During the height of the Monica Lewinsky scandal, President Bill Clinton mastered the art of burying bad news: release everything late on Friday afternoon and hope everyone in Washington forgets about it by Monday. Only one week into his presidency it is clear that President Barack Obama is equally adept at this skill. Late Friday night Obama Health and Human Services secretary nominee Tom Daschle told reporters that he paid over $140,000 in back taxes and interest to the IRS on January 2, of this year. The $128,00 in unreported income came from the $353,552 he received in consulting fees and the use of a car service from a wealthy Democratic donor in just the three years since Daschle left the Senate.
But Daschle’s trouble paying taxes on income he received from wealthy Democratic donors is just the tip of the iceberg. As the New York Times reports this morning, Daschle’s post-Senate career, which allowed Daschle “to make $5 million and live a lavish lifestyle by dint of his name” provides “a new window into how Washington works.” Much of Daschle’s lucre has come from his work for the firm Alston & Bird where “Mr. Daschle has operated in the gap between the popular understanding and legal definition of a lobbyist.” While there, Daschle has “consulted” for clients with business before the federal government including two Indian tribes, a firm with heavy stakes in ethanol subsidies, and another with key issues before the Federal Aviation Administration. Not to mention Daschle’s work for the supposedly non-profit firm EduCap which allows some students to borrow up to $50,000 a year, sometimes at 18 percent effective interest rates.
But these links between big government and big business are not the most worrisome. Daschle will after all be in charge of health policy, and that is where his income from big business is the most troubling. The Health Industry Distributors Association, which successfully lobbied to kill Medicare’s first ever competitive bidding program for health care supplies this summer, paid Daschle $14,000 to deliver one speech at their conference last year. And Daschle was also paid for his policy advice by UnitedHealth, a giant insurance company which receives a third of its revenue from HHS regulated sales of Medicare Advantage and Medicare supplement and prescription drug plans.
Daschle’s ascension to Secretary of HHS comes at a crucial time for health care in this country. For more than a decade, the federal government has been gaining more and more control over the total number of health care dollars spent in this country. Today, the private sector spends only 53.7% of all health care dollars; while state and federal government cut the checks for the rest. The combination of the recently passed SCHIP expansion, and the further expansion of eligibility under Medicaid will certainly push government spending on health care well past 50%. But this is only half of the story. If we include all of the state and federal regulations that dictate private spending, the government already controls over 60% of the health care sector.
Daschle and the health care sector are only part of the big business/big government nexus that is killing our economy. The Obama administration is also using the power of the Wall Street bailout purse strings to dictate how cars are made in this country and how financial firms should operate. Just as the New Deal failed to restore economic growth because it tried to marry big government planning with big business profits, so will Obama’s new New Deal. Daschle’s story is just one window into what the failure will look like.
- As written, the House stimulus bill will to set off a 1930s style trade war.
- Senate Minority Whip Jon Kyl (R-AZ) said Sunday he believes the Senate should completely revamp the stimulus bill.
- State governors, both Democrat and Republican, still believe in the power of tax cuts to spur growth as many governors are wooing companies with tax breaks and financial incentives.
- State and local governments consider the stimulus bill a once-in-a-lifetime opportunity to get free money from Washington.
- Despite headlines to the contrary, President Barack Obama preserved the CIA’s controversial prisoner-transfer program and may expand it.