The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Boneheaded Bonuses and Boondoggles

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


Just when you thought the IRS had been properly chastised and humbled for its egregious behavior with respect to its over-the-top spending on training conferences, some $50 million between 2010 and 2012, the agency is now preparing to hand out $70 million in bonus money to its employees.  This is being done in spite of the fact that in April, the White House ordered a freeze on optional bonuses and awards because of sequestration, the automatic budget cuts that most big-government fans have been complaining about.  The IRS claims it is following legal requirements within their employees’ union contract on giving out the bonuses.

Senator Chuck Grassley (R-Iowa) responded to the IRS claim this way:

The IRS says it’s legally obligated to comply with its bargaining agreement…but the bargaining agreement says award funding is granted ‘within applicable budget limitations’ and can be changed with 60 days’ notice.  If the IRS thinks it has to pay the bonuses, then why did it give notice in March that it was eliminating the awards?  The IRS needs [to] explain that notice and make it available to the public.”

The Grassley press release also said the senator, “received insight from a person with knowledge of IRS budgetary procedures alleging the agency is failing to take all legal steps to stop the bonuses to union members.”

Of course, back in May, the IRS announced that all employees would have at least five furlough days, perhaps more.  According to news reports, some $600 million has to be cut from the IRS budget and furloughing employees is one way to reach this figure.  Yet somehow the IRS can find the money to pay some of their employees bonuses.

Readers may recall that Lois Lerner, the high-level executive at the IRS who oversees the Exempt Organizations Division that targeted conservative groups seeking nonprofit status, received $42,531 in bonuses between 2009 and 2011.  But according to Mark Tapscott of the Washington Examiner, it seems doling out bonuses is nothing new for the IRS.  Lois Lerner’s predecessor, Sarah Hall Ingram, received more than $100,000 in bonuses between 2009 and 2012, when the targeting of conservative groups began.  She has been now promoted to run the office that will oversee the implementation of Obamacare within the IRS.

Mark Tapscott also noted it is the higher-paid employees with an average salary of $94,000 a year that get the bonuses.  While the bonuses average out to about $5,500 per person, the amount can be more.  Those with a bonus greater than $25,000 have to have approval from the president.

So while all IRS employees have to be furloughed, the higher-paid ones will continue to receive their bonus if National Treasury Employees Union has its way.  Furthermore, it will be extremely difficult for any opponent of the sequester to talk about how bad the budget cuts are with a straight face as long as agencies such as the IRS are passing out cash rewards.

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