MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Politics Hour," featuring, starring Tom Sherwood. I'm Kojo Nnamdi. Yes, ladies and gentlemen, he's back from a short vacation, and, boy, did he bring a bunch of scandals back with him. Tom Sherwood is our resident analyst. He's an NBC 4 reporter and a columnist for the Current Newspapers. Nothing happened while you were gone. As soon as you came back into town, scandals just started erupting all over town.

MR. TOM SHERWOODYou know, I tweeted out last week before I left. I said I'm going on vacation for a week, don't make any news while I'm gone. The mayor disrespected me. Kwame Brown, the chairman of the council disrespected me. You know, Lord knows, I'll have to speak to them privately.

NNAMDIYes. Well, now that he's back, he's been covering these stories, but to think it all got started by a scoop by our guest analyst earlier this month via a FOIA request. One Patrick Madden of WAMU 88.5 reported last week that the children of Mayor Vincent Gray's best friend, Lorraine Green, and his new chief of staff, Gerri Mason Hall just landed new city jobs. Patrick Madden joins us in studio today. He's our guest analyst. Why did you start all this stuff, Patrick?

MR. PATRICK MADDENIt was a slow week, so I was...

NNAMDISherwood was out of town.

MADDENSherwood was away.

SHERWOODThe most dangerous thing...

MADDENRight. So I -- yeah. I filed that FOIA request, just to get a sense of who were the new employees in this administration. And lo and behold, you know, I found those two hires, who obviously were children of the chief of staff and the campaign chair.

NNAMDIBut that was very quickly eclipsed by the news that Suleiman Brown, a former peripheral, I guess, would be a fair way of putting it, mayoral candidate, was hired by the health care financing -- health care finance agency at $110,000 a year, and that just started to meltdown. Tell our listeners what happened after that.

MADDENWell, I mean, I think you almost have to start with Wednesday's press conference, which this became an issue with Mayor Gray. There were repeated questions about why Suleiman Brown, this fringe mayoral candidate, was hired into a very important District agency. And Mayor Gray defended the hiring, and then, yesterday, early morning, the Washington City Paper reports that Suleiman Brown has been escorted out of the building by police. And that just set off a very long and wild day at the Wilson Building.

NNAMDIIn the course of -- during the course of that day, Chairman Gray was holding a press briefing in the afternoon, and Suleiman Brown showed up at that press briefing. And here's just a little bit of what he had to say.

MR. SULEIMAN BROWNYou know, I did what I was supposed to do. I didn't look for any type of special treatment once I got the job. I treated people with respect and dignity, and they let me go without respect and without dignity.

NNAMDITom Sherwood, I am still not clear as to why Suleiman Brown was fired. The head of the agency said it had nothing to do with the reporting in the Washington City Paper.

SHERWOODWell, the head of the agency wouldn't say why he was dismissed. He said it wasn't a good fit. But the fact is Suleiman Brown is only kinda this -- is the symptom of what the issue was.

NNAMDITip of the iceberg.

SHERWOODHe was -- I mean, this has all the smell and feel and texture of a political deal that Suleiman Brown was an almost a joke candidate for mayor. He spent the entire time saying if you don't vote for Brown, vote for Gray. And he was -- did withering attacks on Mayor Fenty. And everyone says, oh, as the City Paper said, everyone joked, oh, he must be trying to get a job. Well, lo and behold, he got a job, a $110,000 job. So this raises questions about the mayor's credibility and his administration.

SHERWOODAnd yesterday, when this -- when they did in fact fire him and they learned about him, I'm still not clear why they fired him. The mayor hid from the reporters. I mean, we were out. We staked him out a couple of places. He went into the back door of one place. He hanged out scared, I guess, up in his office for hours, and only because the reporters, including Patrick and me and Segraves from TOP, we stood in the mayor's office out in the entrance. And despite three police officers telling us to leave, we said we're not leaving till the mayor comes out.

SHERWOODThen they said, oh, well, somebody's gonna tell you later. I said you guys have misled us and miss -- abused us all day. We're not leaving. I said I'm gonna sleep here if I have to. Finally, the mayor came out and gave a kind of wimpy statement that he supports the department head for firing him, but that's all he's gonna say.

