The White House strikes back – but can Obama slay three dragons at one blow?

By J Brooks Spector 17 May 2013

After an astounding run of some really bad news, the White House seems to be pulling up its socks – picking up some presidential cudgels and beginning its “push-back” against its current political tormenters. In the process, after taking three shots to the solar political plexus right in a row, the Obama administration is now trying to project the image of an activist president rightly angry about what has happened while he was busy on other important things, but who is, nevertheless, moving resolutely to staunch the flow of blood and sort things out properly. By J BROOKS SPECTOR.

The snarl over the Benghazi talking points had included charges that the Obama administration’s response to the killing of its ambassador to Libya and three staffers had been motivated more by an eagerness to dispel any sense al-Qaeda-style terror cells still had sophisticated capabilities, just before the 2012 election. This line of attack initially picked up some momentum when the media began reprinting excerpts of the email/memo exchanges between the CIA, the State Department, the FBI and the White House that had taken place as part of the clearance process for the government-wide talking points (the text that would guide public utterances by all administration officials). The excerpts seemed to point to more focus on damage control than a crisp recapitulation of the sad events in Benghazi.

It took several days for the White House to respond but when it did, it released more than 100 documents that – essentially in full, save for some blacked out names – painted a somewhat different picture. With this more complete picture, it became more one in which the State Department and the CIA had struggled over what, precisely, to include in those talking points and how far into the details those talking points should go. The plan seems to be one of setting out so much detail that Republican attacks in Congress eventually get lost in a tangled thicket of details and complicated chronologies and thus begin to trip over one another rather than reinforce a single narrative of administration cupidity.

The second part of the Obama team’s “push-back” has now come in the form of yet another more pro-active measure – with the president calling on Congress to “fully fund” the president’s budget request for enhanced embassy security. Previous Republican-led Congresses have been in the position of cutting back on this budget line. As a result, arguing for more funding for such positions, equipment and construction becomes an effort to take the fight right over onto Republican turf – forcing them to support more security spending or explain why such efforts had previously been unneeded in Benghazi last September – and aren’t going to be needed going forward either.

Moreover, despite all the tub-thumping, arm waving and chest beating from people like California Republican Congressman Darrell Issa, most Americans still seem relatively uninterested in the charges about or congressional hearings over the events in Benghazi. According to a Pew Research Center poll released on Thursday, fewer than half of Americans say they are following the hearings very or fairly closely, and this is a percentage that is virtually unchanged from late January when outgoing Secretary of State Hillary Clinton had testified about the event and the administration’s response to it. Unless something changes drastically, this figure seems unlikely to rise and it is possible the White House may now have dodged a bullet on this one – although what the whole issue has done to Hillary Clinton’s chances for the presidency in 2016 are unclear – at best.

The second part of this presidential “perfect storm” was the Department of Justice’s subpoena of some two months’ worth of telephone records of a wide list of Associated Press reporters and editors, as well as the records from the AP’s general switchboard – and even its fax machines. The ostensible purpose behind this wide-ranging trawl for information, presumably leading the feds to reporters’ contacts who gave them leaked information, was to find out how they had been able to report in such detail on a stymied plot by al- Qaeda operatives based in Yemen to use a new, improved bomb on an airplane.

Now, government officials calling up reporters to ask them to reveal their sources is not something entirely new. Sometimes reporters acquiesce when they are convinced the government has made a legitimate national security justification for such a request, although more usually they don’t go along with such calls – reporting is their job, not snitching on confidential sources. As a result, occasionally a reporter even goes to jail for being in contempt of court in failing to comply with such a subpoena. What is nearly unprecedented, however, has been the wide-reaching, all-encompassing nature of this most recent subpoena to the AP. When the story broke, journalists, media houses, press freedom organisations, civil rights lawyers, constitutional analysts, passionate defenders of the First Amendment right to free speech, the lot, excoriated this Justice Department sweep for the information on the sources of the leaks. President Obama has strongly backed his attorney general, Eric Holder, in this matter, adding that he, as president, had only learned about this saga from media reports, rather than having had any part in the decision to take on the AP for its inquisitiveness in a national security matter.

