committee on oversight and government reform will come to order a quorum being present we will begin we will be rolling votes today based on agreement with other committees that are also holding markups today we meet to consider h r eight hundred and twenty nine the contracting and tax accountability act of two thousand and eleven h r eight hundred and twenty eight the federal employee tax accountability act of two thousand and eleven h seventy a bill to extend the probationary period for federal employees and h r one thousand four hundred and twenty three a bill to designate a facility of the united states post office located at one i commend congressman chaffetz for introducing this bill the millions of americans who file their taxes this week know the irs will hold them accountable contractors and grantees who fail to fulfil their tax obligations at some point must be held accountable for contractors and grantees accountability means not getting a contract or grant if they do not and will not pay their taxes th measure prohibits the awarding of a contract or grant unless a perspective contractor or grantee certifies to the agency making the award that they have no seriously delinquent tax  debts i might note for the record that seriously delinquent tax debt is really the final final point of frustration of the irs the gao has shown that thousands of federal contractors and grante had substantial amounts of federal tax debts in two thousand and seven alone the gao found that twenty seven dod contractors thirty three thousand civilian agency contractors and three thousand eight hundred gsa contractors owed a total of seven dollars seventy cents billion in unpaid taxes gao also showed that almost six percent of federal grantees dodge their taxes i will also note for the record that these numbers are based on those who had not paid their taxes only a small subset are those who are not making arrangements or in some other way willing to pay their taxes chairman issa the chair now recognizes the gentleman from maryland mister cummings for his opening statement committee and subsequently passed in the house in th congress i supported this legislation then and i support it today the government accountability office has reported that government contractors owed more than five held from employee wages as well as corporate income taxes further the gao has found that some of the contractors with unpaid tax debts are repeat offenders that have failed to pay their taxes over many many years in fact it has been for almost twenty years in at least one case h r eight hundred and twenty nine will allow the federal government to make sure that contractors seeking to do business with it have paid their taxes before they can receive a responsible contractors no longer have to compete with tax delinquents i urge members to support this legislation and ensure that in this time of fiscal austerity we can make certain that taxpayer dollars are not given to companies  not pay what they owe to the taxpayers with that i yield back the balance of my time chairman issa i thank the ranking member for his comments and his support i will hold the record open until the end of the day for any members who would like to submit written statements twenty two thousand and ten the president issued a statement supporting this type of legislation he has obviously been supportive of it in the past i think we can do this in a very bipartisan way as the chairman mentioned i would like to highlight some of the stat to the american people yet it is not being paid for grantees the numbers are also high one gao report demonstrated that tens of thousands of grantees collectively owed seven hundred and ninety dollars million in federal taxes in two thousand and six alone th included over two thousand individuals and organizations that received one hundred and twenty four dollars billion of payments directly from the federal government and who owed more than two hundred and seventy dollars million in unpaid taxes this represented almost six percent of the recipients that fell into this tax category this bill denies tax delinquent contractors from receiving new contracts at the beginning of the bidding process by denying them status as a presently responsible contractor if they are delinquent with their taxes a company or individual is not allowed to bid on a government business unless they are first determined to be presently responsible the bill also defines seriously delinquent tax debt a outstanding tax debt for which a notice of lien has been filed in public records while providing exceptions for debts being paid in a timely manner and debts in which a due process hearing has been requested or is pending if they are trying to do the right thing if they are trying to get right with the irs and they are trying to get right with making their payments this isnt going to affect them but for those that are going to circumvent the law and those that are going to be pushing this aside it does address families you pay your taxes you owe because it is a fundamental responsibility of citizenship yet somehow it has become standard practice in washington to give contracts to companies that dont pay their taxes later on he went on to say in a time of great need when our families and our nation are finding  necessary to tighten our belts to be more responsible in how we spend our money we cant afford to waste taxpayer dollars we especially cant afford to let companies game the system we need to make sure that every tax dollar we spend is going to address our nations urgent needs and to make a difference in the lives of people the status quo then is inefficient and it is wasteful but the larger and more fundamental point is that it is wrong it is simply wrong for companies to take taxpayer dollars and not be taxpayers themselves so we need to insist on the same sense of responsibility in washington that so many of you strive to uphold in your lives in your own families and in your own businesses i encourage my colleagues to support this piece of legislation i think we can do so in a be more and more aggressive because of the position we are in financially and here is my concern a lien can arise for a number of reasons against a contractor look i am not at all trying to determination regarding a business that a trust is not entitled to certain tax treatment once that determination comes out that tax liability will arise from a decision by  lynch just let me finish my thought and i would be happy to yield here is the problem it says that we are going to put the lien on and disqualify the contractor before we have a due process either accept amendments or certainly to put into report language and we plan on putting it into report language that the practice today is as the gentleman says liens are often put on well before the appeal process even begins and certainly before it ends as a result the term seriously delinquent in this bill we believe from the irs and we believe in the report language will be clearly understood to be upon the conclusion of all appeals so long as there is a dispute that is underway under the administrative process or even through federal court if someone takes leave to do that they would not by definition be seriously delinquent seriously delinquent is when the process has completed or they have defaulted on that process that would be the only point at which someone under each of the bills would be seriously delinquent i would be happy to work with the gentleman and i know mister chaffetz would be happy to work with him on specific report language so that that is absolutely clear this was something that came up on both bills in the last congress we take seriously that out of that seven dollars seventy cents billion we are only looking for those who at the end of the trail that language in the bill i dont see that language in the definition of seriously delinquent it has a bunch of exceptions but it does not indicate that the appeal process has been exhausted it does not indicate that there process here for appeal it just has a blank statement of what is seriously delinquent and the consequences of that so with all due respect to the gentlemen i know what your intent is verbally but i dont see that reflected  payment plan in place they are somebody who is trying to do the right thing the second part of that number two is a debt with respect to which a collection due process hearing under section and it goes on is requested or pending so  clearly if a lien is placed that company or contractor or grantee is given an option and an opportunity to say wait a second i want to have a hearing i need this to be further clarified under this law the way it is currently written that paragraph says requested or pending because you can say i would like a hearing and it may take a couple of months to get to that point that provides that exception conceptually i think i agree with most of what you are saying i happen to think that this paragraph deals with this sufficiently but if you have an amendment or an adjustment to that i have tried to be as crystal clear as we can possibly be i would appreciate if the