Aldermen, Board of

TOWN HALL MEETING WITH CONGRESSMAN BASS APRIL 11, 2012 Members of the Board of Aldermen participated in a Town Hall Meeting with Congressman Bass on Wednesday, April 11, 2012 at 7:40 p.m. in the City Hall Auditorium. President Brian S. McCarthy presided; City Clerk Paul R. Bergeron recorded. President McCarthy This is more or less just a freeform discussion. It is recorded and televised, but it is not necessarily a meeting of the board as a regular or special meeting. I’m going to ask the Clerk to read the prayer and then I will ask Alderman Craffey to lead us in the pledge to the flag. Prayer was offered by City Clerk Paul R. Bergeron recorded; Alderman Arthur T. Craffey, Jr. led in the Pledge to the Flag. President McCarthy I asked Congressman Bass to join us this evening, and he was gracious enough to do so, to discuss some of the issues that affect us that may overlap into the national agenda, and try to get an idea of what is happening there that may effect us, what is happening there that may help us, and just try to have us learn more about the Federal Government and the Federal Government learn more about us. Congressman Bass Thank you. I appreciate that. Thanks for the introduction. It is an honor to be here tonight. I’ve never done this before. I served in the Congress for 12 years and then took a 4 year vacation, which was great actually, and now I’m back. I haven’t had a chance to meet with the Board of Aldermen in Nashua as a group, and I think it is an honor to be here. I would like to make a couple of off the cuff observations and then I would really like to have a discussion; hear what you think I can do to be more effective and to help Nashua work with its issues and problems and resolve them to the greatest extent possible. I think it is gut check time in Congress right now, in the Senate. I understand there is an election underway of course and things are very political, but at the end of this year some awful things are going to happen. We are in Washington sitting somewhere between a huge mountain of debt and a fiscal cliff. At the end of this year the early 2000 era tax relief measures will all expire. Personal income tax rates will go up, capital gains tax rates will go up, the inheritance tax will go back to a million dollar exemption with a 55% tax, dividends will be taxed at basically ordinary income, and the cost of that to the American taxpayers will be about $4.6 trillion over 10 years. Last year we passed, as a result of a vote to raise the debt limit, the creation of a super committee to come up with spending reductions in government, and they were unable to do so. As a result of that a $1.6 trillion across the board sequester will go into effect at the end of the year at the same time. We reduced the payroll tax at the beginning of 2011 and then once again at the beginning of 2012 for an additional year; 2%, approximately a trillion dollars over 10 year increase in taxes if that payroll tax holiday, which is temporary, is not continued, and it may not be. In addition to that we have an alternative minimum tax patch that has to be extended, otherwise people making less than $40,000 a year will be subject to alternative minimum tax. The doctors need to have the resources to take Medicare patients and the Medicare Preservation Act, which was passed in the mid ‘90s didn’t project significant enough growth or payment schedule for doctors, and so each year the Congress passes what is known as a patch to provide adequate Town Hall Meeting with Congressman Bass 2 04/11/12 compensation for doctors to treat Medicare patients, otherwise their compensation goes down by approximately 25% at the end of the year. That will cost about $310 billion just for one year. Add to that the fact that the nation will reach its statutory debt limit and we will have to have a vote on raising the debt limit with almost nothing in the form of accomplishments to justify that vote. Add to that the fact that the Senate has not had a budget for three years. They may take up a budget I understand next week or the week after, which I think is positive, but not having done that means that the work that we do with appropriations is all going to be pretty much for not because there is no plan that the Senate can follow to equal what the House is doing, and so they will probably reject everything that the House does. So at the end of the year we will be on a continuing resolution and not have our appropriations completed. In addition to that there are other issues that will come to the forefront. All of this coming together at the same time. Now Republicans and Democrats have I think over the last year and a half have done a very good job of stating their principles and their positions and taking their spots in their perspective corners of the ring. But there is a lot more at stake than that, and in the context of the understanding that there is an election underway, I think it is time for Republicans and Democrats to start talking about solving problems not stating positions on them. For that reason, I was one of 8 sponsors of the first bipartisan budget resolution that the Congress has considered I think since the budgets were created in 1974. I do it not because I think taxes should be higher or I think this should be that way or that way, I do it because the Democrats have a budget, the Republicans have a budget, all of the Republicans will vote for their budget, all of the Democrats will vote for theirs, the Republicans of course will win when they are in power and the Democrats win when they are, but nobody is really resolving these huge problems. Entitlement spending is now 66% of the total Federal budget. We don’t even control it in Congress. We know the Trustees of the Medicare Trust Fund believe that Medicare will be bankrupt within the next decade. Social Security faces the same problem, but over a longer period of time, and there are problems in some of the other entitlements such as food stamps and others. The Republicans don’t have all the answers and neither do the Democrats, but the American people, I believe, are asking for resolution. Despite the fact that probably everybody dislikes the so-called Simpson-Bowles compromise budget, it is the first time that we have, as a small group; 37 members of Congress voted for it, moved forward and tried to resolve that crisis that is pending. Now, we have another issue, which I think is a little more shall we say more on the front burner, and that is the Transportation Bill. I was one of 4 Republicans who wrote their leadership urging them to take up the Senate bill and pass it. Certainly there are a lot of worthy provisions in the House bill and there are some problems with the Senate bill. What the Senate bill does in