Braley, Ernst Have Deep Divide on Fiscal Issues

Published Nov 1, 2014. By William Petroski.

The $17.9 trillion federal debt, government spending, and taxes are all weighing heavily in Iowa's race for the U.S. Senate, with Democrat Bruce Braley and Republican Joni Ernst each offering voters deeply defined contrasts.

With massive amounts of taxpayer money at stake, special interest groups on all sides of the fiscal issues are intervening in the Senate race with their own advice and opinions, as well as campaign cash and support.

Braley, who has served four terms in the U.S. House, is a Waterloo lawyer who has embraced a populist agenda he contends will benefit the middle class, including hikes in the minimum wage, protecting government programs for seniors, and opposing tax breaks for rich people and major corporations. Ernst, an Iowa Senate member from Red Oak since 2011 and a National Guard officer, paints herself as a fiscal conservative who favors less government, lower taxes, more freedom for business and minimal government intrusion into private lives.

"There is a great deal of division there. I think that in terms of fiscal issues — spending, taxation and pocketbook issues — that is the sharpest divide that separates them," says Mack Shelley, chairman of the political science department at Iowa State University.

With the national debt burgeoning, Ernst says political leaders need to prioritize cuts in federal spending and reduce the size of government. She wants to abolish the Internal Revenue Service, and she believes Congress can't simply cut its way out of the federal deficit.

Ernst says the country must also "grow our way out" of the deficit by having Congress repeal President Barack Obama's Affordable Care Act, by rolling back government regulation of businesses, and by moving to a more fair and simpler tax system.

Braley suggests starting by closing corporate tax loopholes for big corporations and the wealthiest Americans, like saving $40 billion by ending subsidies to big oil companies. He says the nation can also save billions by reducing unnecessary and outdated weapons programs at the Pentagon. But he also says he won't support cuts in programs that help strengthen the middle class, like Social Security and Medicare.

Ernst says scrapping the federal tax code and replacing it with a fairer, flatter and simpler system will result in short-term and long-term economic improvements for the nation.

Braley counters that Congress should focus on cutting taxes for working families and small businesses in ways that help create economic growth. He says that should include tax credits for small businesses that hire unemployed veterans and returning veterans, and tax credits for families paying college tuition. He adds that Social Security should be protected by increasing taxes for the wealthiest Americans because he believes no millionaire or billionaire should pay a lower tax rate than his or her secretary.

The Concord Coalition, a national bipartisan political advocacy group, has held community meetings throughout Iowa in an effort to find solutions to the federal deficit, suggesting tough fiscal choices are needed to protect the nation's future.

Sara Imhof, the Concord Coalition's Midwest director in Coralville until she was transferred to Washington, D.C., in June, says she's been closely watching Iowa's U.S. Senate race. She says Braley has participated in public events in the past with the Concord Coalition and she hopes either Braley or Ernst will support the organization's goals if they are elected.

"It is hard for the candidates, particularly this close to the election, to talk that much about specifics and not be attacked by their opponents," Imhof says. "Neither candidate has come out with a whole lot of details about how they want Social Security to be solvent for the long haul, or Medicare, which is a program that needs to be preserved. But Medicare can't be preserved without modifications to it."

The Concord Coalition isn't currently promoting a specific plan to address the government's fiscal ills, but the organization does support political leaders who decline to take any options off the table, Imhof says. Refusing to reform Medicare or ruling out any possible revenue hike "is pretty much a non-starter for getting deficit reduction in a way that is lasting, and that will allow a buy-in for both parties," Imhof says.

Ernst, however, is solidly in the camp of conservative activists who oppose any new taxes. In July 2013, Ernst signed a "Taxpayer Protection Pledge," sponsored by Americans for Tax Reform, in which she bound herself to oppose any and all tax increases. A total of 219 members of the U.S. House of Representatives and 39 members of the U.S. Senate have taken the no-tax pledge.

Mark Lucas, state director of the Iowa chapter of Americans for Prosperity, a conservative advocacy group, says Ernst best represents his organization's concerns about federal fiscal policy.

