Scandal-A-Day Government: Why?

by Burt on May 15, 2013

The U.S. federal bureaucracy is simply too large. That broad point is easy to lose in the particulars over the Benghazi deaths, the IRS targeting of conservatives, the Justice Department’s secret investigation of the AP, and the Department of Health and Human Services subtly forcing insurance companies to cough up cash to publicize the wonders of Obamacare.

These scandals need to be fully investigated and justice needs to be served if laws were broken. But the larger point must always be at hand: government is too big, and when big government occurs, big scandals inevitably emerge. The Founders knew that, and that’s why they limited government to national defense, delivering the mail, and setting up federal election rules. The Founders believed that government was a source of danger, not a source of action and reform.

Let’s focus on the IRS. The Bureau of Internal Revenue has existed since the Civil War, when President Lincoln created it to collect taxes to pay for the war. But we don’t hear many stories of abuses by the IRS in the 1800s because it was small, and Americans had more of a commitment to limited government. In fact, Congress abolished the Civil War income tax in 1872.

By 1913, we had the income tax back (the 16th Amendment), but only a few people had to pay it. The IRS was still small. Then came Franklin Roosevelt and the New Deal in 1933. FDR promoted government programs as the solution to the problem of the Great Depression. After almost eight years of lavish New Deal spending, unemployment neared 20% in 1939. The spending stimulus, then as now, did not work. But FDR raised tax rates on almost everyone during his presidency. The IRS grew and became FDR’s political tool. In fact, Elliott Roosevelt, the president’s son, said, “My father may have been the originator of the concept of employing the IRS as a weapon of political retribution.”

Just as the IRS under President Obama targeted conservative groups, so did the IRS under FDR. Rep. Hamilton Fish (R-N.Y.) had attacked the “collectivism of the New Deal and its Gestapo methods that threaten free government.” In turn FDR had the IRS audit many years of Fish’s tax returns. Fish also learned from Senator Clyde Reed that his “phone was being tapped, and so were those of many other Republican members of Congress.” When John L. Lewis, head of the United Mine Workers, opposed FDR, Lewis’s taxes were audited. But Lewis’s tax returns were in order. FDR’s gambit to nail Lewis failed. As the Attorney General told FDR, “When you shoot at a king [meaning John L. Lewis] you have to hit him.”

Roosevelt had better luck with his IRS audit against Moses Annenberg, the editor of the Philadelphia Inquirer. Annenberg wrote scathing editorials against FDR, and during lunch on April 11, 1939, FDR and Treasury Secretary Henry Morgenthau discussed what to do about Annenberg. FDR told Morgenthau, “I want Moe Annenberg for dinner.” Morgenthau responded, “You’re going to have him for breakfast—fried.” And that’s what happened. After a remarkably thorough audit, Annenberg was sent to prison and FDR, without Annenberg to pester him in Philadelphia, carried the key state of Pennsylvania in his next election.

Republicans have been guilty, too. That’s the point. The IRS needs to be slashed and stripped of much of its power—not turned over to Republicans to do audits on Democrats. Richard Nixon once said, “We have the power. Are we using it now to investigate contributors to Humphrey , contributors to [Edmund] Muskie—the Jews, you know, that are stealing in every direction? Are we going after their tax returns?”

Lord Acton reminded us that “power corrupts, and absolute power corrupts absolutely.” Let’s cut the IRS in half (or more), and cut HHS and the Department of Justice as well. Many people are watching scandal-a-day government with horror, and public sentiment may be ready to slash the size and power of government, and thereby increase the amount of freedom in all of our lives.

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