(00:00:00) Minnesota Congressman Vin Weber is in the Studio's today many political observers believe he is one of the fastest rising political stars in the Republican Party certainly in Minnesota and even Nationwide then represents the second district in Southwestern Minnesota and is now in his third term. He is one of the founders of a group called the conservative opportunity society and is Chairman of that group this year. Then Weber is a member of the budget and small business committees in the house. Well, it's a pleasure to have you here today then pleasure to be here. I guess the big item in the news certainly is the farm crisis. You had a meeting yesterday with other members of the delegation and with Governor perpich. What do you see coming out of all of this crisis? First of all, it really is a crisis leading up to the meetings that the governor organized yesterday. I spent basically this whole week going around visiting individually with farmers in my district and I mean one-on-one in their kitchens because I wanted to get a little different perspective. We've been meeting them. In groups all the time and I've done that course as long as I've been in politics, but you have a little different sense of it. When you sit down in the kitchen with a farmer and his wife and talk to them about their individual situation because you find out that they they have not all made stupid financial decisions. They were victimized by circumstances and we do face a catastrophe out there in terms of a number of people that are not going to be able to obtain credit for spring planting and in many cases that will mean that they lose a farm off in a farm that's been in the family for a hundred years or more what's going to happen. I think that we will make some additional credit available at the federal level and that will be matched by some money that's going to pass through the state legislature. Maybe 20 25 million dollars will have some loan guarantees in there for Farmers that otherwise would not be able to obtain credit from the local banks and part of that will also be an interest right down provision so that the government will write down some of the interest costs to Farmers. And probably they'll be matched by some write down of Interest costs by the local banks. That's a basically a sound approach. We need to get credit for these people so they can get in the fields. We also need to get their costs down so that they have some chance of being profitable. If you leave either element out, you're really really making a mistake see the basic problem that farmers have faced this year and we've had a crisis or building for a long time. But the reason that it has come to a head this year is because federal and state examiner is going through rural banks have written down the value of farm portfolios particularly Farmland to reflect what has been of plunge of 40 to 50% in many areas in the value of farm land. So all of a sudden a farmer that it was in reasonably good shape, maybe not having the best of times but at least able to get credit finds that the value of his collateral is cut by 50% and there just are not very many people that in any business that could sustain that kind of a writedown of assets and that has all happened in the last several months. So The crisis is coming to a head over that particular issue. The debate of course is over who should assume responsibility for providing a the federal government or the states. Now the administration argues that it should be the state's agriculture secretary block said that it's a regional problem and I think even criticized farmers in Iowa for radicalizing problem and budget director. David Stockman said a lot of farmers are simply going to have to go out of business because of the dynamic economy pointed to Auto Workers losing their jobs, you know, the administration does not seem to be going along with the argument you're making so that's that's correct. Although we haven't seen the final disposition of that the administration in the past has taken a fairly tough line on farm programs and we've ended up persuading them to change their mind for instance on the dairy bill that Senator boschwitz pushed successfully a year and a half ago. They were against that right up until the day of the president signed it they're against doing much right now too, but I think we'll end up getting them to do more Stockman is our biggest problem on this and I have to say although he used to be a friend of mine. That he is absolutely malicious when it comes to Farmers and I don't know what it is. He was raised on a farm himself maybe that has something to do with it, you know some people for whatever reason I grow up hating their roots and I really think that's the case with Stockman because he has been running a vendetta against agriculture as long as he's been in that job block. Unfortunately is a I think just being forced to read a script written by Stockman and others so he's not very much help to us. I don't sense any malice on his part toward agriculture, but but he's frankly been too weak to to resist much his statement about about Iowa radicalizing Farmers. It's really funny. I heard a guy the other night that said that the radical and I was somebody that uses tartar sauce on his bull heads. So I don't know what he meant by that but in terms of the philosophical question philosophically, I would say that black and Stockman are just flat wrong to the extent that you want to identify one level of government. As having responsibility it ought to be primarily the federal government and not just because farm programs have been Federal in nature. But because the problems that that have led to this farm crisis are federally engineered it was the mistakes of the federal government that led to the inflation of the 1970s. It was the policies of the federal government that have given us the deflation of the 1980s at least a deflation in every basic commodity industry. It was the federal government that imposed wage price controls in 1972 and then left him on the beef industry while taking them off everything else which destroyed our beef industry. It was the federal government that embargoed soybeans to to Japan and green to Russia and destroyed our price structure internationally. So you have to argue that to the extent that government has responsibility for this problem. It's Federal now, I would go one step further and say we can't get all hung up and philosophical distinctions about it agriculture is important to Minnesota and we should not quibble about who has primary responsibility we should Get everything we can reasonably out of the feds. And then the state should do whatever they can do because agriculture is important to our state. It's about 7 minutes past the our Congressman Vin Weber is in the Studio's today. And if you have questions for him about Farm policy, that'd be fine about other matters before Congress. We welcome your call in the Minneapolis st. Paul area. The number is two two seven six thousand 2276 thousand in other parts of Minnesota in Congressman Weber's own District, you can call us on the toll-free line. That number is 1-800-695-1418 hundred six hundred 529700 not to belabor this Farm issue then but not to be too much of a devil's advocate. But at the same time the most of the factories you ticked off here inflation deflation wage price