Gov. Hickenlooper: Colorado Can’t Afford To Make Up Some Cuts In Trump Budget Proposal

Ryan Warner: Governor, welcome back to the program.

Gov. John Hickenlooper: Glad to be back.

RW: After this plan was introduced, you said that your administration has reached out to Colorado’s congressional delegation to ensure that, quoting here, “Colorado’s values and priorities are protected.” Where specifically do you believe those values and priorities are in danger?

JH: Well, I’m no stranger to difficult budgets. That being said, if you look at things like the EPA, which play a large role in making sure that we have clean air, clean water; that we continue to make progress away from the days of the brown cloud, those days are hopefully long behind us.

RW: This was a cloud that often sat over the city of Denver.

JH: Yeah, exactly for a long – I mean days at a time with – if you had any kind of respiratory problems, very, very serious issues. We’re very concerned about the cuts to agriculture, the grant and loan programs for water, to make sure there’s safe supplies of water. They’re going to – they would, most likely, if those cuts were made, have to shut down a number of offices. Getting rid of the USAID purchases for foreign aid, that would directly affect the prices of corn and wheat in this state, which we’re already at some of the lowest commodity prices. You know this whole notion of using this budget to continue to look towards a stronger dollar. A stronger dollar makes it harder for farmers to export what they grow and what they raise. So again, with already low commodity prices, to put further downward pressure on them – and you have to look at the budget not just by itself, but at the same time we’re doing the budget, we’re kind of throwing a great deal of uncertainty about our trade relationships with some of our major import/export partners like Canada and Mexico, especially, for agricultural products. Again, you take away some of your markets in which you sell your exports, you’re going to get worse prices. That’s just the way the system works. So I think agriculture – I was shocked. I mean, what did rural Colorado ever do to hurt President Trump? What did they ever do to President Trump except vote for him, right? They were a big part of the momentum behind his campaign and in many ways, this is really some serious losses. You talk to Don Brown, our Commissioner of Agriculture; I think you could say he was shocked.

RW: Is this a bit doomsday? So you’re talking about the quality of water, that a brown cloud could return, that there could be hard times ahead for farmers. Meanwhile, the administration says a lot of what it’s doing is to spur job growth and remove regulation on industry, that there are any number of ways that lives could improve for Colorado.

JH: Well, I mean this is a budget. The president lays it out; the system’s not that different than what we have here in the Colorado – in the state of Colorado where the governor lays out the budget and then the legislature dramatically changes it, and they really have the final word, and I think Congress is going to have a strong difference here. This notion that getting rid of regulation is somehow going to spur job growth in some cases may be true, but in many cases it’s not and initial regulations that people rebelled against at the time of having seatbelts, right, universal seatbelts everywhere. Well once you get the system of putting those seatbelts in and gear up to it, cutting that regulation doesn’t really do much good.

RW: I think that some would argue that the regulations they’re talking about aren’t potentially as common sense as restraining someone in a moving automobile.

JH: If you’re removing regulations and you can demonstrate that that’s going to make the air less clean, it’s going to allow more pollutants, more particulates, more ozone, more pollutants of all kinds into the air, I mean we’re not necessarily going to back to the brown cloud, but if you’ve got a child who’s got respiratory issues, you can feel fairly confident that over a period of time, those ailments are going to get worse. I’m not doing it to be doom and gloom; I’m just saying you really – your air's and your water's either getting cleaner or it’s getting worse. It doesn’t – nothing stays the same in this life.

RW: The proposed cut to the Environmental Protection Agency is 31 percent. Which programs that are now federally funded would be priorities for the state to step in and fund?

JH: Well, I’m not sure. The – you may have missed this, but we’re going through a $700 million budget balancing exercise here because of TABOR, we can’t pick up the slack in the same way that some other states can. We don’t have anywhere near that flexibility. So we look at the grants – a large number of the grant programs that come from the EPA, the superfund sites, right, the -

RW: These are for highly toxic places that need cleaning up.

JH: Right. We’ve had sites that have been waiting for more than twenty years to get – and we thought we were getting close to where the funding was going to be brought together, and now all of a sudden, it looks like that could be pushed off indefinitely. In many cases, these polluting old mines or former extraction industry are continuing to pour polluted water into our systems, and pushing the solution off into the future is probably not a great idea.

RW: The president’s proposal also calls for billions of dollars in cuts to research spending nationally. Colorado’s a research hub, both through the federal labs like the National Renewable Energy Laboratory and grants to institutions like CU. The Trump Administration says it will focus federal money on early stage applied energy research, the fundamental science that’s the building block that may lead to development of new products. Once that early research is done, should private companies be expected to pick up a bigger share of the research tab?

