Borg: Financial first aid. The 110th U.S. Congress is trying to adjourn while financially hemorrhaging carmakers and others are pleading for federal cash transfusions. We're getting comments on that and other issues from Iowa's First District Congressman Bruce Braley on this edition of Iowa Press.
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On statewide Iowa Public Television this is the Friday, December 5th edition of Iowa Press. Here is Dean Borg.
Borg: January 2009 isn't only a new year, it's new beginnings for the nation's governments. The 111th Congress convenes on January 6th and two weeks later on Tuesday, January 20th Barack Obama becomes the 44th President of the United States. But with that new era comes old problems, many seeking solutions so imperative that leaders aren't waiting for the new Congress. Iowa's First District Congressman Bruce Braley is just completing his first term now representing east central Iowa and he's back in January for another term and facing those difficult issues. Welcome to Iowa Press.
Braley: It's great to be back, Dean, thank you.
Borg: We're seeking solutions today.
Braley: Well, there's a lot of solutions that the American voters and taxpayers are seeking as well and those are some of the challenges we're going to have to wrestle with in the 111th Congress.
Borg: I'd like to have you meet two people that you know very well here and they're going to be leading our questioning today, Des Moines Register Political Columnist David Yepsen and Radio Iowa News Director Kay Henderson.
Henderson: Let's talk about the Detroit bailout. Under what conditions would you support it? And what do you believe should be in the package?
Braley: Well, I don't think there is any doubt, Kay, that the domestic auto industry is a huge part of our economy, our domestic economy and that's why everyone in this country should be concerned about what's going on. One of the things that I am concerned about is that the testimony that the domestic auto makers have given yesterday in the senate and today in the house shows that they have come a long way in trying to sort out some of the problems that have plagued them in the past. But if you look at the shear numbers and what they're asking for they're asking for more than the book value of those corporations right now and if that's the case then I think American taxpayers have a right to demand strict accountability and ownership stake in those companies and a complete change in the corporate philosophy of how they're going to go about doing their business. Now, we've seen significant progress in those areas but this is an industry that in the past has fought Congress on increased CAFE standards, on vehicle safety standards and so we want to make sure that this is a ground changing focus change from this industry before we start handing out dollars to them.
Henderson: Speaking about ground changing, what changes should the United Auto Workers accept in that package?
Braley: Well, the United Auto Workers is on record of having accepted major changes including a possible restructuring that's going to reduce a significant number of jobs, at GM alone as many as 30,000 jobs by 2012. And so one of the things that happened in the domestic auto industry is what we've seen happen successfully at John Deere and also in partnership with the United Auto Workers where they have gone away from defined benefit retirement plans and legacy healthcare plans to a more lean approach to how next generation workers at those companies are brought in. And we've seen significant commitments from the UAW to do that in the proposals that were submitted yesterday.
Yepsen: Congressman, at the end of the day isn't it impossible for you to oppose this given the large number of auto workers that are in your district? I mean, how do you as a Congressman from that district -- I don't know how many UAW plants you've got in that district -- say no to Ron Gettelfinger when he calls up and says we need the bailout money?
Braley: Well, the same way that I said no to Ron Gettelfinger when he wanted me to support John Dingle as chairman of the energy and commerce committee. I have to do what I think is best for the constituents I represent in the first district including those auto workers and I think that one of the things that Ron Gettelfinger has been much more candid about in dealing with this problem than the CEOs of the big three is taking steps to address the concerns and make sacrifices. That was all laid out in his testimony yesterday. But one of the things that we have to do is look at the long-term sustainability of this industry and that means we're going to have to look at what strings get attached in a bailout plan that Congress is going to put in place. We passed $25 billion of assistance in 2008 that was tied to promoting the use of hybrid vehicles and part of the retooling process of this industry. That money has not been released yet by the Bush administration which wants to use that money for the bailout.
Yepsen: You've got that $25 billion, earlier on there was an additional $25 billion that the auto companies were after, you told them to get a plan and come back and now it's up to $35 billion, $39 billion and just last week in an economist for Moody's said that's just the beginning, the price tag for this could go $75 billion, $100 billion, $125 billion. Where does this end?
Braley: Well, that's why I made the point that I did earlier, David. One of the things we have to explore is a lot of different options because if you could buy General Motors based on their book value of $2.8 billion today and turn that over into some type of an employee ownership program, which many corporations in Iowa have done successfully, maybe you provide the incentive to those employees to take steps to make that industry profitable and start to turn around the direction of that company. I think we have to look at a lot of different options.
