Republicans target Raleigh Democrat Brad Miller for his work on financial reform | Wake County | Indy Week
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Republicans target Raleigh Democrat Brad Miller for his work on financial reform 

U.S. Rep. Brad Miller tours 3 Phoenix Inc., a small defense-technology company based in Wake Forest.

Photo by D.L. Anderson

U.S. Rep. Brad Miller tours 3 Phoenix Inc., a small defense-technology company based in Wake Forest.

It's Monday morning, and Congressman Brad Miller, a Raleigh Democrat, is in Wake Forest talking radars, incoming torpedoes and "hard kills" with executives of a high-tech engineering firm, 3 Phoenix Inc., which designs and builds state-of-the-art electronic imaging systems for the Navy. The company's customers aren't all military, explains 3 Phoenix principal Joe Murray. Oil drillers buy the company's telemetry, and other commercial applications are possible. Cities could use it to steer drivers to the nearest empty parking space.

But 3 Phoenix wants help steering around the budget cuts and bureaucratic red tape that, according to Murray, has thwarted the Navy's desire to buy products unfamiliar to the "big dogs" on the congressional appropriations committees. As things stand, he says, 3 Phoenix is looking at a $13 million cut in Navy orders over two years—about 60 percent—for a telemetry system that's "best for the fleet." That's a hard hit for a company with 140 employees. "As a small business," Murray says, "it's pretty easy to knock us around. We don't get to fly in on the corporate jet and meet with the admirals."

For Miller, who is not on the House Appropriations Committee but is on the Subcommittee on Investigations and Oversight (part of the Science, Space and Technology Committee), it's all in a Monday's work. Like any member of Congress who wants to be re-elected, Miller comes home most weekends while the House is in session and stays through Monday morning, working his district and meeting with constituents.

The appropriations bill has already cleared the House, Miller tells Murray after a tour of the facility, but there are other ways to obtain funding, and he may be able to help. "It's a game," Miller says, not disparagingly.

It's a game, indeed, that Miller's been very good at for about 30 years as a member of the state Legislature and, since he was elected in 2002, of Congress. But for Miller, the game may be ending, called on account of a Republican redistricting plan that seeks to yank most of Miller's District 13 out from under him and force him to run, in the 2012 elections, where he cannot win. (See "The odd shapes of the GOP congressional redistricting plan.")

In fact, Miller says Republicans have targeted him for extinction precisely because he is on the rise as a progressive, and thus a threatening force in Washington, especially on critical banking and Wall Street reform issues.

If the Republican plan prevails, the new District 13 would be almost unrecognizable to its putative incumbent. Most of the population in Miller's current 13th district is in Wake County or in Greensboro, though the district also spans several rural counties along the Virginia border.

In the new Republican 13th, though, the urban (read: Democratic) parts of Raleigh and Greensboro would be removed from the district, replaced by rural and suburban areas.

Indeed, Miller himself is all but removed from his supposed district. Since his recent divorce, he's moved to an apartment off Wake Forest Road in Raleigh that, not by accident, is located in a little bubble of inside-the-Beltline Raleigh that the Republican mapmakers did retain in the new 13th.

Except for the bubble, though, most of Miller's Raleigh base, including his former house off Glenwood Avenue, has been slammed into a newly configured District 4, where his friend and political ally, Rep. David Price of Chapel Hill, also lives. Two Democratic incumbents, one district: awkward.

They won't run against each other, Miller says. And the 70-year-old Price, whose 12 terms in Congress (24 years) are more than double Miller's five terms, would have "the right of first refusal." Miller is 58.

Ironically, the new 4th would include 150,000 voters in Democratic Cumberland County, Miller says, where he grew up and still has family. Miller has never represented them, however. Neither has Price.

Would Miller run in the new 13th? About that, he was noncommittal. "The new 13th does not remotely resemble the district I've represented," he said during an hour-long interview.

It's far from certain that the Republican-drawn maps will prevail. Their compliance with the federal Voting Rights Act is questionable (the NAACP has already promised a lawsuit), and Miller is among those raising other issues of partisan gerrymandering.

Actually, there's no question this is partisan gerrymandering. The Republicans hold six of North Carolina's 13 House seats. Under their plan, which packs African-American and other Democratic precincts into just three districts (including the 4th), the Republicans are out to win 10 of the 13 seats.

The only question is whether the courts will find that it's such an extreme form of gerrymandering that it violates the Voting Rights Act or the Constitution.

If, however, Miller is ousted in the redistricting process, Congress will lose a forceful and increasingly influential progressive voice, especially on critical banking reform issues.

So says, among others, Elizabeth Warren, special assistant to President Barack Obama and a hero to progressive groups for the battle she has waged on behalf of consumers and against the banking special interests.

"I have great respect for Brad. He's someone who's smart, someone who cares and someone who works his tail off," Warren said in a telephone interview.

In the wake of the Wall Street meltdown of 2008, Warren, then a Harvard law professor, proposed and fought for a new federal agency to protect consumers against predatory banking practices, including—as The New York Times columnist Joe Nocera wrote in a column June 10—the practice of pushing subprime mortgage loans on people who don't understand the bad deals they're getting.

That put her in league with Miller, who, as a member of the Financial Services Committee in 2004, sponsored the first-ever House bill seeking to curb subprime mortgages. (Miller-Watt, he says, was a joint effort with Rep. Mel Watt, the Charlotte Democrat.)

Warren's idea, the Consumer Financial Protection Bureau, became reality as part of the Dodd-Frank banking reform law enacted by Congress last year, and Obama put her in charge of setting it up. Because of her forceful advocacy, though, she is anathema to the Republicans, who've made it clear to Obama that if he nominates her to be the permanent head of the CFPB, they will block her Senate confirmation. That's a fight Obama has so far ducked.

