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| Vol. 1 No. 13 | July 17, 2000 | |
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In This Issue Tax Bill Update: Marriage "Penalty" and Estate Tax Bills Why Shouldn't the Rich Pay More in Taxes? 'Responsible Contractor' Rule Out for Comment Ergonomics Rule Draws More GOP Fire Clean Water Rules Issued in Defiance of Rider CTCs Funded Wiring the Nation's Schools Through E-Rate Program New Wiretapping Tool Eats Away at Online Privacy Tech Help: Message Boards Letters to the Editor: Confusion Around Nonprofit Charitable Activities | Conference Board is Not Bipartisan |
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After the dismal failure of their huge, omnibus tax cut bills earlier this year, the new GOP strategy for getting tax cuts passed is to bring separate bills for consideration under the "budget reconciliation" provisions of the Budget Resolution. This allows for passage without the possibility of procedural delays and filibusters. It also makes for smaller price tags on each bill, though, when you add them up, the cost is huge. The Budget Resolution predicates additional tax cuts or debt reduction based on new and increased surplus estimates in the Congressional Budget Office Budget Update, expected out tomorrow. Congress is proceeding rapidly to pass tax legislation, based on the expectation that the CBO figures will, like the Office of Management and Budget’s mid session review (in PDF format), show even larger surpluses than previously estimated. The strategy appears successful, at least for boasting rights, but since President Clinton has threatened a veto of the estate tax elimination bill and is requiring some horse trading in exchange for not vetoing the marriage penalty elimination bill, neither of these bills may become law. "Marriage Penalty" Elimination On July 13, the House passed a "marriage penalty" elimination bill by a vote of 269-159. The bill is similar to a previously passed version. The Senate is expected to vote on the bill tomorrow. It provides some very limited relief for low and moderate income families, including a small increase in earned income tax credits for low and moderate income married couples with children. However, Citizens for Tax Justice estimates that only about 15 percent of the overall benefits of the bill would go to low and middle income married couples who have incomes below $50,000. Additionally, the bill provides nearly two-fifths of its benefits to families who currently receive a marriage "bonus," thus making the claim that the bill’s purpose is to eliminate the marriage penalty a bit far-fetched. The cost of the bill is high -— since the budget resolution covers only five years, the usual estimate is the cost through 2004, which seems modest, at only $55.6 billion. However, an estimate over ten years is a more realistic figure since it would be very unpopular and quite unlikely that the measure would be repealed after five years. That estimate is $248 billion, almost a quarter of a trillion dollars. The President has threatened to veto the bill, but has offered a trade—a marriage penalty relief bill of the same approximate cost for a Medicare reform package. The Medicare reform package would have to include provisions to preserve the "Medicare surplus," and take it off-budget, the same way the Social Security surplus is now treated, and not allow those surpluses to be used for tax cuts or spending. The Medicare bill would also have to include prescription drug coverage similar to the President’s proposal. It is thought unlikely that an acceptable trade can be made. Estate Tax Update On July 14, the Senate passed the "estate tax elimination" bill and it has been sent to President for an expected veto. The vote was 59 to 39, with nine Democrats joining most Republicans -- far less than the two-thirds majority needed to override a veto. This bill gradually eliminates the estate tax on the less than 2% of Americans who must pay it on the very wealthiest of estates. A Democratic alternative raising the exemption (now $675,000 and rising to $1 million by 2006) failed. The cost of the estate tax elimination bill is estimated at $105 billion over 10 years, but $50 billion a year after that will be lost in federal tax revenue, making for an expensive next ten years. It will be interesting to see if Republicans are willing to compromise with Democrats to get relief from the estate tax or whether they will just make this an election issue. It is interesting that one of the first uses of the surplus could be a tax break for some of the wealthiest in the country. Back to TopWhy Shouldn’t the Rich Pay More in Taxes? The U.S. Tax Code is a "progressive" tax system that was designed to require wealthier citizens to pay higher taxes than those who are less well off. While that might seem amazing to those of us who are concerned about the number of tax breaks the rich get that you and I do not, the progressive tax structure was intended to levy higher taxes on wealthier people. It’s an idea that has enjoyed favor for decades. The recent passage of the estate tax elimination bill is evidence that the idea of fairness through taxation based on income is wearing thin. This is a disturbing sign, especially in a country where we give considerable lip service to the worrisome fact that income