Happy Fourth of July!
Just wanted to let our loyal BudgetBlog readers know we're going on a short hiatus next week. With Congress heading out of town for a short summer recess and the upcoming Fourth of July holiday next week, the Fiscal Policy team is heading out of town in order to escape the heat for some well-deserved vacation. This means, though, that the BudgetBlog will be dormant next week.

But don't despair. Craig and I will return in one short week on July 7 to continue to bring you all the news, gossip, information, and analysis on federal fiscal policy you've come to expect.

Hope everyone has a safe and festive Independence Day next week - be careful with those fireworks.

Another report of a questionable use of outsourcing appeared today in CongressDaily, this time it's happening over at the State Department. Seems folks over there have modified an existing contract to Computer Sciences Corporation (FedSpending.org profile) to "collect visa information and fingerprints of Mexicans applying for new border crossing cards." The non-competed contract has raised some eyebrows in Congress and among government watchdogs, particularly the Government Accountability Office (GAO).

A State Department official testified before the House Oversight and Government Reform Government Management Subcommittee that the contract is just a test program and that the department hopes to initiate a formal competition before the end of the year. But it looks as though that "test program" is just an attempt by the State Department to assess the usefulness of the contract cover their behinds. GAO has not had time to assess the new contracted out work and what impact it will have, and surprise, surprise, neither has the State Department. GAO testified at the same hearing that the State Department has "not developed metrics to measure the success and efficiency of the test program."

So, the State Department is going to determine whether this is a good idea or not by...wait, how are they going to figure that out? Most likely, they have already concluded this outsourcing should happen. My bet is that the test program will lead to a contract for a full program, that Computer Sciences Corp. will undoubtably win, regardless of whether this really is a good deal for taxpayers or might compromise privacy or national security. No worries though - those are just minor details that will unfortunately remain unknown. Sigh...

Looks like reforms that would bring increased transparency to earmarking in the U.S. Senate will have to wait a little longer. The Senate Republican caucus postponed a vote yesterday on a package of recommendations developed by five GOP senators earlier this year that would increase disclosure of earmark requests and accessibility of earmark language in legislation. The Hill reports:

The conference was scheduled Wednesday to vote on reforms that were first proposed in April by a GOP task force to make the process of inserting pet projects into appropriations bills more transparent. But due to the heavy business awaiting Senate action before the Fourth of July recess, and since some members wanted more time to review the recommendations, the meeting was delayed until next month at the earliest.

The earmark reform debate continues to divide the GOP caucus as Republican appropriators have voiced concerns about some of the reforms proposed by the five-member task force. Indeed many believe the delayed vote was not due to the main reason cited in press reports - a heavy legislative calendar - but because Senate Minority Leader Mitch McConnell (R-KY) is an appropriator and is particularly sensitive to reforms that would curb earmarking.

Even if the GOP adopts the recommendations as written, it will still require a Senate rule change to implement some of the reforms, such as requiring that earmark language appear in the text of legislation and not in accompanying bill reports. It is nice to see transparency reforms continue in the debate in Congress, and people like Sens. Jim DeMint (R-SC) and Tom Coburn (R-OK) should be commended for keeping this issue alive. But increasing access to information about earmarking should really be done in a comprehensive way that links earmark information with bill text and background materials and other online information about Congress. This system should be put online in a central place, be searchable, downloadable, and easily understood by average citizens, and the information must be available before Congress considers legislation - not after.

Following up on my blog earlier today about the Webb-McCaskill Wartime Contracting Commission finally starting to get off the ground, I came across a great column by Thomas Frank today in the Wall Street Journal (of all places!) continuing the drumbeat for a contracting commission to finally get to the bottom of the rampant shenanigans that have gone on for far too long in Washington.

Frank, who wrote a cultural analysis of American politics in the book "What's the Matter With Kansas?", briefly explores the original of the privatization movement in the U.S. in his latest edition of his column entitled "The Tilting Yard," and calls on conservatives (of all people) to help turn the tide of waste, fraud, and abuse in federal procurement. Frank concludes:

The days when conservatives railed against red tape and shrieked for efficiency in Washington now seem like a lifetime ago. When they finally got the opportunity to put their theory into practice, conservatives contrived instead one of the most wasteful systems ever seen.

It is time for a new Grace Commission, this one examining the sordid history of privatization in all its details.

Frank's column is worth a read: The Tilting Yard: Conservatives and Their Carnival of Fraud

Craig's post yesterday about some short-sighted decisions at OMB to not provide sufficient resources for contractor oversight at the Army got me thinking about the Webb-McCaskill Commission on Wartime Contracting. There hasn't been a ton of news about that commission since it was enacted into law last fall, but just last week seven of the eight commission members were announced.

Four of the members were selected by Democrats in Congress, one was selected by Republicans in Congress, and two by President Bush. The Project on Government Oversight has a full rundown of the commission members selected so far and ample background information on each of them.