gentleman would consider that congress we had ms tucker who is the wage and investment deputy commissioner for support at the internal revenue service come testify to our committee which you and i were both attending based on her testimony this is at a minimum of a four and a half or five month process during which multiple notifications are given to in this case the contractor so that there is this back and forth and this notification  she went on further to testify that the process can be extended out much longer than four and a half to five months now certainly if you take a larger organization you may have some tax lien that is suddenly found in some other  in the nature of a substitute to h r eight hundred and twenty nine page two line seventeen insert and subject to paragraph three before the comma page two line eighteen insert suspension or before page three after line seven insert the following three determination by the secretary of the treasury a suspension or debarment may be proposed under paragraph one with respect to any seriously delinquent tax debt only after the secretary of the treasury or that we dont tolerate underpayment of taxes from federal contractors that is why i filed this amendment this i hope friendly amendment would help implement the treasury inspector generals recommendations to improve the federal levy collection program which is the means by which the treasury recoups back taxes from contractors it requires that treasury use the levy first to recover back taxes protecting the taxpayers interest before moving to suspension or debarment of federal contractors this structure also ensures that a small business contractor who may not even be aware yet that she or he was behind in her or his taxes has a chance to catch up before being debarred summarily as you can imagine this would not be an issue for the very large contractors and their teams of lawyers but could be a very real concern for small and minority owned business contractors such as recently returned veterans does anyone else seek recognition on this amendment levy federal payments to them are these the people that we are really trying to do business with i guess i have a conceptual vision that the people that play by the rules the people that are paying their taxes the people that are doing the right things are who we should be giving preference to i think that is a fair just and reasonable way to approach this i worry that this amendment would actually things can go wrong that are not the fault of the contractor remember that most contractors are small or minority owned businesses they are not the big guys they dont have bevies of lawyers to protect them in terms of tax accountants and so forth  it is as my friends from massachusetts both pointed out with the best of intentions due process can be violated is there anyone in this room who is not aware of an example where the irs perhaps has made a mistake or has acted hastily am concerned that the legislation in front of us needs to have some flexibility after all the intent here isnt punitive the intent is to collect the taxes owed to the taxpayers of the united states we want to give people an opportunity to come into compliance especially those does business and the manner in which they do business i would be happy to work with the gentleman on that piece of legislation but we are bending over backwards saying that even if you request a hearing we are not going to kick this in that i think is sufficient  a timely manner pursuant to an agreement under and it gives the sections wouldnt that cover anybody that got to the end of the time and entered into a lien with a payment schedule fall on really innocent parties the irs record in terms of due process is a spotty one at best in fact ironically it is my friends especially on the other side of the isle who have often correctly pointed that out reading through this with respect to any seriously delinquent tax debt obviously deals with someone for whom this is not a first time accidental occurrence this is building seriously delinquent and ongoing obviously it cannot be collected through levy because it has been little confused on how this all works the treasury department is basically looking at something and saying yes this is seriously delinquent we have tried a levy and that is not working so that is appropriate so i am a little confused on why this is necessary based on that i think  understand your intent it is the wording of it that i look at i think it is not accomplishing what you are saying it is accomplishing with that i would love to be able to y would say to my friend that i have tried to lay out that i believe what is in front of us this bill the intent of which i certainly support i will not be able to support because i think it is too rigid i think that it is going to cast a wide net and that it is going to collect a lot of innocent or unwitting parties all of us in this congress have complained at one time or another about the arbitrariness frankly of the irs and its methodology in collecting taxes and then sometimes pronouncing someone guilty when in fact they are innocent i really hearken back to the words of both mister tierney and mister lynch it happens it is in an abundance of concern that i want to make sure that we bend over backwards to show the people we are talking about that we are prepared to be fair and give them every opportunity to make sure they are right with the lord that is the sole inten debar a contractor from doing business with the federal government in many cases especially if you are a small minority owned female owned or veteran owned business that could be the end of life as you know it you go out of business so i am concerned about due process irs institutes the lien against the taxpayer your first appeal is to appeal to the irs to reverse their decision you are not appealing so they are going to sit there and say well let us think about this did we make the right decision or the wrong decision of course they are going to side with themselves that is not a meaningful appeal now the word adjudicated has been used by the gentleman from utah a couple of times that is not an adjudication when you go back to the person who made the original decision and ask them to change it that is not an adjudication that is not an independent third party who is actually going to weigh the arguments it is their argument they are ruling on their own decision given the necessarily aggressive posture of the irs going forward taxpayers are going to be in a pretty tough position if they think they are going to get the irs to change their own decision so stop the irs from in your opinion being one sided and so on that may be true i would say to the gentleman that one of the challenges we have is of course that we are only looking at whether somebody has abandoned their rights to continue the appeal and still wants to be a contractor we are not looking at the fact that a contractor is pretty crippled if they cant and wont pay the amount yet it is being taken from them not subject to an agreement i think that is part of what mister chaffetz is seeking here to realize that really bad contractors include those who cannot or will not enter into agreement with the irs knowing that the irs as you said ultimately is a one way street if you walk away and you become seriously are about right here we have to draft law without presupposing whether that individual taxpayer is guilty or innocent so what we are doing here is we are trying to protect their rights we are trying to their rights then those rights arent really being exercised the irs can beat down the taxpayer to the point where they just have to give up and either relinquish the property that is being liened or give up their rights reported that one of our case study contractors had a twenty year history of opening a business failing to remit taxes withheld from employees to the irs and then closing the business only to start the cycle all over again and incur more tax debts almost immediately through a new business the concern that i have with your amendment is that if you say we can simply gather these uncollected taxes through a levy you are going to have unscrupulous business now we are going to review a bill shortly after this one that deals with federal taxpayers not paying their taxes what is interesting here is that the irs was given more stringent rules with their own employees and consequently they have the highest compliance rate i think that is analogous to what we are doing here what we are trying to do is strengthen the hand if a company raises their hand and says i appeal or i want more time then we allow them to do that but based on this would care to respond mister connolly i think we have almost exhausted the subject remember that the reference to levy actually refers to a formal program that exists in the treasury department known as the that a levy which can be fully paid within ten years stops the process of going to seriously delinquent debt so arent we talking here about people who are so far in arrears because of something that are not going to fall subject to this we are trying to