>> mr. chairman the actions that the president announced just a few months ago regarding easing of some of our sanctions against cuba we think will help u.s. businesses, but mostly we think it will help advance the kind of positive change in cuba which could be positive in terms of making a difference where the old policies were not. we have tried to make it easier for the kinds of transactions that have been frustrating for american agriculture to go forward, consistent with the legal restrictions remain in place. ..

on the theme that chairman boos man started with about, community banks can make significant difference. describe how the community development financial institutions fund is used to help rebuild distressed neighborhoods and small businesses and the bond guarranty program ramp up two billion how they might play a constructive role providing access to capital first. second, senator boozman. about the burden, the regulatory burden on smaller banks. i heard from a number of folks from the financial community who believe once banks obtain more

than 50 billion in assets they suddenly become subject to regulatory oversight of the megabanks. while i'm a strong supporter of steps taken in dodd-frank to prevent future crises i'm wondering if that is quite accurate or is there a step series where you steadily ratchet up regulation into froing size? would welcome your insight into that point as well. >> thank you, senator. cdfi i think is enormously effective program both because of what it does directly and the institution building role it plays in the communities it serves. just looking at raw numbers in 2014 we made $146 million in awards and it produced 50,000 new jobs 10,000 businesses financed and in the communities where they're present, there is a financial institution that local businesses can go to. so in places where community

banks weren't able to a food hold it created benefits to what community banks offer. the cdf i-bond guaranty program, you know, addresses one of the fundamental challenges in revitalizing communities. in many low and uider-- low income and underserved communities axe test to fixed-rate long term finance something hard to find or impossible to find and the guarranty program to date guaranteed $525 billion in bonds through the program to help cdfis provide financing needs for the communities. it is leverage an and successful program and why we proposed reauthorization again. senator, with regard to the threshold question you asked about, i think you're totally correct, it is not a hard-line where everything happens to an

institution if they pass the $50 billion threshold. there are many requirements from which institutions remain exempt. there are other cases in which there are standards modified to reflect the lower level of risk. and, i think with that said and, as i said to the chairman we remain very much focused on what can we do to make the burden even less without creating risks to the kind of general, architecture of financial security. it is an area i know all the regulators are focused on and we're focused on at treasury. >> good. i share that concern that we find better ways for more access to capital better lending at community banking level without increasing risk to the financial system as a whole without making basic changes to what i think are important safety and soundness protections. let me briefly ask you about sanctions. i made reference in the my opening statement in a hearing in the last congress, senator mikulski vice-chair mikulski

was central in advocating a significant increase to make sure we've got resources in the office of terrorism financial intelligence. i was struck given the ongoing issues with russia and ukraine syria in particular with iran, that the budget propose as reduction. why does it propose to cut funds for this office, knowing there are significant threats? do you believe it is overresourced? and given the real potential we may return to enforcing sanctions against iran do we have resources this office needs? >> senator, i think the work that our office of terrorism financing does is enormously important and the sanctions programs that we administer have added to this president and all future presidents arsenal tools that are extraordinarily effective and powerful. and i must say, when i think how much time i spent working in this area, it is a bit of a

surprise to me how much of my time goes into this because of the world we live in today. as far as resources go we requested the resource level as a floor not as a ceiling, and we proposed putting it in the departmental offices so we would have a little more flexibility. there were one-time expenditures last year that may or may not occur. as far as the iran sanctions go we have not lessened our level of activity on iran sanctions so we're fully funded on iran sanctions and the russia sanctions were a new start this year. i don't think we missed a beat in any of the other sanction programs we administer. we came up to speed very quickly when there was need for russia sanctions. very proud of our team having mastered intricacies of both russia financial institutions, interconnection to the global financial system and how we use targeted and really surgical sank to put maximum pressure on

target of sanctions with minimal spillover to europe and the rest of the world. so i think we have we have funded it at the right level but it's a floor not a ceiling and you know, we appreciate the support that this committee has given for this very important function. >> i think just speaking for myself, this is an area i intend to follow closely. i want to be continually reassured you have more than adequate resources for the fight. two quick questions in closing if i might. your i.t. investments which are significant relative to the total increase requested and data act implementation i share the chairman's concerns about cybersecurity. these strike me as ways you can modernize and strength i i.t. systems and transparency of your budget. last i have a question about mlps. briefly about the i.t. >> data act is extremely important. we worked with congress on the development of that legislation. we're eager to implement it well. i don't think we can implement

it without resources. we can't implement it as well as we should without resources to do it properly. i think it helps to safeguard our systems to invest in cybersecurity by having better systems to begin with. and as you know, many of our systems are quite old. >> i was struck that the budget proposes eliminating master limited partnerships as a structure. as you know i've long been an advocate on bipartisan basis instead opening them to renewable energy. i think it is a technology neutral, political feasible way to provide long-term financing support for renewable energy. i wonder if you have a comment? >> senator it is an area i would be happy to follow up with you on. our, our proposal, obviously we have many proposals to promote renewable energy in terms of financing and research and development. with regard to master limited partnerships we've had concerns over the years and i look forward to discussing it with you. >> thank you mr. chairman. >> the senator from kansas is

recognized. >> mr. chairman, thank you very much. mr. secretary, welcome. before asking any questions since i last saw the senator from maryland she has announced her intentions not to seek re-election. i wanted to use this as on opportunity to thank her for your service. i enjoyed your tenure as chairman of the appropriations committee and appreciate the tenacity which you tackled our spending and continuing attempt to get us in the appropriations process to regular order. thank you very much. i appreciate the way you treated me for the last several years. mr. secretary, i think three relatively quick questions. as i was walking anyways told the chairman was questioning you about community banking regulations. i would add my voice to that issue. my understanding is that your response was something along lines that community banks are better regulated today than they previously were. i would indicate that i don't think that is the kise.

i think community banks have been caught up in a broader regulatory scheme than they deserve to be in. the consequences are significant to the economy. in a state like mine in which community banks provide necessary capital to growing business, to a startup, the relationship bank something very important. the example that used that has become so annoying to me and so devastating is many of my community banks made the decision no longer to make home loans, home mortgage loans, to individuals who want to buy a home in their hometown where the bank is located because of the significant regulatory environment in which they now operate in. i doubt that dodd-frank intended consequence was to reduce the availability of mortgage credit in a town of several thousand people but that has been the end result. not only the regulatory environment but also the consequences, if there is a failure by the bank to cross every t and dot every i. the reason it is necessary for

me to bring this kind of issue to you, so many of regulators are not subject to appropriations. in this setting you're our one opportunity to express concerns about things happening certainly with the treasury department but broader in the bank regulatory environment that those banks face. >> well, senator i understand the concern about community banks and share the concerns. i agree with all of you who have expressed the view that community banks are enormously important part of the fabric of our economic system and our communities. i do think as we were discussing a few moments ago what happens at the cutoff points is not quite as dramatic as sometimes described because there are different rules for smaller institutions. with specific regard to the housing issue mentioned i know some of the regulators are reviewing some of the rules that have been concern to community banks. i don't think the intention was to stop the lending as you

