Blog Posts of Adam Hughes*

Forgotten Tax Policy: The AMT

  tax forms As we near the end of the calendar year, a familiar drone has been absent this year in discussions about tax policy - the dreaded Alternative Minimum Tax (AMT). Despite early action this year that has put the issue off until 2010, the problems with the AMT that make it such a pain still exist.

The Urban-Brookings Tax Policy Center (TPC) released a short briefing paper in which Katherine Lim and Jeffrey Rohaly updated the TPC's good work on projecting the impact of the AMT. Although Congress enacted another AMT patch along with the Recovery Act back in January this year, that legislation did not fix the problem with the AMT. The two biggest issues - lack of indexing for AMT brackets and exemptions and exacerbation of the AMT by the Bush tax cuts - still exist. Those two issues present a very big potential problem for Congress and, in fact, for millions of Americans. From the introduction:

Absent another temporary fix or other change in law, the tax cuts and lack of indexation will combine to push more than 27 million taxpayers onto the AMT in 2010. If Congress extends the Bush tax cuts, that number would swell to almost 52 million by 2020. Alternatively, if Congress allows all of the tax cuts to expire—which is highly unlikely—the number of AMT taxpayers would fall dramatically in 2011, but then trend back upward over time to hit more than 37 million taxpayers by 2020. Regardless of how Congress deals with the coming expiration of the Bush tax cuts, policymakers will also need to address the explosive growth of the AMT from an obscure tax affecting only 20,000 filers in 1970 to one that could affect nearly a third of all taxpayers in 2010. (emphasis added)

The TPC paper is a great introduction to the AMT for those looking to understand it better, including background about the tax, historical impact and rates, revenue impact, and information about typical AMT filers among other topics. It's worth a read. (h/t: Bruce Bartlett/CG&G)

TPC: The Individual Alternative Minimum Tax: Historical Data and Projections

Image by Flickr user Casey Serin used under a Creative Commons license.

(Adam Hughes* 11/13/09; 0 comments)

Congress Passes Second Continuing Resolution

 

I had a feeling when Congress passed a continuing resolution (CR) last month that funded the federal government for only 30 days that they'd be back to pass another one. And so they did.

Yesterday, the House and the Senate both passed the Interior-Environment appropriations bill conference report, and with it, a second continuing resolution (CR) that will continue to keep the federal government operating through Dec. 18.

The Interior-Environment bill is only the fifth appropriations bill completed this year in Congress (out of twelve). Although the second CR provides more time for appropriators to try to finish all twelve bills, some in Congress are already hinting that an omnibus bill may be necessary before the year is out.

Status of Appropriations
(click to enlarge)

(Adam Hughes* 10/30/09; 0 comments)

Senate Budget Committee Task Force Gets Underway

  Sen. Mark Warner (D-VA)I blogged yesterday about a new task force that was recently created within the Senate Budget Committee that will focus on government performance issues. The task force (SBCTFGP?) got things started this morning with its first hearing, where Jeffrey D. Zients, the Deputy Director for Management and Chief Performance Officer at Office of Management and Budget testified along with Sir Michael Barber from McKinsey & Company and Dr. Paul Posner from George Mason University.

The hearing had a pretty good turnout actually. Sen. Kent Conrad (D-ND), chairman of the Budget Committee was there, along with Sens. Mark Warner (D-VA) - chairman of the Task Force, Jim Bunning (R-KY), John Ensign (R-NV), Sheldon Whitehouse (D-RI), and Ben Cardin (D-MD). Also, despite my dig yesterday at the Senate Budget Committee website for not posting the hearing announcement, the archived webcast and witness's testimony are available on the committee's website right now. So if you missed the hearing this morning, dig in!

Government Performance Task Force Hearing Materials:
Archived webcast of hearing

Testimony of Jeffrey Zients
Testimony of Sir. Michael Barber
Testimony of Dr. Paul Posner

(Adam Hughes* 10/29/09; 1 comment)

OMB Releases Contracting Guidance

 

The Office of Management and Budget has just released two long-awaited contracting reform memos as part of President Obama's larger efforts to overhaul federal contracting. The memos outline ways to increase competition while reducing risks for the government and about strategic planning for the acquisition workforce.

Both memos are the result of a contracting reform process started back in March when President Obama released a memorandum calling for an overhaul of the federal contracting process. OMB released three other memos at the end of July, and one more is still expected very soon that will seek to clarify the definition of "inherently governmental" so agencies can view contracts for potential work that should be insourced back to federal employees.

The Senate Homeland Security and Governmental Affairs Subcommittee on Contracting Oversight will hold a hearing on Wednesday afternoon to review the new guidance, with Jeff Zients, Deputy Director for Management and Chief Performance Officer at OMB testifying.

Increasing Competition and Structuring Contracts for the Best Results (.pdf)
Acquisition Workforce Development Strategic Plan for Civilian Agencies – FY 2010-2014 (.pdf)

(Adam Hughes* 10/27/09; 1 comment)

Congress Getting Into the Performance Game

  Sen. Mark Warner (D-VA)Last week, the Senate Budget Committee announced the creation of a Senate Budget Committee Task Force on Government Performance, to be led by committee member Sen. Mark Warner (D-VA). According to the committee's press release, the task force "will examine the federal government’s management framework and identify opportunities to improve the efficiency and effectiveness of federal programs and services."

