The Senate voted Monday to slash the proposed 1989 Internal Revenue Service budget by $241 million and use the money for the Customs Service's anti-drug program. The anti-drug measure was part of a larger bill that also calls for a 4 percent pay increase in 1989 for all federal civilian employees except members of Congress, and 4.1 percent for military personnel. The Senate approved an amendment requiring that no future pay increase for members of Congress take effect until voted on separately by the House and Senate. The White House had opposed reducing the IRS spending. It cautioned that the ``impact of this reduced level on returns processsing and taxpayer services would be devastating.'' IRS Commissioner Lawrence B. Gibbs had complained that the reduction could cut revenues by $1.4 billion next year. The cut in the IRS budget, to the 1988 level of just under $5.1 billion, was part of a bill that included $15.9 billion for the Treasury Department and its agencies, the Postal Service and several other federal agencies. The vote was 81-4. The spending bill is $246 million less than the administration asked and $196.3 million below what the House passed. The measure is about $801 million over what was appropriated for the same agencies for 1988. When he sent his budget to Congress in January, President Reagan asked for a $241 million increase for the IRS ``to improve the speed and accuracy of tax processing and expand information services provided to taxpayers'' in light of the 1986 tax overhaul. The House agreed. When the Senate panel was considering the appropriations bill last week, James C. Miller III, director of the White House Office of Management and Budget, said that holding the IRS budget to this year's level would ``jeopardize service to the public both in terms of taxpayer inquiries and timely returns processing.'' ``These areas are particularly high priorities of the administration, given the need to implement tax reform fully and the desire to avoid repeating the disruptions of the 1985 filing season,'' Miller wrote. However, the Senate committee concluded that ``the level of funding proposed by the committee will allow the IRS to meet its revenue-raising targets established in the'' deficit-reduction agreement reached by the White House and Congress last year. The bill includes $1.05 billion for the Customs Service, which is $79 million above what the administration requested and $41 million over what the House passed. ``I am proud to say that this bill goes the extra mile, beyond the president's budget to maintain our important anti-drug effort at some of the most important drug enforcement agencies,'' said Sen. Dennis DeConcini, D-Ariz., chairman of the Senate Appropriations subcommittee on the treasury, postal service and general government, which wrote the measure. As part of the Customs Service efforts against illegal drugs, the bill recommends the agency buy a surveillance airship capable of carrying a sensor that can detect ship movements in the Gulf of Mexico. The measure includes money for customs to develop four long-range P-3 Orion planes to use in drug surveillance missions. The Senate approved an amendment by Sen. Paul Simon, D-Ill., suggesting that the Postal Service not activate the second part of a contract with Perot Systems Corp. until the General Accounting Office studies the contract. The corporation, headed by billionaire H. Ross Perot, would get a share of the profits from cost-saving suggestions it made to the Postal Service. Simon contends such a lucrative contract should not have been awarded without bids.
