Congressional candidates grapple with the economy, federal budget

As Americans grow increasingly concerned with the economy and their economic position, candidates hoping to represent Eastern Washington in Congress are making their case to voters that their party and policies will help their constituents get ahead.

Likely Washington voters ranked “cost of living” as their top issue, above abortion and “protecting democracy,” according to a July survey by SurveyUSA sponsored by the Seattle Times, KING 5 and the University of Washington’s Center for an Informed Public.

The 10 people still in the race to fill a seat being vacated by incumbent Rep. Cathy McMorris Rodgers offer starkly different positions, largely along party lines, for how they want to help constituents who are feeling financially left behind.

Democratic candidates generally argued rising housing prices could be made more affordable through incentives for first-time home buyers and grants to encourage the development of affordable housing. Small business consultant Ann Marie Danimus took another tack, supporting tighter regulations on “large corporations” buying up single-family homes, which she believes makes it difficult for first-time home buyers to compete in a tight market.

Republican candidates, on the other hand, support deregulating the home building market. Spokane County Treasurer Michael Baumgartner argued “onerous environmental and labor regulations” make it too expensive to develop, keeping inventory low. Ferry County Commissioner Brian Dansel specifically pointed to growth management laws that discourage sprawl and encourage building density, which artificially constrain the outward growth of cities. He argued that “rabid environmentalist groups” and restrictive energy and building codes have driven up the cost of new homes.

Candidates similarly tend to split along ideological lines with regard to the high cost of health care for Americans, though there was considerably more overlap.

For instance, Democratic OB-GYN Bernadine Bank and Republican state Rep. Jacquelin Maycumber, R-Republic, argued in favor of capping the price of some medications, though Bank’s proposal was broader, saying she would like to cap the cost of many drugs based on their cost in Canada. In 2020, a Maycumber-sponsored bill was approved in Olympia capping the out-of-pocket cost of insulin, which Maycumber’s young son Rowan needs for his Type 1 diabetes, to $100 per month.

Dansel, who tends to be broadly pro-deregulation, said health insurance and pharmaceuticals were the only two industries where he supported tougher regulations to lower costs for consumers, saying it was “patently un-American” for people to be financially ruined by a medical episode.

There is far more daylight between the candidates when it comes to a more sweeping and controversial proposal – universal health care, sharply opposed by every prominent Republican candidate. Kootenai County Deputy Prosecutor Matthew Welde, a Democrat; Rick Valentine Flynn, a Republican candidate who frequently differs from the other Republican candidates; and Danimus all support a universal health care system, arguing that systems akin to Canada’s or in much of Europe would sharply lower costs for Americans. Flynn added, however, that he does not believe “voters are ready” for that big a shift in the health care system.

Neither Bank nor Conroy advocated for such a system. Conroy argued instead for allowing the federal government to negotiate prices for drugs and medical services paid through Medicare and Medicaid, which she argues would lower those costs for all consumers in the United States. Conroy also called for more investment in rural health care clinics to reduce the distance many have to travel to access care.

Baumgartner and Maycumber argued instead in favor of increasing competition, though they highlighted different paths to do so. Maycumber argued that people should be able to purchase health insurance plans across state lines, while Baumgartner spoke to increased price transparency from hospitals so consumers know ahead of time how much a particular facility may charge.

Taxes and tax cuts can frequently be a bitterly partisan topic. At least for the 10 people running to represent Eastern Washington in Congress, there is uniquely bipartisan support for expanding the child tax credit, which reduces a family’s tax obligation and, for many of the lowest income families, increases their tax returns to help them support their children.

The Trump-era tax cuts, or the 2017 Tax Cuts and Jobs Act, increased the child tax credit from $1,000 to $2,000. The 2021 Biden-era American Rescue Plan Act, meant to stimulate the economy during the pandemic, expanded the child tax credit further to $3,600 for children under age 6 or $3,000 for children up to age 17.

While all but the wealthiest families benefited from the credit, which only begin to phase out for households making more than $115,000 annually, the impact on a lower-income family, especially a single-parent household, could be dramatic. The nearly quadrupled tax credit was estimated to have lifted millions of children above the poverty line in 2021, cutting the rate of childhood poverty in half.

But the COVID-era expansion lasted only a year, despite a push by the White House for Congress to extend it, causing the child tax credit to shrink back to $2,000. With portions of the Trump-era tax cuts set to expire in 2025, the credit will shrink further to the pre-2017 levels of $1,000 per child if Congress does not act.

Every candidate, with the possible exception of Jonathan Bingle, supported renewing the expanded child tax credit that expired at the end of 2021.

Bingle prefers tax deductions, which generally have a smaller effect on taxes owed or returns received, over tax credits, which he argued overly skews people’s tax bills. But, like most of the Republican candidates, he emphasized the importance of encouraging the creation of new families.

Every other candidate, however, argued that the expanded child tax credit should be renewed, though conservative candidates like Baumgartner generally emphasized a need to cut spending elsewhere, while liberal candidates like Bank and Conroy argued for expanding other programs that provide services such as free food to needy children.