The bipartisan task force includes Warner and Sens. Ben Cardin (D-MD) and Sheldon Whitehouse (D-RI) along with Republican senators Jim Bunning (KY) and Mike Crapo (ID). Warner hopes the task force will "take on the difficult challenge of making our government agencies and programs perform better through better measurements, enhanced transparency and greater accountability."

The first hearing of the task force is scheduled for this Thursday, Oct. 29, 2009, at 10:00 am. I'm assuming the hearing will be in Dirksen 608 (the regular Budget Committee hearing room), although I can't find any notice of the hearing beyond press statements from the Budget Committee and Senator Warner. Scheduled to testify are Jeffrey Zients, Deputy Director for Management and Chief Performance Officer at OMB, Paul Posner, Director of the Master's in Public Administration Program at George Mason University, and Sir Michael Barber, a partner at McKinsey and Co. and the former chief adviser to British Prime Minister Tony Blair on performance issues in Britain.

Image by Flickr user joelrivilin used under a Creative Commons license.

(Adam Hughes* 10/27/09; 0 comments)

OMB Launches Opening Salvo on Performance Overhaul

 OMB Director Peter Orszag released a memo to the heads of executive departments and agencies this morning announcing a new initiative in the FY 2011 budget process that seeks to bring increased emphasis and resources for program evaluation within agencies. The memo has three separate goals:

1) Posting more information about federal evaluations online: OMB will begin working this fall with federal agencies to expand access to information about program evaluations.

2) Inter-agency Evaluations Working Group: OMB is also going to re-constitute an inter-agency working group of evaluations experts from the Domestic Policy Council, the National Economic Council, and the Council of Economic Advisers.

3) Voluntary FY2011 Evaluation Initiative: The third aspect of the memo is a voluntary program that invites interested agencies to submit additional information along with their FY 2011 budget materials to win additional funding for high-priority evaluation activities.

I have posted a more thorough summary and additional thoughts I have on the memo, but overall this memo is not a comprehensive plan to replace the PART. It does, however, seem to lay the groundwork for that process. Orszag gives a little more insight about the scope and goals of this initiative in a blog post that describes how this initiative will be used by OMB down the road:

This is a first step. The agencies participating in this initial effort will serve as demonstration projects through which we can test approaches to improve program effectiveness and efficiency, share best practices, and further improve performance. After assessing this initiative in FY2011, the Administration will be better positioned to implement government-wide evaluation metrics.

Additional Reading:
WP Federal Eye: OMB Wants More Data on Government's Performance
OMBlog: Valuing Evaluation
OMB Memo: Increased Emphasis on Program Evaluations (.pdf)

(Adam Hughes* 10/07/09; 0 comments)

Opponents of ET Starting to Fight...With Each Other

 head buttingThe estate tax has emerged from its summer vacation and is in the headlines again this fall. But its not the usual "the world will end unless this tax is repealed" drumbeat. In fact, it looks like anti-estate tax advocates are starting to butt heads a bit. Here's a quick rundown:

Alliance of Corporations Backs Down: On Thursday, September 29, a coalition of 46 industry groups, including the U.S. Chamber of Commerce, the National Association of Manufacturers, the American Farm Bureau Federation, the Wine & Spirits Wholesalers of America, and the National Federation of Independent Businesses, sent a letter to House and Senate leaders that abandoned their longstanding campaign to permanently repeal the estate tax in favor of a long-term extension of the estate tax at a reduced rate. The ironically-named Family Business Estate Tax Coalition's letter urged Congress to enact a permanent solution that would lock in a $10 million exemption for couples and a top tax rate of 35 percent.
Bloomberg News: Chamber of Commerce, NFIB Back 35 Percent Estate Tax

USA Today Editorial: On October 1, USA Today ran an editorial opining that compromise may be on the horizon if the Family Business Estate Tax Coalition could bring down their "generous" proposal a bit:

Just this week, 46 groups, including the U.S. Chamber of Commerce and the National Federation of Independent Business, announced that they want not repeal, but a permanent 35% tax on estates worth more than $10 million. That's a bit rich (this year's exemption is a generous $3.5 million), but it's a sign that compromise might be attainable in this long-running policy war.
USA Today editorial

Hard-Core Right Wingers Reject Corporate Compromise: Following the announcement from the Family Business Estate Tax Coalition, even more conservative activists chastised their former allies. The president of the American Family Business Institute, Dick Patten, wrote in an e-mail blast that "[w]e are deeply disappointed by the Chamber's and NFIB's decision to abandon small businesses and farms in the name of compromise." AFBI's president Dick Patten further criticized his business partners by claiming they are not tough enough, "[a]s so often happens, business groups already are running for the barricades, before the fight begins, seeking compromise instead of victory."
CongressDaily: Estate Tax Foes Blast Industry-Backed Deal

Image by Flickr user jerryfeist, used under a Creative Commons license.

