The Bulletin, 7/13/2010 4:00 am
By Keith Chu

WASHINGTON — Oregon may launch an investigation of its heating aid program, a top state auditor said on Monday after a federal audit of the program in seven other states uncovered more than $100 million in fraud.

The state’s top auditor said his office doesn’t have the staff to investigate the program this year, but it will likely begin an in-depth examination next year. In response, U.S. Rep. Greg Walden, R-Hood River, who asked the Oregon Secretary of State to audit the state’s Low Income Home Energy Assistance Program last week, said the state should take a look sooner, after a Government Accountability Office investigation in seven states found $116 million was given to people who didn’t qualify for benefits.

Gary Blackmer, director of the audit division of the Oregon Secretary of State’s office, said he plans to make the program a priority, as soon as three other pending audits are finished this year.

“It’ll be one of those that are toward the top of the list,” Blackmer said.

The Low Income Home Energy Assistance Program provides hundreds of dollars each month to low-income families to keep homes and apartments warm. This year, a family of four making up to $40,563 is eligible for $349 monthly. The state gave aid to more than 114,000 families last year, according to its 2010 model plan.

In Central Oregon, the heating aid is awarded to poor families through NeighborImpact. The public relations director and energy assistance manager at NeighborImpact were both out of the office on Monday.

A Government Accountability Office investigation in Illinois, Maryland, Michigan, New Jersey, New York, Ohio and Virginia found fraud, or failure to provide basic documentation, such as Social Security numbers, by people who received about 9 percent of the program funds. Among the examples it cited were 725 people in prison who received heating benefits, numerous people who collected benefits on behalf of dead relatives and at least three U.S. Postal Service employees who earned far more than the income limit and still received the aid. “There are people who seem to make a career out of stealing from the taxpayers in these programs,” Walden said.

Walden requested the GAO investigation last year, when he was the top Republican on the Oversight and Investigations Subcommittee of the Energy and Commerce Committee.

Walden said he planned to write Gov. Ted Kulongoski, a Democrat, to ask the Office of Housing and Community Services to examine the heating program this year.

“I’d prefer they’d be able to get on it sooner,” Walden said.

The Observer, 7/08/2010 03:05 pm
By Bill Rautenstrauch

U.S. Congressman Greg Walden passed through La Grande Wednesday, sounding a warning for members of the Union County Chamber of Commerce: A huge economic crisis looms if federal borrowing and spending isn’t reined in.

Speaking to a crowd of about 40 people at a chamber luncheon at Ten Depot Street, Walden, R-Ore., forecast a time when the U.S. debt load will equal or surpass those of countries involved in the European debt crisis, especially economically troubled Greece.

“In less than 10 years, we will be Greece,” he said. “That’s just not a very bright future for our country.” (more…)

The East Oregonian

, 7/8/2010
By Phil Wright

Oregon Rep. Greg Walden touched on local issues Wednesday while on a stop in Pendleton to tout the need to curb federal spending. The lone Republican in Oregon’s congressional delegation met with the East Oregonian editorial board after a public event. 

Walden said jobs and the economy are still among top concerns for voters in the district, which includes counties east of the Cascades and several with an unemployment rate above the statewide average of 10.6 percent. Walden, though, didn’t hold out much hope that the eastside foresty bill from Oregon Sen. Ron Wyden would gain enough traction to alleviate his district’s anemic economy.

“The House is a tough sell for any forest legislation,” he said.

Last December, Oregon’s senior Democrat in the Senate proposed the Oregon Eastside Forest Restoration, Old Growth Protection, and Jobs Act of 2009. Wyden, conservation groups and timber industry interests collaborated on the bill to greatly increase thinning and brush-clearing projects on 8.3 million acres in six national forests east of the Cascades. Additionally, the bill would reduce the danger of a catastrophic wild fire, and, most importantly for Walden’s district, add jobs and provide lumber to struggling mills.

The bill still has hearings to get through in the Senate before even getting to a floor vote. But Walden said if the eastside forest plan makes it to the House it could suffer a quick demise. Right now, Walden said, House leadership, won’t even allow a hearing on a forestry bill.