controls and so on are conditions that affected all of American industry not just farming why Taxpayers continue to subsidize that segment especially as opposed to hardware stores or gasoline stations or whatever. That's a tough question for somebody to think about Minnesota. But when you talk about cutting the budget equally and all this kind of thing, it's something that I suspect people out there might want to know of course, there's a limitation and I'm not one who would argue that there should be no limitation to the government's willingness to intervene on behalf of Agriculture or anybody else, but I do think you can make a very strong case that agriculture has suffered disproportionately from federal policies. The deflation that we're experiencing right now is not widespread throughout our economy for instance in in the financial institutions or in high technology industry. You're not a or auto manufacturing. You're not seeing price deflation, which was a problem widespread in our economy at the time of the Great Depression. We're all Isis were falling which is causing real serious problem. It is a problem that is limited and I would argue it's because of Federal Reserve monetary policies limited to basic commodity Industries falling land values falling crop values falling prices of minerals and precious metals. So it's just limited to those areas that produce basic Commodities furthermore. The price structure for agricultural Commodities has been devastated by actions that did indeed single out agriculture. We embargoed sales of soybeans specifically to Japan that hurt just soybean Growers didn't hurt other sectors of our economy grain sales to the Soviet Union, you know, we didn't we didn't embargo across the board in retaliation for the Afghan Invasion. We really embargoed just agricultural sales. So granted there's there's a limitation and it's difficult to talk about because we have a lot of people that need help now but agriculture I think can argue strongly that it has suffered disproportionately from Bad Federal. Policies and not just policies interestingly that reflect a consensus about what our country should be doing economically. I mean, we always are filing policies that are perceived to be in the general interest of the economy that may have negative impacts on one or more sectors of our economy. That's not what we're talking about here. We are talking basically in the case of embargoes about political decisions. Nobody had benefited economically from those embargoes. They were political decisions and and certain sectors of the economy that's in this case agriculture have had to pay the economic price. I'll be essentially a political decision. If you slip your headphones on Congress when you'll be able to hear our callers who are waiting patiently on the line little our first listener now, go ahead you're on the air. (00:09:43) Hello. Hello. I would like to ask Vin. If he is considering changing changing where he lives and running for the governor of inertia by my bag of cultures getting to be kind of a big issue in the state these days and I noticed that the governor's the governor's commission. The first thing that they suggested was that they needed more Federal help. I wonder if his is his attention at the federal level and at the state level would be a great greater (00:10:10) Hill. All right, what are your plans for the Governor's? I'm not I'm not sure. I think I should thank the caller for that question, but I'm not sure that's complementary and people have talked about that. I have a lot of interest in what happens at the state level. I think I think we need strong leadership in our governor's office, but I don't think that that's what I ought to be doing right now. I've thought a lot about it because people have talked to me about it, and because I care about those things, but I guess when you know, I've been in Congress now, I'm in my fifth year in Congress. And I'm very excited about the job. I'm doing there and I like it. I think you should probably leave that job to run for another office or higher office. If you want to think of it that way if one of two conditions Prevail, either you are so frustrated where you are that you just see no chance to achieve anything there. And so you want to get out and try something else or as was the case, I think with Al quie when he ran for governor, if you feel that you have accomplished what you set out to and it's it's a logical time to move on to New Challenges. I'm not neither position. I'm right in the middle of a whole bunch of things that I've been in in trying to introduced in Congress and whole lot of activities that I've been coordinating and I neither I'm so frustrated that I want to get out nor nor so fulfilled that I feel like there are no challenges left in Congress. Are you saying then that you will not be a candidate for governor in 86 think at the you know, the in the interest of my party. I don't want to just say flatly. No because it doesn't do my party and Good to have everybody that's a potential candidate rushing to say how quickly they're not going to run for governor, but I don't have any real intention of doing that. I'm anxious to talk to and meet with the other potential candidates and try and help them. But but it's unlikely in the extreme that I would be a candidate for anything other than Congress in 1986. Do you have a favorite among the people whose names have surfaced so far? No not at this point. I'm going to meet this afternoon with Arne Carlson. That is that's coincidental. I saw I saw that he announced the formation of his committee yesterday, but I've met with him two or three times to discuss the race. I've also met with Mike many who gave my nominating speech at the second district Republican convention this year and Jim lindau who I think is going to be running stop to see me in Washington at the time of the inauguration and these are all good people and I'm not going to State a preference among them or any of the other potential candidates at this time. I think what's critical is first of all that our party He clearly Define what it is that we are critiquing in the perpetuate ministration. We can't afford this a popular governor and we cannot afford a scattergun or cynical approach. We needed to Define very clearly for the voters what it is we stand for that. Would Mark a change in Minnesota's government. And then at the political level the guy that's going to or the guy or the indoor the woman's going to run our be our candidates standard Bearer has to face a difficult challenge in uniting our party difficult, but not insurmountable. We've had a lot of new people coming into our party in the last few years many from the religious community that are motivated by moral and social issues and that is made some other people in our party uncomfortable. Well, whoever is going to win the governorship for the Republican party has to be able to unite the party. That's as I said difficult but not impossible. I want to work with whoever is going to run to help them accomplish both of those objectives. All right. It's a quarter past 12:00. Noon. Vin Weber is here listening for your question. Go ahead (00:13:43) please I'd like to ask however some Weber two-part question brief one and then I'll get off and listen to his answer. I wonder why it is that we're willing to accept almost any political Refugee