No one lays claim to omnibus tax-return provision

The last-minute addition by the Senate and House appropriations committees of a provision to the omnibus spending bill giving them power to review federal tax returns is the latest example of what many lawmakers and staff members view as the arrogance of the powerful panels and presages expected makeovers of their staffs and procedures.

Many Republicans in both chambers are suspicious of appropriators, whom they frequently view as members of a third party, more allied to their personal agendas of doling out federal largess to various states and counties than loyal to their own leadership.
file photo
Rep. Ralph Regula (R-Ohio)

In the House, where Republican lawmakers and staffers say that the controversial provision on tax returns originated, the next chairman of the Appropriations is planning to make “significant staff changes,” according to lawmakers who spoke last week with the three candidates vying to take over the committee. The conversations took place before the controversy erupted over the provision concerning tax returns, which prompted widespread media scrutiny and strong denunciations from lawmakers.

Lawmakers will likely have to return to Washington after Thanksgiving — an irksome prospect for many lawmakers — to strip the provision from the omnibus.

House Minority Leader Nancy Pelosi (D-Calif.) released a statement yesterday saying that she plans to force a roll-call vote on removing the provision.

The House therefore will be in session today to pass a new continuing resolution, which will fund the federal government through Dec. 8, and approve a Senate-passed adjournment resolution. The current stopgap spending law expires Dec. 3.

The Senate will reconvene today — probably with only one or two senators present — to adopt the resolution and adjourn. The House most likely will return to session Dec. 6, and the Senate the following day, to remove the controversial provision and clear the omnibus appropriations bill.

The tax-provision imbroglio is likely to add more pressure on the next chairman to revamp the panel.

Reps. Ralph Regula (R-Ohio), Jerry Lewis (R-Calif.) and Hal Rogers (R-Ky.) since the beginning of the 108th Congress have battled for the panel’s gavel, raising and distributing hundreds of thousands of dollars through their leadership political action committees to ingratiate themselves with colleagues.

Last week, all three promised staff changes and to soften the committee’s practice of retribution, whereby lawmakers who defy them are punished by losing federal appropriations to their districts, said lawmakers who met with them. Last week, Regula, Lewis and Rogers made presentations to the Republican Study Committee, a group of more than 90 conservative members, and the Tuesday Group, a collection of about 35 centrists.

On the Senate side, the Finance Committee is likely to push for changes to how the Appropriations Committee handles legislation affecting tax policy.

Sources say that Finance and the House Ways and Means Committee were outraged with how the process unfolded. They added that that Senate appropriators initially supported the so-called Istook amendment and that the provision could have been struck Saturday through a “correctional resolution” but a proposed deal fell through that afternoon.

Some Republicans and conservatives complain that key staff members of the appropriations committees are holdovers from the days when Democrats controlled the committees in the early ’90s.

Others complain that members and staffs of the appropriations committees and staff have grown too strong-willed and unsympathetic too the wishes of their colleagues during their tenures. Both the Senate and House chairmen, Sen. Ted Stevens (R-Alaska) and Rep. Bill Young (R-Fla.), are reaching the ends of their reigns because of six-year term-limits imposed by the GOP conferences of each chamber.

The author of the provision allowing the chairmen of the committees to empower “agents” to have “access to Internal Revenue Service facilities and any tax returns or return information contained therein” remains a mystery.

In a televised interview over the weekend, Senate Majority Leader Bill Frist (R-Tenn.) attributed the clause to Rep. Ernest Istook (R-Okla.), the chairman of Transportation, Treasury, and Independent Agencies appropriations subcommittee.

But Istook strenuously denied any involvement and Frist yesterday issued a written apology.

Istook spokeswoman Micah Leydorf said that staff assigned to Istook’s subcommittee inserted the language into the omnibus but that her boss had no knowledge of it. In a statement, Istook said his subcommittee staff was working under the direction of the full committee, not his.

“We have a chain of command problem over whether the subcommittee staff are ultimately accountable to the full committee staff — who represent the full committee chairman — or the subcommittee chairman,” Istook stated. “The subcommittee chairman should never be bypassed as I was in this case.”

Leydorf would not divulge the name of the staffer who inserted the language.

Appropriations Committee spokesman John Scofield said the panel directed the IRS to craft the language and put those exact provisions in the measure. He declined to respond to criticism from Istook and added that the Appropriations Committee supports the removal of the controversial tax policy.

GOP aides say the impetus to insert the provision stemmed from an incident earlier this year when appropriations committee staff attempting to conduct oversight of an IRS filing center were denied access because of confidentiality rules the agency enforces to ensure the privacy of tax returns are maintained.

“There was one incident where staff was denied, but there was more than one incident,” said Leydorf, who said she received the explanation of the incident from Istook who in turn received an explanation from the full appropriations committee.

Leydorf stressed that her boss was in no way involved with crafting the provision.

The denial of access angered appropriations committee staffers, who resolved to give themselves access to the restricted facilities by attaching what they claim to have considered uncontroversial language to the omnibus.

Appropriations staff argued that the need to oversee the operations of the IRS is acute, citing inefficiencies at the agency despite billions of dollars spent by Congress to modernize. The administration asked the IRS for a $393 million funding increase to bolster the agency’s enforcement operations.

Terry Lemons, an IRS spokesman, said, “The commissioner was unaware of this provision of the appropriations bill until it was already approved,” referring to Commissioner Mark Everson.

“He strongly supports the measure being deleted from the final bill,” Lemons said.

Geoff Earle contributed to this article.