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Dennis Kucinich on Budget & Economy

Democratic Representative (OH-10)


As Cleveland mayor, first city to default since Depression

In 1978, in order to keep electricity rates low in his city, Kucinich refused to sell off Cleveland’s municipal power company, Muni Light, to a larger power company that was using all of its political and economic leverage to try to force a sale. Althoug Kucinich succeeded in his crusade against the larger power company, his victory came at a very high price. To hang on to Muni Light, Cleveland was forced to default on some of its bonds.

Because of this, under Kucinich’s tenure as mayor, Cleveland became the first American city to go into financial default since the Great Depression.

Due in large part to his temperament while in office, he placed seventh on an authoritative list of the ten worst big-city mayors since 1820. When reelection time came around in 1979, he was solidly defeated.

Source: The Contenders, by Laura Flanders, p.154-155 Nov 11, 2007

Cleveland declaring bankruptcy ok, to save public utility

Q: When you were mayor of Cleveland, you let Cleveland go into bankruptcy, the first time that happened since the Depression. The voters of Cleveland rewarded you by throwing you out of office. How can you claim that you have the ability to manage the US, when you let Cleveland go bankrupt?

A: I want the people to know what the real story was. I took a stand on behalf of the people of Cleveland to save a municipal electric system. The banks and the utilities in Cleveland, the private utilities, were trying to force me to sell that system. And so on December 15th, 1978, I told the head of the biggest bank, when he told me I had to sell the system in order to get the city’s credit renewed, that I wasn’t going to do it. The people in Cleveland in 1994 asked me to come back to public life because at that point they expanded a municipal electric system that the banks demanded that I sell, and I showed the ability to stand up for the people.

Source: 2007 Democratic primary debate at Dartmouth College Sep 6, 2007

Bailing out mortgage lenders just postpones crisis

Q: The Federal Reserve lowered the discount rate for banks to address the mortgage crisis. Should they lower rates for everyone else?

A: The answer is no. The Fed is actually looking at bailing out the creditors. And what we’re looking at is a continuation of the problem and a postponement of the day of reckoning. We need to have a government take strong action where we’ll loan money to those who are in trouble. But we need to do that in exchange for having the power, the money-lending power that the banks have right now, come back to the government; government spends money into circulation; and then government can maintain control over the economy. Unless we take this action, we’re looking at a situation of the collapse of our economy, and we’re looking at a situation where these hedge funds will try to get a bail-out while millions of Americans lose their homes. Save the American homeowners.

Source: 2007 Democratic primary debate on “This Week” Aug 19, 2007

Make any corporation with an American name pay taxes here

Q: Do you agree that the rich aren’t paying their fair share of taxes?

A: There’s three questions involved here: What are we taxed? Who is paying? And how are our tax dollars spent? Right now we know that those who are in the highest brackets are not paying a fair share. We understand that. And we also understand that a lot of these corporations are taking their business offshore so they can offshore their profits and escape paying tens of billions of dollars in taxation. And we also know that our tax dollars right now are being spent overwhelmingly on war and military buildup. I want to see a new direction. I want to see the wealthy pay their fair share. I want to make sure that these corporations, if they have an American name, have to pay taxes here, and I want to see the end of war as an instrument of policy.

Source: 2007 Democratic Primary Debate at Howard University Jun 28, 2007

FactCheck: military spending less than entitlement programs

Rep. Dennis Kucinich falsely blamed the military for gobbling the largest share of the budget. Kucinich said, “And we also know that our tax dollars right now are being spent overwhelmingly on war and military buildup.”

Not really. In 2006 (the last year for which final numbers are available), defense accounted for 23.6% of total spending. That is a significant percentage of our spending, but it pales in comparison to the 46.3% we are spending on various entitlement programs.

Source: FactCheck.org on 2007 Democratic Primary Debate at Howard U. Jun 28, 2007

Must cut Pentagon spending

Q: Will your middle-class tax relief be immediate?