from Eastern Europe where there are very few political killings nowadays, but people from El Salvador and Central America, we in spite of the fact that there are a lot of political killings that go unsolved and perhaps tacit the acceptance by the government. We have one of the lowest accepting rights of refugees from down there is do you have any idea what the comparison is between say our Refugee rate from Poland is that we accept and Refugee rape from Central America (00:14:15) and I can't give you a definitive answer. I know essentially at least at a statistical level that what you say is true. I suspect it has to do with the fact that we are today seeing of course a massive influx of illegal aliens from Central America and we are not seeing a massive influx of illegal aliens from Eastern Europe for obvious Geographic reasons. And so you have to be a unless you are totally Concerned about illegal immigration. You have to accept that. There's going to be a little bit tougher standard in terms of people that claim to be political refugees from that part of the world where that would be a very convenient excuse for anybody that wants to come to this country. Then there would be toward Eastern Europe where basically we don't have any real illegal immigration problem again for obvious reasons. I'm not trying to make an excuse. I understand situation gentleman's referring to I worked a little bit in to be supportive of Congressman Sikorsky on one such case the Hurtado case and I'm not totally unsympathetic. I do think that there are legitimate reasons. Why why political Sanctuary is a little more difficult to obtain from Central America and that it is from Eastern Europe. Another listener has a question for Congressman Weber. Go ahead. You're on the (00:15:31) air. Yes. I'm calling from Worthington and I'm calling in regards to the tax or the benefit. They want to put on our income for driving Vehicles home from like from a workplace or something. I know I work with the municipality and we take Vehicles home. We're not allowed to use them for personal use and many times we leave from home and go directly to the site that we're called to and I do not feel that that is fair if we are using it for personal use I could understand but on a day like this, I don't think this is actually a fair can you opposed to that or favor or as you think it's going to be remedied? (00:16:08) I think it's one of the dummer things that the government's done recently. I can say that with a clean conscience because I voted against it that shouldn't surprise anybody. I vote regularly against just about all tax increases and this was part of a tax increase package for the viewers or the listeners that are not familiar with it it what it basically is is an IRS requirement that would require Very detailed bookkeeping of all business transportation for expense and deduction purposes. And you know, when you apply that to Farmers and other people that have a difficult time segregating out business use from personal use, it really becomes a major intrusion of government into their lives and it's not a common sense rule at all. I have sponsored legislation along with many others to repeal it. We put pressure on the IRS to change their ruling. I hope they do because it is a real problem for people and it's not going to gain the government much revenue, but let me just make a point a larger point because you've given me an opportunity to which is that, you know, every year for the last few years. We have had tax increased packages designed to reduce the federal deficit and I've always opposed that because I think the tax increases are damaging to our economy at this time and there's always pretty broad support for it because people are willing to pay higher taxes in the abstract to reduce the deficit. But whenever we get those packages finally implemented we find all sorts of things that the average Rich person who may have been willing to pay taxes in the abstract doesn't like and we remember the the flurry over withholding on dividends and interest which generated over 30,000 letters to my office alone that was part of a tax increase package to reduce the deficit waiters and waitresses around Minnesota find all of a sudden that they have withholding on their tip income and in some of the larger more expensive restaurants that may not be a big problem. But in the smaller restaurants that it's a real economic hardship for those people that again was part of a tax increase package and the mileage requirement that the gentleman cited is one of the same exact things. So the point I'm making is before you decide that you should support a tax increase to reduce the deficit remember that it is average people that pay tax increases. It's not just the wealthy. It's not just big corporations. It's people like gentleman from one of my favorite towns Worthington that that just called him the collar from Worthington used our toll-free line, which is Nine seven zero zero that number is open again. So if you're in the congressman's district and have a question, feel free to get on the line. Here's another caller with a question. Go ahead please you're on the air. (00:18:38) Yeah a few years ago secretary of agriculture robots made a statement something to the effect that small farmers should either get big or get out of farming and I guess part of the background of that was increased mechanization and Reliance on big-time farming technology. I was wondering if that sentiment is still prevailing in the current Administration and if that's any part of the reasoning behind the situation now as far as like you mentioned Stockman's, you know rejection of his roots and from studying butts his background he You came from a small farm to and it seems to be the same situation any parallel with that. (00:19:24) I don't know. It's sort of interesting, you know, we told farmers in the early 70s to get big or get out and a lot of them have done both. They got very big one of the debt and now they're getting out of farming much against our will I think that that was the prevailing sentiment in the early 1970s when we saw a dramatic expansion of foreign markets third world countries began buying substantially more than they had in the past. The Communist world came into the international market in a big way for the first time and we were the only country in the world that was in a position to respond to this dramatic expansion of demand internationally. We increase the land under cultivation in this country by 43 percent in less than 10 years. No other country could have done that. No other country had the transportation facilities and things like that to to distribute the the food and so there was a there was a mistaken feeling And secretary Bots was frankly one who promoted that this was going to last forever and that the days of small farmers were over in the only way agriculture could go was to get big and produce fence post to fence post. I think that that whole concept has been Shattered by what we've seen happen in the last few years, but I don't think frankly that it has been replaced with a new concept of what agriculture should be all about to his credit Bill Norris and the folks at Control Data have tried experiments with small intensive cultivation farming the last few years. I don't think they've been that successful but I think that this Administration