The $4 Billion Obamacare Slush Fund for Progressives

By Michelle Malkin (Archive) · Friday, February 24, 2012

If you like how the Obama administration's multibillion-dollar "investments" in bankrupt solar companies have turned out, you'll love the latest federal loan program to nowhere. It's the Obamacare loyalty rewards program for progressives.

To appease liberal Democrats pushing for the so-called "public option" (the full frontal government takeover of our health care system), the White House settled for the creation of a $6 billion network of nonprofit "CO-OPs" that will "compete" with private insurers. It's socialized medicine through the side door. House Republicans sliced about $2 billion from the slush fund in last spring's budget deal and proclaimed the program dead. Hardly.

On Wednesday, the White House trumpeted the release of nearly $700 million in taxpayer-funded low-interest loans for seven CO-OPs in eight states. Administered by the Centers for Medicare and Medicaid Services, the fund will pour more money into CO-OP plans nationwide throughout the next year. In 2014, according to Washington bureaucrats, the plans will be offered on the federally approved and federally monitored state health exchange "marketplace."

Some marketplace. Given how Team Obama has dispensed special Obamacare waivers to scores of campaign donors, it's a sure bet the CO-OP/exchange mechanism will be brazenly rigged against non-subsidized, for-profit insurers. And against taxpayers. Obama health officials assure us that there will be an "early warning system" in place before loan recipients get into financial trouble. But we know from the half-billion-dollar Solyndra scam that when this administration sees red flags, it's full speed ahead.

In fact, the Obamacare CO-OP overseers already predict a nearly 40 percent default rate for the loans, according to Kaiser Health. Welcome to the Chicago-on-the-Potomac reverse rule of holes: When you're in one, keep digging.

So, who are the lucky winners of the Obamacare slush fund lottery? Freelancers CO-OP of New Jersey, New Mexico Health Connections, Midwest Members Health in Iowa and Nebraska, Common Ground Healthcare Cooperative in Wisconsin, Freelancers CO-OP of Oregon, Montana Health Cooperative, and Freelancers Health Service Corporation in New York.

You won't be surprised to learn that the Freelancers Union -- the largest CO-OP loan beneficiary to date, with a total $341 million subsidy -- is a left-wing outfit founded by a self-described "labor entrepreneur" and MacArthur "genius." Sara Horowitz has already snagged countless grants from the city and state of New York, the liberal Ford Foundation, the John D. and Catherine T. MacArthur Foundation, the Robert Wood Johnson Foundation, and the Rockefeller Foundation.

Horowitz and Obama served together, along with former green jobs czar Van Jones, as advisers for the progressive think tank Demos -- which in turn partnered with fraud-ridden community organizers ACORN and Project Vote. She also runs a political action committee called "Working Today" that crusades for an expanded government safety net. Crowing about the CO-OP loan from her fellow progressive warrior, Horowitz exulted: "It's like venture capital for health care." Or more accurately, to borrow South Carolina GOP Sen. Jim DeMint's phrase, venture socialism.

While Horowitz plots to rope in 200,000 new clients, existing customers protested in The New York Times over lousy customer service and abrupt changes that resulted in "higher premiums, higher deductibles and more holes than their current plans." Horowitz is more preoccupied with ensuring that the "social-purpose company" meets social and environmental justice goals than with customer needs.

Another of the Obamacare slush fund winners, Common Ground Healthcare Cooperative in Wisconsin, scooped up a $56.4 million federal loan. The group describes itself as a "coalition of religious groups and other organizations." Its pedigree is much more radical than that. As the Milwaukee Journal Sentinel noted, Common Ground "is the Milwaukee affiliate of the Industrial Areas Foundation, founded in 1940 by Saul Alinsky, a famed community organizer and author of 'Rules for Radicals.' The organization, based in Chicago, bills itself as the oldest and largest community organizing network."

The Industrial Areas Foundation was funded largely by the Gamaliel Foundation, which employed Obama in Chicago. As I first reported in 2009, Gamaliel's Gregory Galluzzo wrote that he "met with Barack on a regular basis," that Obama "acknowledged publicly that he had been the director of a Gamaliel affiliate," and that "we are honored and blessed by the connection between Barack and Gamaliel." No kidding. As Americans for Limited Government President Bill Wilson put it: "These grants/loans reek of political payola."

Cronies reap. Taxpayers weep.

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