described. it was intended to put burdens on lenders to know their clients better and to offer different kinds of products but it was not to shut down the lending. looking at things like put back risk regulators are trying to take some unknown out of the system being clear what wouldn't be considered an actionable kind of error. so i think the regulators are attuned to it. obviously mostly this is not directly in the jurisdiction of treasury but i'm very much concerned both as chair of fsoc and someone who claire's deeply about the health of our banking financial system, would look forward to working with you. we have to be careful not to undo architecture that made our system so much safer than it was in 2008. >> is there anyone that answers to you at the treasury department that would be a good person for us to talk to? >> we have an office of domestic finance. we have people that work on

banking issues. i'm happy to have them be in contact with your staff. >> i appreciate that. part of the review underway is grpra which banking regulations are being considered on periodic review. i would welcome a report back as to how that process is going and whether we're headed in a direction that would eliminate or modify existing rules and regulations as they effect. >> senator, i am very much focused on that. when i was omb director we did a look back of rules across the federal government and we didn't have the ability to reach into the independent regulatory agencies. so i'm now pleased to see this process underway where independent regulatory agencies are doing the same thing. i know from conversations i've had the head of agencies are very focused on it. they're participating in regional hearings. i think it will be very interesting to see what they come back with. >> i'm pleased by your smile to the question and i'm pleased by your interest in this topic and

omb, i wasn't sure you would know about process but i guess you would know that hopefully as treasury secretary but certainly as director of omb. let me ask a question, this congress passed last year last session, the tribal general welfare exclusion act. what was going on was irs activity on native-american lands involving their activities. that legislation requires that a tribal advisory committee be established to advise you on matters related to taxation of indians and establishing a training and educational system for the irs field agents. it seems to me that treasury department is going out of its way to not have native americans on the advisory committee. would you dispel me of that belief? >> well, i'm not sure where that notion comes from.

we filed the charter for the treasury, tribal advisory committee. and we've issued a call for nominations for the three members to be appointed by the treasury secretary. we've expressly contacted tribal leaders for their nominations. the deadline for the nomination applications is april 28th. so we're still very much in the process of reviewing candidates. >> do you have any belief tribal leaders should or should not be involved in that, as members of that advisory committee? >> i don't start out with, with a preconceived notion. i think we should review the applicants that come in and look for the most qualified an strongest candidates. >> that is a good answer. i would suggest that tribal leaders at least in part of that makeup of that advisory committee, tribal leaders would be a significant and important component in providing you and treasury department, irs, advice. >> i did have a meeting with tribal leaders several months ago. it was a good exchange. i think the feedback i got was

that they welcome interaction with the treasury department. we will continue to stay very much working with them. >> thank you. stay on time? okay. >> the senator from maryland. >> thank you, mr. chairman, and my colleagues from fine words. secretary, thank you for your service. we've been together a really really long time. >> a long time. >> back when we were discussing earmarks in the old va-hud bill. so again, thank you for your words and also for your own service. i want to reiterate some questions about community banks that i see as a common theme here among all of our colleagues on both sides of the aisle. perhaps, mr. chairman it is going to require maybe a meeting with this domestic finance maybe not a hearing, but a conversation. so mr. good win, let me get to

my questions. i'm concerned, the shrinking number of community banks. number two i'm also concerned about the shrinking number of minority-owned community banks that have demonstrated solvency and stability. but i know since even the last year we've gone from 47 the number in their 20s. so i think these are issues we need to really looking at. we could talk about the merits of a community bank as compared to being, you know, a regional or franchise banking in our community. let me get you to my question. one of which is where the very rules of government are interfering with banks being able to get back on their feet. specific question that i have, is that there's a community bank in maryland that needs the approval from the federal reserve bank of richmond in order to buy back what they had

gotten in the tarp program. they're told that they can't buy it back but it could make it ripe for a hedge fund to come along and buy the bank. well they have got the money to buy it back. they are prudent and i don't want to get into individual cases but where the very rules of government seem to be either torpedoing or redaling community banks to move out of the recession. and yet their own solvency, which we're absolutely committed to, and so on. do you, do you have any thoughts about what treasury is telling people about buying back preferred stock and regulators, kind of, might view on actions on this? >> senator from a treasury perspective we obviously have been working our way through the tarp assets, trying to resolve

them, so that we can recover taxpayer investments fully, wherever possible. and, we have worked with community institutions and are had no objection when community institutions are able to do that. i'm not sure what the regulatory issue is you're describing but i would be happy to look into it, we don't have any authority over the fed decisions. >> no, but one of the things how the fed really has to coordinate with treasury. i would like to get you a formal letter on this. >> i would be happy to look into it. >> and for you to be aware of it. two other points that are very specific to the maryland-d.c. area, just to bring to your attention and ask you to look into them and i have a pretty big question, one of which is the retired d.c. firefighters have called my office, along

with eleanor holmes norton that there is a accounting an old accounting error was discovered and several retirees are getting notifications their benefits might be reduced. these are the pensions that you're responsible for. so i would like to get awe letter on that and letter from eleanor holmes norton. you know, that is the last they need. i'm not asking for a response there. the other is the treasury i know is merging financial management service with the bureau of public debt. the financial management service is in hyattville. i was able to negotiate a five-year delay with treasury in terms of this move. but we hear there are employees an treasury so grouchy what i did to protect those people so we could sort that out that they're being demoted, intimidated and pushed out. could you take a look at that?

>> i will take a look at it. obviously that would be unacceptable if that were true. i think the mergeer has been effective but there should be no kind of treatment like you've described. >> well, you know, they were looking for $8 an hour accountants in west virginia. i don't think any accountant is $8 an hour but i'm not getting into the legacies of bob byrd. i want to have as many legacies of barbara mikulski as i can. other question for my college. you and i have lived through two appropriations together when i was chair now the vice-chair. could you tell me the impact of crisis-driven appropriations with last minute agreements through omnibus? very well-organized. i have nothing but excellent words to say about my colleagues and congressman hal rogers, but

it was a hell of a time. but you as treasury secretary domestic economy, global economy, what is the impact of crisis hive driven appropriations what i like to raise. just as colleague moran has raised, about getting back to regular order? >> well, senator, i think that is an extraordinarily important question and i commend you for the work you did last year to put together omnibus appropriations bill with funding levels designed to meet current needs which is so important in terms of having our system maintain its responsiveness and aguilt. agility. continuing resolutions don't have that ability. when you look at deadline-driven, crisis-driven funding decisions made over the last couple years it substantial anxiety not just in the united states but around the world. when you one looks at the

business investment environment it is about psychology. psychology is the about confidence. the sense that government is behaving in a way that a reasonable set of institutions should behave adds to confidence. the sense we're hurdling off of a cliff destroys that sense of confidence. i detected considerable improvement in both the united states and internationally in confidence in the u.s. as a system and its economy since we've seen return to something that approaches regular order. i think maintaining regular order is extraordinarily important to keeping the recovery we have going. having the investment decisions that depend on people thinking will things going in the right direction, two years three years, not just in a week, a month or maybe for part of this year. i applaud the efforts that you went through to put an omnibus together and to, if congress can meet the requirements to fund the government, to make sure

that our debt doesn't become issue of anxiety again that would be very important. >> mr. chairman, i know my time's up but i have more late-breaking news. this is good news. the senate version of the homeland security bill cleared the house 257-167. so it is on its way to the president. that means we on the appropriations committee we have passed 12 bills and we've completed now today our fiscal '15 work. >> congratulations. >> thank you, mr. secretary, for being here. we appreciate you coming and testifying. and i think that we got some really valuable information. we will follow up with additional questions for the record that our members may have in the future.