transportation is extend the program for two years more or less at present levels. It means that we meet the needs that are currently planned within the State of New Hampshire for road, bridge, and so forth. It does reinstate and reauthorize the multi-modal parts of the bill including passenger rail. It does not include some of the authorizing reforms that were in the House bill some of which are good and some of which are not so good. We’re on a ninety day extension now, and that follows at thirty day and then a ninety day, and it goes all the way back to 2008 with multi-month extensions. This is not good. This is the construction season now, we need to have reliability or the ability to forecast the resources that we are going to have, and that doesn’t exist today. The fundamental problem with transportation is that with the slow economy and with vehicles more and more efficient, we don’t have the resources in the Highway Trust Fund to meet even the minimum requirements for all of the programs that exist in transportation, many of which have nothing to do with roads or bridges but are transportation enhancements. You know what they all are because Nashua Regional Planning Commission is Town Hall Meeting with Congressman Bass 3 04/11/12 essentially responsible for the Transportation Advisory Committee for the disposition of a lot of these funds, and also through the ten year highway plan at the State level. That is the bigger issue that we need to address. I don’t suggest the issue of funding is going to be resolved very quickly, but passing the Senate bill gives us two years to do it. The bad news is at the end of two years, by all projections, the Highway Trust Fund will be absolutely flat broke. Both sides; the House side and the Senate have good reasons to be pushing their respective positions, and this has been going on now for quite some time, but I think the two year extension of the program is better for this country and for the transportation infrastructure therein. Having said that I will make a brief comment about passenger rail; I have as all of you know been a passionate advocate of multi-modal transportation, and during my earlier stint in the U.S. Congress, I worked with the Transportation Sub-Committee of Appropriations for I guess a police way of putting it would be directed spending. Those resources I believe are still available. I also worked with the stakeholders back in 2006 trying to get everybody together so that we could come up with a plan that would essentially result in an extension of the MBTA from Lowell up to the Manchester Airport, maybe even into the middle of the city. We had a special train that we ran through; we had legislative priorities, the liability issue, and other things that needed to be resolved. I think those are working. I think the big change that has occurred since I was in Congress has been the change in authority if you will over the bed from PanAm to the MBTA as I understand. That means that it is a whole new paradigm and there is really significantly opportunity now for this to actually happen. I used to joke, I’ve been working on this issue now through at least three Mayors, and I’m beginning to think that I’m never going to see this happen, but I sure would love to see some progress made here, and we do need to re-evaluate what the priorities are so that in this new paradigm with the MBTA able to extend the line, that we can understand what it is going to take and what it is going to cost. I understand the current estimate is somewhere in the neighborhood of $300 million. That makes me gasp. There has got to be a better more ingenious or flexible, more interesting, more unusual, I don’t know what you call it, way to make this thing happen and not cost that much money. I would be willing, if it takes a change in law in order to have a special, not a pilot project, but a special type of alternative if you will to make that happen, if Federal legislation is needed. I really like passenger rail, I think it is very important for economic development. Especially I think Nashua is certainly a great beneficiary of this, but more importantly frankly it is Manchester where the two big highways come together; 93 and Rt. 3, and to have an additional means to get up and down through Merrimack where the Fidelity facility there with 5,000 employees right next to the tracks. It just makes a lot of sense to me, and I want to see what I can do to help. Having said that, I will stop talking and open up the floor. President McCarthy I think rail is actually a good topic to continue on to start with. As you are probably aware, the study to follow up on rail was rejected by the Governor’s Council a few weeks ago. Congressman Bass Right. Town Hall Meeting with Congressman Bass 4 04/11/12 President McCarthy We had some discussion of that last night, and I think from what we’ve seen, and I absolutely agree with you with the impact on the airport. When I talked to the Director of the Airport he said when he talks to international carriers the first question they ask him is not what does it cost to operate out of Manchester but do you have rail service. He also told me that the MBTA has service to Green Airport in Providence, and by the end of this year will have 20 trains a day that go to Green. Frankly there is substantial worry about the viability of Manchester Airport if we don’t have that kind of …audio inaudible… Congressman Bass Every week I fly on Southwest from Manchester down to BWI. I take the free bus to the park terminal and I get on a marked train and I go down to Union Station and walk to my office and reverse at the end of the week. Two things about that; first of all BWI would not be the airport it is today without that connection to Washington, D.C. Baltimore does not have the, well it probably does, but D.C. is a huge part of the load that goes into that airport. Manchester is losing …audio inaudible…to Logan, we know that, and I think that is serious. I also however don’t believe that the MBTA has to, again I don’t want to get into the nitty gritty of the deal, but I don’t think you have to run the same line from Lowell all the way to Manchester that you run into the middle of Boston. I get off the train at Union Station. If I want to go downtown I get on the subway. I haven’t heard anybody complain about that. There is no reason why you can’t get off the train in Lowell, step across, and get onto something else if it reduces the cost significantly. My personal opinion and everybody can get up and walk out of the room if you want, I don’t think you need two tracks. I think you can go up and down and up and down as fast as you can at least initially and then if working you can add another track later. That would cut the cost significantly. I don’t know