Finding a Middle Road

The Markey Economic Plan

April 2008

INTRODUCTION

This is the beginning to a long conversation that I hope to engage in with the voters of Colorado’s Fourth District.  In the coming years, we face significant challenges with the economy and specifically with many of the issues that drive voters’ concerns about the economy – healthcare, renewable energy, the ongoing cost of the War in Iraq, and our burgeoning federal deficit.  As we come closer to the election, I plan to address those concerns individually and at greater length.

“Finding a Middle Road” is about commencing the discussion on our economy.  As a candidate, I think it only fair that I give voters a sense of what kinds of measures I will support in Congress and what commitments I will make to stay in touch with the needs of the district.

As a small business owner, I am committed to bringing sense and reason to the budget process and to finding concrete ways to cut government waste.  As a mother, I want to see a my children have the opportunity for good paying jobs and a bright future right here at home. 

                                                       Betsy

 
Finding a Middle Road…Ten Concrete Ways to Reduce Government Spending and Raise Revenue

Cut Federal Media Contracts by 10 Percent:  From fiscal year 2003 through fiscal year 2005, the federal government spent more than $1.6 billion on media contracts related to federal public relations campaigns.  Since 2000, federal spending on public relations has more than doubled.  To make the situation worse, about 22 percent of federal PR contracts are awarded on a noncompetitive basis.  Additionally, much of this spending has been done in a questionable manner – including the $240,000 the Bush administration paid to television talk show host Armstrong Williams to promote the No Child Left Behind law on his syndicated talk show.  While the government should be able to use media contracts to promote worthwhile public programs, we do not need to be spending millions of dollars a year during a time of fiscal crisis to applaud the federal government.  This represents big government at its worst and a ten percent reduction in federal media contracts would save this government $8.8 million a year.

Ban Bonuses for Political Appointees:  In 2002, the Bush Administration reversed an 8-year-old ban on awarding bonuses to political appointees.  The ban had been instituted in 1994 after questionable bonuses were awarded in the final days of the first Bush Administration – including more than $100,000 approved by Attorney General William Barr, with two $7,500 bonuses going to close political aides who would later join the law firm where he was a partner.  In the first year that the ban was lifted, the Bush Administration doled out $1.44 million in bonuses – at the same time that they were cutting pay increases for career civil servants and opening up more government jobs for bidding by private contractors.  Eliminating these bonuses would save taxpayers $1.5 million a year.

Reduce Government Travel:  Over the last 7 years, the cost of government travel has increased by 55 percent.  According to a 2007 report released by the Government Accountability Office, government employees spent at least $146 million a year on business- or first-class airline tickets that violated government policies requiring workers to fly coach.  From 2000 to 2006, spending on travel increased from $9 billion to $14 billion.  At a time when telecommuting has become a way of life for many Americans, the government should take their cue from private business and use teleconferencing and the Internet, as well as heed regulations regarding travel, to save taxpayers $1.85 billion a year.

Repeal Subsidies for Oil Companies:    Households are spending about $1,000 more per year for gasoline than they were just five years ago – an 85 percent increase.  At the same time that Americans are feeling the crunch from $4 a gallon gas, oil companies have recorded their highest profits ever.  In 2002, major oil companies including ExxonMobil, Shell and Chevron reported $34.2 billion in profits.  In 2006, those profits had jumped to a record $124.9 billion.  It is time we repealed the $13 billion in tax breaks extended to oil companies by the Republican Congress.

Close the Bermuda Tax Loophole:  A Post Office box in Bermuda should not permit American companies to avoid paying U.S. taxes.  Congress should take definitive action to close the Bermuda tax loophole once and for all.  Currently, this tax loophole is costing average American taxpayers close to $2.6 billion a year.     

Eliminate the Oil Technology Program:  The Department of Energy’s Oil Technology Program provides billions of dollars in taxpayer money to corporations like BP, Chevron, and ExxonMobil for research and development into the production and distribution of crude oil.  The program amounts to nothing more than corporate welfare at a time when oil and gas companies are making record profits and consumers are paying at the pump.  Taxpayers should not be forced to subsidize a program that essentially amounts to free money for the oil and gas industry.  Furthermore, the Office of Management and Budget classified the program as “not performing.”  Eliminating this program would save taxpayers $78 million a year.

