Senate passes IRS reform, gives union seat on board

The Senate Thursday voted 97-0 to pass IRS reform legislation after rejecting a proposal to deny an employee union representative a seat on a new agency oversight board.

Senators rejected, 65-35, an amendment offered by Sen. Lauch Faircloth, R-N.C., which would have denied a seat on the board to a representative of the National Treasury Employees Union. Senators also rejected by a vote of 57-42 an amendment offered by Governmental Affairs Chairman Fred Thompson, R-Tenn., to reverse a proposed waiver for that union representative from federal conflict of interest standards.

Under Thompson's proposal, the union representative would have been barred from voting on personnel matters brought before the board.

Thompson cited a letter from Stephen Potts, director of the Office of Government Ethics, to the Senate leadership last week denouncing the inclusion of a union representative on the IRS board.

"We believe that this provision is antithetical to sound government ethics policy and thus to sound government," Potts wrote. "Government decisions should be made by those who are acting for the public interest and not those acting for a private interest. We recommend the elimination of the position on the board that creates such inherent conflicts. The elimination of the position could be coupled with a requirement that the board consult with employee organizations."

But Sen. Bob Kerrey, D-Neb., one of the oversight board's original proponents, argued that union representation on the board is imperative.

"We are not putting an employee representative on the board for political reasons, but putting one on the board to make sure you have an individual who can sell and who can persuade and can help get these kinds of restructuring decisions implemented and make certain that there is going to be a minimal amount of resistance on the employees' side," Kerrey said.

Later on Thursday, the Senate by a vote of 59 to 40 struck down an amendment by Sen. Connie Mack, R-Fla., to deny an oversight board seat to the Treasury Secretary.

Both Democrats and Republicans praised the IRS reform measure.

"No agency touches the lives of the Americans more than the IRS," said Senate Budget Committee Chairman Pete Domenici, R-N.M. Yet, "one out of every two Americans said they would rather be mugged than be audited by the IRS. This bill should reverse that prevailing view."

Senate Minority Leader Tom Daschle, D-S.D., agreed. "We need to get on with reforming it, restructuring the IRS, sensitizing them."