Congressional leaders were left scratching their heads, contemplating what to do next after the House failed, by a vote of 205-228 to approve a $700 billion plan to buy up troubled financial assets that are purportedly threatening the financial markets.

CQ Politics reports that although the House voted to adjourn, they will return Thursday to continue working on assuaging the angst of financial markets. Calling the issue "much too important to simply let fail," Treasury Secretary Henry Paulson vowed to return to working out a plan to bailout Wall Street. However, legislators have been at best vague in spelling out what to expect in the next few days. As Speaker of the House Nancy Pelosi said, "stay tuned."

Members of the House Democratic Leadership, from left, House Majority Leader Rep. Steny Hoyer, D-Md., House Speaker Nancy Pelosi, House Democratic Caucus Chair Rep. Rahm Emanuel, D-Ill. and House Majority Whip James Clyburn, D-S.C. meet reporters on Capitol Hill in Washington, Monday, Sept. 29, 2008. (AP Photo/Lawrence Jackson)

This post is an updated version of our previous post on a summary of the $700 billion Wall Street bailout plan that the House rejected (205-228) this afternoon.

Size: Up to $700 billion
• $250 billion would be immediately available to Treasury to buy up troubled assets
• Another $100 billion would be available to Treasury "upon report to Congress"
• The final $350 billion would be available upon request of the presidentt, which Congress could reject within 15 days . The rejection could then be vetoed by the president.

Mechanics
• The government could purchase mortgage-backed securities and other troubled assets and their derivatives. With support from the Fed, it could also purchase other troubled assets from investment, commercial, and smaller community banks, credit unions, pension funds, and local governments.

Taxpayer Protection
• Firms participating in the bailout would be required to grant the government warrants to obtain nonvoting shares of stock, if the firm becomes profitable.
• Participating firms would be subject to executive pay restrictions, implemented through the tax code. The plan would also bar firms from giving "golden parachutes" to executives leaving participating firms for reasons other than retirement
• The Treasury Secretary would have the authority to establish an insurance fund not unlike the FDIC to guarantee troubled assets; premiums would be paid for by private firms
• If, after five years, the Congressional Budget Office and the Office of Management and Budget agree that the government has not profited from the sale of troubled assets, the president must submit to Congress a plan to recuperate the cost of the plan from the financial industry

Foreclosure Protection
• Treasury can encourage mortgage servicers to modify troubled mortgages
• Requires federal entities that own mortgages to develop a plan to mitigate the foreclosure rate
• Relaxes requirements for eligibility for the Hope for Homeowners program

Oversight and Transparency
• A bipartisan oversight board appointed by members of both parties in Congress would be created
• An inspector general would monitor Treasury decisions, and the Government Accountability Office would regularly audit the program
• Treasury would be required to make transactions made through the troubled asset program available publicly online
• There would be conflict-of-interest rules for firms hired by the Treasury to help run the program
• There would be judicial review of Treasury decisions

Executive Power Enhancement
• An affirmation of the SEC head to suspend mark-to-market accounting, thus allowing firms to report asset values different from what the market believes them to be
• Allows Treasury Secretary to suspend federal contracting rules

Not Included
• The package does not have language that would allow bankruptcy judges adjust mortgage rates or principal
• No profits from the scheme would flow to an affordable housing trust fund

Media reports and a press release from House Speaker Nancy Pelosi (D-CA) indicate that Congressional leaders and the White House have agreed to a package of measures designed to prevent a financial market meltdown. An official announcement of agreement is expected tonight, and final details of the plan remain unsettled. Here are the package's main provisions:

Size: Up to $700 billion
• $250 billion would be immediately available to Treasury to buy up troubled assets
• Another $100 billion would be available to Treasury "upon report to Congress"
• The final $350 billion would be available upon request of the president. Media reports, however, are inconsistent on this. Some are reporting says that the money would be available "only upon action by Congress," while others say it would be available upon presidential request, which Congress could reject. The rejection could then be vetoed.

Mechanics
• The government could purchase mortgage-backed securities and other troubled assets from investment, commercial, and smaller community banks, credit unions, pension funds, and local governments.

