Is Obama’s Government Too Big to Succeed?
Policy + Politics

Is Obama’s Government Too Big to Succeed?

REUTERS/Kevin Lamarque

President Obama can claim to have killed Osama bin Laden. He can reasonably take credit for helping to avert a second Great Depression.

But Obama has yet to master his management of the federal government, as shown this month by the disturbing revelations about the IRS targeting Tea Party groups, the Justice Department hunting for leakers by seizing Associated Press phone records, and the talking points written by the administration that may have been edited to hide information about the Benghazi terrorist attack.

In some ways, he is making the case that any stewardship of the $3.45 trillion institution—the epitome of too big to fail—can be perilous, if not impossible. This is a troubling development for a president whose polices are based on the idea that government can improve people’s lives.

Consider the administration’s agenda before these three controversies blew up, the ones it claims the country truly cares about. 

It must finalize rules from the 2010 Dodd-Frank overhaul of Wall Street regulations in the hopes of preventing a repeat of the 2008 financial collapse.

It must wrap-up key elements of Obamacare, so that health insurance can be offered through government exchanges and penalties extracted through the IRS for those who decline coverage.

It must negotiate with distrusting House Republicans to lift the debt ceiling next autumn, or risk default.

Add to these initiatives a growing to-do list:  Passing immigration reform. And figuring out executive actions to address climate change. Also, winding down the Afghan War. And sorting through the sequestration cuts. And fixing the widespread problem of sexual assaults in the military. And don’t forget moving political nominees—such as Penny Pritzker for Commerce secretary—through the Senate.

Not surprisingly, White House chief of staff Denis McDonough commanded staffers to devote no more than 10 percent of their time to the IRS, AP, and Benghazi controversies, according to The New York Times on Friday.

Obama’s managerial abilities are being called into question, with the Washington Post noting on Sunday that he is either too aggressive or too reticent when steering the ship of state. The White House claims its policy was to be ignorant of the inspector general’s audit showing that the IRS began in March, 2010 to single out for strict review Tea Party groups that applied for nonprofit status.

“You have a cardinal rule, which is you do nothing to interfere with an independent investigation, and you do nothing to offer the appearance of interfering in an independent investigation,” Obama senior adviser Dan Pfeiffer told CBS News’ “Face the Nation” on Sunday. “So I do feel like we handled this in the appropriate way.”

Even if the administration respected the independence of the Treasury Inspector General for Tax Administration, it seems to have been hands-off before the audit started.

Still, if White House personnel were in the dark, other agency officials were not. A report by Reuters states, “The Treasury Department's internal watchdog, J. Russell George, told the House panel that Deputy Treasury Secretary Neal Wolin, an Obama political appointee, learned nearly a year ago that a government watchdog was looking into inappropriate targeting by the IRS. Wolin, the No. 2 official at Treasury, is due to testify next week before the House Oversight and Government Reform Committee. 

Congressional Republicans feared that newly established conservative groups were receiving special IRS scrutiny, as more and more “social welfare” organizations with an ideological agenda were being established after the 2010 Supreme Court ruling on Citizens United removed some of the restrictions on independent political expenditures.

Rep. Charles Boustany, (R-La.) among others, raised these concerns at a March, 2012 hearing, technically before the start of the inspector general’s audit. At that time, then IRS commissioner Douglas Shulman insisted, “there is absolutely no targeting.”

The administration had little incentive to pursue the matter further.

Preemptive efforts asking the IRS to cooperate fully with Congress might have given Republicans the scent of scandal during the middle of Obama’s re-election campaign. But once the inspector general’s audit started last June—the White House kept its distance to avoid any conflicts of interest, since any meddling could erode confidence in the government.

Now, with the release of the audit last week, the erosion in confidence appears inevitable, regardless of any cardinal rules being followed inside the West Wing.

The Justice Department has launched an investigation, the inspector general appears to be pursuing a follow-up, and House Republicans are hungry for more hearings to address unanswered questions.

“Officials at Treasury knew about this a year ago, officials at the IRS knew about this two years ago,” House Ways and Means Committee Chairman Dave Camp, R-Mich., said Sunday on NBC’s “Meet the Press.”  “Congress has been trying to get answers for two years and we were stonewalled.”

House Budget Committee Chairman Paul Ryan, (R-Wisc.) explained that the inspector general’s audit—which is different from an investigation—never addressed basic issues such as the motives of IRS employees.

The IRS officials interviewed for the audit claimed then and later that they lacked the guidance and manpower to oversee the flood of more than 60,000 organizations applying for nonprofit status.

“They didn't look at emails, they didn't look at intent, they didn't look who was in the chain of information,” Ryan told “Fox News Sunday.” “So, none of that information has been acquired yet. That's what the IG is doing now. That's what our congressional overseers are doing now as well.  So, all we have is a simple audit. We don't have a thorough investigation. That's not the report we got. That is what is now occurring.”

In making his rounds at the Sunday talk shows, Pfeiffer, the White House communications adviser, acknowledged that the administration must repair the damage caused by the IRS, before more Americans lose what little faith they have left in the government.

“This was a breach of the trust,” he said. “Regardless of the motivation, regardless of how it happened, it was a breach of the trust, so we have to fix it, we have to restore that trust.”

But even the managerial choice to have Pfeiffer appear on television as Obama’s point man could prove to be a mistake. As pointed out by CBS News’ “Face the Nation” host Bob Schieffer, Pfeiffer had no direct knowledge of how the IRS audit unfolded and the administration’s past interactions with the agency.

Schieffer wryly noted that the administration tried a similar tactic last year, when it sent United Nations Ambassador Susan Rice to the Sunday talk shows to discuss the attack in Benghazi that killed four Americans.

The attack was a terrorist assault, but Rice portrayed it during her interviews as the result of a spontaneous riot, a false claim made as talking points were edited from the initial intelligence on the ground.

Much like Pfeiffer with the IRS, Rice had no direct pipeline to information about Benghazi.
“That was just a PR plan to send out somebody who didn’t know anything about what happened,” Schieffer said. “Why are you here today? Why isn’t the White House chief of staff here to tell us what happened?”

Pfeiffer dodged the question.