An interview with Buddy Roemer
Buddy Roemer is a former governor and congressman from Louisiana and a candidate fro the Republican nomination for the presidency. He’s also an avid user of Twitter. After I asked him about an intriguing tweet about health-care policy — a phrase, I assure you, I never expected to have to write — he sensibly replied, “There’s definitely more to it (impossible to cover all in 140 characters).” So on Friday, we spoke about his ideas for health-care reform, economic policy and campaign-finance reform. A transcript follows, with light edits for length and clarity.
Ezra Klein: Let’s start where our Twitter conversation left off. You propose barring insurers from discriminating based on preexisting conditions but you don’t support an individual mandate or any other policy to pull healthy people into the market. So how do you prevent an adverse selection problem where unhealthy people enter your system, healthy ones leave, and premiums skyrocket?
Buddy Roemer: Here’s my fundamental first step: Insurance companies ought to be covered under the Sherman Antitrust Act. I know this is heresy. I know they give large sums of money. First phone call I got when I was elected to Congress was from an insurance PAC. I know they’re the largest givers. But it’s ridiculous to have 50 monopolies in this country. Monopolies raise prices and lower choices. And the first thing we need in health reform is to break the stranglehold that the insurance monopolies have in this country.
EK: But whatever one thinks of the Sherman Antitrust Act, antitrust would have nothing to say about the adverse selection problem. So how would you deal with that more specifically?
BR: You cannot buy insurance across state lines.
But that’s due to their regulations, not due to the Sherman Antitrust Act exemption.
Not true. They bought that favor.
Either way, I still don’t see how removing the Sherman Antitrust Act exemption solves your adverse selection problem, Even in markets with a lot of insurers, like New York, when they take steps to eliminate discrimination based on preexisting conditions but don’t include compensator policies, premiums skyrocket.
You’re going to have to let a market actually operate. Whatever the impediments are to a person having choice, you have to start there. It’s unconstitutional to have a mandate.
But aren’t you distorting the market by introducing a regulation barring insurers from discriminating against unhealthy applicants? That’s how the insurance market naturally operates. So if you’re going to stop that from happening, it’s not going to balance out on its own.
You have to have more choices, some who specialize in that sort of individual offering. You just don’t have it, Ezra. It’s hard to describe what the effects of choices will be in a market this contorted. My experience is limited. I’m not an insurance guy. However, my experience is key in the banking business and other regulated industries. And there, we’re improving price and service if we allow a multiplicity of banks and not just 19 Wall Street behemoths. Same in insurance.
Let’s move on to jobs, which I think most Americans would say is issue number one.
I do not think it’s issue one. Issue one is campaign reform. You won’t do budget reform, tax reform, immigration reform, health-care reform, and banking reform till you change campaign financing.
Fair enough. Well, let’s talk about jobs then move on to campaign-finance reform. I looked at your platform online, and there were three planks: Promote the “Made in America” label, fair trade, and encourage businesses to buy American. I don’t see how any of that can really respond to the rise in unemployment over the past few years.
You need four or five things together. The most important is fair trade. I’m not a free trader. I think the evidence mounts that China is a black hole of manufacturing jobs. It affects the wallet directly. But fair trade is just one step. The next step is campaign-finance reform so the jobs adviser to the president is not the CEO of GE, a company that specializes in outsourcing.
Number two, we will recognize where jobs are created: small businesses, not the top 100 corporations who have fired 2.9 million Americans in the last few years. Most jobs come from small business. And I would begin by beginning an immediate process of deregulation. Now, I’m not a no-regulation guy. I think you need speed limits on the highway. I think you need to clean up air and water. But right now, small businesses don’t have a lobbyist. They don’t have a lawyer. They are in trouble.
Can you name a regulation that you think is a major impediment to hiring at the small-business level?
I’ll start with banking. Small banks. We are under half a dozen regulations that take three people to keep up with. And the reason I emphasize small business is I remember being in Congress in 1982 and Al Gore and I and some other legislators had formed an ad hoc committee called the Clearinghouse on the Future. We had a speaker once a month on the future. One guy was from Columbia University, an economist, and he said the next century would be a battle between China and the United States. And so I asked, who will win? And he said, America. And I said, why? And he said, small business.
Number three, we need a stronger patent office. I don’t know what the delay is on this. The average patent pending creates three new jobs. There are more than a million patents pending.
Four, we are addicted to foreign oil. I’m a natural gas guy. It’s 20 percent of the carbon footprint of oil. Now, fracking is an issue. It must be handled wisely and scientifically. But if you’re careful with it, it’s clean, fast and inexpensive, and it would lighten our trade deficit significantly. And it would create a million new jobs.
Finally, I do believe fair trade is a key step. I think we should revoke the agreement we have with China that gives it permanent normal trade relations. I would revoke that. I would get their attention. I would begin to set standards in conjunction with Congress to have a level playing field. Specifically, products made in China by forced labor, child labor, or prison labor would be illegal in the United States. Products where there are no standards that are similar to minimum standards in the United States, I would restrict or penalize. Here’s my test: if the plant could not open in New Hampshire, why should we buy those products from China?
As I read that list, you’re starting — perhaps correctly — a trade war, or at least a trade conflict, with China, reforming the patent office, encouraging domestic energy production and deregulating small business. Even if these are all good ideas, they weren’t what changed in 2007. They’re not going to create jobs quickly. So what would you do in the first year of a Roemer administration to help someone unemployed in a weak labor market like Reno, Nevada?
