McHugh Watch

The following was submitted as a letter to a number of prominent North Country Newspapers four days ago on Tuesday, Sept 23rd. It has not appeared (no hard feelings) so I publish it here:

There is something very, very wrong.

We are told that the root cause of the financial “crisis” is the mortgage meltdown. Less than three percent of all mortgages are in or going into default. The variable mortgages that are defaulting were taken out at teaser rates and when the rates readjusted upwards, are no long affordable. The important point is that when the rates were at teaser rates, for the vast majority of families, the monthly mortgage payments were being made. If this is the underlying reason for the present financial crisis, then the obvious solution is simple. It doesn’t take a trillion dollar bailout of Wall Street and their banks to solve the problem. The simplest and most straightforward solution is to legislate that mortgage rates are rolled back to the teaser levels. Everyone wins, except the banks and Wall Street investment funds don’t win as big. But they still win, and if that had been in place two weeks ago, Lehman Brothers and Merrill Lynch would still be in business as independent entities.

It turns out though, that wasn’t good enough for the banks. They have fought allowing bankruptcy courts to readjust mortgage rates tooth and nail. They are willing however to suck off one trillion dollars of our taxes to cover their lost asses(ts) . After their excesses, they now want us to bail them out. It’s not good enough to make a little money and survive. No, they want the big easy money of the federal government, and they still want to foreclose on those who they lead into the swamp over their heads. What’s more, they want to keep their multimillion dollar bonus and their houses in the Hamptons. Their greed has no limit. They know no shame – only money.

I, for one taxpayer, am incensed that this Republican President, once again, wants to dramatically increase the size of government. Talk about tax and spend. The, congress, along with our congressman, needs to stop this bailout dead in its tracks. If the root cause is truly defaulting variable mortgages, roll back the rates and everyone wins – but that is way too simple and too effective.

My only conclusion is that we are not being told the whole story. It would certainly be in character for this administration to once again be lying to us. This is a repeat of the Iraq war congressional resolution. The big rush job based on the big lie. Stop it now.

Part of campaigning for a congressional seat is having Editorial Boards with the various newspapers across the district. These take the form of interviews with two or more representatives of the newspaper, usually with the either the publisher and/or the managing editor in attendance. Whether it was the Syracuse Post Standard, the Watertown Daily Times, the Plattsburgh Press-Republican or the Ogdensburg Journal, the question invariably asked was: why should we elect you when you will not be able to match the money that can be brought back to the district by a seasoned member who has seniority.

So those are the pragmatics of being a congressman. You are measured by how much money you can raid from the US Treasury and bring back to the district. Mind you, these questions come from unabashed Republicans who run these newspapers, the most partisan of which is John Johnson of the Watertown Times. The same Republicans who demand tax cuts but want the cash under the table from Washington. I always thought it ingenuous and certainly inconsistent with their desire to “starve the beast” so that the government would have to cut back on its spending. That never stopped them from singing the praises of our congressman about all the money that he brought back to the district.

My usual answer was that I was running for congress to enact national policy and – what was good for the United States, was good for the North Country. They just rolled their eyes and smirked – how naive. I would then quickly add, being a member of the majority, no matter how junior, was better than being a member of the minority no matter how senior.

DangerDemocrat posted a blog entry about John McHugh’s prowess at bringing home bacon to the district. Yes, Mr. McHugh brought back $18,906,700 to the 23rd. The real question is, how does that compare to the bacon that freshman house members in the majority can command and bring back. It turns out, it’s chicken feed. No only that, but the money only goes to a relatively few people.

Mike Arcuri, the freshman from the 24th, brought back $28,871,968 and Kirsten Gillibrand, freshman from the 20th brought back $23,849,244. So with all that seniority and all that “influence”, two upstart freshman do better than our congressman. So much for the conventional wisdom that seniority is everything in congress.

I will guarantee you, just as he has done in every other election, about now, our congressman will associate himself with every drop of grant money that comes back here, regardless of the fact that the individuals who actually applied for the money and filled out the grant paperwork did all the work. I personally would be insulted if I did all the leg work and some else took the credit. The mystique is that somehow, without the congressman’s “influence” the grant would not have been successful. That is exactly what he wants you to think, but it is so far from the truth.

To those of you who think that the only reason we send a representative to Washington is to bring back pork money, the clear conclusion is that anyone in the majority party is going to do better than our present congressman, regardless of whether he gets to be the ranking MINORITY member on the Armed Services Committee.

