With Congress and the new administration in Washington, D.C., focused almost exclusively on the shrinking economy in the first month of Barak Obama's presidency, Idaho's freshman congressman from the first district has quickly emerged as a maverick voice in the house Democratic caucus.
One of only 11 Democrats to vote against the House version of the stimulus bill and an opponent of the administration's auto company bailout plan, Walt Minnick said during his recent stop in Emmett that much of the economic recovery plans coming from Washington simply don't make good business sense.
"I've been a businessman all my life, and I've only been a congressman for six weeks," the son of an eastern Washington wheat farmer said. "So it's important to me that any dollar we spend be spent cost-effectively, especially since it has to be borrowed from the Chinese and Arab oil states and repaid by our kids and grandkids."
Minnick was in Emmett on Feb. 21 to meet with voters and elected officials to discuss economic development in Gem County. He sat down for an interview at the Messenger Index to discuss some of the issues relating to the current economic crisis gripping the country.
Life in Washington
As a much younger man, Minnick -; who, like George W. Bush, has a Harvard MBA and, like the current president, a Harvard law degree -; served in the Nixon Administration from 1971-1973. He was a staff assistant to Nixon on the White House Domestic Council and a deputy assistant director for the Office of Management and Budget. For his second tour in the nation's capital, Minnick has a two-room basement apartment five blocks from his office. He doesn't have a vehicle, so he walks, takes the Metro or "goes to events with (Idaho second district) Congressman Simpson; he has a car," Minnick said. Minnick commutes to Idaho on the weekends and said, "I much prefer the trip west than the trip east."
Minnick has met the new president once and said he was impressed by his fellow Harvard Law School alumnus. "He is an extremely talented and thoughtful individual. Extremely intelligent and focused, but that doesn't mean that I agree with all of his proposals," Minnick said, "There is no question that he is highly talented, high energy and is doing the best he can to do the job to the best of his ability."
The economic stimulus plan
In addition to voting against the original house version of the stimulus plan, Minnick was one of eight democrats who voted against the final $787 billion bill that came out of the House and Senate conference committee.
"My biggest complaint in the stimulus bill was that if it works, the jobs it will create will cost north of $250,000 per job," Minnick said. "I think it's not cost-effective."
Minnick wrote a scaled-down version of the stimulus bill that contained about $174 billion to be spent this year and next, focusing on infrastructure, roads, bridges, schools and tax relief for people who are just getting by.
Although his position on the stimulus was in opposition to the president and the Democratic leadership in Congress, Minnick said he has not felt a backlash from his party.
"Leadership would prefer that you vote their way," Minnick said, "but I was not elected to follow leadership, but to use my best judgment and represent Idaho and my district. Other than explaining the logic and the importance of supporting the bill, they put no pressure on me to vote it. I told party leadership I was going to vote against it and told them why. I told the president that I couldn't support him on this bill and they understood it and understand that I have to represent my constituents and exercise my best judgment."
The auto bailout
Minnick was also against the administration's plan to use TARP money to rescue the ailing American auto industry, instead preferring a pre-packaged bankruptcy administered by a bankruptcy judge.
"That's the way they get their labor contracts changed, get out of their fancy headquarters buildings and they won't have to honor their employment contracts," the former CEO of TJ International said. "That's the way they can close plants and get out of their supplier contracts. It's the way they become efficient in one fell swoop. A bankruptcy judge could hire a search firm to ensure they could get new management that is the best they could find. That's what they need to get competitive, and only through a bankruptcy proceeding could that happen.
"It doesn't mean the plants go away and the cars aren't produced; it means they will be competitive. It is absolutely absurd for taxpayers to be dumping money into these businesses that aren't competitive to prop them up and keep executives that ruined these companies on the payroll. It's the opposite of what needs to be done."
Regulating Wall Street
"It's pretty clear that one of the reasons we got into this mess is that we had private speculators without regulation or any concern for the long-term consequences about what they were doing making some very bad financial bets," Minnick said, speaking of the massive proliferation during this decade of the Wall Street practice of trading in credit default swaps.
"Somebody needs to be looking over the shoulders of hedge fund managers and big financial institutions to ensure that what they are doing is regulated to some extent, is disclosed and that they have adequate financial reserves to fulfill their contractual obligations.
"I want to make sure that if somebody writing those kinds of contracts makes the wrong bet, that the obligation gets paid. If the institution is 'too big to fail,' as some of them were alleged to be, that it is not the taxpayer that fits the bill."
Another area Minnick said he would like to see targeted for tighter regulation is the market in asset-backed securities, particularly mortgage-backed securities. Rather than impose rules and conditions on mortgage lenders, Minnick favors a plan that would not allow the mortgage originator to sell his complete interest in the mortgage.
"The people who were lending the mortgages sold all their interests almost overnight," he said. "The people who owned the debt were different than the people who made the loan. If the loan went bad, the people who made the loan were off Scott-free. They collected their money up front, so they had no incentive to make sure those were good loans. They had no penalty if the loans were bad. I think we've got to ensure that the people who make loans have some financial interest in the loans being paid off. That's a big piece of the regulation I'd like to see put in place."
Economic development in Gem
Minnick said there are funds available in the stimulus plan that will help stimulate economic development in rural Idaho if it is spent wisely.
"Money in the stimulus bill that goes into infrastructure should be spent improving the public side of rural Idaho," he said. "Some of the grant money that is intended to stimulate energy efficiency or to help education needs to be focused on rural Idaho. We need to take money from the (stimulus) bill that just passed and make sure that money is spent disproportionately in the high unemployment counties we have in this part of the state, including Gem County.