deal with the most egregious cases the people who are truly trying to game the system and to give the american taxpayer and the american government more latitude in making sure that this doesnt  happen when they go to apply they have to self designate whether or not they are in compliance i think that is information we want to know before a contract is awarded if they are lying about that then we can pursue it though other things but  amendment offered by ms speier of california to the amendment in the nature of a substitute to h r eight hundred and twenty nine page three line seven and page five line seven insert after the period in each place the following if the head of an executive agency waives paragraph one for a person the head of the agency shall submit to congress within thirty days after the waiver is made a report containing the rationale for the waiver and relevant information supporting the waiver decision gentlelady from california is recognized for five minutes to explain her amendment ms speier thank you mister chairman before explaining my amendment let me just say that i support this legislation i think it is a privilege to serve as a federal contractor if are not playing by the rules you should be fired i have worked in this issue area for many years in the state legislature in california one of the biggest areas of failure is in child support enforcement oftentimes the only way that families access child support is through the ability to access federal tax returns or state tax returns and the refunds that they receive from time to time keeping people accountable who work for the federal government should be a preamble i wholeheartedly support this i actually think that the one hundred thousand dollars threshold should be lowered because again i think it  is a privilege to serve as a federal contractor this particular amendment is very simple transparency is what it really is requiring that we continue to hold to it as one of our significant principles it basically requires the ayes have it the amendment is agreed to mi possible bills or amendments in other more broadly constructed language however we are considering narrowly tailored bills focused on addressing specific problems if i make an exception for one non germane contractor integrity bearing this in mind i would like to strengthen the bill by adding a provision that would ensure greater contractor integrity and oversight my amendment would require all relevant contractor performance and conduct data from the last ten years to be included in the federal awardee performance and integrity information system database that is ten years instead of five now what have we learned so far today people game the system th more because you want to know what type of person is applying for this job ten years can tell you a lot more than five it is in the section that you are actually amending with this bill suggesting is todays debate has perhaps brought forth the concern i had when proposing this amendment people are gaming the system there are all kinds of things that they do and it is quite possible that five years isnt enough for us to understand what kind of entity they are what kind of person they are this is all about improving the system and the integrity  those comments i would love to work with you i have a good working relationship with you personally on a specific piece of legislation that could address that i have no objection to that but i will at the proper time  raise my point of order because of the germaneness issue otherwise i wish that we could pursue this it may be that another venue or another vehicle would be the way that we are able to address this i just want to say that i do appreciate it and i think it is in the right spirit it would provide better data the gentleman is recognized on his point of order mister chaffetz i object to the amendment because it is not germane to the bill house rule sixteen clause seven requires amendments to be on the same subject as the bill under consideration the gentlemans amendment is not on the same subject as the bill under consideration and the period of time that records are maintained in the federal procurement data system and is unrelated to tax delinquent contractors and grantees as such the amendment is not germane and is not in order so ruled however i would like to take a point of privilege and say to the gentleman that if he will author a standalone bill i am not completely confident but i will check it may well be a good the title of the bill is not the tax accountability act but the contracting and tax accountability act the amendment is very simple what it says is it would stop rewarding foreign companies with contracts and grants if they refuse to cooperate with investigations into their activities by the united states government now our government relies on hundreds of contractors around the world for a variety of different functions but unlike local u s companies foreign companies generally are not subject to the united law they are not required to comply with subpoenas for example that require them to produce documents during pending investigations of fraud overcharging or other abuses the marshals office also understandably prefers not to personally serve subpoenas on the territory of foreign countries under this amendment if a foreign company is under investigation by an entity of the united states government that follows all of the proper procedures to issue a subpoena it will be up to that foreign company to decide how to respond on the one hand the foreign company could cooperate it could designate a company official to be served with a subpoena and it could produce the required documents like united states companies the foreign company could agree to receive the subpoena by fax or other electronic means so it would not have to station an official permanently inside the united states on the other hand the company could refuse to cooperate it could refuse to designate a company official to receive the subpoena it could deny service of subpoena it could ignore united states demands and it could refuse to provide any documents to the united states government all that my amendment says is that if the company chooses the second path the path of refusing to cooperate it will be referred for debarment could lose the ability to receive any additional federal funds this solution doesnt require the company to do anything and it does not extend u s jurisdiction overseas but what it does do is stop rewarding companies with millions of additional u s taxpayer dollars when they refuse to cooperate with federal investigations this amendment would apply to subpoenas issued by any federal agency including the department of justice as well as committees of congress including this one this amendment addresses a very real problem one that this committee has had firsthand experience with last year the subcommittee on national security homeland defense and foreign operations initiated an investigation into allegations that a multi billion dollar fuel contractor for the united states military in afghanistan and central asia had engaged in corruption with the former first family of kyrgyzstan while the subcommittee initially requested documents from the company the company refused to cooperate after further stonewalling chairman towns agreed to subpoena the documents the company refused service of process overseas and actively sought to avoid enforcement of the subpoenas we quickly discovered that there was little we could do to enforce the subpoena on a foreign contractor even though the united states taxpayers  the company over four dollars billion in the past decade there was simply no way to compel them to cooperate with a duly authorized subpoena from the united states house of representatives for its part the pentagon stated that nothing in the contract would allow them to punish a foreign contractor for not cooperating with a subpoena so this amendment would close this loophole and make sure that foreign contractors cooperate with duly authorized subpoenas or else face the same consequences of any american corporation debarment from contracting with the united states i know mis amendment if it were in my opinion germane i know the point of order hasnt been spoken i am further prepared similar to mister quigleys to support and co sponsor a standalone bill through the process and a sure it a markup here i like former chairman towns was outraged that we were unable to get the facts we were entitled to and that a contractor just because they were foreign found themselves in a preferred position nothing could be worse than to have american contractors subject to subpoenas both from justice and from us and then to find companies who have not played by the rules who have bribed and have been part of corruption that is a felony towns and mister tierney we have had discussions about subpoenas and trying to make sure that people adhere to them i think when you have these foreign companies doing possible to make sure there is as much compliance as possible this will be tricky given international law and how different countries have different