In the world of politics, having one’s feet to the fire is nowhere to be, even if you’re nearly as fireproof as Congressman Charles Rangel. Rangel, Harlem’s elder statesman, who calls his autobiography “And I Haven’t Had a Bad Day Since,” may want to reconsider that title given the swirl of charges and accusations that have engulfed him recently. Despite the controversy and the financial calamity, Rangel, chair of the powerful House Ways and Means Committee, found time to speak to the Amsterdam News before hurrying to Washington to prepare for a second vote on the bailout plan. He was optimistic that the bill would pass in the second round, and he was prescient as the House voted 263 to 171, attracting 26 more Republicans and 32 more Democrats than last Monday night to the revised $700 billion rescue package. Unlike a majority of his colleagues at the Congressional Black Caucus, Rangel voted for the bailout in the first round and in this exclusive interview, he spells out why he did so, his concerns about the economic future, as well as speaks forthright about the barrage of assertions about his own imperiled financial status. Part 2 of the Interview will run next week.
Amsterdam News: Congressman Rangel, give us your take on the current economic crisis and what’s to be done.
Rangel: A lot of people don’t truly understand that when these wrongdoers poison the well, it was motivated by greed and the impact will not be just on the banks. The poison they put in the water, we all have to drink. And the fact that we are angry with the president, with the Congress and angry with these investment bankers doesn’t mean we are not going to suffer as a result of their wrongdoing. These individuals ripped off millions of dollars and by today’s standards, they stole it, but they’re gone. And they have left us with this doubt, with though you’re bringing $700 billion [in] goods and services. So, if you’re successful and nothing does happen, you don’t get credit for anything. If on the other hand, you say I don’t believe there are any bullets in that Russian roulette gun, then you are risking the economic future of the poor and the middle class, who will suffer irrevocably. The rich will only be inconvenienced by a fall in the market or a fall in credit. They will always be able to purchase the goods and services they need. They don’t need any credit.
AN: An inconvenience for the rich is a catastrophe for the poor and middle class…
Rangel: But if you really start to think–and no one wants to–what does our everyday life look like in terms of buying things on credit or the tuition we pay? What happens to our pensions and thrift accounts [a retirement savings plan for civilians who are employed by the United States and members of the uniformed services], which have already dropped a $1 trillion on the market? Who does that really impact the most, the guy who has seen his financial portfolio drop from $30 billion to $20 billion, or the person who has no other resources at all? And this is happening at the worst time because while people are reluctant to talk about the recession we live in–as though that word means something–a recession means, basically, do you have a need for goods and services and you don’t have the resources to buy it? Now when the government said it was prepared, a few months back, to put $150 billion just in checks out there,it wasn’t a good thing, they just felt that with the small business person that as goods and services are inventoried and they are not selling then they have to lay off people and throw them right in the same category where we have a 6 percent unemployment. These are people, who through no fault of their own, lost their jobs. But they did not lose the need to pay rent, mortgage, tuition, health care and gasoline. So if they just throw money at this group and say spend it fast, it really didn’t work because once we got the money out there it was sucked up by the increase in gasoline prices. If you go to the local stores, these folks are not vocal, they are not activists, they don’t scream in the streets. But they make their payroll and their inventory by borrowing money. They plan on borrowing money. The Empowerment Zone is based on borrowing money. They don’t give away money; they loan money.
AN: And there are the other vital necessities we all need…
Rangel: Even grocery stores in affluent communities, where people are buying gourmet food and brand-name foods, but when they get up to the check out counter they are asking the prices and find they have to take some of the purchases out of the cart.
AN: What about those representatives who voted against the bill in the first round and their explanations?
Rangelpeople would be saying, “I told you to vote no, and we sent you to Congress to do what was best for us.” The damage is irreparable; you can’t repair when people don’t have health insurance, they have homes they may lose, they pull their kids out of college and they don’t go back. When the economy has a cold, poor folks get pneumonia.I feel very comfortable with my vote. Since that vote, a lot of changes have taken place.
AN: How do you explain that members of the Congressional Black Caucus, in the first round, voted 21 to 18 against the bill?
Rangel: A lot of the things we had expected to get as part of the package–the stimulus package, unemployment compensation, jobs and help for our schools and building and so forth–was not picked up by the Senate. But something very dramatic is going on right now. The Ways and Means Committee has had several issues before it involving tens of billions of dollars.
One is the alternative minimum tax, a tax that was never intended to fall on middle-class people. It was supposed to really go after the very rich people who didn’t pay any taxes at all because of the exemptions, the deductions and the tax credits. Finally, in 1996 they targeted these people and we set out to take away all the deductions they had received and they were given the choice to file their taxes one or two ways: If they did not under the old system, they would have to pay an alternative minimum tax. However, they didn’t adjust it for inflation, so a lot of people making $60,000 or 70,000 are being sucked into the alternative minimum tax, where they can’t take advantage of their deductions and other credits, instead of eliminating it as we wanted to do in the Congress tax reform because it’s so tremendously expensive.
AN: Why is it so expensive?
Rangel: Because it’s put into the budget as though we ought to collect that tax; that’s close to a trillion dollars. But if you eliminate it, it means you’re going to have a reduction in what your estimate was. No member of the House and Senate is going to allow that to hit their voters. The difference between the House and the Senate, though, is that the House says we should go after these obscene windfall profits to make up for the difference. The Senate says forget about it, we’ll just borrow money. In addition to this, we have a disaster bill to assist people after the fires, the floods and the hurricanes.
AN: Didn’t the recent spending bill passed by the Senate include provisions up to $25 billion for relief in such circumstances?
Rangel: We sent the bill over there and we paid for it by getting money from loopholes. They have a bill which they haven’t paid for that really helps Iowa and the Western states more than it helps the Gulf States. Moreover, we have an energy package that is an exciting opportunity for two major reasons: First of all, it provides a real alternative to oil by reducing people’s taxes through tax credits. The purpose here is to find an alternative that equals or beats the use of fossil fuels, oil and coal. And there is the prospect of solar energy.
AN: In some countries, like Israel, and particularly in the better neighborhoods in Jerusalem, many of the homes and businesses have solar panels on their roofs.
Rangel: Now we know such a development as solar panels are expensive, but we’ll help you pay for it. We’ll give you an incentive; so go solar. There is also the wind terminals we can invest in and hydro electricity. Even waste management and bio-thermo are possible alternatives. And we are looking into the agriculture, where ethanol is a possibility, and even old weeds can be converted into an energy source. The aim is to get to that place, to hit that balance where we are not dependent on Middle Eastern oil. But for me, the best thing is the number of jobs that will be created, and there are the related conservation measures. You get a hybrid car or one that uses flex fuel, we will help you pay for it. We’ll give you a tax break on appliances you purchase that are attached to energy conservation. Take, for example, the insulation of homes. You could take every kid that dropped out of school and teach them how to insulate these apartments and buildings. This is an entirely new profession, but one that could be very rewarding for the kids and the community. Now this bill is very expensive, but we pay for it by closing loopholes. It’s now at the Senate. Furthermore, we have millions of dollars that are involved with tax breaks for people to do research and development…and a variety of laws that are scheduled to expire on December 31. So, we extend them, along with mental health parity, and we put them all in one package