Taxpayer Protection
• Firms participating in the bailout would be required to grant the government warrants to obtain nonvoting shares of stock.
• Participating firms would be subject to executive pay restrictions, although the details remain vague
• The Treasury Secretary would have the authority to establish an insurance fund not unlike the FDIC to guarantee troubled assets; premiums would be paid for by private firms
• A fee may be imposed upon the banking industry to pay for the bailout if the government loses money on the purchase of these toxic assets. Reports on this provisions vary, an no details have been announced

Foreclosure Protection
• Treasury can renegotiate mortgages purchased by the federal government with borrowers
• A "tax holiday" for homeowners facing foreclosure will be extended

Oversight and Transparency
• A bipartisan oversight board appointed by members of both parties in Congress would be created
• An inspector general would monitor Treasury decisions, and the Government Accountability Office would regularly audit the program
• Treasury would be required to make transactions made through the troubled asset program available publicly online
• There would be conflict-of-interest rules for firms hired by the Treasury to help run the program
• There would be judicial review of Treasury decisions

Not Included
• The package does not have language that would allow bankruptcy judges adjust mortgage rates or principal
• No profits from the scheme would flow to an affordable housing trust fund

This information has been compiled from the following news sources:
The Wall Street Journal
The New York Times
The Washington Post
McClatchy Newspapers
Congressional Quarterly ($)

Senate Finance Committee Chairman Max Baucus (D-MT) has released a statement calling for a special Inspector General to oversee whatever program is put in place at the Treasury Department to bailout failing Wall Street banks and investment houses. Baucus's letter is signed by 32 other Senators and really makes a lot of sense, which is something we don't often say about Sen. Baucus's proposals.

So hats off to Baucus! Let's hope this proposals is integrated into the final plan being developed.

Not sure how many of you are reading The Watcher, our bi-monthly newsletter that has interesting commentary, analysis, and insights into key government accountability issues of the day, but you should sign up for it if you don't currently get it (sign up here). Anyway, earlier this week we ran an article in the most recent issue on the Senate's passage of the FY 2009 Defense Authorization bill, which included a number of long overdue contracting reforms.

While our coverage was not incorrect, we certainly omitted some details on many of these reforms that we probably should have included (not a strike out per se, just a swing and a miss). So, to help us out, Rep. Henry Waxman (D-CA), the original sponsor of many of these reforms, has posted a helpful summary of the Clean Contracting Act. This legislation, which was originally introduced in 2006, would:

[E]nhance competition in contracting, limit the use of abuse-prone contracts, start the effort to rebuild the federal acquisition workforce, strengthen important anti-fraud measures, and increase transparency in federal contracting.

These are solid reforms that should have been in place a long time ago, and Waxman and other congressional champions of a more responsible and efficient procurement system should be commended. But the work isn't finished yet. Waxman laments in his statement:

My only regret is that some of the other key reforms passed by the House were not included in the final version of the legislation. I am disappointed that the House and Senate compromise does not include a ban on private interrogators in U.S. military detention facilities or mandate congressional approval for any security pact with Iraq that is negotiated by the President.

Summary of Clean Contracting Act
Waxman's Statement on the Act

Federal News Radio posted a short report from earlier this week about efforts at the Internal Revenue Service (IRS) to collect over $3.5 billion in back taxes from federal employees.

The Internal Revenue Service is trying to collect billions of dollars in unpaid taxes from nearly half a million federal employees. According to IRS records, 171,549 current federal workers did not voluntarily pay their federal income taxes in 2007. The same is true for 37,752 active duty military and nearly 200,000 retired civilian and military personnel.

Documents obtained by WTOP through the Freedom of Information Act show 449,531 federal employees and retirees did not pay their taxes for a total of $3,586,784,725 in taxes owed last year.

Best of all is that Federal News Radio made the data set they obtained under FOIA available to everyone else. You can download the excel file from their site. Nice work Federal News Radio!

(h/t Tax Foundation)

Earlier this week, we highlighted two hearings in the House of Representatives that were focusing on issues of waste, fraud, and abuse and federal contracting. Our friends over at the Project on Government Oversight (POGO) have had their A-game this week. They not only testified at one of those hearings, but have provided some excellent previews, commentaries, analysis and reports, and summaries on the hearings this week. All of the POGO materials are worth at least glancing through, if not reading thoroughly.

I also wanted to share POGO's perspective on the passage of the contractor responsibility misconduct database this week as part of the defense authorization bill in the Senate. POGO has championed this proposal from the beginning and long ago created a prototype of the database for the public.

POGO regularly harps on the deficiencies of the proposed database, but it's still a positive accomplishment. The database would only include defense contractors and would be accessible only to Department of Defense procurement officials and Congress. The database may be made available to other government officials at the discretion of the Under Secretary of Defense for Acquisition, Technology, and Logistics, but it's off-limits to the public. It would also include only instances involving the award or performance of contracts, and only those occurring in the most recent 5-year period.

