In a Q&A, the former City Council president talks taxes, Republicans, Occupy Wall Street, Obama, immigration and more
By David Rolland
November 30, 2011
Thanks to a recent redrawing of political boundaries, Democrats have a real chance of taking the new 52nd Congressional District from incumbent Republican Brian Bilbray in 2012, and two high-profile Dems — former state Assemblymember Lori Saldaña and current San Diego Port Commissioner Scott Peters — want to be the one doing the grabbing. The new district includes Poway, Mira Mesa, Scripps Ranch, University City, La Jolla, Pacific Beach, Ocean Beach, Point Loma, Little Italy, part of Downtown San Diego, Coronado and Imperial Beach.
Peters, a lawyer by trade who lives in La Jolla, spent eight years on the City Council and was the council’s first president. We interviewed him on Nov. 21, and he demonstrated how he’ll field and deflect questions during the campaign about the city’s pension mess and securities scandal that blew up during his tenure. He also talked about his policy priorities at the national level, President Obama, Occupy Wall Street, the Republicans and more. Here’s an edited transcript:
CityBeat: Talk about how your decision to run unfolded. And why Congress and not state government?
Scott Peters: I, like a lot of people, watched this summer what happened in Congress, and we saw this incredible polarization that led to this fight over the debt limit like we’ve never seen. And even though they kicked that can down the road, they waited long enough so that our debt was downgraded for the first time in the country’s history, which will make the cost of borrowing even more expensive for all the borrowing that we’re doing because we haven’t balanced the budget. It’s an atmosphere where no one seems to be talking to each other, and I could make a contribution and help fix it. It comes at the worst time, too, in the worst economic condition we’ve been in for decades. So, it’s a place where change is needed, and it seemed like a good opportunity for me.
Talk more about how the decision unfolded. Were there people who talked to you?
When the new district lines came out, I got a couple phone calls from people saying, “Have you looked at this? This matches you pretty well.” The district is about a third Republican, a third Democrat and a third independent. It includes my whole council district, with the exception of a few houses in the Del Mar part of San Diego, and it includes most of the Port tidelands in San Diego, in addition to Coronado, which is also a Port city. So, it’s an area that I know pretty well, and people said that no one from the extremes is going to be able to win this seat. This is going to be made for a moderate, and I think that’s my reputation. When you look at it, you think, first of all, is it something you can win? Is it a right time for your family? And is it a place where you’ll make a difference? I think people in the district are probably going to want a change. My son is filling out his college applications, and he’ll be gone, and my daughter’s already in college, so it’s not a bad time for the family. And I think the situation calls out for someone who can talk to people, listen and make solutions, and that’s what I do.
Let’s get a big one out of the way. You were on the City Council in 2002 and cast votes to under-fund the pension system and enhance retirement benefits for city employees. You were also deemed negligent by the Securities and Exchange Commission—.
No, by Arthur Levitt, a consultant working for the city. We hired Arthur Levitt. I think that’s very important. I don’t want to re-litigate all those years, but it wasn’t the SEC; it was Arthur Levitt. And, by the way, let me just say that I think that’s a great experience for working in Congress. I had not intended to be a pension reformer when I went to the City Council. I wanted to clean up the beaches and bays and finish the highway and build the parks. And we did make mistakes early on. And that’s why we tried so hard to fix them. So, we impaneled the Pension Reform Commission, and we hired two outside consultants—the council and the mayor—to tell us what we did wrong and how to fix it. And then we took those steps that were recommended and made a ton of corrections, so that by the time we left, what the SEC said, through its monitor Stan Keller, was that San Diego was a model for other cities undertaking pension reform.
What I’d say to you and folks who watched my career is, compare that to Washington, D.C., where they’re continuing to do things as they’ve always done them. They’re not course-correcting. They’re stuck in this kind of do-nothing polarization. They could do a lot by taking the example of San Diego—it was not pretty; it was not fun to take on people and tell them things were going to have to change. But we did take those steps in San Diego, and I think even the San Diego Taxpayers Association, if you ask them, what city has done more than San Diego, they won’t tell you that anyone has. That’s what the SEC said.
