Chicago Tribune - Questionnaire

Interview

Chicago Tribune - Questionnaire

1) Would you have voted in favor of the TARP legislation approved by Congress in 2008? Do you think Congress should approve a stimulus package this year? Please assess the competing proposals from the Obama administration and Democrats and Republicans in Congress. What should be the priority in a stimulus package, if you support one?

Yes, I would have voted for the TARP program (and I would have described it as an intervention rather than a bailout). The TARP program has been reasonably effective so far in dealing with a difficult and uncertain situation. While it has not worked miracles, we do not know what would have happened in the absence of decisive federal action. We have not seen a major bank go into bankruptcy since the program went into effect. TARP signaled that the government was prepared to deal flexibly with the unfolding crisis, and that was an important move. I also have great confidence in Ben Bernanke, who is one of the world's foremost experts on financial panics. Had I been in Congress when TARP was being debated, I would have deferred to Bernanke's expertise on the subject.

I support a significant federal stimulus, though I am disappointed in the bill that recently passed the House. My philosophy on the stimulus is that it ought to be focused on two core objectives. First, it should cushion the effects of the downturn on the most disadvantaged. This is a humanitarian goal, but it also has a stimulative effect in that it protects their consumption. The House bill did a reasonable job in this respect.

Second, the stimulus ought to focus on investments that will make the country more productive in the long run, particularly transportation infrastructure. Transportation infrastructure is something that the government ought to do anyway. The stimulus should speed it up by making federal funding more readily available. Too little of the House bill is focused on infrastructure kinds of projects; too much of the bill is a collection of typical spending projects. I'm not persuaded by the argument that many transportation investments are not "shovel ready". One purpose of the stimulus is to restore confidence. A major commitment to invest in infrastructure--such as a multi-billion dollar capital commitment to the CTA--would have a beneficial economic effect, even if these checks were not cut immediately. We have grossly underinvested in many kinds of infrastructure. Given that these projects ought to be done anyway, we should start them sooner rather than later.

Meanwhile, I strongly object to the "Buy American" provision of the stimulus. I appreciate that President Obama has spoken out against this part of the bill. This kind of protectionist action is eerily similar to the Smoot-Hawley Tariff of the 1930s. As someone trained in economics--a background that sets me apart from the rest of the field--I recognize that this kind of action by the U.S. has the potential to set off retaliatory trade restrictions around the globe. It squanders taxpayer money by forcing government to buy higher priced domestically-produced goods. And it strengthens the protectionist wing of the Democratic party by reinforcing the erroneous belief that trade is somehow bad for the overall American economy.

2) President Obama supports increasing U.S. troop strength in Afghanistan. Do you support a deeper U.S. involvement there, and toward what goal?

I do not have a good answer on Afghanistan. I recognize the importance of fighting al Qaeda and the Taliban. And I also recognize that an unstable and lawless Afghanistan is dangerous for the region and for the United States. However, I do not feel sufficiently informed on the issue to know how effective our current military strategy has been. The military strikes have killed dangerous militants, but they have also angered local populations, which in the long run, may promote radical groups. I would have to learn more about this issue as a new member of Congress.

3) Should Congress expand government-funded health care to cover all citizens? How exactly should a government health care program be structured? Please explain what steps you would take to contain costs.

I support universal health care. The richest nation in the history of civilization ought to be able to provide health care to all of its citizens. Moreover, our current system is quickly becoming an economic albatross. The American health care system is also a huge fiscal burden for small businesses and a threat to the competitiveness of large corporations whose international competitors do not have to pay large health care costs for their workers. The system discourages entrepreneurs because of the high cost of individual or small group policies. And it is also a source of middle-class anxiety for families who fear losing health care benefits as the result of job loss.

I support health care reform that incorporates all of the following:

* Universal coverage for all Americans, built upon the current employer-based system.
* Mandatory insurance coverage for those who can afford it.
* Government subsidies to enable low-income individuals to buy insurance coverage.
* Better data collection to evaluate the cost-effectiveness of different procedures.
* A cost-containment mechanism that limits reimbursement for the provision of care that is not cost-effective.
* Health care portability as we work towards universal coverage.