we would appreciate your timely responses as always. in order to move through the witnesses today with next panel -- >> thank you very much mr. chairman. >> thank you again for being here. commissioner koskinen, i now invite you to present your testimony on behalf of the internal revenue service. >> chairman boozman ranking members cans, members of the --

coons, members of the subcommittee thank you for discussing irs budget. i remain concerned that significant reductions in the budget last five years are undermining the agency to deliver on its mission on this filing season and in the future. irs funding has been reduced $1.2 billion over last five years, dropping to 10.9 billion in the fiscal 2015. at the same time, increase of taxpayers has increased to seven million. implementation of the foreign account tax compliance act and the affordable care act. disconnect between our funding levels and our responsibilities is illustrated in some way by the fact that just three days after cutting our budget by about $350 million congress passed legislation requiring the irs to design and implement two new programs by july 1st. implementation of the able act and certification requirement

for professional employee organizations, is occurring while we're in the middle of our most complicated filing season in years. in discussing our need for adequate funding i understand we have an obligation to be careful stewards of the taxpayer dollars we receive and we must be as efficient as possible. the irs has in fact made considerable efforts for several years to find efficiencies in our operations both in regard to personnel and non-labor spending. through cuts in office space, contracts, printings and mailings, we're saving over $200 million a year. we also made significant progress over the past few years moving millions of taxpayer inquiries from our call centers and walk-in sites to our significantly updated and improved website. already this filing season, there have been more than 150 million visits to irs.gov and more than 2.7 million visits to the section devoted to the affordable care act. we've had over 125 million hits

on our where's my refund site the electronic tracking tool on irs.gov. also more than 11 million copies of previously filed tax information have been obtained on line with our get transcript application. in the past all of these inquiries would have inundated our phone lines and resulted in even longer lines at our walk-in sites. i emphasized we have taken seriously issues raised by inappropriate actions and activities in the past by making necessary changes and improvements in our policies and procedures to insure these situations do not recure. we cut conference spending by 80%. we established review boards for video productions and training expenses. we insured those who willfully fail to meet their tax obligations are not eligible for performance awards. we are reviewing hiring process to insure to the extent possible by law that former employees

with serious conduct issues are not rehired. we require all contractors maintain the same high standards for tax compliance as our employees and we've implemented the recommendations of the inspector general with regard to the serious management failures surrounding the review of applications by organizations seeking to achieve social welfare status. but there is a limit how much we can do in finding cost effectiveness. this year we reached the point having to make very critical performance tradeoffs. there was simply no way around the severity of the budget cuts without taking difficult steps which have had negative impacts on service enforcement and information technology. the funding cuts also limited our ability to work towards giving taxpayers a more complete online filing experience. taxpayers in our view ought to have the same level of service from the irs that they have now from their financial institutions, whether it's a bank, mortgage company or brokerage firm. the president's fiscal 2016

budget request for the irs which totals $12.9 billion would help the agency move ahead in all of these critical areas. for example, we would be able to bring our phone level of service up from the current 43% to 80%. we would also significantly increase enforcement and collection activities, generating over $2 billion more in increased government revenues every year. and we would be able to take steps towards building a toward modern interface between the agency and taxpayers. . .

>> i would like to go to you, sir. thank you. very much. thank you again for being here today and i appreciate your testimony. the problem is lack of confidence. we could go all through these things but irs targeting, people had left, rehiring people who had left with bad records lose some of them having marked on their file don't hire, tax refunds for prisoners, 25% earned income tax credit fraud.

not enough safeguards on sensitive information. one employee taking home over $1 million, 1 million records and the list goes on and on. whistle-blower programs in shambles. cybersecurity, licensure is wasting millions of dollars, bonuses of performance records, taking of bank accounts for people -- from people with little evidence of wrongdoing. still having tax entities waiting for tax deduction for literally years. and still no execution plan on how to implement the aca the we are aware of so the problem is accountability and getting confidence back so in your budget request you are asking for $12.9 billion for the irs. even without the request for

$667 billion above current spending limits are asking for $1.3 billion increase for comparison under the budget control act, non-defense discretionary spending for the entire federal government will increase by $1.1 billion. given current budget constraints and past history, it is clear that this request favors hope over reality. the question is are you developing contingency plans on how to carry out your mission based on more realistic budget expectations. >> i would knows the difference between the irs and other agencies is if you give us money we give you more money back so that in terms of deficit reduction which is a critical issue going forward in many ways is counterproductive that the more revenues and support for the irs get cut the greater difficulty we have been collecting revenues but i do take the point and we are

continuing to assume that one of the options going into the future is we will in fact stay at the flat level and that was our assumption going into 2015 when we ended up with a budget cut of $350 million. the only major agency in the government with a cut. when you look at it we are the only major agency in the government that was not restored to pre sequester level when it was implemented. combined together we in effect have the impact of two sequesters while everyone else awaiting a few for the next sequester. we are ahead of everybody also to that extent we are ready, had to deal with the difficult reality and -- >> very good. we are prepared. all i can tell you if we did not get the increase in funding

requested for customer service the customer service level is going to drop below 50% and has done that. to the extent we do not get additional revenue for enforcement i can tell you the enforcement revenues are going to decrease by six to eight times more than the cuts the budget has been, but we are prepared, we play the hand you deal, and whenever deal you make we will abide with. there are great threats to taxpayer service, and information technology. cybersecurity is a critical issue, we attacked 140 million times a year. there is no database more attractive than our database. and what we think is appropriate. we are significantly underfunded at this point already. >> how much money did you raise -- we some licensure last year?

>> in licensor? i don't know if we wasted -- in terms of mighty licensure there is an eye to the report we are in disagreement with in terms of retired use of licenses for software as to whether in fact we had lost money on lowe's of for licensors by not using them but this was over the past history taking actions to make sure. i am a big supporter of igs. when they raise an issue like that we deal with it. during a hearing last month senator grassley asked about the president's unilateral action and whether it would allow individuals to claim millions of dollars in tax benefits for unauthorized work. your follow-up letter to him last week, individuals may claim three years of refunds, even working off of the books or never paid taxes is truly

startling. why are you allowing individuals who cheated by not paying any taxes to claim a refund that will be financed by hard-working americans who have been paying taxes all along? >> you are eligible for the income-tax credit only if you had earnings that meet the requirements of statutes. we have 700,000 undocumented residents who paid taxes every year. they use an identification number for them. they are paying into the system. anyone who wanted the president's program provided a social security number with the eligible filing and amended return but they have to demonstrate they had earnings and have to pay taxes on those earnings or file a return and only then would they be eligible land a single employee without -- at the low end of the scale without a family is eligible to $600 a year in the earned income tax credit. you have to have worked in those

three years if you file an amended return you have to provide evidence and the documentation and taxes on what you earned to be eligible for any kind of turn income tax credit payment. >> the statement that individuals may claim three years of refunds on income even if they're working off of the books were never paid taxes is not true? >> no. basically if they want to file an amended return they have to file for the income they earned. there are several hundred thousand undocumented residents every year with us. so to qualify the earned income tax credit you have to have worked and if you file a return you have to provide documentation that shows you had earnings that year, taxes on those earnings and it will be factored into them if any earned income tax credit.

