As I was saying …

I can't think of a better example of our problems in Washington, D.C., than the imposition—and subsequent repeal—of the 3 percent withholding tax on government contracts.

The tax arose out of Congress' "pay as you go" mandate, which requires new spending to be offset by either expense reductions or additional revenues. Although well-intended, the requirement becomes, at least in part, a game: Tax increases, for example, can be placed in outlying years and overturned by a new Congress.

And so it was with the 3 percent withholding tax. Congress needed to find some new revenues, and in 2006 the Senate Finance Committee, then controlled by Republicans, came up with the idea of imposing the withholding tax in 2011.

In theory, the tax would be returned to the contractor after a contract was completed and after the contractor had filed a federal income tax return. The model for the tax assumed the government would make its money on some additional tax returns being filed, but most of it would come from the float—interest earned on the taxes as they were collected.

After this scheme was signed into law, it was studied more carefully, and lo and behold, it turns out the tax would cost more to administer and collect than it would ever produce in revenue. So you'd think Congress would simply do away with such a bad idea. But it's Washington we're talking about.

Still bound by the "pay as you go" rules (which don't consider administrative costs for tax collecting and paperwork filing), Congress needed to find other new revenues or expense reductions. Congress, needless to say, is not exactly efficient in either arena.

So instead, as the 2011 deadline approached, Congress punted, postponing the effective date of the tax by a year to 2012. The effective date was further delayed to 2013 in regulations issued by the Internal Revenue Service.

Still, incredibly, while legislation to repeal the measure was gaining widespread bipartisan support, it took an intense lobbying effort by NRCA and others to finally, miraculously, achieve repeal. In the end, the bill to repeal passed both houses of Congress by overwhelming majorities and had the support of President Obama.

We should be grateful for the final outcome.

We also should be reminded that lawmaking is an ugly business done in ways that defy common sense.

Bill Good is NRCA's executive vice president.