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Public Statements

Executive Session

Floor Speech

Location: Washington, DC


Mr. BAUCUS. Mr. President, I would like to speak on another matter, as well as on the Marilyn Tavenner matter. Frankly, my remarks will take more than 4 minutes, so to what degree we can get the Senate to postpone votes, we will be working on that as I am speaking.


Mr. President, over the last 5 days, information that I can describe only as very troubling has emerged about a systematic practice by the IRS to target conservative groups seeking tax-exempt status.

According to a report released last night by the Inspector General for Tax Administration, the IRS developed and used inappropriate criteria to identify applications from organizations applying for tax-exempt status based ``upon their names or policy positions instead of indications of potential political campaign intervention.''

In addition, the 48-page report finds that ineffective management of the IRS allowed for this inappropriate practice to stay in place for more than 18 months, resulted in substantial delays in processing certain applications, and allowed unnecessary information requests to be issued.

While the inspector general report does not say the IRS was intentionally partisan, it did find that the agency's narrow focus of the criteria gives the appearance that the IRS was not impartial in conducting its mission.

These actions by the IRS, if true, are a clear breach of the public's trust. Targeting groups based on their political views is not only inappropriate, but it is intolerable, unacceptable, and cannot be allowed.

I intend to get to the bottom of what happened. The inspector general's report is just the beginning. There are still many unanswered questions. The Senate Finance Committee, which has congressional oversight over the IRS, has just begun what will be a thorough investigation.

Some are now using this issue to try to score political points. Some of my friends across the aisle are claiming the IRS was just doing what Democrats wanted in examining these conservative groups.

Let me clear up this misperception. I, for one, have never advocated targeting conservative groups. This is important, let me be clear. What I have called for in the past, especially in 2010, and continue to call for today is closer examination of any and all groups already granted or applying for tax-exempt status--let me say that again, any and all groups.

Since the Citizens United case decided by the Supreme Court, there has been a dramatic increase in political organizations masquerading as social welfare groups. We need to make sure these groups are complying with IRS political activity rules.

Any group claiming tax-exempt status under section 501(c)(4) of the Internal Revenue Code needs to prove it is following the letter of the law.

As the New York Times noted yesterday, ``No one has an automatic right to this tax exemption. Those seeking one should expect close scrutiny from the government to ensure it is not evading taxes.''

While I expect the scrutiny of the IRS to be thorough, I also expect it to be administered equally across the board, on conservative or liberal organizations and any in between.

Americans expect the IRS to do its job without passion or prejudice. The IRS can't pick one group for closer examination and give the other a free pass. But that is apparently what they did here. That was the agency's big mistake, and now they have to answer for it.

The Senate Finance Committee has launched a formal bipartisan investigation. A team of investigators from my staff and the staff of Senator Hatch has begun compiling questions and seeking additional documents from the IRS. There seems to be some inconsistencies in the timeline regarding who knew what and when, and we will get to the bottom of it.

As part of the investigation, I went straight to the top and met with Acting Commissioner Steve Miller yesterday. It was a tough talk. I told Mr. Miller the actions of the IRS were inexcusable and warned he is in for serious questioning from this committee and from others. I told Mr. Miller the committee demanded nothing less than his complete cooperation and total transparency.

The Finance Committee will hold a hearing on Tuesday to examine this issue. There needs to be a full accounting of what happened at the IRS and who knew what, when, how long did this practice go on, and what other groups were flagged for additional scrutiny.

There is another important question that needs to be asked: Is there a fault in the Tax Code that may have contributed to the IRS taking such unacceptable steps? Do we need a better definition of what organizations qualify for tax exemption? Do we need to revisit the role tax-exempt organizations play in our political system? What part of the Tax Code has to be changed for us to guarantee this overreach never happens again? And there are many more questions.

This will be an issue we delve into in tax reform as well. Clearly, something is amiss for the IRS to behave the way it did. The actions of the IRS are unacceptable and people will be held accountable.


