I figured Republican Mariannette Miller-Meeks was too conservative to have a chance against Representative Dave Loebsack in Iowa’s second Congressional district. Loebsack represents the most Democratic-leaning House district in the state (partisan index D+7), and Miller-Meeks failed to reach the 40 percent mark in 2008. But I was wrong. Plenty of House incumbents who cruised two years ago are in tough races now, and many signs point to a highly competitive rematch in IA-02.

It’s been too long since Bleeding Heartland last checked in on this race. Television commercials for Miller-Meeks and Loebsack are after the jump, as well as highlights from this week’s debate between the candidates.

Loebsack’s first television commercial was a standard positive bio piece. In late September, he started running a second positive ad about his “battle to get the SEC and Goldman Sachs to reimburse the City of Cedar Rapids for their losses.”

A September 20 Loebsack campaign press release included the transcript:

Goldman Sachs’ has to pay the SEC $550 million in fines due to their fraudulent activities that hurt their investors. Loebsack believes the City of Cedar Rapids and Linn County were among the investors that were ultimately defrauded and he wants taxpayers’ money back.

In a recent TIME article, the citizens of Cedar Rapids and Linn County were highlighted as one of Goldman’s ultimate victims. The City lost $2.6 million in an investment vehicle that contained the security Goldman created to fail.

The ad begins airing today in the following media markets: Cedar Rapids, Ottumwa-Kirksville, Quincy, and the Quad Cities. A transcript of the ad is pasted below.

TRANSCRIPT of “Make Them Pay”

[Voice Over]

Record Wall Street profits, at our expense. (“How Goldman Trashed a Town” TIME, 7/5/10; New York Times, 7/15/10)

[Voice Over]

Charged with securities fraud, Goldman Sachs owes a half billion in penalties to the federal government. (Time, 7/5/10; New York Times, 7/15/10)

[Voice Over]

Dave Loebsack is demanding the government turn over our fair share of settlement money to Linn County and Cedar Rapids. To the victims who lost millions because of Goldman Sachs’ greed.

(Cedar Rapids Gazette, 7/22/10; The Hill, 7/23/10)

[Dave Loebsack]

Wall Street must pay for what they’ve done and we want our money back.

I’m Dave Loebsack and I approve this message.

I like the concept of the ad. Miller-Meeks has mocked the incumbent as “do-nothing Dave” and “Pelosi’s puppet,” so it makes sense for Loebsack to highlight his work on an issue of special local relevance. Linn is the most populous county in the district, and along with neighboring Johnson County is crucial for Loebsack. Miller-Meeks will probably carry the other 13 counties in IA-02.

I’m not sure the commercial is clear enough about how and to whom Loebsack demands that Cedar Rapids and Linn County get their fair share, or whether this has any chance of happening. This report from July indicates that Loebsack wrote to the head of the Securities Exchange Commission, but sternly worded letters don’t necessarily change decision-making in Washington. Back in the summer, Miller-Meeks dismissed Loebsack’s effort as an election-year ploy and said he voted for the financial reform bill Goldman Sachs supported. In fairness to Loebsack, he voted for original House financial reform bill, which industry lobbyists opposed, as well as the final version, which lobbyists for Goldman certainly influenced.

Miller-Meeks went up on television in September as well, with this 30-second spot:

My transcript:

Female voice-over: Incumbent Dave Loebsack has failed us. He voted for a national energy tax that would cost Iowa familes thirteen hundred dollars per year [screen shows couple and words, “Costing Iowa families $1,300] and kill 30,000 Iowa jobs [screen shows sad-looking worker in hardhat, “KILL 30,000 IOWA JOBS” Sources given: Roll call, 6/25/09, American Council for Capital Formation report, 2009]

Loebsack voted for the Wall Street bailouts [photo of smiling Loebsack, words “DAVE LOEBSACK: Wall St BAILOUTS”] and the trillion-dollar failed stimulus, [same photo of Loebsack, “DAVE LOEBSACK: $1 trillion FAILED STIMULUS”]

enabling one firm to pay themselves 165 million dollars in bonuses [arms of two men in business suits shaking hands, words “165 MILLION IN BONUSES WITH OUR MONEY” on screen]