JH: Well it’s funny that – because in Colorado, we really have pushed. Part of the Colorado Innovation Network, what we call COIN, was set up to take all those university laboratories and all those federal labs and the innovations and ideas that come out of them, and try to have the state and business be better partners at taking a good idea and turning it into jobs. I think the president is saying he’s going to fund early research and then leave it for the states. So we’re already doing that; I don’t think it’s going to affect us too much one way or the other. We’ve got a pretty good ecosystem of getting research to market. I’m not – this is not a “sky is falling” moment, although I will say I’m very concerned about the level of cuts and the direction they are, but Colorado also has a large military presence and a lot of high level research going on around military.

RW: I’m glad you mentioned because a lot of these cuts are to make room in the federal budget for more military spending.

JH: Right.

RW: To the tune of some $54 billion and indeed, that’s a 10 percent increase. We’ve got major military installations here and as you said, contractors working on military projects. So do you see elements in this budget that would actually help Colorado?

JH: It could help. Again, there’s not – there are no specifics or very few specifics that would give an indication of how much net positive or net benefit, but again, I am concerned – our economic recovery has been profound, right, since 2007, 2008. We have come back with a fury and by most measures, we’re one of the – either the top or one of the top economies in the country. What we’re really focused on is, “How do we get, and make sure, that economic growth and success gets translated into rural parts of Colorado, in to the lower income communities?” I don’t see much support in President Trump’s budget to help us raise up rural Colorado economies, to help us get them better prices for their products. I don’t see many places where we’re – it’s going to help us get into lower income communities and do a better job of educating, training, getting those young kids ready for the jobs that are going to be available.

RW: Are you saying in that regard, a defense boost of this size is misguided given the kind of promises that the president made on the campaign trail?

JH: I would say that I think – and I’ve heard this from a number of people – that there’s a level of disappointment. I’m not criticizing how much of one side or the other. We haven’t seen the details yet, but many people who have talked to me – and they are experts on it from a variety of perspectives – say that there’s a level of disappointment that the increase in the military would – I mean President Obama was going to increase it a certain amount, a significant amount, and this is going considerably past what he suggested. I think that to make all these cuts in the EPA and in workforce training, in support for education, taking away all these funds for research – which is part of the foundation of our higher education – it’s tough.

RW: I’m glad you mentioned Colorado’s economic recovery, which – what were your words? You said it was – not quite “miraculous”, but…

JH: Well we certainly – I mean U.S. News & World Report came out a week ago and said, “We have the number one economy in the United States.”

RW: If that’s the case, I want to ask you about Medicaid because the future of that government healthcare program for the poor is in question. How is it that in a state that’s prospering, as you say it is, one in four Coloradans is on Medicaid?

JH: Well -

RW: That employment rate here is 2.9 percent. It’s the lowest since 2001. Do that many people need to be on subsidized care?

JH: Again, this is one of the big arguments around minimum wage and the estimate these days is for the total homeless population. Thirty to forty percent of them are working more than thirty hours a week and that somewhere close to 20 percent are working forty hours a week, right. So it’s not the vision most people have as someone sitting around on a busy thoroughfare panhandling for loose change. These are people working and we don’t pay people enough.

RW: And yet Coloradans did raise the minimum wage in the last election.

JH: We did and I think that that will have some benefit, but that – in terms of like Medicaid where raising the minimum wage gives people $1,000 or $2,000 a year, there are many people who are far out of reach for Medicaid, and that’s one of the challenges. As technology evolves, it is one of the greatest concentrators of wealth that we have ever seen and it’s probably been more than 100 years since we’ve seen this level of concentration of wealth, and you kind of have to expect that you’re going to see more people struggling to be able to afford rent, more people being able to afford healthcare. I mean this is one of the challenges we’ve got to address.

RW: And yet won’t you hear from some Republicans that there are people on Medicaid who don’t need to be?

JH: And I’ve heard the same examples that there are some people on Medicaid that were offered a raise and wouldn’t take that raise because then it would put them up and it would take them off Medicaid, and I’m the first person to say, “Let’s get to a sliding scale.” There shouldn’t be this cliff effect where someone gets an extra $2,000 a year raise, suddenly they lose so many benefits that the raise isn’t worth it. We should be providing everyone an incentive to keep succeeding and working better and trying to get a raise and a promotion, and Medicaid should be part of that system. I mean, it’s the 21st Century. Can’t we figure out the technology to have a sliding scale?