Walden also said he’s working on meeting with a new admiral regarding the Boardman Bombing Range, which the Navy uses for electronic targeting practice. Walden said he wants to explore how the Navy could accommodate a major transmission line that would cross through the range, and he wants to explore how nearby farms might be able to use a portion of the range for new agricultural production.

In Pendleton, Walden held a public meeting to encourage citizens to use two House Republican websites to weigh in on federal spending and Congress’ agenda.

The government’s deficit spending under the Obama administration is at $900 billion, Walden said, an all-time high that’s nearly twice the previous high-water mark that came during President George W. Bush’s eight years in office. Walden said citizens can visit the “You Cut” website to vote on programs House GOP leaders have selected for budget cuts. And americaspeakingout.com allows visitors to give their ideas about the federal government.

After Pendleton, Walden headed to Hermiston, where this morning he toured small businesses.

Baker City Herald, 6/23/2010 02:02 pm
By Ed Merriman

Officials with the U. S. Department of Transportation said today that $3.2 million has been earmarked for repairs to a stretch of the Wallowa Mountain Loop Road washed out by recent flooding.

“We just got off a conference call with John Porcari, deputy director at the Department of Transportation, and he confirmed we will be getting the money to repair Wallowa Loop Road,” said Rep. Greg Walden, R-Ore.

Federal officials have deemed the Loop Road, a popular summer route between Baker and Wallowa counties, will have the highest priority for repairs to be done by Nov. 1.

The Loop Road generally is closed due to snow from late fall through late spring.

“The Forest Service made a very strong case for the funding to get Wallowa Loop Road back up and open as soon as possible,” Walden said.

Over the past two weeks, Walden has been pushing to get funding for the road repairs on a fast track for approval, due to the road’s importance to the area economy and tourism industry.

Now that the money has been allocated, Walden said, “it’s important to get boots on the ground making the repairs as soon as possible.”
The washed out section is several miles north of Highway 86.

Klamath Falls Herald and News, 6/22/2010

U.S. Rep. Greg Walden, R-Ore. and two federal lawmakers from California have sent a letter to a House committee in support of legislation that includes $10 million for farmers impacted by the water shortage in the Klamath Basin.

If approved, the money   would go to the U.S. Bureau of Reclamation’s drought program, which includes a water bank program, according to a press release.

The funding is already included in a Senate version of the bill. Andrew Whelan, Walden’s spokesman, said the letter is meant to emphasize   its importance.

“Supporting the communities in the Basin isn’t a partisan issue,” Walden said in the release. “The senators did great work to get the funding in the bill, and I hope that this bipartisan effort in the House will bring this much-needed relief to the Basin

Baker City Herald, 6/18/2010 09:04 am
By Ed Merriman

Congressman Greg Walden is continuing his push to secure federal money to rebuild the flood-damaged Wallowa Mountain Loop Road, and to help Baker County farmers and ranchers fix irrigation networks.

In response to a letter and phone calls from Walden, a Republican who represents Eastern Oregon, officials from the Federal Highway Administration visited the Loop Road on Thursday with U.S. Forest Service representatives.

The Federal Highway Administration officials will help the Forest Service, which manages the Loop Road, to apply for repair money through the Emergency Relief for Federally Owned Roads (ERFO) program.

The Forest Service last year allocated as much as $5 million to repave and make other improvements to a 13-mile section of the Loop Road that includes the 500-foot section that was obliterated by North Pine Creek earlier this month.

But Walden said the Forest Service will need another source of money to repair the flood damage.

“We haven’t gotten a dollar figure yet on the cost of repairs to Loop Road, but it looks very good that they will get whatever is needed to make the repairs as quickly as possible,” Walden said. “It looks like the Federal Highway Administration will be the source of the funding.”

He said federal highway officials and Forest Service officials are working to put together cost assessments for the repairs and could be making an announcement any day about providing funding to repair the Loop Road.

The road, which is part of the Hells Canyon Scenic Byway, one of Oregon’s four All-American Roads, is an important link for tourists traveling between Baker and Wallowa counties.

The Loop Road wasn’t the only local route damaged during the county’s worst flooding in more than a quarter century.