constitutions and whatnot but i think the spirit of what mister tierney is saying is absolutely spot on it makes me it begs the question as to why this is not a provision on all contracts anyway it seems that that would be the easiest and swiftest way to do this to include a provision in those contracts for payment overseas but to  grantees that are seriously delinquent the gentlemans amendment would propose for debarment foreign contractors that refuse to comply with a federal subpoena and is therefore unrelated to tax delinquen contractors or grantees as such the amendment regrettably is not germane are there any other amendments at this time  chair the ayes have it the ayes have it and the bill is agreed to that staff be authorized to make necessary conforming and technical changes to the bill without objection the motion is agreed to the committee will now consider h r eight hundred and twenty eight the federal employee tax accountability act of two thousand and eleven i commend congressman chaffetz for introducing this legislation which does nothing to change the terms and conditions of held accountable the irs can fire federal employees who do not pay their taxes it is notable that the non compliance rate among irs employees is less than one percent compared with three point three five percent for their federal civilian counterparts who owe taxes of more than one dollar fifty cents billion for that reason we believe that all federal employees should be covered under similar legislation to that that the i obligations as citizens especially those such as federal state and local taxes that are imposed by law government lawyers auditors and all employees who are paid with federal tax dollars must pay their taxes the vast majority of federal workers take this obligation seriously as evidenced by the fact that the tax compliance rate in the federal community is much higher than among the general public according to the most recent irs statistics more than ninety six percent of federal workers paid their taxes on time and do not owe delinquent debts to the government i am not convinced that the problem of non compliance by federal workers justifies adoption of a new law that applies only to them i also have a number of concerns about the way that this bill is currently drafted first this legislation may have the opposite the intended effect by significantly increasing the cost to taxpayers the bill could actually undermine the governments efforts to collect unpaid taxes from federal employees who are already having their wages garnished by the government if these employees are fired their wages are no longer garnished further we do not know what it would cost federal agencies to engage a small army of employees to comb through court records  in potentially every state and locality in the country seeking tax liens and we dont know if these costs will actually be offset by increased tax collections i am also concerned that workers who owe federal taxes but  unable to pay will be treated unfairly by this bill we have a number of amendments on the democratic side designed to improve the bill i encourage the majority to accept all of them let us make sure that our first priority is protecting the interests of the united states taxpayers rather than rushing to make hasty decisions that advance bad policy and undermine those interests mister chairman i ask unanimous consent that letters from the american federation of written statements we will now open the bill h r eight hundred and twenty eight for consideration without objection h r eight hundred and twenty eight will be considered as read and open for amendment at any time the text has already been distributed to each of your folders the is an honor to introduce this piece of legislation many of the principles from earlier today in our discussion about making sure that contractors pay their federal taxes i think should also apply for federal workers to pay their taxes it is an honor and a privilege to work for the federal government the overwhelming majority of people do a good job they work hard they are patriotic you cannot say enough good things about the overwhelming majority of people who do work in the federal government who apply and want to become a federal worker in one degree or another but at the same time we do have a problem the problem is getting considerably worse according to the irs in two thousand and four we had one hundred and two seven hundred and ninety four federal employees who did not pay five hundred and ninety nine dollars eighty cents million in taxes moving forward to two thousand and nine that number decreased a little bit there were according to the irs ninety nine through a process if you are going through a payment plan and if you are trying to do the right thing you will not be affected by this bill but if you are not and if you get to that category that is called seriously delinquent tax debt which we have defined then we are left with no position and i think we should go to the point where we actually fire and let go of that federal employee they are not doing the right thing they are not trying to make whole the upside down that we cant make them whole that to me seems like the reasonable fair thing to do at a time with high unemployment people who are willing and wanting to do the right thing i think we have a moral obligation to  do this if you are willing to cheat on your taxes and if you are willing to skirt the system what does that say about what kind of quality of work you may be doing for the federal government now again i want to be fair overwhelming majority of people do a great job but we have too many people not paying their taxes there are somewhere close to seven hundred people that work on capitol hill that fall under this category we need to address that now interestingly enough the i dealing with its own internal challenges had employees that werent paying their taxes so they took it a step further and implemented a program that has been highly successful it is no coincidence that the highest degree of compliance is found within the irs that wasnt the case years ago they strengthened their hand made it crystal clear that you have to comply with your taxes and it worked what we are trying to do is to make sure that every department and agency has a reasonable plan in place that gives them the tools to make sure that applicants as they come through the system are highlighted when they fall into this category that is unacceptable and that if you a current federal employee that you are actually going through a process again if you are going through and you are trying to say wait i disagree then you are exempted from this but there comes a point where we actually have to hold the line and say you  to live up to these obligations the federal workers should also have to live up to these obligations as well it is fair and it is right it is a privilege to work for the federal government and we are going to have to deal with the fact that we still have nearly one hundred thousand federal employees concerns about this bill i want to make it very clear mister chairman i believe that those four percent of federal employees ought to be paying every single dime that they owe i dont think you will get any argument from the folks on this side  amendment federal employees are still not protected from unfair treatment based upon hardships such as medical or other financial emergencies that may temporarily impair an employees ability to pay their taxes  in our economy right now you have a lot of people who are going through difficult times losing their jobs when we see the reasons for example for bankruptcies one of the main reasons  that people go through medical situations that are very very difficult to address under this amendment it is not clear what due process if any employees would receive prior to their termination further like the original text this amendment also undermines current collection efforts an outcome that would likely increase rather than decrease the potential cost to taxpayers i continue to have questions about the requirement that agencies review public records to seek tax liens at the same time that we are cutting back on the money that the irs has for its employees this amendment does not explain how they are supposed to do this or how they are supposed to pay for those efforts without knowing the answers to these questions it is impossible to know whether it is in the interests of taxpayers to hire additional employees to go around checking federal state and county records across the country for employee tax liens i know we have a number of perfecting amendments on the democratic side i encourage the majority to accept them and to listen to the  even the safeguards of existing processes under the arbitration policy where no one can be fired from the federal workforce without a series of protections plus of course collective bargaining but mister lynch came to us with a number of very good suggestions we have been working with him i believe he will offer them here today and i believe they will take care of most if not all of your concerns i thank the gentleman