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House report: Cash-strapped IRS prioritized bonuses, union activity over helping taxpayers

While facing budget cuts, the IRS nevertheless prioritized worker bonuses, union activity and the implementation of President Obama’s health care law over assisting taxpayers during tax season, according to a new report released Wednesday by the House Ways and Means Committee.
The findings, in a Republican-led report, were released ahead of a subcommittee hearing Wednesday morning with IRS Commissioner John Koskinen.
At the hearing, Koskinen stressed that the agency is significantly under-funded, and those cuts have consequences.
He said less funding means there will be a decline in service for taxpayers, and pledged that service would improve if they got more money.
"Customer service -- both on the phone and in person -- has been far worse than anyone would want. It's simply a matter of not having enough people to answer the phones and provide service at our walk-in sites as a result of cuts to our budget," he said.

More on this...

• IRS' cash flow woes bankrupted at hearing

• Report: IRS diverts funding away from customer service

But Republicans argued the IRS is making bad spending choices. "I would just suggest to you that there's hardly a person in America today that isn't doing more with less, that hasn't tightened their belt and learned how to work with less," Rep. Mike Kelly, R-Pa., said.
The IRS has faced congressional budget cuts of $1.2 billion since 2010, and has faced criticism in recent years over the targeting of conservative groups applying for tax-exempt status and reports of wasteful spending. The new report said the cuts were intended to “force the IRS to manage its resources more effectively and immediately stop inappropriate activities.”
However, while cuts were made in part to focus the agency on customer service, the report asserted that “spending decisions entirely under the IRS’s control led to 16 million fewer taxpayers receiving IRS assistance this filing season.”
The panel found the IRS had cut customer services while continuing to hand out bonuses to employees, allowing staff to conduct union activities, failing to collect debt owed by employees of the federal government and spending over $1.2 billion on implementing ObamaCare.
Even though the IRS’s budget for taxpayer assistance remained flat from fiscal year 2014 to 2015, the level of over-the-phone customer service significantly decreased, with the agency shifting staff in customer service to focus on written correspondence instead of telephone calls. Meanwhile, the number of calls doubled in that period.
The panel found that wait times increased from 18.7 minutes to 34.4 minutes, and answered calls decreased from 6.6 million to 5.3 million.
“In January 2015, the IRS commissioner estimated that taxpayer service would decline while delays in tax refunds would increase. While the IRS commissioner has blamed this solely on budget cuts, in reality the IRS deliberately diverted resources away from taxpayer services,” the report found.
Despite the drop in service, there was no significant decrease in bonuses for IRS employees. Notably, in November 2014, despite another round of budget cuts at the IRS, Koskinen announced that employees would receive bonuses at the same level as for the previous year, unless they had substantiated conduct issues, the report said.
While acknowledging that the agency has cut the amount of time spent on discretionary union activity, the report questioned why it could not have been decreased further, asserting that “the amount of resources spent on discretionary union activity could have assisted nearly 2.5 million taxpayers.”
The report noted that while the IRS’s implementation of ObamaCare was deemed a success by Koskinen, “the IRS achieved this supposed success by prioritizing … implementation over other activities, including core responsibilities like taxpayer assistance.”
The panel also claimed the agency had failed to pursue recommendations for streamlining and reducing waste and abuse. It concluded that what it called “large areas of systemic waste and inefficiency” present in 2010 remained unaddressed in 2015, and highlighted in particular that the IRS spent $2.1 million on litigation services that the government could have conducted itself.

Obama facing Dem revolt on trade push, Reid says ‘hell no’

President Obama is facing a Democratic revolt over ambitious trade initiatives that are dividing the party, leading to tensions with everyone from Senate party leader Harry Reid to liberal icon Elizabeth Warren.
The disagreements erupted on Wednesday as leaders of the Senate Finance Committee tried to proceed with a vote on trade legislation, but liberal opposition quickly delayed the process.
Sen. Bernie Sanders, I-Vt., a fierce opponent of the trade push, invoked a Senate scheduling rule to sideline the committee's actions for hours. "This job-killing trade deal has been negotiated in secret," said Sanders, who made a lengthy Senate speech denouncing the legislation.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, vowed the committee would finish the bill Wednesday. "I don't care how much time it takes," he said.
The flare-up was just one of many in the Democratic ranks. In a blunt challenge to the president, Reid told reporters earlier this week: "I'm not only no, I'm hell no" on Obama's proposal.