Steve Ellis, Wallowa-Whitman National Forest supervisor, said owners of private property and cabins are also concerned about flood-caused closures of sections of the Eagle Creek Road (Forest Road 77) and East Eagle Creek Road (Forest Road 7745).

Ellis said crews are working on a temporary route that would allow private landowners access to their properties.

“The Forest Service is hopeful that they will have a temporary route for full-sized vehicles open in the next few days,” said Wade Foster, Walden’s representative for Eastern Oregon, based in La Grande.

Baker City Herald, 6/16/2010 10:39 am
By Ed Merriman

Officials from the Oregon Division of State Lands are scheduled to survey Baker County flood damage today and potentially streamline the process so farmers and ranchers in the Pine and Eagle valleys can get permits to repair their irrigation networks.

Rep. Greg Walden, R-Ore., said he called Gov. Ted Kulongoski and other top state officials after listening to concerned residents during a public forum Sunday in Richland.

“I was frustrated to learn the Division of State Lands was not going out until June 23,” Walden said.

Walden, who represents Eastern Oregon, said he asked Kulongoski and other members of the State Land Board, including Secretary of State Kate Brown and State Treasurer Ted Wheeler, to summon Division of State Lands staff sooner.

“The governor got right on this and I appreciate his personal attention on it,” Walden said.

The DSL is the agency that issues permits to property owners who need to repair ditches, headgates, fish screens and other items damaged by severe flooding earlier this month in both of the valleys in eastern Baker County.

Walden said he and state Rep. Cliff Bentz, R-Ontario, along with members of the Baker County Board of Commissioners and other area officials who attended Sunday’s meeting immediately afterward started calling state officials to raise awareness of the deadline facing irrigators.

Crops could be damaged if they don’t get water within seven to 10 days.

Walden said farmers and ranchers expressed concern Sunday that “They can get the permits and do the work, but that DSL can come along later and rule it needs to be done differently, and levy charges, fees and penalties against them.”

Walden said he hopes DSL officials will clarify to farmers and ranchers what they can and can’t do to repair flood damage.

In addition to working with DSL, Walden said he and Bentz are also communicating with the Federal Emergency Management Agency, the Farm Services Agency, Natural Resources Conservation Service and others to see what help and financial assistance is available to help landowners repair irrigation systems, stabilize eroded streambanks and do other work.

One of the specific things Walden has asked NRCS to look into is the possibility of extending flood damage assistance to cover the cost of repairing or replacing fish screens, which generally aren’t currently covered.

Wallowa Loop Road

On another flood-related repair issue, Walden said he has talked with top Forest Service officials about repairing a washed out section of the Wallowa Mountain Loop Road between Halfway and Joseph.

North Pine Creek ripped away a 500-foot section of the two-laned paved route, and caused significant damage in four other places.
The Loop Road, also known as Forest Road 39, is part of the Hells Canyon Scenic Byway, one of Oregon’s four All-American Roads.
“It is an important economic corridor for the three counties (Baker, Union and Wallowa),” Walden said.

Walden said Steve Ellis, supervisor of the Wallowa-Whitman National Forest, is working to get authority to take as much as $5 million already allocated to repave a 13-mile stretch of the Loop Road and use the money to re-open at least one lane of the route during the busy summer tourist season.

The Loop Road is closed due to snow during the winter and early spring.

Forest Service officials also are hoping to get repair money from the Federal Highway Administration.

“The last time we had a washout on this highway 12 or 13 years ago it took two years to get the road open, partly due to all the red tape and appeals filed by the Hells Canyon Preservation Council,” Walden said.

This time around, he said it looks like a judge’s decision allowing repairs to the highway more than a decade ago will apply to the current washout repairs, which Walden said should significantly speed up the repair timeline, if federal money is forthcoming.

In the meantime, Ellis also is trying to add $200,000 to the budget for a project already scheduled to improve Forest Road 66, which could serve as a detour around the washed out section of the Loop Road.

Road 66, the Fish Lake Road, is a gravel route that’s accessible to passenger cars but is not suited for motor homes or large trailers.
“It won’t accommodate a Winnebago, but it will accommodate fire trucks and other vehicles,” Walden said.

Wallowa County Chieftain, 6/16/2010

It is of utmost importance to fix the washouts that have closed Wallowa Mountain Loop Road as fast as possible.

