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Gas Tax Holiday Would Yield Little for Consumers (05/13/2008)
Increasing gasoline prices have spurred federal lawmakers to propose policies designed to help consumers at the pump. One such proposal that has garnered considerable attention is a "gas tax holiday." Unfortunately, this proposal would do little for consumers because it would be unlikely to lower the price of gas.
House Foreclosure Legislation Meets GOP Ambiguity (05/13/2008)
Despite a worsening housing crisis across the country, Congress continues to move slowly to enact legislation intended to ease the burden for homeowners. On May 8, the House adopted comprehensive legislation (H.R. 3221) that would seek to reduce foreclosures in the face of an administration veto threat issued just days before. But Senate negotiations between the chair and ranking member of the Banking, Housing, and Urban Affairs Committee have gone on for weeks, with no deal in sight. Most members' eagerness to pass a bill to address the crisis before Memorial Day has thus far been thwarted by key GOP leaders in Congress and some in the Bush administration.
Congressional Hearings Explore Contracting Waste, Fraud, and Abuse (05/13/2008)
The Senate Democratic Policy Committee (DPC), the political arm of the Democrats in the Senate, has been holding a series of investigatory hearings concerning contracting problems during the Iraq war. The series of hearings has been aimed at increasing accountability and oversight of the federal contracting process, particularly related to the reconstruction of Iraq and the increased outsourcing of key military functions during the war.
Contract Reform Takes Center Stage in House (04/29/2008)
A group of reform bills that would bring accountability and transparency to the federal contracting process has been approved by the House in the last few months, potentially setting the stage for federal contracting reform to be a major area of legislative action in the remaining months of the 110th Congress.
Lack of Action in Congress on Pivotal Fiscal Policy Issues (04/29/2008)
Congress continues to wrestle with a number of high-profile budget and financial bills that will have broad impact on citizens throughout the United States and around the world, including legislation on war funding, economic stimulus, housing, and the last budget of the Bush presidency. Despite significant congressional rhetoric and media coverage of these efforts, Congress has made little real progress on reaching compromise or instituting policies.
Housing Crisis Legislation: A Tale of Two Houses (04/15/2008)
By fits and starts, Congress is moving toward a legislative response to the housing sector crisis — the biggest sectoral crisis to afflict the U.S. economy since the technology stock bubble burst earlier this decade. In what might turn out to be a case of the tortoise and the hare, the Senate has jumped out front with a housing bill that enjoys little if any support in the House or the Bush administration, while the House has embarked on a schedule of hearings and mark-ups of a much-praised bill of a wholly different nature. There is a widely shared consensus that, with elections approaching, Congress must and will act to address the crisis, but thus far, the two houses are proceeding along on separate, if not perpendicular, tracks.
House Cancels Private Tax Collection Program (04/15/2008)
On April 15, the House passed the Taxpayer Assistance and Simplification Act of 2008 (H.R. 5719). The bill, approved by a 238-179 vote, is a collection of provisions aimed at facilitating income tax compliance — especially among elderly and low-income taxpayers. Most significantly, the bill would end the Internal Revenue Service's (IRS) highly controversial private debt collection (PDC) program.
New Report Shows "Historic Collapse" in Audit Rates of Largest Corporations (04/15/2008)
A report released by Transactional Records Access Clearinghouse (TRAC) at Syracuse University highlights a disturbing trend in Internal Revenue Service (IRS) audit rates of large corporations. Audit rates for corporations with $250 million or more in assets (large corporations) are at a historic low at 26 percent. Analyzing IRS data — portions of which had to be obtained through Freedom of Information Act (FOIA) requests — TRAC also found that the decline in audit rates has been accompanied by declines in audit quality.
Senate Considers Plan to Offset AMT with eBay Auctions, Bake Sales (04/01/2008)
You're reading the special April Fools' Day, 2008, edition of The Watcher.
A major divide between the House and Senate budget resolutions — whether or not a $70 billion Alternative Minimum Tax "patch" should be offset with other revenue increases or spending cuts — may be bridged by week's end. An April 1 Congressional Budget Office scoring of Senate Finance Committee Chair Kent Conrad's (D-ND) plan to utilize "alternative revenue methods" may break the congressional logjam. Conrad's measure would allow federal agencies to partially fund their operations through either bake sales or the auctioning off of surplus agency assets through the Internet auction site eBay. "Schools all across the nation do it, so it just makes sense that the federal government avail itself of these taxpayer-friendly revenue enhancers," said Conrad before returning his attention to icing cupcakes.
Bills Improving Federal Contracting Gain Momentum (03/18/2008)
In FY 2007, the federal government paid contractors about $420 billion to provide thousands of goods and services, but it had little insight into whether those companies were delinquent in paying their federal taxes, had broken contracting rules or laws, or if those firms paid top-level executives exorbitant levels of compensation. However, if several proposed bills become law, these obstacles to oversight and transparency will be greatly reduced. H.R.s 3033, 3928, and 4881 were approved by the House Oversight and Government Reform Committee the week of March 10, while H.R. 5602 and a companion Senate bill were introduced the same week.