Miller's bill, too, became law as part of Dodd-Frank, as Miller worked closely with Massachusetts Democrat Barney Frank, then chair of the Financial Services Committee, on the consumer protection aspects of the measure.

He also worked closely with Warren, a fact he emphasized in an interview last weekend with the Indy. Her name came up as he argued that it's no accident that he's being targeted by the GOP. "There's a reason they want me out," Miller said. "I've been a pretty effective advocate too."

If I needed proof, he said, I should ask Warren.

The next day, I did ask, and Warren responded with a wholehearted endorsement: "Brad has a long and deep history" with banking and consumer-protection issues, she declared, and "sees the side that families live back home."

That allows him to challenge the industry's lobbyists, she went on, not in a blustery way, "but in a carefully thought-out, detailed and therefore a much more effective way."

"Nobody owns Brad," Warren said.

In the interview, Miller expressed his worry about the results of Obama's negotiations with the Republicans over increasing the nation's debt ceiling. If the debt ceiling isn't increased, the financial catastrophe that follows will crash the economy, he said. And if it is increased on the terms being discussed, with major cuts to federal spending at a time when the economy is still shaky, that won't be much better. "Either way," he said, "I think it's very likely to tip us back into recession. And we're teetering on the brink of that anyway."

The fact is, Miller went on, progressive Democrats in Congress are outnumbered, and the Republicans—augmented by the new tea party conservatives elected in 2010—have far more leverage on budget issues.

For that reason, Miller said, and because "there is no small amount of unpleasantness" and Republican rancor in Washington, he went through "a period of being pretty ambivalent" about wanting to remain in Congress over the last several years.

But he's over that now, for two reasons. One is the partisan rancor, combined with the redistricting. "Not running," he explained, "because the opposition has been so filled with rage and hate it almost seems like giving in to bullying. And my father taught me never to give in to bullying."

The second, he said, is that despite the grind of living in Raleigh and working in Congress, he'd rather "be in the fight" than have a settled life back home, practicing law and making money. "I'm in the fight of my generation," he said.

That said, he smiled broadly for the first time since we had sat down 45 minutes earlier.

The fight he's in is about the nation's increasing economic inequality, the growing gap between executive incomes and workers' wages—for those working at all—and the failures of the economic system since the '70s to share prosperity with middle-class and working-class families.

The fact that the financial sector in the American economy has doubled in that time, from about 10 percent to more than 20 percent of gross domestic product, has largely contributed to the inequality, Miller argued.

The banks, he said, need to be reined in and directed to perform their basic function—taking deposits at interest and making loans to useful businesses—and get out of the derivatives trading and other "rent-seeking" activities for which they earn billions but put the entire economy at risk.

A Miller bill last year, which he introduced as the House twin to a bill under consideration by the Senate, would've broken up the six biggest U.S. banks into more than 30 smaller banks—none of which would be allowed to hold assets equal to more than 3 percent of the GDP.

"The only reason to be bigger," Miller said, "is so the CEO can command a higher salary. It's not good for the taxpayers, it's not good for the shareholders and it's not good for the economy."

Right now, he said, the six biggest banks are so big—with net reported assets equal to two-thirds of the nation's $14 billion GDP—that they can't be allowed to fail without systemic risk to the economy.

Worse, the whole sphere of "shadow banking," in which the big banks make highly leveraged "bets" with other financial institutions and with corporations on derivatives, is completely unregulated—raising the threat of yet another Lehman Brothers-type meltdown that could take the whole banking system down.

The Obama administration's response to these issues, Miller said, has been tepid. In fairness, he said, it's as if Obama were inaugurated immediately after the Great Depression struck in 1929, rather than—as FDR was—three years later. By then, the Congress was overwhelmingly Democratic and passed the measures Roosevelt wanted.

"So [Obama] hasn't had the opportunity that Roosevelt had," Miller said. "It is also true, I think, the Obama administration's program has lacked ambition."

Obama should have quickly addressed the tanking housing market and mounting foreclosures, "a downward spiral that continues three years later," Miller said. But the administration decided that doing so would jeopardize the banks by requiring them to renegotiate troubled loans on more favorable terms to the borrowers.

"I think they [Obama] made the wrong decision about what was important," Miller said.

Because Obama held back, he argued, the economy is much weaker now than it would've been had the president sided with the middle class.

The public knows what happened, and it's killing the Democrats. Average voters want Congress and the president to be on their side. Today, voters see the opposite. "I think Americans think that everything that's happened in the last three years has been to help the banks, not to help them," he said. "And they're largely right."

But the Democrats will get another chance in a few years, he said, and he wants to be there as one of the leading congressional experts on banking issues. "I don't think I'm indispensable," he said, laughing and repeating de Gaulle's joke that the cemeteries are full of indispensable men. "But I do think there would be a loss."

So does Michael Calhoun, president of the Center for Responsible Lending, the Durham-based nonprofit fighting for consumer interests in Washington.

"Brad's seen as someone who connects with the voters. This craziness in the banking industry ticks off everybody from the tea party Republicans to the far left," Calhoun said. "And Brad is one of the few speaking out."

Calhoun recalled an archetypal Miller comment as Dodd-Frank was fought out, and weakened, in Congress. "He said, 'We need to adopt Dodd-Frank to keep the Masters of the Universe from running with scissors again.'"

"He's smart, and he can see through what the industry is saying," Calhoun said. "And voters respond to him. I don't think it's any accident that he's been targeted for removal."

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