probably is groping for a new idea of what agriculture is going to be about in the future personally. I'm not convinced that that it's an inevitable Trend toward larger and larger and larger Farms, but I would have to agree that that is certainly the way we're moving right now. Congressman Vin Weber is in the Studio's taking questions about a variety of topics in your next. Go ahead, please. (00:21:16) Yes. Thank you. I'm confused didn't most of the farm States voted overwhelmingly for President Reagan. Did they not understand what he was about he said he was not going to help everybody now all of the farmers all of a sudden want help also, where did the bankers doing that this? I happen to agree with Stockman that farmers have overextended themselves with the help of many Bankers. I'd like to hear you discuss (00:21:44) that well, first of all farm States along with virtually every other state except our own did support President Reagan and I'm not convinced that most of them would change their mind about that. Remember that you don't get to judge a president in a vacuum. There may be things about agriculture where I would disagree with this president to but I think many farmers that voted for President Reagan also remembering that Interest rates and inflation rates both hit over 20 percent under the Carter Mondale Administration and at the grain embargo was imposed under the Carter mondal Administration and that there are many things in mondale's background that would cause us to be nervous about how he would approach agriculture as well. I don't mean that in a partisan way particular I'm saying is that if you're a farmer you can you can find fault with both sides out there and I'm as a basically a Reagan supporter. I still think that the president was far better than his alternative. Although I disagree with some of his policies terms of the bankers, you know, I we met with the Minnesota Bankers Association yesterday at again, one of the meetings the governor helped put together. Yeah during the 1970s the bankers in many cases advised Farmers to borrow money to expand to get bigger and I think that they bear some part of the blame. But again, you have to remember the But we were operating in at the time who could have predicted what course inflation was going to take who could have predicted that that inflation would have been followed by a deflation who could have predicted what political actions the government would take on International grain sales. And so it's very easy in retrospect to say well gee these Bankers gave bad advice and the farmers made bad decisions, but you know at the time those decisions were made many of them appeared to be the most logical decisions based on all the evidence that existed there were of course some bankers that were too liberal just as there were some Farmers that were just gamblers and speculators, but they didn't that would not characterize most of the people it would not even characterize most of the farmers the today are in some difficulty in my judgment or listeners waiting with questions your next go ahead the congressman's (00:24:02) listening. I'm calling from the Winona area a congressman Weber. Do you see a overall picture of large multinational agribusiness and Or Corporation gaining control of the agricultural land in the USA. And do you think that Congress in letting most of the budget go to subsidizing the weapons industry creating welfare for Rich Investor's is helping that happen. (00:24:28) Well, there's a fear in agriculture today that the scenario that you cited is going to take place as land values drop dramatically, but interest rates remain high it becomes difficult for individual borrowers to buy they buy the land and could become attractive to foreign investors and large corporations. Personally. I don't think that's likely I think that agriculture has always been and will continue to be based on family based units may be of different size than family based units in the past, but I don't see a likelihood of a great foreign or corporate takeover of Agriculture, and I particularly if we straighten out some of our As far as I mean, I understand the biases of your question about the the military but and I you know, I I hope that we can reduce the budget in all areas including the military this time. I don't necessarily accept your description of how how the increase in the defense budget has benefited wealthy investors in in arms manufacturing firms. I suppose that there's some degree to which that takes place but you know the and I don't want I don't want to defend the whole military buildup. But let's remember the military buildup is being undertaken by this President because he thinks it's necessary for National Security and we might dispute that we might say that there are other considerations that should come in to put into play but I don't think you need to impugn the motives of people that honestly legitimately feel that we need a stronger National Defense just as there are many people who honestly legitimately feel today that we should reduce our spending on defense. Okay. It's about 28 minutes past 12:00. Noon. Vin Weber is in the Studio's today the congressman from Minnesota's second district and toll-free line is open again one 865 2970018 hundred six, five two nine seven zero zero when I give those of you who live in the second district chance to visit with your Congressman particularly day. Meanwhile, we have another caller. Go ahead. You're (00:26:33) next since congressman is from the second district and it's one of the most rural districts in the whole United States. The congressman should be the spokesman for agriculture. Not just in the second district for the nation. I don't think there's been any Administration democrat or republican the last 30 years that it's done anything different to the extent that they're all driving the Family Farms out of business and we talked about the size of it. It's still you're driving the people off the Farms. I don't think there's going to be I think done to change in this Administration, but the second district needs an outstanding spokesman to provide for future for Family Farms and congressmen. What can you do the Europeans made conscious political decision to keep the people on the farms this government for the last 30 years has made the political decisions to drive people off the Farms. Can you change that Congressman? (00:27:35) I think that our economy is different than most of the kind of the economies of Europe. I think that we can change the bias in our economy that may be operating against agriculture as a long-term proposition. I would have difficulty with the idea that the government should embark on a course of subsidization at whatever level is necessary to keep people on the farm. I think that what we want to do is pursue policies that will eliminate the biases against Agriculture and that will give Independent operators the maximum opportunity to make a profit in the marketplace and I don't think those conditions exist today in addition to that. Yes. I think that the government can be more helpful than it has been in the past in terms of how its structures its farm programs. But I guess the basic thing that I think we've done wrong is we pursued monetary policies and fiscal policies that have made it impossible for an independent operator in agriculture to make