WASHINGTON — During a period when federal employees face a third year of the freeze on their basic pay rates and furloughs that could swipe up to 20 percent of their pay, a House committee is going after the tiny percentage of feds with federal tax liens.
With a voice vote, the House Oversight and Government Reform Committee approved legislation Wednesday that could result in the firing of some federal employees who owe taxes and block job candidates in the same fix.
Democrats objected to the bill, saying it unfairly and unnecessarily focuses on federal workers and also could be counterproductive.
“This legislation simply seeks to demonize federal employees rather than ensure their compliance with tax obligations,” said Rep. Elijah Cummings, D-Md., the top Democrat on the committee. “By requiring agencies to fire employees for not paying their taxes on time, the measure actually undermines the ability of the government to collect the unpaid taxes. It is much more difficult to recoup delinquent taxes from someone who is unemployed.”
With bipartisan support, the committee also approved legislation that would require tax compliance for federal contracting companies.
“The very least an individual on the federal payroll can do is pay their taxes,” said Rep. Jason Chaffetz, R-Utah, the chief sponsor of the bills. “If you are thumbing your nose up at the American taxpayer by not paying your taxes, you should be fired or not awarded a federal contract.”
Those with “seriously delinquent tax debt” would not be eligible to be federal employees, under the legislation. Just 3.62 percent of federal civilian employees were tax-delinquent in 2011, which is far better than the rate for the general public, according to Internal Revenue Service data. The legislation, however, would not apply to all federal employees who are delinquent, only those with a federal tax lien.
The IRS said that liens generally are placed against about 12 percent of those who are delinquent. That means less than 0.4 percent of federal employees could be fired, under the legislation. Further, the bill exempts certain tax debt, including that being paid off under a payment agreement or when there is taxpayer hardship.
“If someone is trying to do the right thing,” Chaffetz said, “of course, we want them to continue to be employed.” Citing the IRS, he said that seriously delinquent federal employees owe more than $1 billion.
“I hope that number [of delinquent employees] gets driven down to zero,” he said in an interview. “The intention is not to fire people, but to motivate them.”
Rather than motivating compliance, Rep. Jackie Speier, D-Calif., suggested that the legislation could make it more difficult for the debtors to pay. “If they [federal employees] are fired,” she said, “we lose the ability to collect on the debt.” Speier co-sponsored the bill on tax-delinquent contractors.
The District of Columbia’s non-voting delegate to the House, Eleanor Holmes Norton, complained that the employee legislation holds “federal employees up for special targeting.”
That targeting is unnecessary, Cummings said, because “under current law and regulations, agencies can take disciplinary action against employees for failing to meet their tax obligations, ranging from counseling to outright removal. I don’t see how the exemplary compliance rate among federal employees justifies the adoption of a new law that would apply only to federal employees.”
About the same time the House committee was meeting at the Rayburn House Office Building in Washington, members of the American Federation of Government Employees (AFGE) and other unionists rallied outside the Labor Department against sweeping budget cuts knows as the sequester.
More than a million federal workers face unpaid furlough days because of the cuts.
“Who should be furloughed?” shouted Alex Bastani, president of AFGE Local 12 at Labor.
“Congress,” came the crowd’s reply.
“When should they be furloughed?”
The Labor Department rally was one of more than 100 the union said were organized across the country to protest cuts that would lead to reduced government service. The sequester, Bastani said, affects “not just federal employees. It affects the community.”
“We’re not just a bunch of bureaucrats sitting around,” he added. “We do real work that affects real people.”
The D.C. rally drew international attention. Video journalists from Japanese and French news organizations were on the scene.
Meanwhile, the AFGE is temporarily homeless.
Its national headquarters in downtown Washington has been closed since Monday because of a fire that left its building without electricity.
“We’re telecommuting for the week,” said Brian DeWyngaert, an AFGE official at the rally.