The New York Times leads today with a fascinating article about the Interior Department dropping a claim that oil-giant Chevron is underpaying royalties.

Interior Department auditors had accused Chevron of understating the value of the natural gas it extracted on federal lands. Chevron may have done this by exaggerating the costs of processing the gas, perhaps by five times the actual amount. Add it all up, and Chevron alone could have underpaid the royalities owed to the federal treasury by hundreds of millions of dollars. But auditors decided to end their investigation after proving that costs were inflated at only a handful of processing plant. So they won't see if costs were accurately accounted for at many other processing plants, at least for now. And the reasons they cited for doing so seem questionable.

The rest of the article has a lot of interesting stuff on the complicated process of collecting royalties from energy companies. It's hard to tell exactly what's going on, but with all the funny business in revenue collections these days, I tend to suspect the worst.

Oversight of these kinds of administrative decisions, of course, is badly needed.

About-face! From BNA ($):

Political considerations were one of the factors the Internal Revenue Service considered when deciding to delay enforcement actions for Hurricane Katrina victims--but not the main concern, Commissioner Mark Everson said in a news briefing Oct. 27.

The upcoming November elections played only a small role in the decision to once again postpone the Oct. 16 deadline for about 1.2 million victims to file their 2005 tax returns, he said.

Everson responded to published reports suggesting that the agency wanted to cast itself in a favorable light to help Republicans retain control of Congress in the run-up to Nov. 7.

Let's take the Commissioner at his word (I mean, why wouldn't we?). Define small. Would the deadline have been pushed back if this wasn't an election year? Maybe it would have been pushed back for a different time period? How exactly would things have been different if we were approaching November 2007 instead? Everson, to my knowledge, doesn't say.

All that's beside the point, anyway. However significant they may be, partisan politics should not play any role in how the IRS collects taxes, or in how any part of the administration works. Commissioner Everson, want to try that backtrack again?

On Monday, we criticized a very misguided commentary on the Heritage Foundation blog about how wasteful federal employees and the federal government are - a common, yet incorrect theme of theirs. The Heritage Solution: outsource government functions to the private sector and everything will be ok. The theory is that competative forces in the free market will drive down prices, and the government services will be provided for less. How could things go wrong?

A report released yesterday by the inspector general's office overseeing Iraq spending found that at least 55 percent, or $163 million, of $296 million in total costs rung up by Halliburton unit KBR went to expenses such as back-office support, transportation and security. That percentage was significantly higher than it was on work by other firms in Iraq, and experts said it is far above what is typically found on a government contract.

The Post continues:

According to internal government documents released in March, auditors found that the company had repeatedly overcharged the government by, among other things, billing for work it didn't actually do and paying suppliers more than they were owed. Meanwhile, work schedules slid and company officials balked at requests for accurate cost estimates. At one point, officials threatened to terminate the deal.

Yet another example of the private sector's failure to save the government money didn't dampen Halliburton's stock however - it rose over 5 percent yesterday on the news of the company's more than 18 percent increase in third quarter profits this year. Seems the only victims of wasteful contracting work is the American taxpayer.

The National Journal's Stan Collender ($$) is feeling pessimistic about next year's budget. Key graf:

If Republicans are in the majority, fiscal and social conservatives will have to work with moderates who will fear a lame-duck president and a weakened leadership even less than they did this year. That will make it very hard to get majority support for any of the key budget, tax and spending issues.

If Democrats are in the majority, the traditional split between the Blue Dogs/deficit hardliners and the rest of the party will be just as prevalent as it was before. The major difference, however, will be that, after more than a decade in the wilderness, most Democrats will better understand what it's like to reach the promised land of being in the majority and will be more likely to work together behind the scenes than they were before.

Therefore, regardless of whether one party has a majority in both chambers or whether the House and Senate are split, the FY08 budget debate is likely to be highly contentious and a constant struggle.

Collender doesn't think meaningful budget process reform stands much chance of getting anywhere, either.

Finally, there has been a great deal of talk about Democrats re-establishing the pay-as-you-go budget procedures that used to require entitlement increases and tax cuts to be offset with other mandatory spending cuts or tax increases. This is far more likely to be a House or congressional rule than a change in the budget law. Paygo rules for tax cuts will be unacceptable to the White House and a veto would not be overridden. An internal rule, however, will be more symbolic than substantive.

He may be right, but it's still worth a shot. After all, there's some chance Bush wouldn't veto a perhaps weaker but still fair version of PAYGO...isn't there?

The Heritage Foundation blog put an irresponsible bit of nonsense on their blog last week.

Drawing on an unscientific, informal poll of the readers of Federal Times, the author concludes that there is still much waste in federal programs that can only be rooted out with more competition from the private sector.

From a policy perspective, we wonder that competitive sourcing wouldn't address the lax and wasteful budgeting and work procedures behind these poor results. The basic idea is that government workers compete with private-sector entities in submitting bids for the functions that they now perform.

Big surprise, I know- Heritage thinks market forces make everything nice again. But the interesting thing here is that, for the last 6 years, the Bush Administration has been actively pushing an extreme privatization agenda, outsourcing thousands of jobs and effectively doubling the amount of money spent by government contractors.

And guess what? It hasn’t saved a dime. Nobody has documented any actualized savings.

Moreover, privatization has undermined the integrity of several federal agencies. Abuse, fraud and waste are rampant in federal contracting. Just take a look at the news and you'll see what I mean.

