Congressman John Campbell

Thursday, Dec 02, 2010
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Tuesday, November 30, 2010: Back Here In DC

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Song of the week: “It’s America” by Rodney Atkins

"It's a high school prom, it's a Springsteen song, it's a ride in a Chevrolet. It's a man on the moon and fireflies in June and kids selling lemonade. It's cities and farms, it's open arms, one nation under God. It's America!"

My new, favorite, inspiring, patriotic song. If you haven't heard it, go online and listen.

Back Here In DC, the "lame duck" session continues to trudge towards its end, likely with little resolution of much because lame ducks are rarely very productive. So, since there is nothing definitive to report on the lame duck at this point, here are some random thoughts of mine about recent developments on other topics:

Deficit Commission: I do not agree with all of the elements of the deficit commission's proposal to balance the budget. But, I applaud the work that they have done. I applaud the fact that they made some bold suggestions that touch several of the political "third rails". Any of you who regularly read these missives know that I consider the nation's debt and deficit as the greatest threat facing this country today. We are not many years away from facing a Greece or Ireland-like crisis. Unlike those nations though, there is no one to bail the U.S. government out, and the result would be a financial crisis that makes 2008 seem minor. The problem has been so deeply intensified in the last 4 years that fairly rapid and dramatic action is called for and needed. However, when anyone of either party suggests that action, they are usually demagogued by the opposition. The most familiar form of demagoguery is the commonly used "You want to wreck social security" or "You are trying to end Medicare". Expect new Minority Leader Nancy Pelosi to use these lines a lot. Since roughly 60% of all federal spending is entitlement spending, you cannot fix the problem without dealing with those entitlement programs. Of course, if you do leave them alone, Social Security and Medicare are guaranteed to disappear because they are actuarially bankrupt. So, NOT changing them will assure their demise.

But, back to the deficit commission; we must allow people to propose solutions without being excoriated for making a proposal. If I disagree with a proposal, I will disagree with it. But, I will applaud anyone who proposes the sort of bold solutions where the math confirms that the idea could solve the problem. I hope the deficit commission has made it safe to touch the third rails and start a meaningful discussion.

General Motors: I believe that we had to rescue GM and Chrysler. Remember that it was the Bush administration that made the decision to do so in late December of 2008. Without the government support, both companies would likely have run out of cash before the end of that year and collapsed, probably into Chapter 7 bankruptcy. At that point, the economy was still very, very fragile having just been moved away from "the abyss", debt markets were still largely frozen, and jobs were disappearing in huge numbers. The precipitous collapse of those two companies would literally have evaporated over 1 million jobs almost instantly and probably caused the failure of Ford as well, which was only 6 months away from the same predicament at the time. It could have brought on a much deeper recession/depression. The car business is just too big an employer.

Since then, however, I have disagreed intensely with the Obama administration's management of the bailout. GM's bondholders and terminated dealers of both companies were largely wiped out in a very inequitable manner, while the UAW pension plans were largely kept whole. So, if your retirement was in GM bonds, you lost, but, if you had a UAW retirement, you won. I still can't believe that this blatant and unfair discrimination was legal or constitutional, but it somehow happened.

That being said, I am glad to see GM's reemergence as a publicly held company, and will be even happier when the government has completely removed itself. As the song lyrics quoted above confirm, Chevrolet (and Cadillac too for that matter) is an iconic American brand that I will be pleased to see live on and prosper in future growing economies. I only hope that GM management and the UAW leadership have learned their lessons and do not repeat their past mistakes. We should not bail them out again.

QE2: I used to think that this was only an acronym for the Cunard Ocean Liner, RMS Queen Elizabeth II. But no, now it stands for the second round of Quantitative Easing by the Federal Reserve. QE2 is basically printing money to try and help the economy and keep interest rates low. I am a fan of Ben Bernanke generally, but I don't agree with him here. The problems with the economy are fiscal and government policy driven, they are not monetary. There is plenty of money out there. But, investors won't move it or take risks because of general uncertainties and, more precisely, because of the looming uncertainties of taxes and health care and regulatory policy and government debt. It's that stuff that is holding the economy back, not the misconception that there's not enough money. I understand that the Fed doesn’t have the power to change those other things, but does have the power to print money. But, if you have a cold, it doesn't help to apply a tourniquet because that's all you have.