DEAN: The first priority is balancing the budget. What we will do is lay out a plan to balance the budget and include some sort of plan to increase corporate taxes, just as Lieberman has suggested, because corporate taxes are now at the lowest level since 1934, which means the rest of us are paying the rest of the tax burden and that’s not fair.

KUCINICH: Dean takes the position that he’s going to balance the budget, but he said repeatedly that he won’t touch Pentagon spending. Half the discretionary budget of the US goes for the Pentagon. The solution is get out of Iraq, cut the bloated Pentagon budget by 15%, and stop the tax cuts that are going to the wealthy.

DEAN: There are an enormous number of needs in defense that aren’t getting met: special operations, an anti-terrorist task force, human intelligence; cyber intelligence; soldiers aren’t paid properly. What I will do is leave the Pentagon budget alone.

Source: Iowa Brown and Black Presidential Forum Jan 11, 2004

WPA-type program will create jobs and rebuild America

Q: Do you agree that the economy is recovering?

A: The truth of the matter is that we should have a full-employment economy. With the government, the employer of last resort, there ought to be jobs, enough jobs for all who want to work. And as president, I will create a full-employment economy by sponsoring a WPA-type program, which will rebuild America’s cities and rural communities, new bridges, water systems, sewer systems, new energy systems, put millions of people back to work.

Source: Iowa Brown and Black Presidential Forum Jan 11, 2004

Social cuts redistribute wealth upwards

Q: Each of you has said you would reverse the Bush tax cuts for the so-called rich. How much money do people have to make before you consider them rich?

KUCINICH: When you consider that a steelworker who’s making $40,000 a year has virtually the same tax burden as someone who’s making $400,000 a year, you see that there are inequities. This administration has used the tax code to accelerate wealth to the top. Most of the tax breaks have gone to people in the top bracket.

And what does that mean? That means that we have a diminishing capacity to take care of needs here at home. Look what’s happened with this budget the administration has just submitted. They’re cutting funds for job programs, for veterans, for health care, for education, for all the real social needs. So the wealth continues to be redistributed upward. We need a tax code that’s fair. But we need to cancel the Bush tax cuts that go to people in the top bracket.

Source: Democratic 2004 Presidential Primary Debate in Iowa Jan 4, 2004

$435B trade deficit is critical to economy

I’m frankly surprised at my Democratic colleagues that they won’t take a firm stand and recognize that NAFTA and the WTO have hurt this country. It’s not a choice between trade or no trade. You return to bilateral trade, conditioned on workers’ rights, human rights and the environment. There’s a $435 billion trade deficit. Unless you address that issue all of these other [economic issues] won’t mean an awful lot.
Source: Debate at Pace University in Lower Manhattan Sep 25, 2003

Steel, automotive, and shipping are critical to US economy

Q: Let’s talk about the economy.

KUCINICH: The following steps need to be taken in order to begin to help the American economy recover. First of all, when you consider that we’ve lost 2.7 million manufacturing jobs since July of 2000, it’s shocking but the US does not have a manufacturing policy, an economic policy which states that the maintenance of steel, automotive, aerospace and shipping is vital to our national economy and our national security. We will have a policy when I’m president.

Source: Democratic Primary Debate, Albuquerque New Mexico Sep 4, 2003

Cut the runaway Pentagon budget to save the economy

Q: How will you balance the budget?

A: The only way to meet pressing social needs and be fiscally responsible is to cut the runaway Pentagon budget, which now almost equals the military spending of all other countries in the world combined. My Administration would eliminate the Star Wars National Missile Defense system, the profligate F-22 and Joint Strike Fighter and other expensive, unworkable and unnecessary weapons systems. Plus, I would ban weapons in space.

Source: MoveOn.org interview Jun 17, 2003

Voted YES on $192B additional anti-recession stimulus spending.

Proponent's argument to vote Yes:Rep. LEWIS (D, GA-5): This bipartisan bill will provide the necessary funds to keep important transportation projects operating in States around the country. The Highway Trust Fund will run out of funding by September. We must act, and we must act now.

