We have long anticipated the follow-up to the GOP's earmarks-disclosure rule, which expires at the end of the year. Now, the House Democrats have finally settled on a strategy for rolling out their ethics and budget process reform package in January.

The pieces of the package, including

• Re-instatememt of pay-as-you-go (PAYGO) budget-making rules
  
• Bans on lobbist-paid gifts, meals and travel
  
• Reporting requirements on all contacts with lobbyists
  
• Earmark disclosure (broadened to include more tax expenditures)
  
• [perhaps an independent board to conduct ethics investigations]

will be sponsored by freshman members who campaigned for a specific reform proposal.

According to today's Washington Post "freshmen would offer, over as many as five days in January, separate amendments to ban gifts, meals and travel financed by lobbyists ... rules mandating the disclosure of all contacts with lobbyists would be another vote," etc.

Interestingly, each piece will be debated under open rules, permitting amendment, a significant departure from general GOP floor practice.

A GAO memo today from David M. Walker, Comptroller General of the United States, entitled "Suggested Areas for Oversight for the 110th Congress" says that "fiscal policy is on an unsustainable path."

Among the memo's suggestions are the following "needing Congressional attention":

--> Reimpose caps on discretionary spending. Under caps, consider special rules for well-defined “emergency” designations.

--> Reintroduce pay-as-you-go (PAYGO) requirements—on both the spending and revenue side of the ledger

--> Consider budget triggers that would signal the need for action when there is significant growth in mandatory programs

--> Review the use of supplementals and earmarks in order to determine needed reforms

--> Require estimates of long-term cost implications of major policy proposals (tax and spending) before they are acted upon

OMB Watch applauds Walker's efforts to focus Congress' attention on these reforms. We will be issuing a proposal shortly, based on the last of these suggestions, to require a JCT estimate of the debt implications of legislation to cuts taxes and increase spending.

Good news this morning for oversight of government contracts that might be a precursor to a more vigilant Congress in 2007. After Democrats recently vowed to pass legislation to save oversight of Iraqi reconstruction efforts, Susan Collins (R-ME) and Joe Lieberman (D-CT) have unanimously passed a bill (S. 4046) out of the Homeland Security and Governmental Affairs Committee that would retain the Office of Special Inspector General for Iraq Reconstruction through most of 2008, according to BNA ($$). The Collins/Lieberman legislation was developed in response to a provision in the FY 2007 Defense Authorization bill passed earlier this year that would have eliminated the special Inspector General's office on October 1, 2007.

Both Collins and Lieberman expressed outrage that the office had been scheduled for elimination. Collins called it "inconceivable" that the office would be closed so soon, adding, "This office has proven to be a much-needed watchdog, auditing reconstruction contracts in Iraq and spotlighting numerous cases of waste, fraud, and abuse and we must keep the watchdog on the job." Lieberman added that the Special Inspector has done a "great job uncovering billions of taxpayer dollars wasted through abuse and mismanagement of Iraqi projects" and that his work is "critically important."

The language in S. 4046 would keep the Special IG's office open 10 months after 80 percent of reconstruction funds have been spent. Similar legislation was introduced in the House this week by future Armed Services Committee Chairman Ike Skelton (D-MO).

Nice to see Congress moving in the right direction on oversight of federal contracts, especially in Iraq. Now that he has helped to save his job, hopefully incoming Chairman Lieberman will hold hearings next year to actually hear what the Special Inspector General has to say.

State Medicaid directors from around the country gathered this week in Washington, D.C. for their annual meeting and continued to express frustration and displeasure with the Bush administration's plans to continue to stick it to the states through the Medicaid program.

In short, Bush plans to create regulations that would force states to lower taxes on health care providers and other administrative changes that would limit the federal matching grant states are entitled to under the Medicaid program. The taxes help states pay for health care services covered under Medicaid, and result in higher matching grants from the federal government. Administration officials believe the changes will save $12.2 billion over the next five years. But state officials have repeatedly complained they've been left out of the conversation since the administration announced its plans in February, according to Stateline.org.

With the switch in control in Congress after the recent elections, we may begin to see the administration resort to these types of administrative changes more and more in order to cut program budgets rather than trying to ram their agenda through a hostile legislative branch. Unfortunately, such changes are much more difficult for the public to learn about and scrutinize and are often announced in the dead of night before a major holiday to intentionally obscure their impact.

See the below article for a great summary of the administrative changes and the ensuing political fallout.

Stateline.org: Medicaid directors frustrated by feds

Posted by Adam Hughes, 04:53:49 PM



House Majority Leader: Hoyer Hired

By a nearly 2-to-1 margin, Steny Hoyer (D-MD) prevailed over Jack Murtha (D-PA) today in the race for House Majority Leader.

The result was "a blow to incoming Speaker of the House" Nancy Pelosi, who endorsed and campaign for Murtha.

Some in the House charged that Pelosi was "undercutting her pledge to clean up corruption by backing a veteran lawmaker who they say has repeatedly skirted ethical boundaries."

Another round of news cycles featuring the infamous 1980 Ambscam sting tape with Murtha turning down $50,000 in cash "at this time" has been averted. And the House leadership can perhaps now more credibly pursue the transparency and ethics reforms promised in Pelosi's first 100 hours as Speaker.

As of this writing, the House Democratic Caucus is holding its leadership elections for the 110th Congress, with the Majority Leader's race between Reps. Steny Hoyer (D-MD) and Jack Murtha (D-PA) still up in the air. In the balance is the leadership tone on Congressional ethics standards.

This is no idle matter: to the surprise of both most observers, midterm election exit polls cited corruption in Congress as one of the most important issues motivating citizens to vote.

Indeed, the day after voters gave Democrats a majority in the House, Speaker-to-be Nancy Pelosi promised "the most honest, the most open and the most ethical Congress in history.”

Many Democrats -- though not Pelosi -- have embraced the Emanuel-van Hollen earmarks bill that would:

• ban any earmarks stuffed into conference reports that were not previously approved by either the House or Senate
  
• make it illegal for members of Congress or their families to benefit personally from the awarding of an earmark
  
• rule out of order any tax provision designed to benefit any individual or company

Instead, Pelosi favors re-upping the GOP-passed earmarks disclose requirement she derided only two months ago as a sham ... gimmick."

And, her choice for Majority Leader, Murtha, told a meeting of Blue Dog Democrats yesterday what he thought of the party's ethics and lobby reform package, calling it "total crap." Maybe aiming for "the most honest, the most open and the most ethical Congress in history" is not setting the bar very high.

UPDATE: In a vote not nearly as close at all the buzz preceding it, the House Democrats voted today 149 - 86 to elect Rep. Steny Hoyer (MD) as Majority Leader.