Opinion: Columnists

Obama administration misuses rules to punish enemies and reward friends

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Opinion,Diana Furchtgott Roth,Columnists,Barack Obama,Russia,Analysis,Vladimir Putin

President Obama has been taking lessons from Russia’s President Vladimir Putin. Just as Putin shut down the RIA Novosti news agency on Dec. 9, two new administration rules misuse the government to punish enemies and reward friends.

Over Thanksgiving the Internal Revenue Service issued regulations to silence Obama's tax-exempt political opponents within 60 days of a federal election--while leaving alone left-leaning organizations such as unions, environmentalists and feminists.

And on Dec. 12, since Obamacare wasn't working, the Department of Health and Human Services issued a rule, effective Dec. 15, to require insurance companies to cover health care benefits to those who have not paid premiums or completed enrollment.

If this were Russia, no one would be surprised. But this is the United States of America. The law is the law — or at least it used to be.

The IRS regulations are aimed at tax-exempt organizations, many of them conservative, that file under 501(c)(4) of the IRS code — the ones targeted by the IRS during the scandal. Under the new rules they would not be allowed to engage in voter outreach or education within two months of a general election or one month of a primary.

Left untouched are tax-exempt unions, some of the largest spenders to Democrats in election cycles. They are classified as 501(c)(5). In the 2012 election cycle unions gave $143 million to federal candidates, parties and outside groups.

In 2012 the Service Employees International Union spent $58 million on federal and state elections; the AFL-CIO spent $20 million; and the American Federation of Teachers spent $63 million.

In a column written the weekend before the 2012 election, SEIU president Mary Kay Henry wrote, “On Saturday, more than 25,000 SEIU members were out in full force, knocking doors and making the case for President Obama and other champions for working people. ... Collectively, SEIU members have knocked almost 460,000 doors in Ohio.”

Also left unscathed are 501(c)(3) organizations, which benefit from tax-deductible contributions as well as tax-exempt status.

Rather than regulating the political speech of other tax-exempt organizations, the IRS should leave political speech to the Federal Election Commission.

Neither should HHS require insurance companies to cover patients, “even if the payment and enrollment are not processed by that time,” as it mandates in last week’s regulations.

HHS writes that “it would be reasonable for issuers to consider services received out-of-network as having been received in-network,” meaning that patients should be able to see doctors who are not on their plans.

Further, HHS threatens that renewals of insurance companies’ qualified health plans on the exchanges will depend on whether they comply with the regulation.

The public generally has at least 30 days to comment on rules. But HHS “finds good cause to waive the 30-day delay in effective date as unnecessary, impractical and contrary to the public interest.”

HHS concludes that its new rule does not cause “economically significant effects,” so it does not have to “assess all costs and benefits of available regulatory alternatives.”

How convenient. The government that forces companies to give away their services tells them that this is not economically significant. Al Capone probably told the same to bankers.

We should all be alarmed that the boundaries of democratic government are being ground down, not all at once, but gradually over time.

Examiner Columnist Diana Furchtgott-Roth (dfr@manhattan-institute.org), former chief economist at the U.S. Department of Labor, is a senior fellow and director of Economics21 at the Manhattan Institute for Policy Research.
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