Obama: The Real IRS Scandal is Lack of Funding, So Blame Congress

President Obama swung by The Daily Show earlier this week and was challenged by outgoing host Jon Stewart over government incompetence on his watch. Pressed on prominent instances of malfeasance and ineptitude that have plagued the federal bureaucracy during his administration -- from the VA wait list scandal, to the catastrophic OPM hack, to the IRS targeting affair -- Obama breezily

dismissed the latter example as a non-scandal, chalking it up to Congress writing "crummy" laws that were merely implemented "poorly and stupidly." The Washington Times reports:

President Obama defended the IRS Tuesday in an interview with “Daily Show” host Jon Stewart, saying the tea party-targeting scandal was actually Congress‘ fault for passing “a crummy law” and that the real problem is the agency doesn’t have enough money...the president said he’s not to blame, using the IRS as an example of how what went wrong wasn’t his fault, and questioning whether tea party groups were ever targeted…The IRS‘ internal auditor concluded that the agency did, in fact, target conservative and tea party groups for intrusive scrutiny, and Mr. Obama’s own Justice Department is still conducting a criminal investigation into the targeting. Mr. Obama, though, disputed that version Tuesday, according to the pool reporter traveling with the president. Mr. Obama said Congress “passed a crummy law” that provided vague guidance to the people who worked at the IRS. And he said that employees implemented the law “poorly and stupidly.” The president went on to say that the “real scandal around the IRS is that they have been so poorly funded that they cannot go after these folks who are deliberately avoiding tax payments.”

The buck, per usual, stops elsewhere. Kudos, incidentally, to Stewart for asking this question. Obama and his party relentlessly agitate for a larger and more expensive federal government, a goal Stewart tends to share. But the comedian at least evinces some qualms and frustration over big government's myriad failures; he poses questions like this to prominent Democrats from time to time, and often

appears unsatisfied with the answers he elicits. In any case, this president and his administration have a long track record of diminishing scandalous episodes as phony controversies, stoked by political opponents. Here, he downplays the core element of the IRS scandal, constructing the bogus excuse that agency employees were more or less handcuffed and victimized by shoddy laws passed by Congress. He's been repeating this line for some time now, all while insisting that there isn't a "smidgen of corruption" at the IRS. But as the Wall Street Journal explained last year, Obama's preferred narrative is wholly unsupported by the facts:

Mr. Obama wants Americans to believe that the targeting resulted from the confusing tax law governing nonprofits, which he says was "difficult" to interpret and resulted in mere "bureaucratic" mistakes. This is also the Administration's justification for issuing new regulations governing 501(c)(4)s that would effectively silence White House opponents this election year. Published in the Federal Register in November, the new rules cite the "lack of a clear and concise" regulation as reason for the rewrite. House Ways and Means Chairman Dave Camp blew up this fairy tale at Wednesday's hearing with new IRS Commissioner John Koskinen. Mr. Camp unveiled a June 14, 2012 email from Treasury career attorney Ruth Madrigal to key IRS officials in the tax-exempt department, including former director Lois Lerner. The email cites a blog post about the political activity of tax-exempt 501(c)(4) groups and reads: "Don't know who in your organizations [sic] is keeping tabs on c4s, but since we mentioned potentially addressing them (off-plan) in 2013, I've got my radar up and this seemed interesting."

Interesting for sure. The IRS typically puts out a public schedule of coming regulations, and Mr. Camp noted that in this case "off-plan" appears to mean "hidden from the public." He added that committee interviews with IRS officials have found that the new 2013 rules were in the works as early as 2011, meaning the Administration has "fabricated the rationale" for this new regulation. Mr. Camp added that everything his committee has discovered contradicts the White House argument that the IRS scandal was caused by legal "confusion." The current rules governing 501(c)(4)s have existed, unchanged, since 1959. Prior to 2010 the IRS processed and approved tax-exempt applications in fewer than three months with no apparent befuddlement. The IRS hyper-scrutiny of conservative groups only began in 2010 amid the Obama Administration's larger political attack on political donors like the Koch brothers, and emails show that IRS officials were acutely aware of this political environment.

In other words, the targeting scandal was used as a pretext to introduce the administration's proposed regulations, which were in the works years before the agency's abusive practices were revealed. And the supposedly "confusing" and "crummy" existing system had been enforced for decades, largely without incident. Only when Democrats began squealing about Citizens United and secret foreign donations (not these ones) did the highly-politicized IRS spring into action to "fix" the "problem." The fact of the matter is that the Internal Revenue Service explicitly and deliberately targeted and harassed conservative groups over two election cycles. The numbers, provided by the IRS' Inspector General, are lopsided and clear:

The agency misled Congress about these abuses, top officials told a series of lies about the nature of their activity once the jig was up, and relevant evidence has routinely and mysteriously disappeared. IRS employees exchanged emails detailing their contempt for conservatives, wrongfully leaked private donor lists to left-wing groups, and exploited said donor lists as the basis for audits. None of these factors have anything to do with "crummy laws," vague guidance, or misguided implementation. This was an ideological project that weaponized a coercive, punitive branch of the federal government against the ruling party's political opposition, micromanaged from DC. The agency has admitted to and apologized for engaging in the very behavior Obama is trying to pretend never really happened. As for the president's definition of the "real scandal" in all of this -- insufficient IRS funding -- consider:

(1) The agency's intensive and intrusive questioning of Tea Party and conservative-leaning groups created more, not less, work for the IRS. Rather than cutting corners to compensate for its underfunded operations, the IRS created additional layers of work for itself as a means of targeting and abusing the "wrong" sorts of groups. (2) How well is the IRS spending the money they already receive through appropriations? (3) When asked to tighten its belt, the IRS intentionally placed core customer service functions in the budget-cutting crosshairs, while protecting cash earmarked for union activities and bonuses. Their priorities deliberately hurt taxpayers and preserved their own financial interests. Why reward them for ongoing egregious conduct? (4) If Congress were to further increase IRS funding, how much of that money would be used to rehire or retain and promote proven tax cheats?

Obama: The Real IRS Scandal is Lack of Funding, So Blame Congress

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