NNAMDIAnd, I guess, a lot of this started because it was clear that it was at least in part the mayor's recommendation that got Suleiman Brown as far as the health care finance agency, Patrick?

MADDENWell, that's my understanding. That's what...

SHERWOODThe mayor indicated as much.

MADDENRight.

SHERWOODHe sent the name over and didn't ask for any special favors but sent the name over.

MADDENAnd again, it's unclear why he was fired at this point, but, you know, considering the firestorm that his hiring created, it just -- all these questions need to be asked.

SHERWOODAnd this is a reflection on Mayor Gray's administration, and I say that not as the reporter but from the people I'm talking to who are the intimate people in the administration -- advisers to Gray that he listens to, people who are concerned that they work very hard to get Gray elected. They do not want to see him off the track so quickly as Kwame Brown is, and they're very concerned that Mayor Gray's got to -- have a tighter ship.

NNAMDIYou mentioned Council Chairman Kwame Brown. That was the other big scandal this week or one of the three. There's also the issue of tickets to Verizon Center, but we'll get to that later. Chairman Kwame Brown having leased first one and then two Lincoln Navigators fully loaded. Now, he says that he's going to return them. The cost to the city of the two together was about $4,000 a month. He says now, he's going to return them, and this one -- well, what do you say, Patrick Madden?

MADDENWell, I mean, just the optics of this are horrible as this -- as D.C. is trying to, you know, tackle this huge budget deficit, somewhere between, you know, $400 million, and here we have the council chairman pushing to get these luxurious SUVs. And when the first one comes in, it doesn't have the right interior color. Apparently, you know, we're on the hook for another one now. And so it's just become a total mess.

NNAMDIThis coming on the heels of the story that Tom Sherwood broke last year during the course of the campaign that Council Member -- then-Council Member Brown was having some credit card debt problems gave the impression that what we have is a public servant with expensive taste. And if a public servant has expensive taste and does not have another well-paying job, that's gonna attract a lot of media scrutiny.

SHERWOODWell, he gets paid $190,000 a year now. That's a pretty well-paying job in my book, and he used to get paid 130 as a council member. But those personal debts, he was in court being sued for $50,000 in credit card debt. Now -- so there's a lot of issues, but these cars, this has really hurt Kwame Brown's standing in the community -- politics community and his whole image in the city. And some people think he may never recover from this. To ask for an SUV, you want one like the mayor. That's one thing. Then to get it and then say you don't like the color of the seats, then get another one to make the city beholden for two of them and then to have to turn them back is just too embarrassing by half. And there's some question now, even that the city may be -- was not -- by law was allowed to even lease these SUVs. I don't know enough about it, but I think the City Paper was...

NNAMDIThe City Paper is reporting...

SHERWOOD...tweeting about that.

NNAMDI...today -- Alan Suderman reporting today that there was a law introduced by then-at-large Council Member Carol Schwartz that says only for purposes of security or safety should the city be allowed to use SUVs. We'll see how that...

SHERWOODWell, that didn't sound like a prohibition, though.

NNAMDIExactly. We'll see how that would be interpreted in...

SHERWOODBut the...

NNAMDI...this situation.

SHERWOODThe big picture of this from Mayor Gray's perspective or from the perspective of seeing both of these crises and problems and embarrassments and poorly handled and the mayor ducking down like a scared rabbit and stuff, is that it's embarrassing to the city residents who are worried about the budget that Patrick just mentioned and worse, only because of Washington -- on Capitol Hill, there are people up there who would love to take away the power of the city to do anything, and this is the kind of junk that they can use to say those people can't govern themselves. It's an insult to us for them to say it, but it's an insult for us to give them the chance to say it.

NNAMDIPatrick Madden?

MADDENAnd this SUV story made its way into The Wall Street Journal.

SHERWOODYes, The Wall Street Journal.

MADDENSo it has, you know, which obviously is very, you know, Wall Street is very important to the District right now. So...

NNAMDIIf you want to look for an upside to all of these, maybe the upside is that it all took place during the course of one week and wasn't spread out over a long period of time.

