Stimulus Funds to Tax Cheats?

Sen. Tom Coburn weighs in


NEIL CAVUTO, HOST OF “YOUR WORLD”: A hearing just wrapping up looking at $24 billion in stimulus handouts going to suspected tax cheats.

To the guy who held the hearing, probably one of the last great spending fighters we have in Washington, Oklahoma Republican Senator Tom Coburn.

Senator, very good to have you.

SEN. TOM COBURN, R-OKLA.: Hey, good to be with you, Neil.

CAVUTO: This tax cheat thing, I guess it shouldn’t shock me, Senator, but it’s the latest example of money falling into the wrong hands -- the prison inmate thing, the kids getting it, dead folks getting Medicare checks and all.

Now, I know people who support these programs say these are the exceptions, not the rule, but the more we spend, the bigger these exceptions. What’s really going on?

COBURN: Well, we – what’s really going on is, we don’t have a system within the federal contracting procedures that would cause us to not give contracts to people who are tax cheats.

Is it better than what it used to be? Of course. But it’s not where it needs to be. I mean, we actually had somebody tell us today, well, you don’t want to bar somebody that only owes $200. I don’t want to give the bureaucracy that decision power.

If you can’t pay your taxes and you’re not smart enough to have a shortage on taxes that ought to keep you from getting federal contracts. We want efficient, well-run companies that know what their obligations are and meet them. And if they not meeting their federal tax liabilities, they’re certainly not going to meet their liabilities under the contract.

Now, most of...


CAVUTO: I’m just wondering, though, Senator, whether we abuse it under both parties. I mean, you throw enough money at someone -- I mean, this, in defense, during the last administration -- it was the $1,000 hammer story and the rest.

How does this and why does this keep happening?

COBURN: Because you have people who are spending not their own money, somebody else’s. And it’s not as important.

If you went out to contract, and you knew somebody was going to take an extra $1,000 from you, you were going to work -- you’re going to work on that to make sure you got the best deal you can get for you.

And we have great contracting officers. We have a shortage of them, but we have great contracting officers, but we have all these rules and things that they have go through, rather than just some very simple things. You certify you don’t have any tax deals. We’re going to bounce it off the IRS. If they say you don’t, then you can have the contract.

If they say, what you told us isn’t true, you’re going to jail for a felony false certification. We need to start acting like what we would expect out of our children, which is compliance and personal responsibility and accountability. And we just don’t do that.

(CROSSTALK) CAVUTO: Well, it makes way too much sense, Senator, so it’s not going to go anywhere.

So, I’m kidding.


CAVUTO: You were in this gang of six.

COBURN: Well, we’re actually going to do a bipartisan bill to fix it.


CAVUTO: I understand you’re trying that. But you were also part of this bipartisan gang of six to fix spending. Then you got frustrated. Did you actually quit the gang? And was it over this Medicare issue? You wanted additional Medicare savings?

COBURN: No, I -- I do want additional Medicare savings. I want us to actually pass a deal. I didn’t quit. I’m on sabbatical. I’m going to give them a good letting-alone for a while and see how things works.

(CROSSTALK) CAVUTO: Well, what does that mean? So now there is a gang of five? What...

(CROSSTALK) COBURN: Well, I don’t know. I’m not privy to what is going on right now, so I can’t tell you.

I’m working on bringing to the American people $9 trillion worth of cuts that they can choose from. I think it takes $9 trillion over the next 10 to actually make us healthy. And we ought to be about doing that. But I am not about to embrace something that does not fix the problem.

And there has been a lot of conjecture. I would say most people -- everybody in that group was trying to negotiate in good faith. They just couldn’t go where I needed them to go for me to put my credentials on the line to say this will actually fix the problem, because I don’t think it would have.

CAVUTO: But, Senator, it wasn’t only Democrats who left you sort of at the aisle there.

COBURN: Well, no, that’s not true, Neil.

CAVUTO: But you were not getting a lot of support.

Well, no, but when it came to Medicare savings out of your colleagues in the Senate, let’s say its fair to say that not nearly the same gusto as among your House colleagues.

COBURN: Well, but here’s the question. Is there anybody in America who knows what our financial situation is that thinks Medicare is going to be the same five years from now as it is today? The answer is it’s a financial impossibility. So, if in fact we have that as a truism, we ought to be about fixing it now. And that means creating more personal responsibility, getting more fraud out of Medicare, fixing the payment system.

CAVUTO: So, fine, but when Scott Brown, your colleague, comes out the gate saying the Ryan plan isn’t his cup of tea, for whatever reason, and the Senate itself, as a group of Republicans, do not want to address Medicare immediately...

COBURN: Oh, I think you’re going to see it.


CAVUTO: Well, you tell me.

(CROSSTALK) CAVUTO: Allay me of my pessimism.

COBURN: Well, I think there’s going to be a large number of Republican senators vote for the Ryan budget.

I think there’s going to be a large number of Republican Senators vote for other budgets that actually solve our problem and get us balanced. So, the question is -- is, do we want to do the best policy thing for America or are we more concerned about politics?

(CROSSTALK) CAVUTO: Well, don’t you think a number of your colleagues are? They’re looking at this Upstate New York race. And if the Democrat wins -- and it’s presumably on this Paul Ryan Medicare thing, which I don’t think is fair...

(CROSSTALK) CAVUTO: Are they getting scared?

COBURN: I will tell you, if that is -- if that’s the case, our country’s toast, because if we’re going to run away from what the very real problems are because we are worried about elections, then we’re not going to solve our problems.

CAVUTO: But they are. A lot of your colleagues are.

COBURN: Well, some are, but most aren’t. And to paint it with a broad brush is not fair to them.

You’ve had two Republican senators who have come out and publicly said they’re not going to vote for the Ryan budget. Well, the Ryan budget, although it’s good, it doesn’t get where we need to be. The Toomey budget is much better. And the fact is, it gets us balanced.


CAVUTO: Senator, when you quit something or take a sabbatical from something, you are indicating your frustration with a process that to me doesn’t appear to be going anywhere fast.

COBURN: Well, here’s what I know, is, if we don’t fix the problems in front of us, regardless of the debt ceiling or not debt ceiling, our opportunities to be in control of the solutions in the future will be limited. And the time for -- for -- for leadership is now, and to -- just like Paul Ryan said, the American people need to know this isn’t going to affect anybody over the next 10 years.

CAVUTO: All right.

COBURN: It’s going to affect the people younger than 55.

But, if you want to fix it, you’ve got to fix it now, and you’ve got to start now. And you can’t continue to lie to the American people and say, here’s a -- a mandatory program that is just fine. It’s not. It’s broken. It’s unaffordable. We have to fix it.

CAVUTO: Senator, thank you very much. Good seeing you.

COBURN: You’re welcome. Good to see you.

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