Obamacare's Slush Fund Fuels A Broader Lobbying Controversy




Barack Obama signing the Patient Protection and Affordable Care Act at the White House (Photo credit: Wikipedia)


By Stuart Taylor
05/30/2013

A little-noticed part of President Obama’s Affordable Care Act channels some $12.5 billion into a vaguely defined “Prevention and Public Health Fund” over the next decade–and some of that money is going for everything from massage therapists who offer “calming techniques,” to groups advocating higher state and local taxes on tobacco and soda, and stricter zoning restrictions on fast-food restaurants.

The program, which is run by the U.S. Department of Health and Human Services (HHS), has raised alarms among congressional critics, who call it a “slush fund,” because the department can spend the money as it sees fit and without going through the congressional appropriations process. The sums involved are vast. By 2022, the department will be able to spend $2 billion per year at its sole discretion. In perpetuity.

What makes the Prevention and Public Health Fund controversial is its multibillion-dollar size, its unending nature (the fund never expires), and its vague spending mandate: any program designed “to improve health and help restrain the rate of, growth” of health-care costs. That can include anything from “pickleball” (a racquet sport) in Carteret County, N.C. to Zumba (a dance fitness program), kayaking and kickboxing in Waco, TX.

“It’s totally crazy to give the executive branch $2 billion a year ad infinitum to spend as they wish,” said budget expert Jim Capretta of the conservative Ethics and Public Policy Center. “Congress has the power of the purse, the purpose of which is to insure that the Executive branch is using taxpayer resources as Congress specified.”

The concerns are as diverse as the critics. The HHS Inspector General, in a 2012 “alert,” was concerned that the payments to third-party groups came dangerously close to taxpayer-funded lobbying. While current law bars lobbying with federal money, Obama administration officials and Republican lawmakers differ on where lawful “education” ends and illicit “lobbying” begins. Nor have federal courts defined “lobbying” for the purposes of this fund. A health and Human Services (HHS) department spokesman denies that any laws were broken and the inspector general is continuing to investigate.

Republicans in both the House of Representatives and Senate have complained that much of the spending seems politically motivated and are alarmed that some of the federal money went to groups who described their own activities as contacting state, city and county lawmakers to urge higher taxes on high-calorie sodas and tobacco, or to call for bans on fast-food restaurants within 1,000-feet of a school, or total bans on smoking in outdoor venues, such as beaches or parks. In a May 9 letter to HHS Secretary Sebelius, Rep. Fred Upton (R,Mich) wrote that HHS grants “appear to fund lobbying activities contrary to the laws, regulations, and guidance governing the use of federal funds.” His letter included the latest in a series of requests for more documents and complaints about responses to previous requests.

Some Democrats, including Obamacare champion Sen. Tom Harkin (D, Iowa), are extremely unhappy with another use of Prevention Fund money. The Obama Administration plans to divert $453.8 million this year from that fund to use for administrative and promotional efforts to enroll millions of people in health insurance exchanges that are said to be vital to Obamacare’s success. Harkin calls this shift, which has not been authorized by Congress, “an outrageous attack on an investment fund that is saving lives.”

This extraordinary fund transfer coincides with HHS Secretary Kathleen Sebelius’s much-criticized solicitation of health industry officials for large “voluntary” corporate donations — on top of hefty tax increases — to help implement Obamacare. Together, they give the appearance of a desperate Administration effort to avoid the kind of “train wreck” that Senator Max Baucus (D, Montana), a principal architect of Obamacare, recently said he fears. That’s also one reason why Republicans who want to kill Obamacare refuse to provide additional funding for the exchanges.

An HHS spokesperson responded to an inquiry about the “lobbying” complaints by saying that “HHS is committed to proper oversight and monitoring of appropriated funds, and to awardees’ compliance with all applicable regulations and statutes related to lobbying activities.” As to the shifting of the $453.8 million, the spokesman said that it was necessary “because Congress did not provide the resources requested” and it would help individuals “sign up for affordable health coverage by supporting . . . call centers that provide customer service, consumer education and outreach.”

The lobbying controversy is akin to conservative complaints about the 2009 “stimulus” legislation, in which HHS directed some $373 million to a “Communities Putting Prevention to Work” fund to states, counties and cities and then onto to health advocacy organizations described in a Wall Street Journal editorial as “liberal pressure groups lobbying for fast-food taxes.”
With those stimulus grants largely spent, the Administration has used Prevention Fund money — dispensing more than $290 million in fiscal 2012 and 2013 combined — for very similar “Community Transformation Grants.” As in the case of the earlier grants, HHS made the grants through the federal Centers for Disease Control and Prevention (CDC). Public documents, including CDC descriptions of grants’ goals as well as the reports that grantees must file, are honeycombed with references to seeking state and local policy changes, such as tax hikes on sugary beverages and tobacco and zoning restrictions on fast-food establishments.

Congressional investigators point to documents and federal websites, which detail the spending that critics call “illegal lobbying.” A few of the more than 100 examples cited by critics:


  • In Washington state, the Prevention Alliance, a coalition of health-focused groups, reported in notes of a June 22, 2012 meeting that the funding for its initial work came from a $3.3 million Obamacare grant to the state Department of Health. It listed a tax on sugar-sweetened beverages (SSB), “tobacco taxes,” and increasing “types of outdoor venues where tobacco use is prohibited” as among “the areas of greatest interest and potential for progress.”
  • The Sierra Health Foundation, in Sacramento, which received a $500,000 grant. in March 2013, described its plans to “seek local zoning changes to disallow fast food establishments within 1,000 feet of a school and to limit the number of fast food outlets,” along with restrictions on fast food advertising. A $3 million grant to New York City was used to “educate leaders and decision makers about, and promote the effective implementation of. . . a tax to substantially increase the price of beverages containing caloric sweetener.”
  • A Cook County, Ill. report says that part of a $16 million grant “educated policymakers on link between SSBs [sugar-sweetened beverages] and obesity, economic impact of an SSB tax, and importance of investing revenue into prevention.” More than $12 million in similar grants went to groups in King County, Wash. to push for changes in “zoning policies to locate fast-food retailers farther from . . . schools.” And Jefferson County, Ala., spent part of a $7 million federal grant promoting the passage of a tobacco excise tax by the state legislature.


Among those who have expressed concern about questionable and possibly illegal use of Obamacare Prevention Fund money to lobby — an ambiguous term that the Administration interprets narrowly and its critics broadly — are HHS Inspector General Daniel Levinson; Sen. Susan Collins (R, Maine); and Chairmen Darrell Issa (R, CA) of the House Oversight and Government Reform Committee and Fred Upton (R, MI) of the House Energy and Commerce Committee.

Inspector General Levinson, a respected and veteran independent investigator, was first appointed to his position overseeing the vast HHS bureaucracy by President George W. Bush. He was retained in that job by President Obama, who also named him to the Government Accountability and Transparency Board. Last June 29, Levinson sent CDC Director Thomas Frieden an “EARLY ALERT.”

http://www.forbes.com/sites/realspin...g-controversy/