Before I came to Congress, I spent more than two decades in the local Sheriff's office serving and protecting the people of Indiana. The most basic role of law enforcement is respecting our laws and bringing criminals who violate them to justice. In the Sheriff's office, we would never dream of rewarding those who break the law. Yet, that's just what Congress is doing: rewarding government contractors who are delinquent on their taxes with lucrative federal contracts.
The problem is more widespread than you might think. Studies by the Government Accountability Office (GAO) have repeatedly shown that thousands of federal contractors owe over $5 billion in unpaid taxes. Despite these disturbing numbers, federal agencies are not required to consider tax debts in making contracting decisions. In fact, current law actually prohibits agencies from accessing the tax data necessary to identify and stop these tax cheats from receiving taxpayer-funded contracts.
Everyday Americans play by the rules and pay their taxes; I don't think it's too much to ask companies that receive millions, sometimes billions, in taxpayer dollars to do the same. Not only do these bad actors cheat our government of tax revenue, they also gain an unfair advantage over businesses that are doing the right thing.
That's why I teamed up with Senator Claire McCaskill to introduce the Contracting and Tax Accountability Act. The bill requires contract and grant applicants to give contracting officers permission to check their tax status, and it withholds large federal contracts from businesses and organizations that fail to file tax returns and are delinquent on their taxes.
President Obama introduced similar legislation as a Senator, and he continues to be a strong advocate for these important reforms in the White House. In January, he signed a Presidential Directive ordering the Office of Management and Budget, Treasury Department, and other federal agencies to take steps to prevent contractors who are delinquent on their taxes from receiving new government contracts. While this was an important step forward, it's time for Congress to get tough and hold these tax cheats accountable once and for all.
Our bill is a practical and cost-effective way to ensure all companies compete on an equal playing field and that our tax dollars are being used wisely. By passing these simple reforms, we can begin to restore some needed accountability to the contracting process, as well as the public's trust in Washington.