer through the
Senior Corps program. The Budget proposes $220 million for the Senior Corps program, which meets
a wide range of community needs such as helping seniors live independently in their homes, mentoring
children of prisoners, and tutoring children. The Budget also proposes $40 million for Learn
and Serve America to engage more than 1 million American youth in service learning education. In
THE BUDGET FOR FISCAL YEAR 2006 327
Senior Corps members building homes with Habitat for Humanity.
addition, the Budget includes $10 million for
the Points of Light Foundation to connect
Americans, businesses, and community-based
nonprofits to increase volunteering across
America and $5 million for America’s Promise
to support a network of Communities of
Promise that build the character and competence
of young people. Finally, the Budget
proposes $4 million to support Teach for
America, a national organization supporting
a professional teacher corps that serves in
low-income, rural, and urban communities.
DISTRICT OF COLUMBIA
The 2006 President’s Budget provides $103 million for the District of Columbia (D.C.). This includes
$75 million for D.C. school children, as well as $28 million in funding for other D.C. programs.
The 2006 Budget continues the 2004 and 2005 investment in the D.C. School Choice program, with
$15 million. This program helps increase the capacity of the District to provide parents—particularly
low-income parents—more options for obtaining a quality education for their children who are
trapped in low-performing schools. As part of the Administration’s commitment to improving education
in D.C., the Budget continues funding for D.C. public schools and D.C. charter schools, with $27
million. The Budget also continues to support the D.C. Resident Tuition Assistance program, with
$33 million. This program was started in 1999 and allows District residents to attend public colleges
nationwide at in-State tuition rates.
The President’s Budget continues support to help improve the Anacostia River for D.C.’s residents
and visitors. The 2006 Budget proposes $5 million to continue design and construction work on the
Anacostia trailwalk. The trailwalk will create pedestrian and bicycle trail systems from the Potomac
River to the District’s border with Maryland.
The 2006 Budget continues to support D.C.’s public safety response to events directly related to the
Federal Government’s presence in the District, with $15 million to defray the cost of events such as
protection for the annual World Bank and International Monetary Fund meetings.
The 2006 Budget supports funding for a bioterrorism and forensics laboratory in the District, with
$7 million. The present situation, in which the District relies on the laboratory facilities of Federal
agencies, does not allow the District to keep up with the demand of its current workload. Initial
planning and design work on the lab began in 2005. The 2006 funds will allow the District to move
forward with early construction phases, and will be matched by $1.5 million in local capital funds
from the District.
The 2006 Budget also proposes an increase in the amount of Federal funding the District receives
for child welfare services, specifically foster care and adoption assistance. The 2006 Budget would
increase the District’s reimbursement rate under Title IV-E of the Social Security Act from 50 to
70 percent. Title IV-E is the primary Federal funding source that provides foster care and adoption
subsidy payments, which enable families to adopt special needs children from foster care. This adjustment
will bring the Title IV-E Federal match rate in line with the District’s Medicaid match rate,
as it is in other States.
328 OTHER AGENCIES
In 2006, the Administration will also work with the District to review the current portfolio of
Federal lands in the District of Columbia to determine whether any of these parcels would be better
utilized by the District. In addition, the Administration continues to support enactment by the
Congress of a law to allow the D.C. government’s proposed local budget to take effect without a
separate annual appropriations bill, subject to limitations imposed by the Congress by law.
DISTRICT OF COLUMBIA COURTS
The District of Columbia (D.C.) Courts continue to work on capital improvements necessary for the
Family Court Division of the D.C. Superior Court. The President’s Budget provides $267 million to
the Courts, which includes $83 million for significant capital improvements in the Judiciary Square
area. Judiciary Square is the center ofmany criminal justice functions in the District and is the home
of the D.C. Superior Court, as well as a variety of other city and Federal criminal justice agencies.
Improvements planned for the area include a full restoration of the city’s Old Courthouse. The Old
Courthouse was originally built between 1821 and 1881 and is listed on the National Register of
Historic Places. Restoration work on the Old Courthouse began in early 2005. In addition, the Courts
completed renovation work on Building B in December 2003. This allowed the Small Claims and
Landlord courts to move from the H. Carl Moultrie Courthouse to Building B. As a result of this
move, an interim Family Court facility opened in the H. Carl Moultrie Courthouse in the Fall of
2004. The D.C. Courts will continue to undertake significant design and renovation work on the
H. Carl Moultrie Courthouse in preparation for opening a permanent Family Court.
ELECTION ASSISTANCE COMMISSION
The Election Assistance Commission provides funding to States to improve election equipment
and the administration of Federal elections. Since enactment of the Help America Vote Act of
2002, the Federal Government has provided approximately $3.1 billion to upgrade voting systems,
develop electronic voter registration lists, assure access for individuals with disabilities, and train
election officials for all 50 States, the District of Columbia, and four territories (Puerto Rico, Guam,
American Samoa, American Virgin Islands). The 2006 President’s Budget proposes $17.6 million for
the Commission to develop voluntary standards and initiate an accreditation program for electronic
voting machines.