"She voted for the largest tax cut in Iowa history," Lucas noted, pointing to bipartisan legislation signed in June 2013 by Republican Gov. Terry Branstad that will cut property taxes by $4.4 billion over 10 years, plus provide nearly $90 million annually in income tax relief. In contrast, he sees Braley as a liberal who views big government as the solution to all the world's problems. Lucas says his group's economic scorecard rates Braley's record in Congress as farther left than U.S. Sen. Tom Harkin, D-Ia., who is not seeking re-election.

"The state of Iowa has done a great job of setting an example of balanced budgets and not going into deficit. In Washington, we should hold those guys to the same standards, but we are not," Lucas said. "If you go back to the Republican administration with President (George W.) Bush, they increased the deficit, they increased spending. The more I talk with people as I am knocking on doors, I find people unhappy with both parties. They are unhappy with the spending; they are unhappy with the growth of government. They don't see a return on their investment."

Christina Freundlich, an Iowa Democratic Party spokesman, criticizes Americans for Prosperity, describing it as a super PAC backed by the Koch brothers. She says the advocacy group is promoting an agenda that favors Ernst over Braley because it supports corporate interests over middle-class Iowa families.

"Joni Ernst has already made it clear that the Koch brothers are her true constituency, not hardworking Iowans," Freundlich says. "It's no surprise that another one of their dark money groups is investing heavily in the final days of the race to try and protect their handpicked candidate. Iowans deserve a senator who will fight for them, not one who will make the Koch brothers' tea party agenda her to-do list."

Matt Sinovic, executive director of Progress Iowa, a liberal activist group that generally supports policies espoused by Democrats, contends Iowa would be best served by a "progressive approach" to taxation in which Americans with the most wealth pay their "fair share" while the government invests the money in infrastructure and education.

"When you do that, you get a return on investment that is even greater than the money that you spent initially," Sinovic says.

He objects to conservative politicians who contend the federal budget must be balanced like a family's budget. The reality is that families routinely borrow money all the time on a long-term basis for purposes like buying a house, he adds.

COMPARING THE CANDIDATES ON OTHER ISSUES

SOCIAL SECURITY

Ernst says Congress must protect promises made to seniors and those already on the path toward retirement. However, Congress must also consider moving new entrants in the workforce toward a new, more viable system that may include savings accounts that are either fully or partially invested in the markets or interest-bearing accounts, she says.

Braley says Congress must honor the promise of Social Security, and minor tweaks to the program will ensure it will be around for years to come. He says he would consider proposals that require the wealthiest Americans earning income beyond a certain level to pay more Social Security taxes.

MEDICARE

Ernst says she does not support any plan that changes the benefits for Americans already on Medicare. However, Congress must make this unfunded liability more efficient for the program to survive the next decade, she adds. Any such discussion must begin with a focus on curbing Medicare fraud and negligent oversight, Ernst says. With alleged improper Medicare payments costing almost $50 billion last year alone, this is an immediate area where Congress can have a short-term impact while debating ways to make the system more effective over the long term, she says.

Braley says people who have paid into Medicare their entire lives should be able to count on it when they retire. He opposes plans that would transition Medicare into a voucher system. He suggests securing Medicare for future generations and saving taxpayers money by reforming the way Medicare pays medical professionals to reward quality of care and good patient outcomes rather than the number of services provided.

FARM SUBSIDIES

Ernst says she supports a plan proposed by U.S. Sen. Chuck Grassley, R-Ia., who has sought to better define what qualifies a farmer as being "actively engaged" in farming. Reforms and restrictions on payments are needed so that those who are skirting the meaning and intent of the program do not benefit at taxpayers' expense, she says.

Braley also says he supports reining in farm subsidies. When Congress passed a new farm bill earlier this year, it saved taxpayers $40 billion by eliminating what he describes as a flawed direct payments system. The new farm bill creates two program options farmers can choose from to help out when times are tough to prevent drastic losses and keep food prices from spiking, he says. To ensure these payments are reasonable, Braley says he backed a cap on the amount of these payments to farmers. Congress needs to make sure these farm programs target small- and medium-sized farmers, and help those trying to begin farming, he says.

Candidates

Democrat Bruce Braley is squaring off against Republican Joni Ernst in the general election. There are four other candidates in the race: Bob Quast with Bob Quast for Term Limits; Rick Stewart, an independent; Douglas Butzier of the Libertarian Party; and Ruth Smith, no party.