Spiegel Stuff: The Movement: Is the era of small government over?

By Helen Huiskes | Tuesday, August 18

Illustration / Samantha Wong; and Adobe Stock

Is the era of small government over?

Americans who want the government to stay out of companies’ way are increasingly politically homeless.

Republicans have been the party of small government and big business for decades. But in the last few years, President Trump and the concentric circles of Republicans around him have ushered in a new populist politics that, critics say, has more in common with the same democratic socialists they excoriate than with the party of former President Reagan.

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“It is increasingly the case that free-market, conservative-oriented people are a little isolated from both the Republican Party and the Democratic Party,” said Kyle Pomerleau, senior fellow at the American Enterprise Institute. “It's clear why they're isolated from the Democratic Party. The Republican Party, I think, has been moving in the direction, frankly, of the Democratic Party on economic policy over the last ten years, and that's driven entirely by Donald Trump.”

There are a few policy moves that put a fine point on this. The executive branch now owns shares in more than 30 companies, mostly in the semiconductors, minerals and quantum computing industries. That’s particularly egregious to libertarians like those at the Cato Institute, who have long been raising the alarm about government ownership.

“One of the most arguably unprecedented interventions, intrusions in the history of the republic, and there's not a lot of folks in the traditional free-market, limited-government side that are talking about it or doing anything about it,” said Tad DeHaven, policy analyst at Cato.

The slide into government ownership started last summer when the federal government bought a 10 percent stake in Intel, the semiconductor giant, to boost the American chip industry against overseas competition. DeHaven and others, including a handful of Republican lawmakers, criticized the move at the time. But Trump has only doubled down since then, and now the executive branch has a significant portfolio of equity stakes.

After Trump is no longer president, the policies he's set in place could either be expanded upon by a Democratic president or affirmed by a Republican like Vice President Vance, who subscribes to the Trump brand of economics.

“For Democrats, especially ones that have always thought this is something the federal government should do, this could be lining up perfectly for them,” DeHaven said. “Because they can spend a year of hearings beating the drum on ‘the executive branch shouldn't be doing this alone, look at the corruption and cronyism as a result, and therefore the federal government through Congress needs to set up a formal structure and institute guardrails, et cetera, et cetera, et cetera,’ and take what the administration has started and turn it into a formal policy going forward.”

To be sure, there are still plenty in the Republican mainstream who champion free markets and traditional capitalism, especially in Congress. And some have spoken out about their opposition to tariffs and government-owned equity shares. But, as with other issues, those who differ from Trump can find themselves on the wrong side of a primary endorsement.

Neil Bradley, executive vice president at the U.S. Chamber of Commerce, said the surge of big-government interventionist thinking in both parties puts more onus on proponents of capitalism to make the case for it. Historically, he noted, there’s a reason the pendulum has swung back in favor of free-market economics after other eras of high inflation.

“There's a kind of a belief [among business leaders] that the free-market system has delivered a lot for the American people, for standard of living, for consumer choice, for the U.S. as a whole,” Bradley said. “And I think it's incumbent on us to demonstrate that to the extent that people have concerns with the modern economy, that a free-market approach is better than a government interventionist approach.”

Welcome to The Movement, a weekly newsletter looking at the influences and debates on the right in Washington. I'm Helen Huiskes, Senate reporter at The Hill. Tell me what’s on your radar: hhuiskes@thehill.com.

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NEW TARGET

Fraud Task Force Takes on Gender Care

Vance and Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. are seeking to investigate a slew of hospitals and clinics around the country for allegedly misusing insurance billing codes to get private insurance and Medicaid to cover gender therapy for minors.

In a 64-page report released last week, HHS laid out what it alleges is a pattern of hospitals and clinics around the country misusing insurance codes to get reimbursements for providing gender-affirming care. The report found around $50 million in insurance claims for puberty blockers billed using a diagnosis of an “unspecified” endocrine or hormone-related disorder, in addition to nearly $11 million billed for a diagnosis of early puberty for patients over the age of 13. According to HHS, individuals 13 or older cannot have a diagnosis of early puberty and should not be given puberty blockers.

Vance and Kennedy referred more than 200 clinics named in the report to the Justice Department, asking Attorney General Todd Blanche to investigate whether federal law was broken.

“Some pediatric gender clinics and children’s hospitals have apparently used misleading or even fraudulent diagnostic and billing codes to ensure that insurance companies will cover the procedures,” Vance wrote in a letter to Blanche.