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
The Equal Employment Opportunity Commission (EEOC) enforces Federal laws that prohibit
employment discrimination based on race, color, sex, religion, national origin, age, and disability.
EEOC also seeks to prevent discrimination through outreach, education, and technical assistance
that promote employers’ voluntary compliance with the law. One of EEOC’s responsibilities is to
hold hearings and resolve appeals related to Federal employees. During 2004, EEOC reduced the
inventory of pending hearings and appeals requests from about 12,300 at the end of 2003 to 9,600
at the end of 2004.
The 2006 Budget provides $331 million for EEOC, which is $4 million, or one percent, more than
the level in the 2005 Consolidated Appropriations Act. The Budget would allow EEOC to continue
its outreach to workers and employers, and to reposition the agency for improved service. To support
the President’s New Freedom Initiative—a strategy to integrate people with disabilities fully into
the Nation’s life—EEOC will continue its project to identify States’ best practices for removing employment
barriers faced by people with disabilities. The agency will publish a final report in 2006.
THE BUDGET FOR FISCAL YEAR 2006 329
Teaching Teens about Equal Opportunity
EEOC’s Youth@Work Initiative promotes equal employment opportunity for the next generation of workers.
The Youth@Work website (www.youth.eeoc.gov) explains job discrimination that young workers may encounter
and suggests strategies to respond to it. In addition, the New York District Office’s T.E.A.C.H. (Teen
Education, Assistance, Compliance and Help) program has taught students of several local universities and
high schools about their rights and responsibilities as potential employees and employers.
EXECUTIVE OFFICE OF THE PRESIDENT
The Executive Office of the President (EOP) includes a number of organizations dedicated to serving
the President. As part of the 2006 Budget, the Administration requests a three-part financial
restructuring initiative, which would:
• Consolidate the annual appropriations in the Departments of Transportation, Treasury, Independent
Agencies, and General Government appropriations bill for EOP components that most
immediately serve the presidency—the White House Office, the Office of Policy Development,
Executive Residence, the Office of Administration,White House Repair and Restoration, Privacy
and Civil Liberties Oversight Board, National Security Council, and the Council of Economic Advisers—
into a single appropriation called The White House.
• Extend the general provision for limited transfer authority in section 533 of the Departments
of Transportation, Treasury, Independent Agencies, and General Government Appropriations
Act, 2005 (Division H of Public Law 108-447), to provide for a 10-percent transfer authority
among all of the following accounts: The White House, Special Assistance to the President and
Official Residence of the Vice President, Office of Management and Budget, United States Trade
Representative, Office of National Drug Control Policy, Council on Environmental Quality, and
Office of Science and Technology Policy. Transfers from the Special Assistance to the President
and the Official Residence of the Vice President account are subject to the approval of the Vice
President.
• Continue centralization of rent, after-hours utilities, and health unit funding for the EOP into
the Office of Administration program.
This initiative provides enhanced flexibility in allocating resources and staff in support of the
President and the Vice President, and permits more rapid response to changing national needs and
priorities.
Resources requested for the EOP, and for executive functions and official residence of the Vice
President (see 3 U.S.C. 106 and Public Law 93-346), in 2006 total $329 million, or 1.7 percent, below
the 2005 appropriated level. These resources will support approximately 1,840 personnel, as well as
information technology and other infrastructure needs to serve the President and the Vice President.
FEDERAL COMMUNICATIONS COMMISSION
The President’s 2006 Budget proposes $304 million for the Federal Communications Commission
(FCC), of which $299 million would be offset directly by regulatory fees. This funding provides inflationary
increases and supports the Commission’s ongoing work to ensure that Americans have rapid
and efficient communications services.
330 OTHER AGENCIES
Demanding that Government Programs Demonstrate
Results
The Telecommunications Development Fund (TDF) was
created by the Congress in 1996 with the mandate to
finance small businesses in the telecommunications
sector, help develop new technologies, and promote universal
service. It started operations in 1998 as an equity
investment venture capital fund focusing on early-stage
companies. Over the years, the firm has been capitalized
by the Federal Government; it retains the interest earned
on deposits made by bidders in FCC spectrum auctions.
Between 1998 and 2003, TDF received nearly $50 million
in interest on these deposits.
Through the end of calendar year 2003, TDF had invested
a total of $14.5 million in about 14 companies.
TDF has already written off more than $10 million of
these investments. TDF spent approximately $9 million
on salaries and other administrative expenses during the
same period. As of December 2003, TDF also held $29
million in cash equivalents.
Over the same period, private markets provided billions of
dollars in early-stage venture capital to the telecommunications
sector. Also, the Universal Service Fund provides
over $6 billion annually to promote universal service.
As a result of TDF’s disappointing performance, lack of impact,
and high administrative costs, the Budget proposes
terminating the fund and returning remaining assets to the
Treasury.
