Rep. John Katko on the Campbell Conversations

Jan 21, 2017

As a first-term Member of Congress, Rep. John Katko (R-Camillus), who represents New York's 24th Congressional District, often distanced himself from his more conservative Republican colleagues. And during his reelection campaign he disavowed Donald Trump.  Those positions will now be tested in a Republican House majority making major legislative changes under a Trump administration.  

This week on the Campbell Conversations, host Grant Reeher speaks with Katko about how he’ll be approaching the next year, and explores challenging issues such as a “repeal and replace” of the Affordable Care Act and the trade-offs involved in a large tax cut.

Full transcript (note: transcript has been edited for clarity and may contain errors)

Grant Reeher (GR): Welcome to the Campbell Conversations. I'm Grant Reeher and my guest today is Congressman John Katko. He represents New York's 24th Congressional District, which includes all of Cayuga, Onondaga and Wayne counties, and the western portion of Oswego County. Last November he was reelected to his second term. I should note that we're speaking a couple of days prior to President Trump's inauguration. So I won't be able to ask him about anything that was said there. Congressman Katko, welcome back to the program and congratulations.

John Katko (JK): Thank you very much it's great to be back. I enjoy the show a lot.

(GR): Oh it's great to have you here again. And I just wanted to spend a couple of minutes looking back, and then we'll look forward to the next year. But about your reelection, the pre-election polls indicated that you had a comfortable lead, but were you surprised at all by the magnitude of the victory?

(JK): Yeah I guess I'm always a little surprised. I always try to underestimate myself to make myself work as hard as I possibly can. But you know the bottom line is I was able to run on my record and from the beginning I kept saying 'listen I'm happy to talk about my record,' I ran on my record and it worked out. So I'm very pleased with the results. I'm very humbled by them and I understand the awesome responsibility I continue to have in this job.

(GR): Do you think that your election result was a mandate or a message for anything in particular regarding this district?

(JK): I think it was a message that you know the voters here are a lot smarter than people give them credit for in Washington. And I think that the tired old themes in election year politics, people can cut through that and see and when they see that and they judge you on your record. It's your record and if you did a good job they'll reward you and if you don't they're going to knock you out. And I think that was a message. So yeah, I think that it's not a mandate so much it is that the electorate here in central New York is much smarter than people give him credit for.

(GR): And a question about the presidential election. The last time I spoke with you it was the debate with your challenger Colleen Deacon, and I think one thing that all three of us at that time agreed on was that Hillary Clinton would be the likely winner in the general election. Looking at it from where we were then, how surprised were you at that outcome?

(JK): Well we were quite surprised, like like most Americans. You know 5:00 on election night we thought for sure it was it was going to be Hillary, and then 7:00 we started you know wondering "well wait a minute here." And by 9:00 you are like "holy cow this could really happen." So it wasn't really until that time that I thought that he was going to win. I mean there wasn't a time before then where I thought that, at least from the polling that we saw, that he was going to be able to pull it off. I thought it was actually closer than people thought. But it really was a fascinating outcome and it really spoke volumes as to what's going on and how sick people are with politics as usual in Washington. I think he won, what, 90 percent of the counties or more in this country. And that's amazing when you think about it. I mean, I know that the election was much closer, but nine out of 10 counties in the United States of America went for him. That's pretty amazing.

(GR): Well let's look forward now. What would be your most pressing individual priorities in Congress for the next year?

(JK): Really, local priorities. The continuing to work on the heroin epidemic, which is going full speed ahead here unfortunately. Working on jobs and the economy. Continuing my efforts with tourism. I was just last week in Washington getting the Harriet Tubman Park signed, made into a National Park and I got to hug one of Harriet's descendants. It was a special moment. And you know we introduced a bill last week for Ford Ontario again and I'm told that it's going to be on the floor by the end of the month, I'm hopeful. And then the House can do its part again and we just have to get it through the Senate and we'll get that going on the right direction. Those are two big cornerstones of our historical past here that I want to really try and enhance from a tourism perspective. And there's a lot more to go on. But I think jobs and economy are always paramount.