More on this...

• Trade becomes a wedge issue among Democrats

The Senate Finance Committee eventually endorsed Obama's request for "fast track" legislation late Wednesday, which would renew presidential authority to present trade deals that Congress can endorse or reject but not amend. The committee voted 20-6 to pass the fast track bill. The only committee Republican voting no was Sen. Richard Burr of North Carolina.
If the House and Senate eventually comply, the legislation would ease the way for sweeping trade deals. Obama wants "fast-track" powers to help move free-trade proposals such as the 12-nation Trans-Pacific Partnership.
This, in turn, would make it easier to approve deals like the controversial TPP.
But that authority, and those proposals, face resistance from labor unions and liberal groups who say free-trade pacts hurts U.S. jobs.
They lost a round Wednesday. The Finance Committee narrowly defeated a "currency manipulation" measure that Obama aides said would unravel the Pacific Rim deal. Votes for and against the provision were about evenly divided between Republicans and Democrats, highlighting the unusual -- and possibly tenuous -- political alignments on trade.
The push-back now has Obama on defense, as he tries to muster a bipartisan coalition.
"I would not be doing this trade deal if I did not think it was good for the middle class," Obama said in an interview Tuesday with MSNBC. "When you hear folks make a lot of suggestions about how bad this trade deal is, when you dig into the facts, they are wrong."
In the interview, Obama specifically called out deal critic Elizabeth Warren, a Massachusetts Democratic senator and hero of liberal groups.
"I love Elizabeth. We're allies on a whole host of issues. But she's wrong on this," Obama said.
Few issues divide Democrats more than trade. Obama, like former President Bill Clinton, supports free trade, but many Democratic lawmakers do not.
Clinton's and Obama's stands -- and liberal groups' opposition -- pose a dilemma for Hillary Clinton, the former first lady now seeking the presidency herself. Campaigning Tuesday in New Hampshire, she declined to say whether she supports the Pacific-rim proposal.
"We need to build things, too," Clinton said, taking a pro-manufacturing stance generally embraced by both parties. "We have to do our part in making sure we have the capabilities and skills to be competitive," she said, while getting back to "a much more focused effort, in my opinion, to try to produce those capacities here at home."
This week, Senate Majority Whip John Cornyn, R-Texas, called the trade deal "fragile," noting that Democratic support is necessary. Republican sources say Obama needs to impress his desire for this trade pact on his Democratic allies.
Amid the divisions in Democratic ranks, Fox News has learned there is an effort afoot among congressional Democrats to court just enough from their side not to embarrass the president.
But Senate Finance Committee member Chuck Schumer, D-N.Y., says the administration must press China to stop manipulating its currency, even though China isn't a party to the Pacific-rim negotiations. "I'm disappointed in the efforts by President Obama," Schumer said at a committee hearing Tuesday.
If a nation keeps its currency value artificially low, it can boost exports by making local products more affordable to foreigners. Economists disagree on whether China still engages in the practice, and the Obama administration says it addresses currency manipulation in the fast-track bill.
Republicans generally support trade pacts. But Obama can't count on them alone to push the fiercely debated bills through the GOP-controlled House and Senate.
Most or all Finance Committee Republicans support fast track. Democratic supporters include Sens. Ron Wyden of Oregon, Maria Cantwell of Washington, Tom Carper of Delaware and Mark Warner of Virginia.
Committee passage would move the bill to the full Senate. The House has yet to vote on fast track this year.

ACLU sues feds in bid to make Catholic groups provide abortion to illegal immigrants

Providing food and shelter to illegal immigrants isn't enough for federally-funded Catholic organizations, according to the American Civil Liberties Union, which is suing the federal government to help ensure the religious organizations provide abortion and contraception to them as well.
The suit aims to obtain government records related to reproductive healthcare policy for unaccompanied immigrant children in the care of federally funded Catholic agencies, which do not believe in abortion.
“We have heard reports that Catholic bishops are prohibiting Catholic charities from allowing teens in their care to access critical services like contraception and abortion- even if the teenager has been raped on her journey to the United States or in a detention facility,” said ACLU staff attorney Brigitte Amiri.