The reason San Diego had to do this course correction is because of these votes between 1996 and 2002.
It was actually before that. The siphoning off of pension profits to pay for healthcare started under Pete Wilson. So, the idea is, if you earn more than 8 percent, that money was taken and spent on healthcare. It was actually three decades of bad practices. We did take votes in 2002 that were consistent with those practices. But, I would just say to you that that wasn’t really what caused it; we were the council that stopped the under-funding, we stopped the siphoning off, started requiring workers to pay for a larger percentage of their benefits. And I negotiated a pension system for new employees that is really the least generous of any pension system in the county. And, again, in Washington, they’re not doing that. Anyone who’s been there and voted on a budget in the last few years has contributed to the problem.
If elected, what would be your priorities?
It’s got to be about creating jobs, and that starts with dealing with the budget. Right now, you have to say that the Democrats seem to be showing a little bit more willingness to compromise than the Republicans. And we have to do something about the tax system, where tax rates are the lowest they’ve been since the ’50s, before the Korean War. At a minimum, we have to let the Bush tax cuts expire, so that everyone is making their contribution to solving the problem. I’m not saying, by the way, that that’s the only [solution] because I do think that there’s an opportunity for tax reform that would be progressive and maybe get out of the way of business; I don’t have any trouble with that.
But the problem is, the people who are able to pay have to be making that contribution. And that’s how we’re going to get to be able to do things like what’s in parts of the American Jobs Act. For instance, there are incentives to hire veterans, which would be really useful for San Diego, or just provisions for keeping teachers from being laid off. We’re talking about 200,000 teachers being laid off—that can’t be good for an American future that depends on education. So, those things are really important, but you really can’t pay for them unless you deal with this tax issue, which I think is job No. 1.
There are a lot of other areas that affect job creation in San Diego and nationally, whether it’s an energy policy that leads us away from fossil fuels and to more renewables, or immigration policy that’s just a sane treatment of the border for us, or dealing with a transportation infrastructure—we know our bridges and roads need repair; that would provide jobs in the short term because of construction, but also in the long term because of goods movement. It would make goods movement more efficient, and trade will create jobs.
You’re preaching to the choir on the revenue side—.
I should say that, too, that there are legitimate cost concerns that we have to deal with. Democrats haven’t always been that great in terms of cutting costs. I understand that from being at the city. We had to make a lot of sacrifices that the base constituencies weren’t that happy about. But we did it in a way that was respectful to working people, and I think I have a good reputation coming out of that with them. We need to look at getting Medicare costs under control. I’d like to see the healthcare plan that’s in place now have a chance to work. But, clearly, if it doesn’t work, if it doesn’t control costs, we’ll have to fix that and maybe have to take more measures that the 1970s Democrats would not have taken. So, there’s room on both sides.
Any more specifics on entitlement reform?
This is not a moral issue; it’s a problem to solve, right? But I would say a couple principles: One is there are people who are retired today; you can’t take away their benefits. There are people who are near retirement who are counting on these retirement benefits; it’s really not fair to change things on them. That’s always what I worked on in the past: Let’s be fair to the people who’ve depended on this. But I think if you talked to someone who’s 30 years old, he or she’s got a whole different view of what Social Security’s going to bring. And maybe that’s a place where we can be changing what we put in and what we get out. I do think it’s important to have some health security for folks as they retire, but it could be a different mix than it was in the ’30s, when Social Security started.
We’re already raising the retirement age, and clearly that might have to go up. You might have to change the cost-of-living calculation, just because it may be inflated more than costs are actually going up. And it’s possible that when people reach a certain level where they don’t need the benefits, we might think about not giving benefits to people, to the extent they don’t need them, as much as we do today. It should be done as part of a larger conversation about sustainability, but making sure that people have retirement security.
