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McFadden on how he would deal with his No. 1 worry: U.S. government debt

This is one in an occasional series of articles about the policy positions of U.S. Senate candidates Mike McFadden and Al Franken.

Mike McFadden
MinnPost file photo by Brian Halliday
Mike McFadden

Republican Senate candidate Mike McFadden says that his number one concern, as a father of six children, is the large and growing debt of the U.S. government. The debt is over $17 trillion and has “increased by six or seven trillion since Al Franken took office,” McFadden said.

For obvious reasons, McFadden sometimes chooses to put his analysis of what’s gone wrong with the country over recent years in terms of Franken’s Senate term. In our long interview last week, he did this several times, without specifying actions by Franken or how they contributed to the problems he is highlighting, but it’s probably fair to say that (in addition to the obvious reason) he’s using Franken as a symbol of the basic approach to government of Democrats and liberals in general.

McFadden doesn’t just want to reduce the annual federal deficit, which would slow down the growth of the debt. He wants to eliminate the deficit completely and run a surplus in order to pay off some of the debt. (The gross federal debt, by the way, including the money owed to the Social Security Trust Fund, has gone up for more than 30 straight years.)

Cutting the debt

I asked him his ideas for getting the debt headed down, and he replied: “The way that you address it is twofold. One, addressing long-term costs, and two — which we need to talk a lot more about — is growth.”

We never got around to discussing what McFadden meant by long-term costs, although I assume it refers to bending the curve on long-term Medicare and Social Security costs. We never got around to discussing his ideas for that, either, although I hope to soon. And some might say that ultimately higher taxes will have to be part of the solution to the long-term debt. But not McFadden, who says: “I will not vote to raise taxes on hard-working Minnesotans.”

So that leaves economic growth, which turned out to be the main thing on McFadden’s mind, at least during our interview. As in:

Since Al Franken took office, we’ve had the lowest, slowest rebound from a recession in the history of the United States… We gotta get this economy growing again. And the way to do that is to have sensible regulation, not over-regulation, and to take advantage of the energy renaissance that we’re sitting at the doorstep of.

If not for excessive regulation and long, excessively slow permitting processes — such as the one that has held up construction of the Keystone Pipeline and the one that has held up the Polymet copper mining project in northern Minnesota — we’d be on our way. McFadden can get quite excited on the topic. Allow me to give him the floor, uninterrupted by any of my impertinent asides, for a couple of paragraphs:

We have the opportunity to be an energy superpower again, to be energy independent for the first time since the 1960s. And the effect of that on our country is dramatic. With low-cost energy not only are we able to put more dollars in the pockets of the people of Minnesota, because their heating costs are lower, their gas bills are lower, we’re also able to address our balance of trade.

We can export liquefied natural gas. So we change our balance of payments structure, but most importantly, with low-cost energy, we become a manufacturing superpower again because we can manufacture competitively on a global basis. That’s really exciting. That’s how you create jobs; that’s how you increase wages; that’s how you help people. We start insourcing jobs as opposed to outsourcing.

That kind of economic activity creates jobs, which creates tax revenue without having to raise anyone’s rates, McFadden says. Get the economy growing at a 4 to 5 percent a year rate, instead of the current 1 percent and, over a four or five year stretch, that’s $9 trillion to $12 trillion of additional revenue coming into the treasury, he says.

And what’s the key to making this happen, the thing that McFadden can do as a U.S. senator?

Keystone Pipeline

“The key is to do the things that Al Franken doesn’t do,” McFadden says. “To be very specific, it’s approving the Keystone Pipeline, number one. Number two, it’s fast-tracking the 24 liquefied natural gas pipelines that are in the permitting stage around this country. It’s stopping the war on…the carbon emission strategy that President Obama and Al Franken announced last week. That’s how we do it.

“… I’m a businessman. I look at what this administration and Al Franken have done. They’ve just put regulations after regulation after regulation on businesses.  Including Obamacare, which is estimated to cost the equivalent of 2 to 3 million jobs,” said McFadden, noting that this was an estimate from the Congressional Budget Office, but not noting that the CBO said most of this represented people who would be able to retire or work fewer hours because Obamacare had helped them get health care from other sources.

McFadden does have a big — if common — idea about federal taxes, which I guess must be considered part of his overall economic plan. But really, the plan is just one word. The word is simplification. He favors a major reduction in the complexity of the code. This is a fairly common impulse these days. The hard part is identifying some of the major deductions, exemptions, exclusions and so forth that you want to eliminate. McFadden hasn’t done that. When I asked him to mention some of the provisions he would cut, he said the important thing was to show up at meetings of people who share the overall goal, and put everything on the table.