for his concerns i particularly want to thank mister lynch for working so diligently to  i strongly support that i think the american people would be outraged if they thought we were keeping and the gentleman used the word cheaters on and they were paying cheaters while they were paying their own taxes so i am i believe that is correct ms norton is there a waiver provision for hardship for federal employees chairman issa i believe the gentlelady will see that come to pass as soon as the first amendment is offered ms norton that would be very important these could not be harder times for any of us but certainly for federal employees i can imagine the television coming up with some federal employee who had been a model worker for fifteen years when a child got leukemia even though they had the insurance that we provide for federal employees this child needed a special medicine so there was nothing to do but when they had you can just see it now moved out of their house now they dont have a job because there was no way bill may be at that time because you can be put in a non collectible status that is the irs we certainly dont want to be tougher on federal employees than the irs is so if i can be assured that there is going to be a mirror image very serious reservations with the approach that the majority suggests as it relates to federal employees tax delinquency it seems that in an unamended form we would treat multi national corporations with a one hundred attorneys in the same way that we would treat the janitor at the bureau of printing and engraving i think it is important to note that our federal workers are some of the most dedicated and hardworking employees in our country while i dont get the respect and recognition that they deserve for their contributions including contributions to their tax liability as mentioned by the ranking member federal employees and retirees exhibit a tax compliance rate of about ninety them so we have the ability to make sure that they are tax compliant we have an assortment of garnishment mechanisms where we can say if you are not paying your taxes we are going to garnish your pay and make sure that you do there are many many employees who are actually participating in those types of programs if you look especially over at hud and elsewhere we already have an enhanced useful measures that could probably be employed to address any ongoing delinquency problems to that end my amendment simply takes some of the recommendations from that hearing and incorporates them into this base bill for example the amendment would add section six thousand three hundred and thirty one of the irs code which deals with levies and wage garnishments to the series of exemptions listed under the definition of seriously delinquent tax debt under this bill since we are talking about federal workers here the irs is certainly capable of recouping any unpaid taxes by garnishing federal employees wages and earnings with full interest and penalties in fact in many cases it is already process the likelihood that any tax debt would be satisfied diminishes significantly people who are out of work have a reduced capacity to pay their taxes back in addition to wage garnishment the amendment also excludes economic hardship levies from the definition of seriously delinquent tax debt as the gentlelady from the district of columbia pointed out we have folks in situations where because of a fatal illness in the that they are making efforts to come into compliance lastly the amendment would require regulation to be promulgated by the office of personnel management in consultation with the internal revenue service to make sure that we tighten up the process so that we  process on notification usually to the employee so forty five days would become thirty days under your proposal what i would suggest is to make it sixty days that way they at least get two notice periods in frankly aimed at public employees we have already heard the statistic that there actually isnt a problem of any magnitude to be solved while all of us would agree that everybody should pay their taxes so should members of congress maybe we should have an amendment to this bill that first applies to ourselves any member of congress delinquent in his or her taxes is automatically suspended from the congress that would be about as much due process as in fact we are giving federal employees we are targeting federal employees in this legislation for a reason it is not because we need the tax revenue it is part and parcel of a general assault on public employees in this country and in this congress while the amendments just adopted make it a better piece of legislation i wish not to be associated with it i wish not to be associated with a movement that has made public employees a punching bag it is to me wrong headed and morally wrong public service is a noble calling public employees work diligently on behalf of the constituents we serve every day they ought to be treated with respect and dignity not treated or talked about as if they are nothing more that scallywags and tax delinquents  fear that by passing this bill today we are enabling just such rhetoric and just such attitudes therefore reluctantly mister chairman while i certainly agree all taxes should be collected and all americans should pay their taxes federal employees members of heartfelt i want to associate myself with part of what you had to say it is not the intention and should not be the intention of this committee to forget that ninety six point six percent of all federal employees have no tax problems at all that the vast majority of those who have tax problems are dealing with them in an honest and fair way many of them having had reversals small business losses and other reasons so i would join with the gentleman in saying that i hope if this bill becomes law that it will have just the opposite effect of what you fear in fact we will have set a high standard people in the federal workforce will be able to say we have the lowest failure to pay our taxes in the entire united states we also have strong rules that make sure that the very few whether they are contractors or federal employees directly in fact make those restitutions or do not have a job i would hope that we would look at the part of the cup that is full in the future i realize today that it is difficult for us to know if it will have that effect i for one will be championing the fact that we have held ourselves as federal employees to the highest level and that in fact our workers are the workers who pay their would be a new hire who came in with the baggage he or she could well find themselves outside of compliance and have that questioned at the time of the application now that is a practical matter for opm because the bill is silent as to pre employment checking the second one would be that rare case in which somebody is so head over heels that in fact the irs cannot recover it within ten years they are seriously delinquent and none of the waivers opening comments i was very specific to talk about this large number in dollars of delinquency but to make it clear that the vast majority are making payments they are people who got behind in some cases contractors but certainly for the federal workforce so i shared that with you in advance because i dont believe that this is pure symbolism although it is almost pure symbolism it does give bragging rights to the federal workforce that they live to the highest standard i think there is a value to that for the people on talk radio who often talk about federal workers as though they are somehow not dedicated not hard working and not earning the vast majority if not more than they are paid i thank the gentleman for his question  life better whether they are on the republican side or the democratic side a lot of them are sacrificing tremendously so i would like to emphasize the ninety six percent that are doing the right thing i would assume that this legislation is not to be an attack on them it is truly about fairness i will look at it in the sense of the ninety six percent that are paying their taxes and the overwhelming majority of the remaining four percent that be impacted by this bill i would say that it is a matter of fairness to those hardworking employees who are paying their taxes and to those who are struggling but who have taken responsibility for that most junior federal employee who is working fairness openness and transparency we have a number of people here for the first time we had a hearing on this last year again i concur with all of the comments about the overwhelming majority of the federal workers doing the right thing working hard and paying their taxes but when we asked the irs of the one hundred thousand or so people how many would move into this status her answer was twelve percent so roughly twelve thousand federal employees would actually fall into this category we talk about a fraction of a percent i just feel an obligation to tell you that it is not four or five people we are talking about twelve thousand people out of the one hundred zero that would actually move into this lien status that we would