Kudos to POGO for being on top of their game this week.

It looks like the end of the current congressional session is in sight, maybe. While legislators had an insurmountable work load to complete in the three weeks of work in September, Senate Majority Leader Harry Reid (D-NV) still hopes to adjourn the Senate a week from tomorrow (Sept. 26). Reid is hoping the Senate can still finish quite a lot in the next 6 days, including energy legislation, a tax cut extension bill (with an Alternative Minimum Tax patch), a new economic stimulus package, and some number of appropriations bills and a continuing resolution. The Senate might begin consideration of a compromise tax package as early as this afternoon.

The Senate did successfully pass the Defense Authorization bill last night by a 88-8 vote. The authorization bill has been delayed for months, mostly due to a conflict over earmarks being listed in the committee report language for the bill, but not the legislative text of the bill. Sen. Jim DeMint (R-SC) attempted to offer an amendment to effectively strike the $5 billion worth of earmarks in the committee report, but his amendment was not considered. Sen. John Warner (R-VA) attempted to strike a compromise between DeMint and Armed Service Committee Chairman Carl Levin (D-MI) by offering an amendment that would require the final bill produced by a House-Senate conference committee list the earmarks in the legislative text of the bill. Neither DeMint's or Warner's amendments were considered, along with almost 100 other amendments that were introduced.

The authorization bill also contains some contracting reform provisions that OMB Watch been following throughout 2008, including a contractor misconduct database first proposed by Rep. Carolyn Maloney (D-NY) and Sen. Claire McCaskill (D-MO). While the database is structured to be publicly available in the House version of the authorization bill, the Senate has restricted access to the database just to government personnel.

The House and Senate will need to quickly find compromises to various differences in the two versions as congressional leaders hope to send a final bill to the President before the target adjournment date of Sept. 26. We'll post additional information about the contracting reforms and the earmarking conflict as they become available during the House-Senate conference.

We'll be shutting down the BudgetBrigade a bit early today to head off to OMB Watch's 25th Anniversary celebration. Yup, that's right. OMBW is 25 years young this year and we're primed and ready for our quarter life crisis! We're taking some time to celebrate tonight with friends and supporters and remember 25 years of fighting for a more transparent and accountable federal government.

While we are looking back over some of our accomplishments of the last quarter century (and honoring the unsung work of some of our public sector colleagues), we are also looking forward to the challenges we'll face over the next 25 years and beyond.

You will be a key part of overcoming those future challenges, just as you've been crucial to our past accomplishments. Your involvement, along with hundreds of thousands of people just like you has helped to make us the success we are today. So thank you for your commitment to the open and accountable ideals that have helped guide OMBW over the past 25 years.

And if you want to help make sure those ideals continue to be realized, consider making a small donation to OMB Watch in honor of our 25th birthday. Your contribution will join with hundreds of others who want to ensure we are able to continue our mission and the important work we do everyday.

The Washington Post has an article this morning that details severe contracting problems at the Department of Homeland Security. The Post describes the agency's efforts to oversee $15 billion in contracts over the last six years as having "failed."

The contracts wound up over-budget, delayed or canceled after millions of dollars had already been spent, according to figures and documents prepared by the House Committee on Homeland Security. A panel of experts is to testify today before the House Subcommittee on Management, Investigations and Oversight on how to fix problems with the DHS acquisitions process.

The experts are expected to discuss a number of high-profile screw-ups at DHS, including the Coast Guard's Deepwater program (ships were built and then scrapped), Boeing's border protection fence, which we've skewered numerous times (over budget, behind schedule, doesn't work), a program to track visitors entry and exit from the U.S. called US VISIT (behind schedule, not being managed well), and some contracts related to Hurricane Katrina (mismanaged, wasted funds).

You can watch the hearing, scheduled for this afternoon at 2:00 pm (EST), on the web by following the link at the bottom of the committee web page.

I should also mention that the full committee hearing held last week on the virtual border fence contract in the House Homeland Security Committee will be finished tomorrow at 10:00 am (EST).

There has been some pretty eye opening stuff going on over at the Department of the Interior's Mineral Management Service (MMS). The Department of the Interior Inspector General released the results of three separate investigations into allegations of misconduct among dozens of employees and managers at the MMS. And the pretty shocking results would even make Lurita Doan blush (or maybe take out her pen and pad and take notes?). The IG report described the MMS as having a "culture of ethical failure" and details some ridiculously arrogant and decrepit behavior.