Despite the lengthy interview that resulted in Wednesday’s and today’s posts, and perhaps because McFadden is a new figure in the Minnesota political picture, we did not cover many of the issues on which a Senate candidate should have a public position. I’m working with McFadden to arrange more time to go over his thinking on more issues.

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Comments (27)

  1. Submitted by Gerald Abrahamson on 06/27/2014 - 09:22 am.

    Abandon McFaddon.

    He is not putting forth anything viable.

    Lots of talk, but nothing that lasts longer than a decent coffee break.

    He claims he is a businessman. Really? If he was a REAL “businessman”, he would have detailed plans showing how his ideas would actually work and produce a good ROI. We do not see any of that “businessman” stuff anywhere.

    Let’s simplify the race. Cut out McFadden until he has something, say those detailed plans a businessman would have, to prove his ideas are *really* more than just sound bites.

  2. Submitted by Paul Brandon on 06/27/2014 - 09:38 am.

    Still a lot of slogan

    with no substance.
    His main point is to continue to subsidize the oil industry, let it trickle down on us, and damn the long term costs.

  3. Submitted by Hiram Foster on 06/27/2014 - 10:37 am.

    What do we think?

    Is it really the case that American growth is lagging because of high energy prices? Don’t countries which are growing have to pay those same high prices too? And is it the case that any of the measures Mr, McFadden addresses will lower energy prices?

    Does he really think the legislators from oil producing states like Texas would support those projects if they thought they would drive down the prices their campaign contributors receive for their oil?

    • Submitted by Alex Seymour on 06/27/2014 - 02:05 pm.

      It would help

      It depends if the energy is fungible – that is easily traded. So yes, these proposals would help.

      A clear example would be Iceland. They have cheap hydroelectric power that they can’t trade at market prices to their non-existent neighbors. Since they have cheap electricity, Iceland’s aluminum smelting strongly benefits.

      American Natural Gas is not readily fungible. The US lacks terminals (and more importantly government permits) to export LNG to international markets. This allows American to buy natural gas cheaply. Think Dow Chemical and its chemical manufacturing. I would argue that McFaddon is right in encouraging LNG exports – It would help America as a whole more than it would hurt specific industries.

      Currently, oil is more fungible but there are still issues. There is about a 10% spread between West Texas and North Sea Brent, partly due to technical issues on shipping oil. The Keystone Pipeline would help.

      • Submitted by Clayton Haapala on 06/27/2014 - 06:01 pm.

        How does Keystone help?

        It’s not our oil, it’s Canada’s.
        I suppose if the supply of its products going to Asia, etc. make our domestic supplies cheaper and Middle East supplies cheaper to us, that could help — but only with energy prices. McFadden won’t admit to or address long-term costs of fossil fuels.

  4. Submitted by jody rooney on 06/27/2014 - 10:37 am.

    This guy sounds like an idiot he must have a good staff.

    Has anyone explained to him that the debt is the result of the Republican held House which may originates tax bills for a pay as you go government and also has the key roll in spending.

    The budget was in surplus when GW took over and he decided to run the two longest wars (one totally unjustified) in American history on credit. I believe that was a first for our country.

    The Dems may tax but the unbalanced budget has Republicans written all over it. They have brought us to this position by their gutless pandering to the tax cut crowd. And people like this fellow who don’t have the brains to know the difference.

    • Submitted by Hiram Foster on 06/29/2014 - 03:19 pm.

      Staff

      My guess is that he has come under the wing of campaign consultants and advisers, who have given him talking points. That why what he has to say is so generic, and so scripted. He doesn’t seem to answer questions, he hears questions, and then responds with the talking points that seem to be related to the scope of the specific question. I did note that he was able to avoid specifics on what he would cut. That’s always key for any Republican candidate. Their advisers have impressed on them that while people favor cuts in a general way, they oppose specific cuts on what government actually spends money on.

  5. Submitted by Mike Schumann on 06/27/2014 - 10:53 am.

    Eliminating the debt

    Why is eliminating the deficit not viable? Because we don’t want to bite the bullet and pay for all of the goodies that we want government to provide?

    There is no free lunch. It’s high time to face reality and either cut spending or raise taxes.

  6. Submitted by David Frenkel on 06/27/2014 - 11:19 am.

    XL Pipeline

    The XL Pipeline has been held up in the courts, nothing Franken could have done about it. Even if the XL Pipeline was approved it could take years to complete. Politicians like to take complex issues and turn them into black or white, for or against. Does McFadden know anything about the war in Afghanistan and in general the war on terrorism or is that off his simplistic radar?

  7. Submitted by Paul Udstrand on 06/27/2014 - 11:29 am.

    The recovery?

    Republicans shutting the government down in order to block stimulus spending amongst other things had nothing to do with stalling the recovery?

