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As previously noted, the government debt skyrocketed $339 billion the first day after the debt ceiling was lifted via the spending deal. Now, after 10 days (Nov 12), the total new debt has reached $462 billion.
The initial spike was the result of replenishing the funds that have been total new debt”>”frozen”. “The government began bumping up against the debt limit in March and was borrowing from other funds — using “extraordinary measures” — to keep from breaching the $18.1 trillion level. Treasury Secretary Jacob Lew was able to stretch that borrowing through the end of October.”
The $339 one-day splurge was the greatest Treasury jump ever recorded, but still comparable to actions in recent years. In August 2011, after a negotiation was reached, the Treasury debt increased $238 billion on one day; likewise, in 2013 in a similar scenario, the debt rose $328 billion on one day.
Of what does the $339 consist? “About $199 billion is public debt, which is money borrowed from outside sources, and $140 billion is borrowing from within government accounts. As of Monday, the gross total debt stood at $18.6 trillion, with $13.4 trillion of that public debt borrowed from the outside.”
By the end of Obama’s presidency, government debt is projected to be about $20 trillion — nearly double that which existed when Obama became President ($10.6 trillion). Already, the government is running a deficit. 1 month in to the fiscal year (beginning October 1), spending exceeded revenues by $136 billion. “up 12 percent compared with the previous October, as spending ballooned and taxes remained nearly flat. It was the worst October since 2010, when the government was still spending on the stimulus and was on pace for a deficit of more than $1 trillion that year.”
The situation looks mighty bleak right now.
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David Walker was a former head of the Government Accountability Office under Presidents Clinton and Bush. He recently spoke out about the crippling US debt, pointing out that the national debt is far greater than what is understood — more than three times the amount.
Walker told radio host John Catsimatidis, “If you end up adding to that $18.5 trillion the unfunded civilian and military pensions and retiree healthcare, the additional underfunding for Social Security, the additional underfunding for Medicare, various commitments and contingencies that the federal government has, the real number is about $65 trillion rather than $18 trillion, and it’s growing automatically absent reforms,”
He further pointed out, “If you don’t keep your economy strong, and that means to be able to generate more jobs and opportunities, you’re not going to be strong internationally with regard to foreign policy, you’re not going to be able to invest what you need to invest in national defense and homeland security, and ultimately you’re not going to be able to provide the kind of social safety net that we need in this country.”
Walker also called for both sides to join together in order fix the problems and put aside partisan politics. Unfortunately, actions like proposed recent SSDI bailout only worsen the situation. It reallocates $150 billion over the next three years comes from the Social Security Trust Fund in order to rescue the nearly bankrupt SSDI Trust Fund. This obfuscates the reality of unfunded liabilities and kicks the can down the road.
Walker’s call to make hard choices and severely reform the burgeoning entitlement debt crisis is the only way to truly fix the future. It is refreshing to hear someone speak candidly about the problems everyone is afraid to face.
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The Social Security Administration had record spending in fiscal year 2015, totaling $944,143,000,000. This total includes Social Security payments, disability payments, Supplemental Security Income payments, and the costs to administer these programs.
From CNSNews:
“As of September, there were 59,737,817 beneficiaries getting Social Security or disability benefits, according to the SSA. At the same time, according to the Bureau of Labor Statistics, there were 148,800,000 people who had either a full- or part-time job in the United States. That means there were only 2.49 people with jobs for each of the 59,737,817 Social Security and disability beneficiaries.
At the same time, there were only 121,839,000 people with full-time jobs in the United States in September, according to BLS. Those 121,839,000 full-time job holders equaled about 2.04 for each of the 59,737,817 people getting Social Security or disability benefits.
The $944,143,000,000 spent by the Social Security Administration in fiscal 2015 equaled about $6,345 for each of the 148,800,000 persons in the country with a job as of September. It equaled about $7,749 for each of the 121,839,000 people with a full-time job.
The $944,143,000,000 that the Social Security Administration spent in fiscal 2015 was also $381,637,000,000 (or about 68 percent) more than the $562,506,000,000 that the Treasury says the government spent on the Department of Defense and military programs during the year.”
The spending items include:
— $733,716,000,000 in benefits payments from the Old-Age and Survivors Insurance Trust Fund
— $3,505,000,000 in payments to cover administrative expenses for that fund
— $4,258,000,000 in payments to the Railroad Retirement Account
— $143,009,000,000 in disability benefit payments
— $2,881,000,000 in payments for administrative expenses for the disability trust fund
— $419,000,000 in additional payments to the Railroad Retirement Account.