Loebsack even told the Des Moines Register that higher taxes and Medicare cuts for seniors were on the table. [photo of woman’s face, words “Des Moines Register” in newspaper’s usual font, also words “DAVE LOEBSACK: HIGHER TAXES, MEDICARE CUTS FOR SENIORS” Source is Des Moines Register, 9/18/10]

November second, fire Dave Loebsack. [words on screen: “Nov. 2nd, FIRE Dave Loebsack”]

Miller-Meeks: I’m Mariannette Miller-Meeks, and I approved this message. [photo of Miller-Meeks, campaign logo]

That’s quite a distortion of the climate-change bill Loebsack voted for in June 2009. The American Council for Capital Formation is a conservative group representing big business interests. Those cost and job estimates don’t take into account things like money consumers would have saved because of energy efficiency gains, or jobs that would have been created in green industries.

The stimulus bill cost $787 billion (a significant portion for tax cuts), not $1 trillion. Republicans say it “failed” because unemployment continued to rise last year. But the stimulus did create jobs and support state budgets. Iowans would have faced deep cuts to education and other services without the federal assistance. Republican candidates never own up to what would have happened to state budgets without that stimulus money.

The commercial only uses Miller-Meeks’ name once, at the end, but she has unusually high name recognition in the district as a second-time challenger.

Miller-Meeks hit some of the same themes in a 60-second comparative radio ad released at the end of September. My transcript:

Female voice-over, with sound of snoring in background: Documented by the press, Congressman Dave Loebsack was caught sleeping during health care hearings. Unfortunately, Loebsack was awake when he voted to spend hundreds of billions of our tax dollars bailing out Wall Street fat cats. [sound of man clearing throat in background] And Loebsack voted for massive new government spending, tripling the national debt [sound of gong in background], mortgaging our children’s future. Incumbent Loebsack also voted for a new energy tax, which will cost every Iowa family thirteen hundred dollars, and will kill another 30 thousand Iowa jobs. [sound of alarm clock buzzing] Awake or asleep, Loebsack is bad for Iowa’s families, taxpayers and seniors.

Voice-over continues with upbeat music in background: On November 2, vote for jobs. Vote for Dr. Mariannette Miller-Meeks, a veteran who will cut taxes and cut government debt and waste, letting you keep more of your hard-earned tax dollars, while creating good-paying jobs here at home. Learn more at millermeeks.com.

Miller-Meeks: I’m Mariannette Miller-Meeks, and I approved this message.

Voice-over: Paid for by Miller-Meeks for Congress.

Standard Republican message of our times. The only part missing is “voted with Nancy Pelosi X percent of the time.” Those “energy tax” impact estimates are off-base, and even if they were accurate, the supposed costs and job losses wouldn’t happen, because the climate change bill is dead. I assume the gong ringing in the background alludes to China owning a lot of U.S. government bonds.

Note that Miller-Meeks doesn’t say which taxes she would cut. Loebsack tried to answer that question in his third television commercial, launched last week. I don’t have the video for this one, but I do have a transcript provided by the campaign:

[Dave Loebsack]

I’m Dave Loebsack and I approved this message.

[Voice Over]

Times are tough.

But Marianette Miller Meeks doesn’t seem to notice.

Miller Meeks has a radical plan for a new twenty-three percent sales tax on almost everything you buy.  (Burlington Hawkeye, 3/28/10; www.fairtax.org)

Food.

Clothes.

Even Medicine. Twenty-Three Percent More Taxes.

Miller Meeks’ plan would do away with the home mortgage deduction – hitting those who can least afford it – the hardest. (Burlington Hawkeye, 3/28/10; www.fairtax.org)

Can’t afford the bills now?  You can’t afford Miller Meeks in Congress.

When I heard about this ad, I was skeptical that anyone as smart as Miller-Meeks would be on the “fair tax” bandwagon. This monumentally stupid idea is usually embraced by Republicans like Steve King. But at an October 12 debate with Loebsack, Miller-Meeks said this about her tax proposal:

“I have never ever stated we should increase taxes by 23 percent,” Miller-Meeks said during the hour-long debate over issues ranging from taxes to government spending, the sluggish economy, health care and the environment.

