Commentary

Taking on Spending, Transportation, Insourcing and Other D.C. Follies

Reason Foundation interview with Pamela Gorman, former Arizona state senator and Congressional candidate

In her years in the Arizona State Senate and Arizona House of Representatives, Pamela Gorman was a vocal proponent of market-based policy solutions, privatization and limited government, and she led numerous efforts to cut wasteful spending. She was also a key player in the development and passage of Arizona’s cutting-edge private transportation finance legislation in 2009, and before stepping down from the State Senate she championed a bill—later passed as model state legislation by the American Legislative Exchange Council—to establish a statewide privatization center of excellence in Arizona government modeled after Florida’s successful Council on Efficient Government.

Currently running for retiring Arizona District 3 Congressman John Shadegg’s House seat, Reason Foundation’s Director of Government Reform Leonard Gilroy interviewed Pamela Gorman in May 2010 on a range of federal policy issues, including out-of-control D.C. spending, transportation and the need for more privatization in D.C., not less.


Leonard Gilroy, Reason Foundation: During your terms in the Arizona legislature, many of us in the national free market think tank world came to know you as a strong champion of limited government and market-based approaches to public policy. Yet, in an era of bailouts, health care “reform,” record federal spending and deficits, a gathering entitlement storm, and massive federal intervention in the economy, principles of limited government seem to have limited currency these days in Washington. So what’s prompting you to run for Congress?

Pamela Gorman: Over the years, I have watched a disturbing trend among my contemporaries: they wilt under pressure. It’s easy to “say” you believe in low taxes, reduced spending and free market principles. It’s quite another thing to maintain that commitment when being pressured by colleagues and leadership, special interests and the media. Too many people in public office seem more concerned with being “liked,” than staying true to the principles that got them elected in the first place.

My run for Congress is prompted by the realization that not only am I committed to the principles of limited government and free markets, but I’ve demonstrated more than anyone in the field that I’ll take lead and won’t wilt under pressure in fighting for those principles. At this point in our nation’s history, we can’t settle for anything less from our elected officials

Gilroy: How would you start attacking the runaway spending in DC right now?

Gorman: We need to do an honest and thorough inventory of spending and agg ressively mov e to eliminate that which is not a core function of our federal government. I have real concerns about deficit commissions because inevitably they determine that raising taxes can solve most of the solution to our deficit problems. Rather, I’d like to see us establish a spending commission where tax increases are not on the table. Daylight is the best disinfectant and we need to start by implementing true transparency in the budget process. People have a right to know what their government is doing with their money. But by instituting genuine transparency in this age of the Internet, we could bring millions of extra eyes to the auditing process. We have seen that by simply exposing waste, people will rally against it and the politicos shrink under the pressure of public opinion. Only with this applied pressure from constituents, will enough of the Congress join me in stripping out unnecessary spending. But, it can and must be done.

Gilroy: Our leaders in DC have taken a Keynesian approach to the economic downturn that has involved the federal government spending hundreds of billions of taxpayer dollars in the name of spurring job creation. Is the stimulus working, and if not, what do you think Congress should be doing instead?

Gorman: There has been nothing truly “stimulating” about this administration’s reckless spending spree. If Congress wants to stimulate the economy, then they need to return to sound economic principles that have proven time and time again that you must put the money back in the hands of consumers and employers directly. I prefer to see this done through tax cuts in many different areas of the tax code and an overhaul of the useless and expensive federal regulations that are choking productivity and innovation.

Gilroy: Having worked with you on this issue in the past, I know that you’re a strong advocate for privatization and private sector solutions to public policy challenges. The Obama administration is on a federal hiring spree, bringing on thousands of new government workers at the same time that they are leading a major push towards “insourcing” (or de-privatizing) work currently performed by contractors, both of which guarantee a massive expansion of the federal government. Is privatization an issue that you would engage in Congress? If so, are there approaches or solutions you’ve seen in your state level work that might translate to the national level?

Gorman: Privatization allows for greater efficiencies, but also for better outcomes for the American people. I have worked at the state level to push for an across-the-board look at government waste attributable to “insourcing” activities that can be better accomplished by the private sector, as well as where government inappropriately competes with private industry through tax subsidies and other activities. We absolutely must duplicate this effort in Washington.

We had significant opposition in this effort, but current budget challenges confronted by states and cities have created examples of what can be done to privatize services and capital maintenance and improvement. Misinformed or disingenuous opponents of such efforts often hold up examples of where privatization projects have fallen short, but those situations are almost universally the result of poorly executed government contracts. Best practices in government procurement are key to best utilization of public resources, and the public private partnerships are only as good as the contracts which govern them.

