Is this how the Federal Government plans to attack the deficit ?
http://www.nbcchicago.com/investigations/us-treasury-irs-statute-limitations-tax-grab-208436421.html
http://dealbook.nytimes.com/2013/05/23/banks-lobbyists-help-in-drafting-financial-bills/
Christopher Gregory/The New York TimesKenneth E. Bentsen Jr., left, a Wall Street lobbyist, at a House financial services panel meeting.
http://www.nbcchicago.com/investigations/us-treasury-irs-statute-limitations-tax-grab-208436421.html
Law Erases Statute of Limitations on Your Federal Debt
Feds went after Minooka woman for overpayment of survivor's benefits from 35 years ago
Richard Moy
The federal government no longer has a statute of limitations when it comes to collecting on debt that is owed to them. Lisa Parker reports.
Buried deep inside a massive piece of legislation passed by Congress sits a little-noticed passage that, with few exceptions, wipes out any statute of limitation for a debt owed to the federal government.
Thanks to the "Food, Conservation and Energy Act of 2008," anyone overpaid by a federal agency, at any time in their life, can now be tracked down and put on the hook for debts that are decades old.
For Bridget Galazkiewicz of Minooka, the unexpected tax grab began in the form of a mysterious message from the IRS she received the day after she expected her tax refund.
"If you haven't already seen a letter, expect one," she said of the message.
Soon thereafter, a letter arrived from the Department of the Treasury announcing the government had seized all $1,200 of her 2012 return for a debt about which she said she knew nothing.
There was no warning letter or call, just the seizure notice.
"It just raised more questions because it said the money went to Social Security, and I am not on Social Security... haven't been since I was a kid," Galazkiewicz explained.
Calls to the Social Security Administration left her more confused.
"(They) told me that I was making too much money in 1968. I was eight years old, so I don't think I was making any money," she said. "I had a .25 cent allowance."
The letter contained a social security number that Galazkiewicz thought had belonged to her mother. Galazkiewicz later found out it was actually her father's. And the confusion, she said, got thicker from there.
"And then (they) told me that my mother was working, if I wasn't working, in 1968 and she made too much money," Galazkiewicz recalled.
If you are thinking 45 years is too far for the government to reach back, you would have been correct until very recently. The tiny section tucked away on page 561 of the legislation allowed the federal government to blow out any existing statute of limitations and go after debts decades old.
"This completely lacks due process. It is not a fair system at all," Ralph Martire of the Center for Tax and Budget Accountability told NBC5 Investigates. "So now they can go back 20, 30, 40 years -- which they are doing. It is problematic for taxpayers on a number of levels."
Martire pointed out that some federal agencies, such as the SSA, already had a 10-year statute of limitations. To wipe that out and give agencies an "indefinite" timeframe to go back and find their own mistakes, he said, is a bad idea.
"If they haven't acted on a claim in 10 years, maybe they ought not act on it at all. Maybe it is marginal," he said. "This is guilty until proven innocent... a really unfair burden to put on the taxpayer."
Ultimately, in Galazkiewicz' case, the SSA said she was overpaid for survivor's benefits for her father, who died in 1964. After an inquiry by NBC5 Investigates, a spokesperson for the SSA said Bridget's wages rose for a four-month period in 1979, and that increase led to an overpayment of the survivor's benefits. Almost 35 years later, Galazkiewicz said she has no way to prove or disprove what happened so many decades ago.
http://dealbook.nytimes.com/2013/05/23/banks-lobbyists-help-in-drafting-financial-bills/
Banks’ Lobbyists Help in Drafting Financial Bills
BY ERIC LIPTON AND BEN PROTESSChristopher Gregory/The New York TimesKenneth E. Bentsen Jr., left, a Wall Street lobbyist, at a House financial services panel meeting.
WASHINGTON — Bank lobbyists are not leaving it to lawmakers to draft legislation that
softens financial regulations. Instead, the lobbyists are helping to write it themselves.