(GR): And regarding the heroin epidemic. Tell me some of the things you might have in mind to try to address that, because again that has been something that was a theme of yours, I think in the first term.

(JK): It was. There was a comprehensive legislation was passed last term but more needs to be done. One of the things I really want to do is help local entities with a grant writing processes, because there's a lot more grants out there than there were for the heroin epidemic and I want to continue to help them and continue to identify laws that I can submit to help with the epidemic even further. It's clear that there's still a severe lack of beds and treatment facilities. And we've got to continue to work on that. And from a law enforcement standpoint, from a personal standpoint, I think that the penalties for heroin trafficking, compared to cocaine or crack cocaine, are much too low. And I think we've got to work on that. And synthetic drugs bi ll that I introduced last term. Parts of it got passed. I want to reintroduce a revamped version of the synthetic drug bill to streamline the process to make synthetic drugs illegal and I'll spare you all the boring details, but the bottom line it's a very important piece of legislation I want to keep pushing.

(GR): Do you see having a president of the same party as you, and also at the same time being in the majority in Congress, as opening up any specific doors for your own legislative goals or projects seeing opportunities open by having those stars come into alignment?

(JK): I do to some extent. One of them that comes to mind right away is the Family Leave Act. I'm presenting an alternative and I did last term and I'm going to reintroduce that this term, a Paid Family Leave act that's quite different than the one that the Democrats have proposed. And I know that's high on his list. And it's you know health savings account based and empowering the individual to plan what type of leave they want to take and how they take it. Things like that I think, hopefully, are going to get more traction than they would otherwise. And I know Ivanka Trump is a big proponent that as well, so hopefully things like that excite me. Of course, the Affordable Care Act and fixing that. And some of the other things about tax reform and regulatory reform are quite exciting with this administration. But like the Family Leave Act is one good example. That's my baby that I want to get going on.

(GR): I want to get into the Affordable Care Act…

(JK): I thought you might. (laughter)

(GR): …But let's stick with the family leave. One of the issues there, in terms of fundamental approaches, tax break oriented, putting it into the tax code in some way versus a direct support and one of the criticisms of the tax break approach is that it's going to miss a lot of the people who arguably might need it most. Can you talk a little bit about that?

Rep. John Katko, after being reelected to Congress in Nov. 2016
Credit Tom Magnarelli / WRVO News File Photo

(JK): Sure. I would turn right back around and say that I think the opposite is true, because there is working poor in the United States of America who have no plans of ever taking family leave. Right? And under the Democrats proposal, they would still get taxed. Right? And every single working man and woman in this country would be taxed an additional line on their paycheck for the Democratic proposal for the Family Leave Act. Mine is quite the opposite. If you want to plan for it, we give you every option to. And for example, someone making $20,000 a year, if they put away three bucks a day in one year they would have enough to take 13 weeks of paid leave. So, I think that's a fair balance between the two. And our leave is more flexible too, it's not just taking leave. If you want to keep working, but you have childcare related expenses, you could draw on it to pay for like diapers, for example, or formula, or what have you. It's a little more flexibility on our side and you use in pretax dollars to do it. So I think in the end mine is more common sense.

(GR): Now as the presidential campaign developed, you as a candidate for re-election have made increasingly critical comments about Donald Trump. And in the end you said, in effect, that he shouldn't be running. Do you think that that's going to put you in any difficult situations if you need something from the administration in order to serve constituents or to achieve an individual goal? Because this president elect, still elect as we're talking, seems to be someone that does take names.

(JK): Perhaps perhaps. I hope not. I've seen him put down the swords with a lot of people who are very critical to him, especially some of his own, the people who ran against him for president. I mean that was a pretty vitriolic campaign, and he put down his swords a lot with them. So you know, listen, he's our president. I'm going to support him and I agree with an awful lot of his policies, and we'll go from there.