Gilroy: What’s your view of the recently enacted health care reform signed into law by the President?

Gorman: It is bad policy based on a dangerous philosophy. I have signed a pledge to repeal it. This must be one of our primary efforts in the new Congress following the 2010 elections, as time is running out on our ability to roll back the damaging new policies that are set to trigger over the next several years. Once the nation has acquiesced to the sweeping changes in healthcare delivery, the political “lift” to accomplish the goal of saving the quality of our nation’s healthcare and the economy will be far greater. This is one that cannot wait. Lawmakers must deal it with swiftly and decisively before the damage is irreversible.

Gilroy: What’s your view of the federal responses we’ve seen to the housing market collapse?

Gorman: I have watched with a sickening curiosity as this administration and pundits have called for greater regulation and more government programs to try and “cure” what was, in essence, a course set for disaster by government regulations and government programs.

Fannie Mae and Freddie Mac are obviously primary culprits, but there is plenty of blame to go around. Government never should have been in the business of sub-prime mortgages in the first place, either in the high stakes game of backing them with taxpayer dollars or in government policies that forced the private mortgage industry to extend them to people who had no business entering into debt they couldn’t afford. Government shouldn’t be in the mortgage business at all.

With loans come inherent risks. When government sets a precedence of ultimately assuming the risk, taxpayers become the silent unknowing backstop to bad mortgage decisions. Those that make the loans must be free of government mandates so they can intelligently balance their profit and risk assessment with each loan made. But, the lenders and Wall Street firms that buy up those loans must also accept the inherent risk of those investments. Those are precisely the market forces that make the system work and serve to motivate investors to put resources and policies in place that make economic sense. When government inserts itself into the marketplace like it has, the whole profit to risk ratio formula is turned on its ear and a business philosophy emerges that is doomed to fail again and again— at the taxpayers’ expense.

Gilroy: Being from a growing state like Arizona, you’ve been on the frontlines of the national transportation crisis, where traditional gas tax revenues are falling off a cliff and states barely have enough revenue coming in to even properly maintain their existing transportation systems, must expand or modernize them to keep up with the 21st century economy. You’ve been a strong advocate for innovation in transportation in Arizona, including the use of private sector infrastructure financing, high-occupancy toll lanes and other strategies that in one way or another allow for greater mobility and a wider role for the private sector in delivering infrastructure. Why is transportation important to you, and if elected, how would you approach this issue in Congress?

Gorman: A healthy transportation system provides not just a better quality of life, but creates efficiencies in productivity for Americans and businesses. In a shrinking world where “on demand” inventory is becoming the norm, and the ability to get goods to market quickly can make or break an employer, the nation’s transportation system simply must be able to meet the needs of its people. Oberstar’s STAA bill is a disaster and, should be scrapped. It isn’t salvageable. Since the federal Highway Trust Fund has become a jackpot for pork-barrel-spending by congressmen and big government social engineers, it is best not to put gas tax revenues in peril by even allowing them to pause in the national treasury. I’d like to work to end the Federal Highway Program as we know it now. The federal government should allow the states to keep those federal gas taxes and use them as they see fit, so they can build and maintain their transportation systems at the local level.

Gilroy: What are some of your other policy priorities?

Gorman: As a gun owner with a concealed carry permit to carry my weapon for self-defense, and a teenage son participating in Arizona’s high-powered rifle team through a youth NRA program, the Second Amendment is obviously important to me. I intend to do everything in my congressional power to assure that all law-abiding American citizens enjoy the right to bear arms, as an individual right, regardless of what city or state that person lives in without “back door” freedom-limiting regulations which drive up the costs of gun ownership and ammunition, or serve as a de facto gun ban.

I’ve also been very involved in environmental and energy issues. Unfortunately, radical environmentalism has become more a religion than a science in the last decade. It’s become the textbook example of using big government and subsidies and corporate welfare for personal gain. I’ve fought and will continue to fight to eliminate the religion of environmentalism and instead base decisions on serious, peer-reviewed science and sound economic analysis. America needs a conservative, market-based energy policy. This country has vast energy reserves that could create good-paying American jobs, investment opportunities, profits, tax revenues, energy independence and security. It doesn’t require massive federal investment, tax credits or corporate welfare. It most cases, it simply involves getting government the heck out of the way.


Leonard Gilroy is vice president of government reform at Reason Foundation and senior managing director of Reason's Pension Integrity Project.