5 Takeaways From the Ways and Means IRS Hearing

George, left, and Miller are sworn in before testifying at the Ways and Means Committee hearing. (Douglas Graham/CQ Roll Call)

On a rare Friday of congressional action, the first hearing was held to examine the IRS scandal involving the extra, and in some cases unprecedented, scrutiny given to conservative organizations that applied for tax-exempt status over a two-year period covering 2010 to 2012.

Acting IRS Commissioner Steven T. Miller was in the hot seat for nearly four hours, as the House Ways and Means Committee grilled him on how and why the federal tax-collecting agency appeared to inject politics into what is supposed to be an independent process. Miller, who will leave his job next month, was joined by Treasury Department Inspector General J. Russell George — he received a considerably more friendly reception.

As the hearing progressed, Ways and Means members slowly but surely veered into typical partisan camps. Republicans insisted that a political conspiracy was behind the IRS’ targeting of conservative groups. Democrats tried to walk a line between disapproval of the IRS’ actions, while defending the credibility of the IRS and accusing the GOP of using the scandal to undermine Obamacare, which requires the agency to hire thousands of new agents to police the new law.

Here are the top five takeaways from Friday’s hearing:

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Q&A With Gov. Brian Sandoval (Part II)

CARSON CITY, Nev. — Gov. Brian Sandoval has cut a lower, less-partisan profile than many Republican chiefs executive.

But as a Hispanic Republican and the relatively popular leader of a Western swing state that sided with President Barack Obama last November, Sandoval might be uniquely qualified to offer his party political advice as it seeks to recover in the wake of the disappointing 2012 elections.

In part two of our discussion pulled from my wide-ranging interview conducted earlier this week in the governor’s private office in Nevada’s historic Capitol, Sandoval sounded off on how efforts to change U.S. immigration law might affect the GOP nationally, and what he really thought when 2012 Republican presidential nominee Mitt Romney talked about “self deportation” as an immigration policy.

The governor revealed some of his thinking about the political landscape at home ahead of the 2014 and 2016 elections and discussed how the actions of the Congress and the White House, or lack thereof, have affected his ability to help Nevada recover from an economic downturn that was felt more acutely in the Silver State than perhaps any other state in the nation.

And we closed the interview with a short segment on Sandoval’s choice of footwear — and discovered a Capitol Hill connection.

Q. Over time, will the Senate immigration reform proposal help the image of the GOP with different ethnic demographics?

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Boehner Wants Debt Limit Talks With Obama

Speaker John A. Boehner, R-Ohio, said Thursday that the White House should be prepared to negotiate with House Republicans on the debt limit – despite President Barack Obama’s insistence that he wants to extend it later this summer without strings attached.

“It’s easy to make a statement to that effect,” Boehner said of Obama at his Thursday morning news conference ,”but it’s just not reality.”

Of course, Boehner himself does not appear to have settled on exactly what he would be negotiating for, considering House GOP members emerged from Wednesday’s debt limit brainstorming session without a consensus on what to fight for.

Still, Boehner indicated that House Republicans would likely be seeking deeper spending cuts. “The fact is, that if the Treasury Department needs to pay the bills, the debt limit has to be dealt with, and should be dealt with in a responsible way,” he said. “[Obama] can’t continue to increase the debt limit without doing something about what’s driving the increase in the debt limit, and that is out of control spending.”

Boehner also took the opportunity to tout the House’s vote, set for later in the day, on a bill that would fully repeal Obamacare, the third of its kind since the GOP gained control of the chamber in 2011.

Standing beside the now-infamous, seven-foot “Red Tape Tower,” he gestured to the thousands of pages stacked on top of the other, tied with a red ribbon and balanced on a red hand-cart.

“These are the thousands and thousands of health care regulations,” Boehner explained. “And if we want jobs, we need to get rid of this, because this is getting in the way of employers hiring workers around the country.”

Boehner’s news conference also included mention of the two major scandals that have wreaked havoc on the Obama administration this week, namely revelations that the IRS inappropriately targeted conservative nonprofits seeking tax-exempt status and that the Justice Department seized records from Associated Press phone lines.

“Nothing dissolves the bonds between people and their government like the arrogance of power here in Washington,” Boehner said. “And that’s what the American people are seeing today from the Obama administration: remarkable arrogance.

“This house will stop at nothing to get to the American people the answers that they expect,” he continued. “But the best way to repair this damage is for the Obama administration to come forward with the truth — the whole truth — so that the American people will have all the facts.”

Reinvigorated Tea Party Bands Together Against IRS

Tea party leaders banded together Thursday morning to sound a rallying cry for the first time since news broke last week that the IRS disproportionately scrutinized conservative nonprofits applying for tax-exempt status.