Yepsen: Lots of bailouts, rescue packages, the Federal Reserve is running the printing presses at full speed. Where does all this debt and deficit end?
Braley: Well, that's a very good question that a lot of people are rightly concerned about. Bill Gates, somebody who knows a great deal about making money and being innovative, was in Washington yesterday stressing the point that in a crisis like the one we're facing now, we just found out there's record unemployment, nearly half a million jobs lost, now is not the time to be timid, it calls for bold action and we're going to have to put up with some deficits as we work our way out of this problem. But we have to have a plan in place that gets us back to the point where deficits matter and we start the deficit reduction program we were on before this crisis hit.
Borg: Given just the cascading bad news what do you sense as you come back to your district is the mood of people, your constituents? I'm trying to get at here fear can feed on itself and some have said confidence is a way to get ourselves out of this.
Braley: Well, I think you're absolutely right, Dean, I think one of the big, big responsibilities of Congress and the 111th Congress is working with a new president who was elected on a mandate of change and being bold and taking decisive action and restoring the confidence of the American people that Congress and the president are working together to solve these important problems.
Borg: But do you see people are really scared now or do they really have confidence and hope in the new administration?
Braley: You know, maybe it's just me but I get more of an impression from my constituents that they are angry rather than scared right now. Now, maybe scared is the next emotion the progress to. But part of the responsibility of Congress and the new president is to reduce fear by promoting a sense of trust that we care about the concerns of every day Americans and we're working to solve their problems and to put them back onto a road of recovery. And all you have to do is look at the report today in your newspaper, David, about the situation with IPERS which affects one in ten Iowans and you know this is now a problem that's not just a Wall Street problem, it's creeping into every home and family in Iowa. That's why we are all in this together and we need to work together with the constituents that we represent, the new administration and take bold steps to try to correct these situations.
Henderson: One of the reasons folks are angry is because of the Wall Street bailout. Do you regret voting for that bill?
Braley: No, and because there's still a big myth about that bailout, Kay, because people keep talking about a $700 billion bailout, that is not what we voted on. We voted on an initial appropriation of $250 billion to give the treasury secretary the authority to start the Troubled Asset Relief program. Then he went in a completely different direction than the plan that he represented to us, that's a whole other series of oversight and compliance issues. But until we get to $350 billion no further money can be expended unless the administration comes back to Congress and justifies the need. I can tell you based upon the hearings that my colleagues and I have been having there's a great deal of frustration and anger about how that program has been administered and so there are going to be a lot of people focused on making sure the original purpose of that bill is being met before further funds are expended.
Henderson: Beyond the bailout, you're on the house oversight committee and you've had hearings about reform targeting the financial services industry. What do you see as essential? What do you see as reform that needs to happen in the first 100 days of the Obama administration?
Braley: Well, I went out for the oversight hearing with AIG and I sat there and listened to their current and former chief executive officer talk about how their company was principally responsible for us driving off this cliff. Their London office was headed by a person who made $228 million in the last five years. He was the person CNN identified as the number one villain in this financial meltdown. And after they fired him because their company lost $13 billion in the first quarter this year, they gave him a severance agreement that pays him $1 million a month to essentially do nothing. Now, the people I represent in Iowa's first district are outraged by that type of behavior and we have to stop the corporate culture of rewarding people for misdeeds that cost taxpayers and shareholders money. And one of the other things that came out in that hearing is we have a $55 to $63 trillion swaps and derivatives market that is virtually unregulated by the federal government or state. That has to change.
Yepsen: Congressman, what comes first? I'm looking at the big picture here and there's no end to the problems that confront the new president and Congress, we've talked about a few of them here. What do you do first? Where is healthcare in this? Where is education in this? Is there some sort of row of dominos, a triage that you take care of something first and then something else next? Where do you begin?
Braley: Well, I think we'll be relying on our new president to help establish that triage because he's obviously going to have priorities in terms of what he wants to address. But I think the big concern I have, David, is that we take the approach that the economic problems are so severe we can't focus on anything else until we get that under control. The American public is going to have to be patient as we work through a host of different solutions to try to get our arms around stabilizing the economy. That doesn't mean that we ignore healthcare reform, that we ignore energy reform and that we carry out the president's pledge that I'm very concerned about, about going forward with middle class tax cuts because when you see the problem that's facing middle class Americans here in Iowa, across the country we have to be able to start putting more money in their pockets so that they can start spending and getting this economy moving.
Yepsen: Should healthcare be part of a democratic stimulus package? You hear a lot of this from businesses that this is key to our competitiveness to shift some of these healthcare costs, to get a better healthcare system. Do you see this as part of the stimulus package to rejuvenate America's economy or is this something that's just going to have to wait?