SHERWOODWell, I was hoping -- can I just say very quickly, the mayor this week talked about a new aggressive HIV/AIDS program. He talked about going after 20 companies who do city business who don't hire city workers. He talked about an aggressive summer job program for 12,000. None of those stories -- all of them could have been page-one stories. None of them got any coverage because of this.

NNAMDITom Sherwood is our resident analyst. He's an NBC 4 reporter and a columnist for the Current Newspapers. Patrick Madden is our guest analyst. He's a reporter for WAMU 88.5 News. And, Tom, you talked about budget. Pretty much every politician in the United States is trying to talk a good game about budgets and financial responsibility whether they actually have any expertise or not. Our guest is pushing legislation that would require every high school student in Maryland to take a financial literacy class in order to graduate. He is Peter Franchot, comptroller for the state of Maryland. He's a Democrat, former member of the Maryland House of Delegates. Peter Franchot, good to see you again. Thank you for joining us.

MR. PETER FRANCHOTGreat to be here, Kojo. I was just thinking how boring the subject is compared to all the other...

NNAMDIWell...

FRANCHOT...things that are being talked about, but thank you for bringing it up.

MADDENWell, I think we could use some financial literacy in the District.

FRANCHOTYeah. Right.

NNAMDIAnd one of the ideas that you have, as you say, is that the challenge is to make a financial literacy class not boring, make it interesting. The idea was defeated last year. What exactly are you pushing for this year, and why do you feel it's worth trying again?

FRANCHOTWell, my vision is that the state of Maryland be a champion for financial literacy, particularly for young people. So I've advocated that every high school senior in Maryland have to have a stand-alone financial literacy course as a requirement for high school graduation, and that means they're taught the basics of what a budget is and what credit is and how you can get into trouble, what compound interest is. And kids, Kojo, are...

NNAMDIPatrick may have started dozing as soon as you said the words compound interest.

FRANCHOTYeah. No, just the chief fiscal officer, we're having a good tax season...

NNAMDIBut that is a (word?).

FRANCHOT...but, you know, you forget that the number one reason why kids get turned down for jobs like the federal government that requires security clearances, it's not drug problems or run-ins with the justice system, it's bad credit. And, you know, I just think if we can provide our citizens with information that will protect them from predatory practices but also give them the building blocks for their own personal prosperity, we'll have a state that not only can be socially liberal but can be fiscally noteworthy and responsible and have, you know, The Wall Street Journal was mentioned earlier. Instead of always criticizing Maryland, we can be seen as a state that's really got our fiscal house in order as far as our citizens. Now, we have to combine it with the public budgets which are, frankly, in a -- I call it the failing fiscal infrastructure of the state of Maryland. We're the richest state in the country, and we do not have our budgets in order. Our operating budget is a deficit. Our debt is high.

NNAMDIDemocratic Governor Martin O'Malley and the State Legislature are working to close a budget gap thought to be as high as $1.6 billion. And as we look around the nation, everybody has been watching the situation in Wisconsin where a Republican governor and a Democratic legislature are in a standoff over the collective bargaining rights of unions. They're looking at $3.6 billion in the next few years. Maryland is looking at $1.6 billion. Maryland, I guess, is different from Wisconsin, but pension reform looks as if it's something coming down the pike even in Annapolis. What do you think is the most sensible way to go about this?

FRANCHOTWell, we have billions of dollars of unfunded pension and health care obligations. The health care for public employees is even less funded than that. But we're better off than other states, Kojo, but almost every state, including Maryland, is like an undisciplined household. Whatever money comes in and is available, we spend it. And that is just not sustainable, given the kinds of health care costs and other expenditures that are gonna be required. So I've been advocating along with financial literacy for our citizens, spending reform for our public budgets. And by that, I don't mean Draconian cuts. What I mean is let's take a timeout on new revenues and new gambling revenues and tax increases. Just take a moratorium on that.

FRANCHOTLet's just assume the money we have is enough for our education and health care needs, and let's reengineer how we spend it. It's a little bit of a third way between Draconian cuts and endless tax increases. But in Maryland, for example, we spend 34 billion, and we take in 32 billion. I don't think you need to treat the citizens like a bottomless pit of tax revenue to close that gap. I think what we need to do is figure out how you get better results with what we have and...

