Health reform may have finally become law, but the partisan wars over the bill continue to rage — and the latest flash point is a debate about whether the $940 billion overhaul means thousands of new government workers are about to bloat the federal payroll.
Republicans lawmakers are warning the law would put as many as 16,000 new Internal Revenue Service agents and workers on the streets. They claim Democrats tucked dozens of new departments and boards into the bill. And Sen. Jim DeMint (R-S.C.) predicts a massive expansion of the federal work force.
“There are going to be tens of thousands, maybe hundreds of thousands, before this is all over,” DeMint told POLITICO. “We are going to be looking for the real truth of what this means. Just on something as simple as having 16,000 IRS agents chasing them around, that is going to open a lot of eyes.”
There’s just one problem: Experts say the figures are highly speculative.
Administration aides, who were cognizant that creating massive new bureaucracies would be bad politics, have sought to minimize the potential for a major expansion, sources said.
But the Obama administration has done little to quiet this tempest, as the key players who will implement the new law have provided few specifics on how it may increase the federal payroll.
Most of the burden for implementing the law rests with the Department of Health and Human Services. But in a video interview with POLITICO, Secretary Kathleen Sebelius could not provide an exact figure of additional workers, estimating it at only in the hundreds.
“Some of what is anticipated is new responsibilities potentially, not necessarily new people or new bureaucracies,” Sebelius said. “I’m a big believer that you start with assuming that you do more with less. You know we have new responsibilities, but we’ve got to figure out what within our resources we have the capacity to take on immediately.”
Douglas Shulman, commissioner of the Internal Revenue Service, which will be second only to HHS in new responsibilities, told a House panel last week that his agency was still reviewing the law and would return with estimates “as quick as we can.”
A spokesman for the Office of Management and Budget, Ken Baer, said the “process of assessing each agency for potential additional staffing needs will begin in earnest” following final passage.
In the absence of hard data, Republicans have filled the void, raising the specter of a swelling government work force as Exhibit A in their argument that the law is a freedom-sapping gambit.
“Everybody has to buy insurance under this bill, and your local IRS agent is going to show up at your door to tell you that you better do it or else you will have to answer to the IRS,” said Sen. Judd Gregg (R-N.H.), the ranking member on the Budget Committee, in a colloquy on the Senate floor.
Sen. Richard Burr (R-N.C.) chimed in: “The anticipation is the IRS is going to chase a lot of people to recover the fine.”
In fact, the IRS has no authority to enforce the requirement that every American purchase insurance, according to the Joint Committee on Taxation, a nonpartisan congressional committee.
The IRS will receive vast new powers under the law, processing more than $500 billion in subsidies and tax credits for millions of individual Americans, large employers and small businesses. The agency will assess penalties on individuals — $95 in 2014, up to $695 in 2016 — who do not obtain coverage. There are countless other changes to the tax code in the law.
But fearful of a backlash from voters, lawmakers watered down the enforcement provisions of the individual mandate. The IRS is prohibited from using liens or seizing assets, and individuals will not face criminal penalties, civil penalties or even interest payments on the penalties if they fail to comply, according to the Joint Committee on Taxation report.
The IRS will not audit individuals, either, Shulman told the House panel.
“There has, you know, been some misconceptions out there,” Shulman said. “All that will happen with the IRS is similar to a current 1099 (tax form) where banks — a bank sends the IRS a statement that says, here is the interest someone owes, and they send it to the taxpayer. We expect to get a simple form that we won’t look behind that says this person has acceptable health coverage. There’ll be — [there’s] not going to be any discussions about health coverage with an IRS employee.”
Republicans on the House Ways and Means Committee released a report last month estimating that the IRS would need between 11,800 and 16,500 new agents and workers. The figure blanketed the conservative blogosphere and talk radio, reinforcing the worst fears on the right about the bill.
But the calculations behind that tally are far from precise.
Here is how they did it: The Congressional Budget Office projected that the IRS would need between $5 billion and $10 billion to implement the law. GOP aides took the high end of the CBO’s estimate — $10 billion — and subtracted $1 billion for upfront implementation costs over the next four years. They divided $9 billion by six, which is the number of years over the next decade for which the individual mandate will be in effect. They then divided that number — $1.5 billion — by the average IRS salary.
To be sure, the IRS is likely to boost its work force. “We will need resources to implement the tax provisions in this legislation,” said Shulman, who was not specifically asked at the hearing to estimate the number of new employees the agency would need.
But Mark McClellan, the administrator of the Centers for Medicare and Medicaid Services, which implemented the 2003 Medicare prescription drug program under former President George W. Bush, said the personnel costs are quite likely to be much less than the GOP estimate.
“My guess is that it is not going to be a huge increase in government staff,” McClellan said. “I do think the underlying dollar numbers are right; $5 [billion] to $10 billion is right. But most of that is not going to go to government staff.”
The lead agencies will need to hire contractors, fund education campaigns, conduct outreach programs and build up the technological infrastructure, McClellan said.
A spokesman for Rep. David Camp (R-Mich.), ranking member on the House Ways and Means Committee, said even if the GOP number is too large, the question needs to be asked and answered — and Democrats have yet to offer their own estimates.
“We do not know yet exactly how the IRS is going to use these billions of dollars to implement its portion of the health care bill,” spokesman Sage Eastman said. “If someone wants to dispute the number, they are able to do so. But what is that number?”
Another Republican charge is that the law creates 159 new boards and departments. A list has been circulating on the Internet for months. But there are only a handful of actual new entities, such as the Workforce Commission and the Center for Medicare and Medicaid Innovation. Most are grant programs or demonstration projects that will be operated out of existing offices, sources said.
“Our department is well-positioned to use existing resources and staff to implement many of the provisions in the new law,” said an HHS official. “We anticipate that a handful of new boards or commissions will be established, and many of these will be supported by existing staff, with existing resources. These entities are critical to ensuring we receive feedback from the public as we implement the new law. The notion that a massive new bureaucracy will be required for each provision simply is not credible.”
DeMint said Republicans will seek further analysis on government hiring from the Congressional Budget Office. He said he suspects the agencies will grow far beyond what the authors of the bill envisioned.
“We’re struggling to get the truth right now,” DeMint said.
Sen. John McCain (R-Ariz.) acknowledged the figures may be imprecise but said the question about the IRS work force was valid.
“Let’s say it’s only 5,000,” McCain said. “That is a little scary right there.”
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