“Let’s be clear about the ACLU’s purpose here: ending the productive and successful partnership between the Catholic Church and the federal government on the care and shelter of vulnerable populations."- Kevin Appleby, United States Conference of Catholic Bishops

Almost 60,000 unaccompanied minors illegally crossed over from Mexico border last year. Nearly a third were young girls, and Amiri claims up to 80 percent were victims of sexual assault.
The government contracts with the United States Conference of Catholic Bishops (USCCB) to care for those children until they can either reunite with a relative or face an immigration hearing. The organization has received $73 million overall from the government- with $10 million coming in to care for unaccompanied minors in 2013 alone.
A letter from the USCCB shows the organization strongly objecting to a regulation proposed by the Obama administration requiring contractors provide abortions to immigrants who have been raped.
“The Catholic Bishops are taking millions of dollars in federal grants- and then imposing their beliefs on this vulnerable population who they are supposed to serve… and that raises serious concerns under the separation of church and state provision in our Constitution,” said Amiri.
But the bishops are hitting back at the ACLU- maintaining they are well within their rights to exercise religious freedom while taking care of the minors.
“For decades, we have provided exemplary services to this vulnerable population without facilitating abortions, and despite ACLU’s extreme assertions to the contrary, the law not only permits our doing so, but protects it,” said Kevin Appleby, Director of the USCCB's Office of Migration Policy and Public Affairs.
Appleby says instances in which a client under his organization’s care asks for a service contrary to the beliefs of the Church are rare. He insists the USCCB informs the government of a girl’s desire to access reproductive healthcare if the government has legal custody of that child.
“Let’s be clear about the ACLU’s purpose here: ending the productive and successful partnership between the Catholic Church and the federal government on the care and shelter of vulnerable populations. Denying us the freedom to serve betrays the very children the ACLU is purportedly attempting to help,” he told Fox News.
The ACLU is only suing for federal documents on the USCCB’s policies at the moment, but will consider further legal actions depending on what those documents indicate. The government has not yet officially responded to the ACLU’s request.

China reportedly issues new warning over North Korean nuclear production

Chinese nuclear experts reportedly warned the U.S. earlier this year that North Korea's nuclear arsenal is larger than previously estimated, creating a heightened security threat to the U.S. and its East Asian allies.
The Wall Street Journal reported late Wednesday that by Beijing's estimate, North Korea may already have manufactured 20 nuclear warheads and is capable of producing enough weapons-grade uranium to double that amount by next year. U.S. experts have previously estimated that North Korea has between 10 and 16 nuclear weapons.
The Chinese estimates were presented to U.S. nuclear specialists at a closed-door meeting at the China Institute of International Studies in Beijing this past February. The Journal reported that Chinese military representatives and experts on the North's nuclear program were at the meeting.
Siegfried Hecker, a Stanford University professor and former head of the Los Alamos National Laboratory who attended the February meeting, told the Journal that estimates about North Korea's nuclear program involved a sizable amount of guesswork. He estimated that North Korea currently could have no more than 12 weapons, and as many as 20 in 2016.
"I’m concerned that by 20, they actually have a nuclear arsenal," Hecker said. "The more they believe they have a fully functional nuclear arsenal and deterrent, the more difficult it’s going to be to walk them back from that."
Washington has not had high-level talks with Pyongyang since 2012, when North Korea conducted a banned nuclear missile test. In the intervening time, the U.S. has relied on China to use its economic leverage to put pressure on the impoverished nation's missile program while the Obama administration works toward a nuclear deal with Iran.
However, the Journal reports that relations between China and North Korea have deteriorated since the death of dictator Kim Jong Il in 2011 and the ascension of Xi Jinping to China's leadership the following year.
The Journal report comes a day after the U.S. envoy to the long-stalled six-nation talks said that North Korea should learn from the emerging nuclear deal with Iran that Washington is willing to engage its adversaries if it has a "credible" negotiating partner.
"The entire international community is looking for this type of policy shift in Pyongyang, and that policy shift would be positively responded to," Sydney Seiler told a Washington think tank Tuesday.
But Seiler said there was no sign in two years that Pyongyang is willing to denuclearize, adding that the country would need to halt its nuclear program and missile launches while any talks are underway.