I came across more good news from the IRS today (well, Friday actually) and I'm not really sure what to do with myself. BNA reported late on Friday afternoon that Lisa McCaughey, a senior tax analyst with the Small Business/Self-Employed Division reported that the IRS is reducing the staggering number of audits they conduct each year of taxpayers who claim the earned income tax credit (EITC). Woohoo!

In a speech during a low-income taxpayer clinic workshop of the American Bar Association Section of Taxation, McCaughey said "We are currently reducing the number of EITC audits we do overall. You might see it shift [downward] again next year."

This is very good news indeed. It would be difficult for the IRS to conduct more EITC audits than they have in the recent past. We have highlighted the near obsession the IRS has with low-income folks who claim the EITC. In fact, IRS data shows that upwards of 40 percent of all audits they conduct are of EITC filers even though EITC errors only account for about 3 percent of the tax gap.

What is going on over at the IRS? First they decide not to renew a contract for services that should be handled by IRS personnel anyway, and now they decide to reduce the number of EITC audits they conduct to focus on more efficient ways to close the tax gap. It's almost as if the influence of the current administration is waning a bit and the IRS is free to do things that are...you know...logical.

There have been lots of stories today I was thinking about throwing up on the blog (DCAA shenangians, Interior Department MMS shenangians), but I settled on an article you might have overlooked in the Wall Street Journal about the continuing investigations Sen. Carl Levin (D-MI) and the Senate Permanent Subcommittee on Investigations (PSI) have been conducting on offshore tax evasion.

I've posted a few times (see here and here too) over the last few weeks about corporate tax evasion. One blog in particular detailed another investigation of the PSI that found that foreign banks were recruiting wealthy American citizens to buy into their U.S. tax evasion schemes.

Well, the latest from the PSI is a report about how U.S. banks (namely Morgan Stanley, Lehman Brothers Holdings Inc., Citigroup Inc. and Merrill Lynch ∓ Co.) are recruiting foreign hedge-fund investors to sell them abusive tax-avoidance transations (see the PSI press release). From the Wall Street Journal:

The yearlong probe, which relied in part on internal bank documents and emails, concludes that Wall Street firms actively competed with one another in dreaming up complex transactions that allowed hedge funds to avoid withholding taxes imposed on dividends paid by U.S. companies.

Is it me, or does this feel like a "if you scratch my tax evasion plan, I'll scratch yours?" First foreign banks are helping Americans avoid U.S. taxes. Now it turns out American banks are helping foreign individuals avoid U.S. taxes. No wonder we've got hundreds of billions of dollars in taxes that go uncollected every year - Uncle Sam is getting screwed from both sides of the ocean.

The PSI report also took the time to rightly criticize both the Internal Revenue Service (IRS) and the Treasury Department:

The Department of Treasury and the IRS have failed to take effective action to stop dividend tax abuse. They have failed to publish for ten years final regulations to address abusive stock loans, failed to clarify existing regulations related to abusive equity swaps, and failed to take enforcement actions against participating financial institutions or their clients. The silence and inaction of the Treasury Department and the IRS in the face of a growing problem have encouraged the spread of offshore dividend tax abuse.

OMB Watch has certainly been very critical of IRS enforcement practices and it looks like we haven't even scratched the surface. Everyone is helping everyone else cheat to get a discount on their taxes and our tax enforcement agency has done nothing. Why am I still paying full price?

I came across another delay in a federal contracting effort to report today. Seems the Department of Defense, and more specifically Secretary Robert Gates, feels it will not have sufficient time to complete the re-competition for the contract to build the next generation of mid-air refueling tankers. Gates announced this morning during testimony before the House Armed Services Committee that DoD has decided to cancel the competition and leave the issue for the incoming administration to figure out.

At first my reaction was this was just another example of the Bush administration pushing off their screw-ups onto someone else. But after thinking about it for a while, I think I'm changing my mind. Gates described the tanker contract issue as "enormously complex and emotional" and given the energy of the election season, trying to move forward on this contract in 2008 would probably only make things worse.