SHERWOODWell, Wisconsin has this big fight with Gov. Walker. They're saying that he wants to take away the bargaining rights of public workers. I don't think anyone in Maryland, which is a pretty strong Democratic union state, is suggesting that. But the public worker benefit, do they need to be curbed in some way? I know -- I can hear it now. Don't balance the budget on the backs of the workers. But is there an issue with the union workers and their pensions and the health care and all the issues that public workers (unintelligible)

FRANCHOTNo. That's a good question, Tom, and there are really two issues here. One is an ideological one, which is this battle over collective bargaining. The other is a fiscal issue. And, yes, contributions need to be increased, and benefits need to be reshaped in order to get the pension system into a sustainable mode. We have to get rid of corridor funding, which is another sexy topic, but that allows legislature to underfund the pension system. On health care, that's a much bigger issue because I'm -- much as I support national health care, et cetera, I'm just wondering how we're gonna pay for it because we have just skyrocketing health care cost and -- for our public.

FRANCHOTBut then the employees that were obligated to, that's tens of billions of obligations that I'm very concerned about. But if you look at these issues from a fiscal perspective, we can manage our way through and we can all pull together. The ideological stuff, I'm afraid, is gonna continue to distract the (unintelligible)

NNAMDIWell, take the ideological stuff off the table. Take the whole issue of collective bargaining rights off the table. You're still looking at a confrontation with your unions when you start talking about reducing benefits or advancing the age of retirement for workers in the state to say (unintelligible)

FRANCHOTSure. There's friction and there's sacrifice and there's back and forth, but the black and white figures are very clear. We have to make reforms. And either we do it in a thoughtful and analytical way or it's gonna be done in a Draconian way by folks that replace us in office.

SHERWOODAnd there's no federal money. All of the stimulus money is -- that's withered and that's gone now, right?

FRANCHOTNo. And I complained last year about that one-time stimulus money being plugged into operating expenses and that's -- now there's a big (word?) cry over the education budget in the state being four billion less than it was. Well, that's no surprise because, you know, it was just -- when I talk about an out of control, undisciplined household, that's what we have. And until we -- you know, you don't see it in the private sector necessarily because people, you know, have more...

SHERWOODIs this a criticism of Gov. O'Malley or is this criticism of the entire system, the State House, the entire system?

FRANCHOTNo. It's a criticism of every state legislature, be it Republican or Democrat. There's some version of what we're talking about going on, where it's other people's money, and people either use endless tax increases or endless borrowing to keep everything moving. And my request to Democrats is, guys, we are not the last defenders of every bent dime of public spending. We should be looking at ways to get better results with less money. And, you know, there are lots of things we talk about in Maryland. I'm talking about extending the useful life of school buildings so we can avoid some of the astronomical cost of new buildings. We can delay the onset in health care There's lots of talk about prevention and doing what the private sector is doing, looking at...

SHERWOODHe's so optimistic today. (laugh)

NNAMDIWell, what do you think about the specific plan proposed by a group of Democratic...

FRANCHOTI love my job, too, by the way. (laugh)

NNAMDIProposed by a group of Democratic Maryland Senators, six senators saying they would raise $287 million in tax hikes, set the gas tax at 35.5 cents a gallon, cigarette tax at $3 a pack, charge drinkers and additional 10 cents per drink to raise that $287 million. What would you say to that?

FRANCHOTThe day it goes into effect, we would still have the same structural deficit because it will be spent on new programs. And we just have to get a sense of discipline back. And I'm not talking about cutting public services in the kind of Draconian, antigovernment rhetoric that's out there. I'm talking about actually making people healthier using less money. You know, having a better education product which you get in these schools that are well-maintained.

FRANCHOTIn my own agency, we are urging everybody to electronically file their tax returns, and we have a goal of a paper-free return. Why is that good? It saves the state administrative costs, $1.60 for every one. And it's a better product for the taxpayer. It's more secure. It speeds up their refund. They get it within 72 hours. And that's -- you know, we're talking three million tax returns. You know, it's not gonna solve the budget problem, but it's getting a better result with less money.

