In The News
Dent, Callahan spar over spending
The Morning Call
January 3, 2010
What promises to be a hard-fought battle for the 15th Congressional District seat has started with a skirmish over government spending.
With help from the national GOP, incumbent Republican Charlie Dent launched his re-election campaign last month with radio and Web ads that portray Democrat John Callahan as a big spender for increasing the city budget and successfully proposing to raise taxes twice in his six years as mayor of Bethlehem.
Callahan shot back that Dent hasn't been so tight-fisted himself, voting for federal outlays that include millions in Congressional earmarks and the $850 billion federal bank bailout bill.
Neither can claim they're among the nation's top penny-pinching politicians.
While holding taxes steady for the last four years, Callahan's administration has increased city spending by 55 percent over six years and raised taxes in the first two of six budgets he's proposed.
Though he has often voted against increased federal spending, Dent, a three-term congressman, has earned a lifetime grade of "C minus" from the National Taxpayers Union and a 50 out of 100 from Citizens Against Government Waste, conservative groups that rate members of Congress on fiscal responsibility.
Cross hairs on Callahan
Dent and the GOP have wasted no time going after Callahan, targeting his spending record in radio and Web ads nearly a year before the 2010 election.
The ads paint Callahan as a tax-and-spend Democrat, pointing out double-digit spending increases since his first budget in 2005.
While spending has increased by nearly 55 percent, Bethlehem hasn't raised taxes since 2006. Under Callahan, the city has increased the property tax by 20 percent, less than third-class cities such as York and Easton.
Still, tax hikes in 2005 -- Callahan's first budget as mayor and 2006 were some of the heftiest levies in the city's recent history.
Callahan described those hikes as difficult, but necessary. The city's tax revenues took a serious blow whenBethlehem Steel, which comprised 20 percent of the city's tax base, shut down.
"We had to make some tough decisions early on in my time as mayor in order to be able to balance the budget, continue to pay down city debt and to continue to provide those vital services," Callahan said.
Most of the increased spending, he said, was due to increases in medical and pension benefits, wages, debt payments and inflation. Medical benefits alone, he pointed out, rose by nearly $3.4 million, or 65 percent, since he took office in 2004.
Callahan said he's proud of what the public safety spending -- which rose by 66.2 percent under his administration -- has done for the city.
Bethlehem has the lowest number of nonuniformed employees, but more police officers on the street than at any other point in the city's history. Under Callahan, spending on police, fire, and Emergency Management Services went up by $13.2 million.
"The single most important function of local government is to provide for the safety of its citizens, and it's a duty I take very seriously," Callahan said.
That, he said, has produced a safe city with a low crime rate -- one of the most important ingredients in attracting businesses downtown. Those businesses and the jobs they create, he said, helped Bethlehem rebuild itself after Bethlehem Steel left.
Dent -- and some members of Callahan's own party on City Council -- thinks Bethlehem should use some of the $7.5 million host fee the city will receive in 2010 from the new Sands Casino Resort Bethlehem to cut taxes. That's a move Callahan said he won't consider until 2012.
Dent suggested the city cut waste, such as a planned $1 million skate park that, while financed mostly by grants, will require $100,000 from city coffers.
Callahan argues that his budgets have been tight, with the city using one-time revenue sources to plug holes in the budgets during the last few years.
The political thing to do would be to offer a tax break, Callahan said, but it's not the right thing for city finances. Much of the host fee is already accounted for: $2.4 million in wage increases, $1.6 million to pay back what the city borrowed from an escrow account to pay bills, $1.6 million in additional medical costs and $770,406 in increased debt payments.
Callahan inherited a $273.7 million debt the day he took office. And the first year in office, he led the city to borrow $50.2 million more in principal.
Much of the borrowing was to bolster the city's pension fund, which took a hit in the 2001 stock market. The liability would have been on the city's books whether or not a bond would was taken out. If the pension obligation bond is taken out of the equation, Callahan's administration reduced the city's debt by close to $60 million.
Dent no tightwad
When Dent ran for Congress in 2004, he campaigned as a fiscal conservative, touting his support for a balanced budget amendment, extending income tax cuts enacted by President George W. Bush, and a line-item veto.
Taking over for Pat Toomey, a darling of fiscal conservatives, he had big shoes to fill. He hasn't really filled them, said Pete Sepp, spokesman for the National Taxpayers Union.
"We don't see the record of a superstar like Pat Toomey," Sepp said. "It makes you wonder what political dynamic might be changing there if Dent perceives he might need to be moderate on spending to appeal to constituents."
Dent is far stingier with the purse strings than most Democrats, according to National Taxpayers Union and Citizens Against Government Waste, but he's not among the GOP's fiscal hawks.
In December 2008, Dent voted against extending $14 billion in bridge and restructuring loans to financially troubled U.S. automakers and in May 2008 he voted against a proposal to allow the federal government to lend up to $15 billion to states to buy foreclosed homes for resale to families at or below 140 percent of the poverty level.
Yet, also in May 2008, he voted to spend $48 billion over five years to help fight HIV/AIDS, tuberculosis and malaria in foreign countries. And in October 2008, he was among some 90 Republicans who voted to approve an $850 billion version of legislation that created the Troubled Assets Relief Program, which allowed the U.S. Treasury to prop up ailing banks. He voted against a previous $700 billion version of the bill.
"We had to stabilize the financial services infrastructure of the country," Dent said. "The money was invested. We ended up buying, basically doing a stock purchase program to shore up the viability of financial institutions, many of which were on the brink of failure."
Dent said he voted for the pricier version of TARP not because it added $150 billion in unrelated spending and tax breaks, but because it expanded Federal Deposit Insurance that helped reassure depositors and prevent them from pulling their money out of banks.
He said he has since pushed for all TARP repayments to go toward deficit reduction.
A year ago, Dent voted to override President Bush's veto and boost funding for the State Children's Health Insurance Program by $60 billion by extending eligibility to more families. Dent said the changes brought the federal program in sync with state eligibility rules already in place.
"I felt it was something we needed to do to help a lot of children have access to some health care that they otherwise wouldn't have had," Dent said.
Dent has been a consistent no vote -- as have most Republicans -- on the Obama administration's initiatives, voting against the $787 billion economic stimulus, the Cash for Clunkers program, and consistently opposing the administration's health care reform effort and climate change plans because, he maintains, they cost too much.
"On those big issues I can make a very strong case that I have made avery strong effort on at least trying to keep spending restrained," Dent said.
Dent voted for President Bush's 2006 and 2007 budgets, which carried deficits of $248 billion and $162 billion, and against the 2008, 2009 and 2010 federal budgets, which had much higher deficits. He sponsored or co-sponsored $108.5 million in federal earmarks in the 2008 and 2009 budgets, placing him in the middle of the pack in Congress, according to Taxpayers for Common Sense.
He said he supports a moratorium on earmarks -- federal spending directed to local congressional districts -- but adds that until a ban is in place, refusing such local plums would hurt his constituents.
"If I simply unilaterally disarm or declare we will not accept any of this project funding, it means this money will be spend in other congressional districts," he said.
The tightrope Dent walks was demonstrated last month when he lent his support to a variety of federal earmarks that sent millions of dollars to local municipalities, then voted against the "omnibus" spending bill they were contained in.
Shortly after the bill passed, Dent sent out a press release touting his no vote, saying its spending increases were "simply unacceptable and unsustainable."
A few weeks later, when Democratic Senators Bob Casey and Arlen Specter released a list of programs the omnibus spending bill funded, including $1.3 million in help for police agencies in the Lehigh Valley, Dent's congressional spokesman said such funding was an "ongoing priority" for Dent.