Opponent's argument to vote No:Rep. CAMP (R, MI-4): [This interim spending is] needed because the Democrats' economic policy has resulted in record job loss, record deficits, and none of the job creation they promised. Democrats predicted unemployment would top out at 8% if the stimulus passed; instead, it's 9.5% and rising. In Michigan, it's above 15%. The Nation's public debt and unemployment, combined, has risen by a shocking 40% [because of] literally trillions of dollars in additional spending under the Democrats' stimulus, energy, and health plans.

We had a choice when it came to the stimulus last February. We could have chosen a better policy of stimulating private-sector growth creating twice the jobs at half the price. That was the Republican plan. Instead, Democrats insisted on their government focus plan, which has produced no jobs and a mountain of debt.

Reference: Omnibus Appropriations Act Amendment; Bill H.R. 3357 ; vote number 2009-H659 on Jul 29, 2009

Voted YES on modifying bankruptcy rules to avoid mortgage foreclosures.

Congressional Summary:Amends federal bankruptcy law to exclude debts secured by the debtor's principal residence that was either sold in foreclosure or surrendered to the creditor.

Proponent's argument to vote Yes:Rep. PETER WELCH (D, VT-0): Citigroup supports this bill. Why? They're a huge lender. They understand that we have to stabilize home values in order to begin the recovery, and they need a tool to accomplish it. Mortgages that have been sliced and diced into 50 different sections make it impossible even for a mortgage company and a borrower to come together to resolve the problem that they share together.

Sen. DICK DURBIN (D, IL): 8.1 million homes face foreclosure in America today. Last year, I offered this amendment to change the bankruptcy law, and the banking community said: Totally unnecessary. In fact, the estimates were of only 2 million homes in foreclosure last year. America is facing a crisis.

Opponent's argument to vote No:

Sen. JON KYL (R, AZ): This amendment would allow bankruptcy judges to modify home mortgages by lowering the principal and interest rate on the loan or extending the term of the loan. The concept in the trade is known as cram-down. It would apply to all borrowers who are 60 days or more delinquent. Many experts believe the cram-down provision would result in higher interest rates for all home mortgages. We could end up exacerbating this situation for all the people who would want to refinance or to take out loans in the future.

Rep. MICHELE BACHMANN (R, MN-6): Of the foundational policies of American exceptionalism, the concepts that have inspired our great Nation are the sanctity of private contracts and upholding the rule of law. This cramdown bill crassly undercuts both of these pillars of American exceptionalism. Why would a lender make a 30-year loan if they fear the powers of the Federal Government will violate the very terms of that loan?

Reference: Helping Families Save Their Homes Act; Bill HR1106&S896 ; vote number 2009-H104 on Mar 5, 2009

Voted YES on additional $825 billion for economic recovery package.

Congressional Summary:Supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization, for fiscal year ending Sept. 30, 2009.

Proponent's argument to vote Yes:Rep. DAVID OBEY (D, WI-7): This country is facing what most economists consider to be the most serious and the most dangerous economic situation in our lifetimes. This package today is an $825 billion package that does a variety of things to try to reinflate the economy:

  1. creating or saving at least 4 million jobs
  2. rebuilding our basic infrastructure
  3. providing for job retraining for those workers who need to learn new skills
  4. moving toward energy independence
  5. improving our healthcare system so all Americans can have access to quality treatment
  6. providing tax cuts to lessen the impact of this crisis on America's working families.

Opponent's argument to vote No:

Rep. JERRY LEWIS (R, CA-51): Most of us would agree that the recent $700 billion Troubled Asset Relief Program (TARP) is an illustration of how good intentions don't always deliver desired results. When Congress spends too much too quickly, it doesn't think through the details and oversight becomes more difficult. The lesson learned from TARP was this: we cannot manage what we do not measure. We cannot afford to make the same mistake again.

Sen. THAD COCHRAN (R, MS): We are giving the executive branch immense latitude in the disbursement of the spending this bill contains. We are doing so without any documentation of how this spending will stimulate the economy. Normally, this kind of information would be contained in an administration budget. For items that have a short-term stimulative effect, most of us will feel comfortable debating their merits as an emergency measure. But there is a great deal of spending that is not immediately stimulative.