whether these are the right answers, I’m not a rail engineer, but it is the kind of discussion that we should be having, and I’m willing to help, if Federal regulation or statute is involved to change those in order to accommodate any special ideas that the City might have, and you ought to talk to Manchester and develop a relationship with Ted Gatsas and the Board of Aldermen there because that was working pretty well before when I think Bernie Street and Bob Baines were involved. President McCarthy That is certainly one of the top priorities of ours at the moment. It seems to be hung up on some…it is hung up on the study, which is hung up on a fairly small match in the overall scheme of things. I agree with you I don’t think the final answer is $300 million, but I don’t think we have the tools to get the final answer at the moment. Congressman Bass That’s right, and that is what the study would provide. However, I am going to avoid commenting on the State controversy because it is out of my wheelhouse. The State should do what it does in its own wisdom and you guys have to deal with that. If there is anything I can do as an alternative to where you find yourselves, I’m willing to help. I don’t know what that might be, but I’m willing to look into it. Alderman Moriarty I haven’t heard much discussion in all of the meetings of rail about interfacing with the owners of the existing rail yard and interfacing with the business owners who stand to benefit because we could probably get a lot of support from people who are interested in bringing in heavy industry and a person, I think Mr. Hallo who owns a storage facility out near the airport had said that many heavy industry, without rail it just is unsustainable. Excuse me; you need rail to have heavy industry. So some business owners certainly would stand to benefit Town Hall Meeting with Congressman Bass 5 04/11/12 from having the freight improved. I would think that the melons would have some benefit from having the freight improved supported by passenger rail, and along the airport. Do you have any experience working with the personalities that are associated between… Congressman Bass I do, but I don’t know what the interface or relationship would be between the passenger rail side and the freight side. The freight side of this business is pretty profitable right now. That is why the railroad is running. You don’t have liability issues, you don’t have to go very fast, you can go 15 mph; the tracks don’t have to be as well maintained. …audio skipped… I think freight is working pretty well and PanAm is running that part of the business. Remember if I say something wrong it is just because I haven’t been in this for a while. At one point, there was a discussion about having a Tax Increment Financing District down where the old Grace Chemical factory used to be and try to have a commercial development built there. The idea, the steam as I recall was that we would get primarily Federal funding to build the rail, the State would have to come up with something and probably the stations as I recall, and then the operating funds would come from some other source or maybe it was the Tax Increment Financing that was going to build the station and then the State would have to come up with the subsidy to operate it. And by the way there is no mass transit system, including automobiles on roads that is not subsidized by taxpayer revenue, nowhere in the world that I am aware of. Alderman Moriarty I have another question, but it is about the budget. I don’t know what the answer is. Apparently nobody knows what the answer is because we don’t have a budget yet. I have one friend who lives in Woodstock. He is a young guy, he is retired, and he doesn’t have to work, but he is of the mind… Congressman Bass Woodstock, NY, NH, or Vermont? Alderman Moriarty He lives up in Woodstock, Vermont. And he is of the mind that if you were to raise the taxes on dividends and investment up to a moderate level it is not going to dissuade investors to stop investing they will just work harder. That is his opinion. I have another friend who says don’t you dare raise taxes until, no offense, until those people in Congress show that they are responsible to spend so which do you do first? And then you look at he numbers involved; right now the spending is historically at its high and the tax rate is, since 1945, is the lowest it has ever been so both sides can’t agree so can we pick a number that is somewhat like, let’s just start with what did it used to be at some point in time. I remember reading that you had budget that supports an 18.9% spending rate. Is there a middle ground? Congressman Bass The tax receipts in this nation since 2002 have not exceeded 18.6% of gross domestic product. Prior to 2002 they were up and in the late ‘90s around 20%. When we had the budget surpluses obviously spending and tax revenues were either the same or reversed a little bit. Today tax receipts are around 14.9% to 15.5% of gross domestic product and spending is at around 25%, and that is why we have this big deficit. Spending has got to get down to around 20% to 18% and tax revenues have to get up to between 18% and 20%. That is not politics, that’s math. The question is when; is it going to be next year, mid 2025 or 2075 and will the country still be here then if we don’t do something about it. Town Hall Meeting with Congressman Bass 6 04/11/12 I think that both sides need to agree that there is going to be some tax revenue increases that result from economic recovery, but remember that at 18.6% in the mid 2000s that was arguably an overheated economy and the demographic that we have to deal with in terms of entitlements with the baby boomers getting older and retiring is going to not reduce that spending number but put more pressure on it to go up. Even in the context of protecting and preserving Social Security and Medicare for future generations, we’re probably looking at a balance of somewhere between 19% and 20% if we’re lucky. I hate to sound like Herman Cain, but you know if you could get three numbers that were about the same for the year, for the amount of tax revenue and the amount of spending that would be what you would aim for. That is what essentially Simpson-Bowles attempts to do. It doesn’t cut enough spending in my opinion, but at least it is a start. We’re not going to get there 100% on cutting spending, but raising taxes to pay for more spending, which is what the President’s budget does, which by the way didn’t get a single vote in the House, is just as bad. You make a very good point though, it is that discrepancy that needs to be addressed whether you are a Republican or Democrat or Liberal or Conservative, that is the crisis we face, and we put these arguments off and