disparity between rich and poor is increasing, even in the midst of extraordinary economic good times. According to a recent report by the federal government, mostly praising improvements in the health and well being of our country’s children, when viewed on an international scale, we don’t do so well. The report finds that the U.S. has the second highest percentage of children living in households with incomes below 50% of the national median income, second only to Mexico! Poverty among children is dropping -— among white children it stands at 10%. BUT, the poverty rate of black children is 36% and among Hispanic children it is 34%. Even the fact that one in ten kids lives in poverty is not much to brag about. The tax bills being passed now largely benefit the best off AND those benefits are the ones that will cost the most in ten or twenty years. While we have the promise of budget surpluses for years to come, shouldn’t that money be used to address income inequality or to help the working families in America among whom poverty is increasing? Shouldn’t we be asking why, when there are budget surpluses for years to come, we can’t address the needs of poor children, rather than eliminating estate taxes for the wealthiest 2% of Americans? Back to Top'Responsible Contractor' Rule Out for Comment The Clinton administration is soliciting comments on a revised proposed rule that promotes greater accountability for federal contractors -- to make sure they comply with important public protections. The proposal simply states that, in deciding on a contractor, government procurement officers should take into consideration whether a business has repeatedly and substantially violated consumer, environmental, labor, tax or antitrust laws. To facilitate implementation, the revised proposal would require bidding companies to certify whether they have been found liable for violating laws specified under the rule within the three years preceding the contract. This modest proposal, which amends the Federal Acquisition Regulation (FAR), is simple commonsense. Businesses that consistently flout the laws of the land should at the very least have to worry about how their lawbreaking will affect their prospects of receiving a federal contract. Moreover, procurement officers should take greater care in distributing federal dollars than they have been in the past. According to the General Accounting Office, 80 firms that violated the National Labor Relations Act received more than $23 billion in contracts in Fiscal Year 1993. In FY 1994, $38 billion was awarded to 261 federal contractors that were cited by OSHA for 5,121 violations, many of which were both serious and willful. Unfortunately, some in the business community have suggested that the proposed amendment to the FAR would be used to create a "blacklist" with no allowance for due process. This is flat wrong. Already, procurement officers are to make determinations based on "integrity and business ethics." This would not change under the proposed rule; the proposal simply clarifies what should be considered under this standard. Organizations that receive adverse determinations are not now "blacklisted" and this too would not change. In fact, a representative of the Federal Acquisition Regulatory Council has explicitly stated there are no plans for such a blacklist. Moreover, each determination is made on a case-by-case basis for the contract in question, and does not constitute "debarment" for all federal contracts. As far as the due process issue, the FAR already provides for an agency appeal process if the organization feels that an agency's determination was wrong, as laid out by Executive Order 12979, Agency Procurement Protests. In addition, the FAR also provides details on taking protests beyond the agency to the General Accounting Office, and for small entities, to the Small Business Administration. Nonetheless, the revised proposal does seek to include some additional allowances for due process. Specifically, it requires contracting officers to coordinate adverse determinations with agency legal counsel to notify bidders if they are found non-responsible, along with the basis for that determination. More than just emphasizing compliance with the law, the proposed rule would also bar contractors from billing costs to the federal contract that are incurred from influencing decisions over unionization or that are incurred in a legal proceeding where a contractor is found to have violated a law or regulation. Again, this is simple commonsense. These activities have nothing to do with fulfilling any federal contract, and so should not be billed to the contract, which is now allowed in certain cases. COMMENTS ON THE PROPOSED RULE are being accepted until Aug. 29, and should be addressed to: General Services Administration, FAR Secretariat (MVR), 1800 F St., NW, Room 4035, Washington, D.C. 20405, Attn.: Laurie Duarte View a full analysis of the rule as it was first proposed last year. Back to TopShots in the Dark: Ergo Rule Draws More GOP Fire In their continuing battle against the Occupational Safety and Health Administration's (OSHA) proposed ergonomics standard, GOP leaders have picked a new, strange target at which to direct their fire -- contractors. Rep. David McIntosh (R-IN) is leading the charge against OSHA's use of contractors in developing