Mr. Speaker, I ask unanimous consent to give Members 5 legislative days to revise and extend their remarks on this bill, H.R. 3056. Mr. Speaker, I yield myself such time as I may consume. We are in a time where there is a complete…
Mr. Speaker, I ask unanimous consent to give Members 5 legislative days to revise and extend their remarks on this bill, H.R. 3056.
Mr. Speaker, I yield myself such time as I may consume.
We are in a time where there is a complete fascination in this administration with contracting out. If you are happy with Blackwater in Iraq, then I expect you are perfectly fine with contracting the debt collection of IRS debt to private bill collectors. But there are some essential facts at issue which should give us pause to reconsider.
First, the start-up costs. We were told, in testimony by the IRS Commissioner, this venture was going to cost about $14 million to get up and running. The tab so far, $70 million, five times the anticipated cost to begin this venture.
Now, you might say, well, okay, start-up costs are a little more than expected, but how are we doing on receipts now that we have got them fully going, collecting these receipts? We don't have a very good story on that one either.
It was anticipated that $46 million to maybe $63 million would be collected. Coming in at about half of that anticipation, $32 million in. It costs five times more to start and bringing in about half as much as advertised.
Well, okay, $32 million. It still sounds like a lot. Well, not really when you consider the fact they have been given 118,000 cases with an unpaid debt of $512 million. For the kind of money we have invested, do you know what we are getting back? We are getting about a 6 percent return from this experiment in private debt collection.
You might be asking yourself, look, there must be some more efficient way to do this. Well, there sure is. Let's fund the IRS, hire, train, manage the debt collection. My gosh, if there is one government responsibility, it ought to be in making certain that the revenue owed is the revenue raised.
And the statistics show by the IRS themselves that for $1 spent on IRS staff collecting debt, you get a 20 to 1 return, $20 back for every $1 spent. Private debt collection, the IRS again projecting, at best, $4 back for every $1 spent. That's $20 if we hire to $1 spent, $4 if we hire to every $1 spent under contracting. And that's their projection.
Look, at $32 million collected and $70 million spent, we are collecting 50 cents for every dollar spent so far. That's pretty bad business. If we had spent the $71 million to hire a Federal collection staff, we would have already collected $1.4 billion. That is the total amount they project over 10 years under this experiment of private debt collection.
I sit on the Ways and Means Committee. And as we considered this notion before it became operative, I thought this is the most expensive way to do this. It reminded me of that $600 toilet seat that the Department of Defense paid for awhile back. I call this a $600 toilet seat of tax collection. Well, when you look at it, they have taken $70 million to build this gold-plated throne and they flushed away $50 million on this foolish experiment.
There are many reasons to end this ill-advised endeavor, and the speakers we present are going to offer those reasons. But the fundamental is it's a matter of dollars and sense, and this don't make sense.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, the unrefuted data is that IRS collection with IRS staff is five times more efficient in terms of dollars received than contracting out. If we are worrying about IRS efficiency, do it on the staff model.
And I might say that their cost estimate about this bill contemplates that the IRS would hire no staff, would just forget hiring out contractors, hire no staff, and just walk away from them.
No. We have got a very different notion. We want to take the money we are sending to these private bill collectors and hire IRS staff that are going to collect on this five-to-one ratio. We have got a much better, more efficient model to address this issue of unpaid balances owed to the United States.
Mr. Speaker, I yield 2 minutes to the gentleman from Georgia (Mr. Lewis).
Mr. Speaker, I yield 2 minutes to the gentleman from Oregon (Mr. Blumenauer).
We had hearing testimony on the survey that was referenced by my friend from Florida. Basically, the GAO testified that the survey was fundamentally flawed. Of 300,000 conversations that have taken place, 1,000 were the subject of the survey for getting taxpayer satisfaction, and the private debt collectors were able to pick which ones got the survey. So a 1,000 survey sample out of a 300,000 universe, with those stakeholders picking the ones that get to say it, was not deemed as credible by the GAO and not deemed as credible by the majority on Ways and Means.
With that, I yield 2\1/2\ minutes to the gentleman from New Jersey (Mr. Pascrell).
Mr. Speaker, the gentleman has spoken passionately about the jobs in his district, and I look forward to working with him on economic revitalization issues so vitally important to rural areas like the ones he and I both represent. But this is really not a jobs program before us. What is the best way for taxpayers to have collected what they owed? We want to collect what we are owed. We believe for every IRS employee, we are going to collect $20. For every private debt collector, the optimistic projection is you are going to collect $4. The reality has been much less than that. So when we are talking about the issue before us, what is the best way to get the money we are owed? The best way to do it is hire the personnel, train the personnel, run an IRS capable of getting its job done.
I yield 2 minutes to my friend from Nevada, Congresswoman Berkley.
Mr. Speaker, it is my pleasure to yield 4 minutes to the bill's prime sponsor, the gentleman from Maryland (Mr. Van Hollen).
Mr. Speaker, as part of the IRS appropriation, we fund the National Taxpayer Advocate. In her 2006 annual report, she writes, ``We are concerned that private collectors are using trickery, device and belated Fair Debt Collection Practices Act warnings to take advantage of taxpayers. We are concerned private collectors are taking advantage of taxpayers.'' That is from the National Taxpayer Advocate.
With that, I yield 2 minutes to the gentleman from New York (Mr. Serrano), who has advanced the prohibition of this ill-advised endeavor in the Appropriations Committee.
(Mr. SERRANO asked and was given permission to revise and extend his remarks.)
Mr. Speaker, I would just again read from the National Taxpayer Advocate report: ``We are concerned private collectors are taking advantage of taxpayers.'' I will submit this for the Record.
With that, I will yield 1 minute to the gentleman from Pennsylvania (Mr. Sestak).
Mr. Speaker, the cost cited assumes that not a nickel is spent on IRS capacity. Indeed, if we spend it on IRS capacity, the unrefuted evidence is that it would be a 5-to-1 return relative to private collectors.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, we believe private debt collection of IRS debt is a terrible idea and an important matter, which is why the majority leader will close for our side. I yield the balance of our time to the majority leader, Mr. Hoyer, from Maryland.
Mr. Speaker, I yield back the balance of my time.
Mr. Speaker, I rise to claim the time in opposition to the motion.
Mr. Speaker, my friend is an articulate and forceful advocate. And we are all moved by the story of his time with the accountant, but they did not owe a tax. And basically, there is a figure missing from the motion to recommit he brings before us today, a very important figure: the cost of what the underlying motion to recommit would require. That figure is $498.8 billion. Now, we are a Nation of $9 trillion of debt, $9 trillion of debt, and they bring forward a proposal that would add another $498.8 billion, and they fail to say anything about how they are going to pay for it in their motion.
Well, obviously serious-minded legislators like my friend would not bring forward a serious proposal about repeal of the estate tax without some means of paying for it, and that is really what the heart of this motion is. It is not a real estate tax motion. This is a kill-the- underlying-bill motion.
The other side has some different priorities. Last week they were against SCHIP, expanding health insurance to uninsured kids. This week they are basically for privatizing debt collection of IRS debt. You like what Blackwater is doing in Iraq; you're going to love sending IRS debt to private bill collectors here.
Because they aren't going to prevail on the debate itself, they want to keep the vote from happening at all, which is what the underlying motion to recommit does, sends it promptly back to the Ways and Means Committee, which means the underlying bill is not before the House for a vote.
Mr. Speaker, to further use the time in our opposition to the motion to recommit, it is my honor to yield to the chairman of the Ways and Means Committee, Mr. Rangel from New York.
Mr. Speaker, I yield back my time.