So what could he have done to help all of us? For one thing, he could have backed and sponsored legislation for national health insurance. Not only would that have covered each and everyone of us, but after the cost savings of reigning in the insurance companies, the drug companies and the trial lawyers, it would have saved every man, women and child in this district $2,480. He could have sponsored and backed legislation that would get us out of a war that we should never have started and where we do not belong. Considering that the Iraq war is conservatively going to cost Three TRILLION dollars, that would be a savings of $10,610 for every man, woman and child in the district. So instead of bringing back the equivalent of $29.07 for each person in the district, he could have saved each of us, $13,090 – money in our pockets.

Of course, if he did that, he couldn’t collect the campaign contributions from the drug companies, the insurance companies, and the defense contractors to keep him in office and guarantee that we will be paying his pension for the rest of his life. You see, it really all does come down to money.

The alternative minimum tax (AMT) was enacted in 1969 to target 155 wealthy households who were able to arrange their tax liabilities such that they paid little if any taxes¹. I was a freshman in college when the announcement was made by the then secretary of the treasury Joseph Barr three days before Richard Nixon was to take office.

This was at the height of the Vietnam war and as much as we college students were grateful for the end of Lyndon Johnson’s presidency, I personally was troubled at a “black list red baiter” Joseph McCarthy protégé assuming the presidency – not to be confused with Eugene McCarthy who recognized that there was nothing to win in Vietnam and sought the Democratic presidential nomination in 1968 promising to end the Vietnam war. Regretfully, he did not win the nomination at the disastrous 1968 Chicago Democratic convention and it took another 45,000 Americans deaths for us to leave in 1975.

So in the middle of January 1969, when we were all consumed with getting out of Vietnam, participating in local and national demonstrations, comes this wave of public indignation about 155 wealthy families with incomes greater than $200,000 paying no taxes. The indignation trickled down to my dinner table at the college commons where we were all just shaking our heads in disgust. Today, $200,000 annual income does not seem an obscene amount, but then it represented $1.3 million in today’s dollar.

So the congress acted to target these 155 households and make them pay their fair share.

Therein lies the problem. Since the AMT was not indexed to inflation, it has now caught 2.5 million households in its grip². The AMT disallows deductions for mortgage payments, state and local – property – taxes, family exemptions (children) and losses from investments which are used mainly for retirement or college savings. By particularly disallowing the deduction for state taxes, it hits those hardest that live in states with high tax rates – New York.

The AMT hits those families with incomes as little as $50,000. Nearly 40% (65,564)³ of families and over 30% (75,797) of households in our district are in the income brackets that are subject to the AMT⁴. So why did our congressman turn his back on the middle class and vote against repealing the AMT? The word play – spin – is that repealing the AMT will raise taxes. VERY TRUE. It will raise taxes on hedge fund managers. So what. What do hedge fund managers contribute to our society that they should command such wealth and not be expected to pay full income taxes on their gains. Of course, I could ask the same question regarding Dennis Rodman. What intrinsic value does he have? He at least however pays full income taxes.

Additionally the house bill targeted those making greater than half a million dollars a year. I’ll remind our congressman that income bracket represents far less than one percent of our district. So why is he protecting this exceedingly minute population of our district? It doesn’t make sense. Does he owe this type of money anything? We know he doesn’t get much of his campaign money from our district. Most of comes from the inside the beltway. What’s the connection between those making at least a half a million a year and our congressman’s vote.

The Democratic congress responsibly recognizes that cutting taxes is not enough. Bush – enabled by McHugh – has driven this country into unprecedented debt, wreaking havoc with the value of the dollar. The last time we had a budget surplus was under Bill Clinton. McHugh along with his republican handlers have created the largest, most expensive, most intrusive government we have ever seen.

So my question is this. Why did you vote against the middle class, and when are you going to be responsible and stop voting for increase government spending without covering it with appropriate revenue? It’s good for votes, but horrific for our – and significantly not his – children.
1. Lori Montgomery, “Democrats Craft New Tax Rules, New Image,” Washington Post, April 23, 2007.
2. Jonathan Weisman, “Falling Into Alternative Minimum Trouble,” Washington Post, March 7, 2004.
3. Family Incomes, NY23, US Census 2000.
4. Household Incomes NY23, US Census 2000.

Today our congressman voted against taking care of our wounded soldiers, against providing healthcare for children, against funding education, and against deficit reduction and tax relief for the middle class – clean sweep.