they are all coming to a head at the end of this year. President McCarthy Before I go onto anything else, I should have asked the Clerk to call the roll at the beginning so we would have a record of who was here. I’m going to do that now. The roll call was taken with 7 members of the Board of Aldermen present; Aldermen Dowd, Melizzi-Golja, Chasse, Caron, Donchess, Tabacsko, Vitale, and Pressly were not in attendance. Alderman Deane Is there a requirement for the City Clerk to participate through this meeting? President McCarthy Actually unless you find the discussion fascinating… City Clerk Bergeron I will stay. Thank you. Alderman Deane Not trying to throw you out Paul. City Clerk Bergeron Thank you. President McCarthy Just giving you the option. Actually a quick question; what percentage of the federal annual spending today is entitlements and what percentage is interest on the national debt? Town Hall Meeting with Congressman Bass 7 04/11/12 Congressman Bass I will give you the numbers; interest on the national debt right now is about $400 billion a year in a $3.6 trillion budget. Entitlements, I will give you percentage now, is about 63-66% so you can do the math on $3.6 trillion. What is really scary about interest on the national debt, bear in mind to put this in perspective, when Ronald Reagan was elected President in 1980 the entire U.S. budget was $450 billion. When I entered Congress in 1995 the entire U.S. budget was about $1.6 trillion, which is about the size of the debt today. Interest rates are on average right now that the fed is paying is about 1.8% because most of our debt is in short-term instruments because everybody thinks that the end if near and we are going to have a bout of inflation. So in 2000 interest rates were about 5%. If interest rates today were 5% instead of 1.8%, the cost of debt would be close to a trillion dollars a year. That is another black cloud that is hanging…audio skipped… President McCarthy Uncontrollable expenditures range between 75-80% of annual spending… Congressman Bass The 66% may include, that is all non-discretionary spending, which includes interest on the debt. President McCarthy Oh okay. But the net result is if we eliminated all discretionary spending, which I assume defense actually falls under discretionary spending… Congressman Bass We would just barely balance the budget right now. Defense is discretionary. President McCarthy And we would have no defense and we would have no investment in… Congressman Bass No education, no transportation, no housing, none of that. That is where we are. Alderman Sheehan Thank you. Thank you for coming tonight and thank you for your support on rail and transportation. I go to a lot of the NRPC meetings and understand the impact of the ten year plan on our economic viability. It is funny that 66% is for federal and we run at about 70% at the city level. I see the echo. One of the things that people always ask me is are you going to raise taxes or cut services, and my answer is some of both need to probably happen but what is a better solution is to grow our base. A lot of the changes I saw about ten years ago and with the finance reform I saw the writing on the wall that banks were going to make a lot of money and people could no longer walk away from debt, they would be accountable forever, but businesses could be. I saw that incentives were made for people to move jobs away. I don’t think that anybody has less things that isn’t…but what is happening is hardly anything is made here. What are we doing to make tax reform so that it encourages and incents manufacturing coming back here because people get annoyed when they find out that gas profits are at a record high and we are subsidizing it. That the Kentucky Derby tax break pays for the Town Hall Meeting with Congressman Bass 8 04/11/12 horses that are being run in the race, their entire cost is a tax write-off, and $4.7 trillion is what is coming to the taxpayer, but it seems like it is coming to the middle-class taxpayer and not to the job creators that are supposed to be job creating. We have record profits and we don’t have record job growths. Congressman Bass If I could address that I think those are very good points. The tax code in this nation is so broken that I don’t think anybody really knows whether they fill out their tax form correctly or not. I would hate to be a Certified Public Accountant. It is interesting it is the CPA society supports tax simplification and the flat tax or anything that we have today. The examples that you give, in my opinion, along with a whole lot of other ones should all be on the table because tax reform is also related to the economic goals that you mentioned having to do with the export of jobs beyond our borders. We have the second highest corporate tax rate in the world and we have a peculiar provision in our tax code that requires foreign earnings to be taxed at the U.S. rate. We’re one of only a small handful of countries that do that. The result is that any U.S. company that has a subsidiary abroad that is making a profit will not bring their profits back to the United States because they would face a higher tax rate. Conceptually what we need to do is to lower the top tax rate, but eliminate a lot of the tax expenditures, i.e., credits and deductions that either don’t serve any economic purpose or disproportionately benefit groups of individuals or businesses that don’t necessarily need that benefit. You could lower, in my opinion, the overall tax rate for everybody in a perfect world to between 22% and 28% or 29% depending upon how much savings you can get out of eliminating deductions some of which would be very controversial and unpopular. If you were to do that some of these non-partisan think tanks estimate that would make us in the lower percentile of corporate tax worldwide. Some countries like Ireland only have a 15% corporate tax rate, but we would be down there with the rest of the world, and some say that we would see a repatriation of about a trillion dollars in assets outside of our borders. Now that is real economic stimulus. There is some cost by the way to the Federal Government because you’re not getting the tax receipts that could have come in if you hadn’t changed the law, but they will never come in so that in and by itself would make a difference. Now you hear it is mostly political dogma but you hear this discussion about how this kind of tax reform, which is visioned in both the bi-partisan budget and in the Republican budget would somehow create enormous benefits for the wealthy. That can’t happen because it is revenue neutral, and in the case of the Simpson- Bowles budget actually raises revenue. You can’t lower taxes on the rich and now raise taxes somewhere else and still have