Mr. President, let me take a moment to turn briefly to a related topic. As some may know, the Senate Finance Committee has been working on comprehensive tax reform for the last 2 years. We have held more than 30 hearings and heard from hundreds of experts on how tax reform can simplify the system for families, spark economic growth, create jobs, and make U.S. businesses more competitive.

Last Thursday I teamed with House Ways and Means Committee Chairman Dave Camp to launch a Web site to get even more input directly from the American people. We launched to give folks in Montana, in Michigan, and all across America an opportunity to weigh in on tax reform. Since the launch of the site less than a week ago, we have received thousands of ideas directly from the American people on how to improve the Code.

I want to thank all those who have shared their ideas and opinions, and I encourage more people to log on to to let us know what they think of the Nation's tax system and what it should look like.


Mr. President, if I might, one other issue I want to address is the nomination of Marilyn Tavenner.

Marilyn Tavenner has been nominated to be Administrator for the Centers of Medicare and Medicaid Services, otherwise known as CMS. As head of CMS, Ms. Tavenner would be in charge of administering Medicare, Medicaid, and the Children's Health Insurance Program, among others.

Roughly one in three Americans relies on health coverage under the jurisdictions of CMS--one in three. This includes 50 million Medicare patients, 56 million Medicaid patients, and more than 5.5 million children in the Children's Health Insurance Program. In my home State of Montana, 167,000 seniors and 8,300 military retirees rely on Medicare alone.

Marilyn Tavenner is an experienced health care professional. She has proven herself to be a strong leader, and I believe she is the right woman to lead CMS, a view shared by my colleagues on both sides of the aisle.

Ms. Tavenner is a proud native Virginian and her congressional delegation, all of them, warmly introduced her--if they were all not there, in spirit--at a confirmation hearing before the Finance Committee last month. Democratic Senators Mark Warner and Tim Kaine and Republican House majority leader Eric Cantor all spoke on her behalf. Here is what House majority leader Cantor said:

I don't think there is any secret that I differ with the Obama administration in a lot of matters in health care policy ..... but if there is anyone that I trust to try to navigate [these] challenges, it is Marilyn Tavenner.

Two weeks ago, the Finance Committee approved Ms. Tavenner's nomination with a unanimous vote. She has earned this broad support from both sides of the aisle and the confidence of many of us because of her demonstrated abilities.

She started as a nurse, quickly rose through the ranks to become a hospital administrator, served 4 years as Virginia's Secretary of Health and Human Resources before joining CMS in 2010, and she has served as acting administrator for the last year and a half. I am confident we will get a strong vote for this nomination because Marilyn Tavenner has a reputation for being a pragmatist and a person who doesn't give up.

One story I wish to share--and this is important--is of Marilyn working the night shift in the intensive care unit at Johnston-Willis Hospital in Richmond, VA, as a nurse. At 2 a.m. a rescue squad brought in a young woman to the emergency room. She had been in a terrible car accident and crashed through the windshield of her old Volkswagen bug.

Badly injured and having suffered massive blood loss, she was pronounced dead. But Ms. Tavenner and the doctors went to work to revive her. The surgeon on call told reporters:

We came up with a game plan, and it was right on target. We used about 60 units of blood. Marilyn was very supportive in everything ..... The patient ultimately walked out of the hospital.

That is Marilyn Tavenner. She doesn't give up. We need that type of leader at CMS, believe me. Her experience in health care is real, it is varied, and it will serve us well in this position.

One final note. As someone pointed out, CMS has operated without a confirmed administrator for several years, so I am glad we are moving forward with this nomination. We need a confirmed administrator, with all the work she has to do, especially implementing the Affordable Care Act. That was an essential bill that created good law. In a few months the health care marketplaces will be open for enrollment, and tax credits and subsidies will be available to help families and small businesses pay for health care. It is a critical time to have someone with Ms. Tavenner's experience confirmed and in charge at CMS. She has done a good job in the past, and she will do a good job in the future.

I urge my colleagues to support me in supporting her nomination.


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