While this subpoena has been a lightning rod for criticism by free speech supporters, as the story has advanced, it has become clearer just how hard it will be for Republican critics of the president to run with it untrammelled. These are the same individuals, after all, who while they would love to attack Obama on a second front, generally are also strong advocates of toughness on the domestic security front. They are supportive of the ruthless, rigorous tracking down of terrorists, without all those bothersome impediments from liberals who support the right of the media to report on whatever it chooses to write about or broadcast.

And here too, after initially faltering in the pulling together a cogent response, the Obama administration finally announced it has asked New York Democratic Senator Charles Schumer to introduce a federal media shield law. This would be similar to laws already in place in many states that would protect journalists from the precise kinds of fishing expedition the Justice Department now stands accused of conducting against the AP. Here again, after days of dithering, the ball may well have been successfully hit back over the net to the Republicans.

The third and final part of Obama’s worst week ever has been the imbroglio over the Internal Revenue Service’s ultra-aggressive investigation of many right wing groups who have been pursuing valued tax-exempt status under a part of the US Tax Code. Republican congressmen – and a not inconsiderable number of others as well – have assailed the heavy-handed tactics by the IRS in its thorough interrogation of applications for tax-exempt status by a whole collection of right wing, politically active citizen groups.

The question begins, in the first place, with the way the federal tax code is written over time and adjusted in Congress. The way things usually work, pressure from a politically connected interest group like the petroleum industry has led to the passage of special tax provisions benefiting that group. In the case of oil producers it has been their special deduction against their expenses – the so-called depletion allowance keyed to the idea that the value of oil reserves run down over time and they are entitled to a special tax break to compensate them for the risk in seeking the oil in the first place.

Of course there are other tax breaks that are designed to benefit a small but key group of voters such as mohair ranchers. Their tax benefit is the one that a long-time ABC White House correspondent was often teased about at White House presidential press conferences for his having benefited from by virtue of his New Mexico ranch – imagine, a tax cut for raising mohair goats.

And the most widely supported tax break in the US is the mortgage bond interest deduction against family income that virtually everybody in the US who finances a home purchase benefits from – and that essentially guarantees it will never be abolished. This interest deduction is an example of the use of the tax code as a kind of social engineering – it assumes home ownership produces a more stable family life, a stable family system generates stable neighbourhoods and cities – and that, in turn, creates a prosperous country in which people can borrow against their home equity to pay for everything else they might need. (Of course, as was seen in the financial crisis, this presumed social good can go horribly awry as with the 2008 housing bubble, but that’s a whole other issue.)

It is important to understand precisely what happened to the conservative groups targeted by the IRS. They were not being audited on their submitted tax returns or dunned for additional taxes. By law, this sought after tax-exempt status has been extended to several classes of organisations. There are so-called giving foundations – such as the Ford, Rockefeller, Mott, and the Bill and Melinda Gates foundations – that distribute grants (at least 5% of their yearly earnings on investments) to beneficial causes and activities in the US and around the world. And there is also the tax-exempt status for churches, educational institutions and cultural organisations and facilities.

In the wake of the Supreme Court’s “Citizens United v the Federal Elections Commission” decision in 2010 that had famously held that money (including corporate cash) was a form of free speech, a whole run of new groups, many of them part of the loosely organised tea party movement, petitioned the IRS to be granted tax-exempt status under section 501 (c) 4 of the federal tax code (thereby making their income tax-exempt and making contributions to them tax deductible, something those giving to them would be delighted to have happen). In so doing, they could much more easily raise and use funds, as long as they followed the general understanding that at least half of their income was spent on “social welfare” – however that was defined – and that their funds were not directly spent on the specific campaigns of individual political candidates.

The IRS section managing the granting of tax exemptions had relatively recently been centralised in its regional office in Cleveland and it was that office, in the wake of this new surge of applications, that seems to have gone into overdrive to interrogate these new applications – pushing for increasing amounts of documentation. A recent Inspector General’s report of the Treasury Department has now determined that office was in an advanced state of organisational disarray. Given the squishy, soft definitions to be applied and the organisational tumult, the result should have been predictable. Groups finding it hard to gain that new, coveted status started to complain and that, in turn, began to generate increasingly pointed inquiries from certain congressional staff members and a river of complaints on right wing blogs and so forth.