Earmarks: Republicans in the House and the Senate have now unanimously voted to ban earmarks for the 2 years of the 112th Congress. As one of the original earmark warriors, I am tempted to spike the ball in the end zone. But, I won't do that just yet. Earmarks are a symptom of a culture of favor-trading and spending. We need to jettison that culture along with the corrupting practice of earmarking. Organizational cultures can be stubborn. Although I am encouraged by the resolve of the 87 new Republican freshman in the House, we need to make sure they are a part of bringing about a fresh culture and that they are not co-opted by some of the "old guard" who will try to teach them how it “should” be done. I am also a little surprised that the Democrats have not joined us in either House in opposing earmarks. Do they really think it's a winning campaign issue?

Anyway, we are in the "red zone" for the end of earmarks as we knew them. But, I will hold that end zone celebration for a little bit longer.

And Finally, as I walked to vote last night, I overheard two Democratic members of Congress talking to each other. One of them exclaimed in an angry voice, "I can't believe the hypocrisy of these Republicans with these tax cuts. If your business brings home a quarter of a million dollars, we are supposed to subsidize you?"  Therein lies the fundamental difference in understanding. This Democrat (who purports to be a moderate and who narrowly won reelection) clearly believes that the product of an individual's effort, talent and sweat belong to the government....and we should be thankful for what the government allows us to keep. I do not believe that allowing someone to keep half of what they have earned (after you count state taxes) a subsidy. You see the difference.

Until next week, I remain respectfully,

Congressman John Campbell
Member of Congress


Friday, November 12, 2010: Transitions

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Transitions: The 112th Congress of the United States will be sworn into office on January 5th, 2011. We Republicans will be back in the majority after 4 years of the Pelosi-controlled House.  

When the majority shifts, there will be opportunity to change much. Obviously, leaders and offices and people will shift around, but, since in our Constitution there are coequal parts of government with no superior branch of government, the House makes up its own rules. Those rules are newly approved by each congress and they determine how the House will be run. Traditionally, many of those rules do not change from congress to congress because they have been established by over 200 years of precedent, and they are the accepted way to engage in civil, but vigorous debate on the floor and in committees.

I have been appointed by soon-to-be-speaker John Boehner to the 22 member Transition Team, which is tasked with drafting those new rules, as well as other procedures on how we will run the place.

I hope we run it very, very differently than either Speaker Pelosi has or than we did prior to 2007.

I, obviously, do not agree with Pelosi's policy choices over the last 4 years. That is hardly a news flash. But, I believe that there is some bipartisan and objective agreement that the House was run poorly. Pelosi engaged in top-down and top-heavy management with little delegation. For example, the committees did little actual work. Bills were crafted by a select few in a back room, and then presented to the Congress, both Republicans and Democrats, as a fait accompli with no opportunity for amendment. Time was very inefficiently used, as we spent a lot of time in DC not doing very much and were given little time to hear from constituents. Huge bills with no time for anyone to read them resulted in a lot of unintended consequences. Many smaller bills with bipartisan support were not allowed to come to the floor, as all the oxygen in the entire town was sucked up by the health care monstrosity and other huge proposals. None of these smaller bills will, by themselves, save the Republic. But, in the aggregate, they can remove barriers to growth and clarify things in numerous areas of the economy that will spur job creation. Currently, the rules in the House are skewed to favor spending more money. We need to correct them to favor saving taxpayer's money.
We need to fix all of this, and we will. Exactly how, though, will take several weeks to determine, as we craft proposals and solicit input from Republicans, Democrats and staff members. We should have it all figured out by early to mid-December.