In light of all these ideas, what could you possibly get done as a freshman member of Congress?
Even though it’s not one of nine [members] or one of seven, I think the dynamics may be the same. And it’s a matter of getting on a committee and listening to folks and working with them to come up with a solution. And I do believe that if you’re respectful of the institution, you can have an influence. But I would also say this: Our [congressional] district gets to elect exactly one of the 435 representatives in Congress. The change is going to happen one by one, and if you have someone in there who’s not doing the job, it’s totally appropriate to make a change and try to give someone else a chance. We have a representative today [Brian Bilbray] who signed the Grover Norquist pledge that is absolutely in the way of dealing with these budget problems. Twelve percent of the federal budget is non-military, non-entitlement, non-interest. You can’t solve the problem staying in there and just cutting. We’ve had really serious repercussions, not just for families—poor families, middle-class families—really for the economic future of the country. You have a person who voted to de-fund Planned Parenthood as part of the budget, not even as a principled stand, but as part of the budget negotiations. You’ve got [his] really extreme views on immigration that make the Georeg W. Bush plan look like a leftist plot. So, just sending a message that you’re going to make a change there, I think, would be important for the district, and it’s a start. I’d like the chance.
What committee assignments would you seek? And would you immediately work toward attaining a leadership role in the party?
It’s a little presumptuous at this point to talk about what committees I want to be on. Let me tell you what I’m interested in, though: I’m interested in what could be a big effect for San Diego, and I think the issues of energy, immigration, veterans affairs are important for San Diego. Obviously, I have a background in tax policy—I’d be interested in that kind of stuff, too, in general. And absolutely I’d seek to provide leadership. I’d prefer not to be a backbencher—that’s never been my role; I don’t think that’s the most effective place to be. Think of the leaders who’ve come out of San Diego recently: We’ve had Darrell Issa, who’s obviously become a leader in a short amount of time—although not necessarily on the issues that San Diegans care most about. And Duke Cunningham, who got on the Appropriations Committee.
How would you assess Obama’s tenure so far?
I think he’s done a pretty good job in very difficult circumstances. I mean, when the [minority] leader of the Senate says that the goal is not to fix healthcare, to provide cheaper healthcare or to provide universal healthcare, but to defeat a president’s reelection, that’s a difficult place to start. I think he’s done some good things. [I] wish he’d started this jobs effort a little earlier. I was a Hillary supporter because I thought she’d have more experience, but I’m fine with the president now, and I’ll support his reelection. But you’ve got to know when to fight and when to negotiate, and sometimes I think you need to fight before you negotiate, and I think we wish maybe he’d done a little bit more of that. I wish him the best of success, though, because I think he’s trying to do the right thing.
How are you feeling about the Occupy Wall Street movement?
People complain that they don’t have an agenda, and I guess that would be my typical reaction: What are you trying to do? What are you trying to get? But I understand that people are really frustrated around the country with institutions they just can’t trust, whether it’s the government or the church, even Major League Baseball. I think a lot of people feel let down, particularly today where you have Wall Street—you have people who seem to have brought the economy down and not have borne the consequences of the risks that they took. And there’s a great amount of frustration, and so I think people should take heed of that and the alienation that that represents in dealing with public-policy issues to make sure that we don’t have that disconnect. In general, we need to be more responsive through the government and through the regulations that we enact.
The Dodd-Frank financial-services reform—was that good legislation? And would you want to reform financial services further?