be dealing with immediately again i want this to pass because i think we need to have a bigger better tool in place to get compliance but in full disclosure if you go back and look at her testimony she estimates twelve percent of the one hundred zero thank you mister platts i am reclaiming my time i think it is important to reference the twelve thousand if i do my math quickly in my head that would be about zero point five percent of federal employees that goes to the point that ninety nine point five percent are compliant or are trying to be compliant so we are trying to as well as the postal regulatory commission from the list of agencies subjected to the bills provision as i am sure everyone is well aware the postal service does not rely on appropriations or taxpayer dollars to carry out its operations since one thousand nine hundred and seventy one the postal service has basically functioned as a self sustaining enterprise and supported itself through the sale of postage stamp and mail service delivery so if the fundamental premise of h r eight hundred and twenty eight is that employees paid from taxpayer dollars should be current on their federal taxes then it seems unfair and inappropriate to include employees of the postal service and its regulatory body the postal regulatory commission in the underlying bill while i think we are all in agreement on the importance of tax compliance urge caution on the part of our committee in considering legislation that may potentially impact the postal services bottom line as we discussed at great length during last weeks hearing on the future viability and sustainability of certain postal service costs the financial condition of the postal service continues to be challenged by modern modes of communication and the recent sluggish growth in the american economy furthermore we heard a good deal about the billions of dollars in cost reductions that the postal service has achieved over the past couple of years however we also heard about the difficulties the postal service in light of these circumstances i strongly question whether congress should again be moving legislation that may ultimately lead to increases in the postal services overhead as amended h r eight twenty eight would require agencies to perform searches of public records on current employees as well as on potential hires to determine their tax compliance given that the postal service employs nearly six by requiring them to review lien notices which are often filed at the county level the bill could also increase their cost per hire as well as adversely affect the length of time it takes to bring new hires on practices are governed under title thirty nine versus title five and its worker disciplinary policies are subjected to collective bargaining agreements i am not convinced that applying the provisions of this particular bill to the postal service and the prc makes the best policy sense as i understand it the committee may be considering some form of postal reform later this year perhaps it makes more sense to address the issue of postal employee tax compliance at that point i would hope that my colleagues from both sides of the isle will join me in support of this amendment i yield back the balance of my time chairman issa i thank the gentleman oppose this amendment postal service employees should live up to the same high obligations and duties as other federal workers they happen to have a higher delinquency rate than the rest of the federal government employees there is something like two hundred and and must live up to the highest standards but from a technical vantage point postal employees are not really federal employees the postal service is indeed not a solid federal agency it is a pseudo federal agency many of these employees are governed under contract agreements as a result of collective bargaining those agreements do not enter into discussions or definitions relative to this kind of discipline or tax liability i dont know if technically they actually fall under the challenges faced by the postal service as a matter of fact we just had a hearing last week the postal service is expected to act as an independent business and does not pay its employees with u s tax dollars nonetheless the majority would subject the postal service to the bills requirement including requiring the post office to conduct ongoing searches of public records in potentially hundreds of state and local jurisdictions to determine if a tax lien has been filed against any was a pervasive problem i couldnt agree with him more the bill before the committee today allows individuals the opportunity to complete job related training and to demonstrate their capabilities for the position to which they have been hired at the same time the bill provides the government a way to quickly and easily correct instances where the hiring process doesnt result in a good match i commend the subcommittee chairman mister ross introducing this bill to reform hiring practices i recognize that those who are hired would like certainty from the day of their offer however making sure that we get it right is in the long run in the best federal employees serve a one year probationary period from when they are hired into federal service or promoted to a managerial or supervisory position according to the merit systems protection board the purpose of this probationary period is to provide the government with an opportunity to evaluate an individuals conduct and performance on the job to determine if an appointment to the civil service should become final let me become clear it is appropriate that the federal government as an employer has a reasonable opportunity to evaluate the abilities of new hires and newly promoted employees to carry out the work for which they were hired that said one year is a fully adequate period in which to assess held a single hearing to identify any shortcomings in the current probationary period we do not have a single piece of testimony or evidence from any agency explaining why a two year probationary period is needed or how it would improve the efficiency of the federal workforce yet here we are considering the legislation that would erode protections guaranteed to federal employees without identifying any benefit this would produce put simply probationers can be fired without cause the mspb has explained that the primary reason non probationary employees are granted due process protections against adverse actions is to keep the civil service free prohibited personnel actions such as wrongful termination or other such practices mister chairman i know that you have an interest in protecting whistleblowers who alert us to wrongdoing within a government agency weakening the due process protections available for whistleblowers will only make federal employees less willing to report fraud or abuse it is our interest as the main oversight body in the congress to support protections for federal workers that allow them to effectively and efficiently carry out their duties without fear of arbitrary personnel actions or retaliation current law provides ample time for managers to evaluate new employees i cannot support an effort to extend the time during which employees serving our federal government are not offered basic protections under the law for those reasons i urge my colleagues to vote against the bill with that i yield back chairman issa i thank the gentleman i will hold the record open until the end of the day for members who want to submit written code to extend the probationary period applicable to appointments in the civil service and for other purposes chairman issa the gentleman from florida has an amendment in the nature of a substitute the amendment has been distributed without objection the amendment will be considered as read and  probationary period is currently set by regulation the purpose of the probationary period is to provide the government with an opportunity to evaluate an employees conduct and performance on the job to determine if an appointment should become final this bill establishes a minimum two y probationary period for the civil service agencies have discretion to lengthen the probationary period for a reasonable fixed duration provided such probationary periods are uniformly applied by occupation the bill does not change the terms of term dialogue between employees and their supervisors the bill requires probationers receive information on performance requirements probationers may continue to appeal terminations they believe were for partisan political reasons marital status or improper procedure the amendment further clarifies that veterans preference shall be imposed by keeping the length of the probationary period the same for veterans it also confirms that the extension of the probationary period applies only to new hires probationary period for competitive service federal employees federal employees care for our veterans research and fight diseases such as cancer respond to natural disasters ensure that the food we eat is safe and protect our borders then have subjected them to another two year probationary period every time they are