Oh his way out the door, Obama's IRS chief imposes ObamaCare penalties on thousands of employers

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Published by: Dan Calabrese on Wednesday November 08th, 2017

Koskinen's revenge.

Recently the IRS had to formally apologize for targeting conservative organizations and foot-dragging their applications for tax-exempt status. This did not please IRS Commissioner John Koskinen, a swamp creature if ever there was one, and the man appointed by Barack Obama to cover up the IRS's malfeasance even as it was claimed he was there to do the opposite.

All you have to do is listen to Koskinen talk for a few minutes to know the man detests the idea that his agency should be held accountable for anything it does. He believes the federal bureaucracy knows best and should be able to do whatever it wants for whatever reason.

So the compelled mea culpa for the sins of Lois Lerner and others did not sit well with Koskinen, who is getting ready to leave the job and who this week found a way to get his revenge. For the past four years, the IRS has been keeping records on employers it believes are not in compliance with ObamaCare's mandate that they provide certain health insurance benefits to employees. But the IRS has not acted on any of this. It simply collected the information and sat on it.

Until now. As he's heading out the door, Koskinen is lowering the boom, not only socking these employers with penalties but doing so retroactively - in some cases for four years' worth of perceived sins against ObamaCare. That's bad enough, but John Koskinen being who he is, it's not all that surprising. What's worse is that Treasury Secretary Stephen Mnuchin has the authority to overrule Koskinen, and apparently isn't going to use it:

Nobody knows how many businesses will be hit, but by some estimates it will be tens of thousands. The Congressional Budget Office estimated in 2015 that employers would owe $9 billion in fiscal 2016 and $13 billion in fiscal 2017. This comes as premiums continue to rise on the ObamaCare exchanges.

The mandate is particularly burdensome for smaller job creators hard-pressed to comply with an extraordinarily complex mandate that requires them to report on the status of every employee and dependent. The letters are also a blindside hit, since the IRS was silent about its plans.

Treasury Secretary Steve Mnuchin could have overruled Mr. Koskinen and delayed enforcement until the IRS could better prepare the business community. The IRS is not an independent agency but is part of Treasury, and the IRS Commissioner reports to the secretary. The employer mandate remains the law, though Republicans on Capitol Hill have been trying to repeal it.

Treasury’s defense is that the law says the IRS “shall” enforce the mandate, and a Treasury spokesperson said: “Based on a review by Treasury lawyers, there is no ground for the Secretary to direct the IRS to not send out the letters to collect this tax.” But that view was hotly contested inside the White House, and after so long a delay, allowing some time for a new IRS chief to review is hardly stretching the law.

I fault Mnuchin for doing nothing, but if this was hotly debated within the White House and there was still nothing done, then I fault President Trump even more - first for choosing a Treasury Secretary unwilling to stand up to Koskinen and secondly for not ordering him to do so in this situation.

There are far too many agencies within the executive branch that are allowed to operate as if they're completely independent. Intervention from the president, especially when his name is Donald Trump, is regarded as some sort of horrific political intervention in the business of the people.

Nonsense. The president is the one and only person vested by the Constitution with the authority to make these decisions. Koskinen works for Mnuchin and Mnuchin works for Trump. It's one thing when something like this done under the radar and the president doesn't realize it until after the fact. When the issue is actually debated at the level of the White House and the malevolent action is still allowed to stand, then someone needs to explain to President Trump that he is actually in charge.

GDP growth for Obama's final year? A measly 1.6 percent

I suppose there is a line of thinking that you make ObamaCare harder to get rid of if you keep shielding people from its worst elements. The Obama Administration held off on this enforcement precisely because it understood what a firestorm it could create, and they didn't want to give rise to further opposition to the law. Trump wants ObamaCare gone, and maybe he thinks the public needs more reasons to want it gone as well.

But at a time when the economy is finally starting to grow and employers are hiring, they don't need a regulatory nightmare like this. Trump's relaxing of the regulatory state's war on business is one of the reasons GDP is finally advancing at a more respectable pace, and this action stands out as being completely inconsistent with that.

John Koskinen should have been fired the day Trump took office, but I guess they thought it was easier to just let him run out the clock on his term. That was a mistake. It's also a mistake to let him scorch the earth like this as he's going out the door. Steve Mnuchin needs to grow a pair and overrule this action. I don't know how the Trump Administration can claim to be draining the swamp if it won't use its authority in a situation like this.

Dan's new novel, BACKSTOP, is a story of spiritual warfare and baseball. Download it from Amazon here!