Spending bill stalls over IRS provision

WASHINGTON -- A $388 billion government-wide spending bill, passed by Congress on Saturday, was stranded on Capitol Hill, its trip to the White House on hold yesterday as embarrassed Republicans prepared to repeal a provision that could give the Appropriations committees the right to examine the tax returns of Americans.

Top GOP legislators disavowed the provision, expressed surprise that it was in the bill, and blamed both the Internal Revenue Service and congressional staffs for incorporating it into the omnibus spending package funding domestic departments in 2005.

But Democrats, and some Republicans, said the incident highlighted the deterioration of a budget-writing system that is prey to such incidents. Unable to agree on how much to spend on basic governmental services, they say, House and Senate GOP leaders increasingly resort to a secretive process that leaves the public and most members of Congress ignorant of the content of huge spending bills until hours before a final vote.

At a news conference denouncing this closed-door process, Senator Kent Conrad of North Dakota, ranking Democrat on the Budget Committee, warned that ''something really seriously bad is going to happen if we let this continue." He quoted a Republican, Senator John S. McCain of Arizona, as saying, ''This process is broken."

Republicans hope to quell the uproar over the provision tomorrow, when the House is set to approve a resolution repealing it. The Senate took that action Saturday, after Senate leaders promised the omnibus spending bill on which the provision was riding would not be sent to the president for his signature until both houses had repealed it.

The provision, added to the spending package of more than 3,000 pages last Thursday, would give staff members of the House and Senate Appropriations committees similar powers to enter IRS facilities and examine tax returns as the tax-writing committees of the two chambers now have.

But the provision appeared to some legislators to expressly set aside privacy safeguards, which mandate criminal penalties for those divulging individual tax information. Members of both parties said this could breach the confidentiality of returns.

House officials said the language was intended only to allow staff members to enter IRS facilities where returns were being processed, to oversee how taxpayer money was being used. Such full access is now denied by the IRS, they said, because of the chance that a congressional aide might inadvertently see a return.

The provision, House sources said, was drafted by the IRS and inserted into the bill by lower-level House staff members. Senior House and Senate Republicans said they did not see it until the bill appeared on the floor. IRS spokesman Terry Lemons said yesterday that the IRS commissioner ''was unaware of the provision until after it was already approved. He strongly supports it being deleted from the final bill."

Saturday, Senate majority leader Bill Frist, Republican of Tennessee, referred to the provision as the ''Istook amendment" and congressional aides said it had been inserted at the request of Representative Ernest J. Istook Jr., Republican of Oklahoma, who chairs the appropriations subcommittee that oversees the IRS.

But Istook said in a written statement yesterday that he had been in the dark about the provision: ''I had nothing to do with it."