One bill that sailed through the House Financial Services Committee this month — over the
objections of the Treasury Department — was essentially Citigroup’s, according to e-mails
reviewed by The New York Times. The bill would exempt broad swathes of trades from new
regulation.
In a sign of Wall Street’s resurgent influence in Washington, Citigroup’s recommendations
were reflected in more than 70 lines of the House committee’s 85-line bill. Two crucial
paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied
nearly word for word. (Lawmakers changed two words to make them plural.)
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The lobbying campaign shows how, three years after
Congress passed the most comprehensive overhaul of
regulation since the Depression, Wall Street is finding
Washington a friendlier place.
The cordial relations now include a growing number of
Democrats in both the House and the Senate, whose
support the banks need if they want to roll back parts of
the 2010 financial overhaul, known as Dodd-Frank.
This legislative push is a second front, with Wall Street’s
other battle being waged against regulators who are
drafting detailed rules allowing them to enforce the law.
And as its lobbying campaign steps up, the financial i
ndustry has doubled its already considerable giving to
political causes. The lawmakers who this month
supported the bills championed by Wall Street received twice as much in contributions from
financial institutions compared with those who opposed them, according to an analysis of
campaign finance records performed by MapLight, a nonprofit group.
In recent weeks, Wall Street groups also held fund-raisers for lawmakers who co-sponsored
the bills. At one dinner Wednesday night,
corporate executives and lobbyists paid up to $2,500 to dine in a private room of a Greek restaurant just blocks from the Capitol with
Representative Sean Patrick Maloney, Democrat of New York, a co-sponsor of the bill
championed by Citigroup.
Industry officials acknowledged that they played a role in drafting the legislation, but argued
that the practice was common in Washington. Some of the changes, they say, have gained
wide support, including from Ben S. Bernanke, the Federal Reservechairman. The changes, t
hey added, were in an effort to reach a compromise over the bills, not to undermine Dodd-
Frank.
“We will provide input if we see a bill and it is something we have interest in,” said Kenneth
E. Bentsen Jr., a former lawmaker turned Wall Street lobbyist, who now serves as president
of the Securities Industry and Financial Markets Association, or Sifma.
The close ties hardly surprise Wall Street critics, who have long warned that the banks —
whose small armies of lobbyists include dozens of former Capitol Hill aides — possess outsize
influence in Washington.
“The huge machinery of Wall Street information and analysis skews the thinking of
Congress,” said Jeff Connaughton, who has been both a lobbyist and Congressional staff
member.
Lawmakers who supported the industry-backed bills said they did so because the effort was
in the public interest. Yet some agreed that the relationship with corporate groups was at
times uncomfortable.
“I won’t dispute for one second the problems of a system that demands immense amount of
fund-raisers by its legislators,” said Representative Jim Himes, a third-term Democrat of
Connecticut, who supported the recent industry-backed bills and leads the party’s fund-
raising effort in the House. A member of the Financial Services Committee and a former
banker atGoldman Sachs, he is one of the top recipients of Wall Street donations. “It’s
appalling, it’s disgusting, it’s wasteful and it opens the possibility of conflicts of interest and
corruption. It’s unfortunately the world we live in.”
The passage of the Dodd-Frank Act, which took aim at culprits of the financial crisis like lax
mortgage lending and the $700 trillion derivatives market, ushered in a new phase of Wall
Street lobbying. Over the last three years, bank lobbyists have blitzed the regulatory agencies
writing rules under Dodd-Frank, chipping away at some regulations.
But the industry lobbyists also realized that Congress can play a critical role in the campaign
to mute Dodd-Frank.
The House Financial Services Committee has been a natural target. Not only is it controlled
by Republicans, who had opposed Dodd-Frank, but freshmen lawmakers are often
appointed to the unusually large committee because it is seen as a helpful base from which
they can raise campaign funds.