Another Clinton Cartoon

Maine governor opens up ambitious new front in crackdown on welfare abuse

A Republican governor who led one of the boldest welfare reforms at the state level in years is pursuing a new crackdown aimed at curbing abuse of benefits while requiring job searches.
Maine Gov. Paul LePage's tough proposals, unveiled earlier this month, would prohibit using welfare benefits to buy alcohol, tobacco, lottery tickets and tattoos. LePage also wants to require applicants to apply for three jobs before being eligible, and ban the use of EBT (electronic benefit transfer) cards to withdraw cash outside of Maine.
Kansas Republican Gov. Sam Brownback last week signed similar legislation, banning benefits for everything from booze to concerts to lingerie.
In Maine, state Department of Health and Human Services Commissioner Mary Mayhew told FoxNews.com: "The emphasis is the moment someone applies for benefits, to get them urgently and immediately into the process of getting a job."
Welfare reform has been a central plank of the firebrand governor's platform since taking office in 2011. He said at a 2012 state Republican convention: "To all those able-bodied people out there, get off the couch and get yourself a job!" His first budget, passed in 2011, brought Maine in line with the 1996 federal requirement of a 60-month limit on benefits.
The move was part of a much larger restructuring of the welfare system that the LePage administration says emphasized the "temporary" in the "Temporary Assistance for Needy Families" (TANF) program -- a.k.a., "welfare."
In July, Maine started printing photos on EBT cards as part of a move to combat fraud, prompting the Obama administration to threaten to cut Maine's food stamp funding, claiming the policy could have a "chilling effect."
In October, Maine allowed the Obama administration's SNAP work requirement waiver to expire, meaning ABAWDs (able-bodied adults without dependents) have to work 20 hours a week, volunteer, or be part of a work-training program to receive benefits after three months.
The LePage administration claims the reforms contributed to LePage's re-election in November, which also saw Republicans take the state Senate.
In 2015, LePage has shown no signs of slowing down.
In January, as part of a bipartisan agreement, Maine implemented drug-testing among welfare recipients who have been convicted of drug-related felonies.
LePage wants to expand drug-testing to all recipients, which would make Maine -- which hasn't voted Republican in a presidential election since 1988 -- a seemingly unlikely addition to the 12 mostly red states that have passed broader drug-testing legislation for welfare recipients. They include: Alabama, Arizona, Florida, Georgia, Kansas, Michigan, Mississippi, Missouri, North Carolina, Oklahoma, Tennessee and Utah, according to the National Conference of State Legislatures.
A LePage administration spokesperson told FoxNews.com that since implementing the 60-month-cap in 2011, enrollment has dropped to 6,191 cases in March 2015, from 14,804 in 2011.
LePage noted that his new proposals are similar to those rejected last year by Democrats, but thinks this time will be different.
"Our liberal friends said 'no.' They made all sorts of excuses. Well, as you saw in November, the Maine people didn't buy it. They're demanding reform, they expect reform and we're going to give them reform," LePage said recently, according to the Portland Press Herald.
Democratic House Majority Leader Jeff McCabe rejected LePage's narrative, saying Democrats have always sought to work with LePage on welfare reform, often leading the way.
"I think the reality is that he grabs headlines when we're doing the hard work and the bipartisanship of passing good policy," McCabe told FoxNews.com.
Advocates for welfare recipients also question whether the cutbacks are hurting people who genuinely need the help.
"Are we keeping people off who really need assistance? We want to make sure we are finding a way that we are not just keeping people who actually need this assistance off the rolls just to keep the numbers down -- we don't want to penalize them," Democratic strategist Taryn Rosenkranz told FoxNews.com's "Strategy Room."  Rosenkranz, founder and CEO of New Blue Interactive, also voiced concern this debate is becoming "about partisanship, instead of trying to find that ... right balance."
McCabe has reintroduced his own proposal from 2014 that would ban the use of benefits for alcohol, tobacco and other purchases, but would reduce some penalties.
"For many people who use certain programs, the way to address infractions is to include an educational component or to explain the benefits and their appropriate use," McCabe said. "Going out and penalizing people in rough situations, people who are trying to escape poverty, because we're trying to get a political headline isn't appropriate."
McCabe also said Democrats and Republicans have been working to create a tiered system that would soften the "welfare cliff" for those returning to work.
Mayhew said the administration welcomes bipartisan interest, and agreed that the tiered system was a source of agreement, but expressed cynicism as to why the Democrats were on board.
"The only reason they are talking about these reforms in a favorable way is because of what happened in November," Mayhew said. "What I have seen from Democrats is a desire to create excuses and exemptions in this legislation that helps people back to work."

