Treasury budget proposals aimed at modernization

President Bush's fiscal 2006 budget request for $612 million to update high-tech efforts throughout the Treasury Department and its agencies would go toward modernizing programs and boosting online services, but at least one lawmaker expressed skepticism Tuesday.

Treasury Secretary John Snow told the Senate Appropriations subcommittee with jurisdiction over the department that the president's proposal adheres to the principle that "taxpayer dollars must be spent wisely, or not at all."

But the subcommittee's ranking Democrat, Patty Murray of Washington, questioned whether the department is following this principle. The committee receives a continuing "stream of reports" from the Government Accountability Office and the inspector general regarding "projects that are way behind schedule, that cost more than they should or that are not adequately secure," she said. "When it comes to addressing the agency's physical and IT infrastructure, it's clear that Treasury needs to do a better job on how it spends the dollars it collects from taxpayers."

Bush's request of $11.6 billion for Treasury includes $236.2 million for the Financial Management Service, which manages the government's collections and payments system. Among the service's electronic initiatives are a program that converts checks to electronic debits and Pay.gov, which offers on-line electronic financial services to federal agencies.

Bush's request also calls for $199 million for continued efforts to modernize the tax system. "Business system modernization" funding for the IRS is designed to activate online e-services functionality for tax practitioners, brokerage firms and banks, facilitating speedier transactions such as e-filing. Funds also would go to support a program offering electronic filing for large corporations and tax-exempt organizations.

The department also would continue with plans to have a database of customer accounts replace an outdated system that stores tax returns. The department estimates that the data engine ultimately will hold tax information for more than 200 million tax returns each year.

Under the proposed budget, TreasuryDirect, operated by the department's Bureau of the Public Debt, would be expanded with a $179.9 million appropriation. The system allows Treasury customers to manage their investment accounts online.

An additional $7.9 million would go toward improving information technology infrastructure in the areas of financial management and combating terrorist financing.