Recent years have witnessed
enormous growth in advanced communications
technologies. Following the
FCC decision to deregulate broadband,
companies announced over $6 billion in
planned investment to bring broadband
to an additional 20 million homes,
supporting the Administration’s goal
of universal, affordable access to
broadband by 2007. The FCC plans
to auction 90 MHz of spectrum for
advanced wireless services, half of
which represents spectrum moving
from Federal to private use. This spectrum
will allow multiple companies
the opportunity to become broadband
providers—stimulating vigorous competition
and bringing lower prices and
improved services to consumers.
Spectrum auctions have proven to
be an effective mechanism to assign
licenses for certain spectrum-based
services. Since 1994, communications
service providers have won over
25,000 licenses and paid over $14
billion into the Treasury through FCC
auctions. The Administration supports
legislation to extend indefinitely the
FCC’s auction authority, which expires
in 2007.
To continue to promote efficient
spectrum use, the Administration also supports granting the FCC authority to set user fees on
unauctioned spectrum licenses based on public-interest and spectrum-management principles. Fee
collections are estimated to begin in 2007 and total $3.1 billion in the first 10 years.
To encourage the digital transition, the Administration seeks to create incentives for television
broadcasters to vacate the analog spectrum, as required by law, in a timely fashion. The Administration
supports authorizing legislation for the FCC to establish an annual lease fee for analog spectrum
use by commercial broadcasters starting in 2007. Individual broadcasters would be exempt as they
return their analog spectrum, and collections would decline.
FEDERAL DEPOSIT INSURANCE CORPORATION AND NATIONAL
CREDIT UNION ADMINISTRATION
The purpose of deposit insurance is to maintain stability and public confidence in the Nation’s
banking system. Federal deposit insurance, offered by the Federal Deposit Insurance Corporation
(FDIC) and the National Credit Union Administration (NCUA), is designed to protect depositors from
losses due to failures of insured commercial banks, thrifts (savings institutions), and credit unions.
THE BUDGET FOR FISCAL YEAR 2006 331
Individual deposits of up to $100,000 are covered in most U.S. banks, savings associations, and credit
unions.
Currently, the Federal Government, through FDIC and NCUA, insures $4 trillion in deposits at
more than 18,000 institutions. These agencies maintain insurance reserves to reimburse depositors
at failed institutions. FDIC and NCUA fund these reserves through assessments on insured institutions,
recoveries of assets liquidated from failed institutions, and interest credited to these reserves
from U.S. Treasury securities. At the end of 2004, the insurance reserves at the FDIC exceeded $46
billion, while the insurance fund balance at the NCUA was over $6 billion. In 2004, 27 commercial
banks and credit unions, worth approximately $300 million in combined assets, failed. This compares
to 2003, when 12 institutions with $1.2 billion in assets failed.
While the deposit insurance system for banks and thrifts is generally sound and well managed, it
has structural weaknesses that, in the absence of reform, could deepen over time. The Administration
supports reforms that would strengthen the deposit insurance system managed by FDIC. The
Administration supports the proposal submitted by the Treasury Department and Federal banking
regulatory agencies to the Senate in 2003 that would accomplish this objective. The proposal drew
on a framework outlined by the FDIC and discussed in congressional testimony and elsewhere by
the Department of the Treasury officials.
• FDIC has been prohibited from charging premiums to well-capitalized and well-run institutions
since 1996. Therefore, under the current pricing structure, fewer than 10 percent of banks and
thrifts pay regular insurance premiums. The proposal would restore the FDIC’s ability to levy
premiums for the benefit of deposit insurance, and to vary those premiums according to the
relative risks to the insurance fund posed by each institution. It also would enable the FDIC to
ensure that institutions compensate the fund for insured deposit growth.
• Under the current system, FDIC is required to maintain a designated reserve ratio (DRR), the
ratio of insurance fund reserves to total insured deposits, of 1.25 percent. When the reserve
ratio falls below the DRR, the FDIC must charge premiums that are sufficient to restore the
reserve ratio to the DRR within one year. If the reserve ratio remains below the DRR for more
than one year, FDIC must charge premiums that average no less than 23 basis points. Such a
premium increase could occur when the banking system, and probably the economy, are under
serious stress. The proposal would permit FDIC to alter the DRR within a range and give FDIC
broad discretion in managing reserves within this range. This flexibility will enable reserves
to grow when economic conditions are good, in order to enable the fund to better absorb losses
under adverse conditions without sharp premium increases.
• The Administration supports merging the bank and thrift insurance funds, which offer an identical
product. A single merged fund would be stronger and better diversified than either fund
alone, and, therefore, would improve the system’s ability to withstand future losses.
FEDERAL ELECTION COMMISSION
The Federal Election Commission (FEC) administers the Federal laws governing financing of candidates
for the Presidency, Vice Presidency, the U.S. Senate, and the U.S. House of Representatives.