Miller-Meeks said she instead wants to reform the current tax structure with a flat sales tax that would replace the progressive income tax in place today. “It would be a single tax, not an additional tax to what we already have,” she said. “It eliminates the IRS.”

Sorry, Dr. Miller-Meeks, but replacing the current progressive income tax with a flat sales tax (technically, it would be a value-added tax) is what the “fair tax” is all about. If anything, Loebsack understated the impact of her plan, because what fair tax advocates describe as a 23 percent sales tax is actually higher:

Americans for Fair Taxation offers the following plain-language interpretation of H.R. 25:

Americans for Fair Taxation: A 23-percent (of the tax-inclusive sales price) sales tax is imposed on all retail sales for personal consumption of new goods and services.

It is the parenthetical that is important, for it hides the real truth of the tax rate.

First consider the way in which sales tax is normally figured. A consumer good that carries a $100 price tag might be subject to a 5 percent sales tax. That means that the final bill for the item is $105. The 5 percent figure is the amount of tax that is charged on the original purchase price. But now suppose that instead of pricing the item at $100, the shop owner simply priced the item at $105, then sent $5 directly to the state. The $105 price would be a tax-inclusive sales price. But $5 is just 4.8 percent of $105. That 4.8 percent number, however, is relatively meaningless. You are still paying exactly the same 5 percent tax on the item.

The 23 percent number in H.R. 25 is the equivalent of the 4.8 percent in the previous example. To calculate the real rate of the sales tax, we have to determine the original purchase price of an item. We can begin with the same $100 item, keeping in mind that a price tag that reads $100 has sales tax already built in. If our tax rate is 23 percent of the tax-inclusive sales price, then of the $100 final price, $23 of those dollars will be for taxes, meaning that the original pre-tax price of the item is $77. To get $23 in taxes on a $77 item, one must impose a 30 percent tax. In other words, a 23 percent sales tax on the tax-inclusive sales price is equivalent to a 30 percent tax on the actual price of the item.

It’s ironic that Miller-Meeks is running a radio ad about letting Iowans keep “more of your hard-earned tax dollars.” Replacing the progressive income tax with a much higher national sales tax would be one of the worst things we could do for working-class people. It’s a “textbook example of a regressive tax” because lower-income and middle-income earners spend a far greater share of their money on necessities that would be subject to a much higher sales tax. People who pay little to now income tax now would be hit very hard, while higher-income earners, who are able to save or invest most of what they make, would see a big reduction in their federal tax obligations.

At Tuesday night’s debate, Loebsack mentioned “a study done by the Bush administration that he said showed a fair tax like the one proposed by Miller-Meeks would be unfair to the middle class.” I asked the Loebsack campaign for evidence to support its tax claims and received this:

What the fair tax means for Iowa families:

·         According to President Bush’s advisory council report:

o   A typical married couple at the bottom 25th percentile would see a 42 percent tax increase. (President’s Advisory Panel on Federal Tax Reform, Page 213);

o   A typical married couple at the 50th percentile of the income distribution would see a 36 percent tax increase.  (President’s Advisory Panel on Federal Tax Reform, Page 214)

·         According to the Institute on Taxation and Economic Policy:

o   Tax Increases for the Middle Class:

§  Increase the tax burden on the lowest 20% of Iowa taxpayers by an average of $3,591

§  Increase the tax burden on the second lowest 20% of Iowa taxpayers by an average of $3,361

§  Increase the tax burden on the middle 20% of Iowa taxpayers by an average of $3,714

§  Increase the tax burden on the fourth 20% of Iowa taxpayers by an average of $1,941

o   Lower Taxes for the Top Income brackets:

§  Decrease the tax burden on the next 15% of Iowa taxpayers by an average of $834

§  Decrease the tax burden on the next 4% of Iowa taxpayers by an average of $5,339

§  Decrease the tax burden on the top 1% of Iowa taxpayers by an average of $130,565 (Institute on Taxation and Economic Policy)

Miller-Meeks is a more thoughtful candidate than most Republicans on the ballot, but she needs to do more homework on this “fair tax” idea.