Clearly, what we had wasn’t working. Remember that what made America so attractive a place to invest in the last century was that we had fair rules that people could trust. So, the securities laws of 1933 and 1934, I’m sure businesspeople hated that when that was set up. But it gave investors a sense that “No one’s cheating me; I can play in this field without insider trading and things like that.” We have a free-market economy, but there are rules set up so that it’s fair and it works and people trust it. So, in the last decade, we got away from that. People were giving appraisals on houses that were really out of bounds, and mortgages were going out to people who never should have been able to afford them, and there seemed to be no relationship between the risk that people were taking and the money that they were making and the consequences of all these things. The book by Michael Lewis, The Big Short—you could see how very few people saw this coming, but really we should have been looking out for it. So, Dodd-Frank is a response to that. I hear it’s imperfect. I hear people complain about it, which is fine. But don’t tell me we’ve got to go back to where we were. Just like on healthcare: Don’t tell me we’ve got to go back—we’ll repeal Obamacare, but then we’re going to be back in this other unsustainable position. So, let’s all work together to come up with something that works. I know Dodd-Frank is a start. Some people say it’s clumsy—alright, let’s fix it, but let’s not pretend that we can go back to where we were, in a situation that was totally uncontrollable and really let this bubble get way too big before it burst.
My question is about whether the financial-services sector still has so much power over government that Dodd-Frank was too watered down, and do we need to regulate further. I had essentially the same question about healthcare reform.
First, let me say that I’m a little bit humble about exactly what I know yet. As you can imagine, I’ve been trying to do a lot of reading and learning about this stuff. I’m not going to pretend that I know everything. I’ve read the Simpson-Bowles report and I’ve read some books. And I have to tell you, too, for me the healthcare stuff is the hardest to understand. And I’m talking to a lot of San Diegans about what they think about that. So, I’d like to talk more about that in the future, although one thing I’ve noticed about healthcare is that there were these efforts to fix it all along and the president kept coming up with ideas, and he had a lot of people say that they were terrible ideas but they never made any constructive suggestions about how to fix them. So, the idea that we can go back to where we were is just irresponsible. If you don’t like the healthcare plan, offer some suggestions on how to fix it. But don’t tell me we’ve got to go back to where we were, because everyone knows we still have the highest healthcare costs in any industrialized country with results that don’t justify it.
But on Dodd-Frank, I would just say that it’s probably a little bit too early to say that it’s too tough or too loose. I think you’ve got to give it time to work and see if it works. And I’m not sure you break up every bank that got too big. I think there’s a lot about the financial-services sector that’s done well in terms of creating wealth and letting people live the American dream. I just want the rules to be fair and transparent, and I want the people who take risks—which is great; if you’re a great risk taker, you should bear the risk and consequences of that risk, and not just the upside consequences, but also the downside consequences.
The Tom Udall amendment to allow the federal and state governments to regulate campaign finance—would you vote for something like that?
That sort of reverses Citizens United, which I think is a really tough ruling. When I was in city politics, a lot of the people who make donations—for which you’re very grateful—are also the people who are interested in the outcome of the votes. Sometimes that’s fine because you agree with the position of the people that you’re supporting. So, when I was against rent control, the apartment association supported me. Now, I’m a pro-choice candidate, and I’m sure I’ll get support from Planned Parenthood. On the other hand, there’s probably a pressure that’s unnecessary on elected officials because they need to get money to run these big campaigns, and I think we ought to find ways to relieve that, and I think doing something to deal with Citizens United is probably a necessary first step.
Would you support reclassifying marijuana in order to break the conflict between the federal and state governments?
I decided to go with what the state says about that. It’s funny, my father would like to legalize marijuana, which is a funny position for me because he’s a minister, and you don’t know what to expect from him. In California, we voted to make marijuana available for medicinal purposes, so I support that. Just recently, we voted not quite to make it legal. I think as a resource matter, it’s probably not what you want to spend the most time on, but I think the people want law enforcement to have that as a tool, and I would respect that and support that position.
But what about reclassifying marijuana—right now, it’s a Schedule 1 drug on par with heroin.
Yeah, I understand that. What I would do is, I would accommodate states’ ability to make decisions on that. So, I’m not sure that reclassifying is necessary to respect where California is.
But it sort of depends on who’s the president and what orders they give the DEA, because it is against federal law.