it revenue neutral. The only way you can do this is to increase, if you are lowering the tax rate from 35% to 25% you’ve got to decrease tax expenditures in order to make it revenue neutral, and that is what it would do. To give you specific examples that the committee might take up, there might be limitations on deductions for mortgages and interest, if the interest was over a million dollars. These are all ideas. There might be limitations on deductibility of life insurance policies that are held by companies not individuals. There is a whole list of pages and pages of ideas. And you gave one about horse racing, there are others. They are all over the place. The tax code has been manipulated to the point where it is hard to tell who benefits from what and how and who and so forth just to get all of that stuff into a box and get rid of most of it, and then lower the overall tax rate and simplify the tax code. I think most people would be thrilled with that. But you know change is scary sometimes. Alderman Sheehan Thank you. Town Hall Meeting with Congressman Bass 9 04/11/12 President McCarthy I guess I would like to change topics for a while and talk about education. By way of background, I was recalling on the way down here that you and I were both at the first regionals about 5 or 6 years ago when Dean Kamen gave a very moving speech about the U.S. now being an average producer of engineers in the world economy and a more moving portion on what it meant to be average in the world of the 21st century, and it wasn’t a pretty picture. I think this board and our Board of Education have identified math and science education as weaknesses that we’re very concerned about. I personally believe some of that is that it is difficult to find people who are subject matter experts in those areas that will spend their career teaching when there are other opportunities available to them, and I think that gets back to things like higher education costs and student loans and issues that are very apparent at the national level. More pragmatically of late No Child Left Behind is certainly causing us some concern given that 16 of our 17 schools are failing to meet average yearly progress, which given that we think that our system is actually in reasonably good shape, would tend to leave me to believe that the metrics are not as good as they are. Tell us what is going on with education. Congressman Bass You made three observations; STEM education, higher education costs, and No Child Left Behind (NCLB). With the exception of NCLB, the first two are quite difficult questions without easy answers. No Child Left Behind was a bipartisan reauthorization of the Elementary and Secondary Education Act, ESCA that is its generic name. George Miller, John Boehner on the House side, Democrat/Republic, Ted Kennedy and Judd Gregg on the Senate side agreed that there ought to be some way to measure progress and link it to federal funding. That was basically what No Child Left Behind sought to do. Some of the Democrats feel that it didn’t work the way it should have because the promises that were made for funding levels were never kept and I think that there are significant issues within schools along the very lines that you’re talking about. The problem with reaching a goal that isn’t defined is that you never get there. It is always half way to the goal line and it is a definition of infinity. To start with I think that there needs to be a re- evaluation of what constitutes success. I know that the law was set up to always make success a goal rather than an accomplishment, and that is laudable, but in the end, it is physics; you are going to end up with everybody being unsuccessful. That is where we are today, and I think we need to re-authorize the bill and really study how it is working. We really have a great period now for case studies on this, and figure out how we can change it so that we’re still promoting excellence in education. Despite the complaints about testing and so forth, most parents want their children well educated and they want them to pass these tests because they want them to be able to go to decent colleges. I’m in that category now; I’ve got a boy a senior in high school. I want him well educated. Higher education costs and student loans are really, that is a very difficult long, hard problem because we have over the years raised Pell Grant levels and Stafford loans and, although I don’t like it, the direct student loan program was passed by…I wasn’t there when it happened and I wouldn’t have voted for it, but the direct student loan program has been passed, which is supposed to I don’t know increase availability of student loans. The problem is that the costs of education go up faster than the assistance that is needed for students. How do you control education costs in private and public higher education institutions? I will never forget the only time that Deborah Arneson and I agreed, we were having a debate back in 1996, which we both said you know we’re never going to solve the higher education debate until we figure out how to control costs. We still don’t know how to do that. I don’t know how to do that. Healthcare costs, teacher salaries, energy costs, it’s all real nitty gritty stuff that…there are some interesting debates going on in the secondary education level. Town Hall Meeting with Congressman Bass 10 04/11/12 There is a controversy now between the for-profits and the non-profits higher education. We’ve got one right here in Nashua near the airport. Secondly, the colleges, the independent colleges are having significant financial problems and they’re moving to the internet. The beauty of an internet course is that you don’t have athletics, you don’t have dormitories, you don’t have libraries, any of the expensive infrastructure that lies on top of higher education, and yet in the end it can be argued that you do learn what you need to learn in order to be more successful. Lastly, science; I introduced and Senator Shaheen I believe has a companion bill in the Senate, a STEM bill, trying to move us forward along the model that Dean Kamen has so successfully developed in founding the First Robotics competition, to get the government more involved in promoting this type of education, which has been so enormously successful. Everybody who goes through First, almost everybody is better off afterwards, and there are very very low dropout rates for those kids. The bill that I introduced is revenue neutral because I identify an obligation to the Secretary of Education to cut other programs that are underperforming in order to fund this one so that it is revenue neutral. I haven’t been successful in getting the Education Committee to bring it up, but I think it will have a big impact especially in