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inflated picture of the administration's paperwork reduction accomplishments. The way they do this is they count as reductions in paperwork when the computer drops off its list those forms which have expired for their approval by OMB even though the agency continues to use the form. This would be like a company saying to the IRS I'm only going to report to you those sales that we keep in our computer for 6 months and nothing before that. If they did, I think you would send them to jail, Commissioner. And, OMB unfortunately, is taking that same cavalier attitude toward reporting their responsibilities

for reducing paperwork. They did identify 872 violations of law last year and 710 violations of law this year where agencies levied unauthorized paperwork burdens on the American people. GAO stated that there is a troubling disregard, in their words, by the agencies for the requirements of the Paperwork Reduction Act. GÃO further stated, "As disconcerting as those violations are, even more troubling is that OMB reflects the hours associated with unauthorized information collections ongoing at the end of the fiscal year as burden reductions.”

We all know the direct costs of the Tax Code, the $2 trillion Americans pay Uncle Sam. But there is also a hidden cost that adds an extra 8 percent, according to the Government's estimate, on how long it takes to fill out IRS forms, or $160 billion, to that burden. Each year Americans are estimated to spend a total of 6.1 billion hours complying with the 691 tax forms. This doesn't count the outside accountants they hire, the cost of computers, and other mechanisms by which taxpayers keep track of their obligations and the huge amounts that taxpayers pay to those entities and accountants to help them complete the IRS forms. This cost is an enormous burden for Americans.

Please note the large stacks of paperwork requirements on display in front of the hearing room. The first stack includes IRS paperwork forms imposed on small businesses. The second stack includes other IRS paperwork forms imposed on Americans. It also includes the regulations and the laws relating to those stacks.

Soon after last year's hearing I met with IRS Commissioner Rossotti, who suggests dramatically decreased IRS paperwork burden was one of his primary objectives. One idea I suggested is to have the IRS send taxpayers a simple booklet similar to what accountants send to their clients to complete so the IRS can complete the complicated forms for each taxpayer. Another idea I suggested is to have the IRS send taxpayers partially completed tax forms, including all information previously forwarded to the IRS by third parties, such as interest earned, dividends received, mortgage interest paid, real estate paid, charitable contributions over $250, etc., so that taxpayers would only have to complete the remaining fraction of information on the forms.

I also recommended that the IRS sample the forms filed by actual small businesses to identify opportunities to reduce duplication and to simplify reporting. I look forward to hearing how the IRS has analyzed each of these possibilities and if they're being pursued or what other ideas they're pursuing to reduce the paperwork burden.

Now, let me turn to the entire government's paperwork, which OMB has dramatically mismanaged. The Paperwork Reduction Act principally intended to, “minimize the paperwork burden for individuals, small businesses, educational and nonprofit institutions, Federal contractors, state and local and tribal governments and persons resulting from the collection of information by or for the Federal Government.” The act sets governmentwide paperwork reductions goals of 10 or 5 percent per year from 1996 to 2000.

Now, the first chart on display reveals that the Clinton-Gore administration has increased, not decreased, that's increased, paperwork in each of these years. What should be going down is indeed going up, and in fact further, higher this year.

After last year's hearing we requested that, starting in July, OMB keep basic information about its role in governmentwide paperwork reduction. The law requires OMB to keep the Congress fully informed. Incredibly OMB has repeatedly refused to comply with this oversight request, even claiming that doing so "would impair our ability to serve the public."

Because OMB refused to keep track of its own paperwork reduction actions, in December 1999, we surveyed 28 departments and agencies to identify any substantive changes in agency paperwork submissions made by OMB pursuant to the law and any paperwork reduction candidates added by OMB in the time period of July 1, 1999 to December 31, 1999. As chart 2 displays, over this 6-month period, OMB independently identified no paperwork reduction candidate from the over 7,000 existing paperwork requirements in OMB's inventory. None. And only reduced by about 2000 hours from the agency generated paperwork. This trivial amount hardly makes a dent in the 7.3 billion hours of paperwork that OMB keeps track of.

