MR.
TUERCK: Ladies and gentlemen, I believe that Senator Coats and Congressman
Kasich are willing to take a couple of questions. There's a microphone
there.
MS.
KING: I'm Patricia King with the U.S. Catholic Conference of Bishops.
And I was just wondering where the money will come to fund this charitable
tax credit? Will we see reductions in other Federal programs that are
designed to serve these same populations of needy families or will we
see some other way of generating revenues to cover the cost of this?
SENATOR
COATS: I'm going to touch on this very, very briefly and then let John
give you the specifics because he and his staff have worked particularly
hard over the past several months to provide the offset for this.
We
do not believe, obviously, that we want to contribute to the deficit.
We have got the Congressional budget balancer here and all of us feel
that one of the most important things we can do for the future of America
is to get our fiscal house in order.
So,
we, therefore, have come up with an offset to pay for this and John will
describe that. But let me just briefly say this. We are transferring some
money out of the current system. But we believe that whatever we transfer
is going to have a multiple effect for the dollars that go directly, that
bypass the bureaucracy and go directly to these poverty serving organizations.
They have demonstrated over and over again that given the same dollar
that goes to the Federal effort, much more of that--in fact, Beacon Hill
will tell you $1.67 goes directly to the poor compared to every dollar
for the Federal Government.
Secondly,
the dollars that they have they apply so much more efficiently because
they have less overhead costs, they utilize volunteers, far less administrative
costs. Having said that, let me let John give you the specific offset
on the credit.
MR.
KASICH: I listened to Peter Ferrara talk about the fact that we should
only offset dollar for dollar. We don't do that and it's an interesting
idea and maybe as you go through the passage of things, you can consider
that. But, you know, I think there is an element of fairness in America.
We have reformed welfare for the poor which is the greatest cultural change
by government in my lifetime. But we have not reformed welfare for the
rich and for those who have lobbied representatives in Washington.
And,
so, I believe there are a number of subsidies in our spending side, and
tax provisions on the tax side that should and rightfully should be closed
in order to help pay for this.
But,
secondly, when it comes to the welfare programs we would reduce the block
grant program at the national level by the amount that gets contributed,
to help pay for it, and then beneath that there are some other programs
within welfare that we would reduce as well.
But
it's to the tune of 4.7 percent and as Dan Coats said it isn't like you're
going to cut welfare. What you're doing is are substituting a government
run welfare system--and there is no one that I know of that doesn't know
there's huge attendant bureaucracy connected to it--and you get it over
at the local level with a very strong provision against overhead and it
has to be spent on the poor.
Now,
let me say to the lady who's here from the Catholic Conference of Bishops,
if you come out against it, you could kill it. You know, I understand
the Catholic Church, I used to be an altar boy. Let's have some faith
in the parishes. So, that means let's have some faith in the people that
go to church every Sunday and it's worth a 4.7 percent try. Don't snuff
it out.
It'll
come back at some point, but don't snuff it out. We need you. We need
Catholic Charities, we need all these organizations. And we even need
the people that play in the symphonies.
Arianna
made a very good point. Somebody said, well, you know, the symphony people
think this is a bad idea. The fact is that the decay in our communities
related to poverty and violence and crime is a crisis. We love the symphony
but this, you got to have priorities in any society and this is, we think,
is a top priority.
Now,
you got to examine your heart and ask yourself, if you're watching this
show, what is the greater crisis, the symphony or crime?
MR.
FUND: I wanted to ask the Congressman to what extent you've had discussions
with Democrats on the Hill to try to bring them on board and if you haven't
been successful, what do you think the major impediments are in having
conversations with Democrats that would bring them along?
SENATOR
COATS: Let me just start from the Senate side. I've had a number of discussions
with my Democrat colleagues and there's been great interest. This clearly
is an issue that transcends party differences. I talked about how we can
find common ground and there's been very significant expressions of support
in the Senate. I will let John address it from the House standpoint
MR.
KASICH: John, I haven't done all of the work yet, but I can just promise
you that if I sat down with the blue dogs, I think the Blue Dogs [conservative
Democrats] would like this. I believe that if I sit down with a member
like, believe it or not, some people would say, you're wrong, with a George
Miller, I think George would say, yeah, try something new, try something
different. I will get into that this year because this program is going
to be a priority for me, a top of the list priority for me.