Reference: American Recovery and Reinvestment Act; Bill H.R.1 ; vote number 2009-H046 on Jan 28, 2009

Voted YES on monitoring TARP funds to ensure more mortgage relief.

Congressional Summary:Requires specified depository institutions under the Troubled Asset Relief Program (TARP) to report periodically on their use of TARP assistance. Requires federal banking regulatory agencies to examine annually the use of TARP funds made by the deposit institutions.

Proponent's argument to vote Yes:Rep. BARNEY FRANK (D, MA-4): Last year, after we responded to the urgent pleas of the Bush administration to authorize the $700 billion deployment of Federal funds to unstick the credit markets, many of us became very unhappy, [because Bush] repudiated commitments to use a significant part of the fund to diminish foreclosures. If we do not pass this bill today, we will make no progress in what is the single biggest economic problem we've been facing, namely, the foreclosure crisis.

Opponent's argument to vote No:Rep. RON PAUL (R, TX-14): There has been a lot of money spent to try to bail out the financial industry, and nothing seems to be working. I think it's mainly because we haven't admitted that excessive spending can cause financial problems, & excessive debt and inflation can cause problems.

Actually, the recession is therapy for all of the mistakes, but the mistakes come, basically, from a Federal Reserve system that's causing too many people to make mistakes. Interest rates are lower than they should be, so they don't save. That contributes to what we call "moral hazard" as well as the system of the Fannie Mae and Freddie Mac system. With the assumption that we're all going to be bailed out, people say, "Well, no sweat because, if there is a mistake, the government will come to our rescue." A private FDIC would never permit this massive malinvestment. There would be regulations done in the marketplace, and there would not be this distortion that we've ended up with.

Reference: TARP Reform and Accountability Act; Bill H.R.384 ; vote number 2009-H026 on Jan 21, 2009

Voted YES on $15B bailout for GM and Chrysler.

Congressional Summary:

Proponent's argument to vote Yes:Rep. BARNEY FRANK (D, MA-4): This economy is in the worst shape that it has been in since the Great Depression. This Congress voted 2 months ago to advance $25 billion to the auto industry to promote innovation. This $15 billion is an additional "bridge loan."

Opponent's argument to vote No:Rep. SPENCER BACHUS (R, AL-6): We all understand that the bankruptcy of either GM or Chrysler would have a cascading effect on other manufacturers. But I cannot support this plan because it spends taxpayer money without any real promise to return the industry to profitability. I see several glaring flaws. We are creating a new car czar to manage these companies from Washington; not a CEO, but a car czar. Second, this legislation actually imposes new and expensive mandates on our automobile companies. Third, this legislation imposes Federal Government management on the Big Three, the wisdom of Washington. It is clear that the management of these companies have made mistakes, many mistakes, but to set up a command and control Federal bureaucrat is exactly the wrong solution.

Rep. RON PAUL (R, TX-14): The problems that we are facing today date back to 1971. But we don't seem to want to go back and find out how financial bubbles form and why they burst. Instead, we just carry on doing the same old thing and never look back. We spend more money, we run up more debt, we print more money, and we think that is going to solve the problem that was created by spending too much money, running up debt, printing too much money. Today, we are talking about tinkering on the edges without dealing with the big problem.

Reference: Auto Industry Financing and Restructuring Act; Bill HR.7321 ; vote number 2008-H690 on Dec 10, 2008

Voted YES on $60B stimulus package for jobs, infrastructure, & energy.

Congressional Summary:
    Supplemental appropriations for:
  1. Infrastructure Investments: Transportation: DOT, FAA, AMTRAK, and FTA
  2. Clean Water (EPA)
  3. Flood Control and Water Resources (ACE)
  4. 21st Century Green High-Performing Public School Facilities (ED)
  5. Energy Development (DOE)
  6. Extension of Unemployment Compensation and Job Training
  7. Temporary Increase in Medicaid Matching Rate
  8. Temporary Increase in Food Assistance

Proponent's argument to vote Yes:Rep. DAVID OBEY (D, WI-7): Congress has tried to do a number of things that would alleviate the squeeze on the middle class. Meanwhile, this economy is sagging. Jobs, income, sales, and industrial production have all gone down. We have lost 600,000 jobs. We are trying to provide a major increase in investments to modernize our infrastructure and to provide well-paying construction jobs at the same time.

