IRS Cuts Delayed

THE DAILY FED

IRS Cuts Delayed

The plan, part of an omnibus spending bill covering agencies like IRS that have not yet received fiscal 1997 appropriations, will not allow the IRS to reorganize its field offices before next March. The agency will be required to justify its plan to downsize through a reduction-in-force before implementing it. The agreement also sets aside more than $25 million for employee buyouts.

Under the plan, IRS's budget would be $7 billion for fiscal 1997, almost $1 billion less than the Clinton administration requested and $342 million less than last year's budget.

The agency's computer modernization program will take a large chunk of the budget cuts. A congressional aide said some of its employees may be transferred to the IRS Year 2000 program to update software codes that are likely to malfunction at the turn of the century.

In another key civil service reform decision, the House rejected a bill that would have made employee performance ratings more important than seniority when layoffs are decided. The vote fell short of the two-thirds majority it needed to move on to the Senate.