— $58,901,000,000 for the Supplemental Security Income Program.
This was an increase of $33 Billion from fiscal year 2014. A quick analysis of the beneficiaries for the month of October included: “39,968,311 retired workers, 2,330,148 spouses of retired workers, 641,654 children of retired workers, 6,077,209 survivors of deceased workers, 8,922,858 disabled workers, 143,164 spouses of disabled workers, and 1,749,236 children of disabled workers.”
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The Bureau of Labor Statistics released its latest monthly report today. The October numbers women’s employment retreated just slightly from the record it set in September: 56,540,000 women over the age of 15 were unemployed.
Overall, 94,513,000 people in America were out of work during the month of October. This is the lowest it has been in 38 years; only 62.4% of Americans age 16 and above were either looking for work or working.
The Obama Administration still continues to tout the unemployment rate as being low — this month it was tabulated to be 5%. But the only reason it is low is because so many people HAVE given up working or even looking for work, which is accurately reflected in the labor participation rate. With fewer people being counted as “working,” the unemployment numbers calculated among a smaller pool of people makes the rate sound smaller.
But everyday Americans are not fooled by statistics.
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Rich Lowry over at National Review pointed out some hard realities of Obamacare as we enter in a new enrollment season.
“Yes, ObamaCare has covered more people and has especially benefited those with pre-existing conditions (to be credible, Republican replacement plans have to do these things, as well), but the program is so poorly designed that, surely, even a new Democratic president will want to revisit it to try to make it more workable.
Enrollment is falling short. The Obama administration projects that it will have roughly 10 million people on the state and federal exchanges by the end of next year, a staggering climb-down from prior expectations. The Congressional Budget Office had predicted that there would be roughly 20 million enrollees. If the administration is to be believed, enrollment will only increase about another million next year from its current 9 million and only sign up about a quarter of the eligible uninsured.
Premiums are rising. Not everywhere, but steeply in some states. Indiana is down 12 percent, but Minnesota is up 50 percent. Health care expert Robert Laszewski points out that it’s the insurers with the highest enrollment and therefore the best information about actual enrollees that have tended to request the biggest increases — a sign that they don’t like what they’re seeing in their data.
Relatedly, the economics are shaky. According to a McKinsey Co. analysis, last year health insurers lost $2.5 billion in the individual market that ObamaCare remade. ObamaCare co-ops that were supposed to enhance choice and lower costs have been failing and almost all of them are losing money, a victim of the absurd rules (no industry executives on their boards, no raising capital in public markets, etc.) imposed on them by the law.
The problem with ObamaCare in a nutshell is that on one hand, by imposing motley regulations and mandates, it increases the price of health insurance, and on the other hand, by providing subsidies, it tries to hide the cost — but not enough.
According to an analysis by the health consultancy Avalere, the poor or near-poor have been signing up, but enrollment steeply drops off further up the income scale as the subsidies fall away. It found that three-fourths of uninsured people earning less than 150 percent of the federal poverty level got coverage through Medicaid or the exchanges, while almost none of uninsured making more than 250 percent of the federal poverty level have enrolled.
For them, it’s just not a good deal. A study of the ObamaCare exchanges by researchers at the Wharton School found that “even under the most optimistic assumptions, close to half of the formerly uninsured (especially those with higher incomes) experience both higher financial burden and lower estimated welfare.”
Even the success that ObamaCare has had enrolling people should come with an asterisk. The Department of Health and Human Services announced earlier this year that nearly 11 million people have signed up for public health insurance — Medicaid or the children’s health program, CHIP — since 2013. If Medicaid is better than nothing (although this is harder to prove than you might think), it is substandard coverage that locks the poor into second-class care with limited access to doctors.
If the goal was to expand this deeply flawed program, it could have been achieved without the expense, disruption and economic irrationality of the rest of ObamaCare.
(emphasis added).
As Laszewski points out, on the individual market, ObamaCare is a monopoly. It gives money to people to buy its product and through the individual mandate punishes those who don’t. And yet it’s still having trouble making the sale.”
