Without Office of Management and Budget oversight, agencies may try to exempt themselves, law professor has testified.
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Democrats suggest 49 amendments to the measure; one would require agency chief to have small business experience.
A request for proposals expected this summer would allow contractors to compete against federal service centers.
The military must foster partnerships as it focuses on stability operations.
Unauthorized access to secure areas, slow processing of large payments, procedures for hiring juveniles were among the problems.
Move will help 2,000 secret-level applications; Top Secret credentials and requests for re-investigations still stalled.
One measure would make the agency independent again; other would keep it within the Homeland Security Department.
Neither the White House nor House leaders want the final price tag to exceed $94.5 billion.
Department to assume responsibility for additional detainees, enforcement.
Funds freed up would be used to hire investigators, mediators and attorneys for field offices.