>> senator from maryland. i really appreciate that someone of your caliber has decided to continually public service at irs. the irs has taken a beating both in the budget by members of congress. we demonize the men and women who work there and underfunded. and have an impossible job. and we punish them by giving them less money so the impossible goes to the catastrophic so i appreciate you just showing up every day and trying to run this ship. i do think the president's budget if we don't find a full $13 billion we are talking about the need to add more money in

taxpayer service keeping up enforcement, strengthening operations and looking at these new technologies. let me get to my question which goes to service. i am concerned about giving you guys money. and what is the staff reductions since 2010? >> we lost 13,000 employees, we estimate another 3,000 at the end we will be down and estimated 6,000 employees? >> 16,000 employees in four years. >> five years. >> having looked at that, i understand the tax payer advocate, for every dollar spent on tax enforcement we get $6

back but i am concerned about the fraud issues as you are we talked about it the guys in prison who come up with dummy accounts, this recent thing with turbo tax, we could go through one fraudulent thing after another. what is the impact of shrinking the amount of money in the area of enforcement and investigation staff and all that you add. >> it cuts across the board because we have no choice but to cut across the board, three quarters of our budget is people, we have fewer people we have fewer people everywhere. we tried to support and maintain the number of people helping taxpayers who have been victims of taxpayer fraud but the short underfunding of our information technology means we made less progress in the development of our fiscal filters and this is incapable of dealing with the influx of those returns. we have 5,000 fewer revenue agents, officers and criminal

investigators so again, increasing percentage of criminal investigation work is focused on tracking down identity thieves and those responsible for refund fraud. there's a limit to what our revenue agents can do and what our criminal investigators and do. there's reference to the earned income tax credit. and is noted in testimony, in terms of legislative fixes but there again we have limited number of people in that area as well. >> what this the. is double sequester and the reductions congress has forced upon you. are you having a hard time recruiting people? >> at this point we have some difficulty except for emergencies we are not hiring anybody. when people leave. >> you have a freeze? >> total freeze. we have taken 10% of what we save in a total freeze for emergencies because it makes no sense when division heads are

senior managers but as a general matter we are not replacing anyone when they leave. >> when you have a freeze people leave in the enforcement area at, the investigation area the replace them? it is not only a freeze but a freeze on placement. >> the rate we're going to lose 3,000 people this year is not replacing those. we have 1,000 people right now who have applications to retire. they will retire over the near-term future and won't be replaced. that is significant experience going out the door that won't be replaced. we will have an employee face that has a baby bust in the middle of it that we are fully replacing every one in 5 over two years so in the future there will be a time at which we have a gap in our experience level and over three to five years that will start to be a serious problem for the agency no matter what we do now.

>> let me go to the impact. i will raise the issue related to helping the victims of a payroll provider fraud problem. i have many constituents who are victims of the crime related to a company called act you pay. as you know, small business, whether it was a home improvement agency, they hire someone to do that. that is the way they talk about it. this company took their money and gave them to pay the taxes didn't pay irs and then kind of disappeared. i got into it. got into it straight. i find approximately five to 600 businesses were scam in my state. the irs has only offered 54

offers and compromise to these businesses. they paid the company, they didn't pave the irs so the irs comes back and goes after home-improvement and beauty shop, the small-business really mean streak business and i put in legislation that requires irs to more but they happened. it is even an issue with the national taxpayer advocate for number 21. the irs does not comply with the law regarding victims of payroll service provider failure. >> the requirement is a sensible one that we should every time a

tax preparer and intermediary payroll provider makes any change in residence we should notify the constituents that their payroll provider has moved. and trying not only in this area but across the board whenever anyone misses and estimated tax payments rather than waiting until the end of the year we try to more affirmatively reach out and identify when payments are not made by a quarterly basis, and known there was a problem until well after the end of the year. we are trying to do with limited resources is to the extent we can identify quarterly payments of employee taxes. >> that is the solution but can

i ask you to look at the taxpayer advocacy, that they are not complying with the law. your agency is not implementing the law. >> i will be delighted, the process of notifying people when there are dressed changes. >> i thought that. and asked last year and this year to take the most significant challenges every year and to give me the list of those we could implement without having to spend more money. last year she gave me the list and implemented those including taxpayer bill of rights and made the same offer, if you will give me out of your list of things we should do the things we could do without expenditure of money which we don't have we make a serious effort to do that and this would be one of those. >> we will give it to you right now. >> thank you, i think you

brought up an excellent point. the senator from kansas. >> thank you. commissioner, a couple of topics. dealing with veterans. my understanding is the american legion the national american legion has been required by the irs to provide tax identification numbers from every post across the country when they file their return and they are incapable of doing that. air charter indicates they are not a parent organization for various american legion across the country and they have been trying to sort this out with the irs without any success. a number of letters and requests have been made to the irs.

if you could bring me up to date on this topic and i also say that i met with you or your predecessor in 2013 in which the topic was american legion posts across the country were being required to provide the 214 service connected discharge document for every veteran that was a member of their posts and my understanding was that practice was coming to a conclusion that the irs concluded that wasn't a beneficial use of their limited resources. i just in fact before i walked in this hearing came from a meeting with members to indicate that circumstance is again occurring across the country. and like american legion post they are being required to provide the 214 for every post member which is something very difficult if not impossible to accomplish. that is the issue that arose in

2013 i was sure had come to an end and more recently the american legion being told they must provide tax-exempt status documentation from every post across the country which they are incapable of doing but have been unable to receive a response to their inquiry from the irs. >> i am happy to assume responsibility for everything the irs does even before i got there at the end of 2014 so whatever the discussions were i am not privy to them. i thought we had resolved the issue on the 2014 with the va. if your staff would get us the background information we would be delighted. our challenge with our limited resources and the limited resources of tax exempt organizations is to ensure to the extent we can and they can that they are operating in the realm of their charters and exemption and that involves

where veterans organizations are basically dealing with veterans and not expanding their operations to include non veterans. we had taken the point in the past that this has to be done in a reasonable way. we can't be layering impossible burdens on top of people so if you give me details about that i would be happy to get back to you. >> does the second and larger aspect of american legion, the national post, the national american legion required to provide information from every post across the country to the irs which is a different issue than you and i just described, did you know anything about that topic? >> i have not heard that problem and to the extent they don't charter and the the established posts across the country and don't have records, that wouldn't make much sense either. the issue is primarily protects is and withholding employee taxes. again i would be happy to look at those issues and let you know the status of them and get back

to them quickly. >> based on your and words and response my assumption is this appears to be something that could be resolved quickly and satisfactorily towards veterans service organizations. >> yes. i am not an expert at where we are and the details of it but our goal in a lot of these areas is to make it easy for people to establish their still operating, serving with in their charters and serving the people paper meant to but we ought to be able to figure out that in a way the works efficiently. >> i was surprised because in 2013 your predecessor, the acting commissioner assured me this practice was coming to a conclusion. i hadn't heard about it at the local level until i as i say at this meeting got to question the irs commissioner and immediately they had a request and this apparently is the post in new york state. >> i would be happy to -- acting

commissioner, the process is coming to an end, richard of come to an end. there were resilience out there. >> thank you very much. a similar question asked secretary lew on the legislation congress passed. the law stipulates the benefits under the general welfare exclusion was suspended until travel advisory committees are established and the irs field agents are properly trained and educated in federal law and how it relates to sovereign indian tribes. with this issue is and maybe you are familiar with it. i met with the tribal leaders late last fall when they were here in washington. thank you for doing that. the concern that exists is the irs audits continue even though

the tribes believe that the issues being audited are related to the general welfare exclusion. provide me with the standards used to determine whether an audit relates to the general welfare exclusion and that difference is provided to the tribal governments based on that exclusion? >> i would be delighted to get that information. my understanding is that has been made clear that the general welfare exclusion of clyde and we will honor that but i am delighted to be able to go back and check on that and get back to you quickly. if your staff could let us know the details of where they are hearing that i can't talk about that in individual cases that was our understanding when i met with tribal leaders who we were going to try to have a better working relationship, understand the significance of their sovereignty and make sure our people were properly trained and respectful of that sovereignty.