Convened by Rep. Michele Bachmann, R-Minn., former presidential candidate and chairwoman of the House Tea Party Caucus, the news conference outside the Capitol included tea party allies in the House and Senate, national leaders and representatives from local groups around the country.

Their rhetoric left little room to wonder how they feel about the recent developments.

Jenny Beth Martin, co-founder of the Tea Party Patriots, called for an audit of the IRS, which she described as “thuggish.” Adam Brandon, the executive vice president of FreedomWorks, said the government was operating more like “a third world junta than a constitutional republic.”

“It’s an abuse of power, potentially by this administration, to advance their own political ends,” Bachmann told a crowd of reporters afterward. “And story after story after story leads one to the conclusion, based upon the presumptive evidence, that the administration was willing to misuse and abuse government power to advance its own re-election chances in the next election. That’s wrong.”

Lawmakers and political organizers pledged one after another that this is an issue that won’t temper a roaring boil anytime soon, and that they would continue to speak out until they had answers.

They were also joined by pro bono attorneys on Thursday, a clear signal that the voices of those targeted by the IRS will only grow louder.

“They lost funding, they lost donors,” said Jordan Sekulow, the executive director for the American Center for Law and Justice. “We have a group out of Tennessee that lost a $3,000 donation because they weren’t approved.

“There are monetary damages here. Events had to be canceled. Attorney fees before they hired us … groups hired local attorneys and were not allowed to even operate once they got approved,” Sekulow said.

Though revelations about IRS misconduct became public May 10, conservative organizations have been voicing concerns beginning around February 2012, at which point 27 of them became clients of Sekulow’s group.

House GOP Still Struggling for Consensus on Debt Limit

They talked about balancing the budget in 10 years, repealing Obamacare, slashing spending and overhauling the tax code.

In other words, the House Republican meeting Wednesday afternoon to brainstorm a path forward for dealing with the debt limit basically consisted of “a laundry list of everything imaginable,” in the words of Rep. Rob Bishop, R-Utah.

That isn’t to say it was a surprise, or a disappointment. Leading up to the GOP leadership-convened conference, lawmakers said that they expected it to be a listening session rather than a strategy meeting on what demands they should bring to the negotiating table as a condition of raising the debt ceiling.

Policy Committee Chairman James Lankford, R-Okla., said Tuesday that he didn’t anticipate consensus around a single idea, but that perhaps “instead of 10 options, maybe we’ll come out with three or four.”

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House GOP ‘Gang of 6′ Slams Senate’s ‘Gang of 8′ Immigration Bill

As the Senate Judiciary Committee continues to debate the immigration overhaul measure authored by the bipartisan “gang of eight,” a more informal and more partisan “gang of six” gathered outside the Capitol to slam what it called an “amnesty bill.”

The cadre of House Republicans, led by Rep. Steve King of Iowa, held a Tuesday morning news conference to weigh in on how to address the nation’s population of undocumented immigrants.

The answer, group members said, is to start by securing the borders before passing any bill that attempts a comprehensive overhaul.

Rep. Louie Gohmert, R-Texas, said that President Barack Obama wants to offer legal status to any immigrant without discretion and have that be the condition on which he agrees to secure the border.

“[It is] hypothetically like some random president saying, ‘Hey media, if you don’t write good stories, I’m gonna be going into your phone records on a regular basis until you start,’ just hypothetically, or like, ‘Hey groups, you gotta get off my back or I’m going to harass you with the IRS,’” Gohmert said referencing two scandals within President Barack Obama’s administration: one dealing with the Justice Department seizure of Associated Press phone records, and another involving the IRS inappropriately targeting applications from conservative organizations.

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In Race to Investigate the IRS, Ways and Means Wins

(Scott J. Ferrell/CQ Roll Call File Photo)

Days after House Republican leaders promised that the chamber would investigate charges that the IRS disproportionately scrutinized applications by conservative groups, the Ways and Means Committee has scheduled a hearing for this Friday.

Chairman Dave Camp, R-Mich., and ranking member Sander Levin, D-Mich., jointly announced on Monday afternoon that the Friday hearing would focus on the IRS’s “practice of discriminating against applicants for tax-exempt status based on the political leanings of the applicants.” Full story

House GOP Investigating IRS Focus on Tea Party Groups

Updated 5:52 pm | House Republicans are seizing on the IRS admission that personnel improperly targeted tea party groups for scrutiny, with Speaker John A. Boehner drawing a connection to abuses of the past.

“The admission by the Obama administration that the Internal Revenue Service targeted political opponents echoes some of the most shameful abuses of government power in 20th-century American history,” Boehner said in a statement Friday.