FEC requires candidate disclosure of campaign finance information, enforces financing and contribution
limits, and oversees the public funding of Presidential elections. The President’s Budget proposes
$54.6 million to fund these activities in 2006.
332 OTHER AGENCIES
FEDERAL TRADE COMMISSION
The Federal Trade Commission (FTC) enforces consumer protection laws that prevent fraud, deception,
and unfair business practices, and promotes consumer choice and public understanding of
free markets. The Commission also enforces Federal antitrust laws, which prohibit anticompetitive
mergers and other business practices that restrict competition and harm consumers. The 2006
President’s Budget proposes $212 million for the FTC, which will be partially offset by fee collections
from businesses for merger filings, and from telemarketers for access to the Do-Not-Call list in order
to avoid calling registered phone numbers.
The Budget includes funding for the FTC to continue enforcing the National Do-Not-Call Registry,
in partnership with States and the Federal Communications Commission. Since its inception, more
than 73 million numbers have been signed up for the Do-Not-Call Registry, which has stopped over
835 million unwanted telemarketing calls each month.
Experts estimate that unsolicited email (spam) costs U.S. businesses between $10 billion and
$87 billion annually. The FTC currently is pursuing cases under the Controlling the Assault of
Non-Solicited Pornography and Marketing Act (CAN-SPAM Act), which the President signed in
December 2003 to provide the FTC with new tools to address the negative economic and social
impacts of unsolicited email.
Identity theft has affected the lives of more than 27 million victims over five years and has resulted
in billions of dollars in losses for businesses and consumers. As part of its continued efforts to stem
identity theft and increase consumer credit protection, the FTC is establishing new rules pursuant
to the Fair and Accurate Credit Transactions Act, including a rule to allow certain servicemembers
to place an alert on their credit report to help protect them from identity theft while deployed.
As part of its efforts to monitor the marketplace for anticompetitive mergers and practices, FTC
pursues administrative remedies in antitrust cases regarding a variety of consumer issues, such as
high technology, health care, and oil and gasoline.
The Budget supports the FTC’s continued work to help ensure that American businesses and
consumers reap the full benefits of our free market.
GENERAL SERVICES ADMINISTRATION
The General Services Administration (GSA) assists Federal agencies in operating more efficiently
and effectively by providing superior workplaces, expert information technology solutions, and best
value acquisition services.
GSA owns approximately 1,600 buildings, accounting for about 180 million square feet of space.
GSA continues its efforts to assess the financial and physical condition of its existing inventory and
is restructuring its real estate portfolio to focus primarily on those income-producing properties that
meet capital reinvestment needs. Since 2001, GSA has completed 30 construction projects and 32 major
repair and alteration projects. In 2006, the Budget proposes funding for 12 construction projects
and 10 major repair and alteration projects. The most sizable project is funding for a new Federal
courthouse in San Diego, California ($231 million).
In 2006, GSA will significantly advance the President’s Management Agenda. GSA will spend
$45 million on E-Government projects that use improved Internet-based technology to make it easy
for citizens and businesses to interact with the Government, save taxpayer dollars, and streamline
citizen-to-Government contact. Furthermore, GSA has begun to make greater use of performance
information in management by developing a performance-based budget request and implementing a
THE BUDGET FOR FISCAL YEAR 2006 333
new performance appraisal system that holds employees accountable for their contributions to overall
agency performance.
The 2006 President’s Budget also proposes changes to the funding mechanism and organization of
the Federal Technology and Supply Services. First, the Budget proposes to establish a new General
Services Fund by merging the Information Technology Fund and the General Supply Fund. This
action will improve accountability by bringing oversight of the Fund under the agency’s Chief Financial
Officer. Due to the evolution of how information technology is acquired—buying solutions
that are a mix of products and services rather than stand-alone hardware or services—two separate
Supply and Technology organizations are no longer needed. Therefore, the Budget proposes breaking
down these artificial barriers by merging the two services into a Federal Supply and Technology
Service. The result of this restructuring includes increasing organizational efficiencies, improving
coordination by streamlining functions, and achieving savings for customer agencies by modifying
fee structures. GSA will develop an aggressive action plan to achieve these objectives by July 2005.
Also, in January 2006, GSA will reduce the fee agencies pay when using Government-wide contracts
to procure commercial services and products.
INSTITUTE OF MUSEUM AND LIBRARY SERVICES
The Institute of Museum and Library Services (IMLS) is established within the National Foundation
on the Arts and Humanities. Through its grant programs and leadership activities, IMLS assists
museums and libraries in sustaining their contributions to educating our citizens and strengthening
our communities. The Administration continues to support the important role of libraries and
museums with a 2006 Budget proposal of $262 million, including nearly $22 million in increases for
priority programs and activities. The request does not continue support for the nearly $40 million in
unrequested, noncompetitive projects that were funded in 2005.
