Federal Budget & Tax

Federal Budget & Tax: News Blog Background

Tuesday, January 29, 2008

Bob Herbert's column in the NY Times today elevates an important issue that has been swirling under the radar the last few years in Washington and around the country but has not garnered enough attention - lack of infrastructure investment. Herbert highlights the work of Sens. Chris Dodd (D-CT) and Chuck Hagel (R-NE) to create a national infrastructure bank that would identify, evaluate, and help finance large-scale, long-term infrastructure projects across the country to rebuild and strengthen roads, bridges, levees, transit systems, water treatment facilities, schools, hospitals, electrical grids, and other key infrastructure sectors.

Dodd and Hagel are hoping to create a sense of urgency to address the growing infrastructure problems faced by the U.S., framing this as an economic issue as much as a quality of life concern. The need is certainly clear. From Herbert's column:

The need for investment on a large scale — and for the long term — is undeniable. According to the American Society of Civil Engineers, in a study that should have gotten much more attention when it was released in 2005, it would take more than a trillion and a half dollars over a five-year period to bring the U.S. infrastructure into reasonably decent shape.

...

As things stand now, the American infrastructure is incapable of meeting the competitive demands of the globalized 21st-century economy. Senator Hagel noted that ports are overwhelmed by the ever-expanding volume of international trade. Rail lines are overloaded. Highways are clogged.

Herbert's well-reasoned column reminded me of another commentary from the Times editorial board last week entitled "Charity Begins in Washington." This editorial argued there are many aspects of our society - namely social needs - that demand government investment and cannot be left to private philanthropy. Dodd and Hagel have certainly made a strong case that infrastructure projects also warrant considerable and sustained federal investment.

Read more about the Dodd-Hagel National Infrastructure Bank Act of 2007.
Bill summary and letters of support

Posted by Adam Hughes, 05:22:27 PM

Open-Gov Questions Candidates are Afraid We'll Ask

Elections are the time when politicians pay the most attention to people and issues, and therefore the best time to ask them questions about how they plan to govern. OMB Watch wants your help in figuring out the best questions on government transparency that can be put to the candidates. Take just a few minutes to answer our survey and vote on your five favorite questions on the issue of government transparency and openness. We will then share the top questions with the news media and other organizations that have direct contact with candidates.

Government openness affects every issue from budget and taxes, to the regulatory process, to non-profit advocacy. The range of questions tries to reflect this breadth so check them and see which are most important to you.

Take the Open Government: What We Need To Know Survey today.

Posted by Adam Hughes, 01:58:10 PM

Friday, January 25, 2008

DoD Unable to Control Contractors

Another unbelievable story on contracting in the Washington Post this morning. Walter Pincus reports that government officials (including Jack Bell, deputy undersecretary of defense for logistics and materiel readiness, Stuart W. Bowen Jr., special inspector general for Iraq reconstruction, and William M. Solis, director of defense capabilities and management for the Government Accountability Office) testified before Congress that the Bush administration is unable to manage the enormous number of U.S. contractors currently working in Iraq and Afghanistan.

At the end of September, there were over 196,000 contractor workers assisting the Department of Defense in the two war zones, and Defense Undersecretary Jack Bell stated that despite the crucial role these contractors play in the war effort, the Defense Department was "not adequately prepared to address this unprecedented scale of our dependence on contractors." The GAO also found not enough trained service personnel are available to handle outsourcing to contractors in the wars, a finding supported by Retired Army Gen. David M. Maddox, who has studied the contracting effort in Iraq as a member of an Army-appointed commission.

This testimony was delivered at a joint hearing of two subcommittees of the Senate Homeland Security and Governmental Affairs committee yestereday afternoon. And it is more than simply related to ensuring efficient management of the war effort - there's a lot of money involved here too. Subcommittee Chairman Tom Carper (D-DE) noted in a statement:

Out of $57 billion worth of contracts for services and reconstruction work in Iraq, the Defense Contract Audit Agency has reported that more than $10 billion — or one-sixth of the total spent on contracts — is either questionable or cannot be supported because of a lack of contractor information needed to assess costs. To date, there are more than 80 separate criminal investigations into contracts totaling more than $5 billion.

Here's a link to the committee page for the hearing where this testimony was heard, but it really won't do you much good as it doesn't have any testimony or information about the hearing other than who testified.

Image by Flickr user jamesdale10 used under a Creative Commons license

Posted by Adam Hughes, 10:30:39 AM

Thursday, January 24, 2008

Poor Contractor Performance Hampers Government

The past few weeks have seen a flurry of stories about ~~the ineffectiveness of government contractors~~ government mismanagement. While I'd like to go into detail on each one (they are definitely worth a closer look), the stories are starting to pile up. Instead, a summary round-up of some of the contracting screw-ups that appeared so far in 2008.