We recognize that this Forest Service road isn’t a highway, but it is the main access to Wallowa County for motorists from Baker County and most of Idaho.

Businesses throughout Wallowa County, and especially those in Joseph, depend heavily on the patronage of those visitors. The county Chamber of Commerce estimates that the closure may result in losses of as much as $1.88 million to county merchants.

 (more…)

The Bulletin, 6/16/2010
By David Holley

Small-business owners offering professional services — including attorneys, accountants or engineers, among others — could pay anywhere from 3 percent to 15 percent more in taxes on certain portions of their business income if Congress passes an amended version of House Resolution 4213, known as the American Jobs and Closing Tax Loopholes Act.

A section of the act, included in an amendment approved by the House of Representatives in late May and now being examined by the U.S. Senate, would charge Medicare and Social Security taxes on most income garnered by a business that operates as an S-corporation, according to a Bend accountant. Previously those corporations only paid Medicare and Social Security taxes on income that pays for wages.

Maggie Erickson, a certified public accountant at McGregor-Caverhill in Bend, said the taxes would be detrimental to businesses hoping to grow and develop. She said S-corporations’ earnings that aren’t targeted toward wages are typically used for business improvements, such as hiring additional employees or making capital investments.

“They’re going to get hammered,” Erickson said. McGregor-Caverhill would be impacted, she said.

The amendment would only affect small S-corporation businesses with three or fewer employees, whose “reputation and skill” make up the principal assets of such businesses. That could include professions ranging from consulting to brokerage services, but doesn’t include firms with more than three people working in those professions.

The additional taxes are estimated to raise about $11.25 billion over 10 years, according to a summary of a Senate substitute amendment of the act filed with the Senate Committee on Finance June 8. This section of the act, 413, was maintained in its entirety between the House and Senate versions.

The summary of the Senate’s substitute amendment contends that those business owners should be paying Medicare and Social Security taxes on all income. It says that some people have been using an S-corporation designation as a loophole.

“Some service professionals have been avoiding Medicare and Social Security taxes by routing their self-employment income through an S-corporation,” the summary says. “These taxpayers then pay themselves a nominal salary and take the position that the remaining earnings are exempt from employment taxes.”

U.S. Sen. Ron Wyden’s office said that while it is not the time to be raising taxes on small businesses, loopholes that allow tax evasion are unfair to citizens who pay all their taxes. They force everyone to pay more, said Jennifer I. Hoelzer, communications director for Wyden, D-Ore.

“Closing this loophole will prevent some of that evasion and, in this case, help pay for the package of tax-extenders for critical expiring programs like unemployment insurance and health care for seniors,” Hoelzer wrote in an e-mail.

How it would work

The tax change would become effective for tax years starting after Dec. 31, 2010. It is buried in what is now a more than 300-page house resolution, which Erickson said would also do good, such as providing tax deductions for teachers and property owners. Most of the press HR 4213 has received is for proposing to extend unemployment insurance.

“We love the fact that those are in there,” Erickson said.

The federal filing status of a business determines the method by which it pays taxes. While C-corporations pay corporate taxes, and the executives and shareholders of them pay income taxes, S-corporations don’t typically pay corporate taxes because all of the profits are passed through to the businesses’ owners or shareholders.

That income is then charged both state and federal income taxes. As the law works now, Erickson said, business owners pay themselves a wage out of the profits, which is subject to the Medicare and Social Security taxes. Medicare and Social Security taxes don’t have to be paid on the remaining income, she said.

For self-employed S-corporation owners, there’s a heavier tax burden when they’re paying the Medicare and Social Security taxes for their own wages and profits, Erickson said. The Social Security tax is 12.4 percent and the Medicare tax is 2.9 percent.

In businesses with employees, employers pay half of the Social Security and Medicare taxes, while the employees pay the other half. Self-employed individuals, such as S-corp owners, pay all of both taxes on their own wages, however. No Social Security tax must be paid on wages above $106,800.

Say an S-corporation, owned by a physical therapist for example, had $100,000 in post-income tax earnings, and planned to pay himself $55,000 in wages and keep $45,000 in profits for investments in his business. Today, the $55,000 in wages is subject to the Medicare and Social Security taxes — $8,415 in taxes — while the $45,000 isn’t.