(GR): Well let me get into the Obamacare, the Affordable Care Act known as Obamacare, and spend a bit of time on it. ecause you recently voted against another repeal of it. You were one of the few Republicans to do so, you said that you did not vote in favor of that repeal because there was no clear plan to replace it. And I do want to spend a bit of time on this because this is arguably President Obama's most significant domestic policy change and repealing it and replacing it would be a big shift for the country. So let me start with a big question. But can you give me an idea of the contours of a replacement plan that you would support?

(JK): Sure. A market based approach, allowed competition across state lines for insurance companies, incentivizing people to get insurance through tax credits. Reforming it, with respect to prescription drug prices and those are kind of the guts of what I would do. But you know there's a lot more technical details that have to be worked out. And my concern is we're going here at warp speed, and no one to this day, right as we speak today, has a concrete plan out there. We're hearing all these proposals, all these ideas. We've had seven years in the opposition, almost eight years in the opposition, and we still have not come up with a firm plan. And that concerns me that all of a sudden magically within a few weeks we are going to have to vote on whether or not we want to do the repeal. What we voted on last week was basically lighting the fuse, and the fuse is now burning, and now we have 'X' amount of time to do what's called reconciliation. And instead of boring you with all the details, basically it allows the Senate to have a straight up or down vote not a 60 majority vote. And that's why they using this particular procedure, which is only available once a year through the budget process. I think we would have been much better served to do tax reform first, get the economy going along with the regulatory rollbacks and regulatory reforms we're going to have, and then work on this after we have some goodwill capital built up, because economy is expanding. But be that as it may, I'm hopeful that it gets to a point where I can vote for a replacement. But I'm not going to vote for a replacement that's piecemeal just not going to do it.

(GR): Well continuing on with the conversation about Obamacare, you mentioned this when you were talking about the contours that you'd be looking for and a replacement, some sort of tax base scheme to get more people into coverage. One of the challenges I think for any replacement plan is going to be matching the same level of insurance coverage for the population. President-elect Trump has said that everyone will be covered, that's a direct quote from him. But Obamacare has put that percentage at an all time high while also trying to cut back on the overall cost curve. So in your mind for a replacement plan, is there a certain target of coverage level that you're looking for, you know a reliable estimate of how many people would be insured or percentage of insured that you're looking to see?

(JK): I would hope that we don't lose any insured. I would hope that we maintain, you know, for everybody that wants insurance and needs insurance that it's available for them. That should be the goal and it must be the goal. One of the things I failed to mention previously, was 90 percent of the costs associated with health insurance now are generated by 10 percent of the patients. So one of the key components of any reform is going to be funding these high risk pools and basically the people that are in very high risk or you know high cost, that's a subsidized pool. What that means is the other 90 percent are going to be paying much lower rates. That's the goal. OK. Because right now that is being borne by everybody. And what I hear constantly is their insurance is very expensive, and the deductibles are so high it makes it unaffordable. And I just saw something of the day, somebody was a family of four making $55,000 a year has a six or seven thousand dollar deductible on top of their insurance. That's got to be fixed because it's making people not being able afford it.

(GR): Are there features that are being talked about, the Republican Party, different members of the Republican Party in Congress are throwing around a lot of different ideas, but are there features that you know now would be nonstarters for you if they were part of a replacement package?