This week Miller-Meeks started running a new commercial accusing Loebsack of lying about her intentions:

My transcript:

Female voice-over: Why is Dave Loebsack lying? [on screen a photo of Loebsack and words, “Why is Dave Loebsack lying?”]

He knows Dr. Miller-Meeks will never raise taxes. [on screen a photo of Miller-Meeks and words, “Dr. Mariannette Miller-Meeks will NEVER raise taxes.”]

Loebsack’s game? Distract you from his job-killing record. Higher taxes on families and seniors, and job-crushing debt. [photo of Loebsack on left of screen, on right hands holding huge dice next to “Loebsack’s game,” then sad-looking man in hard-hat with words, “Unemployment SKYROCKETED Kill 30,000 Jobs,” then couple with words, “$1,300 in higher taxes,” then man with words “$13 trillion dollar debt”]

Loebsack’s lies may work in DC, but not in Iowa. [photo of Loebsack, words against backdrop of U.S. Capitol: “LIES may work in DC NOT in Iowa”]

Uplifting music, as Miller-Meeks speaks to the camera: Please don’t believe Dave Loebsack’s desperate lies. I will always protect Iowa’s taxpayers, families and seniors. I will not privatize Social Security. I will cut waste, cut taxes and help create good-paying jobs here at home. I’m Mariannette Miller-Meeks, and I approved this message.

As I mentioned above, those alleged “higher taxes” Loebsack supposedly voted for are based on a corporate think tank’s analysis of the climate change bill. Meanwhile, the stimulus bill Loebsack voted for contained substantial tax cuts for middle-class Americans, but Miller-Meeks won’t acknowledge that fact.

It seems that she doesn’t understand the implications of replacing all income taxes with a flat sales tax. That policy, which she supports, would be a tax cut only for upper-income people. Most Americans would face higher federal tax obligations.

That said, Miller-Meeks has a compelling voice, and she may be able to convince a lot of viewers that Loebsack is lying about her tax plans.

The ad mentions Social Security because in several interviews and public forums, Loebsack has said Miller-Meeks supported privatizing the program. That was her position during the 2008 campaign, but she has since changed her mind:

A supporter of allowing younger workers to put some of their Social Security contributions into private investments through personal accounts when she challenged Democratic U.S. Rep. Dave Loebsack two years ago, Miller-Meeks now opposes such “privatization.”

“I’m not for privatization given that this year we know that Social Security is paying out more in benefits than it’s taking in,” the Ottumwa Republican said in a Sept. 13 forum in Coralville.

“The numbers have changed,” Miller-Meeks, an ophthalmologist, explained at a campaign appearance at the Hamburg Inn in Iowa City Tuesday. In 2008, it appeared the retirement system would take in more than it paid out until 2017. However, this year the system is projected to pay out more benefits than it takes in. “That certainly causes all of us to look for an adjustment.”

I suspect the big stock market declines of 2009 informed Miller-Meeks’ new stance on this issue. If millions of Americans had tied their Social Security accounts to the stock market before the downturn, that would have been a disaster.

Right now, though, the main threat to Social Security comes from the deficit commission President Obama appointed. Obama doesn’t back private accounts, but the commission will probably recommend various cuts in Social Security benefits. I would like to see Loebsack promise not to support any such plans.

You wouldn’t know it from the latest Loebsack and Miller-Meeks ads, but for the most part the IA-02 campaign has been less acrimonious than other House races around the country. Miller-Meeks and Loebsack sparred during their October 12 debate, but Steffen Schmidt described it as a “calm and civil” event. That’s the impression I got from Trish Nelson’s live-blog of the debate. Miller-Meeks objected to how Loebsack characterized her tax proposal, and Loebsack objected to her assertion that he flip-flopped on extending the tax cuts, but that is mild compared to what some candidates say about each other. When Loebsack and Miller-Meeks appeared jointly on Iowa Public Television last month, they also disagreed in a relatively respectful way. You can watch the video or read the full transcript here.