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Reince Priebus had a swift and forceful response to the mockery that was the CNBC debate hosted on Wednesday night. Though I am not particularly a fan of the RNC, in this instance, Priebus was correct to call out the behavior of the moderators and the breech of agreement that occurred. Here’s his letter in full below:
Mr. Andrew Lack
Chairman, NBC News
30 Rockefeller Plaza
New York, New York 10112
Dear Mr. Lack,
I write to inform you that pending further discussion between the Republican National Committee (RNC) and our presidential campaigns, we are suspending the partnership with NBC News for the Republican primary debate at the University of Houston on February 26, 2016. The RNC’s sole role in the primary debate process is to ensure that our candidates are given a full and fair opportunity to lay out their vision for America’s future. We simply cannot continue with NBC without full consultation with our campaigns.
The CNBC network is one of your media properties, and its handling of the debate was conducted in bad faith. We understand that NBC does not exercise full editorial control over CNBC’s journalistic approach. However, the network is an arm of your organization, and we need to ensure there is not a repeat performance.
CNBC billed the debate as one that would focus on “the key issues that matter to all voters—job growth, taxes, technology, retirement and the health of our national economy.” That was not the case. Before the debate, the candidates were promised an opening question on economic or financial matters. That was not the case. Candidates were promised that speaking time would be carefully monitored to ensure fairness. That was not the case. Questions were inaccurate or downright offensive. The first question directed to one of our candidates asked if he was running a comic book version of a presidential campaign, hardly in the spirit of how the debate was billed.
While debates are meant to include tough questions and contrast candidates’ visions and policies for the future of America, CNBC’s moderators engaged in a series of “gotcha” questions, petty and mean-spirited in tone, and designed to embarrass our candidates. What took place Wednesday night was not an attempt to give the American people a greater understanding of our candidates’ policies and ideas.
I have tremendous respect for the First Amendment and freedom of the press. However, I also expect the media to host a substantive debate on consequential issues important to Americans. CNBC did not.
While we are suspending our partnership with NBC News and its properties, we still fully intend to have a debate on that day, and will ensure that National Review remains part of it.
I will be working with our candidates to discuss how to move forward and will be in touch.
Sincerely,
Reince Priebus
Chairman, Republican National Committee
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During Congressional testimony on Tuesday, John Koskinen defended his tenure as Commissioner of the IRS against stirrings of impeachment among some elected officials. Koskinen maintained that there has been an ample turnover of personnel, as well as disciplinary reviews within the IRS, so that the IRS has been positively rehabilitated since the scandal erupted in 2013.
While the accusation of charges against Koskinen — accused of “misleading the public and destroying documents that were being sought under a congressional subpoena” — was newsworthy, another portion of his testimony was just as important, but went largely unreported by the the media: the future role of 501c4s.
Koskinen framed part of the reason for the IRS targeting scandal on confusing rules, “leaving the nonprofit groups and IRS auditors uncertain about what activity was allowed.” However, this assertion is utterly nonsensical, as the rules that govern 501c4 activity have been in place since 1959. So why the sudden interest in the last couple of years to create (or “clarify”) rules that limit activities by nonprofit organizations? Because of the 2016 election.
Don’t forget — the IRS tried to do a major rewrite in 2014 ahead of midterm elections, but received an unprecedented amount of comments during the IRS rulemaking comment period. If you added together all of the comments on all Treasury and IRS draft proposals from the seven prior years and doubled that you came close to the number of responses received, which was more than 150,000. In light of the overwhelming response on the proposed changes, the IRS decided to delay any rules changes.
So here we are on the threshold of another major election cycle, and we have the IRS announcing it will be stirring the pot. The Washington Times reported that Koskinen hopes, “that we’d be able to provide these proposed new rules early enough next year so that they could — the work on them can be completed well in advance of the election so there wouldn’t be any confusion.” And more: “But I would stress that the work that we’re doing now is focused on clarifying — not changing — but clarifying the rules under which organizations operate.”
Yet this is onerous and unnecessary. These are your social welfare organizations, for which advocacy for “the common good and general welfare” is their primary purpose. They differ from 501c3, which are your charitable organizations; 501c5s, your labor unions; and 501c6s, your trade organizations. The one thing all of these organizations do have in common is that they are all tax-exempt organizations.
501c4s are not tax-deductible precisely because they are not political organizations. They serve to educate by being issue-based. This is protected under free speech; so long as the 501c4 sticks to an issue and not advocate for a particular candidate, it is not considered political speech and therefore it cannot be curbed. They can talk about policies and positions, not people.
