Policy Update

OMB Watch Federal Update

5/02/2005

Senate Committee Passes Amended 527 Bill
http://www.ombwatch.org/article/articleview/2826/1/339
An attempt by Sens. John McCain (R-AZ) and Russell Feingold (D-WI) to extend federal campaign finance regulation to independent political groups has backfired in the Senate Rules Committee, which amended the 527 Reform Act of 2005 (S. 271), to repeal portions of the Bipartisan Campaign Reform Act of 2002 (BCRA).

The vastly altered version of S. 271 passed by the committee on April 27 is a crazy quilt of amendments that restricts independent groups while lifting limits on business groups and PACs run by members of Congress. An additional amendment exempts groups that limit their activities to voter mobilization if they do not use broadcast media.

Another exempts the Internet from the definition of regulated public communications. The bill reflects opposing approaches to changing campaign finance laws that were also debated in an April 21 hearing by the House Administration Committee.

IRS Describes Increased Enforcement of Nonprofit Sector
http://www.ombwatch.org/article/articleview/2827/1/339
Mark Everson, the commissioner of the Internal Revenue Service (IRS), warned attorneys at the Georgetown Law Center's Tax-Exempt Seminar that the sector must act to head off a "gathering storm" resulting from use of the sector as a vehicle for tax avoidance. Other IRS officials at the April 28 training described new and increased enforcement activities.

GAO Finds Bush's Social Security Campaign Not Illegal Lobbying
http://www.ombwatch.org/article/articleview/2828/1/339
On April 27, the Government Accountability Office (GAO) sent a letter to eight Democratic senators finding that the Bush administration's program to promote its Social Security plan to the public does not constitute illegal use of government funds for grassroots lobbying. The senators had asked for an assessment of whether the overall context and message of the administration's Social Security campaign amounted to a clear appeal to the public to contact members of Congress. The GAO disagreed, saying that no violation occurs unless there is an express request to the public to contact Congress.

House Ways and Means Committee Holds Hearing on the Tax-Exempt Sector
http://www.ombwatch.org/article/articleview/2829/1/339
More law school seminar than hearing, on April 20, the House Ways and Means Committee examined the "legal history of the tax-exempt sector; its size, scope and impact on the economy; the need for congressional oversight; Internal Revenue Service (IRS) oversight of the sector; and what the IRS is doing to improve compliance with the law."

According to Chairman Bill Thomas (R-CA), the hearing, was not meant to parallel a recent hearing by the Senate Finance Committee reviewing specific reforms. Instead the committee wanted to "establish a foundation from which members can systematically begin to examine the tax-exempt sector, and determine what remedies, if any, are needed to provide greater clarity, transparency, and enforcement."