the right decisions and to make money again the inflation followed by the deflation the basic problem we have right today and my judgment is not an insufficiency of subsidization. Although I certainly accept the need for an immediate infusion of capital from the government to help people get into the fields that spring but the basic underlying problem is a fiscal and monetary policy problem without arguing for a second about the causes of that problem whether it is primarily or exclusively result of the federal deficit or related to the Actions of the Federal Reserve board consider what the situation in agriculture would be today if we had lower interest rates. I tell you as one who sits down day after day with individual Farmers, if you lowered the interest rate by 5% which is where historically it ought to be relative to the inflation rate about Five Points lower than it is today for Farm borrowers that alone would help make a lot of people that are not able to cash flow today profitable not everybody but a lot of them in addition to that the strong dollar that we face today, which is making it hard for us to sell on the World Market depressing our prices. The strong dollar would re value itself lower relative to other currencies if interest rates went down by 5% Shall we say and this country was suddenly a somewhat less attractive place for foreign investment. Finally furthermore in terms of the international sales situation are marginal buyers in the world. The third world countries that literally have to decide if they can afford to feed their people are burdened with massive debts, and the worst thing that Do for them as saddle them with high interest rates on those debts. Again, if you reduce the interest rate that the third world Nations need to pay on that debt by 4 or 5% you dramatically increase the amount of money. They have to buy things from us including things like agricultural Commodities. So to a substantial extent the problem that we have is not just one of the government not pursuing a policy of subsidizing directly everybody in agriculture. It's a problem of the monetary and fiscal policies of our country creating an environment in which it is impossible for a legitimate operator to make money in my judgment. That's what we want to remedy I believe basically in having the freest economy that we can I think that's what the American tradition is all about. And I'm not one that's going to support a radical move away from that but I do think that the government has a responsibility to make sure that they don't buy us the marketplace against agriculture or any other sector of the economy and that where the market Isn't working for instance. When you have subsidized foreign competition as we have for agriculture today that they come in on the side of the people that are being victimized by it. You have been an outspoken supporter of Agriculture during this broadcast today. I suspect that if we were doing this program in New York City and you are representing a constituency there. You would be supporting the program's the folks they're in need. And so it would be around the 435 congressional districts in the country given the fact that we have these two hundred billion dollar deficits and almost everybody agreeing that somehow they're going to have to come down. They can't go on forever. How in the world are you in Congress representing these diverse interests ever going to make any agreement on that? Well, you put your finger on both the problem and the solution we have a wide diversity of interests and we have been deadlocked as long as I've been in Congress over how to approach it for that reason. I think that the solution to the problem lies in the analysis of the problem itself. If we in the the approach that I have taken over the last few years is to argue for an across-the-board freeze on spending if you Everything in the budget essentially the same then you can break not the economic deadlock, but the political deadlock that's what we face and you can tell everybody that is affected by this that they are being treated the same as every other sector of the federal budget no more money for defense this year than we spent last year no more money for agriculture than we spent last year. No more money for Education no more money for public radio and more money for anything else and that no question that will be a sacrifice for a lot of people but it'll take about a 40 or 50 billion dollar bite out of the deficit the first year with savings compounded an additional years and I think it's fair. I think people are willing to put up with that kind of sacrifice. The president doesn't seem to be willing to accept that for his Advanced budget. They'll know that's I think the president is not going to get what he wants for his defense budget this time. He wants a rate of growth of 6% in outlays in real terms and there are various ways that you can measure spending in the federal government. So if somebody's read a different figure it probably is, you know, we're comparing Apples and oranges, but in terms of dollars spent this year outlays, they want 6% growth after the inflation rate. I think that there's a consensus in Congress to reduce that substantially. I am prepared to vote for a freeze no growth at all. I think that most everybody I've talked to is willing to limit growth to no more than 3% So I was so my guess is we'll come in somewhere in between those numbers zero growth and three percent growth for the military budget before this whole cycle is over, but it's you know, it's unfortunate that we haven't aggressively in my judgment pursued the idea of a genuine freeze on everything in the budget because that's really a way we can make some progress time is getting away from us, and we have lots of listeners with questions. Go ahead please you're (00:34:03) next. Hi. I'm calling from Winona. I'd like to tell MPR thanks for having been on today and ask our favorite Congressman because opinion of the flat tax and its prospects. I'll hang up and listen. Thanks. (00:34:17) How about the flat tax? So while I appreciate the collar and if you leave her address, the check will be in the mail tomorrow. I think that the flat tax is a very promising idea. I'm a co-sponsor of one of the versions of the flat tax that is before the Congress right. Now. First of all, what are the objectives of modifying our tax code and a substantial weight toward a flatter simpler tax structure. One of the objectives is to encourage economic growth. There are many biases in the tax code currently that move income into tax shelters rather than into productive investment. If we would eliminate those biases our economy would probably be stronger second of all, there's a basic fairness issue many people today feel properly that the tax code is biased against the average taxpayer because if you're very poor you don't pay taxes and if you're very rich you don't pay taxes because you can shelter all your income. The third reason is simple Simplicity. The average person should not feel that he has Hire a battery of lawyers and accountants to compute. His tax returns are to finish out his tax returns. So for purposes of economic growth fairness and simplicity many of us are seeking to substantially simplify the tax code eliminate most deductions exemptions and credits and reduce the rates across the board. There are three