Rep. Charles Boustany Jr., is leading the push through his role as chairman of the Ways and Means Subcommittee on Oversight. The Louisiana Republican has already sent a letter to acting IRS Commissioner Steve Miller seeking all agency correspondence relating to the exact terms “conservative,” “tea party” and “patriot.”

Boustany noted that the Ways and Means panel already has an investigation under way.

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Can Lame Ducks Baucus, Camp Achieve a Tax Overhaul?

Baucus and Camp are both staring down their legacies atop the Senate and House tax-writing committees. (Tom Williams/CQ Roll Call File Photo)

With Sen. Max Baucus’ decision to retire in 2014, the two committee chairmen in charge of an uncertain comprehensive tax rewrite effort are now officially lame ducks.

Ken Spain, a former congressional aide who served as communications director of the National Republican Congressional Committee in 2010, helpfully pointed out a small but interesting development. “Potential policy implications for Baucus retirement: Two tax-writing chairmen won’t hold gavel in two years. Better shot at tax overhaul?” tweeted Spain, who is now a spokesman for the Private Equity Growth Capital Council, a lobbying organization closely monitoring the progress of a possible tax overhaul.

Rep. Dave Camp, R-Mich., is not retiring next year. But his tenure as Ways and Means chairman is term-limited by House GOP rules, which means both he and Baucus are staring down a career deadline to move a tax bill through their respective committees and to the House and Senate floors for consideration. The two chairmen are attempting to coordinate their efforts.

The process was already complicated enough, both politically and substantively, and it is not yet clear if the lame-duck chairmanships of Baucus and Camp will further burden their bid for tax policy changes or perhaps liberate them and bolster the effort’s prospects.

“At a national level, I will continue to work on simplifying and improving the tax code,” Baucus said as a part of his lengthy statement confirming his retirement plans.

Debt Ceiling Bogs Down Obamacare Tax Repeal

Looming negotiations to raise the debt ceiling appear to be at the heart of what is stalling stand-alone legislation to repeal Obamacare’s medical-device tax.

Rep. Erik Paulsen, R-Minn., has lined up more than 218 co-sponsors for his bill to repeal the tax on medical-device manufacturers created as a part of the Affordable Care Act. But House Republican leaders and key GOP committee members, concerned with maintaining their negotiating position in the upcoming debt ceiling talks, do not want to send Senate Majority Leader Harry Reid, D-Nev., a revenue bill that he could use to jam them.

The Senate recently approved in overwhelmingly bipartisan fashion a nonbinding amendment to repeal the medical-device tax, and Minority Leader Mitch McConnell, R-Ky., has lobbied House Republicans to move legislation and force a vote in his chamber. Paulsen has indicated his support. But Republican sources on and off Capitol Hill have confirmed that GOP leaders don’t want to give Senate Democrats a vehicle they could use to combine a debt ceiling hike with tax increases.

“Once we launch vehicles they can do anything they want with it over there. So I think our leadership’s being wisely cautious on this matter,” Rep. Tom Cole, R-Okla., said Thursday during a brief interview. “Frankly, while we all support the repeal of the medical device tax and I think that’s something that will happen, it’s probably better done in a larger deal or done after the debt ceiling, or in some larger agreement around the debt ceiling.”

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Tax Day Q&A With Peter Roskam

(Tom Williams/CQ Roll Call)

As the House chief deputy majority whip with a coveted slot on the Ways and Means Committee, Rep. Peter Roskam regularly finds himself at the nexus of the political and policy issues driving debate on Capitol Hill.

The Illinois Republican’s job is to help GOP leadership line up support for all manner of legislation — and count the votes. The GOP is enjoying its second largest House majority since World War II, but rarely has Roskam’s task been an easy one. The deputy whip’s role in helping Ways and Means Chairman Dave Camp shepherd comprehensive tax reform is also loaded with political uncertainty and peril.

With Monday’s deadline for Americans to file their tax returns, Goppers sat down with Roskam, 51, to discuss the House Republicans’ effort to overhaul the tax code, why Democrats keep outflanking the GOP on the issue of taxes, and whether the White House should hold its breath waiting for the GOP to agree to another tax increase.

In part one of our Q&A, the fourth-term congressman, who represents the suburban Chicago 6th District, telegraphs how the House is likely to address gun control. Roskam opens up on what he thinks of the Senate, a characterization you don’t want to miss. Look for part two of our Q&A on Tuesday, when Roskam talks immigration, national politics and the challenge of whipping a sometimes fractious House Republican conference.

CQ Roll Call: Today is tax day. Do Americans pay too much of their income to the federal treasury every year?