If the amendment to the American Jobs and Closing Tax Loopholes Act is approved, the physical therapist would have to pay the 12.4 percent Social Security tax and the 2.9 percent Medicare tax on that $45,000 — an additional $6,885.

Skepticism

“It’s just killing small business,” said Erickson, adding that the additional tax takes away the incentive to grow.

Gary Holbrook, who owns HD Architecture in Bend, said the amendment would hurt his business. He said he hopes local groups will advocate against the amendment.

“I don’t think it’s going to get too far,” Holbrook said about the section calling for the tax. “Going after really small businesses doesn’t make too much sense.”

While the amendment as is would make S-corporations pay more in taxes, Erin Shields, press secretary for the U.S. Senate Committee on Finance, wrote in an e-mail that the Finance Committee “is working to ensure the provision is precisely targeted and does not hamper the growth of small businesses.”

Andrew Whelan, press secretary for U.S. Rep. Greg Walden, R-Ore., said Walden voted in May against adding the section of the act that charges the Medicare and Social Security taxes.

“New taxes on small businesses are crippling right now, especially when small businesses are the job creators for 80 percent of new jobs,” Whelan said.

The Bulletin, 6/8/2010 4:00 am
By Patrick Cliff

U.S. Rep. Greg Walden visited Bend on Monday to pitch a new Republican effort named YouCut, a move by the party to have the public propose and vote on federal budget cuts.

Each week Congress is in session, the Republicans will post five budget cutting ideas on the YouCut website. So far, the effort has drawn about 650,000 votes and resulted in House Republicans bringing two ideas to the floor. But both attempts — at cutting the Temporary Assistance for Needy Families and freezing federal employee pay raises — have failed.

Walden, R-Hood River, who is running for reelection told an audience of about 20 people at ServiceMaster Cleaning Specialists in Bend that YouCut, in part, was an attempt to cut into a $1.4 trillion federal deficit. But it was also a way for people to weigh-in on the federal budget.

“There is a great frustration of people all over America that they’re not being listened to,” Walden said.

Walden compared YouCut to a small business working to save every nickle and dime. This week’s proposed cuts — which range from about $3 million to $30 billion — are small relative to the entire deficit, Walden said. Still, the ideas are important, he said.

“If you can’t control this spending, how can you control (higher costs)?” Walden said.

Walden urged Central Oregonians to cast a vote each week, which people can do online or through text messages. Even if the budget cuts are never approved, YouCut could help the Republican Party over the long term, according to Tiffany Gallicano, an assistant professor of public relations at the University of Oregon.

Something like YouCut allows people to participate and feel as if they have an influence on the legislative process, Gallicano said.

“I think it strengthens their relationship with people,” she said. “When people have a chance to be heard, when they have the chance to drive the agenda, that creates a strong relationship. It’s more likely to create accountability and, from that, loyalty.”

Gallicano, though, warned that the Republicans must follow through and bring the ideas to the House floor. If the Republicans fail to follow through, some of the good will could dissipate.

“I think that it increases loyalty when they listen and act on the ideas,” Gallicano said. “I can’t guarantee they can keep it.”

This week, people can vote on five issues, ranging from obscure to well known. The options include pulling back on some federal funding for the upkeep of non-federal records, a move that could save $10 million in one year, according to the YouCut website.

Reforming federal mortgage agencies Fannie Mae and Freddie Mac could save $30 billion dollars, according to the site, which provides top-level, broad descriptions of the kind of cuts that could bring savings.

Other options include saving $25 million a year by eliminating federal grants for rural television stations to digitize or $3.8 million by cutting back on “non-essential and questionable research” grants. The website pointed to a $219,000 grant to fund a study on the influence of alcohol on “‘hook up’ behavior of female college coeds.”

The final option projects a $34 million savings by reducing funding of federal advisory committees and combining them.

Cathie Hendrix, a local banker who attended Walden’s talk, said she had not picked one of the options but was excited about the chance to do so.

“It’s a quick, easy and accountable way for the American public to cast their vote,” Hendrix said.