OMB Watch is looking forward to the work of the commission. We hope this badly needed oversight body for the broken federal procurement system will be able to continue to bring to light the significant problems with federal contracting, but also develop policy solutions to prevent future abuses.

However, before the bill could be approved under suspension of the rules, Democrats had to strip a few controversial provisions that would have allowed the GAO to administer oaths to agency employees; obtain information on Medicare Part D (the drug benefit) from HHS; and force the FDA to give the GAO information on drug pricing information, even if that information is considered a trade secret.

When the bill was passed out of the House Committee on Oversight and Government Reform, ranking member Tom Davis (R-VA) issued a statement with this revealing bit of logic:

By increasing GAO's investigative powers, I am concerned we will trigger a chilling effect on GAO's relationship with federal agencies — resulting in agencies being less forthcoming in providing information and diminishing GAO's role in improving government operations and promoting best practices in the federal government.

Maybe we should apply this logic to contractor oversight -- restrict investigative authority and contractors will be banging down the Oversight Committee's door in a fevered rush to declare their own misdeeds.

The Center on Budget and Policy Priorities has a helpful policy brief out today that runs through all the reasons the upcoming package of tax cuts -- popularly referred to as the "extenders" package -- should be offset. We couldn't agree with CBPP more. In their brief, they make four main points, the last of which is probably the most important:

• Congress should pay for the tax extenders, as its budget rules require.
• Arguments against applying PAYGO to the extenders bill do not withstand scrutiny..
• The offsets in the House-passed bill are reasonable policy.
• In the future, Congress should subject the extenders to greater scrutiny.

CBPP makes a great point with the fourth one on the list. There has not been any mention during debate on the extenders this year (or in any past year I can remember) that considered whether some of the provisions of the "extenders" package should continue to exist. House Ways and Means Committee Chairman Charles Rangel (D-NY) did mention during a committee markup that a comprehensive review of the package to determine which aspects were achieving their goals was necessary, but that review has not yet taken place. The popular name of the package itself -- the "extenders -- implies these tax policy provision will live on year after year without any review.

Hopefully while Congress tries to get its act together in order to go the extra mile and do a comprehensive review of the "extenders" package, they will at least do no harm and pay for the policies they want to extend wholesale.

Below are blog and news stories discussing the introduction yesterday of a new transparency bill cosponsored by Sens. Barack Obama (D-IL) and Tom Coburn (R-OK). Given the bill was introduced at the same time as Obama was wrapping up the Democratic nomination for president, the coverage was not bad.

The bill will likely be marked up in Sen. Carper's (D-DE) subcommittee of the Homeland Security and Governmental Affairs Committee sometime in the next few weeks and then hopefully move to the floor before the August recess. Sen. McCain (R-AZ) joined this bill shortly before it was introduced as an original cosponsor, dramatically increasing the chance of it passing this year before election year pressures impose gridlock in Congress. Perhaps Obama and McCain will promote the bill in their potential series of town hall meetings - that would definitely give it a boost in Congress.

The Hill: Rivals Obama and McCain work together behind scenes
Sunlight Foundation: USASpending.gov 2.0
OMB Watch: Obama-Coburn Continue Transparency March
POGO: Obama for...Transparency
Chicago Tribune: Obama, McCain agree on transparency
CongressDaily: Obama, McCain Give Boost To Contract Data Legislation

Updated:
DC Examiner: Another revolutionary leap forward for federal spending transparency
Talking Points Memo: Nugget from Behind the Scenes
ThinkProgress: June 5 Think Fast summary

Update II:
Obama and McCain Agree on Transparency
Federal Times: Obama-McCain bill would post federal contracts online

Sens. Barack Obama (D-IL), Tom Coburn (R-OK), Tom Carper (D-DE), and John McCain (R-AZ) introduced new legislation on June 3 as a follow-up to the 2006 Transparency Act. The bill, the Strengthening Transparency and Accountability in Federal Spending Act (S. 3077), would augment the 2006 law but go further, making important new data more easily accessible to the public and making it easier for citizens to hold our government accountable for the fiscal stewardship of our shared resources.

It should be interesting to see if this new bill will generate the same amount of chaos, confusion, and excitement that the first bill did that Obama and Coburn worked together on. Stay tuned...

And now a word from our friends at the Joint Committee on Taxation:

We are pleased to announce that The Joint Committee on Taxation has a new web address: www.jct.gov. We hope that this more logical address will make our website easier for you to remember, and encourage you to visit it frequently. The old address (www.house.gov/jct) is still functional and will continue to work for the time being. Please update your favorites/bookmarks.

The Committee isn't all tax bill cost estimates and technical explanation. Of interest (to some) will be its recent work on tax expenditure theory, for example. Not exactly beach reading, but it amply demonstrates the impressive range of thought the folks over at JCT engage in. In particular, we recommend:

• A Reconsideration Of Tax Expenditure Analysis
• Rethinking Tax Expenditures