    And again, here’s a private sector business guy who’s spent a lifetime with a “growth” mentality, i.e. “growing” business, but his solution and his “expertise” are to limit government growth? Can he point to a business model that he deployed that limited growth and increased revenue?

    Look, we tried this experiment, we found out that there’s no such thing as magic and we produced the biggest recession in 60 years.

    We had a huge debt after WWII, we paid it off in something like five years while growing the economy at an unprecedented rate.

    It’s funny, the only government intervention that we actually know works, is stimulus spending. Yet all these business geniuses who’ve spent careers developing business models based on growth, promise to boom the economy without any stimulus spending by shrinking the government.

  8. Submitted by Paul Udstrand on 06/27/2014 - 11:38 am.

    As for the pipeline…

    If McFadden thinks that one pipeline is the key to a growing the economy, he’s betrayed a complete lack of understanding regarding national economies. He’d create a whopping 400 jobs with that pipeline. We need 200,000 new jobs a month just keep pace with population growth.

    And no one anywhere on the American political landscape is a champion of over-regulation so he’s positioning himself in opposition to an imaginary foe. It’s like when Republicans claim to be champions of efficiency, as if they oppose champions of inefficiency somewhere. Meanwhile they seem to experts at developing inefficiency themselves, where they at with that huge debt they wrang up these day anyways? Almost paid off is it?

  9. Submitted by Todd Hintz on 06/27/2014 - 11:44 am.

    Put In Pipe and Smoke It

    They Keystone Pipeline is a non-starter when it comes to energy independence for the United States. The reason they want to run it down to Texas is for the export terminals down there. Those terminals are in the business of sending oil to other parts of the world. That’s why they’re called export terminals and not refineries.

    If you just want to bring the oil into the United States for domestic use, then the pipeline just needs to reach Minnesota.

    That makes me wonder if McFadden is stupid and doesn’t know this or if he’s assuming that we’re all stupid and we can’t follow the pipeline from point A to point B. In either case he’s not someone I want leading this state.

    • Submitted by jason myron on 06/27/2014 - 12:51 pm.

      It’s the latter

      too many people have absolutely no idea what the Keystone pipeline is all about…other than assuming it’s going to transport Canadian oil to their local refinery and provide them with $1.50 a gallon gas to fill their Suburbans with just like the good old days.

  10. Submitted by Paul Udstrand on 06/27/2014 - 01:35 pm.

    Just to put a finer point on it the recovery stalling

    As near as I can tell the House Republicans deliberately stalled the economy so they could run on stalled economy platforms. Whatever. The problem with McFadden is he seems to be promising to continue the stalled economy by bringing those strategies to the over to the Senate. The sequester, the shut down, the stimulus package half the necessary size, these things stalled the recovery… fighting the minimum wage increase for instance, endless filibusters etc. McFadden is promising more of the same.

    Meanwhile, the only the Republicans seem to know who to do with debt is increase it under the guise of limited government. For all their promises in the last four decades they have rarely if ever actually limited government growth. Mostly because they typically grow military spending or something else. The few time they did actually limit growth, like Pawlenty’s administration, they rolled back economic growth and efficiency along with the government and created one budget crises after another.

  11. Submitted by Maureen Nalezny on 06/27/2014 - 01:40 pm.

    Wha?

    He sounds like Chauncey Gardner from “Being There.” But much less likable.

  12. Submitted by Thomas Swift on 06/27/2014 - 02:24 pm.

    Reading Eric’s coverage, to say nothing of the comments, I really have to give it to McFadden for agreeing to be interviewed. The guy has no fear of leftists.

    • Submitted by jason myron on 06/27/2014 - 03:34 pm.

      Wow…

      ONE interview that wasn’t in an ideologically friendly environment. Yeah, he’s the very definition of “no fear.”

  13. Submitted by Charles Holtman on 06/27/2014 - 02:35 pm.

    In other words

    Mr McFadden believes that the solution to the greatest threat to the ability of his children to live decent lives is to find and burn as much fossil fuel as we can as rapidly as possible.

    The outlook for humanity is not good when views such as this are given credibility.

  14. Submitted by Neal Rovick on 06/27/2014 - 02:36 pm.

    The war on carbon??

    As it is clear from the example of the Bush administration in terms of the debt, it is possible to go from the prospect of paying off all of the national debt to mountains of debt locked in, all within the term of one president.

    In terms of the present situation, the debt could be completely wiped out in a couple of decades with some tax changes and policy changes. 10 or 20 years to turn it around–eliminate it like a paid-off mortgage

    But with carbon emissions we are locking in hundreds or even thousands of years of an unfriendly climate that will not sustain the lives of 7 billion people in the world or even 300 million in America. You think debt causes big problems?

    The debt problem is only money.

    The other is life, itself.

    Shows the priorities.