promoted transferred demoted or reassigned under the provisions of the original bill an individual newly hired by the border patrol would have served a two year probationary period if that individual was then transferred every two years say to tucson then to el paso and then to san diego the agent would have been on probation for eight years of his career if the agent performed well and was promoted to a supervisory position the agent would have been placed on probation for another two years if the agent was then transferred after completing the initial supervisory probationary period he or she would have begun another two year probationary period as a result of this legislation the employee would quite literally have been on probation his or her entire career one of the many potential negative effects of this system could be to impede the effectiveness of our national security and law enforcement agencies federal employees guarding our borders serving in the fbi or filling other homeland security functions could be reluctant to accept reassignments or transfers that would result in further probation even if such a transfer was in the best interests of our national security i appreciate that representative ross amendment eliminates the possibility that federal employees might spend decades on probation but the manner in which this legislation was drafted suggests a profound lack of consideration of the impact of the policy change this legislation seeks this reflects the fact that the committee has not held a hearing or conducted any other type of assessment to determine whether any lengthening of the current probationary period is needed or would even be an improvement over current practice instead of presenting a thoughtfully constructed tool for government managers this bill appears instead to be another example of the majoritys campaign to reduce the rights of federal employees and another chapter chairman i appreciate the ranking member pointing out the original problems with the bill we were able to correct that i think that makes it a very good bill not only that but we look at the fact that the government managers coalition indicates that if managers miss the one year window to dismiss a failing employee the burden of proof becomes much greater if they decide to do so later for that reason the federal managers have an incentive to dismiss the employee prior to the expiration of the one year window even though the employee has not had sufficient time to show they could master the job after which they then have to be on the job to apply the training they have one year is not sufficient time furthermore you probably have one of the best jobs as a federal employee you have attrition rates of federal employees of one  five percent annually you have one point two percent for postal employees it is a coveted position we want to make sure that those that are working for the federal government in whatever capacity have the ability to perform their jobs and more importantly that we have managers supported by the government managers coalition that this flexibility for more time and this ability to ensure that the fit works are needed i am sensitive to the ranking members statement that someone could be transferred from time to time to time but as the ranking member knows once you complete your two years the only risk you would have would be that you were not able to continue in a promotion or a job transfer for which the peter principle potentially applied  ultimately in the real world you do not have the protections that we have in the federal workforce in the real world if you get promoted to your level of incompetency you then get fired in this case if you get promoted to a level for which you cannot do the job you only end up back where you were you still retain your fundamental rights to reclaim your underlying job so i do believe that the gentleman has corrected those areas that were most in need at this time my intention is to open this for amendment in case there are additional amendments that would make this good bill more perfect with that the bill is open for amendments mister clay mister chairman i dont have an amendment but i move to strike the last and eighty three federal government jobs were part of the spoils system the selection supported the party in power under the civil service federal employees are chosen and promoted based on merit some senior positions are filled by political appointment but the vast majority of the federal workforce is appointed under the competitive service those federal workers are provided protections against discrimination as well as targeting by political appointees the separation of politics from the business of government is a bedrock princip ensures that our federal workforce is free from undue influence and prejudice over the years some have made attempts to erode this principle and weaken the protections points many believe that the federal government begins and ends with elected officials but i am talking about dedicated public servants who have devoted their careers skills talents an efforts to serving their fellow citizens they are the ones who make this government and in many ways this country work federal agencies managers should have an appropriate period of time in which to evaluate their new hires if that period ends without incident or cause the employees should be made permanent and enjoy the protections of the civil service  if a federal manager cannot properly evaluate a new employee in three hundred and sixty five days agencies should retrain their managers not double the probationary time as members of congress we accept that our jobs come with a specific probationary period one that comes up for review every two years but the federal civil service is the probationary period expire while you were just finding out whether the person was a good student rather than whether they were able to do the job mister clay i dont know if we are going to split hairs about thirteen months or twelve months mister chairman but i do know th year probationary period should you should you chairman issa i think under current law they actually are probationary under a promotion mister clay so that is a catch twenty two then you can just keep putting them into probationary period even if they you go through a year or nearly a year of training the manager who sees you for the first time might see you after the probation is over there are programs that often go much of or even for a full year so one of the challenges is that under current law  they get a new job is a period where they are not only proving themselves to the employer but they are also proving themselves to themselves the relief that many of these individuals once they have completed the probationary period is something that they are very joyful about they know that they have now made it they are considered regular employees with all of the benefits rights and privileges that one should have so i think that expanding this beyond a year is a bit of overkill i agree with all of those who believe that you should get a days work for a days pay that you ought to be competent in what you do but i think that promoted fear out that a year should be plenty of time a year should be plenty of time if a manager is engaged in watching that employee i think about what goes on in our own offices you know within a month whether that person is going to be able to handle the job you are looking for a basic level of commitment and energy and attitude towards doing that job generally you can see within the first month whether that person is going to make it or not here we have a year long process i want to point out that as the chairman has pointed out and as the ranking member has pointed out in weakness is here sometimes they get promoted to different levels without sufficient evaluation by making it two years it isnt going to mean that the person is going to be fully evaluated if it is the same manager they will just kick the can down the road for two years i just think it denies an opportunity we are trying to attract good people into government i think that the public employee bashing that we see going on in the media and elsewhere and in this body  physicist in a nuclear program you are looking at whether or not this person coming into the agency has the basic level of competency commitment and attitude to do the job if you apply yourself as a his statement and support his statement i would just add that i very much view public service as a very noble profession when it is done well done honestly and done with great commitment regrettably there seems to be a great deal of public employee bashing that is taking place in our country today this bill seems the same to me i can tell in a day i can tell in a month to have an additional year on probation is a standard that certainly is not in the private sector nor in any other public sector around the world nor anywhere i would say that those that are critical of public employees are the same ones that were critical of the child labor laws that were critical of the safety and standards laws and that were critical of the many steps