And
I have no reason to doubt that the Democrats, in fact, will not want to
get involved in this and to try it. Then we can come back in a few years
and see how it works. My great fear is that all the different groups will
weigh in and they'll all say, ah, no, no, no, we can't do this and what
about that? It's everything that has blocked change in this town forever.
It is fundamentally the elites who think they know everything, posing
all series of questions and sometimes, not without good intentions, but
they end up blocking change. That's my fear.
MR.
FUND: And I just wanted to add that we, at the Wall Street Journal, have
noted President Clinton's interest in this idea and I wanted to ask Senator
Coats if you think when the President says he wants to change the welfare
bill, that he might include this as one of the changes he would seek?
SENATOR
COATS: I'm not sure that's what he had in mind when he said that but--
[Laughter.]
SENATOR
COATS: --we would sure like to encourage him to consider this as one of
the positive changes that can bring us together. The President has had
some personal experience which he's related to me personally about non-government
organizations and their effectiveness. And I would hope that those experiences
will allow him to look at this with an open mind and he'll get plenty
of people out of his shop that'll be saying, no, we got to keep it, we
cant do anything to upset the present system, we've got constituencies
here, political constituencies, et cetera.
The
President is in his second term and he won't be running for reelection
and this is the time to break some new ground and we're hoping he will
join us.
Arianna?
MS.
HUFFINGTON: This is a companion question to John's. What kind of conversations
have you had with your Republican colleagues and if their outcome has
been positive, then why is John Kasich so cynical or, perhaps, discouraged
about the prospects of this really becoming law, while you're still around
and not after you leave Congress
MR.
KASICH: Well, Arianna, this is a big change in the way things happen in
this town. And there's only, in my judgment, three ways you get change.
One is everybody knows there is a big crisis going on. I don't think they
recognize crime and poverty as a crisis in the particular, it's kind of
like an ongoing thing. It's not like whoa, the building's on fire. And
we believe that it is. But most people don't see it.
Secondly,
that the people believe we're on the road to going off the edge of a cliff.
I think the public sense is that which is what gives me optimism of being
able to rally public support for this program as illustrated by people
like Bob Woodson and his, in some sense, hyper ventilated enthusiasm to
get this done and get it done now.
But,
thirdly, you have to have both political parties who want to make it a
priority. I think our job is to number one, rally the community groups
behind this so they can talk to their members, and, secondly, call on
the leaders of both parties to say we need to do this.
I
know that Newt Gingrich wants to do this. He is for this. It's just going
to take a lot of work, Arianna. I don't want to stand here today and say
I think this is a slam dunk. I always believe that reading it like I see
it is the best way to do it. And I think we're going to get a lot of momentum
in these two years. Could we get some version of it through? Yes. Will
John Fund put this on the front page, and editorialize and will the Washington
Post and will the Plain Dealer and will the networks run it?
If
they do, you'll build support for this. And, so, our job is to build support,
our job is to energize the base and our job is to convince leaders of
both parties that this is necessary. And it will take some time. Every
once in a while you throw a three-pointer in from the corner. I hope we
do in this case but I think it's going to be a longer road than a shorter
road.
SENATOR
COATS: Nothing is easy in this process and in this town. You can have
the best of ideas and sometimes they die of a thousand cuts, a thousand
minor changes, objections.
It
takes a great deal to rally public support to take a proposal, an idea
and move it into reality especially when it replaces or threatens to replace,
even to a small extent, an existing program. There are a lot of constituencies,
there are a lot of bureaucracies that would feel threatened by the effectiveness
of outside organizations and, frankly, are threatened by the fact that
taxpayers have a choice in terms of how they direct some of their charitable
giving. And that's a lot to overcome, so, we have our work cut out for
us
MR.
KASICH: Can I say one other thing, Arianna. You know, there is in some
quarters a fear of comparison. I was struck when the Cardinal of the New
York Catholic Schools agreed to take the poorest, least educable children
into the Catholic school system because of over-crowding in the New York
Public Schools and amazed to watch the elite write against it, sue, litigate
against it, and block it.
I
mean in some sense people would rather have kids sit out in a hallway
somewhere, rather than let them go into another system where the other
system can prove to be very effective.
It's
very threatening, but I got a little message. And it is we're not on earth
all that long and so let's just try to do the right thing. It'll work
out, trust me, trust me, it'll work out.
MR.