lower income schools, to get these kinds of science and math projects going. Alderman Moriarty I have a question on education, which is sort of the philosophy of the role of the Federal Government in it; on one hand since I moved to New Hampshire I like the idea of self governance. It sort of permeates our state, and the idea that we have a school board, and as an Alderman I don’t have to know everything about the school system. What I can so is I can delegate, let them be the subject matter experts of school education discussion and establishing the policies. I can influence my friends possibly on who I would like them to vote for if I believe someone does things a certain way as a school board, but that is a good thing that is a local control. On the other hand, I used to live in Hollis, now I live in Nashua. There is one reason that Nashua might never have the same quality as Hollis might be able to simply because the demographics are different and Nashua has the fact that we have a very large percentage of the people that are getting free lunch, special needs, it is just the fact of being in an urban environment. So we will do the best we can with what we have given us. That side would sort of present well maybe the Federal Government could come in and provide some sort of equalizing force. Can you comment on a trade off between like I said on one hand local control versus in the other hand some sort of equalizing support? Congressman Bass Well Federal support of elementary and secondary education has always been a relatively small percentage of total funding for education, and I think that is a good idea. If the Federal Government becomes the primary funding of public education they are going to run the public education as well. It is a legitimate thing to expect. We do have, as you know IDEA, ESEA, Title I funding and so forth, which are federal funds. I don’t know what the current number is, but my guess is that federal funding makes up somewhere around 10% nationwide of all funding for education, and after that we all know how divisive and controversial education funding can be. New Hampshire is one of the states that has lead the way, depending on how you look at it, in terms of that debate; to what extent is our education costs at the elementary and secondary level socialized over city lines or town lines to the State level, and that is a debate that is ongoing, but it is not a federal debate, and in my view I think that local control of education is a laudable thing. To the extent that the Federal Government is involved it should be good stewards of the use of its funds but not those that are raised and spent by the state or locality. Town Hall Meeting with Congressman Bass 11 04/11/12 President McCarthy Are there other questions on education? If there are questions from the audience we could take 1 or 2 of those now. Sue Newman, 25 Charlotte Ave. Good evening Congressman. Thank you for being here. Congressman I heard you refer early in your presentation that the President’s budget recently was defeated, didn’t get a single vote. Would you explain to me why the President and the budget that he submitted didn’t get a single Democratic vote even? Congressman Bass I can’t. It has been traditional that when the House brings up budgets you consider 5 or 6 different budgets; the majority party budget, the minority party budget, there is usually a congressional black caucus budget, a progressive budget, a very conservative budget, and also the administration’s budget. They are all voted on, and each one gets 1 hour of debate. There are no amendments because these are resolutions. This year, this may not be unusual, but this year there was no one who was willing to introduce the President’s budget so it was actually introduced by a Republican and there was debate, I didn’t hear the debate, but not one single Democrat voted for it. I can’t explain that because if I then went home and said that I supported sections of that budget or all of it…I can’t answer your question because I voted no as well. Sue Newman With due respect, something that I had read referred to it, and it commented that the budget was so discombobulated or whatever, changed around by the Republicans that the Democratic leadership looked at it as a caricature of the President’s budget so that it was convenient then for the Republicans to say there is the President’s budget, it didn’t get a vote, and the Democrats were stuck with that is not the budget he sent over. Where I’m coming around to is you mentioned that the problem in Washington, that is symptomatic of the problem in Washington. I don’t see anybody giving an inch to get anything done on behalf of all of these people and all of the people that are out there looking for a job, underemployed, a young student trying to get a job, all of the above because everybody just wants to get their side pushed forward, their agenda pushed forward. If I’m wrong with what I said, I will stand here and let you correct me. Congressman Bass I’m not going to correct you. I will only say that I was under the impression that the President’s budget was copied verbatim. He submitted it to Congress, and I don’t know whether it was changed, maybe it was, I will look into that. Nobody told me that that had happened. There were some provisions in the President’s budget that were not particularly popular. I will give you a couple that maybe nobody would want to vote for. He proposed in his budget to cut low-income energy assistance by 50%. He also proposed raising Veterans’ retirement co-pays by 350%. And there were others. Those were provisions that he submitted… Sue Newman Congressman could I ask…on their Veteran co-pay thing, would you give me some actual examples of the dollar amounts? The percentages are huge. Town Hall Meeting with Congressman Bass 12 04/11/12 Congressman Bass The percentages are huge, the dollar amounts are relatively low, but if you are a Veteran and you expected to get free healthcare for life, which is what they believe they were promised, and I agree with that, if you are raising a co-pay from $40 to $50 that means something to somebody who is living on $120 a week. Sue Newman Okay. And I’m glad you mentioned that because during the summer time, I think it was in Time magazine, Alan Simpson did something and he talked about the frustrations that he and Erskine Bowles had with the budget, and I remember the Tricare, which is the military benefit, came up. I believe the number he said it is $53 million, there is no co-pay, if you try and even go add it and you’ve got everybody coming out of the woodwork. Where I sincerely am coming from if everybody, a Veteran included, I’m sorry if we’re all in this together then we are all in it together, and it seems…I don’t quite