Ted Simons: Good evening and welcome to "Horizon". I'm Ted Simons. Republican state representatives Bill Knopnicki and Cecil Ash are suggesting that the state's budget problems could mean reduced prison sentences to save money on corrections. Knopnicki says lawmakers in the past have been afraid to consider such a plan because they didn't want to be labeled as soft on crime. But the Department of Corrections now takes up 11% of the state budget with prison costs now ten times what they were 30 years ago. The third time was the charm for newly elected Republican Congressman David Schweikert. After two failed congressional attempts, Schweikert easily defeated Democratic incumbent Harry Mitchell in Arizona's fifth congressional district. Now Schweikert will be headed to the capitol to be part of the new Republican majority in the house. Here to talk about his plans is congressman-elect David Schweikert. Good to see you again. Thanks for joining us.
David Schweikert: Happy to be here. I don't know how I ended up on a show where you will be doing quantum physics next.
Ted Simons: We do our best. We try. Two years ago, as you well know, folks were not happy with the Republican agenda. Now, all of a sudden, you're off to Washington. What you going to do?
David Schweikert: If you think about two years ago, I think there was this great optimism. You know, we often and I think a little too tritely say hope and change. Americans wanted a dramatically different direction. What they got I don't think they were prepared for. I heard over and over on the election trail, look, we're fearful be being bankrupt. You know, we're not happy with the direction we believe the health care reform is going and we want jobs. We want economic growth. So, you know, I've been elected. My obligation is, how do I deal with the excessive spending? And how do I start creating economic growth?
Ted Simons: Let's talk about jobs. October numbers are in. Jobs were added in five months. Education and healthcare sectors were leading the way. Private jobs added as well ten straight months. It seemed as though things are moving forward. Is it time to change that plan?
David Schweikert: It may be angling in the right direction, but it's no anemic. It's not enough to sop up those folks who desperately need employment. When you and I talk about a nine and a half, 9.7% unemployment, we over and over hear from the economists how much shadow unemployment. That may be in the high teens. The fact of the matter is we have to double, triple that rate of private job growth just to really make a dent in these numbers.
Ted Simons: The congressional budget office, which I'm sure you'll be become with back there in Washington, they're saying without the stimulus plan we would be pushing, in terms of real numbers, the obvious numbers, above ground numbers, 12%. They're saying the stimulus plan seemed to do something as far as unemployment is concerned. Talk about, are we ready for another stimulus plan? Because it sounds like the Republican majority of the House doesn't want any part of it.
David Schweikert: Heavens, no. The debate on those numbers is we grew government jobs. We grew very expensive government jobs. Some of the numbers we see say every federal government employee all in costs maybe $170,000. Could you imagine if many of those stimulus dollars went directly to try to create private sector employment where it would be sustainable, where it would have a multiplier effect? Government jobs don't have that same level of velocity.
Ted Simons: But when we talk about losing government jobs, which we would do if we cut enough in terms of government, especially as far as the country is concerned, those are jobs. Those are people who lose their jobs.
David Schweikert: There's the great battle. How do I create -- how do we create enough private sector economic growth so if there are government jobs that are going to evaporate, whether it been just as we saw the census or other agencies that curve on their growth is now going to have to be tailored back, we have to have private sector growth. Do you do this through the tax code? Do you do this through regulatory environment? Do you do this by freeing up excess I believe credit? The answer is you do it all.
Ted Simons: The Bush Era Tax Cuts, I know this is a big issue as far as Republicans are concerned. Some say you will add trillions to the next decade and companies, basically what they're doing, they're taking this money right now, whether it's large or small companies, whatever tax cut you want to talk about, whether it's corporate or individual or whatever, people are not spending. They're taking the money and hoarding. They're raising stock prices and not making jobs.
David Schweikert: You're nailing the problem. Would you take the cash you're holding in your business and spend it today in this environment where you don't know what your future tax liabilities are going to be? What's your capital gains rate? What is the death tax going to be come January? You create an environment where there's no visibility for future investment so what you do is you don't invest at all. The trillion number on the extending the Bush tax cuts is way off. You also have this basic economic theory. You never ever raise taxes while you're in the middle of a recession. So if we're after economic growth right now, we need to create economic visibility. That's also some tax stability.
Ted Simons: The idea again, though, of finding a way of getting that deficit under control, are you looking at things like reducing payouts to social security and Medicare? Are you looking at things like raising taxes a little bit like Clinton did back in the '90s? Like Reagan did at one point.