I would prefer a plan that is based on the current employer-based system because I think that is the most politically feasible option, but would also support a single-payer system if there was a politically-feasible proposal pending in the House of Representatives.

As the question correctly infers, cost containment must be at the core of any health care reform. I would explore the creation of some kind of Health Policy Board, loosely modeled after the Federal Reserve, that would identify which medical procedures must be covered in a standardized, basic health plan, and more important, which procedures will not be reimbursed because they have not been proven cost effective. The economic reality--and the key political challenge--is that any effective cost containment will involve saying "no" to health care spending that cannot be justified in terms of its benefits.

4) Give us your views on tax policy and entitlement spending. Should marginal tax rates be raised for people who earn more than $200,000 a year? Should the inheritance tax be abolished or extended? What difficult steps would you take to control the costs of Social Security and Medicare?

I am comfortable with a modest increase in the marginal tax rate for people who earn over $200,000 a year, provided that rates do not go any higher than they were during the Clinton Administration. The inheritance tax is arguably unfair because it taxes those who save over the course of their lifetimes more heavily than those who consume all that they earn. (It is basically double taxation, since the income is taxed, and then the inheritance is tax again.) That said, the inheritance tax is extremely progressive and is not an unreasonable burden for those who are privileged enough by life to have to pay it. Thus, I would accept a modest inheritance tax provided that there are protections for farms and small businesses.

In terms of tax policy, I am most committed to introducing some kind of carbon tax with offsetting cuts in the payroll, personal income, or corporate income taxes. Tax policy has a powerful effect on incentives. The benefits of a carbon tax are legion: it would reduce conventional pollution; it would reduce CO2 emissions; it would encourage investments in alternative energy; it would reduce our dependence of foreign oil. Meanwhile, the offsetting cuts in the payroll, personal income, and/or corporate income taxes would promote work and investment.

The tools for restoring the long-term health of Social Security are straightforward and well known. It is just a matter of political will. We must enact some combination of the following four policies to ensure social security's long-term solvency:

1. Reduce benefits for future retirees (most likely by gradually phasing in an increase in the retirement age, or by taxing the benefits of high-income retirees). We should not reduce the benefits of current retirees or those who are near retirement, as they have not had sufficient time to plan for such policy changes.

2. Increase the payroll tax, either by raising the tax rate (currently 12.4% split between employers and employees) or raising the cap so that the tax is levied beyond the current cap of $102,000.

3. Allow more young immigrants into the U.S. so they can begin paying taxes into the system.

4. Increase worker productivity so existing tax rates can generate enough new revenue to fund the extra burden of an aging population. This is a lovely solution but we have no direct control over productivity.

I would likely support some combination of these measures. The most logical would be raising the retirement age (since life expectancy has grown far beyond what it was when the program was designed) and raising the cap so that the payroll tax is collected on a higher proportion of the incomes of wealthy Americans.

Social Security, however, is the easy issue. The more significant long-term fiscal challenge is Medicare, as it represents a "blank check" for the health care costs of all future retirees rather than the promise of a fixed payment. With health care costs increasing much faster than inflation, the Medicare program is not sustainable in its current form. I support the same kind of cost containment for Medicare that I have embraced for health care reform. There must be fair but strict limits on reimbursement for medical procedures that are not cost effective.

5) Whom did you support in the 2006 primary and general election for governor? Please explain the reasons for your support.

I voted for Edwin Eisendrath in the Democratic Primary and Judy Barr Topinka in the General Election. Having observed Government Blagojevich up close during my time at Chicago Metropolis 2020, I was discouraged by what I witnessed. I believe that party loyalty is a dangerous thing in the face of obvious incompetence. The Democrats were guilty of this in Illinois for too long with Rod Blagojevich; the Republicans did the same thing with George W. Bush.

6) Do you support a constitutional amendment to allow voters to recall public officials? How would you have voted on the recall amendment that was approved in 2008 by the Illinois House? Please explain your thinking.