>> any idea how many audits have been suspended as a result of the requirements of the exclusion act? >> i do not but i cannot believe -- >> another question is as you provide me information in addition to how many audits have been put on hold and suspended, awaited training and appointment of advisory committees i would ask that if there is a tribe that believes that the audit is improper, how do they appeal the decision that they are being audited? there seems to be no recourse, the irs is here and they shouldn't be auditing us that don't know what to do about it. >> every taxpayer has a right to the appellate process. and the number of the way to

raise their concerns. >> thank you for responding to my questions. >> thank you. i want to associate myself with the veteran issues in particular. i would appreciate follow-up on that. and join the appropriations committee because of the server and passion and commitment that the chair and vice chair demonstrated towards returning us to regular order and her very effective leadership will be sorely missed at the end of these two years. you identify service and enforcement as three core themes we're funding shortfalls caused real colleges for taxpayers. and the treasury inspector general for tax administration identify security for taxpayer data as its number one priority challenge and i assume that is not unrelated to your eye tee investment.

let me talk about identity theft and combating refund fraud and identity theft refunding tax year 2013. and dealing with refund fraud and identity theft. is a comprehensive and aggressive enough to keep pace and keep finding sophisticated ways to hack in and access to take it vantage of different schemes. and to detect fraud and halt fraud schemes before they get out of hand? >> it has been a growing problem exploded in the 2010-12 area, overwhelmed law-enforcement and the i r s. we made significant progress but some extent, the important one is as i said, we have gone over 2,000 convictions of people going to jail and average of 40 months or higher and to some extent we have got a lot of

individuals and prisoners identified and prosecuted but what we are finding not surprisingly, consistent across all the cyberareas is we are dealing with organized crime syndicates here and around the world. people filing 500 returns at a time. and investigations and prosecutions on the one hand. restart 5 million returns when they went out because of suspicions about refund fraud. and when we double the resource

constraints and helping taxpayers, 3,000 people working with taxpayers used to take as a year and our goal is to get the result in less than 20 days. part of our challenge, this is a high priority, there's a limit to all of the priorities we had. we were slower at developing more sophisticated fraud filters and detection devices that we would like to have been. we are making progress stopping more returns before they are process than we did last year as a result of the improvements but if we had the funding we were suggesting for next year we would get to the point where we would be more effective. in terms of additional tools across the board if we got primarily w. 2 information returns earlier it would help us significantly. we also are working on legislation requirements that if we could get in effect unique

identifiers for a dubya 2 we would identify legitimate w. 2s, there's a move afoot by criminals to form falls corporations, get false b i ns and filed false w. 2s which would file a return against those. both of those legislative fixes would be important for us. >> thank you for the input. in terms of dealing those who have been victims of it advocated an approach that would have a single account representative for tax related identity theft victims to help navigate the case rather than be frustrated by having several different irs employees handle it. is that something you intend to implement? >> in completing it now, all of the refund fraud activity is in a single location. it used to be spread throughout the agency so there is in fact a

single point we have an individual employee assigned to each of the taxpayers working through, we disagree with that in the sense that you think your experience dealing with call centers anywhere else with you amazon or a bank when you get assistance you get a case number, you get help but the next time you call up you don't ask for joan forces in. they may be on vacation or out of the office. what you want to be able to do is call back in, to the single point of contact they know who you are and you don't have to start over again. in the past many taxpayers had that experience, they got moved from one part of the agency to the other and had to start over again. we don't think if you had to track down a single appointed irs employees that that is a help. >> the time i have left, service levels are significant concern

to me. my impression is roughly a decade ago the irs answer 87% of calls and they wait time of two minutes. your projection given significant reduction in your work force for this taxpaying season is less than half the callers seeking advice and assistance will never succeed in having their calls answered and there is an average wait time of 33 minutes. what do you think would be an acceptable level of service for taxpayers calling the toll-free line trying to get a question answered. what dollar amount of increased funding would be required to return you to your service level. or social consequences of having those who try to comply voluntarily unable to get their questions answered. >> we identify if we had $380 million applicable in that area we would bring the level of service to 80%. we think the 85%, 87% is the

ultimate right number. you don't want to be 100% because then you are just waiting for the calls but the waiting time not to be less and five minute. you should be able to call and get a lot assistant in five minutes. the impact we are concerned about that i am concerned about is we focus on how much money we collect with our activities six or eight times as month but enforcement revenues and activities and taxpayer service trying to help people figure out what they owe and how to pay at are two sides of the compliance clean and the number i am concerned about is with -- we collect $3 trillion in the compliance system. of the compliance rate goes down by 1% because people think the chances are getting flooded or they can't find the right information or get aggravated with it, 1% decline in the compliance rate costs the government $30 billion annually on the ten year throw, we are looking at, is $300 billion. besides the fact that it is not an on/off switch goes to the

chairman's concern and people lose confidence in the agency. if they lose confidence in the fairness of the system, the risk to us is not that our collections will go down all those they will. the real risk is what happens to the overall compliance rate and that $3 trillion number and i'm concerned, the people most concerned about the taxpayer level of service are our employees they view the service taxpayers ought to get as they are committed to and as i go around the country at talk to 13,000 individual irs employees and the biggest concern is not they are overworked but there aren't enough people to provide the services to taxpayers that they think is a program important. >> thank you, commissioner. >> thank you for your testimony commissioner. i know you have a big job and we look forward to working with you

and in an effort to serve and protect the american taxpayer so thank you for appearing here today. at this time i would like to call forward inspector general quote george to presented his testimony. [inaudible conversations]