The Budget proposes a $10 million increase for the Library State Grants program, which supports
State efforts to promote access, for individuals of all ages, to learning and information resources at
all types of libraries. The Administration is requesting $26 million for the Librarians for the 21st
Century program, a $3 million increase, to support partnerships between libraries and institutions of
higher education for the recruitment and education of a new generation of library professionals who
are prepared to tackle the technological challenges of the information age. In addition, the Budget
proposes $15 million in increases for IMLS museum programs to support initiatives that enhance
the educational and technological linkages between museums and their communities, and to foster
better evaluation of the impact of these programs on the communities they serve.
NATIONAL ARCHIVES AND RECORDS ADMINISTRATION
The National Archives and Records Administration (NARA) safeguards records of all three
branches of the Federal Government and ensures ready access to records documenting the actions
of Government officials and agencies. In 2006, the Budget proposes $314 million for NARA. Of this
funding, $36 million will go toward development of the initial deployment of the Electronic Records
Archives project, a comprehensive means for preserving and providing access to the Government’s
electronic records. The Budget level also includes $3 million to improve the security of NARA’s
holdings.
334 OTHER AGENCIES
NATIONAL ENDOWMENT FOR THE ARTS
The National Endowment for the Arts (NEA) supports excellence in the arts, brings the arts to
all Americans, and provides leadership in arts education. In 2006, the Budget requests $121 million
for programs and associated costs, including Challenge America: Reaching Every Community
grants and national initiatives such as American Masterpieces: Three Centuries of Artistic Genius.
Funds in the Budget will expand the American Masterpieces Initiative to celebrate our Nation’s
great artistic achievements with special touring programs in dance, visual arts, and music; local presentations;
in-school arts education programs; and student visits to exhibitions, presentations, and
performances. NEA will support projects that extend the reach of the arts by supporting works of
artistic excellence and promoting projects in communities that have not had access to quality arts
programming. These projects will be supported with public and private partners, including State
arts agencies and regional arts organizations.
NATIONAL ENDOWMENT FOR THE HUMANITIES
NEH Chairman Bruce Cole congratulating winners of the 2004 The Idea
of America essay contest for high school students, a newWe the People
program.
The National Endowment for the Humanities
(NEH) serves and strengthens our Nation
by promoting excellence in humanities and
conveying the lessons of history to all Americans.
NEH supports research, education,
preservation, and public programs in the
humanities. In 2006, the Budget requests
$138 million for NEH. Of this, $11 million is
for the continued support of the agency’s We
the People Initiative, which is strengthening
the teaching, study, and understanding of
our Nation’s history and culture. NEH
funding also will support partnerships with
State humanities councils; the enrichment
of humanities education; efforts to preserve
and increase access to important reference
materials; and museum exhibitions, television
and radio documentaries, and reading programs in the humanities that reach millions of Americans.
NATIONAL LABOR RELATIONS BOARD
The National Labor Relations Board (NLRB) regulates private-sector employer and union relations
to minimize interruptions to commerce caused by strikes and worker-management discord. NLRB
supervises elections in which employees determine whether to be represented by a union. The Board
is also authorized to prevent and remedy unlawful acts, called unfair labor practices, by unions or
employers. In 2006, NLRB expects to receive 29,000 unfair labor practice cases and 5,100 representation
cases.
Fair and expeditious case resolution is NLRB’s highest priority. The agency is more effective when
it can achieve a voluntary resolution of meritorious cases, thereby reducing the need for time-consuming
and costly litigation. NLRB will continue its goal of settling 95 percent of its unfair labor
practice cases before they require a decision by the five-member Board; in 2004, the settlement rate
THE BUDGET FOR FISCAL YEAR 2006 335
was 96.1 percent. Through its performance goals, NLRB will continue to place a high priority on
reducing its case backlog, especially on the oldest pending cases.
The 2006 Budget provides $252 million for NLRB’s primary activities, including $208 million for
pay and benefits, which make up 82 percent of the agency’s budget. This amount also includes $8
million for information technology projects, such as automated case management, and the maintenance
of key administrative systems.
NATIONAL TRANSPORTATION SAFETY BOARD
The National Transportation Safety Board (NTSB) is charged with determining the probable
causes of transportation accidents and promoting transportation safety. The Board investigates
accidents, conducts safety studies, issues recommendations, and evaluates the effectiveness of other
Government agencies in preventing transportation accidents. The agency also coordinates Federal
assistance to the families of victims of catastrophic domestic transportation accidents. The 2006
Budget provides funding for NTSB to investigate more than 2,500 accidents.
The 2006 Budget provides $77 million for salaries and expenses for the NTSB to fulfill its role of
improving the Nation’s transportation safety.
