OMB Watch released a statement yesterday afternoon harshly criticizing the Democratically control Congress and the president for abandoning fiscal responsibility in the final hours of 2007 after they entire year was spent adhering to or attempting to adhere to righting our nation's fiscal course. From the statement: Adding insult to a year of fiscal policy injuries, Congress has abandoned fiscal responsibility by waiving pay-as-you-go (PAYGO) rules in order to pass a one-year patch to the alternative minimum tax (AMT) without offsets. This tax cut adds another $50 billion to an already expanding deficit next year, and will give fewer options for our children and grandchildren to seek solutions to the problems of tomorrow. While I expect as much from President Bush, this is a huge disappointment from the new Democratic majority in Congress whose number one promise was to uphold pay-as-you-go (PAYGO) rules. So much for promises: This vote is particularly disappointing as Democrats have gone to great lengths this year to comply with PAYGO rules, particularly on spending. From student loan reforms to expansions of the State Children's Health Insurance Program and Food Stamps, Democrats have negotiated the turbulent fiscal waters of the federal budget responsibly, diligently, even courageously. That is why at this point, after all that work and sacrifice, the compromises and the concessions needed to construct balanced solutions to the AMT problem, it is unacceptable for them to abandon their stated principles of fiscal responsibility because they fear Americans will not accept paying up front for the services and benefits the country demands. As the statement makes clear, there is plenty of blame to go around in Washington for this policy failure. What an awful way to end 2007.

Walter Pincus reported in the Washington Post on Monday that the fiscal 2008 intelligence authorization bill includes a requirement that Director of National Intelligence Mike McConnell produce a report by March concerning the "activities performed by contractors" in all 16 intelligence agencies and how the outsourcing process at those agencies is overseen. Apparently Congress is concerned the intelligence community does not understand which functions can appropriately be outsourced and which should be handled by government employees. Perhaps they are also concerned about one estimate showing a core government worker, on average, costs about half as much ($126,500) as a average contracted employee ($250,000). That fact alone is cause for concern. How are contractors supposed to be saving the government money when they are charging twice as much as it would cost the government? Tom Shoop, who blogs over at Government Executive magazine, quoted another blogger who focuses on the intelligence community who correctly points out the funding structure Congress has implemented has lead to increased levels of outsourcing: By limiting the number of positions within the Intelligence Community while adding funds for services, Congress set the stage for the wide scale outsourcing we see today, with some 70% of the de facto workforce of the CIA's National Clandestine Service made up of contractors. After years of contributing to the increasing reliance upon contractors, Congress is now providing a framework for the conversion of contractors into federal government employees--more or less. An interesting aspect to this issue is that Congress has allowed Mr. McConnell the leeway to automatically change positions held by contractors into full-time government positions. McConnell has the authority to increase the size of the intelligence agencies by up to 10 percent. This approach might be one way to fight back against the raft of outsourcing that has accelerated during the Bush presidency - by giving executive branch personnel the authority to expand government positions automatically rather than having to pound a higher appropriations number through Congress every year for staff increases. I'm curious to see if this tactic will work, and if so, if it will be tried elsewhere in the Federal government. Stay tuned...

The President and his taxophobic colleagues in Congress, refusing to abide by the rules of PAYGO, have succeeded in giving the lie to their campaign to re-invent themselves as fiscally responsible. This death-bed conversion for Bush and his Congressional co-conspirators was obliterated for good today, when House Ways & Means Committee Chair Charles Rangel (D-NY) conceded that, while he had long supported Blue Dogs and other defenders PAYGO,