The federal budget

Congress is not only asked to consider how to ease the financial burden on citizens but also to balance their own budgets. The last time the U.S. federal budget was balanced was in 2001, approved in the last year of the administration of former President Bill Clinton.

The federal government holds roughly $35 trillion in debt, according to the U.S. Treasury, though this includes $7.17 trillion the government “owes” to itself. Debt held by the public, the number on which most economists focus, is $27.82 trillion, which has increased by more than $10 trillion in just the last four years, driven by pandemic-era stimulus spending and the Trump-era tax cuts. The country’s gross domestic product for 2024, meanwhile, is estimated to be $28.78 trillion, according to projections by the International Monetary Fund.

There is broad consensus among mainstream economists that the U.S. cannot reduce its national debt without cutting spending and increasing revenue. While almost every candidate, regardless of party, agreed that the national debt was a serious issue, Democratic candidates tended to emphasize tax increases, usually on the wealthy, while Republicans mostly wanted wide and deep cuts in federal spending, in some cases calling for the elimination of entire agencies.

Baumgartner suggested eliminating “unnecessary” government agencies, providing as example the Transportation Security Administration, the agency responsible for nationwide airport security created after the 9/11 terror attacks. Maycumber suggested scrapping the much larger Department of Education, though she said she still wants much of the money that agency handles to be given to school districts.

Underscoring the difficulty of paying down the national debt, eliminating those agencies and saving every dollar budgeted to both would save only a fraction of the $868 billion the nation spends each year just to pay the interest on its debt. The TSA has a budget of $11.2 billion, while the Department of Education has a budget of $202 billion.

Dansel didn’t name specific cuts, instead saying that he approved of Kentucky Sen. Rand Paul’s “Penny Plan,” which when introduced in 2017 suggested the deficit – the amount added to the federal debt each year – could be eliminated over time by reducing all federal spending by 1% per year for five years. In 2022, Paul revised this proposal, saying the deficit had grown so much that the budget would need to be slashed by $300 billion in its first year and an additional 6% per year for five years to balance the budget without raising taxes.

The Democratic candidates, meanwhile, mostly suggested fixing the national deficit with a more progressive tax system. Bank suggested doing away with the cap preventing personal annual income over $168,800 being taxed for Social Security, while Conroy spoke broadly to undoing tax cuts for corporations and the wealthy.

A 2023 study by the Manhattan Institute, a conservative think tank, estimated that significantly higher taxes on the wealthy and corporations, paired with aggressive enforcement of tax evasion, could raise nearly $700 billion per year, though the same study projected that revenue would be partially offset by negative macroeconomic impacts from higher taxes. Without tax increases on the middle class or significant spending cuts, these policies would not be enough to eliminate the deficit, according to the report.

“Most of America’s income is earned by the non-wealthy, and, like Scandinavia and most of Europe, the U.S. will need to tax those families considerably to meet any ambitious revenue needs,” report author Brian Riedl wrote. “Taxing the rich cannot even cover baseline deficits, much less finance the progressive spending agenda.”

Partisanship also animates how candidates consider the possible renewal of a major slate of tax cuts passed under the Trump administration, some aspects of which begin to expire next year if Congress doesn’t act.

The Trump-era tax cuts were a complicated piece of legislation that prominently cut individual income tax rates, sharply reduced the corporate tax rate from 35% to 21%, increased the standard deduction and doubled the child tax credit. The reforms lowered income taxes for most Americans, though the lost revenue is expected to add nearly $2 trillion to the deficit by 2028, according to the Brookings Institute.

Many of the other tax cuts, including those lowering taxes for individuals and certain corporate deductions, are set to expire or begin sunsetting in 2025. The 2017 bill did not have an expiration date for the slashed corporate tax rate, however, which several Democratic candidates were not aware of when they said they would favor allowing the tax cuts to expire. Congress could, however, pass a new bill changing the corporate tax rate.

Former President Donald Trump has pledged to extend the expiring tax cuts if he is re-elected, which is estimated to add another $3.8 trillion to the deficit over the following decade, and has suggested he would cut taxes further. President Joe Biden had proposed cutting taxes for those making under $400,000 a year while hiking taxes on wealthier Americans and raising corporate tax rates to 28%, halfway to their pre-cut rate.

It is Congress, however, that approves tax legislation, and tax bills begin in the House of Representatives. The 10 candidates running to represent Eastern Washington in Congress split along party lines regarding the Trump-era tax cuts, with Democrats generally willing to let them expire and eager to reverse the portions without an expiration date, while Republicans mostly support their renewal.

Baumgartner and Maycumber argued that the slashed corporate tax rates were necessary so American businesses could compete overseas; the 2017 legislation brought the country’s corporate tax rate more in line with the global average, according to the Tax Foundation, a pro-business think tank. Dansel said that he broadly supports tax policies that “leave more money in the pockets of taxpayers,” arguing in favor of even deeper tax cuts.

Bank, Danimus and Conroy, meanwhile, argued that the tax cuts overly benefited corporations and the wealthy. Of them, only Conroy, noted that the lowered corporate tax rate will not expire on its own, adding that she would vote for tax reform that raised rates back to their pre-2017 level. Conroy and Danimus argued in favor of renewing the tax cuts that affected lower- and middle-class individuals.