Officials giving mixed messages on why US aircraft carrier shadowing Iranian convoy

An American aircraft carrier and its warplanes are shadowing an Iranian convoy approaching Yemen, as the U.S. beefs up its presence in the region -- but back in Washington, officials can't seem to agree on why. 
Pentagon sources confirmed to Fox News that the USS Theodore Roosevelt is tracking the Iranian convoy, and also launching F/A-18 Hornets to conduct "manned reconnaissance" of the estimated nine Iranian ships.
Those ships are suspected of carrying weapons to rebel fighters in Yemen.
But State Department spokeswoman Marie Harf insisted Tuesday that the U.S. ships were "only" there to "ensure the shipping lanes remain open and safe" -- and "not to do anything in terms of those Iranian ships."
She blasted "misreporting" that asserted U.S. ships were prepared to intercept Iranian vessels.

More on this...

• Secret Iranian unit fueling Mideast bloodshed with illicit arms shipments

"That is blatantly untrue -- so this discreet movement of U.S. assets is for a discreet purpose," Harf said.  
White House Press Secretary Josh Earnest also said Tuesday that the ships are in the region primarily to "protect the freedom of navigation and the free flow of commerce."
However, Earnest acknowledged the U.S. is very interested in tracking the movements of any potential arms deliveries to Houthi rebels.
He said "any effort by Iran or anyone else to provide weapons to the Houthis would be a clear violation" of U.N. Security Council resolutions. Earnest said the U.S. and its partners are "serious about the Iranians not providing weapons to the Houthis," and making sure the U.N. arms embargo is taken seriously.
The Pentagon also acknowledged the convoy is a factor.
Army Col. Steve Warren, a Pentagon spokesman, said the aircraft carrier is there to assure the waterways are open. But, he added, "they have moved to that area in response to the deteriorating security situation in Yemen. Many have asked me whether or not they are there because of the Iranian ship convoy or flotilla that is also in the area. That is certainly one of the factors."
The mixed messages, though, leave unclear how far the U.S. would go to enforce the embargo. The U.S. Navy generally conducts consensual boardings of ships when needed, including to combat piracy around Africa and the region. So far, however, U.S. naval personnel have not boarded any Iranian vessels since the Yemen conflict began.
A senior defense official at the Pentagon on Tuesday pushed back on reports that the White House has made a decision about boarding the suspected ships.
"The White House is not even close to making a decision," the official with close ties to the administration said.
But the movements nevertheless escalate a standoff in the waters off Yemen, which comes as the U.S. and other world powers are trying to hammer out a diplomatic deal with Iran on its nuclear program.
Navy officials first confirmed Monday that the USS Theodore Roosevelt -- along with her escort ship, the USS Normandy, a guided-missile cruiser -- had been dispatched to the Arabian Sea to help enforce a blockade of any Iranian weapons shipments to Houthi rebels in Yemen.
The Iranian convoy consists of a mix of freighters, suspected of carrying those weapons, and warships.
The convoy is about to cross over from waters off the coast of Oman to those off the coast of Yemen, in the Arabian Sea. The Iranian convoy is steaming toward an unknown port in Yemen.
The Iranian Navy ships are characterized as "smaller than destroyers," according to a Pentagon official with knowledge of the convoy. Asked what type of weapons the freighters are carrying, one Pentagon official said, "they are bigger than small arms."
The U.S. Navy has been steadily beefing up its presence in the Gulf of Aden and the southern Arabian Sea amid concerns about the Iranian convoy. There are now nine Navy warships, and three support ships, in the region.
The deployment comes after a U.N. Security Council resolution approved last week imposed an arms embargo on rebel leaders. The resolution passed in a 14-0 vote with Russia abstaining.
With the U.S. Navy's only aircraft carrier now out of the northern Persian Gulf, the Navy's contribution to the air campaign against the Islamic State also has been temporarily halted.
The U.S. Air Force has conducted 70 percent of the airstrikes against ISIS in Iraq and Syria to date. A spokesman from the U.S.-led coalition said from its headquarters in Kuwait that, "We have plenty of resources [to strike ISIS], and we are not concerned about a loss of effectiveness." But he admitted, "More is certainly better."