IN THE NEWS

Budget Critics Say Furor Over Tax Provision Highlights Big Flaws in Process

by Joseph J. Schatz and Jill Barshay
Congressional Quarterly

November 25, 2004

The hasty and haphazard completion of nine overdue fiscal 2005 spending bills raised new appeals from lawmakers that Congress figure out a better way to enact its annual budget.

Lawmakers combined the nine appropriations bills into a huge $388.4 billion omnibus in the recently completed lame-duck session — a process that left some lawmakers expressing outrage. The new fiscal year began Oct. 1, and appropriators resorted to creating an omnibus package in an effort to enact the overdue spending bills as quickly as possible.

The Nine Bills at a Glance

But a furor erupted over a provision slipped into the 3,016-page bill (HR 4818 — H Rept 108-792) just before it came to the Senate floor Nov. 20, which would have allowed appropriators and their staff to access personal tax returns, with no penalty for publicly revealing information on the returns. Red-faced appropriators acknowledged the provision should never have been included and promised to rectify the situation.

Critics who say the appropriations process is broken pounced on the incident as the latest example of a growing problem of too much budget work being done, largely in secrecy, with too little time for members to review the product before voting.

Rep. Steny H. Hoyer of Maryland, the House Democratic whip, said on the House floor Nov. 24 that he hoped discovery of the provision will be an “object lesson” to overhaul the appropriations process so that lawmakers have a chance to read spending legislation, reflect on its provisions and air their views.

House GOP leaders had planned to hold a quick voice vote Nov. 24 to adopt a Senate-approved resolution (H Con Res 528) deleting the controversial provision — a move Senate Democrats demanded before they would allow the omnibus to be sent to President Bush for his signature.

Both chambers had adopted the conference report on the omnibus Nov. 20.

But House Minority Leader Nancy Pelosi, D-Calif., did not want to let the majority party off so easily, and sought a roll call vote on the resolution to strike the offending tax provision.

That forced Congress to clear a new continuing resolution (H J Res 115) Nov. 24 that will keep the government operating through Dec. 8, allowing time for the House to return Dec. 6 for the roll call vote.

Once the House clears the resolution striking the tax provision, the omnibus will be sent to Bush for his signature.

The maneuvering prompted new discussions of ways to bring some order to the appropriations process, perhaps by giving more power to the budget committees and, when an omnibus becomes necessary, enforcing House rules to give members three days to review details of the legislation.

One idea being floated in GOP leadership circles is to give the chairmen of the Senate Appropriations, Finance, Armed Services and Banking committees more of a stake in the process by requiring them to serve on the Budget panel as well, according to a senior Senate budget aide.

For now, the idea is still at the staff level, and incoming Senate Budget Chairman Judd Gregg, R-N.H., has not weighed in.

Despite the calls for overhauling the appropriations process, few expect serious changes to be made any time soon. Wrapping legislation into an omnibus package has become an effective tool for the GOP leaders in Congress, allowing them and the White House to dictate the terms of the final negotiations.

Even if rank-and-file members dislike a provision in the final package, they are often reluctant to vote “no,” because of all the other spending projects in it.

Ted Stevens, R-Alaska, the chairman of the Senate Appropriations Committee, placed the blame on the budget process, arguing that the GOP leadership’s inability to get a budget resolution adopted in the Senate this year caused delays for appropriators trying to write their bills and forced the year-end pileup.

However, the situation this year is not unusual. Republicans have struggled mightily over the past three years to live within their own the spending limits, and appropriators have failed to enact their bills on time, even in 2003, when Congress adopted a budget.

John McCain, R-Ariz., called the system “broken,” and argued that the current way of doing business helps appropriators sneak special earmarks into legislation. The omnibus “always is considered at the last minute before we go out, or the last hour or the last two hours. Why? Because the members of the Appropriations Committee know it will not bear scrutiny,” McCain said.

Pelosi’s Objection

Pelosi supports striking the tax language from the omnibus, but before she would let Republicans fix the problem, she wanted GOP leaders to agree to stop ramming bills through the House without giving members time to review them.

The House has rules requiring waiting periods before committee-reported bills can be considered on the floor, as well as a prohibition against floor action on the same day that the Rules Committee establishes the ground rules for debate on a bill. However, the majority party in the House can easily waive the rules, and Republican leaders declined to meet Pelosi’s demands.

Pointing Fingers

A tax aide to Sen. Kent Conrad , D-N.D., discovered the tax provision as lawmakers and their staffs were reading the final bill the morning of Nov. 20. Soon, word spread and senators of both parties threatened to kill the bill if the provision was not removed.

Rep. Ernest Istook, R-Okla., the chairman of the Transportation-Treasury Appropriations Subcommittee, was blamed by senators for inserting the provision. He, in turn, blamed his staff. “I didn’t write it; I didn’t approve it; I wasn’t even consulted,” he said. His staff, in turn, blamed the IRS for requesting language the staff assumed was non-controversial.

David R. Obey of Wisconsin, the top Democrat on the House Appropriations Committee, said the real culprit was the process for assembling the omnibus. He said two aides fainted because they had been working two days without sleep. “They worked to the point of exhaustion,” he said. “When they do that, mistakes are bound to be made.”

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