I believe the American people deserve better results from their Vice President, who chairs the effort, and better results from OMB, the agency.

The subcommittee's investigations reveal a disturbing pattern of contempt for congressional oversight that goes beyond OMB's disregard for its own paperwork reduction responsibilities. From March 1998 to March 2000, the Subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs sent 14 oversight letters to OMB on paperwork reduction, 6 oversight letters on governmentwide guidance to the agencies, 14 oversight letters and a subpoena to OMB to understand the President's request for a $6.3 billion increase in funding for their climate change proposals.

Here's what we found. First, they refused to provide basic accountability information so the subcommittee can determine their role in paperwork reduction. Second, OMB has refused to issue complete Congressional Review Act (CRA) guidance even after Congress in the 1998 appropriations act provided OMB an additional $200,000 to do so at my request, the Appropriations Committee provided that, and even after Congress in the 1999 appropriations act directed OMB to issue additional CRA guidance to ensure that agencies would fully comply with the law. I am not sure what we can do there but maybe we ought to ask some of the folks at OMB

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if they want to reimburse the taxpayers that $200,000 out of their own paychecks.

Third, OMB does not make a complete search in response to our June 26, 1998 subpoena for information on proposed funding of global climate change programs and activities.

As a consequence of this pattern, I have asked an expert in the Congressional Research Service to present options available to Congress when faced with agency non-responsiveness to congressional oversight, including subpoena requests for documents and letter requests for specific information.

So today in our hearing we will pursue both the IRS plans and the general scope of government efforts to reduce paperwork.

I want to welcome back the IRS Commissioner, who testified at last year's hearing. The Clinton administration will also be represented by John Spotila, who is OMB's OIRA Director. I asked Mr. Spotila to discuss substantive changes in paperwork made by the OMB staff.

I also want to welcome Nancy Kingsbury, who is the Acting Assistant Comptroller General for the General Government Division at GAO, and Morton Rosenberg, specialist in American Law at CRS.

Finally, I also want to welcome two folks from my home State in Indiana, Cindy Noe, who is owner of the IHM Facility Services in Fishers, IN, and Nick Runnebohm, who is owner of Runnebohm Construction Co. in Shelbyville, IN. They will discuss paperwork issues of concern to real Americans outside of Washington who are operating small businesses in Indiana.

Welcome to everyone here.
[The prepared statement of Hon. David M. McIntosh follows:]

Statement of Chairman David McIntosh Subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs

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“Reinventing Paperwork?:
The Clinton-Gore Administration's Record on Paperwork Reduction”

April 12, 2000

Today, the Subcommittee is conducting a followup to its April 15, 1999 hearing on the Clinton-Gore Administration's abysmal record on paperwork reduction. Once again, the record shows a minimal number of actual paperwork reduction accomplishments and a minimal number of specific paperwork reduction initiatives in the Administration's last two years. Last year's hearing revealed basically no involvement by the Vice President in paperwork reduction, even though he heads the Administration's Reinventing Government effort. That hearing also revealed the Office of Management and Budget's (OMB) mismanagement of the paperwork burden imposed on Americans. Today, we will examine if the Vice President's and OMB's track records have improved.

The Paperwork Reduction Act (PRA) requires OMB to be the Federal government's watchdog for paperwork, making OMB responsible for guarding the public's interest in minimizing costly, time-consuming, and intrusive paperwork burden. Yet OMB failed to push the Internal Revenue Service (IRS) - and other Federal agencies - to cut existing paperwork burdens on taxpayers. In fact, last year, IRS, which accounts for nearly 80 percent of the goverment-wide paperwork burden on Americans, identified no specific expected paperwork reductions in year 2000. None!