>> inspector general please proceed. >> thank you, mr. chairman, ranking member coons, thank you for the opportunity to appear today. i will address the internal revenue service's fiscal year 2016 budget request and specific areas where it can perform its mission more effectively and i will address the fiscal year 2016 budget request for the treasury inspector general for tax administration. the proposed irs budget request appropriated resources $12.9 billion. this is an increase of $2 billion for fiscal year 2015 on active levels. this proposed increase tended to improve taxpayer service levels

and enforcement efforts. it provides critical information technology changes related to the affordable care act. and other requirements to sustain information technology infrastructure. we have reported that a trend of lower budget and reduced staffing has affected the irs's ability to deliver its priority program areas including customer service and enforcement. at the same time it has increased responsibility of implementing the affordable care act. the irs also continues to dedicate significant resources to detect and review potential identity theft tax returns. irs employees work the majority of identity theft cases our telephone systems to return taxpayers' calls to the irs's toll-free telephone lines. this has contributed to the irs's inability to timely

resolve victims's cases as well as the continued decline in timely response to taxpayers's written correspondence. as of february 14th, 2015, the average wait time for the irs to answer a call was 28 minutes. the level of service was only 43% and overage correspondent inventory, and the irs in several areas where the irs can operate more effectively. the ira saved $17 million a year to electronically file amended tax returns rather than only allow paper returns and this will enable the irs to use the same validation processes it utilized to verify originally

filed tax returns. this could prevent the issuance of $2.1 billion and potentially erroneous refunds. the irs could make more informed business reforms when limited resources. and reduce taxpayer assistance centers although the irs stated services are eliminated or reduced were the results of the irs's anticipated budget cuts. the irs plans did not show to what extent service cuts would lower costs. moreover, it later had to reverse in decisions. also found the irs's field work election process is not designed to ensure that cases with the highest collection potential are identified. additionally changing the law to require third parties to file information returns earlier would provide the opportunity to

use the information contained on these forms to verify tax returns at the time they were processed. and third-party route information returns were received more timely the irs allowed them to use this data. generally the irs must audit any tax return it identifies with a questionable claim before the claim can be adjusted or denied even if the irs has reliable data that indicates the claim is erroneous. the department of treasury has included a proposal as part of the budget requests since fiscal year 2013 to obtain correctable error authority which would permit the irs to systematically denied all tax claims for which the irs has reliable data showing the claim is erroneous.

this authority along with the expanded use of the national directory of new hires, part of the department of health and human services could have prevented the issuance of $1.7 billion in questionable tax credit claims in tax year 2012. fiscal year 2016 proposed budget request appropriated resources of $167 million, an increase of 5.7% compared to fiscal year 2015 enacted budget. budget priorities include mitigating risks associated with tax refund fraud and identity theft monitoring the irs implementation of the affordable care act and other tax law changes and assessing the irs efforts and offshore accounts.

and criminal activity, and iris facility data and infrastructure are secure not impeded by threats of violence and protecting the irs against external attempts to corridor otherwise interfere with tax administration to take priority. ranking member coons and members of the subcommittee, thank you for the opportunity to share your views happy to take questions. >> senator coons has a classified briefing, we will go to him on this round. >> very kind of view thank you. to identify security taxpayer data as the no. one management challenge facing of the irs what are the key concerns about the adequacy and how responsive is the irs to your

recommendations to bolster its systems and what would you recommend they make their top priority in responding to this? >> they have been responsive, senator. the new commissioner and i have had a long-term relationship, we work together in various capacities. he listens to the concerns we provide. they don't agree 100% but they agree with enough so that i feel secure or confident that least some of the shoes we identify our address. i think it is important to note as the commissioner noted that they are under attack on a daily basis hundreds of times. fortunately we have not yet detected any breaches to the tax system that would undermine it which obviously would be

devastating to this nation. so in that sense we feel confident. limited resources and having to make difficult choices as to what to focus on is going to put some of what i just said to you possibly at risk or make it completely inaccurate depending upon what happens day to day. >> given the response to your concerns, criticisms, suggestions, what level of confidence do you have the increased investment and available resources might actually result in significant increase in the security of this vital data? >> no question the state had additional resources to devote to this it would enhance my confidence it would be more secure. >> you identify implementing but aca as the number 2 management challenge. i wonder what your chief concerns are about the capacity

of the irs to meet their responsibilities for implementing rules of the riding and a new responsibility. and what recommendations have you offered the irs in improving their responsiveness? >> at the request of congress we are in the process of working both with the inspector general of the department of health and human services as well as my people on this important issue. this is unprecedented territory for the internal revenue service. at this stage i am not in a position to give you a definitive answer. all i can say is we are monitoring and we will be reporting our information in the near future. >> i don't want to impose on the chairman's kindness. tax gaps estimated $450 billion, 17% on compliance rate which is striking, what are your views on that adequacies of the irs's strategy to narrow the gap and whether the impediments that

need to be dealt with to attack this ordeal with this given the declining resources available to the irs? >> we believe that figure which is an irs produced figure is actually understating the problem. we believe that the international aspect is not adequately included in that figure and there is no question that some of the many recommendations we made in the hysteria and will continue to make include third-party reporting. there is a figure, a few figures and i beg your indulgence because it is so important people understand this that this according to the internal revenue service there is such a correlation between tax compliance with a third party, information reporting, and withholding taxes. the irs estimates individuals

whose wages are subject to withholding report 99% of their wages. self-employed individuals who operate nonfarm businesses are estimated to report only 68% of their income for tax purposes but the most striking figure is self-employed individuals operating on a cash basis are estimated to report 19% of their income. no question this is a tax policy question. if everyone were required to fill what form to cut their lawn or paint their home and third-party reporting increased the amount of money that is reported as ultimately taxes paid to the federal government. this is just one aspect of what can be done to address the tax

gap. >> i look forward to working with you to make sure your recommendations are responded to appropriately by the irs. i was going to ask consent. there was a statement by the subcommittee for the president of the national treasury employees union that that be made part of the record. let me thank you very much for your forbearance in allowing me to get to this briefing. >> good luck in your meeting. >> thank you very much mr. george, for being here. the an income-tax credit has been part of the high-risk program. the irs estimates 24% of all payments made in fiscal year 2013 were $14.5 billion. in addition the irs estimates it has paid between $124 billion, and $148 billion in improper payments on earned income tax

payments in fiscal year 2003 through 2013. the irs has developed a strategy to reduce the improper payments to focus on early intervention to ensure that individuals claim credit are in compliance with the earned income tax credit rules. however, despite those efforts the estimated improper payment rate has remained relatively unchanged since fiscal year 2003 and the amount of tax credit claims has literally grown. the question is the irs noted it cannot fully address the earned income tax credit noncompliance by simply auditing returns must pursue alternatives to traditional compliance efforts. have you made any recommendations to the irs how to combat the problem? >> we have. what i would like to do at this point is seek permission to

include a report that we have conducted on the earned income tax credit into the record. >> without objection. >> suffice it to say as a refundable credit, all refundable credits that the irs issues difficult to manage. once the money is out the door it is so much more expensive for the irs to reclaim it. they have to make a cost-benefit analysis as to whether or not it is worth doing. there are ways the irs could address this which we recommended in the past and that included earlier reporting of earnings under w. 2 warm.