Loebsack and Miller-Meeks agree on some issues, like moving from fossil fuels toward more renewable energy use and repealing the military’s Don’t Ask, Don’t Tell policy. Even though Miller-Meeks opposed the health care reform bill Loebsack voted for, she has said it has some good provisions. Many Republican candidates claim there is nothing in the bill worth keeping. For his part, Loebsack has agreed that Congress should repeal a provision of the health care bill relating to small business tax filings, which Miller-Meeks has criticized. One can’t imagine a Brad Zaun talking about issues in detail the way Miller-Meeks does, and that makes me more baffled that she doesn’t seem to know the implications of the “fair tax.”

As a Republican in a Democratic-leaning district, Miller-Meeks has wisely put some distance between herself and the GOP leadership in Congress. Asked about the Republican “pledge to America” unveiled last month, Miller-Meeks said she hadn’t read the whole document. She talks about lowering taxes and cutting spending but has avoided more extreme positions often heard from Republican candidates, like eliminating the federal Department of Education. The conservative Coralville Courier blog, which backed Steve Rathje in the IA-02 primary, didn’t care for Miller-Meeks’ performance in this week’s debate because she came across as too moderate.

Speaking of discontented conservatives, Miller-Meeks seems to be having less trouble with them this year than she had in 2008. Some conservatives who had backed Peter Teahen in the IA-02 primary vocally opposed Miller-Meeks during her first general election campaign against Loebsack. Iowa Right to Life sent out a newsletter calling her a “great pretender”. (Miller-Meeks is anti-choice but thinks abortion should be legal in cases of rape, incest or danger to a mother’s life.)

I don’t know whether second district conservatives are more satisfied with Miller-Meeks now or are just better at being loyal Republican soldiers. One exception that proves the rule is Rathje, who’s giving off a strong sore loser vibe:

I wonder how many Republicans will cast a vote for a “Republican In Name Only” just because their name appears on the ballot?

Iowans can begin voting today. I proudly cast my votes for Branstad and Reynolds, Vaudt, Northey, Findley, Schultz and Jamison. Vote now!

Grow up, Mr. Rathje. Miller-Meeks got more than twice as many votes as you did in June, even though she didn’t run a single television commercial during the primary campaign.

To beat Loebsack, Miller-Meeks needs Republicans united behind her as well as a strong lead among no-party voters. Since no recent polls of the IA-02 race have been published, it’s hard to evaluate her chances. The American Future Fund polled the race just before Labor Day and found Loebsack ahead 47 percent to 39 percent, but much closer results on the generic Congressional ballot. In September, Miller-Meeks released partial results from an internal poll showing a tied race: Loebsack at 41 percent, Miller-Meeks 40 percent, with 13 percent undecided. Miller-Meeks refused my request for details about the demographics of that poll sample.

I assume the race is close, because Loebsack’s campaign hasn’t released any internal polls and has a negative commercial running on television. Also, the AFL-CIO has sent out at least three direct mail pieces criticizing Miller-Meeks for opposing financial reform and supposedly wanting to privatize Social Security (see also here). I assume the union wouldn’t get involved unless they thought Loebsack was in danger.

Factors working in Miller-Meeks’ favor are high unemployment in pockets of the district, a potential “enthusiasm gap,” a swing of independent voters away from Democrats, and Republican candidates leading at the top of the ticket in Iowa. She will have to improve her performance in Linn County and Johnson County; Loebsack racked up a 47,000 vote advantage in those counties in 2008.

The political lean of the district works in Loebsack’s favor. He has also been able to run more advertising district-wide. The National Republican Congressional Committee bumped Miller-Meeks up to the top tier of its “Young Guns” program recently but hasn’t reserved any air time in IA-02.

The ballot measure on Iowa City’s ordinance banning people under 21 from local bars has boosted turnout among University of Iowa students beyond the usual level for a midterm election and has mobilized many of the city’s residents not attached to the university. That should help Loebsack, since Iowa City has very strong Democratic voting performance.

Any comments about the IA-02 campaign are welcome in this thread.

UPDATE: Miller-Meeks reported loaning her campaign $359,600 in the third quarter and raising another $211,700 for $571,300 in total receipts. As of September 30, her campaign had $406,745 cash on hand, enough for lots of district-wide advertising.