Rounds up GOP senators to focus on poverty
SPARTANBURG, S.C. — Tim Scott was doodling in my notebook.
The Republican U.S. senator and I were having dinner before he and a few staffers were to make the three-hour drive to Charleston, so he could sleep in his own bed that night.
But first, I’d asked him to explain how his idea to defer capital gains taxes would help struggling communities like the one we’d just visited in this city of roughly 40,000 people.
He scribbled some numbers and words, while talking about the bill that he and Sen. Cory Booker, D-N.J., introduced in April. If passed into law, it would let anyone defer the capital gains tax on the sale of any asset — a business, a piece of land or property — if they reinvest the money in an economically distressed area.
The idea is to give wealthy individuals and corporations an incentive — in the form of reduced tax burdens on investment profits — to put money into developing low-income areas.
Scott’s approach is savvy both in terms of business and in terms of politics. He understands business, having owned an insurance company and been a partner in a real estate company. And having worked with Booker, a Democrat who happens to be the only other African-American member of the U.S. Senate, Scott has inoculated himself against the charge that he’s just another Republican cloaking efforts to reduce government in the language of helping people out of poverty.
Scott also knows that partnering with Booker on the legislation gives it a better chance to pass. When I mention Sen. Rand Paul’s proposal from three years ago for what he called “Economic Freedom Zones,” Scott dismissed it.
“I want something that will actually have a shot at passing some day,” he said.
The Scott and Booker legislation would allow investors to defer capital gains tax for as long as their money was invested in what they would call “Opportunity Zones,” which would be designated by the states. Investors could pool their contributions. They would owe tax on the original capital gains whenever they took their money out of the “Opportunity Zone,” but would get a reduction if they kept their money in the zone for at least five years, another reduction if they kept it in for seven years, and wouldn’t have to pay tax on additional capital gains if their money stayed put for at least 10 years.
The most likely ways for investors to come into these zones would be to purchase and rehabilitate vacant property and finance new development.
Scott said he is still working on the details of the bill, to get it ready for scoring by the Congressional Budget Office.
But having started to build a policy foundation that has bipartisan credibility, Scott is now expanding his anti-poverty efforts.
On Wednesday, he’ll help announce a new group of five senators who will call themselves the Senate Opportunity Coalition: Scott, Sen. Marco Rubio, R-Fla., Sen. Joni Ernst, R-Iowa, Sen. Dan Sullivan, R-Alaska, and Sen. James Lankford, R-Okla. They are all Republicans, and that’s intentional.
“We believe strong conservative solutions can help every single American family,” the group says in its announcement.
“This is not something that will be solved with one bill,” they say. “From taxes to education, infrastructure to agriculture, we are each bringing stories from our own states to help show how wide-reaching our solutions must be.”
There is some tension between the idea that the group will introduce “conservative solutions” to poverty while working with Democratic lawmakers, which Scott told me is one of its goals.
But its intent is in part aspirational. Republicans don’t often talk about poverty, and they strategize even less about how to address it. This group, which is Scott’s brainchild, aims to change that.
Scott says that despite the exclusivity of the group, including only Republicans, this isn’t a branding effort. “I’m not here to make the Republican Party stronger,” he says. “I’m here to make the country stronger.”
Other members of the Republican group intersect at different places on the continuum of poverty awareness and action. Ernst, a freshman senator — like every other member of the group — from rural Iowa, speaks of recent “realizations” about the solutions for “food insecurity” in her own state. Lankford is promoting community nonprofits.
Sullivan’s anti-poverty efforts are centered on helping a remote Alaskan village get federal approval for a road that will lower their fuel and supply costs. Rubio is seeking to improve the federal Department of Housing and Urban Development’s inspection process for low-income subsidized housing. He passed three amendments in May toward that goal.
Scott is the only member of the group, so far, with a piece of standalone legislation aimed at reducing poverty. He’s also the only member of the group who grew up in a single-parent home, in a low-income neighborhood.
When Scott visited a group here that is working to revitalize a neighborhood on the north side of downtown Spartanburg, he spoke from firsthand experience about the challenge of living in poverty and having a “pit that’s in your stomach that just never goes away.”
“Anybody know that feeling, that you just look out toward tomorrow and there’s really no reason to be hopeful?” Scott asked the group. “And you meet someone who helps to change that reality, where tomorrow is not really filled with hope, but it’s not as dark as it used to be. And then the next day is not completely dark. It’s got shades of gray. And then one day you wake up and — it wasn’t overnight — it was as if, through prodding and plodding and moving, one day you just have a different sense of what’s possible, not for the community, but what’s possible for you.”
Scott is running for election to the Senate for the second time in two years, unlike most senators. He was appointed to the seat in 2012 to replace Jim DeMint, who retired to run the Heritage Foundation, a conservative think tank. Scott won the special election in 2014 to serve the last two years of DeMint’s term, and is running this fall for his first full six-year term, with only token opposition.
Politically, the Senate Opportunity Coalition being announced Wednesday seems similar to the effort of House Speaker Paul Ryan, R-Wis., to talk about something other than Republican presidential nominee Donald Trump, and to present a different face of the Republican Party, even while tepidly supporting Trump.
But Scott said his work on fighting poverty “predates Donald Trump.” “I’ve been talking about this for three decades,” he said.
Scott, who supported Rubio’s presidential candidacy in the Republican primary, has endorsed Trump, even though he does not agree with everything Trump says and stands for.
“We don’t have the same approach to life,” Scott told me. “I place a greater emphasis on civility and looking for ways to build a bigger, better success story. I don’t shy away from the fact that I think some of the things he’s said should not have been said.”
But at a recent conservative gathering, the Value Voters Summit, Scott went so far in endorsing Trump as to suggest that a vote for the Republican nominee was a vote for “hope.” He contended that President Obama’s policies have produced “12 million more people living in poverty, a 40 percent increase in those eligible for food stamps, a 1 percent economic growth in our nation, more division, disaster and challenges.”
He even told the audience that they could “vote … to make America great again.”
Over dinner, he told me that phrase wasn’t in his prepared remarks.
“I said it, and before I was actually thinking about Donald Trump specifically. I’ve heard it so many times, it just popped out of my head,” Scott said. “It made me laugh.”