President Barack Obama is directing the Office of Management and Budget and other federal agencies to keep contractors who are delinquent on their taxes from getting new contracts with the government.
The president signed a directive on the issue at a White House ceremony Wednesday, a move the White House says is part of a broader effort to cut down on waste and ensure that tax cheats aren’t boosting their bottom lines at taxpayers’ expense.
“All across this country, there are people who meet their obligations each and every day. You do your jobs. You support your families. You pay the taxes you owe because it’s a fundamental responsibility of citizenship,” Obama said. “And yet, somehow, it’s become standard practice in Washington to give contracts to companies that don’t pay their taxes.”
But he said that policy can be driven not only by Congress, but by the administration through presidential memorandums like the one he is signing Wednesday.
“Here in our nation’s capital, there are a number of ways to advance the ideals and interests of the American people,” Obama said.
Citing a 2007 report by the Government Accountability Office report, he said there are “tens of thousands” of “deadbeat companies” that owe more than $5 billion, money he said could be invested in education, health care or clean energy initiatives.
Obama also directed the Internal Revenue Service to review the overall accuracy of firms’ claims about tax delinquency “to be sure that when a company says it’s paying taxes, that company is, in fact, paying taxes.”
Tax cheats shouldn’t sweat this news too much however as it’s well known that they could all become well paid members of the Obama Administration.