RW: And to do that calculation. The Colorado Health Institute says that under the Republican proposal in Congress, Colorado would lose roughly a billion dollars over the next year. That’s if the federal government drops down to paying 50 percent of Medicaid costs as it did before Obamacare. The same institute says 600,000 patients could lose Medicaid by 2030 and that a lot of them might just go uninsured. This harkens back to a previous question I asked you, but is there some sense that the state could pick up more of the tab? If not, who would absolutely be the priority to keep and who would be the first to be cut if the state was making those decisions?

JH: Well we haven’t even begun an assessment because I – for the life of me, I can’t imagine that this country wants to go backwards and roll back coverage. We had a big event in the state capitol this week where we had – the Global Down Syndrome Foundation had a huge reception. Many of those families now get support to deal with the – their child who might be differently abled and that early support makes a dramatic difference in unlocking the potential of each one of these people. I mean, they just blossom and grow in front of your eyes. I’ve been seeing a lot of these kids for the last six years, seven years.

RW: And they’re on Medicaid.

JH: They’re on Medicaid. The vast majority of them are on Medicaid. If they cut back, they would be – this is one of the populations that is at risk and I can go down one list after another. Senior citizens, right. The people that aren’t sixty-five yet – so they’re not eligible for Medicare, but people between fifty and sixty-five, maybe, who have been – lost their careers, their jobs. Many of these people voted for President Trump. I can’t imagine – I mean everything I’ve ever heard him say, he doesn’t want to take people off of healthcare coverage.

RW: Still early days, it sounds like.

JH: It still is early days.

RW: In the – in your own administration and in that administration in terms of this conversation.

JH: Well I’ve talked to – in the last couple weeks, I’ve talked with several Republican governors who have expanded Medicaid and they feel just as strongly as I do that they should not roll back coverage, and I -

RW: Which ones? Which Republican governors?

JH: Well I don’t want to get anybody in trouble because sometimes talking to a Democrat these days could be the kiss of death, but they’re from large states that did expand Medicaid coverage. You can do the math; there’s not that many, but I think that – the fact remains. In those states, someone may be – get a congressperson to vote for this. I don’t think they’re going to get senators to vote for it.

RW: One last point about the administration in Washington. President Trump has said that he’ll propose a one trillion dollar infrastructure program and tax cuts. He says this will stimulate the economy, create jobs. If those things are happening in concert with what we’ve discussed thus far, is this budget blueprint such a body blow?

JH: Well that – so far, there’s been no details about his infrastructure program and as I understand -

RW: There has been some Republican skepticism in Congress.

JH: Exactly. I don’t see anything in this budget that’s going to free up the money to do infrastructure at the scale that he has described. I don’t see a trillion dollars anywhere in this budget that’s going to come out of thin air.

RW: Let’s talk about another budget and that’s the one you have a bit more influence over: the state budget. There is currently a scramble to balance it and your office is predicting up to a $700 million shortfall in the 2017-2018 budget. What are the options for bringing it into balance?

JH: Well, it’s the same things that we’ve been doing. I mean, we’ve tried to cut -

RW: You sound weary when you say that.

JH: You know in elected office, having to do budget cuts is the steep part of the hill and it’s hard. You’re trying to decide between people whose children have different types of challenges. You’re trying to make decisions between infrastructure that’s vital for the future of jobs but at the same time, making sure we have comprehensive medical care so that people don’t get left behind.

RW: You say cuts. I’ll say that Republicans would say, “There’s not so much cuts here as not as quick of growth.” That overall – that the state budget from year to year grows.

JH: Sure, of course. It grows by inflation plus population growth. We’ve been doing that for almost – for more than twenty years.

RW: These are under constitutional limits.

JH: Yeah and successfully, I don’t mind pointing out. One of the few states where you can look at – as our economy has been booming these last seven or eight years, we have restrained our growth, but let me give you a couple of examples where that’s not going to always hold true. One is transportation infrastructure. I’ll tell you another place we’re going to run into trouble is the number of individuals turning sixty-five and just for the record, I have now turned 65. So I know what I’m talking about.

RW: Now you’re an expert.

JH: Now I’m an expert and there’s no question. When you look at the statistics, older Coloradans are going to require more support, more financial support than younger. So even though our population doesn’t change – let’s imagine that the population is flat – by 2025, they’re saying that the number of people 65 or over could be up close to 50 percent, some people said 60 percent; compared to 2010, that is a significant growth and a huge demand for resources.