We seem to have been able to adopt a medical-marijuana plan at the City Council. I guess what you’re saying is that that’s a presidential thing. I think whatever the federal government does should respect where the states want to be on that. I don’t think, as a practical matter, we have a ton of money to spend on marijuana, as a society, in enforcement—I think heroin is a bigger priority; there are probably other big priorities. But I guess I would respect the states’ choice on how they would want to handle that from state to state. To the extent it has to be reclassified to accommodate what California voters have chosen to do, then yes. But it sounds like it’s more of an enforcement choice.
What is your level of interest in foreign policy issues?
Growing. You know, we’re at war. People tend to not even be paying attention to that, which I think is remarkable. We’ve spent a ton of money, some of it righteously trying to defend our borders, some of it perhaps we would want to rethink. There were no weapons of mass destruction as we were told, but I think there are real threats. So, I guess as an elected official of the federal government, I think we have to be up to speed and familiar with what the threats are, when it’s appropriate to be spending money on defense and even nation-building around the world, as opposed to spending money at home. I’m a little bit worried about Iran and Pakistan and what’s going on in the Middle East. I think there’s an appropriate amount of effort to be spent on protecting ourselves there.
I’m chuckling as I ask a question about foreign policy because it just seems sort of surreal talking to you about foreign policy, with all the things we’ve talked about over the years—pensions and living wage. To be suddenly talking about Pakistan strikes me as kind of funny.
I guess I’ve got to get past that, don’t I? [Laughs.]
There’s talk of reducing the amount of aid that goes overseas. Have you given that any thought?
I do think about that. It’s sort of like crime prevention—there’s a lot you can spend up front that’s a lot cheaper than having things fall apart and having to clean up at the end. So, I really believe that foreign aid is important as a tactical, preventative, alliance-building kind of strategy. The notion that we should just not do it because it’s foreign, I think, is probably unwise and a little bit blunt. For all these expenditures, you’ve got to look at them critically. But clearly there’s a reason to make friends around the world, and it’s cheaper to do it up front than it is as part of a military alliance. I see foreign aid as an important part of our diplomatic and strategic plan.
Every time the PATRIOT Act comes up for renewal, Susan Davis votes to renew it, Bob Filner votes against it. Where do you come down?
I think there’s parts of the PATRIOT Act that I’m uncomfortable with, like the classic thing of knowing what you’re checking out at the library. All this security stuff—I mean, it’s obviously very important. At the same time, it seems like we spend a lot of resources on, you know, patting down a 12-year-old girl. I guess I would maybe ask for some time to look at what the status of the PATRIOT Act is now, because I know it’s come up and it’s probably been changed a couple of times. We have to protect our borders, and information security is important to that, but there’s a balance, though, too, because a lot of what makes us America is the freedoms that we enjoy, and it does concern me that we would cut into those.
You mentioned George W. Bush’s immigration policy—.
We’re all for George Bush’s policy. I’m adopting it—how ’bout that? [A] secure border against real criminals, not people who come across the border to pick strawberries. Real criminals. [And] a reasonable guest-worker program and a path to citizenship for people. By the way, at the top end, the educated people, there’s something called the Staple Act, which is if someone gets a Ph.D. here, you staple their citizenship to their diploma so say stay here and create jobs here. That kind of approach makes a lot of sense to me, too. Why would we be kicking out people who came here to be educated and telling them to go start their company someplace else. It’s absurd.
There’s a battle in Congress to maintain funding for open-data initiatives. Is that a funding priority for you?
Yeah, it is. I don’t think that’s the biggest issue. It’s a cheap thing. It’s not so much the ability to put stuff online; it’s that you have to disclose. I understand there’s a lot of people who don’t want to disclose where they get their campaign money from, and now there’s these secret organizations, they’re taking a role in politics and we don’t know who they are. It’s great to put that online, but first you have to have a law that says what you have to put online. I think that’s the bigger priority.