NUCLEAR REGULATORY COMMISSION
The Nuclear Regulatory Commission (NRC) regulates the commercial use of nuclear material in
the United States. Its programs facilitate the Nation’s safe and effective use of nuclear materials for
civilian purposes. Consistent with the National Energy Policy (May 2001), the Budget provides NRC
with the funds it needs to keep pace with the industry’s interest in the renewal of nuclear power reactor
licenses and the possible construction of new nuclear power plants. To date, NRC has renewed
the operating licenses for 26 of the existing 104 nuclear power plants, and at least 18 more plants
are under review or anticipated through 2005. NRC will continue to improve the effectiveness and
efficiency of its review of designs for advanced reactors and to prepare for potential combined license
applications. In addition to licensing, NRC also performs inspections on all existing nuclear power
plants to ensure that safety issues are identified and resolved before they affect safe plant operation.
Since September 2001, NRC has strengthened its regulatory programs in support of the Nation’s
efforts to enhance homeland security and preparedness, including actions to improve security at the
Nation’s civilian nuclear power plants, nuclear fuel facilities, and other licensed users of radioactive
materials. These efforts will continue in 2006.
NRC also expects to receive from the Department of Energy in 2005 an application to build a
high-level waste repository at Yucca Mountain, Nevada. Upon receipt of the application, NRC’s
workload will expand significantly. This first-of-a-kind undertaking will involve conducting thorough
safety and security evaluations, performance assessments, adjudicatory hearings, and site inspections.
NRC will complete its review and reach a license decision in a timely manner.
To carry out these and other activities, the Budget proposes $702 million in 2006 for NRC. User
fees from NRC licensees will recover approximately 90 percent of NRC’s budget. Appropriations from
the Nuclear Waste Fund will cover the costs of the high-level waste repository effort.
336 OTHER AGENCIES
OFFICE OF PERSONNEL MANAGEMENT
The Office of Personnel Management (OPM) is the central human resources agency for the Federal
Government and the primary policy agency supporting the President as he carries out his responsibilities
for managing the Federal workforce. OPM oversees and safeguards merit system principles
and veterans’ preference and leads Federal agencies in the strategic management of their human
capital. It also proposes and implements human resources management policy, and provides agencies
with ongoing advice and technical assistance for implementing these policies and initiatives.
Furthermore, OPM administers Federal employee benefits programs and manages personnel security
and background checks for suitability and national security clearances.
The 2006 Budget requests $242 million to finance OPM’s efforts to continue its leadership in the
management and oversight of Government-wide human capital systems, initiatives and strategies,
and administration of the Federal employees’ benefit trust funds (retirement, health benefits, and
life insurance).
Through the Strategic Management of Human Capital, one component of the President’s Management
Agenda, OPM is leading efforts to transform the way agencies manage the Federal workforce
and enhance the value of the civil service. In this capacity, OPM provides agencies the tools to manage
their workforce and implements new human resources management policies. In 2006, it will
further streamline the Federal hiring process, decrease the time agencies use to hire new Federal
employees, and change how Federal employees are paid and how their job performance is evaluated.
Many of these new policies will be informed by lessons being learned from OPM’s partnerships with
the Departments of Homeland Security and Defense in setting up new human resources management
systems in these two large agencies.
In addition, OPM is the managing partner for the Human Resources Line of Business, which includes
five projects under the President’s E-Government initiative: Recruitment One Stop, E-Training,
E-Clearance, Enterprise Human Resources Integration, and E-Payroll. These initiatives will
save the Government about $2.7 billion dollars over the next 10 years. For example, Recruitment
One Stop reduces the complexity of Federal hiring and decreases the cost per hire. To date, the
USAJOBS website has received over 100 million visits by citizens to locate and apply for Federal
jobs. In addition, the E-Training project offers the convenience of web-based training to the Federal
workforce, leading to savings in tuition and travel costs and by compressing learning time. Over
440,000 users have registered on the GoLearn.gov site and completed over 310,000 courses, since its
inception. The E-Clearance project will reduce the time to process clearances and reduce duplicative
investigative efforts, while the E-Payroll project alone will save the Government $1.1 billion dollars
over the next decade by consolidating civilian payroll processing. The Enterprise Human Resources
Integration project will reduce the need for paper personnel documents and improve the currency and
accuracy of Federal human resources data. Recruitment One Stop and E-Clearance are funded fully
now by user fees paid by agencies. The Administration anticipates that in 2006, E-Payroll will be
completed and that E-Training will mature to a level that will allow it to operate on a fully fee-funded
basis in 2007.
OPM will pay out $94 billion in benefits in 2006: $59 billion to more than 2.5 million Federal retirees,
survivor annuitants, and other beneficiaries; $33 billion in health benefits for about 8 million
enrollees and dependents; and about $3 billion in life insurance claims from policy holders. OPM will
enhance the competitiveness and value of these programs in 2006 as it implements dental and vision
coverage. These new offeringswill join other recent additions to the suite of employee benefits, including
Health Savings Accounts, Flexible Spending Accounts, and long-term care insurance, ensuring
THE BUDGET FOR FISCAL YEAR 2006 337
that the Federal Government continues to be a competitive and model employer that balances work
and family needs and offers choices to employees as consumers.