know the word, I hesitate to say disingenuous, but when I realized that a majority of one side is also dealing with the repercussions of signing a pledge from Grover Norquist so the taxes are out there, I just see this as a totally dysfunctional operation because it just doesn’t seem to be a sincere effort to really try and get beyond the stumbling blocks. Congressman Bass I appreciate that, and you said essentially exactly what I said in my opening remarks, and I was one 4 sponsors of the bipartisan Simpson/Bowles budget, which was introduced. Now Americans for Tax Reform, Grover Norquist, is not happy with that budget to say the least, but it is the only way that we are going to resolve these big problems, and you stated it better than I could have done; however, it is not just Republicans, it is also Democrats… Sue Newman I recognize that. Congressman Bass …and I put my chin out along with 7 other people, be advised that 3 months ago there were 120 Republicans and Democrats that held a press conference supporting this budget, and in the end there were 8 of us that were willing to bring it to the floor. I believe that I was elected to solve problems not to fight. I believe that if nobody steps forward initially to address this issue and take the heat, which I’m taking for it, our nation may not survive, and this budget that we proposed has been endorsed strongly by Simpson and Bowles, but USA Today, by all of the major national newspapers, by the Council of CEOs, people who know how the economic engine of this country works, and they know what is going to happen if we are not able to address some of these big issues before the end of the year. Sue Newman I agree, but if the leadership does not agree… Congressman Bass Well you have to start somewhere… Town Hall Meeting with Congressman Bass 13 04/11/12 Sue Newman I recognize that. Congressman Bass …and we’ve got 37 votes, and we’ve got a few more to go before we get to 218. Sue Newman Thank you. Congressman Bass Thank you. Alderman Deane I wanted to ask a budget question. I believe it’s been like 1,075 days since the budget has been in place. Congressman Bass That’s right. Alderman Deane So if you had 2 years of one party with control not only in the White House, but in both houses of Congress, why was the budget not passed? Congressman Bass Well that is kind of a loaded question. First of all the House for this year as of last week and also last year, has passed a budget with great controversy and lots of television adds and terrible rhetoric associated with it. I think that the Senate’s lack of interest in passing a budget is mainly political. They know how controversial these budgets are. They know that if they produce a budget that they can pass with 51 votes that it will show such terrible deficits going out for so long that just the publication of the situation will make people say why did we ever put you there to begin with. This country is in real financial trouble. We’re in a workout. I’m a businessman, you have; you are on the loan list, you have turnaround, you have workout, and you have bankruptcy. We’re in the workout stage right now. When you are borrowing $.40 on every $1.00 from you and your children and everybody else to pay for expenses that is a problem. If you’re not willing to deal with the spending side, which the Democrats aren’t and the Republicans aren’t willing to deal with the tax side then you are not going to solve the problem. The Senate doesn’t want to put up a budget because they …audio interrupted... They just don’t want to cut spending. Alderman Deane What I was lead to believe through what I observed and read and watched was that the President’s budget as submitted wasn’t altered by anyone and that being an election year even members of his own party didn’t want to have anything to do with it and that is why it didn’t garner a single …is there any truth to that? Town Hall Meeting with Congressman Bass 14 04/11/12 Congressman Bass Again, you are asking me to opine on the motives of my colleagues’ votes, which I never do. But the fact is as they say at the poker table let the cards speak, and the vote was 400 and something to nothing, and every individual member has their own reason for doing what they did. I don’t understand why the President’s budget didn’t receive a single vote. Alderman Deane Thank you. Congressman Bass You are welcome. Thank you President McCarthy. I appreciate your time. President McCarthy I have one more question, which is let’s talk about something less perhaps depressing, which is the rather trivial discretionary side of spending. So we actually invest money in our future sometimes and there are things that the Federal Government does that are just by their scope not likely to be achieved by private industry or private citizens. One of those that is of personal interest to me is the space program as just an example of the sort of things we’re…when we undertook the Apollo program and the space shuttle we undertook a lot of very basic technology questions. The research …audio malfunctioned… too expensive to do elsewhere and the spinoffs that came from those things have been of tremendous value to American industry over the years. We can argue a little bit about how much that value is, but I think it is pretty clear that those programs have paid for themselves in terms of economic development. I, with some sadness, attended the last launch last year, and am watching for…getting back to the science and math education, etc. …audio malfunctioned… setting the bar very high for ourselves in terms of scientific advancement. How do you feel about those kinds of programs in the discretionary budget, not just the space program but other basic research and things that just try to advance our basics so that we have a base to build on for our industrial economy in the future? Congressman Bass There is research going on at the federal level in all sorts of fields, academic fields, scientific and so forth, National Academy of Science, National Institute of Health, the Department of Energy, NASA, even transportation. All of the agencies have research arms and they are important because as you stated in the beginning of your question, there are aspects of research and development where public funds can create enormous dividends that far exceed any cost that might have been needed in order to get to that point. I will give you a great example; there wouldn’t be any air transportation in this country if states, municipalities, and federal authorities hadn’t stepped forward to build airports for airplanes to land. There were only a handful of private airports that were used for commercial purposes. It worked and it wouldn’t have happened otherwise. That is an extreme example. Now the space program, I am