Also today, DangerDemocrat found a story from UPI quoting our congressman’s concern about the military healthcare system for our soldiers:

“There is no doubt that these are most difficult times for the military health system. One of the most severe challenges rests in the fact that, for the second year in a row, the budget for the Defense Health Program has been significantly reduced with the hope of congressional support for changes to the benefit in the form of increased fees for TRICARE,” Rep John M. McHugh,R-N.Y., the ranking Republican on the Military Personnel Subcommittee of the U.S. House of Representatives said in a statement at the subcommittee’s hearing on the state of the U.S. military health care system.

“The budget assumes reductions to funding for military treatment facilities for the third year in a row with the expectation that these facilities must become more efficient. The fiscal year 2008 budget reduction is $2.1 billion,” McHugh said..

“It is undeniable that the care provided to our troops, their families and to our retired beneficiaries is vital to the success of our military now and in the future,” he said.

He was commenting upon the President’s budget sent to Capital Hill a few weeks ago. His words sound pretty good. He’s sounds somewhat “concerned” – a favorite word of his.

What happened today? The House passed the 2008 Budget Resolution.

After receiving the President’s budget, both the Senate and the House (usually by early April) draw up a spending plan for the year: the Congressional Budget Resolution. It provides a fiscal roadmap for the various congressional committees for later appropriations – in a future post I’ll explain the appropriations process. The Resolution balances the budget by 2012 with a surplus projected for that year.

Here are the major highlights:

• Most importantly it increases and assures funding for wounded veterans. The resolution provides $43.1 billion for veterans in 2008, representing a 98% of the level requested in The Independent Budget, a plan developed by four leading veterans groups. It is $3.5 Billion more than Bush requested. It also rejects Bush’s proposal to raise TRICARE co-payments and removing more than 100,000 veterans form the VA healthcare system. From the Resolution itself:

  SEC. 501. SENSE OF THE HOUSE ON SERVICEMEMBERS’ AND VETERANS’ HEALTH CARE AND OTHER PRIORITIES.It is the sense of the House that–
  (1) the House supports excellent health care for current and former members of the United States Armed Services, who have served well and honorably and have made significant sacrifices for this Nation;
  (2) this resolution provides $43,055,000,000 in discretionary budget authority for 2008 for Function 700 (Veterans Benefits and Services), including veterans’ health care, which is $6,598,000,000 more than the 2007 level, $5,404,000,000 more than the Congressional Budget Office’s baseline level for 2008, and $3,506,000,000 more than the President’s budget for 2008;
  (3) this resolution provides funding to implement, in part, recommendations of the bi-partisan `Walter Reed Commission’ (the President’s Commission on Care for America’s Returning Wounded Warriors) and other United States Government investigations into military and veterans health care facilities and services;
  (4) this resolution assumes the rejection of the enrollment fees and co-payment increases in the President’s budget;
  (5) this resolution provides additional funding above the President’s inadequate budget levels for the Department of Veterans Affairs to research and treat veterans’ mental health, post-traumatic stress disorder, and traumatic brain and spinal cord injuries; and
  (6) this resolution provides additional funding above the President’s inadequate budget levels for the Department of Veterans Affairs to improve the speed and accuracy of its processing of disability compensation claims, including funding to hire additional personnel above the President’s requested level.

• Increases children’s access to health care by increased funding of the State Children’s Health Insurance project (SCHIP program).
• Invests in Education by restoring Pell grants, increased funding of the No Child Left Behind Act along with increased funding of the Individuals with Disabilities Education Act (IDEA).
• Protects middle-class taxpayers by providing Alternative Minimum Tax (AMT) relief for 2007 and 2008 – one year more than the President – preventing millions of middle-class taxpayers from being subjected to the AMT. It includes no tax increase. Under PAYGO (pay as you go) it allows for new tax relief and the extension of expiring tax provisions, IF the cost of these measures is offset. By requiring offsets, the resolution protects the American taxpayer from having to pay the higher interest costs on the debt that would accumulate when tax cuts are not paid for. The resolution also calls for strong new measures to close the tax gap, shut down tax scams, and address offshore tax havens. And it sets the stage for tax simplification and reform.

Guess who voted against it. You’re right, our very “concerned” congressman. Later today, NCPR is going to showcase his concern. Any bets on them asking him about his vote today. Highly doubtful. He mouths concern and then turns his back on our soldiers.

Says all the right things: does nothing. When are we going to wake up?