Washington, May 21 2009 May 21 - Treasury Secretary Tim Geithner told a House Appropriations subcommittee today that Treasury needs a 5.3% budget increase for fiscal year 2010 largely to increase IRS enforcement efforts, but said the office that runs the TARP will need less money next year.

Geithner told the subcommittee that Treasury is asking for a $13.4 bln budget for FY 2010, 5.3% more than the current year budget. Out of this $676 mln increase, Treasury envisions spending an additional $332 mln to improve IRS enforcement efforts, including $128.1 mln to add almost 800 new IRS employees that will fight offshore tax evasion.

Geithner added that Treasury wants another $137 mln to double the size of the Community Development Financial Institutions fund, a program aimed at supporting financial institutions in "economically distressed communities."

The Office of Financial Stability, which oversees the TARP, is currently budgeted at $279 mln, but Geithner said Treasury is proposing a smaller budget of $262 mln in FY 2010. He said the reduction is possible because Treasury estimates fewer contracts will be written in the next year than were written when the program started up.

Geithner also said Treasury has "no plans to request additional funding for direct management of the program (TARP), which was provided for under the Emergency Economic Stabilization Act approved by Congress last fall."

Geithner briefly outlined the administration's efforts to combat the housing and credit crises, but in less detail than he did yesterday.

pete.kasperowicz@thomsonreuters.com /wash

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