I hope we are bold with changing how we run the place. I hope we get rid of earmarks completely, and create a culture of efficiency and less spending. I hope we empower committees, where the real detail work should get done, to first, do that work independent of the Speaker, and second, bring bills to the floor and let members amend them and then take a vote. If the bill passes, then it passes, and if it fails, it fails. I hope our time in DC is more productive, and I hope that we are able to spend more time in our districts, where we will be able to hear from and be influenced by our constituents and less by the beltway.
And, if we decide to change something and find that it doesn't work, I hope we have the courage to admit that we made a mistake and change it. There will be somewhere north of 81 new Republican freshman in the 112th Congress. That's over 1/3 of all the Republicans. That's huge. I hope we engage them fully in all that we do.

Lame Duck:  The so-called "lame duck" session begins Monday. I have "seen this movie" before in the lame duck session of 2006, when the winners and losers were reversed. Lame ducks are often not very productive, as the Senate still needs 60 votes to pass something and a lot of the members who lost their seats in the new minority are not in a very good mood. You are all aware that the tax cuts expire at the end of the year. But, a lot of other stuff expires or is on deadline. The death tax will go up to its 1999 level, the Alternative Minimum Tax will grab and increase taxes on another 21 million taxpayers, many credits will expire, doctors will be paid less by Medicare, there still is no budget or appropriations bills for the current fiscal year, the unemployment insurance extensions expire, etc. etc. etc. The Democrats kicked a lot of these cans down the road in September to avoid an unpopular vote before the election. That did not work to save their majority. Much of the above will likely just get kicked past the first of the year, and the new congress, a very different congress, will deal with it.
I will keep you posted.

California:  There are now many readers of this missive from all across the country. So, I do not want to get too California-centric on you, but you may know that I am a 4th generation Californian and I feel very passionately about this state. I love its natural beauty and weather, of course. Who wouldn't? But, I also love the spirit of discovery, entrepreneurship and adventure that exists here. It is a culture that is accepting of new things.
But, the election results here at home, and in fact, in all 4 Pacific states (CA,OR,WA,HI) were disappointing. It's like the national trend crashed and burned somewhere in the Rockies. People in the other 46 states elected over 60 new Republicans to the House and 6 to the Senate. But, in these 4 states, only 1 net new Republican was elected to the House and none in the Senate. Democrats actually gained seats in the California legislature, while losing the majority in 19 other state legislatures.

There are a lot of reasons, given California's way above average unemployment and huge debt and deficit problems, to be pessimistic on the West Coast. We just re-elected the people who are driving up spending and taxes and driving out jobs. But, at least the Democrats now are in complete control, and will have no one but themselves to blame if California continues to lag behind the rest of the country in so many critical areas.
And then, maybe the message will finally get through.  But, don't give up on California. Not yet. There's too much good here that offsets a bad government. I'll have more to say about this in the months ahead.

Until next week, I remain respectfully,
Congressman John Campbell
Member of Congress


Wednesday, November 3, 2010: Election Edition of the Campbell Laptop

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It was quite a night. Republicans were returned to the majority in the House yesterday with the largest change in House seats since 1948. We picked up 6 seats in the Senate, 19 state legislatures, and many governorships across the country. And, it's all thanks to you, the voting public, who would not go quietly into submission to ever larger, more oppressive government and ever reducing hope and aspirations. You sent a message last night, and it was a resounding one.


Read more: Wednesday, November 3, 2010: Election Edition of the Campbell Laptop


Thursday, October 21, 2010 - Health Care Propaganda

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In a desperate attempt to persuade the American people that the terrible ObamaCare law is somehow good for you, the Obama Administration is now using your tax dollars to make misleading commercials. I have already seen the ad below on TV several times. Maybe you have too. Notice that it really gives you no information, but merely tells you how much you are going to like the changes made in the new health care law. And, of course, this ad is running, not coincidentally, just days before an election.

