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Spending Bill Held Up by Tax Provision

Measure Lets Panels Examine Returns; Repeal Is Planned

By Dan Morgan and Helen Dewar
Washington Post Staff Writers
Tuesday, November 23, 2004; Page A01

A $388 billion government-wide spending bill, passed by Congress on Saturday, was stranded on Capitol Hill yesterday, its trip to the White House on hold as embarrassed Republicans prepared to repeal a provision that could give the Appropriations committees the right to examine the tax returns of Americans.

Top GOP lawmakers disavowed the provision, expressed surprise that it was in the bill, and blamed both the Internal Revenue Service and congressional staffs for incorporating it into the omnibus spending package funding domestic departments in 2005.

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But Democrats -- and some Republicans -- charged that the incident highlighted the deterioration of a budget-writing system that is prey to such incidents. Unable to agree on how much to spend on basic governmental services, they say, House and Senate GOP leaders increasingly are resorting to a secretive process that leaves the public and most members of Congress ignorant of the content of huge spending bills until hours before a final vote.

At a news conference denouncing this closed-door process, Sen. Kent Conrad (N.D.), ranking Democrat on the Budget Committee, warned that "something really seriously bad is going to happen if we let this continue." He quoted a Republican, Sen. John McCain (Ariz.): "This process is broken."

Republicans hope to finally quell the uproar over the provision tomorrow, when the House is set to approve a resolution repealing it. The Senate took that action on Saturday, after Senate leaders promised that the omnibus spending bill on which the provision was riding would not be sent to the president for his signature until both houses had repealed it.

The provision, added to the spending package of more than 3,000 pages last Thursday, would give staffers of the House and Senate Appropriations committees similar powers to enter IRS facilities and examine tax returns as are now available to the tax-writing committees of the two chambers.

But the provision appeared to some lawmakers to expressly set aside privacy safeguards, which mandate criminal penalties for those divulging individual tax information. Members of both parties charged this could breach the confidentiality of returns.

House officials said the language was intended only to allow staffers to enter IRS facilities where returns were being processed, to oversee how taxpayer money was being used. Such full access is now denied by the IRS, they said, because of the chance a congressional aide might inadvertently see a return.

The provision, House sources said, was drafted by the IRS and inserted into the bill by lower-level House staffers. Senior House and Senate Republicans said they never saw it until the bill appeared on the floor, and yesterday IRS spokesman Terry Lemons said the IRS commissioner "was unaware of the provision until after it was already approved" and "strongly supports it being deleted from the final bill."

On Saturday, Senate Majority Leader Bill Frist (R-Tenn.) referred to the provision as the "Istook amendment," and congressional aides said it had been inserted at the request of Rep. Ernest J. Istook Jr. (R-Okla.), who chairs the Appropriations subcommittee that oversees the IRS.

But yesterday Istook said in a written statement that he had been left in the dark about the provision: "I didn't write it; I didn't approve it; I wasn't even consulted. My name shouldn't be associated with it because I had nothing to do with it."

Micah Leydorf, Istook's spokeswoman, said she understood the language was added by the full Appropriations Committee staff or by Istook's subcommittee staff at the direction of staffers for the full committee.

"We have a problem with how bills like this are put together," Istook acknowledged. "The subcommittee chairman should never be bypassed like I was in this case."

He added that "honest mistakes were made but there's no conspiracy."

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