I don’t know if you saw the 60 Minutes on insider trading in Congress. Here’s another thing that’s amazing: There’s no law against insider trading in Congress? They pointed to a guy, Spencer [Bachus] from Alabama—he got a briefing, apparently, that the economy was about to collapse, so he goes out before the next day’s news and makes a bunch of trades on his own account, saves himself a bundle of money. And there’s no law against that. Can you imagine? You’d be amazed at how much effort I take to make sure I don’t own a stock on anything I vote on. I pay someone to look over each docket, just because I don’t want to make a mistake. And I made mistakes anyway; at least a couple of times of the eight years [on City Council], we missed something. But in Congress, you can flat-out go in and trade on information that nobody else has. It’s, like, the law doesn’t apply to you, and that is absolutely astounding to me.
They interviewed a former congressman from Washington who put in a [bill] to make insider-trading laws apply to Congress. Out of 435, how many cosponsors do you think he got? Six. And that’s where we’ve gotten to. That’s the kind of thing where, if you worked in local government, you wouldn’t even dream—you’d walk out of the meeting and say, I have stock; I’m out—I would not even dream of that. It’s not the disclosure on the Internet; it’s the rules of what you disclose that are much more important.
And so we can expect you to be a member of that small minority?
I’ll be the seventh person! I’ll be part of the 14 people who go to lunch once a week as Democrats and Republicans. It used to be where Tip O’Neill and Ronald Reagan were best friends. They’d beat the hell out of each other during the day and then they’d have a whiskey at night, because they understood they were working for the good of the country, and we totally lost that. And the representative we have—he’s on that team. And we can just do better. By the way, I won’t be trading on information. I’ll apply that rule to myself even if Congress won’t apply it. I mean, it’s just preposterous.
Anything else you want to talk about? [Peters’ aide, MaryAnne Pintar, suggests he talk about what drove him to public service in the first place.]
You’re supposed to ask me how I’m part of the 1 percent! I didn’t come from money. My parents put my three sisters and me through college on a minister’s salary. They saved their money. They borrowed against the house. And my mom went to work as a church secretary. They did all the things that families do to get their kids through school. And the federal government stood behind us; I got government-backed loans. I got a work-study job. Remember work-study? You get a job that’s subsidized by the government; you work your way through school. I cleaned pigeon cages and was a telephone operator. So, what concerns me, and one of the reasons why I’m interested in this: I’m not sure that all kids are having the same opportunity that I had, to make it. My sisters and I got into law and healthcare and education and business, you know, because we had a chance. And that seems to me to be disappearing. So, now that I’ve been very fortunate to do this and be able to be in the positions [I’ve been in], to do something as crazy as run for Congress, I think I’m sort of called to do it. It’s important.
Are there any national figures, past or present, who would serve as a model for your own public service?
I like a lot of the presidents. No. 26, Teddy Roosevelt—oh, I’ve memorized them all. [Laughter.] I liked Teddy Roosevelt because he really stood up for what was right, at a tough time. In terms of both monopolies and national parks, I thought he was quite great. And I like the ones who have looked toward tomorrow and thought beyond the limitations of the day. So, I liked Kennedy that way. Who’s going to announce the next moon launch—whatever it is. We’ve lost that kind of daring that we used to have.
Is there anybody on the scene today that you admire, on the national level?
[Long pause.] Um. [Long pause.] You know, I—. [Long pause.] Most of those people—I don’t think it’s the people who are the problem. I think it’s the system. I bet if I met most of those people in Congress, I think they probably got into it for the right reasons. People respond to their incentives, and the incentives are bad. So, I’d hate to say that I don’t admire any of them, that they’re all bums, but you’ve got to make a change in those incentives to really make it work. I’m not a person who goes around slamming people, as you know, typically, but I hope that I find a bunch of people who are really trying to do the right thing and only need a few people to stand with to change course. We can find that, I believe, in those people—most of them. I hope.