These social welfare groups can therefore participate in the political arena as long as they maintain education as their primary purpose. Some examples of 501c4s would be the National Rifle Association (NRA), American Association of Retired Persons (AARP), Americans for Tax Reform (ATR), and the Sierra Club. 501c4s themselves have been around for nearly 100 years, and the regulations that currently govern them have been in place since 1959.
And yet the IRS has been increasingly adamant about clarifying the rules for social welfare organizations that have been in place for more than 50 years. And why only the social welfare organizations — not the unions or trade organizations?
It is well known that on issue-based advocacy, the Republicans have made much better use of 501c4s than the Democrats. So of course, the Democrats want to find a way to disrupt this. Dozens of articles in recent years have documented how this conservative group and that conservative group spent money on political ads, more than the liberal groups — as if that is somehow unfair. It’s perfectly fair and perfectly legal, except when the Democrats are on the losing/receiving end.
This situation is reminiscent of the repeated attempts to implement the “Fairness Doctrine” for talk radio, pushing to give conservative and liberal talk radio shows “equal air time” — because the conservatives dominate that market as well.
The IRS tried reforming 501c4s in 2014 because they knew the Democrats were vulnerable. It didn’t get done then, and 2014 was a disaster year for Democrats. What better way to stifle the ability for conservatives to message than by attacking the methodology? The Democrats, in cahoots with the Obama Administration, are working in tandem with the IRS to change to the way social welfare organizations function by introducing very specific and onerous rule “clarifications”.
By trying to redefine some activities as “political” instead of advocacy, they would be opened to being limited or even banned — activities which serve to provide education for the common good, as they always have.
Critics of the way 501c4s operate, which allow their donors to remain protected, suggest that the 501c4s are somehow gaming the system — using phrases like “secret donors” and “secret activity” to inflame the public against 501c4s. But this is patently untrue.
Political donors are required to be disclosed under campaign finance, but since 501c4s are specifically not political organizations, the donor names do not need to be made public. Their anonymity is protected under the Right of Free Association. Those who are on the receiving end of 501c4 activities to educate the populace during the election cycle, however, are now pushing for this to change in order to reveal citizens identities.
Therefore turning a simple and known definition of a 501c4 into a new and incomprehensible one, has the effect of stifling speech. Even the mere presence of such a proposal will have detrimental affect. Why? The possibility of new regulations becoming permanent rules will have 501c4s worried about potential infractions — especially as we are recovering from the 2013 IRS targeting scandal, especially since the IRS has been known to issue rules that are effective immediately, and even retroactively.
The most egregious part is that we probably won’t have the ability to comment on proposed changes this time around. According to the IRS bulletin (last revised April 2015), the IRS states, “Given the diversity of views expressed and the volume of substantive input, we have concluded that it would be more efficient and useful to hold a public hearing after we publish the revised proposed regulation. Treasury and the IRS remain committed to providing updated standards for tax-exemption that are fair, clear, and easier to administer.”
In other words, they don’t want to hear feedback this time around. What good is a “public hearing?” It’s not, of course, at least for the public. But from the vantage point of the 2016 presidential elections, the effect of curbing or scaring the activity of 501c4s during the upcoming election cycle is beneficial. What organization would risk the potential for increased scrutiny and possible violation from the IRS, knowing that the IRS has been operating in an unjust and partisan matter? They wouldn’t. So the 501c4s would have to be more careful for at least the time being, which plays right into the timing of the important 2016 election cycle activity.
The IRS continues to act in an incompetent manner. That they are targeting 501c4s, and not c5s and c6s, show that there is an inherent bias internally within the IRS. No one can look at the situation and not think that this isn’t being done to have an affect on our political cycles. This is not how the IRS is supposed to function in our country.
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The latest reports on the budget deal show some entitlement changes coming to Social Security Disability Insurance (SSDI) and the Social Security Trust Fund. The text of the bill is here.
According to analysis of the deal, spending would be increased “by $80 billion over two years, not including a $32 billion increase included in an emergency war fund. Those increases would be offset by cuts in spending on Medicare and Social Security disability benefits.”
The deal sought some much needed structural changes to the SSDI program, because it was slated to reach insolvency sometime in 2016 — which, of course, would play right into the Presidential election cycle.
Some of the proposed changes include: “a medical exam now required in 30 states before applicants could qualify for benefits would be required in all 50 states. That change was projected to save the government $5 billion.”
Another reform looks to be restructuring work and benefits reviews, “in which some people who receive disability benefits could earn money from working with less fear of triggering a review that can result in benefits being cut off. Instead, people participating in the projects could see their benefits gradually curtailed as their income rises … ”
While these changes are a start, they come at a price that no one in the media is really talking about in depth. The NYTimes casually mentions that there were be a reallocation of “funds among Social Security program trust funds to ensure solvency of the disability insurance program.” That sounds well and good, until you get to the details.
The reallocation of roughly $150 billion over the next three years comes from the Social Security Trust Fund in order to rescue the nearly bankrupt SSDI Trust Fund; in other words, we are borrowing money from one entitlement program to another!
SSDI was slated to receive across-the-board 20% cuts in 2016 as a way to deal with its nearly-depleted funds. But that is a very messy topic for a very messy election year. This deal papers over the SSDI funding problem — infusing it with cash from Social Security over the next three years, and extending the insolvency question for the disability question until around 2022.
“Congress has been kicking the can down the road on disability insurance reform for decades and 2016 should have been the end of the road—time for meaningful reform. Instead, policymakers want to provide a little more roadway for the disability insurance program by whacking off a portion of Social Security’s roadway.
This isn’t the first time the disability insurance program has run out of money and it isn’t the first time Congress has kicked the can down the road. As recently as 1994, the disability insurance program was about to run out of money and Congress increased the disability insurance payroll tax by 50 percent, from 1.2 percent to 1.8 percent. That increase was coupled with a stark warning that the disability insurance program was in dire need of additional reforms to sustain it over the long run.
What has Congress done to reform the disability insurance program since then? Nothing.
Rather than looking to improve the efficiency and integrity of the program, Congress sat idly by as the percent of the working-age population receiving disability insurance benefits increased from 2.8 percent in 1994 to 5.1 percent today.”
This cash infusion — from Social Security of all places! — merely obfuscates the larger question of true entitlement reform. Using Social Security Trust Fund money was a perfect cover for lawmakers because it can be explained as a routine “reallocation of Social Security funds”, without explaining it is essentially robbing Peter to pay Paul. It is a known fact that both programs are slated to run out of money in the future. This deal just extends the life support for one program, while shortening the life of another.
Though lawmakers made a few minor changes to SSDI, it wasn’t enough. There are major systemic problems with SSDI. Just last month, a report by the Government Accountability Office (GAO) found that for 5 years (FY2009-FY2013), disability payments totaling $371.5 million were overpaid to many individuals — all while the program is running out of money. In this instance, “the SSA’s ‘internal controls’ rely on beneficiaries to self-report overpayments.” Why not fix this problem? Start somewhere. But that would be hard. It’s easier to throw new money at the problem (again) instead of actually tackling tough entitlement reform, thereby kicking the can down the road for future lawmakers to deal with (again). All this deal did was hide the problem so that it did not become an issue for any of the Presidential candidates next year.
Last January, I wrote on this topic, reporting a conversation with Charles Blahous, (a Trustee of the Social Security and Medicare Trust Funds,) about the Social Security situation. Blahous described how “the problem is not that disability needs a bigger share of the overall payroll tax than it now has, but that Social Security as a whole faces a financing imbalance that needs to be corrected. The single most irresponsible response to the pending [disability insurance] trust fund depletion would be to do nothing other than paper it over with a reallocation of funds, delaying meaningful corrective action as long as possible.”
Unfortunately,that’s JUST what we did.
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With open enrollment for Obamacare beginning in a week, the Wall Street Journal outlines some of the major failures of this legislation to attract enrollees. Obamacare is severely behind target, which in turn affects costs for premiums for subscribers and costs to the government for subsidies. The Wall Street Journal suggests that within a year, by 2017, the need to overhaul and/or replace Obamacare will be necessary. Read their thoughts below:
ObamaCare’s image of invincibility is increasingly being exposed as a political illusion, at least for those with permission to be honest about the evidence. Witness the heretofore unknown phenomenon of a “free” entitlement that its beneficiaries can’t afford or don’t want.
This month the Health and Human Services Department dramatically discounted its internal estimate of how many people will join the state insurance exchanges in 2016. There are about 9.1 million enrollees today, and the consensus estimate—by the Congressional Budget Office, the Medicare actuary and independent analysts like Rand Corp.—was that participation would surge to some 20 million. But HHS now expects enrollment to grow to between merely 9.4 million and 11.4 million.
Recruitment for 2015 is roughly 70% of the original projection, but ObamaCare will be running at less than half its goal in 2016. HHS believes some 19 million Americans earn too much for Medicaid but qualify for ObamaCare subsidies and haven’t signed up. Some 8.5 million of that 19 million purchase off-exchange private coverage with their own money, while the other 10.5 million are still uninsured. In other words, for every person who’s allowed to join and has, two people haven’t.
Among this population of the uninsured, HHS reports that half are between the ages of 18 and 34 and nearly two-thirds are in excellent or very good health. The exchanges won’t survive actuarially unless they attract this prime demographic: ObamaCare’s individual mandate penalty and social-justice redistribution are supposed to force these low-cost consumers to buy overpriced policies to cross-subsidize everybody else. No wonder HHS Secretary Sylvia Mathews Burwell said meeting even the downgraded target is “probably pretty challenging.”
The HHS survey shows three of four ObamaCare-eligible uninsured people think having coverage is important—but four of five say they couldn’t fit their share of the premiums into their budgets even after the subsidies. They’re not poor; they tend to have jobs in industries like construction, retail and hospitality but feel insecure financially; and they prioritize items like paying down debt, car repairs or saving to buy a home over insurance.
The law’s failure to appeal to the young and rising middle class is already cascading through the insurance markets. Researchers at the Robert Wood Johnson Foundation and Urban Institute recently published a remarkable study of the industry barometer called medical loss ratios, or MLRs, and the pressure is building fast.
MLRs measure the share of premium revenue that flows to reimbursing medical claims. ObamaCare sets an MLR floor of 80% for patient care, with one-fifth left over for overhead like administration and profits, and the pre-ObamaCare 2010-13 historical trend for the individual market ranged from 79% to 86%.
The researchers found that in 2014—the first full year of claims experience in ObamaCare—average MLRs across all health plans sold on 16 state exchanges roamed from 90% to 99%. Average MLRs in 11 states climbed to 100% or more, reaching as high as 121% in Massachusetts. A business can’t stay solvent for long spending $1.21 for every $1 that comes in.
The 2014 MLRs are used to set rates for 2016 premiums, which are still under regulatory review. But the researchers estimate that to rebound to an MLR of 85%, premiums in the 11 money-losing states need to rise by 10% to 36% in the best estimate and 23% to 52% in the worst scenario. The familiar danger is that as rates rise, more people drop out, and thus rates must rise still higher, as the states that attempted ObamaCare-like regulatory schemes in the 1980s and 1990s discovered.
ObamaCare liberals pose as what-works-and-what-doesn’t technocrats. So perhaps they’d care to explain what it says about their creation that so many rational adults are willing to pay a fine of $695 or 2.5% of their earnings, whichever is higher, for the privilege of not buying an ObamaCare-compliant health plan.
***
ObamaCare will almost inevitably be reopened in 2017, whoever wins the election. The good news is the emerging consensus among Republican candidates about a credible, pragmatic and optimistic alternative. Jeb Bush was the latest to release a plan two weeks ago—and this is a debate that has always deserved to be litigated at the presidential level to create a mandate for reform.
The basic approach is to deregulate insurance and medical practice while replacing ObamaCare’s complex subsidy schedule with a refundable tax credit for individuals who lack job-based coverage. Unchained from benefit and redistribution mandates, insurance products and prices would come to reflect what consumers want. The credit would be sufficient to buy at least coverage for catastrophic expenses if people get sick, and the trade-offs of such skinnier plans might look better to voters priced out of ObamaCare.
GOP reformers also recognize that the Cadillac tax on high-cost employer-sponsored health plans is a heat shield that might let them solve some of the problems of the pre-2010 health finance status quo. Substituting a cap on the tax-code subsidy that helps drive medical inflation is more politically plausible with the Cadillac tax in place than without.
Mr. Bush was shrewd to frame his proposal with the vocabulary of innovation and aspiration. ObamaCare is built on a 20th-century chassis that is ever less relevant to modern medicine and consumer finance. If the law continues to underperform, voters may be open to a new model that puts their choices and needs ahead of the political class’s.
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The cynic in me was wholly unsurprised when the Associated Press reported the Department of Justice (DoJ) concluded that no formal charges would be filed against any of the IRS officials embroiled in the IRS scandal of 2013. In a letter to Congress, the DoJ announced that they found “no evidence that any IRS official acted based on political, discriminatory, corrupt or other inappropriate motives that would support a criminal prosecution.”
Never mind the fact that computer hard drives and emails disappeared, secret email accounts were maintained, interoffice messaging systems were used to avoid written records, only one conservative group received approval under Lerner in three years, and some groups remain unapproved after 5 years — all while Obama’s brother received retroactive tax-exempt approval in less than 30 days.
According to the DoJ letter, such actions were merely, “mismanagement, poor judgment and institutional inertia.” That is utter nonsense.
Stephen Dinan at the Washington Times did a decent round up of the news and reactions to the decision.
“The IRS did mishandle tea party and conservative groups’ nonprofit applications, but their behavior didn’t break any laws, the Justice Department said in a letter to Congress Friday that cleared the tax agency and former senior executive Lois G. Lerner of any crimes.
“Ineffective management is not a crime,” Assistant Attorney General Peter J. Kadzik said in a letter to the House Ways and Means Committee. “The Department of Justice’s exhaustive probe revealed no evidence that would support a criminal prosecution. What occurred is disquieting and may necessitate corrective action — but it does not warrant criminal prosecution.”
The decision comes more than two years after the IRS’s internal watchdog reported that auditors singled out tea party groups’ applications for special scrutiny and delayed those applications beyond reasonable timelines, preventing the groups from being able to say they were officially recognized nonprofits.
The agency initially admitted its bad behavior, and President Obama vowed an investigation — but he later said, in the middle of the probe, that there was no evidence of corruption.
Some Republicans have questioned the validity of the probe from the beginning, after learning that one of the Justice Department lawyers assigned to the investigation was a contributor to Mr. Obama’s political campaigns.
In its letter Friday the Justice Department specifically cleared Ms. Lerner, a senior executive in charge of approving the groups’ applications, who had authored a number of emails that suggested a bias against the tea party movement.
Investigators said none of the witnesses they interviewed believed Ms. Lerner acted out of political motives, and said that Ms. Lerner seemed to try to correct the inappropriate scrutiny once she “recognized that it was wrong.”
“In fact, Ms. Lerner was the first IRS official to recognize the magnitude of the problem and to take concerted steps to fix it,” Mr. Kadzik wrote.
Congressional Democrats said the decision confirmed what they’d figured out years ago — that there was no underhanded political dealing at the agency.
“Over the past five years, Republicans in the House of Representatives have squandered literally tens of millions of dollars going down all kinds of investigative rabbit holes — IRS, Planned Parenthood, Benghazi — with absolutely no evidence of illegal activity,” said Rep. Elijah E. Cummings of Maryland, the top Democrat on the Benghazi investigation and ranking member of the House Oversight Committee.
The House Ways and Means Committee conducted its own investigation into the IRS’s tea party targeting, as did the Senate Finance Committee. The House panel was the one that voted to refer Ms. Lerner’s behavior to the Justice Department for criminal investigation.
Rep. Paul Ryan, the chairman of the Ways and Means Committee, called the Friday letter “deeply disappointing,” but said it wasn’t a surprise given the bent of the Obama administration.
He said his committee’s probe did find “serious and unprecedented actions” by Ms. Lerner that deprived tea party groups of their rights.
“The American people deserve better than this. Despite the DOJ closing its investigation, the Ways and Means Committee will continue to find answers and hold the IRS accountable for its actions,” he said.
Ms. Lerner’s lawyers, in a statement, said they were “gratified but not surprised” by the announcement.
“Anyone who takes a serious and impartial look at the facts would reach the same conclusion as the Justice Department,” they said, adding that she cooperated with the investigators and answered their questions.
That stands in contrast to her interaction with Congress, where she refused to answer questions, invoking her Fifth Amendment right to remain silent — but only after she delivered a statement declaring her innocence.
The House Oversight Committee concluded that she was not, in fact, able to invoke the Fifth Amendment at that point, and when she refused to answer questions, the House voted to hold her in contempt of Congress.
The Justice Department declined to pursue that case, too, arguing that her claim of Fifth Amendment rights was likely to succeed.
Groups that faced targeting by the IRS were infuriated by Friday’s decision.
“To say there is no evidence of discrimination makes a mockery of all we witnessed in the last two years,” said Catherine Engelbrecht, founder of True the Vote, which had its application for nonprofit status delayed as it and another group she was involved in faced scrutiny by everyone from the FBI to federal occupational health authorities.“