Braley: Well, I think you hit the nail on the head, I think it is a critical component of our long-term ability to be competitive in a global marketplace. The real challenge for us is whether we can ramp up a significant healthcare proposal to be part of a short-term stimulus package. Based on past experience in Washington and dealing with healthcare reform I'm not confident that that's going to be doable short-term but it may be. But I'm committed to making sure that healthcare reform is an important part of the early activity of the 111th Congress. That's one of the reasons why I've been working hard to try to get myself onto the energy and commerce committee which is going to be the principal committee of jurisdiction on healthcare reform, on energy reform, on green job creation in this country which to me are some of the most critical issues facing Iowans today.
Henderson: Let's talk about the energy committee then. What is the future of the ethanol industry? Corn ethanol vis-à-vis the ethanol they make in Brazil using a different plant the comparison is not very good, there's a huge tariff. Is it time to do away with the tariff and have a full blown competition in this country between Brazilian made ethanol and U.S. made ethanol?
Braley: Kay, I believe that corn based ethanol is an important short-term and future solution to our overall global energy problems that affect us here in the United States but I have always said that it's a first generation technology. In fact, we shifted some money away from corn based ethanol into cellulosic ethanol as part of the last energy bill to try to create incentives for people to move in that direction. And one of the reasons that I introduced the New Era Act as my first bill and worked hard to make it part of the farm bill and now we're working to get funding from the Obama administration is to help train and educate the next generation of technicians and research in renewable energy without regard to labels of corn based, sugarcane based or cellulosic ethanol. The technology is going to be the same. It's extracting it from the feed stocks that we hope move into an area that allows us to continue to be the breadbasket of the world and at the same time meet our energy needs.
Yepsen: Does Congress need to get in the act here on the question of these farmers getting stiffed by some of these ethanol companies when they go broke? I'm thinking specifically of VeraSun. You're a lawyer, is this just a normal bankruptcy thing? Is there anything that can be done to help people out?
Braley: Well, I think it has to do with whether it is simply a straight business transaction or whether the transaction was in violation of existing federal law or regulation that might have an impact on the role that Congress would play and if there are needs within the Department of Agriculture to tighten up restrictions on how farmers who make those types of commitments are protected and aren't just subject to the whims of the bankruptcy courts in terms of what they wind up on the back side those are things that I'm certainly open to exploring.
Henderson: Let's refer to Agriprocessors, there are legal issues there as well.
Braley: There are a host of legal issues there.
Henderson: So, number one, you have a bunch of cattle operators, you have a bunch of poultry farmers who had contracted to sell animals and now those animals are not being sold, millions of dollars unpaid for animals that were slaughtered. What is the legal answer there and how should the government be involved in that case?
Braley: Well, one of the things that the government needs to do is look at whether there were violations of federal law and federal regulation as part of all of the operations of Agriprocessors which put it in the predicament it finds itself in now and I'm talking about food safety violations, child labor violations, workplace safety violations, immigrant hiring violations, that led to the calamity that shut down Agriprocessors right now. We as a state want to encourage corporate employers to be responsible citizens and are the type of place where people want to come here and work at because it gives them a good, stable income and they contribute value to our communities.
Borg: So far the federal role has been enforcement and punitive. Is there a federal role now in rehabilitation?
Braley: I think there is because one of the things we know is that the city of Postville is bearing the brunt of this right now. You have a lot of community organizations that have stepped up and tried to provide humanitarian relief, you've got workers who came here at the inducement of this company from all over the world looking for a better way of life at a time when the labor needs were accued at that plant and find themselves stranded with no ability to return home.
Borg: So, what should be done?
Braley: Well, I think what needs to be done is we have to look at whether existing federal programs first can help us solve those problems and if not look at some short-term solutions that may not be permanent solutions but are a temporary workout to deal with the crisis that is unfolding there.
Henderson: Iowans suffered through some flooding in June. How would you grade the federal government's response to that flooding?
Braley: This isn’t' the first time I've been asked that question and I'll give you the same answer I've given other people, Kay, and that is the initial emergency response was outstanding. I was given a contact person at FEMA within hours after the flooding crisis hit and she was fabulous. She was based down here in Des Moines. Every time a local elected official called me and needed assistance I would call her and she would be back to me within less than an hour with a solution. That response was fantastic. Then as we have moved further along and as more and more people have gotten through the emergency response stage into the rehabilitation and reconstruction stage I've been very disappointed at the pace of progress and getting money appropriated by Congress into the hands of the people I represent who are in dire need of it. And some of those problems are based upon the regulations that those existing agencies had. So, when HUD appropriated CDBG money that was actually getting into the hands of homeowners who didn't have flood insurance but had an acute need for that money then they ran into the same problems that other people have faced whether you have abatement problems with lead based paint, many of these homes are not new housing stock, that's why they're in the flood plain to begin with and we've worked to try to mitigate some of those obstacles but it's still an enormous frustration.