OPM will continue its internal emergency preparedness planning and maintain its leadership in
this arena Government-wide. It will continue to be a strong advocate for such planning in all Federal
agencies.
POSTAL SERVICE
The Administration continues to support the enactment of comprehensive postal reform legislation
that is consistent with the report of the President’s Commission on the United States Postal Service
and is guided by the principles of BestGovernance Practices, Transparency, Flexibility, Accountability,
and Self-Finance, as expressed by the President on December 8, 2003. The Postal Service provides
an important service to the American people and the economy, and the Administration believes that
the Postal Service should continue providing affordable and reliable universal service, while limiting
exposure to taxpayers and operating appropriately in the competitive marketplace.
The Administration is committed to working with the Congress and postal stakeholders in early
2005 to bring about needed reforms that ensure that we have a healthy Postal Service for future
generations. To this end, the Budget proposes to use the pension savings provided to the Postal
Service by the Postal Civil Service Retirement System Funding Reform Act of 2003 (P.L. 108-18) that
would otherwise be held in escrow in 2006 and beyond, to put the Postal Service on a path that fully
funds its substantial retiree health benefits liabilities.
REGIONAL ECONOMIC DEVELOPMENT AGENCIES
The President’s 2006 Budget proposes $78 million for three regional economic development
agencies: the Appalachian Regional Commission, the Delta Regional Authority, and the Denali
Commission. The President’s proposal recognizes the constructive role of the regional economic
development agencies in coordinating, planning, and fostering partnerships among the Federal,
State, local, and private sectors. This coordination has a positive impact on the effectiveness and
efficiency of Federal activities targeted to improve the quality of life and remedy severe and chronic
economic distress within Appalachia, the Mississippi Delta area, and Alaska.
SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission (SEC) protects investors and works to maintain fair,
honest, and efficient markets. SEC’s activities are critical to the health of our securities markets,
which in turn are a vital part of our national economy. In calendar year 2004, the dollar volume of
shares traded on the New York Stock Exchange and theNasdaq Stock Market was almost $19 trillion.
SEC oversees key participants in the securities world, including stock exchanges, broker-dealers, investment
advisors, mutual funds, and public companies. During that year, SEC oversaw roughly
5,330 broker-dealers with approximately 96,000 branch offices and 664,100 registered representatives.
SEC also oversaw an estimated 5,000 investment companies with 36,500 portfolios and $8.1
trillion in assets, and 8,550 investment advisers with $23 trillion in assets under management. In
2006, the President’s Budget makes available $888 million for SEC.
338 OTHER AGENCIES
Protecting Investors
SEC is the preeminent enforcement agency in investor markets. SEC works to prevent fraud and
manipulation in securities markets by reviewing corporate disclosure data, investigating investor
complaints, and monitoring exchanges for unusual activities. In addition, SEC recently created a
new Office of Risk Assessment designed to improve the agency’s ability to anticipate potential problem
areas across the securities industry by focusing on early identification of new or resurgent forms
of fraud and illegal or questionable activities. In 2004, SEC opened 973 investigations and initiated
an estimated 610 enforcement actions against individuals and companies for violations of securities
laws. Through these efforts, SEC was able to halt fraudulent activities quickly, seek civil penalties,
and order violators to disgorge ill-gotten gains. Major enforcement actions in 2004 included:
• Seventeen actions against a variety of persons associated with mutual funds, including investment
advisers, fund directors and brokers, and registered investment advisors. These actions
involved late trading of mutual fund shares, abusive market timing arrangements, or both. As
a result, SEC ordered $477 million in disgorgement and $457 million in penalties in abusive
market timing and late-trading cases to be distributed to injured investors.
• Charges against former Enron and WorldCom executives whose allegedly fraudulent activities
contributed to the collapse of the two companies and resulted in losses of billions of investor
dollars.
• More than $246 million in penalties and disgorgements against New York Stock Exchange specialist
trading firms for profiting from improperly executing customer trading orders. These
activities resulted in customers receiving inferior prices or having orders that went unexecuted
altogether.
The SEC is also an active participant in the President’s Corporate Fraud Task Force, an interagency
working group, led by the Department of Justice, designed to aggressively pursue joint civil
and criminal actions against corporate wrong-doers.
Improving Transparency
SEC works to ensure that all investors have access to certain basic facts about an investment and
to prevent fraud and misrepresentation of those facts in securities markets. SEC requires that public
companies submit detailed financial information, which it makes available to the public through its
website (www.sec.gov/edgar.shtml).
SEC focuses on making sure that rules and regulations are clear for market participants, especially
small business and individual investors. It is important to the health of the economy and the role
that public companies play in job creation that the benefits of securities regulation outweigh the
costs. SEC recently established the Advisory Committee on Smaller Public Companies to examine
the benefits and costs of the Sarbanes-Oxley Act and other Federal securities laws on smaller public
companies. For example, the advisory committee will review the impact of new internal control rules,
financial reporting regulations, and corporate governance requirements to evaluate the net benefits
to investors. Its members will also make recommendations to SEC to ensure that smaller companies
are able to grow and succeed by accessing capital in the public markets.
