Fiscal Reponsibility

[Disclaimer: This post was first published on Coleen Rowley's campaign weblog.]

The New York Times has an absolutely fascinating story out this morning, about plans to privatize IRS collection enforcement:

Within two weeks, the I.R.S. will turn over data on 12,500 taxpayers — each of whom owes $25,000 or less in back taxes — to three collection agencies. Larger debtors will continue to be pursued by I.R.S. officers.

The move, an initiative of the Bush administration, represents the first step in a broader plan to outsource the collection of smaller tax debts to private companies over time. Although I.R.S. officials acknowledge that this will be much more expensive than doing it internally, they say that Congress has forced their hand by refusing to let them hire more revenue officers, who could pull in a lot of easy-to-collect money.

This is one of the problems with our current Congress --- it seems that no one can analyze the consequences of their actions more than one day into the future. In fact, it seems that few people even want to, other than crying about the theoretical Social Security crisis in an effort to distract attention from more pressing matters.

It's difficult to imagine a bigger waste of money than to hire private collection firms to do work that the IRS could do far more efficiently itself. How much more efficiently?

Privatizing government services is often promoted as a way to cut costs. But the government would probably net $1.1 billion from private debt collectors over 10 years, compared with the $87 billion that could be reaped if the agency hired more revenue officers, as Mr. Rossotti had recommended.

About 80 times more efficiently. First Congress passes unprecedented tax cuts which principally benefit the wealthy, and then they give away a substantial portion of the tax revenues to private companies.

It's time for a change.