NNAMDIPeter Franchot is comptroller for the state of Maryland. He's a Democrat, former member of the Maryland House of Delegates. We have several callers who have questions for you. We will start with Linda in Gaithersburg, Md. Linda, you're on the air. Go ahead, please.

LINDAGood morning. My question for Mr. Franchot is -- I have to preface it a little bit. My husband and I are in our 60s. I cared for my father for 10 years with Alzheimer's. My husband was a realtor, and then oops, there came the real estate fall, rise, problem, whatever. And we lost our home and that, of course, created bad credit. So here we are, 60 years old. We're homeless. Both college graduates. I can't get a job. I tried for three years. A) because I haven't been in the workforce. Taking care of somebody with Alzheimer's doesn't qualify.

NNAMDISo you're saying that you…

LINDAAnd we have bad credit. My question is why is it legal for bad credit to be indicative of your character? Therefore, you can never pull yourself up by your bootstraps.

FRANCHOTNo. I think that's a good question and, obviously, in some employment, it's not appropriate. But in areas like my agency, for example, that handles sensitive fiscal issues and security clearances that are required by some federal jobs, it is important and it is part of that. But I really wanna go back to your situation because you are not alone in Maryland. There are hundreds of thousands of people like you that are standing in a kind of the edge of a fiscal abyss.

FRANCHOTAnd I just wanna let you -- I know it's not gonna make you feel any better perhaps, but there is an enormous amount of suffering and pain that's going on in our state. And I'm asking our leadership, our governor and our legislative leaders, to just be sensitive to that every time they vote for new taxes, however well intentioned they are, because it's just a limited ability out there, given the soft economy.

NNAMDIHow would classes in financial literacy for high school students be able to have helped somebody like Linda and her husband avoid the situation that they now find themselves in?

FRANCHOTWell, it's not a panacea. It's never gonna prevent a recession and we've had this -- obviously a huge recession that's impacted the real estate industry, Linda's husband and, you know, there are just -- there are very difficult medical situations that she was describing. So financial literacy is not gonna be a panacea, but it will certainly give kids the information to avoid getting into credit problems which will affect their employment.

SHERWOODWarning flags.

FRANCHOTYeah. And give them, more importantly, from my standpoint, the knowledge to construct prosperity for themselves. Right now, I mean, I don't mean to say to people at this table, but, you know, it's -- there's a lot of financial literacy out in the world, and we learn it through kind of mistakes and hard knocks. Why not teach it to kids? It's -- you know, I think about the families in the state that are affected by divorce and tension at home. Most of that marital discord, according to the studies, comes about through financial pressure and dispute. And so let's try to give particularly our high school graduates some information that they can...

NNAMDILinda, thank you so much for your call. Here is Jay in Queen Anne's County. Md. Jay, you're on the air. Go ahead, please.

JAYKojo, thank you. And Mr. Comptroller, thank you for your service to Maryland.

FRANCHOTThank you.

JAYI have a -- both a comment and also a question. Back in 2007, while you sat on the Board of Public Works, the Board of Public Works denied a wetlands license that would've had a really devastating effect to Queen Anne's County regarding the Four Seasons project. And recently, Queen Anne's County's circuit court judge ruled against the Board of Public Works over that decision. And I'm just wondering if the judge's ruling has caused you to reassess your position on Four Seasons and how you feel about it?

FRANCHOTNo. It was a bad project then, and I will continue to vote against it and respect the judge's decision, but the Board of Public Works has pretty complete, total authority to issue of these wetlands permits. The governor and I partnered to turn the last one down. And I assumed that when this comes back before us, we will reject it again. It kind of raised a small issue, but it underlines this Board of Public Works. Since I was elected, we'd voted on 7,000 contracts, totaling $34 billion. And it's a little known three-member panel in Maryland. And it has a lot power and authorities, specifically in this case over wetlands.

SHERWOODCan you say, like in one sentence, what it would have been? What the license would allow? What's ...

FRANCHOTThe license would have allowed a large housing development in Queen Anne's County in a very environmentally important area, wetlands. And it simply was a bad project in a bad place. And we've put our foot down and (word?) that.