Budget Resolution: Recap and the Road Ahead (03/18/2008)
Late on March 13 and early in the morning of March 14, the House and Senate adopted $3 trillion budget resolutions for Fiscal Year 2009 by votes of 212-207 and 51-44, respectively. While the resolutions are similar in terms of broad policy outlines and priorities, they differ on a few major points, including the total amount of discretionary spending and whether to offset the cost of a one-year patch to the Alternative Minimum Tax (AMT).
GAO Report Examines Overuse of Supplemental Spending (03/18/2008)
In a recently released report, the Government Accountability Office (GAO) examined ten years of supplemental spending (FY 1997-FY 2006) and found not only a five-fold increase in the amount of expenditures funded through the supplemental process, but also that procedures that enable legislative deliberation are bypassed when Congress funds government operations through supplemental spending. Supplemental spending has become an alternative funding process, parallel to the normal annual appropriations process. This allows certain expenditures to elide close congressional and public scrutiny and allows Congress to escape debate over federal funding priorities.
House Panel Hears Testimony on IRS Policies (03/18/2008)
On March 13, the House Ways and Means Subcommittee on Oversight heard testimony concerning the 2008 tax return filing season, Internal Revenue Service (IRS) operations, the Fiscal Year 2009 budget proposals, and the National Taxpayer Advocate's Annual Report to Congress. Then-Acting Commissioner of the IRS Linda Stiff testified, and Nina Olson, the National Taxpayer Advocate, pressed for reforms that would both protect taxpayer rights and improve tax enforcement.
FY 09 Budget Resolution: Goals, Strategies, and Challenges (03/04/2008)
The House and Senate Budget Committees will soon turn to the congressional budget resolution for Fiscal Year 2009. The draft versions of the budget resolution, to be offered by House Budget chief Rep. John Spratt (D-SC) and Senate Budget head Kent Conrad (D-ND), are likely to be considerably different from President Bush's unrealistic budget proposal submitted to Congress in February.
Assessing the Fiscal Stimulus Package (02/20/2008)
President Bush signed a two-year, $168 billion fiscal stimulus package on Feb. 13 — the largest legislative initiative ever designed to ease an economic slowdown. Although it was passed by overwhelming margins in the House (385-35) and Senate (81-16), there was considerable debate on how to structure the package so as to maximize its efficacy and stimulative impact on the economy.
Emergency War Spending Lacks Transparency, Increasingly Used for Non-Emergency Items (02/20/2008)
The Bush administration's emergency supplemental spending requests for the wars in Afghanistan and Iraq have lacked the transparency that normally accompanies the appropriations process, according to a new report from the Congressional Budget Office (CBO). In addition, the CBO war spending report, however constrained by available data, revealed the composition of the war funding requests has been evolving into broader Defense Department spending initiatives, such as acquiring next-generation aircraft and replacing aging aircraft.
The Bush Budget Legacy: Misleading Claims and Misguided Priorities (02/05/2008)
On Feb. 4, President Bush laid out, in a rather slender volume, his federal budget proposal for Fiscal Year 2009, which begins on Oct. 1. Unfortunately, Bush has made little progress toward constructing an honest, fiscally responsible budget that meets the needs of America's communities. In fact, criticisms identical to those levied a year ago against his FY 2008 budget are still quite suitable in their application today — Bush's assumptions about war spending and Alternative Minimum Tax (AMT) reform are unrealistic if not outright spurious. His attempt to balance the budget by 2012 requires massive cuts to Medicare, Medicaid, and other popular domestic investments Congress will certainly not enact. His proposal to terminate or radically cut 151 federal programs is fantastical — wholesale cuts to popular discretionary programs are not only unlikely but are irresponsible in the face of worsening economic conditions.
Stimulus Status: The Eye of the Storm (02/05/2008)
Momentum in Congress to pass a fiscal stimulus plan has halted for the moment, with the nation's political attention focused on the biggest primary day ever and, to a lesser degree, on the release of the president's FY 2009 budget proposal. Indeed, because Super Tuesday has three senators hop-scotching around the country, Senate leaders have put off an expected showdown over the plan until Wednesday, Feb. 6.
Bipartisan Consensus on Stimulus Package Gathers Momentum (01/23/2008)
Amid slumping capital markets and real estate values, a jump in unemployment, and a growing chorus of economists forecasting a recession in the U.S., a consensus has rapidly developed in Washington during the first few weeks of the year that a fiscal stimulus package is in order. The watchword in Washington has been "bipartisanship," and President Bush and the congressional Democratic leadership have already made concessions. Some questions remain regarding the optimal structure and size of the package, but indications point to its enactment in a matter of weeks.