I would not support a constitutional amendment to allow voters to recall all public officials. I think it would be an expensive distraction in the long run (as was the case in the California recall election ). We have the opportunity to turn our officials out of office when they come up for reelection. In cases of serious malfeasance, there is an impeachment process, as we have watched recently.

7) Do you think the U.S. Senate should have accepted the appointment of Sen. Roland Burris by Gov. Rod Blagojevich to a vacancy in the U.S. Senate? Should the legislature have called a special election?

The U.S. Senate had no option or constitutional authority to block the appointment of Roland Burris, despite the circumstances of that appointment. The Illinois Legislature should have passed a bill to require a special election to fill the seat. Senator Burris will never have the legitimacy that comes either from a statewide election or from appointment by a governor untainted by scandal.

8) Whom did you support in the 2006 primary and general election for president of the Cook County Board? Please explain your thinking.

In the Democratic primary for Cook County Board I supported Forrest Claypool. I believe that his platform of reform for Cook County and an end to cronyism and nepotism was a message that still needs to be delivered to the Cook County Board. I've worked with Forest in the past, and I appreciate his competence and commitment to public service. I honestly can't remember what I did in the General Election. I suspect that I did not cast a vote for that office.

9) Should the 1-percentage-point increase in Cook County's portion of the sales tax be repealed?

Yes. A sales tax at that rate has the potential to distort economic activity and harm the local economy. I support increased funding for mass transit. There is, however, much that can be done to streamline and cut waste from the Cook County budget before the citizens are forced to pay a sales tax increase. If additional revenues are necessary, I support broadening the base of the sales tax, and possibly including some services, which would allow for a significant cut in the sales tax rate. A lower tax on a broader base is always preferable.

10) Tell us: What have you done? What are your specific accomplishments in government or public service? What difference have you made?

I've made a difference on a number of levels (or so I can convince myself). My family has made a difference in Lincoln Park. I have served as an elected member of the Lincoln Park Local School Council and as an elected board member of the Sheffield Neighborhood Association. My wife and I have three children, all of whom attend Alcott School, which is a Chicago Public School. We support public schools by actually sending our children there. (I have little patience for Democrats who oppose school choice while sending their own children to private schools or to exclusive suburban schools. I am on record as supporting school choice if the plan is reasonably designed.) My daughter started kindergarten at Alcott six years ago. She is now in 5th grade and her siblings are in 3rd grade and kindergarten. We've had a terrific experience. Along the way, we've worked hard to raise money, support our teachers and principal, and otherwise invest in our local public schools.

I've made a difference in the Chicago region. I worked for several years at Chicago Metropolis 2020, which is a civic group promoting sensible regional policies in areas like housing, transportation, and early childhood development. We advocated for better policies in these areas, but we also worked to implement our ideas. I was a registered lobbyist during my tenure at Chicago Metropolis 2020. I spent time in Springfield successfully promoting legislative change. As a senior lecturer at the Harris School of Public Policy, I now teach a course on regional policy. My former students work in the Mayor's Office; for Chicago 2016, at CMAP, at the CTA, and in many other capacities throughout the region.

I've made a difference nationally and internationally. I spent five years as the Midwest correspondent for The Economist. I reported on issues ranging from drugs to farm subsidies. (I assume that since you are journalists, you will count this as "making a difference".) The final story I wrote was a cover story on America's burgeoning ex-convict population. During my tenure at The Economist, I wrote a book called Naked Economics: Undressing the Dismal Science, which is a layperson's guide to economics. The book is now used as supplement in economics courses at the high school and college level around the country (including New Trier and the University of Chicago). It has been translated into 10 languages, including Hebrew and Arabic.

My teaching also has an international impact. I created a course called the International Policy Practicum. Each year, I choose an international topic for in-depth study with 12 graduate students. At the end of the 10-week course, we all travel to the region of study to meet with elected officials, journalists, representatives of NGOs, and other policymakers. As a result, I've spent time "on the ground" meeting with people who matter in Brazil, India, Israel, the West Bank, Kuwait, Cairo, Turkey, and Lebanon.

I am running for Congress because my experience in economics and international policy make me uniquely qualified to address the most important issues now confronting voters in the 5th District and the rest of the nation.

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