Scandal outbreak
Survival of reform depends on how administration weathers the storm
Washington is once again in the grip of scandal fever. The Benghazi e-mails; the IRS targeting of conservative groups; allegations that HHS Secretary Kathleen Sebelius shook down healthcare companies to promote the insurance expansion in the Patient Protection and Affordable Care Act: The competition is growing intense for top billing as the scandal du jour.
The stakes are high. Given the Obama administration’s bungled response to the media firestorm, the most pressing political question facing healthcare leaders now is whether the rollout of healthcare reform will become collateral damage.
There’s a recurrent pattern to outbreaks of scandalitis. The malady usually strikes early in the second term of a president who is despised by his political opponents.
President Richard Nixon and Watergate trained an entire generation of journalists to be on the lookout for the next smoking gun that can bring down a chief executive. Ronald Reagan and Iran-Contra, Bill Clinton and Monica Lewinsky, and now Obama. Last week, House Speaker John Boehner (R-Ohio) gave new GOP congressmen their first chance to vote to repeal the ACA. Can an impeachment resolution be far behind?
Substance rarely matters in these highly politicized imbroglios. A close reading of the Benghazi e-mails suggests an interagency fight between the State Department and the Central Intelligence Agency led to the administration’s failure to immediately say that organized terror cells might have been involved in the attack on a U.S. diplomatic outpost.
The IRS targeting Tea Party-associated groups was immediately condemned by the president, and rightfully so. Yet isn’t the root cause of this ham-handed bureaucratic snafu the U.S. Supreme Court’s decision in Citizens United, which allows tax-exempt groups to raise unlimited and undisclosed cash as long they don’t spend more than half on politics? The left and right are engaged in a massive arms race for these hid- den contributions. If Congress is serious about solving this problem, it would immediately pass a law closing the nondisclosure loophole.
The alleged Sebelius shakedown is rooted in the Republican-led House’s refusal to give the Obama administration money to promote the start-up of the exchanges. Effective implementation will require a substantial amount of public education. A group led by Ron Pollack of Families U.S.A. launched Enroll America to raise money to do promotion.
In late March, Modern Healthcare urged healthcare firms and institutions to open their wallets for Enroll America. Sebelius’ crime, according to Sen. Lamar Alexander (R-Tenn.), was doing the same by going directly to some of the firms her department regulates. He compared it to Iran-Contra. But there’s a big difference. The ACA passed Congress. Sebelius was encouraging support for the law. Iran-Contra violated the law. The architects of that funding scheme were subverting the will of Congress.
The Sebelius brouhaha will blow over because it has no substance. If one really wants to understand the roots of Alexander’s complaints, one need look no farther than the fact he is up for reelection in 2014 where the only serious challenge might come from a Tea Party candidate on the right. A little scandal-mongering now is designed to inoculate himself against that possibility. The burgeoning IRS scandal, on the other hand, poses a much more direct threat to the rollout of reform. The agency has numerous roles to play in the enforcement of the individual mandate, the distribution of tax credits and the imposition of penalties on businesses that fail to provide coverage. It also will collect taxes levied on insurers, medical device manufacturers and hospitals.
Last week, the president fired the interim chief of the IRS. If new acting commissioner Daniel Werfel becomes paralyzed by scandal, it will be much more difficult for the IRS to meet the challenges of administering the complex law. For those rooting for its failure, that’s the point.