Henderson: What about long-term? Back to David's question about the deficit and all of the spending in other areas that the federal government is engaged in or soon will be engaged in, shouldn't Iowa flood victims realize they're going to be on their own in the future?
Braley: Well, not necessarily on their own but one of the things that I've heard from talking to a number of local officials, local elected officials is if you have been through this crisis once you need to learn the lesson from going through that. And then at some point in time if you don't follow up the recommendations and take advantage of substantial federal assistance either through a remediation program or a mitigation program of moving to some place else then I don't think that you have a right to expect the federal government to come back over and over and over again to help you.
Yepsen: We always like to talk politics on this show a little bit, Congressman, so I want to change subjects here. President-elect Obama was elected to make change. Well, Hillary Clinton is at Secretary of State, Robert Gates is staying on as Defense Secretary, don't hear a lot of speed about getting out of Iraq. Are you disappointed that the Obama administration looks to be just more of the same old Washington?
Braley: I'm not disappointed because I think that the most critical decision was electing Barack Obama as president and the issues that he ran on that gave him what I consider to be a strong mandate when you combine it with the impressive gains in the house and the senate during this cycle. He surrounded himself with bright, capable, intelligent people who are independent thinkers and are going to share their opinions with him. That is something we didn't have in the last eight years. We had a president who depended on very few key people in high level positions to advise him on critical decisions.
Yepsen: And Iowa was supposed to be very important to Barack Obama's election as president, he said so, but so far in these cabinet picks no Iowans. Tom Vilack was talked about for Agriculture Secretary, nada. What is Iowa getting out of this administration by way of federal appointments? The only one that I can recall right now is Jackie Norris becoming Chief of Staff to the First Lady, not exactly a heavyweight policy position. Are you disappointed in the lack of Iowans in the cabinet so far?
Braley: I'm only disappointed, David, because I think there are outstanding Iowans who could have served this administration well. I don't have the luxury of getting inside Barack Obama's head and deciding why he felt certain people were better for these positions than someone from Iowa. I do have this concern though and this is a cultural concern about how Washington operates. There is a perception among some people in Washington that unless you have an Ivy League education you are not capable of being a high level problem solver in Washington. I reject that wholeheartedly and I think all Iowans should as well. We have bright, talented people who have come out of our state universities, our private colleges in this state who are capable of competing intellectually with people on any level no matter where they got their education. So, that is why I'm hoping that as this administration moves forward there will be other openings, people move in and out of administrations. I'm hopeful that President Obama will realize the incredible assets we have here in Iowa that could help him in his administration.
Henderson: There is a perception among Iowa's political elite that Chuck Grassley is going to have a cake walk to re-election in 2010. Is there going to be a credible democrat step forward to challenge him and would it be you?
Braley: Well, I don't know who is going to step forward to challenge Senator Grassley but I've been through my own first re-election campaign, we have enormous problems in this country to deal with. I'm excited about going back to Washington and working to represent the first district of Iowa with a new democratic president and I don't think now is the time to speculate about politics.
Yepsen: How worried are you about 2010? We saw in Georgia last week a guy who came close to knocking off a republican in the general election but lost big. Without Barack Obama on the top of the ticket are you worried as a democrat that 2010 is going to be a very tough year for democrats?
Braley: Well, I don’t know about that, David, because people said if you look at history that 2008 was going to be a tough year for democrats in the house because never before had there been two consecutive years of substantial gains by one party, especially by democrats. When I started thinking about running for Congress in 2004, shortly after John Kerry lost, we had a 31 seat deficit in the House of Representatives. When I go back in January we're going to have an 81 seat majority.
Borg: I have to leave on that happy note for you. Thank you very much for spending time with us today. On the next edition of Iowa Press we're moving across the political aisle to the senate and we're going to be questioning Iowa's senior senator, Republican Charles Grassley. You'll see that conversation with Senator Grassley at the usual Iowa Press airtimes, 7:30 Friday night, 11:30 Sunday morning. I'm Dean Borg. Thanks for joining us today.
Funding for Iowa Press was provided by Friends, the Iowa Public Television Foundation. The Iowa Bankers Association, for personal, business and commercial needs Iowa banks help Iowans reach their financial goals.