Close the CEO Pay Loophole:  IRS regulations defining performance based compensation and director independence have been abused to the tune of at least $20 billion.  In 1993, section 162(m) of the federal tax code was created, allowing corporations to deduct up to $1 million in executive pay from their tax returns.  However, a loophole to the law allows corporations to deduct MORE than $1 million if the pay is “performance based.”  Whether or not the compensation qualifies as performance based is left up to a compensation committee of independent directors.  Average taxpayers should not be asked to subsidize the salaries of CEOs making millions of dollars.  Eliminating this loophole would save taxpayers $15 billion over ten years. 

Consolidate Federal Statistical Agencies:  Currently, there are at least 70 agencies that engage in statistical activities for the federal government.  Studies by experts have concluded that consolidating the major economical statistical agencies would produce more accurate data at a lower cost.  By consolidating the principal statistical agencies – including the Bureau of the Census and the Bureau of Labor Statistics – into a single agency we can eliminate redundancy, actually increase and improve the collection and analysis of data, and save American taxpayers $5 million a year.

Create a Bipartisan Corporate Subsidy Reform Commission:  Federal subsidies to large corporations cost anywhere from $60 billion to $87 billion a year.  In the 1990’s, along with then Representative Richard Gephardt (D-MO), John McCain suggested creating a Corporate Subsidy Reform Commission modeled on the military base closing commission legislation of the 1990’s.  The idea of the commission was to take a bipartisan look at corporate subsidies and make recommendations to eliminate the most egregious examples of corporate welfare.  The idea of creating a commission is to allow those with honest differences of opinions about what subsidies are worthwhile and what subsidies are wasteful to find common ground.  A conservative estimate of what a fully empowered commission would save American taxpayers over ten years is around $250 billion.

Reform the Earmark System…and Start with the Historic Whaling and Trading Partners Program:  True reform to our nation’s system of earmarking can only come by reforming the system itself.  A huge part of the problem with earmarks is that the system lacks transparency and accountability.  As a member of Congress, I will be committed to listing on my website my entire list of earmark requests, as well as the entities doing the requesting.  I will also be committed to eliminating earmarks like the Historic Whaling and Trading Partners program, which funds organizations with experience in developing or operating programs that illustrate the contributions of the whaling industry.  Earmark reform needs to start with programs like this.  Just cutting these grants to a variety of museums dedicated to the history of the whaling industry would save taxpayers $9 million a year. 

Finding a Middle Road…Providing Immediate Relief to American Taxpayers

Enact a Two-Year Refinancing Credit:  Assist homeowners to transition to lower-cost mortgage loans by providing a two-year, one-time $2000 credit toward closing costs when they refinance into a fixed-rate mortgage.  The estimated cost of such a credit is about $2.5 billion per year.  This represents a switch from “quick-fix” solutions to the mortgage crisis because it encourages homeowners to transition into a mortgage they can afford and works to prevent other homeowners from being caught in the trap of plummeting house prices due to neighborhood foreclosures.

Fix the AMT:  Few people disagree that the Alternative Minimum Tax needs fixing.  The AMT was created in 1969 to target 155 wealthy tax dodgers – but because it was not indexed to inflation, it now ensnares 4.2 million middle class families.  Projections suggest that by 2017, nearly half of all taxpayers will pay the AMT.  The problem we have had in the past is that temporary solutions to the AMT have been just that – temporary.  We need to work, in a bipartisan manner, to prevent middle class taxpayers from getting ensnared in this tax and also be committed to cutting government waste to offset the cost of this fix. 

Establish Criminal Penalties for Fraudulent “Foreclosure Consultants”:  In 2004, Colorado was identified as one of ten hot spots for mortgage fraud by the FBI.  Many so-called “foreclosure consultants” are not legitimate professionals seeking to help struggling homeowners, but rather con-artists who take money from the most vulnerable, often the elderly, maneuver homeowners into transferring their deeds to them and then strip the homes of their equity and evict the homeowners.  We need to pass strong national legislation that sets standards of conduct for these consultants, establishes criminal penalties for violators, and allows victims to sue for damages.   

Finding a Middle Road…Restoring the Middle Class

Double the Personal Exemption for Each Dependent:  The cost of raising a child in today’s world has risen significantly – especially over the last ten years.  We need to keep the tax code current with the realities that families face.  Therefore, I support doubling the current tax exemption for each dependent from $3500 to $7000.