not a great advocate for NASA these days, not because I oppose the space program, after all my Father was in Congress when the Space Committee, as it was called, now called the Science & Technology Committee, was created. The only thing he wanted to do was to be on that committee because that was where the future of science was in this country. Now NASA has kiosks at airports, they have a channel on Cable so you can see technicians working on space stuff, they talk about going to Mars. Going to Mars has nothing to do with science, it is money for Houston Control because it is in trouble. The Town Hall Meeting with Congressman Bass 15 04/11/12 International Space Station has contracts let out to every single defense contractor and there is a piece of it made I believe in every congressional district in the country. That isn’t science and space that is politics. I believe in unmanned exploration, I believe in the Hubble Telescope, I believe in the science that we’ve gotten from the space program, but there are a lot of aspects of it and most especially the idea of putting warm fragile human bodies into an adverse climate that are not cost effective in my view, and to send an individual to Mars when we can probably for a small fraction of that cost learn just as much about that planet without sending somebody there I think is foolhardy, but Houston Control isn’t going to survive if we don’t have men in space or women. Alderman Moriarty One more question about healthcare, and I’m going to bet you a penny that you’ve never heard this question before. I’m on a wellness committee up at BAE Systems and there is an assertion, which I believe and there is a lot of data to back it, that has to do with a dollar invested in incentivizing your employees to become healthy and fit pays off substantially; it is like 20/1 in reduced costs. Again, another little factoid, I heard something that by 2016 the healthcare costs are projected to be something like 20-30% of the GEP, which is insane. The present discussion about healthcare seems in my opinion somewhat misdirected. It is all focused on who is going to pay for it. At some point, I don’t care who pays for it, somebody is going to pay for it. The question is has anybody in Congress tried to champion the idea of encouraging the population to become more fit or more healthy and whereas at BAE Systems what they have done is they give us huge deductibles, but you get paid piece by piece for getting your biometric screening, to go talk to a health coach and set up a plan. Some of the people are very resistant to it because it sounds like the company is forcing me to jump through these hoops to become fit, which is exactly what the company is trying to do because it pays off in the long run. I can only imagine, and I actually had this discussion with the Firemen’s union leader, and I said you guys could benefit from this ultimately, we would give you an option where you could do it the old fashioned way or you could be financially incentivized to jump through these hoops and as a result your pool of claims will go down and you will end up saving in the long run. If the Federal Government could somehow incentivize people, anybody who is on Medicare to say now you have two options, you have this option and you have this other option where you have to jump through these hoops, but we will pay you, that would have a huge impact on reducing the load on our economy. Congressman Bass The answer to your question, like most of these questions, is quite controversial. I would only say that to the extent that the administration of healthcare is flexible and able to use natural human inclinations to achieve goals versus rules and government employees setting out standards that apply to everybody exactly the same, I think the system would work better. I will use an example; the fastest growing healthcare system in the world or let’s just say in the country, are Medicare and Medicaid. The slowest growing are elective plastic surgery on the face, i.e., facelifts. The reason for that is nobody gets a dime from an insurance company for it. Nobody is paying for it and the people that want facelifts get competitive…costs of elective plastic surgery is going up less than the CPI. It can be done, but it gets done…oh the second example, Medicare Part D, prescription drug program, it was based upon an entirely different model from Part A and Part B, hospital and doctor services in that seniors would have a choice of picking from private insurance plans and of course there was a lot of debate because this would create all kinds of confusion and insurance companies would make out like bandits and the taxpayers would be hosed for it and so forth. Well since the implementation of that plan, the cost of the program has never gotten even close to what its cost was projected to be because for example the co-pay for prescriptions was set initially at about $27 average Town Hall Meeting with Congressman Bass 16 04/11/12 and one plan that was proposed was to have it set by the government to go to $27, $28, $29, $30, $32 and so forth up to $50 over twenty years, but the plan that ended up getting passed, which was the Republican plan, didn’t set any number at all. The idea is well it could be hundreds of dollars charged, it is still less than $27 on average today because most of the insurance companies are waiving those fees in order to get the business. That is as close as I want to get to dealing with a very …to encourage good health is a great idea. I think it works best however when it is done depending on a group by group basis and is sensitive to who the people are that are being insured. Alderman Sheehan Just a note to what you said; I think something that maybe wasn’t considered and might be affecting the costs that you are seeing, my father is a Veteran who is now of age, and two years in a row he hit a wall on his prescriptions and for the last three months of the year he was paying for them out of pocket so he instead switched to VA benefits, which he hadn’t been using before, which helps. He doesn’t get some of the same medicines, they had to switch up and that sort of thing, but that could be not unique so that might be flexing the number in a direction also. That is just something to keep in mind. Congressman Bass Okay. Fair enough. President McCarthy Well thank you very much. Congressman Bass Thank you. I enjoyed it. President McCarthy This has been very enjoyable and … Congressman Bass I would love to, God willing, come back and do it again with you next year. President McCarthy Alright. Alderman Wilshire Thank you. President McCarthy I don’t think we have any need to adjourn since we are not actually a meeting. Thank you all for coming. The Town Hall Meeting concluded at 8:45 p.m.