its ergonomics standard, arguing that contractors performed "inherently governmental functions" -- an odd charge for someone so keen on government privatization -- and that they were improperly "coached" by OSHA in developing testimony on the standard. Taken together, these charges seem hard to reconcile. On the one hand, the contractors were doing OSHA's job, yet on the other, OSHA was doing the contractors' job. Nonetheless, taking McIntosh's cue, four Republican senators -- Sens. Fred Thompson (TN), Kit Bond (MO), James Jeffords, and Mike Enzi (WY) -- recently asked the General Accounting Office (GAO) to investigate the matter. For its part, the Dept. of Labor contends that there was nothing unusual about its use of contractors. "As a general matter, OSHA's use of expert witnesses and consultants is expressly authorized by Congress and has been approved of by the Courts," wrote Charles Jeffress, assistant secretary of the Labor Dept., in a letter to McIntosh. "In addition, the practice has been recognized by the General Accounting Office, and is consistent with OSHA's past practice under four different Presidents over two decades." In a letter to the Labor Dept., McIntosh acknowledges a 1980 Appeals Court decision allowing the use of expert consultants. But he highlights a dissenting opinion in that case and states, "I believe that now, 20 years later, it is time for the Court to reexamine this decision." It's unclear why McIntosh is writing Labor about this or how he plans to get the courts to revisit the matter. But it seems McIntosh's problem is less with OSHA than with court precedent. If there were irregularities in OSHA's use of contractors -- of which there is no evidence -- that is a legitimate concern of Congress. However, what seems to be driving this concern is not an interest in the rulemaking process, but opposition to the proposed ergonomics rule itself. McIntosh and his allies have argued strenuously against a new standard, and in fact they recently succeeded in attaching a rider to the Labor-HHS appropriations bill that prohibits OSHA from moving forward. Now they are grasping for new arrows to shoot down the standard -- to cast doubt on the entire rulemaking process and to send OSHA back to go. But it should be pointed out that this standard has been more than a decade in the making. Indeed, it was initiated under President Bush's secretary of Labor, Elizabeth Dole. Since then, numerous studies -- including studies done wholly independent of OSHA -- have clearly demonstrated that musculoskeletal disorders (MSDs) caused by ergonomic hazards are the biggest safety and health problem in the workplace today. The evidence demands action. Unfortunately, the McIntosh crowd is unwilling to face it. Back to TopUnbridled: Clean Water Rules Issued in Defiance of Rider Republican leaders thought they had the administration in a bind when they slipped a provision into a must-pass emergency spending package -- which includes money for the administration's anti-drug efforts in Colombia -- that blocks EPA from issuing new clean water regulations. But before the president signed the bill, making it law, EPA simply went ahead and issued its regulations, thereby dodging the rider (although it will not have money to implement or enforce the new standards until at least October of next year). Now it's Congress that is crying foul. Sen. Larry Craig (R-ID) called EPA's move "a slap in the face of the policymaking body of this country," according to the Washington Post. But if Congress is going to play games with appropriations bills, it should expect the administration to play too. The rider was slipped in during conference committee and was never subject to an up or down vote by itself. It's not clear that it could pass on its own merits, outside of a must-pass spending bill. In any case, Congress will still have an opportunity to put this to the test. Under the Congressional Review Act, Congress has 60 legislative days to vote down the rule. If the votes are there -- if moving forward is indeed such a bad idea -- then those behind the appropriations rider should have nothing to worry about. But as upset as they are about EPA's move, we doubt very much that the rider truly represents the will of Congress. Indeed, there is ample justification for the regulations -- a 1998 assessment, for example, found that 40 percent of the nation's waterways are not suitable for fishing or swimming. EPA's new regulations require states to conduct pollution surveys of about 20,000 bodies of water and develop plans for cleaning them up over the next 15 years. Could Congress really be against that? Read a Washington Post editorial on the matter. Back to TopOn June 14, the House passed the FY 2001 Labor, HHS and Education Appropriations bill (217-214), which includes funding for the federal Community Technology Centers (CTC) program under the Department of Education. The bill includes $32.5 million, which is the current funding level. On June 30, the Senate passed its FY 2001 Labor, HHS and Education Appropriations bill (52-43), which includes $65 million for CTCs. The Clinton administration requested $100 million. The next step is for the conference committee of the House and Senate to hammer out a final version of the bill which will then go to the President for his approval or veto, expected this fall.