  15. Submitted by James Hamilton on 06/27/2014 - 02:46 pm.

    I am appalled

    by the thought that a politician would accuse his opponent of failing to do what he cannot do and claim that he will get it done while occupying the same office. OK, maybe not appalled. Maybe not surprised in the least.

  16. Submitted by Connie Sullivan on 06/27/2014 - 02:50 pm.

    I hope journalists like Eric keep pressing this guy on specifics. He doesn’t seem to grasp them (kind of like the guy who beat Eric Cantor in the GOP primary out east, who can’t talk sanely on a national issue to save his life).

    That way, we Minnesotans can clearly sense the huge difference between an empty head like his, and a careful and thoughtful and diligent Senator like Al Franken. Press Franken, and you get lots of detail about lots of issues, and he listens to us, too!

  17. Submitted by Clayton Haapala on 06/27/2014 - 05:58 pm.

    My, but that was …

    … content-free, despite your best efforts, Eric. McFadden hasn’t upped his game lo these several months.

    Debt? Keystone? “Growth”? Clearly he’s part of the problem set, not the solution set. His party has made it clear that there is no problem that can’t be deferred until Obama’s first term is over — even in 2014.

  18. Submitted by John Ellenbecker on 06/28/2014 - 12:56 pm.

    Pres. Clinton showed us how to deal with the debt

    “He wants to eliminate the deficit completely and run a surplus in order to pay off some of the debt.” Which is EXACTLY what Pres. Clinton did – without a single vote from Rebublicans. The deficit vanished, a surplus resulted, and the economy boomed – going on the longest sustained expansion in our history. Instead, Rebublicans saw the surplus produced by Pres. Clinton and immediately turned it into a deficit by cutting taxes. Return to the Clinton tax rates – revenue will produce a surplus and reduce the deficit – and watch the economy boom as a result.

  19. Submitted by John Clouse on 06/29/2014 - 12:06 am.

    McFadden

    I can only hope that in the days ahead more reporters will hold McFadden’s opinions up to the light of day so that everyone can see through them.

  20. Submitted by Christopher Williams on 06/30/2014 - 02:04 pm.

    Keystone Supporters throw me a bone…

    Can someone supportive of the Keystone Pipeline give me some honest answers? I’m not being snarky. I really don’t know the answers here. This is not something that interests me or that I have followed. But apparently, It’s going to be a big campaign issue. Be civil 🙂

    First, as I understand it. Oil is mined from tar sands in Alberta, or something like that. Currently it is transported by rail to be refined. It’s not like a brand new tap that would suddenly flood the market with giant amounts of new oil if we built the pipeline, it’s an existing source in production today it’s just not transported as efficiently as it could. So it’s not like finding new oilfields or a new supply that would shift the production curve to the right (ala Econ 101).

    However, the slower transport method causes crude to pile up here in the general midwest area, somewhat driving down midwest gas prices, since midwest refineries can buy the oil a bit cheaper so the oil companies can have money now, rather than waiting for it to ship slowly by rail all the way down to Texas.

    As I understand it, the eventual terminus of this pipeline will be refineries on the gulf coast in Texas, where the goal is to refine this and export this to energy hungry places like China at a higher price than they are getting in the midwest.

    Second, the tar sands are very energy intensive to mine. They have been present for a long time, but only became a feasible business operation once these record high oil and gas prices came about. If prices were to fall, production In Alberta would cease again, as it wouldn’t be economically viable.

    Third, all the treehuggers tell me this tar sand is super dirty and harder to refine (more energy intensive).

    So supporters of the pipeline, what are we gaining here? From what I understand, this will not drop gas and oil prices here in the midwest, as we are already enjoying artificially low prices (relatively speaking). As the product is headed for export, and oil prices are set on the world market, this relatively smallish existing supply will not drop prices (even TransCanada says this project will have no downward impact on prices). I hear there will be some construction jobs, but less than 100ish permanent ones once built, and those will be spread across the pipeline states – not in Minnesota per se. The fuel is dirtier and harder to refine.

    I mean it sounds like corporate welfare to me. Giving away a ton of money to a Canadian corporation, for some temporary construction jobs, that will actually harm our energy future by making it easier to export oil away from the Midwest. Dirtier product. Production/refinement of the tar sands product requires oil and gas prices stay high to make the project feasible. What am I missing here? Honestly asking. Unless I’ve missed something big in the coverage on this, I don’t see how anyone can be for this.

  21. Submitted by Mike Strand on 07/02/2014 - 01:23 pm.

    All Hat, No Cattle

    Do any of these guys have a mind of their own? His talking points are right out of the ALEC playbook. The political system seems to have devolved into a vote-for-hire talent show. Would be interested to know the level of financial support he’s getting from Koch Industries and the like.

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