Owe taxes? Want funding? No problem

By The Gazette Editorial Board

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U.S. Sen. Chuck Grassley, R-Iowa, is calling attention to a new report about federal stimulus funds. He's right to be upset.

The Government Accountability Office found 3,700 recipients of the 2009 American Recovery and Reinvestment Act that owe $757 million in back taxes nonetheless received $24 billion in stimulus awards. The group averaged more than $204,000 in back taxes; some owe millions.

The GAO examined 63,000 of 80,000 contractors who received funding, The Recovery Act appropriated a total of $275 billion for federal contracts, grants and loans. As of March 25, $191 billion had been paid out.

Grassley, among those who requested the GAO investigation, especially wonders why the federal government awarded stimulus funding to many companies that have tax debts going back several years and have yet to make good-faith efforts to pay up. “A government contract is something to be earned, not something to be taken for granted,” he said Tuesday.

Agreed.

While the report's findings (www.gao.gov/new.items/d11485.pdf) may seem relatively small compared to the total stimulus money and number of recipients, the GAO also said the more realistic figures of those with back taxes are at least 10 percent owing nearly

$1 billion.

In either case, it's too much to excuse. By comparison, a billion dollars is one-sixth of Iowa's entire state budget.

The GAO's report also points out that federal law does not prohibit the awarding of contracts or grants because a company or other entity owes federal taxes.

Grassley said there is a federal program in place to catch “tax cheats that get federal payments” after the fact but many escaped the GAO review because the money was disbursed at the state and local level or by a prime contractor.

Grassley says similar problems involving back taxes have surfaced previously. He wants Congress to shore up the oversight and rules.

Grassley for decades has been the Senate's premier budget watchdog when it comes to questionable use of taxpayer dollars. His latest concerns should be taken seriously as well.

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