(JK): Well if it's a replacement package that's not a replacement package that's going to be a problem for me. Because I think my concern is that they don't say "this is a replacement package" when in fact it is not, and you're not going to get everything done in the reconciliation package that you want. Reconciliation has to be budget related. So if it's not budget related, what the heck are we going to do with all the other components, about keeping kids on a policy until they're 26 and portability of preexisting conditions. That's regulatory based. And we have to wait till Dr. Price gets confirmed and becomes head of Health and Human Services to find out what those regulatory reforms are. And guess what? Those regulatory reforms are not going to happen for about a year, at least, because that's a process. By the time you propose regulations until the time it's completed. And then the third bucket, or third component of this, is going to be what else you can get passed through a 60 vote majority Senate, which I'm not optimistic there's going to be much. So it's going to be very difficult to do everything reconciliation. We don't know what's going to happen with regulatory reform yet. And the third bucket, I'm not sure we're ever going to get to because I don't know if we'll ever get the 60 votes, so that's my concern with the whole process.

(GR): Let me throw out a couple specific ones in this regard.

(JK): Sure.

(GR): I'm drawing on some of the ideas that have been put forward by Speaker Paul Ryan and others, but they have long spoken about two ideas. One is block granting Medicaid and privatizing Medicare. So just really quick here, a block grant for Medicaid would basically provide set sums of money to the states to spend on the medical care for the poor as they wished. More flexibility for the states, but also a mechanism for basically capping what the spending is going to be. The concern would be that it would not go up as the needs would go up. The basic idea for Medicare privatization would be, in essence, a block grant for individual retirees to spend on private insurance in the market with again, some mechanism for capping what the federal spending would be on those folks. Those would be tectonic changes in the health care system and they've been put out there. Do you have views on those particular kinds of reforms?

(JK): Oh I absolutely do. New York State I think it could be economically calamitous, because New York State is one of the handful of states nationwide which has really done a tremendous amount of Medicaid expansion through the exchanges, health care exchanges, and those states that have done the Medicaid expansion to get people's coverage, health care coverage, I'm not sure how they're going to be affected because I'm not sure that the block grants will take into account the Medicaid expansion. So, with that being said, that's no man's land for me. There's no way I can support that. And it's funny a lot of my colleagues in New York state that voted to light the fuse last week, which I did not, are now starting realize that's a huge issue. And now they're starting to try to figure out ways to get assurances from the leadership that we're going to have that covered. And I'm not sure it's going to. So you're right. It's Medicaid block granting is a way to keep costs under control, which we need to do. But you need to take care of the fact that there is an awful lot of people in New York state that that have health insurance now under Medicaid expansion. We've got to be mindful of that.

(GR): If you're just joining us you're listening to the Campbell Conversations on WRVO Public Media. And my guest is Congressman John Katko. Well let's turn to tax cuts, the thing that I guess you would like to see done before the replacement of Obamacare. It is likely that federal tax cuts are going to be on the agenda in the first weeks and months of this Congress. The president has talked about a large tax cut. I believe "huge" was the word that he used. Past evidence suggests that such cuts also raise the deficit and contribute to the increase in national debt. So how would we know beforehand when a tax cut, level is likely to be fiscally irresponsible.

(JK): Well, I'm hoping through the OMB director that's going to be confirmed. Mick Mulvaney. He happens to have his locker next to mine in the congressional gym, so I speak to him often and he is a hardcore fiscal conservative, so he will give you the straight dope on that, I think, in advance. But the bottom line is, from an economic standpoint, there is literally trillions of dollars that were taxable that it's overseas that used to be here. And anything we can do to get those dollars back here is a good thing. And if you lower the tax rate for manufacturers and make it more competitive with other countries, they will come back. They want to come back and if they do we're going to inject an awful lot of money into the stream. So I think you're right. In the past, just lowering taxes across the board did that. But this is different, because part of it's designed to get money back from overseas, so I don't know what impact that's going to have. But of course we want to make sure we don't increase the debt. But we also got to jumpstart the economy, we've been limping along at a 2 percent rate for the last eight years and a healthy growth rate is like 4 or 5 percent. And I really that between regulatory reform and fixing the tax rates, I couldn't give a darn about making wealthy people more wealthy. That's not my point. My point is to get manufacturers back here, to get jobs back here. And if we adjust the tax rate for manufacturers, we're going to get jobs back here and it's going to have a huge impact on our economy.