For Wall Street, the committee is a place to push back against Dodd-Frank. When banks
and other corporations, for example, feared that regulators would demand new scrutiny of
derivatives trades, they appealed to the committee. At the time, regulators were completing
Dodd-Frank’s overhaul of derivatives, contracts that allow companies to either speculate in
the markets or protect against risk. Derivatives had pushed the insurance giantAmerican I
nternational Group to the brink of collapse in 2008. The question was whether regulators
would exempt certain in-house derivatives trades between affiliates of big banks.
As the House committee was drafting a bill that would force regulators to exempt many
such trades, corporate lawyers like Michael Bopp weighed in with their suggested changes,
according to e-mails reviewed by The Times. At one point, when a House aide sent a
potential compromise to Mr. Bopp, he replied with additional tweaks.
In an interview, Mr. Bopp explained that he drafted the proposal at the request of
Congressional aides, who expressed broad support for the change. The proposal, he
explained, was a “compromise” that was actually designed to “limit the scope” of the
exemption.
“Everyone on the Hill wanted this bill, but they wanted to make sure it wasn’t subject to
abuse,” said Mr. Bopp, a partner at the law firm Gibson, Dunn who was representing a
coalition of nonfinancial corporations that use derivatives to hedge their risk.
Ultimately, the committee inserted every word of Mr. Bopp’s suggestion into a 2012 version
of the bill that passed the House, save for a slight change in phrasing. A later iteration of the
bill, passed by the House committee earlier this month, also included some of the same
wording.
And when federal regulators in April released a rule governing such trades, it was
significantly less demanding than the industry had feared, a decision that the industry
partly attributed to pressure stemming from Capitol Hill.
Citigroup and other major banks used a similar approach on another derivatives bill. Under
Dodd-Frank, banks must push some derivatives trading into separate units that are not
backed by the government’s insurance fund. The goal was to isolate this risky trading.
The provision exempted many derivatives from the requirement, but some Republicans
proposed striking the so-called push out provision altogether. After objections were raised
about the Republican plan, Citigroup lobbyists sent around the bank’s own compromise
proposal that simply exempted a wider array of derivatives. That recommendation, put f
orth in late 2011, was largely part of the bill approved by the House committee on May 7
and is now pending before both the Senate and the House.
Citigroup executives said the change they advocated was good for the financial system, not
just the bank.
“This view is shared not just by the industry but from leaders such as Federal Reserve
Chairman Ben Bernanke,” said Molly Millerwise Meiners, a Citigroup spokeswoman.
Industry executives said that the changes — which were drafted in consultation with other
major industry banks — will make the financial system more secure, as the derivatives
trading that takes place inside the bank is subject to much greater scrutiny.
Representative Maxine Waters, the ranking Democrat on the Financial Services Committee,
was among the few Democrats opposing the change, echoing the concerns of consumer
groups.
“The bill restores the public subsidy to exotic Wall Street activities,” said Marcus Stanley,
the policy director of Americans for Financial Reform, a nonprofit group.
But most of the Democrats on the committee, along with 31 Republicans, came to the
industry’s defense, including the seven freshmen Democrats — most of whom have started
to receive donations this year from political action committees of Goldman Sachs, Wells
Fargo and other financial institutions, records show.
Six days after the vote, several freshmen Democrats were in New York to meet with bank
executives, a tour organized by Representative Joe Crowley, who helps lead the House
Democrats’ fund-raising committee. The trip was planned before the votes, and was not a
fund-raiser, but it gave the lawmakers a chance to meet with Wall Street’s elite.
In addition to a tour of Goldman’s Lower Manhattan headquarters, and a meeting with
Lloyd C. Blankfein, the bank’s chief executive, the lawmakers went to JPMorgan’s Park
Avenue office. There, they chatted with Jamie Dimon, the bank’s chief, about Dodd-Frank
and immigration reform.
The bank chief also delivered something of a pep talk.
“America has the widest, deepest and most transparent capital markets in the world,” he
said. “Washington has been dealt a good hand.”
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