THE BUDGET FOR FISCAL YEAR 2006 339
SMITHSONIAN INSTITUTION
In 1829, James Smithson, a British scientist, bequeathed his estate to the American people for the
“increase and diffusion of knowledge.” Today, the Smithsonian Institution supports that goal through
its operation of National museums and research institutes. Approximately two-thirds of the Smithsonian’s
funding is from direct Federal appropriations; the remainder comes from its endowment
fund, private donations, business activities, and grants from other Federal agencies. In September
2004, the Smithsonian opened its eighteenthmuseum, the NationalMuseum of the American Indian,
dedicated to celebrating the culture of the Native peoples of the Western Hemisphere.
The National Museum of the American Indian.
The 2006 Budget provides $615 million
in Federal funding for the Smithsonian.
Funds are provided to prepare for the July
2006 reopening of the newly renovated
Patent Office Building, continue a major
revitalization project at the National Museum
of American History and continue ongoing improvements
at the National Zoo. The Budget
also accommodates lease costs, maintenance
requirements and inflation-related adjustments
across the Institution. Addressing
these increases in a time of fiscal constraint
requires that the Smithsonian continue to
prioritize and seek out innovative cost-saving
mechanisms.
The Smithsonian continues to receive low ratings in many of the President’s Management Agenda
initiative areas, in part due to its long history of decentralization and unique management structure.
However, the Institution continues to implement management reforms and best practices and
has made marked progress in coordinating its information technology portfolio, assessing its future
workforce needs, and linking its budget and senior staff compensation to performance measures.
TENNESSEE VALLEY AUTHORITY
The Tennessee Valley Authority (TVA) is a wholly owned agency of the United States Government
created in 1933 by the TVA Act. TVA serves the people of the Tennessee Valley by providing power
to the Tennessee Valley region, and supports navigation, flood control, and economic development
in the area. TVA operates the largest public electric power system in the United States. It serves a
population of more than eight million customers throughout most of Tennessee, northern Alabama,
northeastern Mississippi, southwestern Kentucky, and small portions of Georgia, North Carolina,
and Virginia. TVA is the exclusive wholesale power provider within this geographic region.
TVA’s 2004 operating revenues totaled approximately $7.7 billion and its receipts and expenditures
are included in the Federal Budget. TVA uses its internally generated proceeds to fund power
generation and transmission operations as well as its resource stewardship programs. Annual expenditures
of $87 million are devoted to TVA’s resource stewardship program, which includes recreational
activities, river stewardship, and navigation services. The remaining funds are devoted to
power generation and transmission services.
340 OTHER AGENCIES
TVA transmission lines.
TVA faces several operating and financial challenges posed by the
dynamic business environment and changing electricity market in
which it functions. Some of these challenges were addressed by the
Consolidated Appropriations Act of 2005, which includes reforms
that will assist TVA in moving toward a more efficient management
and business structure. It also requires TVA to file statements with
the Securities and Exchange Commission (SEC) to allow for more
transparency of its business operations.
The 2006 Budget proposes additional reforms for TVA that will help
position it for a more competitive market in the future, strengthen its
financial position, and better serve its customers and investors. Proposals
include legislation that would require TVA to register its debt
securities with the SEC to provide investors with greater insight into
the characteristics and risks inherent in TVA securities. In addition,
the Budget proposes granting the Federal Energy Regulatory Commission
(FERC) jurisdiction over TVA’s transmission system, similar
to that which FERC has over public utilities.
TVA continues to be burdened by its excessive debt level, currently estimated at $26 billion. The
2005 Budget included a goal endorsed by the TVA Board of reducing TVA’s debt by $3 billion to $5
billion over the next 10 to 12 years. In order to increase TVA’s financial flexibility and minimize its
risk exposure, the Budget maintains that goal. In addition, fulfilling a commitment in the President’s
2005 Budget, the 2006 Budget includes specific legislative language that clarifies the definition of
TVA’s debt. Some agency transactions, such as equipment lease/leasebacks and long-term power prepayment
agreements, result in liabilities that make a claim on future agency resources and have risk
similar to traditional debt, and therefore constitute a form of debt which should be counted toward
TVA’s statutory debt limitation. To ensure the integrity and usefulness of TVA’s debt cap, the Administration
is proposing legislation to ensure that these types of debt-like transactions are treated
as debt and counted toward TVA’s $30 billion statutory debt limit.
In 2000, TVA’s Inspector General (IG) became Presidentially-appointed. TVA’s IG funding level is
subject to TVA Board approval and is derived directly from TVA revenues. All other Presidentiallyappointed
IGs are funded through annual appropriations. The Budget reproposes to appropriate
funds for TVA’s IG out of TVA’s revenues beginning in 2006.