(Adam Hughes* 10/06/09; 2 comments)

Obama Names Gordon to Run OFPP

  Daniel Gordon

On Friday, President Obama named Daniel Gordon, currently the deputy general counsel of the U.S. Government Accountability Office (GAO), as his nominee to run the Office of Federal Procurement Policy (OFPP). Gordon has been at GAO for 17 years and has also worked as the managing associate general counsel for the GAO's Procurement Law Division and the associate general counsel and senior attorney for the Procurement Law Division. At first glance, Gordon seems like a real solid pick for this position who will certainly have a lot on his plate if he is confirmed by the Senate.

OMB Director Peter Orszag had the following to say about Gordon on OMB's blog:

Dan is a career contracting professional who understands that the top goal of our procurement efforts is to use taxpayers’ dollars smartly and effectively – that we get the most value for every dollar we spend. Dan will bring a fresh approach to procurement policy, but he also will rely on the expertise of the career procurement workforce to improve our procurement processes.

GovExec.com: Gordon officially gets the OFPP Nod
OMBlog: A Real Pro for Procurement

(Adam Hughes* 10/05/09; 0 comments)

Senate Hearing Will Examine Use of Performance Information

 

Sen. Carper's (D-DE) Homeland Security and Government Affairs Subcommittee on Federal Financial Management, Government Information and International Security is scheduled to hold a hearing this Thursday, Sept. 24, on the use of performance information within federal agency decision-making processes.

The hearing, entitled Getting to Better Government: Focusing on Performance is a follow up to a hearing Carper held in 2008 on the use of performance information. Two interesting things to watch in this hearing.

First, the Government Accountability Office will be releasing additional information about a study that sought to understand the extent to which federal agencies use performance data for correcting problems and sharing best practices, and how their use could be improved. GAO released preliminary findings from this survey at the first hearing in 2008.

Second, this will be perhaps the first time newly-appointed Chief Performance Officer Jeffrey Zients will testify before Congress about the future of the Program Assessment Rating Tool (PART) and the Obama administration's plans for developing a more useful and productive performance measurement system. Although Carper's release on the hearing states Zients is planning to talk about "OMB plans to strengthen a performance culture throughout the federal government," this hearing would be a very appropriate place to share information about the broader reform plans being developed within OMB and throughout the federal government. Given this is a topic OMB Watch has been heavily involved in monitoring, we are particularly interested in hearing his testimony.

The hearing is scheduled to begin at 10:30 am in Dirksen Senate Office Building Room 342.

(Adam Hughes* 09/22/09; 0 comments)

House Considers Scrapping Virtual Border Fence

  The Government Accountability Office (GAO) released a new report yesterday before a House Homeland Security Subcommittee hearing on the embattled Secure Border Initiative (SBI) program - a multi-billion dollar program designed to secure the U.S. borders. A subset of that program, called SBInet is supposed to be building a fancy, virtual fence along the U.S. southern border. The program, begun during the Bush administration, has consistently been behind schedule and over budget - and that's when the new technologies have worked at all. And now it looks like Congress may want to cancel the program altogether.

Lawmakers might be thinking it's time to pull the plug on SBInet because the update on the project from GAO isn't encouraging:

SBInet technology capabilities have not yet been deployed and delays require Border Patrol, a [U.S. Customs and Border Protection] component, to rely on existing technology for securing the border, rather than using newer technology planned to overcome the existing technology’s limitations. Flaws found in testing and concerns about the impact of placing towers and access roads in environmentally sensitive locations caused delays. As of September 2006, SBInet technology deployment for the southwest border was planned to be complete by early fiscal year 2009. When last reported in February 2009, the completion date had slipped to 2016.

Since SBI's first year, it has received over $3.7 billion in funding, of which about $1.1 billion has been invested in the SBInet program. The delays and cost overruns certainly are not anything new, but another key part of why this program is such a disaster is that the U.S. Customs and Border Protection folks are not even gathering the necessary data to figure out if this is a wise investment. Again from GAO:

CBP reported that tactical infrastructure, coupled with additional trained agents, had increased the miles of the southwest border under control, but despite a $2.4 billion investment, it cannot account separately for the impact of tactical infrastructure. CBP measures miles of tactical infrastructure constructed and has completed analyses intended to show where fencing is more appropriate than other alternatives, such as more personnel, but these analyses were based primarily on the judgment of senior Border Patrol agents.

The hearing in the House Subcommittee on Border, Maritime and Global Counterterrorism of the Homeland Security Committee did not go well for the SBInet program. Lawmakers at the hearing, both Democrat and Republican, were frustrated and angred at the continued delays and problems detailed in the GAO report and some suggested the program may have to be scrapped altogether, including GAO representative Richard Stana. The Subcommittee has archived video of the hearing on its website.

GAO: Technology Deployment Delays Persist and the Impact of Border Fencing Has Not Been Assessed
GAO: Testimony of Richard M. Stana, Director Homeland Security and Justice Issues
CongressDaily: Lawmakers Suggest Scrapping Border Project

Image by Flickr user waynewhuang used under a Creative Commons license.

(Adam Hughes* 09/18/09; 8 comments)