NNAMDIFinal question, general assembly considering a bill this year that would allow residence to ship wine directly to their homes, good idea or bad idea? The law against that has been around since Prohibition.

FRANCHOTCorrect. And my agency has traditionally been opposed to this on behalf of the alcohol industry that we regulate. But as the chief alcohol regulator, when I arrived from day one, I said, this is not good. We are gonna champion the local wine industry. It's good for the environment. It's great for tourism. And frankly, some of the wine is pretty darn good. So we have completely reversed the agency's position on this. We pulled the industry together. We've got what we think is a consensus bill. It's not a total bill like you have in D.C., but we got to walk before we run in Maryland. And for the first time in 30 years, we are gonna break the log jam and allow out-of-state and in-state wineries to direct ship to consumers.

NNAMDIThat tinkling you hear are glasses being tinkled in (word?). Let's drink to that.

MADDENHey, can I say something quickly about Jack Evans? I know he's coming on afterwards and...

NNAMDIIs he?

MADDENYeah.

NNAMDIHow did he get in here today?

MADDENWell, whatever. But he...

SHERWOODThen what's your saying he may not be allowed in.

MADDENYou know, I was sitting with my wife this morning. And she looked up from the paper and said, I really wanna follow this guy Harper who is gonna play for the Washington Nationals. And I couldn't believe it. I mean, Annie, I love you, but you're never interested in sports. And, in fact, you have...

NNAMDINow, that we have a team...

MADDENIn fact, we have a team. I just hope when they finally win the World Series, Jack Evans is gonna be at the front of the parade, because he took a lot of slings and arrows to help get that team located here.

NNAMDIIndeed, he takes credits for bringing the Washington Nationals here. He's...

SHERWOODHe's trying to get the Redskins back -- he's trying to get the Redskins back from you guys too.

MADDENWell, I don't know. That's a little -- that's...

NNAMDIHe takes credits for the Verizon Center. And he's going to be taking credit if we ever get the Washington Redskins back here again. Peter Franchot, thank you so much for joining us.

FRANCHOTThanks, Kojo, Patrick and Tom.

NNAMDIPeter Franchot is comptroller for the state of Maryland. He's a Democrat, former member of the Maryland House of Delegates. You're listening to the Politics Hour, starring Tom Sherwood. He's our resident analyst, an NBC 4 reporter, columnist for the Current Newspapers. Patrick Madden is our guest analyst. He's a reporter for WAMU 88.5 News. Tom Sherwood, Patrick Madden, one of the other aspects of Washington politics that we have not discussed is another scramble over access for tickets by city council members to those luxury suites at the Verizon Center. This time, it started over a Lady Gaga concert?

MADDENI feel like it's Yogi Bear deja vu all over again. I mean, I just don't understand how they can be having another squabble over these tickets.

NNAMDIWell, I understand. Here's why I understand. Here's what you don't understand.

NNAMDIWe're talking Lady Gaga here.

MADDENRight. When you put it like that, I can't argue.

NNAMDI(laugh) Exactly.

SHERWOODYou know...

NNAMDITom Sherwood, in this situation, what happened?

SHERWOODThe city helped build the Verizon Center.

NNAMDIThe house that Jack built.

SHERWOODWell, Abe Pollin donated a lot of his money, but the city put $100 million plus in infrastructure and all that. And the city recently helped float the bonds for $50 million in renovation. So in the course of that, the city, I think, has two -- I can't be correct about someone coming in the room here -- two boxes, one for the mayor and one for the council. And the council chairman, if he controls that box for the council, should keep in mind for the council members and they ought to be a fair distribution of tickets there. And so that council members can give them to people and their constituents. They can -- its favors or whatever to a small matter. It shouldn't go blow up into this kind of idiot issue of not giving tickets to people.

MADDENBut I just don't understand why these tickets can't be put up for auction, especially giving...

SHERWOODWell, because who -- then who's gonna put up the auction? Who's gonna handle it? I mean, every city in the country where there is a stadium or something like that, there's a local government box. And that's what people do. And it's not a big deal if they're handled as like mature people and not these silly (word?)