Part of the reason I think this is that self-interested politicians keep sticking their noses into this issue where they don't belong. The latest is House member Rick Larsen (D-WA), who decided he was qualified enough to judge that the postponement was "great news" and a "step in the right direction." Now maybe Larsen has previous experience as a contracting officer, defense analyst, or refueling tanker pilot (these details are not apparent from his website bio). Not surprisingly, Larsen's district is home to Boeing's enormous Everett aircraft assembly plant, the main company in the team who lost the initial competition for the tanker. Gee, I wonder if that is impacting his perspective on this issue?

The last thing we need is for the contracting process to become even more political than it already is. While Larsen is a member of the House Armed Services Committee, contract competitions are the perview of the executive branch, not Congress and Larsen and other politicians should stay out of a process that is already too political. Gates wisely decided that because the keen interest of politicians in this contract in an election year would only make the competition less fair, the right decision is to postpone.

The Senate Homeland Security and Government Affairs Committee held a hearing today to listen to witnesses describe systemic mismanagement and corruption at the Defense Contract Audit Agency (DCAA). The committee heard testimony from the GAO, the Pentagon inspector general's office, and the Defense Criminal Investigative Service (DCIS). The hearing comes on the heals of a GAO report released in July that substantiated 14 of 14 whistleblower claims made against DCAA managers investigated by GAO.

DCIS investigators found that managers deleted material from audits without auditors' knowledge. The managers issued "clean" audit reports without supporting documentation, according to material to be disclosed at the hearing. The DCIS investigators also confirmed that pressure to issue audits on deadline contributed to problems.

The GAO probe found that three DCAA offices under scrutiny had repeatedly diverged from standard accounting practices in their audits. In some cases, agency supervisors allowed contract officials and contractors to subvert DCAA's independence and "improperly influenced" the scope and findings of audits. The GAO investigators also turned up evidence that managers had tried to intimidate or silence auditors, according to a recent report.

Greg Kutz, GAO managing director for forensic audits and special investigations, said the problems at DCAA may be widespread. "It's clear that the issues go beyond the 14 audits that we investigated," he said in an interview.

Yesterday I ripped into folks over at the Professional Services Council (a contractor front group) for implying that current contracting woes had nothing to do with the contractors themselves. Then this morning I come across an update on the SBInet program - which is supposed to establish a virtual fence along the southern border of the United States to monitor illegal crossings. The program continues to be behind schedule and over budget. Big surprise.

We blogged back in April about how the program was behind schedule and over budget, citing two other reports from June 2007 and February 2008 that showed the program was not going well. In fact, the Customs and Border Protection office decided to scrap a part of the program being handled by Boeing called Project 28 after $20 million had been spent on a system that didn't work.

The House Homeland Security committee held a hearing yesterday to explore why the virtual border fence has not become a reality. Two representatives from the Government Accountability Office (GAO) testified that the SBInet program is pretty much a disaster. From GAO director of information technology architecture and system issues Randolph Hite's testimony:

Important aspects of SBInet remain ambiguous and in a continued state of flux, making it unclear and uncertain what technology capabilities will be delivered and when, where, and how they will be delivered. For example, the scope and timing of planned SBInet deployments and capabilities have continued to be delayed without becoming more specific.

Ouch. Not a lot of grey area there. GAO's Richard Stana, director of homeland security and justice issues, also testified that time lines for the program had slipped, in some cases by up to three years, and the cost of the pedestrian fence has increased from about $4 million per mile to $7.5 million per mile! Wow! Now that's what I call wasteful spending.

Elizabeth Newell wrote an good summary last week in Government Executive magazine of the state of a handful of reforms to the federal contracting process that have been stalled in the Senate Homeland Security and Government Affairs Committee.

With time running out in this congressional session, a number of sweeping contracting reform bills are languishing on the back burner. Several significant pieces of acquisition legislation are stuck in the Senate Homeland Security and Governmental Affairs Committee, and their authors are attaching provisions to other bills in a last-ditch effort to address federal acquisition issues.

We've seen this strategy pay off already this year, as the article goes on to note. At the end of June, two contracting reforms were enacted as part of the latest war supplemental spending bill, and back in May, another reform passed as part of the HEART Act, a bill to give tax cuts to veterans. I'm hoping it pays off again in September (although Neil Gordon writing over on POGO's blog isn't very optimistic).

One small gripe about the article though. Newell quotes Colleen Preston, the executive vice president for public policy with the Professional Services Council (PSC). The PSC is a trade association that represents the interests of government contractors - counting some of the largest government contractors like Lockheed Martin and Boeing as members. Preston's quotes are, well, predictable.