The report is a win for conservative groups that have been pressing for investigations into fraudulent practices by gender care providers. It also underscores an HHS rule, also finalized last week, that prohibits federal Medicaid or Children’s Health Insurance Plan (CHIP) dollars from going to puberty blockers, hormone therapy or surgery for enrollees under age 18 for Medicaid, age 19 for CHIP.

“These are very serious cases of how they've used ambiguous, vague diagnostic codes in order to allow for the dispensing of drugs and even the conduct of surgeries and with the full reimbursement, based on these vague codes like an endocrine disorder, unspecified, when there have been codes in the diagnostic manual that actually would allow for treating or or identifying diagnosing someone with a, with gender dysphoria,” said Doreen Denny, senior adviser at Concerned Women for America. “But see, this is the thing: They wanted to mask that. Otherwise, why not be clear as codes ought to be for billing purposes?”

The Trump administration has emphasized rolling back gender-affirming care for minors from the start, with an executive order in January 2025 directing HHS to “take action to end gender affirming care for children.”

The Justice Department has already investigated cases involving insurance coding fraud in hospitals and has come to legal settlements with multiple hospital systems requiring them to stop providing minors with gender-affirming care. The latest moves based on the HHS report are a combination of the two major emphases for the Trump administration: rooting out what it says is fraud throughout the federal government and ending gender-affirming care for minors.

There is no evidence that these clinics engaged in a purposeful pattern of “upcoding” the insurance claims, rather than making mistakes. But the likely investigation will dig into how intentional the claims were and whether providers broke any federal statutes in providing the care or asking for reimbursements.

“What we hope that this report will spur on is not only an investigation that needs to go into this practice about how billing codes are used for false pretense or for receiving coverage and reimbursement for procedures that are very expensive,” Denny said. “But also that it's going to lead to a full reckoning of what's really happening now in the medical industry here, and the collusion, frankly, that's happened between medical associations, those that might profit from this kind of activity, and the government, the previous government, that was ready to reimburse it for any reason.”

AOC GETS PERSONAL

MAGA Women Divided Online Over Egg Freezing

The latest online debate among conservatives is about the ethics and optics of women freezing their eggs, a process that allows women to have children by in vitro fertilization (IVF) later in life than natural fertility might allow. It drew a dividing line on the right, demonstrating that IVF is still a somewhat unsettled issue for the movement at large.

This flare-up was sparked by Rep. Alexandria Ocasio-Cortez (D-N.Y.), who regularly attracts conservative ire for any number of things, as a prominent voice for the progressive Democratic brand and a young female lawmaker with a likely ambitious political future. But this time, Ocasio-Cortez’s openness about her decision to freeze her eggs brought her some unusual support, including from Katie Miller.

Some conservatives criticized Ocasio-Cortez for playing into “the lie that women can have it all,” as Allie Beth Stuckey put it.

But others, including Miller, affirmed Ocasio-Cortez’s choice to share her decision.

“We have historically low birth rates worldwide,” Miller wrote on social media. “If one woman wants to preserve her right to have children, which means more than having none—we should celebrate that.”

There isn’t one clear conservative consensus on IVF. Miller’s view aligns more with the White House’s policy actions during Trump’s second term, including a proposed Labor Department rule that would allow more employers to offer IVF coverage benefits.

At the same time, anti-abortion groups like Students for Life of America and some state Republican parties have ramped up pressure to restrict IVF on ethical grounds.

THREE MORE THINGS

1. FAUCI CONT.

Sen. Ron Johnson (R-Wis.) said Dr. Anthony Fauci will not appear for another Senate interview, after Johnson released texts and emails between Fauci and other health officials questioning the safety of the COVID-19 vaccine. More here.

2. BREAM TRIGGERS TRUMP

Trump went after "Fox News Sunday" host Shannon Bream on Truth Social after an interview in which she pressed Blanche on how he would stay impartial in the role. Trump called Bream “biased against MAGA, Trump and Republicans.” More here.

3. MACE'S NEW INK

Rep. Nancy Mace (R-S.C.) revealed tattoos she said she got in February, in the inaugural episode of her new YouTube show. She has said the tattoos were a way to “reclaim” her identity. Mace lost the primary for South Carolina governor in June and will leave Congress next year. More here.