Measure Allowing Examination of Tax Returns Holds Up Spending Bill

Congress applied the brakes to a $388 billion spending bill as Republican lawmakers scurried to repeal a measure that would allow the Appropriations committees to examine Americans' tax returns.

The Washington Post reported that Republican lawmakers said they were surprised that the provision had been included in the bill - a massive omnibus spending package that allocates government funding for next year.

The bill also includes the Bush administration's proposed changes in overtime rules, which critics say will deny an estimated 6 million workers overtime pay. An attempt to block the new rules - an amendment that would have retained overtime protections from all workers previously covered - was killed after the White House threatened to veto the entire bill.

Members of both parties said the incidents highlight a seriously flawed budget process. Because both sides can't agree on how to fund basic government services, many of the spending bills are delayed. Republican leaders then added all the remaining legislation into one omnibus package that cannot be amended.

In this case, Senate leaders promised that the bill would not be sent to the president for his signature until the tax provision is repealed by both houses. The measure rankled many lawmakers, as it would allow staff of House and Senate Appropriations committee to examine tax returns at IRS facilities. Some lawmakers said it set aside privacy protections, which usually would call for criminal penalties against those who reveal individual tax information.

House sources told the Washington Post that the IRS drafted the provision and it was added to the bill Thursday at the request of Rep. Ernest J. Istook Jr. (R-Okla.), who chairs the Appropriations subcommittee that oversees the IRS. Istook, however, said he was “in the dark” about the provision. “Honest mistakes were made but there's no conspiracy."

However, Sen. Charles E. Grassley (R-Iowa), who chairs the tax-writing Finance Committee, called the provision an "outrage" and said it will "bring us back to the doorsteps of the days of Nixon, Truman and similar dark periods in our tax history when tax return information was used as a club against political enemies."

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