Heritage-ies might think that this only means we haven’t gone far enough. Privatize more and better, they’ll say, and the theory will finally bear itself out. That might be true. Who knows? But privatization has gone very far already. Nearly 1 million jobs have been slated to be examined for their potential to be privatized, thousands have been privatized, and government contracting has gotten out of control. Given the sheer scope of privatization over the last 6 years, in the very least, it’s clear that privatization has not made that much of an impact on the cost of government services.

For the last 6 years of failure, though, Heritage has sung the same song, despite mounting counterfactuals. Makes you wonder if they’re really all that interested in solving the problem. Or if the problem of widespread waste and inefficiency by government employees ever really existed in the first place.

CQ reports ($$) that the House Appropriations Committee Chairman -Rep. Jerry Lewis (R-CA)- did not renew the contracts of 60 investigators who examined federal spending. About 16 investigators remain on staff, but given the contractor reduction, no investigations will be going forward any time soon.

Committee spokesman John Scofield said Thursday that the contracts were not renewed because the panel is conducting a “bipartisan review” of the unit’s staff.

“Frankly, the work we’ve been getting as of late has not been that good,” Scofield said. “There is nothing sinister going on.”

All 60 of them were doing a bad job? That doesn't pass the smell test.

Rep. Lewis could have other things on his mind. From Sen. Tom Coburn's (R-OK) office:

Rep. Jerry Lewis, the top GOP appropriator, is currently under investigation by the Justice Department for connections between lobbyists, Lewis' campaign contributors, and earmarks awarded by Lewis' committee. Rep. Duke Cunningham was sent to prison earlier this year for selling defense earmarks in return for bribes.

David Broder today gives this year's Congress and the Bush Administration bad marks for fiscal policy.

His bottom line: the economy isn't growing enough.

Still, a chart that is part of the National Journal story gives pause. It compares the economic performance of the first 5 1/2 years of this Bush administration with identical periods under Presidents Ronald Reagan and Bill Clinton. Personal income after inflation and taxes rose 22.7 percent under Reagan, 20.4 percent under Clinton and only 14.1 percent under Bush.

FedSpending.Org is now online! Check it out!

Cactus of the econo-blog Angry Bear looks for a connection between who's President and tax enforcement rates. A few interesting results: Ronald Reagan was a strict tax enforcer in his second term, while George W. Bush's first term saw the largest decline in the tax enforcement rate in the last 50 years.

Ive had a few posts in the last month or two about taxes and honesty. One post showed that the lower the degree of tax enforcement, the lower the share of total income taxes paid by the top 1% and 5% of income earners. Another noted that over time, the correlation between the amount of corporate and individual income taxes paid and enforcement has increased, which seems to indicate that a lot of us are becoming less honest when it comes to taxes.

But how big is the problem of tax evasion? Is there any direct evidence that it gets better or worse in any given year? Its a tough question to answer because it requires knowing how much income people actually make, not how much they report to the IRS. Being an adorable scamp, I was wandering around the IRS website and located a table showing, among other things, taxable income (from the Statistics of Income or SOI) as a percentage of total income (from the BEA NIPA tables). The data runs from 1950 to 2004.

The launch of OMB Watch's powerful new Web-based tool for tracking government spending and congressional accountability will be held at 9:30 a.m.next Wednesday Oct. 10, in the Lisagor Room of the National Press Club.

Update:
The press conference in Washington on Tuesday, October 10 will also be webcast - so you can join in on the excitment from anywhere. Sign up for a reminder from OMB Watch by email on Tuesday morning about the event.

Now that only a lame-duck portion of it remains, we are now in a position to begin to assess the 109th Congress.

Per the Thomas Mann and Norman Ornstein article that my colleague Matt points out below: “with few accomplishments and an overloaded agenda, [the 109th Congress] is set to finish its tenure with the fewest number of days in session in our lifetimes, falling well below 100 days this year.”

At the same time, as the Washington Post reports today, the House passed 165 bills… in the last week alone. That’s more than one for every threatened incumbent, and then some.

I’d argue that the efficacy of a Congress is better measured not by days or bills but, at a bare minimum, by how it disposed of issues that it is constitutionally bound to address, such as the budget.

Thus far, this Congress’ performance on the fiscal front stands somewhere between “negligent” and “reckless.” Before adjourning on September 29th — two days before the new fiscal year — to let members go campaigning, Congress neglected even to vote on 10 of the 12 appropriations bills it needs to in order to adhere to its own rules governing annual budget-making. And congressional leaders recklessly paired a set of tax credit extensions that millions of Americans depend on -- the R&D, state sales tax, work opportunity tax credit and welfare-to-work credit, college tuition, teachers out-of-pocket expense tax credits — with the estate tax, a sure-fire loser in the Senate, where the extensions remain stuck in limbo.

Going into the final turn, on the real fiscal lay-ups before it, the 109th Congress’ shots are closer to nothing than nothing but net.

The House adjourned on Saturday, setting a record for the fewest days in session since the "do-nothing" Congress of 1948. The total for the entire year will most likely fall far below 100 days, depending on how long they stay during the November lame-duck session.

(For perspective, Congress has spent an average of 152 days in session since 1985).

Norm Ornstein and Thomas Mann have that story and more on this Congress's procedural improprieties.

This part-time Congress has other parallels to the famous "Do-Nothing 80th Congress" that Harry Truman ran against successfully in 1948. The output of the 109th is pathetic measured against its predecessors and considering its priorities, which included a comprehensive immigration bill, tax reform and the research and development tax credit, lobbying and ethics reform, healthcare costs and insurance coverage, trade agreements, procedures for the detention and trial of suspected terrorists, and regulations for the oversight of domestic wiretaps, among many others. With just days to go before Congress adjourns and the fiscal year begins, not a single one of the 11 appropriations bills that make up the range of government programs has been enacted into law.