Even amid crisis and scandal, the two parties remain as divided as ever—especially when it comes to finding solutions.
That much should be evident on Friday morning when the top Democratic and Republican tax writers gather for the first in a series of hearings about problems with the Internal Revenue Service’s screenings of tax-exempt advocacy groups.
Republicans will spend the morning trying to score points by casting the IRS’s issues as systematic discrimination against conservative political organizations, and they will try to hold a greater number of people accountable for the IRS’s blunders, apart from just Steven Miller, the former acting commissioner of the IRS who resigned on Wednesday and who will testify at Friday’s hearing.
“We want to know: What did they know and when?” said Rep. Charles Boustany, R-La., chairman of the House Ways and Means Subcommittee on Oversight. “I just simply refuse to believe that lower-level IRS personnel were making these kind of decisions.”
Meanwhile, Democrats will acknowledge the agency’s misdeeds while calling into question the legitimacy of tax-exempt organizations that do not have to disclose their donors and that played an outsized role in the 2012 presidential election.
“Americans should not be afraid of the IRS, based on their political beliefs or associations,” said Rep. Richard Neal, D-Mass., a member of the Ways and Means Committee. “At the same time, I think we should call attention to the lack of transparency in terms of political advocacy.”
This is a tricky balancing act for Republicans and Democrats. Republicans want to get as much mileage out of the IRS scandal as possible as a way to delegitimize the agency that will heavily factor into implementing the Affordable Care Act. But they cannot go so far that the politics backfire on them, as they did in 1998, when they overreached in their attacks on President Bill Clinton and lost seats in the midterm elections.
“We want to keep this fact-based and not sensationalize it,” Boustany added about the challenges that he faces. “We want to clean up the mess at the IRS.”
The conservative political group Heritage Action for America urged House Republican leaders to keep their focus on the IRS and the other scandals in the coming weeks. “Legislation such as the Internet sales tax or the FARM Act, which contains nearly $800 billion in food stamp spending, would give the press a reason to shift their attention away from the failures of the Obama administration,” wrote Michael Needham, chief executive officer of the group, in a letter sent to House leaders.
The trick for Democrats is to seriously examine the allegations that IRS employees improperly targeted conservative tax-exempt groups for special scrutiny, even as they want to contain the political fallout. Ways and Means ranking member Sander Levin, D-Mich., said that his goal with Friday’s hearing is to “get the facts out so that it won’t happen again.”
“It’s also important to not allow the hearings to become politicized,” he said.
At stake is the integrity of the Internal Revenue Service: the agency responsible for collecting roughly $2.5 trillion in individual and corporate income taxes in fiscal year 2012. In addition to collecting the money to fund the federal government, the IRS delivers social policy through the tax code with tax breaks like the earned income tax credit, which benefits millions of Americans.
The IRS also will oversee much of the implementation of the Affordable Care Act, which is being funded through new taxes. Now, the agency is responsible for policing the rise of social-welfare groups known as 501(c)(4)’s.
All of this makes the IRS’s blunders serious and deeply problematic given the scope of its duties. Both Levin and Ways and Means Chairman Dave Camp, R-Mich., condemned the actions of the agency once the Treasury Inspector General released its report on Tuesday, saying that the agency had inappropriately targeted conservative tax-exempt groups associated with terms like "tea party," "patriot," or "debt" for extra review—not out of political malfeasance but out of mismanagement.
At the hearing, both Camp and Levin intend to ask a series of detailed questions to figure out who at the agency oversaw the reviews for the tax-exempt groups and the criteria the IRS employees created to evaluate the groups. They will also try to ascertain if the criteria was ever communicated to anyone at the White House and Treasury Department.
The Senate Finance Committee and House Oversight and Government Reform Committee plan to hold hearings next week as well on the IRS’s missteps. President Obama tried to preempt this onslaught of congressional investigations into the tax agency by appointing a temporary acting commissioner of the IRS on Thursday. The temporary leader, Daniel Werfel, comes from the Office of Management and Budget and is a longtime public servant who has worked for both Republicans and Democrats.
This article appears in the May 17, 2013, edition of NJ Daily.