Worse, the General Accounting Office (GAO) confirmed in last year's hearing that OMB lied to the American people, providing a falsely-inflated picture of the Clinton-Gore Administration's paperwork reduction accomplishments. OMB identified 872 violations of law last year and 710 violations of law this year where agencies levied unauthorized paperwork burdens on the American people. GAO stated that there is a "troubling disregard" by the agencies for the requirements of the Paperwork Reduction Act. GAO stated, "[a]s disconcerting as these violations are, even more troubling is that (OMB) reflects the hours associated with unauthorized information collections ongoing at the end of the fiscal year as burden reductions."

We all know the direct costs of the tax code -- the $2.0 trillion Americans pay Uncle Sam. But there is a "hidden" cost that adds an extra 8 percent or $161 billion to that burden. Each year Americans spend an estimated 6.1 billion hours complying with the 691 tax forms plus a huge amount taxpayers pay to accountants to help them complete IRS' complicated tax forms. This is unconscionable. Please note the large stacks of paperwork requirements on display. The first stack includes IRS paperwork forms imposed on small businesses; the second stack includes all other IRS paperwork forms imposed on Americans.

Soon after last year's hearing, I met with IRS Commissioner Rossotti to suggest ways to dramatically decrease IRS' paperwork burden. One idea I suggested is to have the IRS send taxpayers a simple booklet, similar to what accountants send to their clients to complete, so that the IRS can complete the complicated tax forms for each taxpayer. Another idea I suggested is to have the IRS send taxpayers partially completed tax forms, including all information previously forwarded to the IRS by third parties, including interest earned, dividends received, mortgage interest paid, real estate taxes paid, charitable contributions over $250, etc., so that taxpayers would only have to complete the remaining fraction of information on the tax forms. I also recommended that IRS sample the forms filed by actual small businesses to identify opportunities to reduce duplication and to simplify reporting. I look forward to hearing how IRS analyzed each of these possibilities and if they are being pursued.

Now, let me turn to the entire government's paperwork, which OMB has mis-managed. The Paperwork Reduction Act was principally intended to “minimize the paperwork burden for individuals, small businesses, educational and nonprofit institutions, Federal contractors, State, local and tribal governments, and persons resulting from the collection of information by or for the Federal Government” (44 U.S.C. 83501). The Act set government-wide paperwork reduction goals of 10 or 5 percent per year from 1996 to 2000. As Chart #1 on display reveals, the ClintonGore Administration has increased, not decreased, paperwork in each of these years. What should be going down is going up and up.

After last year's hearing, we requested that, starting July 1, 1999, OMB keep basic information about its role in government-wide paperwork reduction. The law requires OMB to keep the Congress “fully” informed (44 U.S.C. 93514). Incredibly, OMB has repeatedly refused to comply with this oversight request and even claimed that doing so "would impair our ability to serve the public.” Because OMB refused to keep track of its own paperwork reduction actions, in December 1999, we surveyed 28 departments and agencies to identify any substantive changes in agency paperwork submissions made by OMB and any paperwork reduction candidates added by OMB from July 1, 1999 to December 31, 1999. As Chart #2 on display reveals, over this 6 month period, OMB independently identified no paperwork reduction candidates from the over 7,000 existing paperwork requirements in OMB's inventory and only reduced 1,915 hours from agency-generated paperwork. This trivial amount hardly makes a dent in the 7.3 billion hours of paperwork in OMB's inventory.

The 1,915 hours of reductions made by OMB is 3/100,000ths of 1% of the 7.3 billion total government-wide paperwork burden hours on the public and only 5/10,000ths of 1% of the 1999 statutory paperwork reduction goal of 348 million hours. OMB: (1) cut 938 hours from Agriculture's “emergency” survey to identify 100-year old family farms for the First Lady's Millennium Celebration and to award each such farm a commemorative certificate; (2) disapproved 42 hours for HHS' proposal to assess ethnicity/race and services to bi/multilingual populations in community health centers because it failed to serve an agency purpose and lacked practical utility; and, (3) cut 935 hours from the Corporation for National Service's $1,450,000 longitudinal study “to measure the outcomes and impacts of national service on individuals who serve in AmeriCorps programs.” These proposals make me wonder what paperwork OMB

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