Make College More Affordable:  The cost of higher education has skyrocketed over the last decade – at the same time that it has become harder and harder for workers to obtain good paying jobs without a college degree.  I support expanding current tax law to create a single college tuition tax credit equal to 50% of college costs up to $10,000.

Create Flexible Education Accounts:  One of the biggest challenges that Americans face today is the cost of job retraining and education.  A college education has become the price of admission to jobs that pay more than the minimum wage.  We need to assist workers who are being squeezed out of the current economy to seek job retraining and continuing education programs by creating flexible education accounts that include tax credits for education and training.

Help Baby Boomers Care for Aging Parents:  As the law currently exists, the only families who are eligible to claim tax credits for caring for aging parents are those whose parents are living with them.  We need to extend these tax credits to families where the elderly person being cared for lives outside the home. 

Finding a Middle Road…Encourage Investment in Business

Make the Research and Development Tax Credit Permanent:  The history of the United States is littered with stories of extraordinary innovation in business and technology.  As we move into the future, we need to make sure that we continue to provide incentives to companies to make investments into the often-times costly and almost always risky early stage research needed to fuel innovation.  The R&D tax credit grants companies a 20 percent tax credit on year-to-year increases in R&D – enabling small companies to make the investment in research and retain the long term benefits of that investment.  The former Congressional Office of Technology Assessment concluded: “For every dollar lost in tax revenue, the R&D tax credit produces a dollar increase in reported R&D spending, on the margin.”  I therefore support making the R&D tax credit permanent.

Increase the Small Business Enterprise Credit:  Currently small businesses can deduct up to $5,000 in start-up costs.  We need to encourage entrepreneurship, especially as we deal with new challenges in the economy and new competition abroad.  I support increasing the allowable deduction for business start-up costs from $5,000 to $10,000.

Make the Production Tax Credit Permanent:  Decreasing our dependence on foreign oil and encouraging growth in the renewable energy sector will be one of my top priorities in Congress.  Currently, renewable energy facilities can obtain a 1.9 cent per kilowatt-hour (kWh) benefit for the first ten years they are in business in the form of the Production Tax Credit.  The Tax Relief and Health Care Act of 2006 extended this credit for one year after it was set to expire in 2007, but we need to go further.  The Production Tax Credit was originally enacted by Congress in 1992 but has been allowed to expire on numerous occasions.  The PTC has been a major driver of wind power development and every time the credit is allowed to expire, it sets the wind industry back.  I support making this tax credit permanent. 

Finding a Middle Road…Staying in Touch with the 4th Congressional District Economy

As a small business owner, a mother and a resident of Colorado’s fourth district, I take the challenges we face in this current economy very seriously.  I wish I could go to Congress and never leave Colorado.  But the job requires that legislators spend a significant portion of the year voting in Washington, DC.  Therefore, I think it is imperative that I lay out the steps I am ready to take to keep in touch with the district and make sure that my constituents’ concerns are always my concerns.

Colorado’s 4th Congressional District is extremely large, spanning eighteen counties and many different industries and communities.  It takes time and energy – and a commitment to every single community – to be a legislator that truly understands the concerns of every part of the district.  The promises I make below are the MINIMUM steps I am ready to take to fulfill this responsibility.

It is for these reasons that I am making a promise to take the following steps to keep my feet firmly planted in Colorado if elected:

1. Spend one day each year personally working in a small business in the district and one day working on a farm.

2. Commit to meeting AT LEAST twice a year with representatives from the Chambers of Commerce in each county, as well as with representatives of the labor community and the local economic development councils. 

3. Meet at least once a year with Governor Ritter to discuss the economy, as well as primary and secondary education.  I will also pledge to hold an education summit once a year with leaders from both the business and education communities to discuss the challenges we face in educating the next generation of our workforce.

4. Hold a real “district work week” during one of the first scheduled congressional recesses of the year.  This would involve meetings with local government officials and business owners, tours of local industries and town hall meetings with constituents and press.

5. Hold a town hall meeting in every county in the district during my first year in office.

6. Hold “Workplace Town Halls” where I travel to work places around the district and spend the lunch hour in a town hall meeting with employees and management.