LOCONTE: Joe Loconte with Policy Review Magazine. Senator, if a good portion
of the money flows to explicitly religious organizations, how will you
avoid or overcome the Church/State constitutional challenges that are
probably going to arise?
SENATOR
COATS: Well, that's the beauty of the charitable tax credit because we're
leaving the choice to the individual, no government agency or government
official will be directing that it go there. The courts have ruled in
a number of instances that as long as the choice is outside the hands
of government and there is no limitations on that choice, that it would
stand the constitutional test.
So,
now, if we define in our legislation the types of religious organizations
to which this money could flow and excluded others, then clearly that
would not stand the test. But we're not doing that. That means that we
leave the choice to the taxpayers.
That
means that you will pick up the paper at some point and read a story about
funds that have been given to an organization that is violative of some
of the tenets of your particular religion or some other particular religion.
So,
how can that organization derive money from the taxpayer? Well, it's not
the government directing it to that organization, it's simply the taxpayer's
choice and as long as they meet the prescription of qualifying as a 510(c)(3),
meeting the 22 IRS restrictions in terms of how they use the money, dedicating
more than 75 percent to specific poverty fighting, subject to the audits
of IRS and so forth, as long as they meet those qualifications.
After
all what we're after here is results, we're not after on the front-end,
we're after results on the back end.
MR.
KASICH: My sense is that there are a growing number of Americans who don't
think the worst thing that could ever happen in life is that somebody
says a prayer. There are Americans actually coming to believe that maybe
it works, that if our kids are going to be in schools where they are beating
each other up and people are selling them drugs, their teachers are getting
assaulted, I mean how bad is it, in a community like that, to say, well,
wait a minute, Judeo-Christianity is an ethic in our society that kind
of always worked. And there's worse things than Judeo-Christianity out
there, isn't there? I mean like how about chaos?
The
other side of that is, again, we're back to people choosing and if they
want to say that, you know, Alcoholics Anonymous, there's a member here
who I sat with one night who is an alcoholic and he told me that Alcoholics
Anonymous would not work without one of its basic dictates, premises.
And that is there is a spiritual side to recovery.
Now,
I will also tell you that I don't think that's the only choice. If people
don't want to vote for that, they don't want to give to that, they vote
for something else with their pocketbook.
Let's
set the people free. Let's set Americans free. That's what the country
is about.
QUESTION:
Senator Coats, can you explain why you want to replace the current tax
deduction that you get for charity right now and why is your tax credit
better than that?
SENATOR
COATS: Well, the tax credit is far superior to the deduction because the
deduction, of course, only goes to that portion of your income that is
offset by the tax bracket.
But
the charitable tax credit is a dollar for dollar contribution and it gives
the taxpayer a pure choice up to $500 per individual. You can send it
to the federal government and have it distributed through HUD or IRS,
or HHS or any other federal agency.
Or,
you can direct with your check to an organization outside of government
and take it as a credit against your taxes due.
So,
number one, it provides additional support for these organizations but
it also gives the taxpayer a far greater incentive to make contributions
to these organizations than they have under the current deduction.
QUESTION:
And isn't this a way to provide a safety net for the people that, under
the new welfare law, really are cut out of getting welfare and there's
no place for them to go? Isn't this basically an answer to that?
SENATOR
COATS: Well, we hope it's an answer to that. We hope that there is an
alternative to either the status quo, more of the same government effort,
or simply washing our hands of the problem and hoping that it works out,
sort of a social Darwinist approach.
We
hope this is a middle ground that does provide hope and a vision for how
to address some of these very difficult problems that exist in every community
in America. We can point to examples of where it has proven extraordinarily
effective that is outside the government process.
I
don't think the American people are ready to be non-compassionate. I think
they're just compassion fatigued with the terrible results that they've
gotten from an extraordinarily complex federal social welfare system.
When
we have earthquakes or hurricanes or tornadoes, or floods or disasters
or famines in this country, the outpouring of American volunteer spirit
is extraordinary.
And
I think the American people are generous and willing to do that, but they
just simply have lost faith in their generosity as it filtered through
the Federal Government.
I
think this could encourage a significant outpouring of support from the
American people when they see their dollars actually making a difference
in people's lives and in their communities.
It's
a little past our time, so, we thank you all for coming today.
[Applause.]
[Whereupon,
at 1:38 p.m., the conference adjourned.]
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