[Congressional Record Volume 150, Number 136 (Wednesday, November 24, 2004)]
[Senate]
[Pages S11849-S11850]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

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                           TAX RETURN PRIVACY

 Mr. CONRAD. On Saturday, November 20, 2004, the American 
taxpayers dodged a bullet. The Congress came close, much too close, to 
passing legislation that would have stripped every American of their 
right to privacy with regard to their tax returns.
  The Senate averted this dangerous step, in part, because members of 
my staff--and one staffer in particular--came in to work on Saturday 
and read through more than 3,646 pages of a bill and its explanatory 
text.
  As my colleagues know, we were called to the Chamber on Saturday to 
debate and vote on the conference report on H.R. 4818, the Omnibus 
appropriations bill. This so-called ``catch-all spending'' package 
included nine different appropriations bills costing some $388 billion 
for fiscal year 2005.
  Many Members of Congress were familiar with some elements of the 
individual appropriations bills, including funding levels for programs 
and projects important to our States. But few, if any, Members were 
able to carefully analyze the bill in its entirety. Because the bill 
was delivered to each Senator and House Member at 6 a.m., we did not 
have much time to review the massive bill before we were asked to vote 
on it.
  When the bill arrived I asked members of my staff to pore over the 
bill, each tasked with finding and reviewing sections of the bill where 
they have policy expertise. It was during this effort to review the 
bill that one of my staff members discovered an egregious tax 
provision. Steve Bailey, my tax counsel on the Senate Budget Committee, 
reading the Transportation-Treasury section of the bill, spotted 
section 222 and immediately realized it was a huge problem. The 
paragraph read:

       Notwithstanding any other provision of law governing the 
     disclosure of income tax returns or return information, upon 
     written request of the Chairman of the House or Senate 
     Committee on Appropriations, the Commissioner of the Internal 
     Revenue Service shall hereafter allow agents designated by 
     such Chairman access to Internal Revenue Service facilities 
     and any tax returns or return information contained therein.

  Mr. Bailey, who has worked on tax issues for more than 20 years, knew 
that if enacted, the provision would endanger the right and expectation 
of every American. This provision held the very real promise that the 
privacy of their tax returns could be compromised.
  Thanks to Mr. Bailey's close reading of the bill and his quick 
recognition of the negative implications of that 60-word paragraph, I 
was able to bring the paragraph's existence to the attention of my 
colleagues. Fortunately, the Senate then firmly and unanimously 
rejected the paragraph and demanded that the House of Representatives 
remove the offending language before the bill could be sent to the 
President's desk for his signature.
  At the conclusion of my remarks, I would like to have printed in the 
Record at the conclusion of my remarks an editorial from today's New 
York Times, ``Snookering the Taxpayers.'' This editorial mentions ``a 
sharp-eyed Democratic staff member [who] spotted the terse paragraph 
sitting like a toxic clam in the muck of the omnibus spending bill. . . 
.'' This editorial concludes with a clear understatement, ``Taxpayers 
can only hope someone keeps reading.''
  Well, I can assure my constituents in North Dakota that my staff and 
I will keep on reading. But I also hope this experience will lead to a 
new method of doing business next year. The Senate should never again 
tolerate a process by which we are given a 3,600-page bill and are then 
asked to vote upon that bill several hours later. As my colleague from 
Arizona, Senator John McCain, has noted, this process is broken and it 
must change. I will be working with my colleagues to accomplish that 
goal next year.
  I wanted to take this opportunity to recognize and thank Mr. Steve 
Bailey for his outstanding work and service to me and to the Senate. 
This past week, his hard work made a big difference to millions of 
American taxpayers.
  The editorial follows.

                [From the New York Times, Nov. 24, 2004]

                        Snookering the Taxpayers

       It is called a snooker clause in legislative parlance--a 
     last-minute insert into a dense and hurried midnight bill 
     that, if ever disclosed after passage, always leaves 
     legislators shocked, shocked at how such an undemocratic bit 
     of mischief ever came to be. ``No earthly idea how that got 
     in there,'' said Bill Frist, the Senate majority leader, 
     after the impenetrable, 14-inch-thick omnibus budget bill 
     turned out to have a provision giving Congressional chairmen 
     and staff members entree to Americans' tax returns without 
     regard to privacy protections.
       This has been a sacrosanct area ever since the Watergate 
     scandals. Severe civil and criminal penalties were enacted 
     after the Nixon administration's rifling of private tax 
     returns to build the ``enemies list'' aimed at government 
     harassment.

[[Page S11850]]

       A sharp-eyed Democratic staff member spotted the terse 
     paragraph sitting like a toxic clam in the muck of the 
     omnibus spending bill, a 3,000-page disgrace in its own right 
     that capped months of Capitol procrastination. Once the 
     provision was found, everyone felt compelled to denounce it. 
     Senator Charles Grassley, the Iowa Republican, growled that 
     it summoned ``the dark days in our history when taxpayer 
     information was used against political enemies.'' The Senate 
     declared the clause void, forcing G.O.P. leaders in the 
     House, where the gambit originated, to sheepishly follow 
     suit. House leaders insisted there was never an intent to pry 
     into taxpayers' lives. The goal, they said, was simply to 
     establish better oversight of the tax collection bureaucracy. 
     Really? Then how come anyone bothering to read the bill (and 
     that did not include many members of Congress) could see what 
     an outrageous license it provided for the appropriations 
     committees to look into tax offices ``and any tax returns or 
     return information contained therein.''
       Embarrassed solons had to admit they had no idea what other 
     dangerous items might be in the bill. Taxpayers can only hope 
     someone keeps reading.

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