so the earlier the irs has information on what people are paid the earlier they can address problems that they ultimately find. this is in conjunction with the requests that the treasury department as well as recommendations we have made and the irs has made for what is known as correctable error authority. for example, once tax filing season begins which is the second or third week in january depending on the year people can file their tax return and seek a refund. the irs is not required to receive from the employer or whoever for another three months sometime in march, the same

information on that individual. if the individual claims a different amount than what the employer claims, that individual could receive more money and then receive a refundable credit, whether it is the additional child tax credit or an education credit. if the irs has what's known as correctable error authority it does not necessarily have to wait until at that pointed out in my opening statement, all of the information is in hand or what have you. they could automatically hold off paying vat refund and making the corrections themselves. the taxpayer would still have the right to contest the irs's decision if they believe it is inaccurate. it is a symbiotic relationship in terms of legislation that the

irs and the department of the treasury is seeking. there are ways to address this but it is obviously a delicate area for all involved. >> the frustration is not throwing money at it, won't help in this sense of making it more -- we have a program in the area of 24% of the time, which is certainly not acceptable. in the past, refund fraud has been committed by prisoners, a significant problem for the tax administration. report noted the refund fraud associated with prisoner's social security numbers remains a serious problem. the number of fraudulent tax returns filed using prisoners social security number that was

identified has increased, 37,000 tax returns in calendar year 2007 to 237,000 tax returns in calendar year 2012. refunds claimed on these tax returns increase from $166 million to $1 billion the scientist and treasury has the authority to share information with the federal bureau of prisons and state departments of corrections to help determine if prisoners may have filed for help the filing a fraudulent return. would you please give us an update on the effectiveness of the irs efforts to reduce these improper payments to prisoners? >> yes, thank you for posing this question because i have to admit this is one of the areas, i have to let met i am most disappointed because this is one of the first subjects that i testified before congress on almost a decade ago, the problem

that existed that has since continued to grow. congress did empowered the irs to take action to address this by forming that agreements with various states and federal penitentiary or correctional organizations and they have -- they did at some point take positive steps in doing so. some of those expired. others fell by the wayside but this is a multibillion-dollar problem. it is still going on and a lot of these individuals have so much time on their hands and in all candor have nothing left to lose, they won't stop. until something more tangible is

done, further prosecutions or more authority or in all candor the irs somehow feeling the pinch if they don't take action with signing up that information, sharing programs and the like with states. the problem will continue to grow and metastasize. >> i read the report talking about this and one of the recommendations was there are 300 some odd prisoners they identified to essentially give that information, to make it such that that group that they had, they could fix it where they couldn't do it and refuse to do that. is that correct? >> don't know if the refused to do it but they did not have the authority to do it. i am not sure if what you are describing predates that congress did provide or not but

i got to get back to you on clarity. >> it is the frustration among the many things we talked about. one last question and we will let you go in you have lots of stuff to do. there are significant concerns about premium tax credits and security tax day at the irs provides to help exchanges. the irs will the minister penalties related to the individual mandate and try to seek premium tax credits provided to an eligible taxpayer and collection of tax credits. according to your audits the irs continues to report the 20%, we talked about this, other income-tax credit is a problem issued in -- improperly. $15 billion in 13 to 15 billion in 2013 in improper payments we discussed earlier, do you

believe there is potential for problems with tax credits? >> most definitely. it starts from the outset. the bottom line is if someone can provide fraudulent information at the outset when they first apply for this credit, that starts the ball rolling downhill. to its credit the irs has established some filters in their system to try to we'd these out. i hope the magnitude of the problem isn't anything like the other, the refundable credits we referred to earlier, but we are in the process now of evaluating this very e shu to see whether the irs has adequate processes information and ultimately in effect because this could be a

budget buster. >> thank you so much for your testimony today, thank you for being here. we appreciate your hard work as again all of the witnesses who testified. i know that everybody is doing their best to worked in a very difficult situation, trying to restore confidence in the agency. i want to thank again the other two witnesses. >> we will be the last few minutes of this hearing to go live as the u.s. senate is about to gavel in. we expect consideration of a resolution to disapprove a national labor relations board rule on union elections. they will vote on the issue at 11 faherty eastern today. senators will vote on moving forward with an override of president obama's veto of the keystone oil pipeline. both houses of congress approve the pipeline despite the president's promise to veto it. at 10:00 eastern senate women will come to the floor to talk

about ending human trafficking. speakers will be largely democrats and one republican. the house is working on a bill to authorize reauthorize amtrak and other subsidized passenger rail service. debate and votes on amendments to wrap up by late afternoon. the house is not expected to be in session after today due to bad weather happening in washington. now to the floor of the u.s. senate. the chaplain: father in heaven holy is your name. you brought light from darkness and order from chaos. you can bring order to our nation and world. thank you for the gift of this day and for our borrowed heart

beats. thank you also for the privilege to serve you by serving our great country. use our lawmakers to do your will. may they become your merciful hands to reduce the pain and pathology in our world. lord use their daily experiences of joy and sorrow, pleasure and pain, victory and defeat for your glory. protect them with the shield of your love as you fill their hearts with your peace. we pray in your marvelous name.

amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington d.c. march 4, 2015. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable rand paul, a senator from the commonwealth of kentucky, to perform the duties of the chair. signed: orrin g. hatch president pro tempore. mr. mcconnell: mr. president. the presiding officer: the majority leader. mr. mcconnell: i understand there is a bill at the desk and it is due a second reading.

the presiding officer: the clerk will read the title of the bill for the second time. the clerk: s. 625 a bill to provide for a congressional review and oversight of agreements relating to iran's nuclear program and for other purposes. mr. mcconnell: in order to place the bill on the calendar under the provisions of rule 14, i would object to further proceeding. the presiding officer: objection having been heard the bill will be placed on the calendar. mr. mcconnell: mr. president construction of the keystone pipeline would pump billions into our economy. it would support thousands of jobs and a bipartisan majority in both house and senate voted to support it. today the senate will vote to support american jobs and infrastructure one more time. it should be a no-brainer. for a long time, projects like keystone basically were no-brainers. they were often approved without much controversy at all but that was before powerful special interests and ideological

extremists decided to embark on a quixotic crusade. the implication that building keystone would result in some sort of apocalyptic collateral clinton-mitchell has always flown --cataclysm has flown in the face of science. the thought that it would have an impact on environment ignores the findings of president obama's own state department. it stayed that the environmental impact would be minimal. the reality is that the energy resources in question are almost certainly going to come out of the ground whether keystone is built or not. the real question here is whether we're going to allow keystone's energy to help support middle-class jobs in america or whether we will allow those jobs and energy to potentially be sent to high-polluting countries like china. deep-pocketed leftists and extremists appear to prefer the latter option. by vetoing the bipartisan

keystone jobs bill, president obama sided with those moneyed special interests over the middle class and it's still unclear why. it can't be about protecting the climate because vetoing the bipartisan bill would hardly have an effect. it can't be about protecting a broken review process the president himself broke long ago because this bipartisan bill seeks to fix the review process. and it can't be about giving the president more time because he's delayed this decision for years on end. here's the only serious explanation i can think of. president obama is signaling to extreme special interests that his party is turning away from workers and toward them. we have seen how the president's veto has outraged some in the labor union community. i know it makes some of our democratic colleagues pretty uncomfortable as well. i suspect that includes democrats who didn't support the senate's initial passage of

keystone. i suspect it also includes democrats who might otherwise support their leadership's unprecedented filibuster of a veto override motion. i'm urging every democrat who still believes their party should be about workers workers, not deep-pocketed special interests and extremists to join us. vote for cloture and vote to override. keystone's bipartisan coalition in the senate is only a few votes shy of the two-thirds majority we would need to override this partisan veto and bring keystone jobs here to america. and it's not too late to stop your party from venturing down a path even further afield from the interests of american workers and the middle class. so join us. together let's support keystone american jobs and infrastructure. now, mr. president on another matter, across the street, the supreme court will hear arguments today in an important