proposals on the table currently. There's the administration proposal which secretary Regan put together. There is the Bradley Gephardt proposal which is basically the Democrat bill and the camp cast and Bill which I've co-authored and which we introduced at a press conference last July which is basically the Republican bill all of them are close enough together so that we should be able to negotiate some kind of a bipartisan agreement on what would be the most revolutionary tax reform since the enactment of the progressive income tax some 70 years ago. I think it's worth noting that we will not have a pure flat tax in all likelihood. We will end up with perhaps one rate in the neighborhood of 25 to 30 percent or a modestly graduated rate structure going up to a top rate of 30 to 35% But we would maintain some deductions. We would maintain the deductibility of mortgage interest because in this country the savings and Financial Security of the middle class in our country is wrapped up in the equity in their home and the ability to deduct the interest they pay on their mortgages second of all, I believe we must maintain the deductibility charitable contributions. One of the things we're trying to do right now is encourage the non-governmental sector of society to assume more responsibility for society's problems doesn't make sense to do that on the one hand and then make it harder for them to put together the resources to solve those problems on the other hand finally in this is very key because some people may be listening and young working people or people who have a marginal means and saying my gosh 25% I can't that would be Massive tax increase for me a critical element of the tax reform proposal that I've supported and of any proposal that I believe should become law is to increase substantially the individual deduction currently, you can deduct thousand dollars for yourself your spouse and any of your children interestingly if that deduction had kept pace with inflation just with inflation since Harry Truman was President, it would be nearly five thousand dollars today you think about that what that would mean for the taxable income of the average working-class middle-class family and it's substantial. We are not suggesting that the government can afford to raise it to five thousand dollars. We are saying the government should double it to $2,000 for the husband and the wife and as many children as they may have and if you are a young family or a working-class family or middle-class family and you begin to compute your tax rate 25% tax rate on income that is After you've deducted $2,000 per dependent and your mortgage interest and your charitable contributions, I suspect you'll find out that your average tax rate is going to be at least no worse than it is right now probably considerably better and you'll maybe even save some money in the preparation of your tax returns. It's 20 minutes before one o'clock Congressman Vin Weber in the Studio's today, and we have another listener. Go ahead you're on the air. (00:38:47) Hello. I recently returned from a tour of Nicaragua with a group of farmers and Rural pastors involved in farm issues. Now we visited state farms cooperatively owned Farms small private farmers and large landowners. We met with the Nicaraguan government and officials of the u.s. Embassy. We were amazed to find the types of agrarian measures that the Nicaraguan government has implemented are essentially the same as those proposed by our own us Farmers. Now, we were also impressed at the extent to which our government lies to us and tries to divert us from some of the issues. We've come to believe that Nicaragua just wants to be left alone. But since you have big business with the help of the US government has historically controlled Central America, I can only assume that that's what the administration wants to continue doing (00:39:48) ma'am. Could you ask Congressman? Where were to come in on one specific (00:39:52) thing? Yes. I just want to ask. What do you think? Are the motives and forces behind the US government (00:40:00) positions? Well, I have a different point of view than the caller and I'll be glad to share that with you. I think that I'm going to be going down to Central America this spring myself most of the trips that I have seen organized to go down there frankly. Give a fairly one-sided view you can on the one hand see go down there with right-wing groups that will let you see the El Salvador and government the military and the business people and folks like that on the other hand. You can go down with Many religious groups that are more liberal in their orientation and they won't let you see officials of the Catholic church for instance in Nicaragua who would have a rather different story than then the lady just referred to they won't let you see the dissidents within that country who are objecting to the treatment of religious minorities and others in Nicaragua. So there are two stories to be told they're I understand if you look at it historically there's a lot that our country should not be proud of in terms of Central America granted. Business interests in that country, we're not helpful in terms of moving away from repressive dictatorships and toward pluralistic Democratic societies. That's that's true of our past. There's just no question today in my judgment that that has nothing to do with our policy in Central America today. There are not mass the extent of corporate involvement in Central America relative to those same corporations worldwide interests is almost miniscule, you know, American business interests are substantial and perhaps the Middle East and the Far East where there's some money there isn't much money in Central America. And so that argument doesn't make sense anymore in my judgment what the what the objective of the administration is fairly simple. The objective of the administration is to prevent the spread of Communism in Central America, you can argue over whether or not you think there is a real threat of Communism you can argue about whether or not you think it is appropriate for us to try and stop it if you agree the threat exists, but there's no question my that is the only policy objective we have in that in that region of the world and I have to I have to disagree a little bit with with the caller about about the objectives of the Nicaraguan government, you know the best source of information for somebody who has some real questions about Soviet intentions in Central America regardless of your views on human rights abuses economic deprivation civil liberties questions in any of those countries is to look at some of the papers that we captured from the grenade and government when we invaded Grenada because we captured virtually all of the documents of that government which was a Marxist government of pro-moscow government and brought them back to this country and they're publicly available and a lot of those papers correspondence between Moscow and Grenada and the minutes of the meetings of the of the government down there and things like that are very explicit in talking about the Soviet aim of expanding its influence throughout Central America and basically In a group of satellite nations in that part of the of the world furthermore, if you listen to the stream of people who have left the sandanista government in Nicaragua