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Camp Takes Aim at Romney’s Favorite Tax Break

Eliminating the carried interest provision from the U.S. tax code is on the table as a part of comprehensive tax overhaul, House Ways and Means Chairman Dave Camp confirmed on Thursday.

In a brief interview following the Christian Science Monitor breakfast briefing with reporters, the Michigan Republican would not rule out eliminating the loophole, which famously allows hedge funds but also the more standard category of investor to pay the capital gains tax rate on their earnings, rather than the standard (and higher) income tax rate. Camp also confirmed that he favors repealing the health care law’s medical device tax through comprehensive tax overhaul, rather than as a stand-alone bill.

“We’re going to look at all of the tax code and I’ve got a working group looking at [carried interest.] And, I’m going to let them make their report to the committee and have the joint committee analyze what they’ve come up with,” Camp told CQ Roll Call. “Everything’s on the table because we’re still doing our analysis of it. … It is a very intricate set of issues. I’ve got working groups that haven’t completed their work and I’m going to let them do that.”

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Boehner Downplays Debt Ceiling Fight as Leverage

Boehner said the GOP may use the debt ceiling increase to push for long-term entitlement changes. (Chris Maddaloni/CQ Roll Call File Photo)

Speaker John A. Boehner downplayed the importance of the debt ceiling increase in remarks to reporters Thursday, saying it might provide “some” leverage to Republicans to force spending cuts, “but I’m not going to risk the full faith and credit of the federal government.”

Rather than isolating the debt ceiling as an individual point of leverage, Republicans are hinting they’ll use it alongside the sequester cuts and the budget fight to push for long-term entitlement changes.

“We’ve made clear that to get rid of the sequester, we need cuts and reforms that will put us on a path to balance the budget over 10 years. The president is clear that he’s not going to address our entitlement crisis unless we’re willing to raise taxes. I think the tax issue’s been resolved. So at this point in time, I don’t know how we go forward,” the Ohio Republican said.

Republicans are planning an extended closed-door meeting to hammer out their strategy on the debt ceiling and other issues when they return from Easter recess. Boehner and other members of House leadership met on March 14 with a working group of influential conservatives on the issue.

Conservatives in the group are coalescing around demanding changes to entitlements for the debt ceiling increase and said the extended conference session will allow the GOP to “hash out” which reforms they will support.

Republicans Remain Skeptical of Obama’s Charm Offensive

Latham said he hopes Obama’s recent outreach to congressional Republicans is “genuine.” (Tom Williams/CQ Roll Call File Photo)

Congressional Republicans remain skeptical of President Barack Obama’s charm offensive — very, very, very skeptical.

In conversations with House and Senate Republicans late Tuesday, a deep suspicion of his motives for reaching out and his commitment to working with them on fiscal and other issues hung like a dark cloud over their otherwise predictable comments expressing cautious optimism that Washington could be on the cusp of a new era of bipartisanship.

“There’s some concern as to whether it will be more than political window dressing,” Rep. Tom Cole, R-Okla., said during a brief interview. “I think members are happy that it’s happening. They’re not yet convinced that it’s going to be consistent and long-lasting.”

“I hope it’s genuine,” Rep. Tom Latham, R-Iowa, added. “Who knows?”

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Ryan’s Budget: ‘Means to an End’ Not ‘Root Canal Economics’

(Chris Maddaloni/CQ Roll Call)

When you hear congressional Republicans insist over the next few months that the American people agree with their budget priorities, keep this in mind: They know better.

House Budget Chairman Paul D. Ryan introduced his committee’s fiscal 2014 spending plan Tuesday and amid all the focus on the fact it would balance Washington’s books in 10 years, in part by repealing the Affordable Care Act (a.k.a. Obamacare), I was struck by a phrase the Wisconsin Republican repeated several times in his morning news conference: “means to an end.”

There is little difference between Ryan’s 2014 budget and the two previous proposals offered by the House GOP majority. But politically, the emphasis and messaging have been altered significantly. This new blueprint might appear to be about balanced budgets, tax reform and overhauling Medicare. In fact, many House Republicans will still focus on these items — it’s why they came to Congress. But what does Ryan want Americans to think about his budget? That it will make their lives better.

“We want people to know that this isn’t simply an accounting exercise, that this is an exercise in making a better country, and helping people who are in need, in getting a growing economy that produces more opportunity and upward mobility,” Ryan told CQ Roll Call after he unveiled his budget. “That’s why we’re doing what we’re doing. It’s not an accounting exercise; it’s not root canal economics, it’s pro-growth economics that gets people the kind of opportunity that they’ve always known about in America growing up.

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