(GR): There's also been in this regard some discussion of trading the state and local tax deduction on federal income taxes for some of those cuts. Do you have a view about that?

(JK): Yeah. That would be a little difficult if you're in New York state or California or Virginia and a couple of the other states who, where that's a big component of your taxes. But I have articulated that concern to the budget folks and the finance folks. And they hear us loud and clear. And we're a pretty substantial block between California and New York and Virginia. That's quite a few votes. And they can't afford to lose them, so I think they're going to take that into consideration and they're going to either up the standardized deduction to make it so high, the standard deduction won't matter anyways or that they're somehow going to take it into consideration. But I'm hoping that, actually, I think it's a nonstarter unless they figure out how to fix that.

(GR): There is a logic to that argument though I wanted to get you to comment on from the Republican perspective, and that is, why should the federal government in essence be subsidizing states and localities to spend a lot and tax a lot? I mean, that's what you could argue this amounts to in terms of the incentives that get put in place. So looking at this from a standpoint of a federal legislator, which you are, you know, it's going to hurt New York State and in the short term in a sense, but why should the federal government be subsidizing that behavior?

(JK): It's a fair comment, because you know, let's face it, California and New York aren't exactly the most fiscally responsible states in the country. And on top of that, we tax our people to death and it's no accident that we're losing population on a percentage of the national population, that were 49th or 50th in business friendly environments. And it's because they're either regulating us to death and taxing us to death in this state. And you're right. So part of it, we've got to get our own house in order. So I know that's part of the reason, the part of the argument, and I think they're right to some extent but we can't just sit there and expedite the exodus from New York state either. So we've got to try and find a happy balance between the two.

(GR): Just have a couple of minutes left but I wanted to ask you a couple of questions about party and looking forward again. The first one is on the relationship with your own party in Congress. It's one thing to be a party in opposition, which was the case with the House Republicans during the Obama administration. It's another thing being the governing party. And that's what you're going to be now. Do you think that's going to change? I know that's a big question, but just if you have just a minute. Do you think that that's going to change the dynamic of the relationship between the leadership and the rank and file members on important votes down the road that the conversation going to be all different now.

(JK): There's no question about that. And there's no question that now is a time you've got to be stronger than ever. And I've already shown my individualism by not voting for that last week, and I was one of a handful. And I just look right now and say "look you're not going to shake me on this. You know where I stand. I'm also in a district that's five percent more Democrats than Republicans and I'm mindful of that. And so if you want me to be around here, you're going to let me represent all my folks not just some of them. And that's what I want to do going forward. And that's just where it's going to be." My law school professor, I would just basically say what he said to me: Tough noogies. It's not always going to go the way you want me to go.

(GR): Well let's look ahead a year from now. So we're out a year. Are there markers that you will use to determine whether, first this president, and then second this Congress, has been successful in this first year of the administration?

(JK): Some of the regulatory rollbacks for sure. Tax reform for sure, we should be doing. And I think looking at the overall health of the economy, because I think if we can get business excited to start reinvesting again in the United States, I think the economy is going to start humming and if it starts humming that's going to be the biggest bellwether for us. I think Obamacare is going to be a long slog. I think it's going to be fraught with ups and downs. But I think, from an economic standpoint, creating more jobs and getting an economy moving again is going to be probably the biggest one for me. You know, there's talk that there may be a downturn and a natural cyclical downturn in the economy. But I think we can blunt some of that by some of the reforms that we're doing.

(GR): Last question, just a few seconds left. OK, so you were reelected by a large margin. Are you going to get a place down there now or are you going to keep this arrangement that we've read about where you're basically living out of your office.

(JK): I'm living out of my office, I'm never going to change that because I don't want to get comfortable and I'm very serious about that. And I always will be. So your answer is hell no, I'm not changing.