Lack of Resources and Poor Policies Hurt IRS Mission (01/23/2008)
A lack of enforcement resources, misplaced priorities, and inefficient policies at the Internal Revenue Service (IRS) are among the factors perpetuating the federal tax gap, according to a new OMB Watch report released Jan. 15. The report, Bridging the Tax Gap: The Case for Increasing the IRS Budget, illustrates why the IRS has had such a difficult time recovering the more than $300 billion in federal taxes that go unpaid every year and offers some practical solutions to the problem.
Temporary and Targeted: The Basics of an Economic Stimulus Package (01/08/2008)
The release of dismal national jobs data on Jan. 4 has prompted rumblings from politicians in Washington about the need for an "economic stimulus package." On Jan. 7, President Bush and Treasury Secretary Henry Paulson delivered separate speeches on the state of the economy, in which they addressed the basic outlines of a fiscal policy designed to mitigate the effects of a possible recession. Bush announced he is taking a stay-the-course approach while economists from across the political spectrum are calling for some type of stimulus package. The president could still offer a plan in his State of the Union speech at the end of January.
Despite New Majority in Congress, Fiscal Policy Still Mostly Stuck in Neutral (12/18/2007)
A new congressional majority in 2007 promised a clean break from past practices of a Congress noted for its corruption, dysfunction and profligacy. It moved on a modest agenda and successfully enacted a few important policies, but overall, it failed to chart a new direction in fiscal policy. This failure was due in large part to the majority underestimating the ability and willingness of a coalition of conservative policymakers and the president to fiercely obstruct even the modest reform policies on the new Congress's agenda.
Congress, President Running Out of Time to Achieve Fiscal Priorities (12/04/2007)
In our last issue, The Watcher detailed the status of several federal spending measures that have been delayed most of the fall. In this issue, we take a look at what these delays could mean to millions of American citizens.
Republicans Keep Obstructing Common-Sense Investment Initiatives (11/20/2007)
Over the past few months, an intransigent president and a conservative coalition in Congress have waylaid a host of common-sense, progressive spending initiatives, including the reauthorization of the nutrition section of the Farm Bill, the State Children's Health Insurance Program (SCHIP), and funding for domestic priorities in the Departments of Labor, Health and Human Services (HHS), and Education.
Estate Tax Repeal No Longer on the Table (11/20/2007)
On Nov. 14, the Senate Finance Committee dedicated time to a hearing to investigate uncertainty in estate tax law, despite a plethora of more pressing fiscal issues facing the current Congress.
White House Attempts to Entrench PART at Federal Agencies (11/20/2007)
The White House issued an executive order (E.O. 13450) on Nov. 13 that would attempt to entrench the administration's controversial Program Assessment Rating Tool (PART) within federal agencies long after President Bush leaves the White House. The order would create a point person within agencies responsible for program performance, allow the Office of Management and Budget (OMB) more leverage over specific aspects of program implementation and solidify the PART program review process as the evaluator of government programs.
The Real Long-Term Health Care Challenge (11/20/2007)
Recently, the Congressional Budget Office (CBO) has been issuing reports challenging conventional thinking about the long-term fiscal problem facing the nation, which holds that it is primarily related to the influence of demographic changes on Social Security and Medicare. These reports draw on the work of researchers and writers who found that the long-term fiscal challenge is almost entirely unrelated to demographics and Social Security, and it is mostly confined to inefficiencies in the private and public health care system.
AMT: Mother of All Tax Bills and Progeny (11/06/2007)
On Oct. 25, after a gestation period of nearly nine months, House Ways and Means Committee Chair Charles Rangel (D-NY) finally unveiled the Tax Reduction and Reform Act of 2007 (H.R. 3970), his self-described "mother of all tax bills." The Rangel bill is a $930 billion, multi-faceted tax reform package that seeks to abolish the Alternative Minimum Tax (AMT) on a revenue-neutral basis. The measure redistributes the tax burden away from lower- and middle-class taxpayers and toward the wealthy beneficiaries of the Bush tax cuts of 2001 and 2003.
Congress to Send Labor/HHS Appropriations to President While SCHIP Conflict Continues (11/06/2007)
President Bush is soon expected to veto a congressionally approved version of the Labor/Health and Human Services/Education (Labor/HHS) appropriations bill, which funds an array of human needs programs. It is still uncertain if there is enough support in the House to override the president's veto. Meanwhile, enough Republican opposition remains to a proposed reauthorization of the State Children's Health Insurance Program (SCHIP) that the months-old conflict over the program drags on.
House Conservatives Sink SCHIP (10/23/2007)
Despite a considerable lobbying campaign by supporters, House Republicans blocked an effort to override President Bush's veto of a five-year, $35 billion funding increase for the State Children's Health Insurance Program (SCHIP) that would have provided an additional 4 million uninsured children with health insurance.
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