Wiring the Nation's Schools Through E-Rate Program Because of the E-Rate program, which gives grants to public schools and libraries to help buy Internet connectivity, 95 percent of the nation's public schools, at the end of 1999, had at least one site with Internet access, and 63 percent of all classrooms had been wired, according to the Federal Communications Commission, which oversees the program. As the program enters its third year, nearly $4 billion has been awarded to schools and libraries in the United States and in the territories of Puerto Rico and Samoa. Incorporating the new technology into the curriculum has not proceeded as quickly or smoothly. To help address this concern, President Clinton recently announced $128 million in grants to help train teachers on computers. The proposal has been opposed by House Republicans. Back to TopNew Wiretapping Tool Eats Away at Online Privacy The FBI has deployed a new computer system to wiretap the Internet, dubbed "Carnivore" inside the FBI because it rapidly finds the "meat" in vast amounts of data. The system "sniffs" the "packets" into which all information that travels across the Internet is broken up and can discriminate e-mail packets from other sorts of information packets (e.g., an online purchase). While the system can be tuned to only monitor the number and recipients of e-mail messages sent by a suspect, it could also be used for much broader searches. According to press reports, the Carnivore system is attached directly to an Internet Service Provider's (ISP) network and, thus, gives the FBI access to all traffic over the ISP's network, not just the communications to or from a particular target. Carnivore is attached either when law enforcement has an order from a court permitting the FBI to intercept in real time the contents of the electronic communications of a specific individual, or a trap and trace order or a pen register order allowing to it obtain the "numbers" related to communications from or to a specified target. The actual process takes place, however, without scrutiny by either the ISP or a court. In the traditional telephone context, trap and trace orders or pen register orders reveal nothing more than the numbers dialed to or from a single telephone line. In the Internet context, these orders -- and certainly Carnivore -- are likely to involve ascertaining the suspect's e-mail address, as well as header information that may provide information regarding the content of the communication. The approach used in employing Carnivore is, according to civil liberties experts, the antithesis of the procedures required under our wiretapping laws, which authorize limited electronic surveillance of the communications of specified persons, usually conducted by means of specified communications devices. These procedures put the responsibility for separating the communications of persons authorized to be intercepted from other communications on the provider of the communications medium (in this case the ISP). Because Carnivore permits access to the email of every customer of an ISP and the email of every person who communicates with them, the ACLU, in a letter to Congress, notes that "Carnivore is roughly equivalent to a wiretap capable of accessing the contents of the conversations of all of the phone company's customers, with the "assurance" that the FBI will record only conversations of the specified target." Attorney General Janet Reno has said that she is now looking at the Carnivore technology and its implications for online privacy. Back to TopTech Help: What's the Word on Message Boards?
Your organization's website presents a lot of content to
users. But what does it offer visitors and users in terms of tools to hear what they think about the information you provide? Message boards are one way nonprofit websites engage audiences in substantive discussions around the information they present. If you were reading NPTalk, you would know where to look for tools that will help
keep your audience from being bored silly online.
Conference Board is not nonpartisan [Response to "A Rising Tide May Not Be Lifting All Boats," OMB Watcher Online, Vol. 1 No. 12] [Editor's note: The Conference Board is a 501(c)3 organization, which is a nonpartisan charity. Mr. Wehrly makes a good point, however, that we should make an effort to better characterize the bias of the organizations that we cite.] Non-profit charitable activities [Response to "Commentary on Nonprofit Disclosure," OMB Watcher Online, Vol. 1 No. 12] Back to TopYour comments are always welcomed! Please send comments and questions to ombwatcher@ombwatch.org |
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