and come to this country to talk about about their government. You find a fairly chilling tale a lot of people that fought and risk their lives to overthrow Samosa and who would never want to go back to him have fled that country after being initially part of the government because they did not see it acting on its promises to establish a democratic and pluralistic society. But instead see it moving toward a totalitarian pro-soviet government and I just think that we have a legitimate interest in preventing the spread of that kind of a government and that kind of influence throughout Central America. Now the time is a quarter to 1:00 and Congressman Weber is listening for more questions your next go ahead (00:43:59) please (00:44:02) where are you calling (00:44:02) from Brainerd? Right? And my question is why don't we have a federal usury law to control interest rates. They the biggest objection that I can see to it were first the laws that we did have did not take inflation into account which is easily remedied because we could we could just add to what the real cost of capital rates of Interest have been historically and the other problem of when we did have a lot of usury laws why every state had its own law and it would cause money to go from one state to another depending on what their top rate on you feel off certain things were but made it one of the biggest problems of the farmers to die. Interest rate when the biggest problems of our export Market is high interest rate. The high dollar (00:44:59) is Irishman with the federal Usery Lobby the solution to that. No, I agree absolutely with the caller and identifying the problem but I don't agree with him on the solution. In fact, he pointed out one of the reasons why I use realize not the solution Minnesota at one time had a usury law and we found that money was moving to South Dakota and other places where it could earn a higher return and so we got rid of our state's use realize that does the caller indicated the problem with a national usury law today is that we're living in a global economic Marketplace and capital will seek a return elsewhere in the world. If it can't get it in this country. Now that doesn't mean that interest rates shouldn't come down and it doesn't mean that there aren't government policies keeping it up. I think that there are I think that our monetary policies is profiled by this Federal Reserve board are wrongheaded and are forcing interest rates to remain at a level that It is not necessary to fight inflation. And that is not necessary even given the problem of the federal deficit, you know in the summer of last year in July and August. If you look at the credit markets what was happening the bond markets in New York interest rates were falling naturally, but the Federal Reserve exercised its power at that time and did what it can do which is to drain reserves from the system in order to keep interest rates high. Now that had nothing to do with the federal deficit or anything else. It had to do with a policy of the Federal Reserve. Why did they do that? We got a rare glimpse of the federal reserve's thinking earlier in the summer when the chairman of the Boston fed gave a speech in which he basically told what the policy of the Federal Reserve board was and he said the FED doesn't believe that the economy can grow faster than three to four percent A Year Without reigniting inflation. And so they're going to hold interest rates as high as is necessary to slow the economy down to that level. Well, I just think that A frightening policy. There's no evidence in this economy today of renewed inflation you and indicated the the report came out today show that there was Zero inflation at the wholesale price level furthermore historically. The best indicator of future inflation is not money supply necessarily or anything like that because we have a hard time defining money supply. It's what happens in basic Commodities and we are seeing in all basic Commodities precious metals land agriculture Forest Products. You name it dramatic deflation. So there's no reason in my judgment why the FED has to continue to pursue a policy of fighting inflation or really fighting economic growth, which is what they're doing through high interest rates and changing the monetary policies of the Federal Reserve board as well as doing something serious about the deficit are the real answers to the interest rate problem much more than any kind of a usury law what you're talking about. Then really is legislation to remove the independence of the Reserve board I wouldn't say remove it Bob. I would say restricted somewhat the FED today has more independent autonomous authority over monetary policy than it has ever had and that's because in the past for instance, we had a either an international or national linked to gold which limited substantially the degree of Independence that the FED had today. The valuation of our currency is solely determined by those individuals who sit in the Federal Open Market Committee and decide what policies are going to follow. I'm not even suggesting we have to go back to the gold standard. Although I think it deserves a lot more serious discussion than people been willing to give it but there's no reason why Congress can't pass some laws establishing parameters within which the FED connect to say that you you have to accommodate a certain amount of money growth as long as there's no inflation and basic Commodities and that really ultimately is what the gold standards all about. Tying it to one very specific commodity but there are other ways you can do it if people are nervous about a goal Standard something so that you can't have this horrible dilemma that we have now of the FED following a high interest rate policy to fight inflation at the same time as all of our basic commodity Industries are struggling for survival against deflation. It's about nine minutes before one we have time for a few more questions your next go ahead, please. (00:49:13) Yeah calling from st. Louis Park Constitution says all money bills shall rise in the house, which would put the final Blaine if you want to put it that way on the house for whatever is meant or is packed or whatever. The other thing that I would like to ask him. It relates to this since we know at least where to blame it it by 1990. We will have a national debt of about two and a half trillion dollars at the rate. We're deficit financing under the 22 term Administration now in office which builds in over a 200 Then dollar interest rollover of the National Data pays nothing on it just rolls it over and that will keep fighting and I suppose my question is what court liquidates a country. (00:50:06) That's a bankrupt. Well in our case a no court will liquidate a country that goes bankrupt. We will they but that's not to say that a country can't go bankrupt. We will we will see the impact of bankruptcy a little differently than if you go through a court proceeding we would see either either a horrible depression or a hyperinflation and that's how a country I suppose goes through bankruptcy in essence. I still think that we can avoid that substantially the problem the gentleman cited is it real one? And I think you're right in saying that Congress has ultimate responsibility, especially since over half the budget today is in entitlement programs that cannot be reduced unless