Preston said to some extent the pileup of contracting legislation is an election-year inevitability. The problems the bills seek to address may be real, she said, the solutions may not be what the government really needs.

"The real problem is the acquisition workforce," she said. "Until the government can address that issue, it's not clear anything will make a difference."

I want to move past the strange assertion that the government doesn't need solutions to real problems in federal contracting and cut straight to the bashing that Preston gives government contracting officers. It's so nice for her to come along and explain to us all that the problem is simply the bureaucrats. Oh, now I get it. Problem solved!

I suppose Preston feels the problem isn't related to contractors? Not at all? Really? Contractors never deliver products that don't work, never go over budget, never intentionally charge the government more than they should, never waste resources, and never fall behind schedule? Contractors never break laws or cheat or try to get every advantage and perk to turn a profit? Please.

I take issue with Newell's failure to mention that PSC is an interest group whose purpose is to promote the use and reliability of federal contractors. Knowing that, it becomes obvious that PSC has no interest in exposing its members to public scrutiny or burdensome reforms; better to blame the government for the failures of private contractors.

Last month I blogged about a July GAO report that studied the percentage of companies that reported little or no tax liability from 1998 through 2005. While I think the report itself is very telling, I also chastised Sens. Byron Dorgan (D-ND) and Carl Levin (D-MI) a bit (well, really just Levin) for jumping to the conclusion that companies were intentionally cheating on their taxes.

Now I wasn't trying to defend corporations (I think most of them cheat bend the rules at just about every opportunity they get) and the work Sen. Levin has done in this area has been critical. He's been a leader on international tax issues that most citizens, much less public officials, could care less about. But the GAO report didn't show that companies were intentionally cheating.

Never fear Sen. Levin - GAO has come to the rescue. They released another report in August on corporate taxation in which they studied the average effective tax rates that U.S.-based companies pay on their income earned inside and outside the United States, as well as trends in where these companies' business activity is located. From the summary:

The average U.S. effective tax rate on the domestic income of large corporations with positive domestic income in 2004 was an estimated 25.2 percent. There was considerable variation in tax rates across these taxpayers. The average U.S. effective tax rate on the foreign-source income of these large corporations was around 4 percent, reflecting the effects of both the foreign tax credit and tax deferral on this type of income.

Nothing necessarily shady going on here yet, but it shows a huge incentive, on average, for corporations to classify income as "foreign" rather than domestic. But I think further down are the results that Sen. Levin was looking for back in August. From the new GAO report:

Reporting of the geographic sources of income is susceptible to manipulation for tax planning purposes and appears to be influenced by differences in tax rates across countries. Most of the countries studied with relatively low effective tax rates have income shares significantly larger than their shares of the business measures least likely to be affected by income shifting practices: physical assets, compensation, and employment. The opposite relationship holds for most of the high tax countries studied.

What this means is that companies move income to jurisdictions where they will pay the least taxes on that income, even when those jurisdictions have a disproportionately small amount of business activity from that company in comparison to its income. Sen. Max Baucus (D-MT) and Charles Grassley (R-IA), the chairman and ranking member of the Senate Finance Committee, released a statement about this new report, where Baucus in particular criticized companies who manipulate the tax code to avoid paying their fair share. I wonder if Sen. Levin got that press release? I think he might be interested in it.

One-Page Summary of GAO Report
Full Report: U.S. Multinational Corporations: Effective Tax Rates Are Correlated with Where Income Is Reported

Ellen Miller blogs today over at the Sunlight Foundation about the legacy of the Federal Funding Accountability and Transparency Act of 2006 (Transparency Act). The Transparency Act mandated that all federal spending be easily accessible and searchable in the Internet. After the law passed in 2006, the federal government launched USASpending.gov in 2007, which was built on the software platform that powers OMB Watch's FedSpending.org.

Ellen reports the legacy of this federal law is being felt at the state level, all over the country:

Since 2007, 11 states (Hawaii, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Oklahoma, South Carolina, Texas, Utah and Washington) have established, via legislation or executive order, free and searchable Web sites that give access to state spending. And 24 other states are working on it, with more than half introducing spending transparency bills this year. B2G Exchange blog wrote in May that transparency Web sites were the "hottest new trend" in state government.

The original cosponsors of the Transparency Act bill - Barack Obama (D-IL) and Tom Coburn (R-OK) - as well as the hundreds of advocacy groups and transparency organizations, blogs, and regular citizens who helped push this legislation to enactment should be very proud of this legacy. Let's hope it continues to spread.