Well, we need to do several other things that are only indirectly related to jobs. Real bank reform. We don’t have that. We can’t even get a consumer bureau set up. We do need Glass-Steagall back. We still have too-big-to-fail. So we could start with bank reform. And then tax reform. We have a tax code lobbyists wrote, and only they can read it. I’ve always liked the Steve Forbes idea of a flat tax. I would modify it a little bit. I would have a $50,000 deduction for families. After that, I would have a 17 percent flat rate with no exemptions and deductions.
But even if these are good ideas in the long run, you’ve just taken out the mortgage interest deduction in a weak housing market. That’s going to collapse demand. You’ve taken out the employer exclusion for health-care insurance. That’s going to lead to a lot more unemployed. You’re imposing aggressive reforms on the banking industry. That will have at least a temporary effect on credit. You’ve got the uncertainty from the trade fight with China. I still don’t see where the jobs are coming from.
Let’s just take the mortgage interest deduction. Look at the normal homeowner. For most, it’s a wash. Everybody is paying their fair share. This is not an idle proposition. This is the way you energize a state or nation. I would go further. I would have a supermajority requirement in the Congress to change the code. In Louisiana, we made that 67 percent. And the state has improved enormously since then.
Well, I think the mortgage interest deduction is awful policy. I would like to phase it out. But the experts I know who are the most committed opponents of that policy worry about attacking it now, when housing demand is so weak. And that’s more my point: This seems like an enormous amount if disruption in a fragile economy.
That’s a fair thing. And I wouldn’t take something that would impact industry that much without phasing it in. You need a full debate. You need leadership from the president, which this president has not given us. I think it’s my job to propose a holistic tax reform. Listen to feedback and make modifications. My goal is to keep it simple. My goal is that both parties would vote for it. My goal is not to hurt housing. I’m willing to phase in some things. But I think the American public would like to see a holistic plan that gives business a sense of certainty. And I think the best thing we can do for jobs now is not a new government program but a sense of relief from the unexpected.
That gets to my question, though. Even if everything you’re offering is good policy, it’s hardly relief from the unexpected. You’re calling for root-to-branch reform of trade, taxes, banking, health care and campaign finance. That is, for a while, massive policy uncertainty.
Well, there’s a system in place and it’s not working. So expiration of changes would be very positive. Now, we have an entire year of a campaign to discuss and build and work on ideas. But I took a state with 12 percent unemployment and four years later it was half that. The thing we added was certainty. I lost my reelection on tough issues. Changing parties, right-to-work. But it changed the state. Our bond rating was raised five times.
So let’s move to campaign-finance reform, then. To sort of reverse positions here, what surprised me about this part of your platform was its modesty. You don’t call for public financing of elections, or limits on contributions. You mostly focus on transparency, and rolling back some of the post-Citizens United superPACs.
Well, I’m not against money. I’m a conservative. What I’m against is money in the dark. What I’m against is special favors for people with big checks. I start with transparency. I start with full disclosure. I think sunlight is a powerful thing. I agree that it’s not enough. Right now, we live in a capital without disclosures or limits. Liberals have historically wanted limits. Conservatives have wanted disclosure. I think we need to end up with both.
But I begin with full disclosure. I have a 48 hour reporting period. If you didn’t change anything else, I would eliminate super PACs. Supreme Court has been pretty clear that corruption is a problem in a democracy and the appearance of corruption is a problem. Butrwe have to go further. I don’t think corporations are people. I don’t think they can get a flu short or be drafted. I think people understand they’re a legal entity. I have no problem with limiting them, but we’ll need a constitutional question for that.
Finally, the ultimate solution is to have some carefully crafted public funding. Read Larry Lessig’s book, ‘Republic, Lost.’
I did. It’s a very persuasive book. And it’s part of what’s in my mind here. He’s very critical of transparency as a solution to the problem.
Well, he says it’s not enough. It is a good start. He’ll tell you that. But it’s not enough. And what gets me now is we have neither limits nor transparency. I have spent my time making the case for campaign reform. I have not tried to develop my ultimate economic development plan or health-care proposal. I’ve hit a few high spots. Done enough so people know I’m credible and give a damn. But I’ve really spent the first leg of this talking about campaign-finance reform as the key to all the others. And my first bill will be campaign reform. I will listen and try and compromise where I can, but that will be the first bill I try and get this Congress to pass.
EK: One last question, as I know you have to run. What’s your theory for getting all this passed? An argument I have with Lessig is he sees money as the key impediment to change, but I look at these issues and I see money on both sides of all of them. Insurers donated to pro-health reform candidates and anti-health reform candidates. If you wanted to predict people’s votes, you had to look at their party. And I take from that that party polarization — and, in particular, the way it interacts with the rules of the Senate and the incentives of our elections — is the real problem here.
I think there will always be politics. I’m not a Pollyanna. I’m the only person running for president who has been a governor and a congressman. I’m the only person I know who has spent 20 years as a Democrat and 20 years as a Republican. I enjoyed being a member of the House. And I will be hands-on with the House. I will watch poker with them. I will watch football with them. I will go to beauty pageants with the women, or whatever their thing is. My ideas can be improved and I will challenge others to improve them. But I’m in a political system polarized because of the money. It’s how they get elected. They’re on this extreme or that extreme. In my first speech as president, I’ll ask Democrats and Republicans to come together in the middle. And I’ll show by example, by appointing members of both parties to my Cabinet, by giving members of Congress credit for the accomplishments. And watch what happens. Just watch what happens.