23. CONGRESS TAKES THE MONEY AND RUNS

Last year, Congress got caught with its hand in the till and everybody heard about it.

In fact, Senator William Proxmire (D-Wis) revealed what he called "Congress's Dirty Little Secret" in the July issue of Reader's Digest, the largest circulation magazine in the world. An incensed Proxmire said "Voters should be outraged by what we've done. ... Unless Congress moves to repeal the tax break it has given itself, there may well be a new rebellion."

In brief, this is what caused all the furor:

On December 15, 1981, the U.S. House and Senate approved the Dole Amendment giving themselves a nice tax break -- an automatic deduction of $75 for living expenses each day Congress meets during the year.

The tax deductions, unchallengeable by the IRS, were worth about $19,000 to each member of Congress.

When word about this self-serving legislation got out in early 1982, the American public -- already suffering from recession, unemployment, inflation, and its own tax increases -- said it was mad as hell and wouldn't take it any more.

As U.S. News & World Report said there was a tidal wave of criticism -- some 34,000 angry letters to the Internal Revenue Service alone. "Get this repealed or, so help me, I will refuse to pay my income tax this year," wrote a Pittsburgh woman. Others assailed lawmakers as "parasites," "thieves," and "hogs."

As a result of the media coverage and the public outcry and an awareness of the coming November 2 elections, the House voted 378 to 7 on June 9 to go along with the Senate proposal to repeal the tax break.

There was a flurry of news stories, sanctimonious statements in Congress, and the woman from Pittsburgh no doubt gleefully said "Well, we got them this time!".

Not quite. The media didn't follow-up on that story.

While Congress repealed the legislation, it did not make it retroactive.

Thus, every Congressman who wanted to take advantage of that tax break for 1981 could and no doubt did.

SOURCES:

Correspondence from Irving Babbitt (10/18/82) who cited his Congressman, Ray McGrath, 5th CD, New York; confirmed by David Bonta (3/30/83), aide to Congressman Douglas Bosco, 2nd CD, California; US News & World Report, 6/21/82, "The Tax Break That Congress Regrets," Reader's Digest, July 1982, "Congress's Dirty Little Secret," by Sen. William Proxmire.