case. king versus burwell is the latest reminder of a law that is as unwieldy as it is unworkable -- obamacare. obamacare has been one rolling disaster after another for middle-class americans. first, it attacked seniors by raiding medicare to finance more government spending. then it canceled health plans for many who had been told they would be able to keep the plans they liked. and who can forget the web site debacle? the hits have kept on coming ever since. fewer choices higher costs increased tax burdens borne by the middle class and even more headaches at tax time. in fact, we now know that the obama administration sent inaccurate obamacare tax information to nearly a million

people. so america's middle class deserve a lot better than the hurt of obamacare. now, we have heard a lot of predictions about what might happen if the court finds for the plaintiffs in this case, but we've also seen republican ideas about how to help americans that may be harmed again again by obamacare's broken promises. for instance, republicans think it's better to give americans and states the freedom to choose what's right for them rather than trying to impose costly mandates from washington like obamacare. so regardless, regardless of how the supreme court rules i look forward to continuing to work with my republican colleagues because while obamacare is a law that's all about higher costs and broken promises, republicans think health care should be about helping middle-class americans instead. mr. reid: mr. president. the presiding officer: the democrat leader.

mr. reid: most issues that come before this body are complex and nuanced. rarely are we faced with simple issues but today we have a very simple clear-cut issue before us. it's as straightforward as any one could be, any one question. it is do you support american workers or do you not support american workers? under our law workers have the right to unionize and have their voices heard in the workplace. through elections workers choose for themselves whether or not to form a union. last year, the national labor relations board took an important step to modernize and streamline union election procedures. commonsense, simple advancements. the rule changes are good for workers and good for businesses. this whole fight doesn't deal with business for its workers. you have to search long and hard to find a business that opposes what the nlrb did.

this is all the antiunion rhetoric of the republicans here in the senate. the reforms that nlrb pushed forward allows employers and unions to file forms electronically kind of the modern world that we all live in. they also allow communications with workers by email and cell phone. pretty reasonable reform, it sounds like to me. yet today senate republicans are trying to roll back rule changes instituted by the nlrb. later this afternoon we'll vote on a resolution of disapproval to undo those commonsense reforms. republicans think they are striking a blow against labor unions with votes like today's vote, but what they're really doing is undermining the american worker, american families. american workers and their families have come to rely on many of the benefits provided by collective bargaining -- higher wages, safe working conditions, decent health care. it's no surprise that some of

the most prosperous times in american history namely the middle of the 20th century came about in times of record union membership. even today in my home state of nevada unions predict wages with the -- protect wages of the employees at the las vegas strip, up at lake tahoe and all over the state we ensure through the unions safe working conditions. certainly for the miners in elko county and around the state and also with rare exception provide quality health coverage to educators statewide. so i want to be very clear -- this is about who the republicans really are attacking, and it's the middle class. each time republicans throw a roadblock for workers to organize, they are weakening the american middle class. i support american families, i support american workers i support the middle class. senate democrats support the middle class. we do not support this republican attack on unions. we will vigorously fight any attempt to weaken worker protections, including the -- today's resolution vote. i would just comment briefly on

my friend the republican leader's further trying to come to the floor once again and try to minimize the disaster of attacks on obamacare. the house has voted 57 times to repeal that law, 57 times. each time, the result is the same. as albert einstein said, the definition of insanity is someone who does something over and over again and gets the same results. so it's insane what they've done in the house and it's really insane what they're trying to do here in the senate. there's no question about the case before the united states supreme court. the language is clear. almost 10 million people will lose health insurance and we've

seen in the press the last few days that really very, very terrible things would happen to families that lost their health care. but my friend, the republican leader is talking about doing is turning it back to the insurance industry. how is that? if you had a preexisting disability, no insurance. they set arbitrary limits as to how much they would pay. it was a time of -- for families who were trying to ensure -- insure their boys and girls mothers and fathers. so i would hope the supreme court would listen to the will of the american people and the will of the united states senate and the house of representatives which passed this law. we all knew the democratic congress, we still do. the law is very clear and the supreme court should follow the law. mr. president, would you announce the business of the day? the presiding officer: under the previous order the leadership time is reserved. under the previous order the

senate will resume consideration of s.j. res. 8 which the clerk will report. the clerk: calendar number 21, s.j. res. 8 joint resolution providing for congressional disapproval under chapter 8 of title 5, united states code, of the rule submitted by the national labor relations board relating to representation case procedures. the presiding officer: under the previous order, there will be two hours of debate remaining equally divided in the usual form. mr. reid: i note the absence of a quorum. the presiding officer: without objection. the clerk will call the roll. quorum call:

quorum call:

a senator: mr. president? the presiding officer: the senator from south dakota. mr. thune: i ask unanimous consent the quorum call be dispensed with. the presiding officer: without objection. mr. thune: mr. president the median time today between when a union files an organizing petition and when employees vote on whether to unionize is 38 days. or just slightly over one month. 95% of all union organizing elections take place less than two months after the date an organizing petition is filed. and approximately 70% of these elections are won by unions.

all in all i think anyone would agree that unions are doing pretty well. and that this is a pretty fair process. in fact, the current median time between union organizing petitions and union elections surpasses the goal set by the national labor relations board itself. you would think that this would be a classic case of if it ain't broke, don't fix it. well apparently, mr. president, the obama nominees on the national labor relations board don't agree. they proposed a new rule which will go into effect next month that will drastically shorten the time between the initial union organizing petition and the union election to anywhere from 11 to 22 days. while the current situation if anything gives an advantage to unions it also provides adequate time for employers to express any concerns and for employees to hear the pros and cons of the union proposal.

the new nlrb rule would remove these protections. businesses would have to respond to the union organizing petition within seven days of it being filed which would leave employers scrambling to research any arguments that they want to bring up at the union organizing hearing. small businesses who frequently lack experience dealing with unions or in-house counsel to provide advice would be hit particularly hard by this rule. but it's not just businesses, mr. president, who would suffer. under the new rule, employees would have very little chance to research and consider the benefits and drawbacks of joining a union. they'd be forced into a hasty decision with little opportunity to change their minds later on. in addition the rule also presents substantial privacy concerns for employees. under the current system, employers already have to give

unions employees' names and home addresses. the new rule, the new rule would expand that disclosure requirement to include employees' cell phone numbers email addresses work schedules, and shift locations. worse, the rule contains no additional requirements for safeguarding that information or disposing of it appropriately. mr. president, given the evergrowing concerns about privacy, it's astonishing that any employer would be forced to give up so much sensitive information without the explicit permission of his employees. mr. president, this new rule is unfair to employers and it's unfair to workers. there's a reason it's called the ambush elections rule. it would ambush employers and employees alike. unions would have unlimited time to organize while employers would be given almost no time, no time to present their

concerns and exercise their free speech and due process rights. and employees would be pushed into making the long-term decision about whether or not to join a union without all the facts. mr. president, government should not be in the business of tilting the playing field in favor of unions at the expense of workers and businesses. the nlrb's ambush elections rule is unfair and it's undemocratic. i hope congress will pass the joint resolution of disapproval that we're considering today and i hope that the president will sign it. the rights of american workers and businesses should not be sacrificed to the demands of unions. mr. president, i yield the floor. and i suggest the absence of a quorum. the presiding officer: the clerk will call the roll. quorum