RW: Let me say also that older people tend use more services than buy goods. Services aren’t taxed and that has implications for the budget as well. I’m glad you brought up transportation. So at the start of the legislative session, you and the leaders of both houses made increased transportation funding a priority. Now those leaders – Democratic House Speaker Crisanta Duran and Republican Senate President Kevin Grantham have agreed on a proposal to ask voters for a 6/10 of a cent sales tax for roads for twenty years. That said, both of Grantham’s Republican deputies have said they’ll oppose it as have conservatives in the House. Their argument is that more or all of the money for road improvements should come from the existing state budget.

JH: Wait, wait, wait; so I’ve invited everybody to come down and go through that budget, everyone who’s said – that has said, “Hey, Henry Sobanet knows that budget as well as any human person.”

RW: This is your budget director?

JH: My budget director who’s a Republican, right. Served under Bill Owens, was a budget director Bill Owens. So let him walk anyone who’s interested through that budget and see if you can find – and we’re talking hundreds of millions of dollars here.

RW: They might point to Medicaid, Governor.

JH: They might and then you have to say, “Do we as a state want to roll back coverage on that many people?” and most studies suggest that that’s going to be more expensive in the long run.

RW: Let me ask this: do you support the plan that has been fashioned thus far?

JH: Well, what I support is the process and let me just – something on the previous topic there. All the Republicans are saying they’re going to come out and oppose this. All this legislation does is put it on the ballot, right. So they’re saying they don’t even want people to have the opportunity to vote on it.

RW: I want to go back, before we wrap up, to President Trump. So you attended the National Governors Association meetings last month in Washington.

JH: Yeah.

RW: You didn’t meet privately with the president, but you did attend meetings where he spoke and after one of those meetings, you tweeted, “Govs at White House. President Trump makes clear no roundup or deportation except serious criminals. A good day!” Exclamation mark, your exclamation mark. There are many signs from the administration that it is casting a wider net than serious criminals. Now that will delight some and disappoint others, but do you have confidence in what you tweeted about Trump’s immigration outlook?

JH: Well at that point, I was tweeting what he said and he said it in no uncertain terms, on – we have a dinner on Sunday night. It’s a state – formal state dinner, tuxedos, all the governors and their spouses, the President and the First Lady, all the cabinet come, and you have this wonderful opportunity to talk to each other in casual terms, and that was eye-opening. And he – and I will say he was charming. I mean, I was – he was different than any image of him I’ve ever seen on TV. Self-deprecating, lots of humor. When I shook his hand, we walked through the photo line. You get your picture taken; he made kind of a wisecrack about – I’d been on the – that was the morning I’d been on Meet the Press and he kind of joked and went, “Hey, I saw you this morning, Governor. You were good; you were very good. I might have to keep my eye on you.” I mean, he was just funny. He was making a joke. The next morning and – well that night at the dinner, he sat next to Governor McAuliffe from Virginia and was very direct that we are not going to round up, detain and deport undocumented immigrants unless they are connected with serious crimes.

RW: And what’s your sense now of that?

JH: Well I think what’s happened is that they’ve given a lot more leeway, more responsibility to individual agents of ICE out on the streets and I think some of those agents have grudges or are out there acting on their own, maybe outside the protocols that Trump was hoping to have in place.

RW: How do you know that that’s happening?

JH: I’ve just heard stories of it, of people being detained and then deported when there was no connection to a violent crime, there was no conviction there.

RW: Would you call those rogue actions?

JH: No, I don’t think – again, I don't know the – exactly what they’re hear – what communication is coming from the White House, but I will say the next morning, the president was asked again about immigration in front of all the governors – and this was with Vice President Pence, President Trump and then all or most of his cabinet was there. Attorney General Sessions was not there and to a person, they all said, “We are not going to round up, detain and deport undocumented immigrants and – without serious criminal activity.” I mean if you can’t trust what your government says to you directly, then we’ve got some serious problems.

RW: Do you feel that you can trust this administration?

JH: Well, we’re working on it. I think we have to be able to. I mean we have to do everything that we can to be candid and transparent to the White House, and let them know where the issues are that we really have the most problems with, and that we have to trust that they will be direct and honest with us because if they’re not, if our government is being deceitful to the states, then we’ve got some real – I mean some very, very serious problems, and I think that we’re going to work as hard as we can from our side to make sure that we build a relationship that’s based on trust.

RW: Governor, thank you for being with us.