** The Washington Times reported today that an investigation that lead to the conviction of a former GSA procurement official (Dessie Ruth Nelson) and two top executives at a private security company (Holiday International Security, Inc.) is being widened to include other "unrelated contractors" who may have bribed Nelson or other procurement officials. Nelson pleaded guilty in early January to accepting over $100,000 in bribes in exchange for steering contracts to the private security firm founded by Michael Holiday. Nelson received, among other things, a shopping bag filled with $35,000 in cash, an envelope containing $10,000, and a $7,000 Caribbean cruise.

** The House Committee on Oversight and Government Reform released a report on Jan. 11 that found a web site created for the Transportation Security Administration to address grievances from travelers incorrectly flagged by the government's no-fly list was poorly constructed and vulnerable to hackers. The report, covered in the Washington Post, Government Executive Magazine, and other tech blogs, concluded that cronyism and a lack of oversight exposed thousands of site visitors to identity theft. In this case, the contract was awarded without competition and the TSA official in charge of the contract was a former employee and good friend of the CEO of the contractor.

** Federal Times reports today that the top official at the National Oceanic and Atmospheric Administration is alleging that "poor contractor performance is delaying a new satellite that will monitor global environmental conditions." The contract in question was given to Raytheon (FedSpending Profile) and Northrop Grumman (FedSpending Profile), which have been slow to solve problems with a key instrument for the National Polar Orbiting Environmental Satellite System (NPOESS).

** Finally, the Washington Post also has an article today about a recent Government Accountability Office report that found a defense contractor hired to repair combat equipment "routinely failed to do the job right and then charged the government millions of dollars for the extra work," according to the WP. The contractor, ITT Industries (FedSpending Profile) apparently received $4.2 million for additional labor, according to the GAO report.

Posted by Adam Hughes, 02:10:41 PM

Thursday, January 17, 2008

The Blind Leading the Blinder

The Washington Post reported this morning that congressional leaders have asked the Government Accountability Office (GAO) to investigate the use of no-bid contracts to hire businesses and corporations to oversee and monitor other businesses and corporations. Sen. Patrick Leahy (D-VT) and Rep. John Conyers (D-MI) apparently thought something smelled fishy when a federal prosecutor steered a no-bid, 18-month contract worth between $28 million and $52 million to his old boss, former Attorney General John Ashcroft.

The contract is for overseeing an out of court settlement the Justice Department reached with a knee and hip replacement company called Zimmer Holdings, Inc. from Warsaw, Indiana. Apparently Zimmer Holdings was accused of ~~bribing~~ giving kickbacks to doctors who used their knee and hip implants. Now the way these types of settlements work is that the monitoring company is paid directly by the offending business that it is supposed to be monitoring. Therefore, Ashcroft's consulting firm will be paid directly by Zimmer Holdings - the very entity he is supposed to be overseeing to make sure, if you can believe this, they don't make more illegal payments or bribes.

It's hard for me to even begin to describe the gut-wrenching, mind-boggling irony of this situation. First off, how can Mr. Ashcroft be expected to monitor a company in an independent manner that is paying him directly? Second, it's not like Zimmer Holdings was accused of union-busting or providing unsafe working conditions for its employees. They were accused of bribing doctors! Wouldn't it be reasonable to believe they could continue to attempt to offer illegal bribes? And how would the public know if they were doing that? Because the monitor company's bills are not subject to an independent review, are we just supposed to take Mr. Ashcroft's word for it?

Believing Ashcroft isn't the only problem. Read more...

Posted by Adam Hughes, 04:26:24 PM

Tuesday, January 15, 2008

New OMBW Report Exposes Poor Tax Enforcement Policies

OMB Watch released a new report today examining the IRS budget and enforcement policies and their impact on the tax gap. The report, Bridging the Tax Gap: The Case for Increasing the IRS Budget, focuses on three key areas in need of reform at the IRS: auditing, tax collection, and services for low-income taxpayers claiming the EITC.

This report comes at the start of a new budget cycle after the IRS was given too little money to accomplish its mission of enforcing the nation's tax laws and collecting federal revenues in 2007. Because of insufficient resources and inefficient (and sometimes dangerous) policies at the IRS, over $300 billion in federal income taxes goes uncollected every year. It's time for Congress to step up:

Congress has given considerable lip service to doing something about the tax gap for years but has done little to actually give the IRS the tools to make significant progress in closing it. Despite this fact, Congress has demanded the IRS close the tax gap without making more resources available for the agency to do so. Thus, the IRS has been forced to make difficult choices as to how to use the limited resources it has been allocated. As a result, at the very least, the tax gap remains a large problem, and most experts believe it has probably increased in size as the IRS has largely scaled back tax law enforcement over the last ten years.

We believe its time for Congress and the IRS to get their collective acts together and make some long-overdue changes to the IRS' budget and tax enforcement policies. This report gives some first steps in how this can happen.

Bridging the Tax Gap: The Case for Increasing the IRS Budget
OMB Watch Press Release for Report

Posted by Adam Hughes, 12:13:08 PM

Friday, January 11, 2008

Questions, comments, suggestions, and glad tidings can now be directed to the BudgetBlog inbox at: