Bankrupting America’s Spending Daily

| May 13 2013

Spending Daily | May 13, 2013

IRS Targeted Groups Lobbying to “make America a better place to live”

The Wall Street Journal reports, “The Internal Revenue Service’s scrutiny of conservative groups went beyond those with ‘tea party’ or ‘patriot’ in their names—as the agency admitted Friday—to also include ones worried about government spending, debt or taxes, and even ones that lobbied to ‘make America a better place to live,’ according to new details of a government probe. The investigation also revealed that a high-ranking IRS official knew as early as mid-2011 that conservative groups were being inappropriately targeted—nearly a year before then-IRS Commissioner Douglas Shulman told a congressional committee the agency wasn’t targeting conservative groups. The new disclosures are likely to inflame a widening controversy over IRS handling of dozens of applications by tea-party, patriot and other conservative groups for tax-exempt status. The details emerged from disclosures to congressional investigators by the Treasury Inspector General for Tax Administration. The findings, which were reviewed by The Wall Street Journal, don’t make clear who came up with the idea to give extra scrutiny to the conservative groups.”

 

“IRS Knew Tea Party Targeted in 2011”

According to The Associated Press, “Senior Internal Revenue Service officials knew agents were targeting tea party groups as early as 2011, according to a draft of an inspector general’s report obtained by The Associated Press that seemingly contradicts public statements by the IRS commissioner. The IRS apologized Friday for what it acknowledged was ‘inappropriate’ targeting of conservative political groups during the 2012 election to see if they were violating their tax-exempt status. The agency blamed low-level employees, saying no high-level officials were aware. But on June 29, 2011, Lois G. Lerner, who heads the IRS division that oversees tax-exempt organizations, learned at a meeting that groups were being targeted, according to the watchdog’s report. … Lerner instructed agents to change the criteria for flagging groups ‘immediately,’ the report says.”

 

Bill Seeks to Boost Penalties on IRS Lawbreakers

POLITICO reports, “In the wake of an admission by an IRS official that conservative groups had been targeted for additional scrutiny, Rep. Michael Turner will introduce legislation Monday that would increase the penalty for singling out ideological organizations —including the possibility of jail time. Turner, a member of the House Oversight and Government Reform Committee, said news about the IRS is an example of abuse of government power. ‘Across the country, people are appalled to learn the IRS targeted people because of their political beliefs,’ the Ohio Republican told POLITICO. ‘These are issues of basic rights of expression.’ … Turner’s bill would expressly prohibit an IRS employee from discriminating against a group or individual based on protected statuses. It also expressly states that political speech and expression are protected statuses and protect all political speech from being targeted by the IRS — not just that of conservative groups. IRS employees are already prohibited from discriminating in the course of the work, but the highest level of punishment is termination. Under Turner’s law, the penalty would be increased to a fine up to $5,000, five years in prison or both.”

 

“Huge Drug Cost Disparities Seen in Health Overhaul”

The Associated Press reports, “Cancer patients could face high costs for medications under President Barack Obama’s healthcare law, industry analysts and advocates warn. Where you live could make a huge difference in what you’ll pay. To try to keep premiums low, some states are allowing insurers to charge patients a hefty share of the cost for expensive medications used to treat cancer, multiple sclerosis, rheumatoid arthritis and other life-altering chronic diseases. Such “specialty drugs” can cost thousands of dollars a month, and in California, patients would pay up to 30 percent of the cost. For one widely used cancer drug, Gleevec, the patient could pay more than $2,000 for a month’s supply, says the Leukemia & Lymphoma Society. New York is taking a different approach, setting flat dollar copayments for medications. The highest is $70, and it would apply to specialty drugs as well. Critics fear most states will follow California’s lead, and that could defeat the purpose of Obama’s overhaul, because some of the sickest patients may be unable to afford their prescriptions.”

 

“Budget Wars Likely to Fizzle Fast”

According to Roll Call, “After a two-week break — heralded by the quick and bipartisan capitulation to exempt the flying public but no one else from the sequester’s scythe — the budget wars are getting started again. But signs point to the next few skirmishes fizzling fast.  … That’s mainly a consequence of the government’s short-term fiscal position, which on paper looks pretty good. The Treasury’s balance sheet for April was $113 billion in the black, the biggest monthly surplus in five years. Steady economic growth and the higher tax rates put in effect in January have quickened the flow of revenue. And the flow of spending has slowed now that those deep spending cuts, once dismissed as too indiscriminate to carry out, have nonetheless been put in place (except, of course, for those air traffic controllers).”

 

“Sequester Signals Need For Real Deficit Reduction”

Ed Rendell editorializes in POLITICO, “It seems the debt deniers are back. If recent news reports are any indication, there is a growing sentiment that after enacting the nearly across-the-board ‘sequestration’ spending cuts, Washington has already done enough to reduce the deficit and should avoid further deficit reduction that could disrupt the fragile recovery. However, this rhetoric is based on the false notion that deficit reduction and economic growth are mutually exclusive. … The austerity we currently face is precisely the result of our inability to deal with long-term deficits. … Policymakers may pretend the current situation is sustainable, but in reality everyone loses. By resisting continuing efforts to reach a responsible deficit-reduction deal that could replace the sequester, those in my party concerned about protecting programs that provide support for low-income people, enhancing public investments and ensuring the economic recovery is the tide that lifts all boats may very well be, unintentionally, thwarting all three goals.”

 

Sebelius Solicits Donations to Ensure Success of Health Care Implantation 

The New York Times reports, “Kathleen Sebelius, the secretary of health and human services, has solicited sizable donations from the Robert Wood Johnson Foundation and H&R Block, the tax preparation service, as part of a multimillion-dollar campaign to ensure the success of President Obama’s health care law, administration officials said Sunday, even as a leading Senate Republican raised questions about the legality of her efforts. The foundation is expected to contribute as much as $10 million, while H&R Block is expected to make a smaller donation of about $500,000, the officials said. The senior Republican on the Senate health committee, Senator Lamar Alexander of Tennessee, said the fund-raising “may be illegal.” He likened it to efforts by the Reagan administration to raise money for rebels fighting the leftist government of Nicaragua in the 1980s, after Congress had restricted the use of federal money. Aides to Mr. Alexander said Sunday that he would ask the Government Accountability Office, an investigative arm of Congress, to examine the propriety of the Obama administration’s fund-raising efforts.”

 

Health and Human Services Say Nothing Is Wrong with Taking Donations to Promote HealthCare Law

The Hill reports, “The Health and Human Services Department (HHS) says there’s nothing illegal or improper about soliciting donations to help promote President Obama’s healthcare law. Republicans leapt at the news that HHS Secretary Kathleen Sebelius has been asking industry and community groups to donate to Enroll America, an outside organization created to promote the health law and encourage people to enroll in its new coverage options. HHS spokesman Jason Young said the fundraising push serves the department’s basic goals. … ‘We have always worked with outside groups, and the efforts now ramping up are just one more part of that work,’ Young said.”

 

Is The Senate Budget Balanced?  Fact Check: Three Pinnocchios

The Washington Post reports, “A reader asked: Is the Democratic-crafted budget plan ‘a balanced budget,’ at least in the conventional sense? Most people would interpret that phrase as meaning a plan that in theory leads to an equal level of revenues and expenditures by a given date. In other words, the federal government no longer ran deficits. After all, House Republicans claim to have a budget that leads to balance in 10 years. Do Democrats? … It’s important to remember that these 10-year budget blueprints are more political, aspirational documents than serious financial plans. No one really knows what the economy will look like a decade from now, and so actual tax revenues and government spending in the future are heavily dependent on factors beyond politicians’ control. …. But in any case, does the Democratic Senate plan ever predict a ‘balanced budget’? Nope. The summary tables produced by the Budget Committee show hundreds of billions of deficits year after year, with $566 billion in deficits at the end of the 10-year period. About $5.2 trillion is added to the national debt over the 10 years. So how can Stabenow even begin to refer to this as a ‘balanced budget’? It comes right out the Budget Committee’s news release: ‘This budget takes the balanced and responsible approach to our fiscal challenges that every bipartisan group has endorsed and that the American people support.’ See that word ‘balanced’? Democrats clearly want to have their cake and eat it too, using a nice, poll-tested word that resonates with voters without making the cuts or tax increases needed to get there.”

 

Underground Economy of $2 Trillion May Help Keep Economy Afloat

USA Today reports, “The growing underground economy may be helping to prevent the real economy from sinking further, according to analysts. The shadow economy is a system composed of those who can’t find a full-time or regular job. Workers turn to anything that pays them under the table, with no income reported and no taxes paid — especially with an uneven job picture. ‘The underground economy is quite big in the U.S.,’ said Alexandre Padilla, associate professor of economics at Metropolitan State University of Denver. ‘Whether it’s using undocumented workers or those here legally, it’s pretty large.’ … Estimates are that underground activity last year totaled as much as $2 trillion, according to a study by Edgar Feige, an economist at the University of Wisconsin-Madison. That’s double the amount in 2009, according to a study by Friedrich Schneider, a professor at Johannes Kepler University in Linz, Austria. The study said the shadow economy amounts to nearly 8% of gross domestic product.”

 

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