Opponent's argument to vote No:Rep. JERRY LEWIS (R, CA-41): Just 2 days ago we were debating an $800 billion continuing resolution. Now in addition to being asked to pay for a bailout for Wall Street, taxpayers are being asked to swallow an additional $60 billion on a laundry list of items I saw for the first time just a few hours ago. The Democratic majority is describing this legislation as a "stimulus package" to help our national economy. But let's not fool ourselves. This is a political document pure and simple. If these priorities are so important, why hasn't this bill gone through the normal legislative process? We should have debated each of the items included in this package.

It doesn't take an economist to tell you that the economy needs our help. But what does this Congress do? It proposes to spend billions more without any offsets in spending. The failure to adhere to PAYGO means that this new spending will be financed through additional borrowing, which will prove a further drag on our struggling economy.

Reference: Job Creation and Unemployment Relief Act; Bill S.3604&HR7110 ; vote number 2008-H660 on Sep 26, 2008

Voted YES on defining "energy emergency" on federal gas prices.

Congressional Summary:

SUPPORTER'S ARGUMENT FOR VOTING YES:Rep. WATERS: This bill preserves public housing. The administration eliminated the one-for-one replacement requirement in 1996, effectively triggering a national sloughing off of our Nation's public housing inventory. Housing authorities have consistently built back fewer units than they have torn down and, as a result, over 30,000 units have been lost. I urge you to support our Nation's low-income families and to preserve our housing stock.

OPPONENT'S ARGUMENT FOR VOTING NO:Rep. HENSARLING: President Reagan once said that the nearest thing to eternal life on Earth is a Federal program, and I don't think there is any better case study than perhaps the HOPE VI program. If there was ever a program that cried out for termination, it's this one.

This program began in 1992 with a very noble purpose of taking 86,000 units of severely distressed public housing and replacing them, demolishing them. Well, it achieved its mission. But somewhere along the line we had this thing in Washington known as mission creep.

We already have 80-plus Federal housing programs, and the budget for Federal housing programs has almost doubled in the last 10 years, from $15.4 billion to more than $30 billion now. So it's very hard to argue that somehow Federal housing programs have been shortchanged.

LEGISLATIVE OUTCOME:Bill passed House, 271-130

Reference: HOPE VI Improvement and Reauthorization Act; Bill H.R.3524 ; vote number 08-HR3524 on Jan 17, 2008

Establish a usury limit of 16% for consumer credit cards.

Kucinich signed establishing usury limit of 16% for consumer credit cards

Section 107 of the Truth in Lending Act (15 U.S.C. 1606) is amended by adding at the end the following new subsection, entitled "National Consumer Credit Usury Rate":

  1. LIMITATION ESTABLISHED--The annual percentage rate applicable to any extension of credit under, or any outstanding balance on, any credit card account under an open end consumer credit plan may not exceed 16 percent.
  2. INCLUSION OF CERTAIN FEES IN DETERMINING APR--In determining the annual percentage rate applicable to any credit card account, membership fees or annual fees shall be included in the finance charge [calculation].
  3. ADJUSTMENTS--the Board may make adjustments to the maximum annual percentage rate limitation when any such adjustment is in the public interest and economic conditions warrant. Any increase in the maximum annual percentage rate limitation [will be determined by] severe economic conditions, taking into account the prevailing bank prime rates, and statistical information the Board determines to be relevant.
    Source: National Consumer Credit Usury Rate (H.R.4300) 2009-H4300 on Dec 11, 2009

    Other candidates on Budget & Economy: Dennis Kucinich on other issues:
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    GOP V.P.: Gov.Sarah Palin
    Democrat: Sen.Barack Obama
    Dem.V.P.: Sen.Joe Biden

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    Libertarian: Rep.Bob Barr
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    Page last updated: Feb 08, 2010