that we took to protect public employees and other workers in our country so i want to nature of the people that we represent not the basest or most damaging or most negative aspects of society out there i think that we should try to elevate and promote the ideals of public committed is a noble goal it is a perfectly sensible management goal but i think mister lynch put his finger on it more often than not the problem isnt the probationary period of time it is in fact the training of the managers themselves we have a letter that was distributed to us today addressed to you mister chairman and to the members of the committee from the federal managers association i want to read part of it it says merit systems protection board has found that few managers receive training on how to use the probationary period in initial employee assessments untrained managers are more likely to quickly let an employee go before giving them a valid assessment or to allow a mediocre employee to advance past the probationary period in the hope that that employee would eventually improve requiring supervisor training on the use of the probationary period as an assessment tool would greatly increase the effectiveness myself on a bipartisan basis because we think that supervisor training would frankly better address the underlying issue that mister ross is getting at which is a worthy issue so what my amendment does is to substitute the federal supervisor training act a bipartisan bill for the bill in front of us opm director john berry said just last week we know we can fire poor performers it is just that managers arent doing it the director of the federal managers association explained how to fix that problem the general schedule provides avenues for managers to deny step increases and terminate poor performing employees but managers must know these avenues exist to utilize them this amendment simply would help fire underperforming employees not just in their first year but throughout their career it would get at the heart of the problem which is the need to do a better job of training managers i would hope mister ross would accept this as a friendly amendment i think it could and seventy extends the probationary period for newly hired federal employees the gentlemans amendment would strike the underlying bill and replace it with new requirements on agencies to provide management training management training is at least to double the probationary period applied to new hires in the civil service or to those promoted within the service in fact as written the bill requires a probationary period of at least two years with no mandatory upper limit so theoretically enactment of this bill would allow an agency to establish an indefinite probationary period in essence however the bill seems intended to double the period in which federal employees lack the due process protections evidence explaining whether or how such a change would improve the efficiency or effectiveness of our workforce i strongly oppose this rush to an uninformed judgement for that reason i am offering an amendment in the nature of a substitute that would require the gao to conduct a thorough assessment of the current probationary period applied to federal employees to determine whether existing regulations and procedures provide sufficient time to enable a federal agency to assess whether a new hire or recently promoted employee should be retained in that position this amendment would require the gao to submit its findings within six months of the date of enactment in a written report provided to this committee and to the senate committee on homeland security and governmental affairs if we are truly concerned about putting in place the probationary period that best serves the needs of the federal and form legislation that will accomplish what should be our shared priority of ensuring that we have in place a fully trained workforce capable of effectively implementing government programs set by regulation a longer probationary period for competitive service positions i think it was mister ross just a moment ago that mentioned that the internal revenue service under that authority already can extend that period you also have the national institute of standards and technology u s department of agriculture department of defense laboratory demonstration programs and department of commerce so i wonder whether this bill is necessary in that the regulations five percent would be more than willing to accept a federal job that has total compensation on the average of one hundred and one thousand dollars in exchange for a two year probationary period i would actually like to see us have a total  probation period do i now have to go through another probation period then after they transfer me from boston to arizona will i have to go through another probationary period this is not clear to me i think that we need to have these kinds of yielding it is a two year probationary period if you start your date of employment on september one it goes for two years from that particular date no matter whether you are geographically transferred somewhere else within this country it is a two year probationary period it does not restart itself it continues for two years after which you would have full permanent employment with the federal government is there any ethical reason for this kind of change mister ross if i might respond one of the things that we discussed and i think that it was brought rather evident in our previous hearings is that we want to make sure that we recruit retain and reward good federal employees as is evidenced by the letter that we received from the government managers coalition this empowers them with another tool to make sure they are getting the best human resource out there to work for the federal government if we are speaking of ethics i think it is an even more necessary tool to make sure that ethically these government managers are doing the best job they possibly can in making sure that we recruit retain and period to ensure only the best candidates received finalized appointments it indicated that the supervisors wanted greater flexibility to determine the length of probationary period particularly for supervisors who were trainees it also indicated that flexibility  tailoring the length of probationary period based upon the unique characteristics of the position was necessary so in essence to empower now the gao to do this again is nothing more than kicking this can down the road i think we have significant evidence before us and significant testimony before us that says this is a tool that i thank the chairman i just want to make sure that we are all talking about the same thing my understanding from reading the code sections that apply to internal revenue service employees is that the three year probationary period is limited to a specific class of irs employees which are the special agents and that the standard probationary period under the internal revenue service personnel requirements is a one year period i am reading specifically from  is where the heart of this matter comes down those agents have a specialized level of training equivalent to somebody who goes to a professional school that is why that certification and probationary period is necessary but as somebody who advised a lot of private businesses on human resources policies i think it is absurd to impose a two year probationary period most private employers that i worked with had a ninety  day or a six month probationary period because if you are not capable of determining the performance abilities of an employee within that period of time you are making a huge mistake in retaining them on your payroll so this is really just a misguided attempt to try to impose more flexibility to take adverse action against an employee who has already demonstrated fitness for their job it seems to me an incredible overreach to extend probationary periods when the purpose of probation is for an employer to be able to determine whether that employee has the fundamental skills to perform the duties of that job if they cant do that in six months or a year then those managers are woefully inadequate in their job that is why i will oppose this effort chairman issa i thank the gentleman the question is on agreeing to the amendment offered by the gentleman from maryland all consent that the staff be authorized to make necessary and conforming technical changes to the bill without objection mister turner do you have a statement for the record airborne division and was only nineteen years old when he passed away on behalf of the committee i thank specialist phillips for his brave and courageous service to our country and offer our condolences to his family i would ask a members to join with me in reporting this bill favorably died at the young age of nineteen on february th two thousand and eight while serving our country honorably in iraq having met all the committees requisite criteria i support the passage of  issa thank you i will hold the record open until the end of the day i would note that the gentlelady who worked on this bill it is her birthday we will move on