Acting-IRS commissioner may cancel union employee bonuses

Facing a mountain of criticism over the agency’s targeting of Tea Party and conservative organizations, acting-IRS Commissioner Danny Werfel is working to cancel the $70 million in bonuses union employees were scheduled to receive:

The acting IRS chief told agency employees on Tuesday that bonuses for managers would be canceled this year, and that he was working to do the same for union staffers.

Danny Werfel, who took over the reins at the IRS in May, told staffers across-the-board spending cuts had required bonuses be suspended elsewhere in the federal bureaucracy, and agency employees serving under union contracts shouldn’t be treated any differently. Werfel is seeking to stop bonuses for senior executives as well.

That’s the good news. What’s more, House Republicans are open to trading a couple of furlough days in exchange for the bonuses, an idea that Werfel is open to. But the bad news is that the union that represents IRS employees is pushing back against scrapping the bonuses, claiming that the agency is legally bound to pay them:

The National Treasury Employees Union (NTEU) has said the IRS is legally bound to pay out those awards. Colleen Kelley, the union’s president, reiterated that stance on Tuesday, saying the agency should cut elsewhere before getting rid of bonuses and noting that the awards being discussed are for work starting in 2012.

Werfel’s comments came the same day that House Majority Leader Eric Cantor (R-VA) unveiled plans for a series of votes aimed at the IRS — including allowing Americans to record their conversations with government officials and requiring congressional approval for regulations that will have a significant impact on the economy.

There are two problems here that need to be addressed. First, the IRS has gotten far too big and powerful, which is an indictment of our tax code, and will only get bigger thanks to ObamaCare.

It costs Americans $160 billion each year to comply with the 73,608 pages of federal tax rules and regulations. Moreover, the IRS is claiming broad power to conduct surveillance of Americans’ e-mail and text messages without a warrant. Needless to say, the single biggest argument for substantive tax reform is the IRS itself.

The other is the need to get rid of federal employee unions. The main reason Lois Lerner, the employee at the center of the IRS scandal, hasn’t been fired yet is because of union protections. Instead, she’s on administrative leave and still getting a government paycheck. Public-sector unions have made it almost impossible to fire workers for abuse or gross negligence. In fact, Bloomberg recently reported that firings for IRS employee misconduct are at an 11-year low.

Political dynamics in Washington make it next to impossible to accomplish these reforms, at least right now. While the House could act, President Obama and Senate Democrats — the biggest recipients of National Treasury Employees Union support — aren’t going to let that happen. But it does provide some motivation to work a little harder to put reformists in office next fall.

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