David Schweikert: What you may end looking at is can you create some type of tax simplification that removes loopholes by lobbyists and special groups where you don't get it but some group who happened to have a good lobbyist got it? When the tax code is monstrous, one of the engines to economic growth is fine, time to do a dramatic simplification of the tax code.
Ted Simons: Is Congress ready for that?
David Schweikert: I think the House may be. I've been spending a lot of the last week, when the telephones aren't blowing up from my friends and family who all want jobs is to try to talk to some of the members of the new freshmen class. They're passionate about this agenda of the economic growth, about getting jobs. A lot of this in those discussions is how do we simplify the tax code? How do we deal with the regulatory burden? There's a desire.
Ted Simons: I want to get to the health care reform but before I do that I want to bridge this. President Obama has his agenda. The Democrats had their say. It looks as though in many ways the economy seems to be straightening out. In some respects it's going well. Is there, for better or worse, the Republicans have been considered a party of no. Right now we're hearing from the Senate side, the best thing we can do is get rid of President Obama as opposed to here are plans. Is there compromise? Can you compromise back there?
David Schweikert: I think there's a couple of problems in that scenario. One is the party of no, the party of no to things that just were absurd to the Republican agenda. It's going to be fascinating with the Democrats controlling the U.S. Senate, will they now adopt the party of no position?
Ted Simons: Should both sides become the party of maybe? Can both sides become the party of maybe?
David Schweikert: If it's the right thing to do. The battle is you don't compromise on principle. If there's rational things we can do to curb the spending and make economic growth, we'll step up and do it.
Ted Simons: Will you roll back health care reforms?
David Schweikert: Absolutely.
Ted Simons: Why?
David Schweikert: If you and I agree, I have a problem in portability, I have a problem in pre-existing conditions, I have a problem in the way the tax benefits flow, you fix those items. You do not nuke the entire healthcare system.
Ted Simons: You're saying you nuke the entire healthcare system. Are you saying those problems were fixable individually? Because a lot of folks were saying they weren't. It would take too long and you need to have this kind of -- as you're saying, a grand idea regarding tax code. They were saying a grand idea regarding health care.
David Schweikert: I have a very different vision of that. There was lots of folks and a lot of the healthcare economists were saying just the opposite. That you don't do it the way they did it. There are so many problematic issues within the, we'll call it, the Obamacare, health care reform that it's going to be devastating to us here in Arizona and to our congressional district which is made up of small businesses and entrepreneurs. There are better ways to do it.
Ted Simons: It sounds as though the increases initially and once 2014 hits, if the reforms stay in place, obviously the ball field changes. Initially and even then, we're looking at perhaps in terms of premiums for employer-based policies 1 to 2% changes up, down, sideways. That doesn't sound like much of a difference.
David Schweikert: I don't know where those sorts of numbers come from. If you remember, the promise was even going into 2011 you wouldn't see increases in premiums. The fact is, we're seeing dramatic increases in premiums. Much of that modeling and prediction we got from the Democratic majority wasn't right.
Ted Simons: The idea of bringing federal money to Arizona, earmarks, will you work to bring money to Arizona?
David Schweikert: I will never do an earmark. I will through the budget process make sure that Arizona stops being what they call a net contributor state where more of our tax revenue goes out than comes back. You use the appropriations process. You use -- you know, one of the things that the House of Representatives of representatives is to review, to look over spending. And when a congressman goes on and attacks something, often it doesn't create more money to the state. What it means is the money gets directed to someone you have a personal favor with. That type of patronage must come to an end.
Ted Simons: But you have to be part of that patronage. Why not go for it?
David Schweikert: Let's say a gentleman owns a piece of land next to one of my big contributors. Instead you let the professionals at the transportation agency at your state make the decision. The arrogance of a congressman thinking he knows where to direct the dollars down to that micro level. My job is to make sure Arizona gets its fair share but you don't do it through earmarking.
Ted Simons: Republicans have been very critical of unfunded mandates in a variety of ways. Critics will say what about the wars in Iraq and Afghanistan? That helped take us to where we are and where we were as far as deficits go? What do you see about funding the wars?
David Schweikert: They were absolutely a contributing fact, if you figure the stimulus bill of 800 billion. You don't run a military operation off the books. Put it on the books. Let the American people and make Congress deal with the real numbers.
Ted Simons: Good to have you here. Thanks for joining us.
David Schweikert: Very happy to be here.