This is wrong on so many levels; not the least of which is the fact that taxpayer dollars were used to pay for these commercials. By the way, the Obama Administration has spent $3 million thus far, all of which is borrowed, on ads touting the health care law.

Take a look and see what you think:

 Click Here to Watch the Video

I remain respectfully,

Congressman John Campbell
Member of Congress


Wednesday, October 13, 2010 - The 2011 Tax Quiz

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Last week, I promised you an opportunity to gauge your understanding of the consequences of Congress failing to extend current tax rates before the year ends. Well, below you will find a short multiple choice quiz to assist you in testing that understanding. Good luck!

1) Currently there is no Death Tax. However, on January 1, 2011, the Death Tax will come back at a rate of:

a) 55% of all family assets over $1 million. (This is not indexed for inflation, so the "value" of that $1 million exemption will drop over time.)
b) 45% of family assets over $3.5 million. (Indexed for inflation.)
c) Zero, if you are a member of a government employee union; and 95% if you are not.
d) Death will be made illegal, and will be punishable by confiscation of all assets of those who violate the law.
e) Your tax will be inversely proportional to your global warming carbon footprint.

2) Currently, the highest individual tax rate on dividend income received from a corporation is 15%. This is after the corporation has paid 35% tax on the income before paying the dividend. So, under current law, if a company earns a dollar, investors get to keep 55 cents after federal taxes, but still will pay state taxes. Under the tax increases scheduled to occur by 2013, the amount of a dollar that shareholders will get to keep after top bracket federal taxes and California state taxes is:

a) 2 cents
b) 28 cents
c) 40 cents
d) 50 cents
e) Nobody will pay dividends anymore. So, who cares?

3) It is well known that taxes will increase on incomes of the "wealthy" and the "middle class", no matter how you might choose to define those groups. But, taxes will also increase for people with taxable incomes as low as:

a) $64
b) $5
c) $10,000
d) Taxes will increase for everybody - unless you are here illegally, in which case no taxes are due.

4) A married couple with a joint taxable income of $110,000 will pay how much more in federal taxes next year if the current rates are not extended?

a) $110,000
b) It doesn't matter. According to the liberal intelligencia, you are rich. You don't "need" the money. Go smoke another cigar wrapped in hundred dollar bills!
c) Enough to cover the entire federal deficit for one tenth of a second.
d) $3,500

5) In order to assuage the guilt of those who think taxes should be raised, existing law allows them to:

a) Give all of their income away to charities and pay no tax.
b) Voluntarily pay the additional tax they see fit without forcing the rest of us to do so.
c) Voluntarily pay any additional amount of tax that would make them feel good.
d) Advocate spending cuts equal to the "cost" of not raising taxes.
e) All of the above.

6) The Alternative Minimum Tax was put into place in 1969. It originally impacted roughly 150 taxpayers in the country who earned over $1 million in that year. It was not indexed for inflation. Inaction by Congress this year will cause the total number of taxpayers paying extra money due to the AMT in 2011 to be:

a) 100,000
b) 1,000,000
c) 10,000,000
d) 28,000,000
e) Only those who voted for Obama.

(OK, I wish "e" were the correct answer.)

7) The income tax was established by the 16th Amendment to the Constitution in 1913. At that time, the tax rate was:

a) 70% on incomes over $1000.
b) 30% on incomes over $10,000.
c) 20% on incomes over $25,000.
d) 7% on incomes over $500,000. ($11 million in annual income in today's dollars)
e) 5% on people who voted for Woodrow Wilson.

(Answers below)

So, how did you do? Did you notice that in 1913, the "rich" were considered to be people making over $11 million a year in today's dollars? Now, many Democrats consider "rich" to be $75,000 of income.

Until my next missive, I remain respectfully,

Congressman John Campbell
Member of Congress

1. (a)
2. (b)
3. (b)
4. (c & d)
5. (e)
6. (d)
7. (d)


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