The problem went into overdrive quickly and, as Obama’s critics looked for a link to the White House. After days of waiting, the president – in pushing back on this issue as well – announced his anger over the unfolding events and had the acting commissioner of the IRS fired for failing to manage his troops (and presumably for deeply embarrassing the administration in the process). It hasn’t mattered much that most of the vetting of the conservative organisations applying for tax exempt status took place under an IRS commissioner appointed by Republican president George W Bush (and one who only relatively recently left the government).

As part of this mess at the IRS, it can be argued that the core of the problem has been the ill-defined nature of this tax-exempt status for organisations claiming they are engaged in social welfare activities that has blossomed in recent years – along with the poorly administered process for granting the desired tax status. (It is possible this scandal will prompt Congress to begin to address the amorphous nature of this social welfare tax status – but don’t count on quick action, such drastic steps would gore too many oxen.) Add to that the funding cuts on the IRS budget as an administrative office that have made it hard for it to keep up with the overall demands on it, and there were all the makings of a problem just waiting to happen.

In contrast to Benghazi and the AP subpoenas issues, nobody but nobody likes the taxman in the US (or probably anywhere else), and everybody but everybody knows someone who has been, or claims to have been, hounded in an IRS audit or denial of deductions. Add to that the fear by others that the IRS is somehow targeting them because their personal beliefs, about the only way to staunch the immediate pain of this particular wound was to shoot the messenger – and try to change the message simultaneously. With the White House’s steps in the past two days to defuse these three crises, it hopes it has moved proactively enough to allow the president to turn the national conversation back towards issues he wishes to address like immigration reform, instead of the overlapping Benghazi, IRS and AP subpoena crises.

Commenting on this counterattack by the Obama administration, Politico has written, “In recent days, Democratic strategists have all but begged President Barack Obama to take control of a deepening public relations disaster that threatens to derail his second-term agenda. On Wednesday evening, Obama began to do just that.”

Noting the release of all those emails and documents on Benghazi, the removal of the acting IRS commissioner and the appointment of a replacement, Politico asks, “Has a string of decisive actions in the space of less than a day stopped the bleeding? For Republicans, the answer is clearly no. They’re going to remain on the attack — and they’re upping their demands. Moments after Obama spoke, Republican national committee chairman Reince Priebus called on Obama to apologise to the American people. ‘Simply allowing the acting head of the IRS to resign is not enough,’ he said in a statement. And Rep. Darrell Issa (R-Calif.) said on CNN that while Obama “set exactly the right tone” on Wednesday night, the president must cooperate with Congress in the days ahead. But after days of anxiety, Democratic operatives said the White House has found its footing. Still, happy as they were to see Obama win a news cycle, they insisted he’s far from being in the clear — Republican adversaries feel that they’re only just beginning, and they’ll have another chance to lay into the administration at Friday’s hearing on the IRS.”

But Republicans, too, must be careful what they wish for, let alone try to achieve. Imperial overstretch is not just limited to empires. DM

Read more:

  • President Obama tries to stop the bleeding at Politico
  • Obama calls on Congress to ‘fully fund’ his budget request for embassy security at the Washington Post
  • Obama aims to halt perception of passive president at the AP
  • Groups that sought tax-exempt status say IRS dealings were a nightmare
  • Obama struggles to get beyond a scandal trifecta at the Washington Post
  • The false god of ‘narrative’ at the Washington Post (a column by  EJ Dionne)
  • Should 501(c)(4)’s Be Eliminated? (a debate) at the New York Times
  • Take Politics Away From the I.R.S. an editorial at the New York Times
  • I.R.S. Approved Dozens of Tea Party Groups Following Congressional Scrutiny at the New York Times
  • Notes on three scandals – A bad week for the president is revealing of what really irks voters at the Economist
  • Obama calls on Congress to fully fund his budget request for embassy security at the Washington Post
  • Sorting Out the Scandals (a column by Joe Klein) at Time

U.S. President Barack Obama listens during one in a series of meetings discussing the mission against Osama bin Laden, in the Situation Room of the White House May 1, 2011. A pivotal moment in the long, tortuous quest to find Osama bin Laden came years before U.S. spy agencies discovered his hermetic compound in Abbottabad, Pakistan. REUTERS/White House/Pete Souza/Handout


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