NNAMDIOur current guest has a suggestion of combining the tickets from the mayor and the city council and, therefore, being able to give each member of the council two tickets. Our guest, Jack Evans. He's a member of the D.C. council, a Democrat who represents Ward 2. He's chairman of the council's Committee on Finance and Revenue. Jack Evans, welcome.

MR. JACK EVANSThank you, Kojo. Always a pleasure to be here.

NNAMDIThank you so much for joining us. But problem with your suggestion is you got to get the mayor to go along with that.

EVANSWell, let me start up by saying this. I think having any discussion in the tickets is ridiculous.

NNAMDIOkay. We'll move on.

EVANSWe have so many other issues at the finances of the city and everything else.

SHERWOODThe SUVs, Suleiman Brown.

EVANSSo...

NNAMDIHaving said that...

EVANS...my suggestion was, at the council retreat, was to simplify this, just as Tom said, and Tom hit -- I'm just gonna repeat what you said. Look, we have a box at the baseball stadium. We have a box -- there were two boxes at the baseball stadium, two boxes at the Verizon Center. There are enough tickets to go around for every member. And let me just preface by this, this suggestion comes from 1975. When the city first got home rule, we had -- we owned RFK Stadium. There are 60 seats in a box at RFK Stadium. So when I first came on the council, every council member, the mayor and members of the sports commission got two tickets in the box at RFK Stadium.

EVANSSo this isn't a novel idea. Something that's predates me by 20 years. So my suggestion to everybody is two tickets, all the elected officials. You can give four to the chairman, if you want. You can give six to the mayor. You have enough seats in the boxes at both of Verizon Center and at National Stadium. Do it that way. It's clean. It's easy. And you never have to deal with this issue again.

NNAMDISince Jack Evans is running the show, we won't be dealing with issue again in this broadcast.

NNAMDIWe've gotten rather used to talking about the D.C. budget and doom and gloom mode dwelling on shortfalls, and the hundreds of millions of dollars and the cutbacks city will need to make -- to fix them. But this week, the script flipped a little bit. And we've been talking about the city spending money whether it's on fully loaded Lincoln Navigators or on salaries for city employees. A month and a half into the Gray administration, what concerns do you have as the chairman of the Committee on Finance and Revenue about the city's ability to live up to its commitment to fiscal responsibility?

EVANSLet me just say this. This week has been a very, very bad week for the District of Columbia image wise. We just -- we're up on Wall Street. There were testimony before Capitol Hill. And then this week, I think, in my 20 years on the council at least, I haven't seen anything like this. I was going back to the Vista Hotel where we have been in the news in The Wall Street Journal, all in an unfavorable light. And, hopefully, we won't have another week like this. So these issues have to be solved immediately and put behind this, because in response to your question, the District of Columbia whose finances actually are in quite good shape.

EVANSBut like every other jurisdiction -- I was just listening to Peter Franchot who is a great friend of mine, and he accurately identified the problem. We have revenues -- and in the District, it's interesting. Not that they're declining, but they just are flat, and expenditures that continue to grow, producing a gap. For the last four years, we've filled that gap by spending our savings down to the point now where we can't use that anymore. So this year, we have $400 million gap that must be filled by one of two ways, either raise taxes or cut expenditures.

MADDENCouncilmember, I've heard that the revenue estimates coming in are actually somewhat better than initially thought. Is that the case? Is the budget deficit as big as everyone is talking about right now?

EVANSThe budget deficit is as big. We have not gotten revenue estimates. And we won't get them till February. So anyone who's telling you that they're better or worse has no idea what they're talking about.

SHERWOODI'm sorry. February? When's the next revenue -- at the end of February?

EVANSAt the end of February.

SHERWOODOkay.

EVANSAnd at the end of February...

SHERWOODA couple of days.

EVANS...we will -- and this is what I took away from our meeting on Wall Street and meeting just in general. Nat Gandhi will give us a revenue number at the end of February. Whatever that number is, that's what we have to spend, period. We should not try to increase that number by raising taxes and have more money to spend. Because, frankly, when we visited Wall Street -- I mean, we could do it. But everyone will look very skeptical on our ability to make hard decisions if we do that.

