VENANGO, Pa. — As a congressman, Mike Kelly (R-Pa.) can no longer run the day-to-day operations of his auto dealerships in western Pennsylvania, but he remains an owner and still keeps close tabs on sales and customer visits.
Kelly’s sons and nephew now run Kelly Automotive, a company founded by his father in 1953 that operates Chevrolet, Cadillac, Hyundai and Kia dealerships — and almost disappeared three years ago.
As part of a downsizing strategy, GM informed Kelly in 2009 that it was revoking his Cadillac franchise — a decision prompted by the federal government’s bailout of the struggling company.
GM eventually relented — but only after Kelly mounted a legal challenge and decided to channel his frustrations into a first-time run for Congress. Capitalizing on economic frustrations in western Pennsylvania, Kelly defeated Rep. Kathy Dahlkemper (D-Pa.) and appears poised this cycle to win an easy reelection.
2chambers interviewed Kelly at the Venango Valley Country Club Monday night before he met with a group of retired military officers. (Kelly drank Sprite, 2chambers sipped an Arnold Palmer. Yes, really.)
Our conversation — edited for clarity and length — appears below:
2chambers: If you compare sales right now to back when your frustrations compelled you to run for office, are they better or the same?
Kelly: I notice that people still worry if they’re going to have their job, if they're still going to be making the same amount of money. It’s still there.
And a lot of of my friends — they would like to make a purchase but they’re just not sure. We have a lot of pent-up desire to buy vehicles, but again, the uncertainty whether they’re going to have a job or get more orders. These guys aren’t going to buy a car — they’re not sure they can, they’re not sure they can make the 48- or 60-month payments.
You see surges from time to time of buyers, but I think a healthy environment would be in a 12.5 million to 13 million [cars sold nationwide] each year. I think at 16 million we were borrowing too much into the future, we were pulling people out of cars before they should have, and putting people in new cars and financing new equity.
For me in this area, what I see is that we’ve lost the truck sales and the sport utility vehicles and that’s all about gasoline.
2chambers: So people are indeed buying smaller cars?
Kelly: Yeah, they’re buying smaller and making due with what they have right now. But things pick up in the service department a little bit as they put a little more into the cars they have right now in hopes of making it run longer.
2chambers: What surprised you about being a congressman in the last two years?
Kelly: There’s nothing that’s caught me off-guard. I knew for a long time that the government doesn’t run like a business. You can’t keep borrowing money, you can’t keep being that reckless.
In my business, the worst thing I can do is promise them something I can’t come up with. If you want to lose a customer forever, you promise them something and don’t produce.
I think the surprise for me is that we’ve survived as long as we have with very poor business practice. I mean, horrendous things — nobody in the private sector runs their business this way, you just can’t do it.
2chambers: You’re part of the most unproductive and unpopular Congress in modern history. How do you defend it to voters who ask you about the lack of productivity.
Kelly: I would say that that’s true, as long as you realize that there’s two chambers in Congress. Because not too far down the hall there’s a Senate.
And you get to the point where you pass things in the House of Representatives — including budgets, three years — and it goes down there and it sits and you can’t get anyone to even look at them.
2chambers: But on the flip-side, you know that the Senate has sent things to the House that also haven’t been considered.
Kelly: I understand that, but when you have such a divide early on, with people who are drawing a line and saying there’s just no way in hell that we’ll do anything without raising taxes, that just doesn’t make sense.
I haven't worked with Mr. Reid, and I’ve only been there 20 months. I think the disappointing thing for most of us members — and some of my Democratic friends — they can’t understand why it’s so hard to sit down as clear-thinking people and say “Look, if you’re looking for higher revenues, you don’t need to raise rates to get higher revenues.” For me, the worst days for me were when I didn’t pay taxes — that’s because I didn’t have any revenues.
I’m not with leadership at the table when they talk, and I don’t know how it evolves from that. I know the Speaker, he told us in conference that I’m going to ask the president to just hold hands and jump in and get these things fixed.
I think the frustration is really at the leadership level. It’s not so much with me — I’ve been negotiating with people all my life — you could not stay in business with what I do for a living if you didn’t know how to negotiate.
But not being on the inside of it, not seeing what all the different hold-ups have been, I can’t say. I know from talking to Eric [Cantor] and the Speaker about their frustrations.
2chambers: But Democrats would tell you that the frustrating thing is that Republicans completely rule out raising taxes.
Kelly: I think we believe fundamentally that you do not have to raise tax rates to raise tax revenues.
There’s such a disconnect — there’s a belief that if somehow I tax you more, that’s going to fix me more. I say, if you tax me more, you change the cost of my operation. You make my product heavier than the other guy’s product.
Raising revenues is the key — raising rates is not the key. When you have the most heavily-taxed companies in the world, when you have the most regulated companies in the world, and then you say to them, the sons of b******, you’re not feeling the pain enough, you’ve got to put more in. My response is, you’re making it hard for me to win, you’re making it hard for me to compete and now you're calling me unpatriotic? That’s crazy.
2chambers: Is there anything the Obama administration has done right?
Kelly: Tell me.
2chambers: No, I’m asking you.
Kelly: I’m trying to figure it out. I’ve been there for three and a half years and I’m trying to figure out what they’ve done. I guess they’ve done things with health-care that nobody could do before and I would say that’s true. You have done some things with health-care that nobody did before — 23 new taxes coming with it.
I haven't seen a domestic strategy that makes sense to me. I haven’t seen a foreign policy strategy that makes sense to me and I kept hearing about how great our foreign policy was. Now I see that Northern Africa is on fire — I think the whole continent is on fire.
I would love to see — if the last three years belonged to George W. Bush — I would love to see the media doing a number on him. They would have torn him from limb to limb, upside down, inside out. This guy has gotten more free passes than a 12-year-old boy at a fair.
The debt’s out of control. There’s no policy domestically that makes sense for people to hire people. We’re talking about raising taxes!
Correction: This story originally misidentified the location of the district. It has been corrected.