Congress acts to change the law that establishes that entitlement. That's the key reason my judgment why the president is more right than the Congress and that argument not say the president's totally right, but he is in my judgment more right than the Congress because of the percentage of the budget that cannot be touched unless Congress acts affirmatively to change the law but let me say as bad as a deficit is and as proper as the figures are that were cited by the collar. There is also a some some good news, you know, the deficit is not just increasing in a vacuum. We are also increasing the size of our economy. The economy is growing we are adding to the assets of the country and although it is a serious problem. It may not be quite as desperate as a nation facing bankruptcy because just as a business that is growing and adding to its assets can afford to assume somewhat more debt a country that is growing and adding to its assets can assume somewhat more debt not as much as we are but but enough more so that the Should may not be quite as catastrophic as the caller indicated. Do you think the president blundered by promising not to freeze Social Security benefits? I would not have made that promise if I was the president and I interestingly I don't talk to a whole lot of senior citizens that are demanding big cost of living adjustments. Most of them. I think are like everybody else if the budget were frozen across the board. They would be willing to accept that on their Social Security checks for a limited period of time as well. They desperately want to see the financial Integrity of Social Security maintained and they don't want to see their benefit checks reduced and that's reasonable and they should not have to fear either the insolvency of the system or the reduction of their benefits, but to argue beyond that that that you cannot reduce the rate of growth of benefits for a limited period of time, I think underestimates the willingness of older Americans to participate in in a national sacrifice along with everybody else and I met with President recently in somebody not Not me, but somebody else raise this point again with him. I must say he is just as adamant as he's ever been about not not touching one penny of the Social Security cost-of-living adjustments. So I suspect that that is not going to be part of any deal for reducing the deficit five minutes before one we have time for a couple more questions. Go ahead. You're next. Hello? (00:53:14) Yes Congressman Weber. Yes. I have to compliment you on your job that you're doing. Thank you. Where are you calling from calling from Lakefield, Minnesota. (00:53:27) God bless you (00:53:29) and I want to extend an invitation. I don't imagine as possible for you on such short notice. But tomorrow morning at Lakeville Minnesota at ten o'clock at the high-low club. We are having a meeting of farmers and businessmen. There will be at least one state representative possibly to and I extend an invitation to you Congressman the if It would be at all possible and you'd have to be the judge. (00:53:59) I wish that I could I'm afraid that I'm all scheduled throughout the day tomorrow. I was in your your area earlier in the week and I met with a lot of farmers as well as some Farm organization people particularly in Murray County, but I compliment you on on whatever you're doing down there to try and get folks organized and bring attention to the problem and decided to sleep in tomorrow. Huh? No, I don't get to sleep in. Let's take another listener question here before we reach the under the are go ahead. You're next. (00:54:28) Hello, as farmers are going out of business at a rate of 1% a month and ironically suffering from overproduction a hundred fifty million people and 24 African nations are being affected by the famine. So what do you feel that us government's response should be specifically what are your feelings about HR 100, which would appropriate all four hundred ninety-two million for purchasing and shipping grain and then too Under 25 million for different development programs like Health agriculture water needs Etc. (00:55:01) Okay. I'm in favor of giving more food to African countries particularly at the Opie and I've supported legislation along that line. I'm not simply in favor of increasing the amount of money that's going to him. I think we should specifically ship them the food and I think we should do it in a way that makes that gives us a degree of control over its distribution part of our problem in that country and others has been that we can't get food that we send their past the government the government's are often limited stability and they often find it more to their interest feed the military then to feed the people that are starving in addition in some countries. It's impossible for people to know who is giving them the aid and I think it's important that we have a measure of control over the distribution of the food to assure that it gets to people that are hungry and if they know it's coming from the United States. Given those qualifications, I think yes, we should dramatically increase our food Aid specifically to Africa. But remember that that's that's not a real solution to the farm problem in the long term in the long term. We don't need International charity cases as pitiful as those maybe to solve the farm problem. We need customers people that can pay money for the food. We send to them. That's the only real solution to the farm part of the problem from a humanitarian perspective. We have an obligation to help the people in Africa, but but I'm afraid of that's until people can afford to pay for our food. That's not going to be a solution to the farm problem. Well golly. We're down to the end of the hour. I'm afraid we don't have time for any more listener questions. Although there are a lot of you still on the line Congressman. Thank you very much. My pleasure sharing the are with us today. Maybe we have time I can ask you one quick one before I leave who's your choice for president? We've handled the governorship now Rhonda present well, You know, I'm it's too early to endorse anybody because nobody's announced. I think that the vice president is going to be a strong Contender, but I don't think there's any any secret about the fact that I'm probably closer personally as well as philosophically to Congressman Jack Kemp. I think the jack is going to run for president I think is going to be very strong candidate and in all likelihood. I'll be backing him. That's not to denigrate any other candidates running. It's just that he he stands for things that I believe in he has probably been the most powerful exponent of economic growth and policies that would enhance economic growth and that is what the Republican party has to stand for and he's now the most powerful exponent of policies in my judgment that would spread that growth into sectors of the economy that remained depressed and since I come from agriculture, I'm very concerned about doing just that so Jack is probably going to be my candidate and although if he's not our nominee. I wish has done a fine. Job as vice president. I don't have any big problem with him or and there we have to quit afraid that just plain out of time Congressman Vin Weber. Thanks to linear Schultz for handling. The phone's the engineer today was Randy Johnson, and this is Bob Potter.