SHERWOODHow are you going to make hard decisions when someone who appoint to the Gray, to -- or Kwame Brown -- many people have said and those who like him that his credibility to lead the fight on the budget matter for the council is really undermined by this SUV stuff and his own credit problems, but just the SUV is enough. But now, with Mayor Gray with this Suleiman Brown person and other things you just referenced, how can you look at the people you're cutting the programs around the city without them looking right back at you and saying, well, Mayor Gray hired this guy for $110,000? It seems to me it undermines the ability of the mayor and the council to get the real work done.

EVANSThere is no doubt, Tom, that it absolutely does. This episode, this last week has in many ways tarnished the image of the city that Mayor Williams, Linda Cropp, myself and others have tried to change over the last 10 years. Having said that, what I would recommend to the -- everyone involved in this on the Kwame Brown issue, those SUVs needed to be returned. Whatever money gotten from them needs to be gotten, and the difference, he needs to make up and move on. That's what has to happen. Anything short of that will keep this issue alive for us during the budget. On Vince Gray's issue, I have known Vince for 20 years. He is an outstanding guy. I really mean that. I've known him for 20 years. I sat next to him for four years. He's had some missteps this week. I hope it's just a bad week. And going forward that he -- now that he understands the problems he's facing that he can correct these and we can move forward quickly.

SHERWOODHis own private advisers are telling me that he's got to get better staff support so he can head these things off, or if they do crop up, cut them off so they don't just go on for days and days and days.

EVANSYeah. And that's all good advice, Tom. But remember, other mayors, I have to say this, when they started out, have had equally bad missteps. Tony Williams, moving the University of the District of Columbia to east...

NNAMDITo southeast.

EVANS(laugh) I mean, talk about a misstep. Within the first month, we were swarmed at the building if you remember. And so, we all have short memories and forget that other people, in these jobs, it's not hard to make a misstep. The thing you have to do when you do it, though, is recognize it immediately, put it behind you and move forward.

SHERWOODDon't hide from the media.

EVANSAnd I think with chairman -- Mayor Gray, again, I've know him a long time and he's a very capable guy. Kwame Brown, he's just to get this thing paid for and off of his ledger.

NNAMDIJack Evans is a member of the D.C. Council, a Democrat representing Ward 2. He's chairman of the council's Committee on Finance and Revenue. I wanna get back to the issue of raising taxes because some of your colleagues are talking about raising taxes for wealthy residents in order to deal with our budget problems. What do you say?

EVANSI think it couldn't be worse idea. First of all, for two reasons -- raising taxes only gets you through the year in which you raise the taxes. It increases your revenue up to a different level, but it does nothing to address the increase in your expenditure. So you're going to have a gap the following year unless the economy turns around, which it shows no sign of doing quickly, and increases the revenue by the development factor. So raising taxes is an easy way out for a one-year period. And secondly, Kojo, in our city now, we're back in that situation where we have 13 percent of the people earning more than $250,000 a year, paying almost 70 percent of the taxes. At what point does enough become enough?

EVANSYou have half the residents in the District of Columbia aren't paying any taxes. You know, some of the suggestions I've heard, which I don't agree with, but at least make more sense to me, tax everybody. Tax -- make every person in the city pay taxes. And all of a sudden people will say, well, maybe it isn't a good idea after all. But it's always a good idea, if I don't have to do it and you do then it's always a good idea. And that's what we have to look at.

SHERWOODPeter Franchot, you mentioned, he was here. He talked about the severe pension problems...

EVANSRight. Right.

SHERWOOD...in the state of Maryland, in Wisconsin that the governor says, let's get rid of collective bargaining. I know you're not for getting rid of collective bargaining.

EVANSNo.

SHERWOODBut how bad -- if you can summarize, how bad is the pension problem in the city?

EVANSYou wanna know the answer to that?

SHERWOODYes, sir.

EVANSWe have no pension problem. And you know why?

SHERWOODReally?

EVANSBecause ours was assumed by the federal government in 1996. Remember the issue.

SHERWOODWhoa.

EVANSWe took over the city in 1975 and took a two -- an unfunded pension liability of -- I think it was about $2 billion. Over the course of time, by 1995, we had managed to mismanage it into a $10 billion unfunded pension liability. And in the Revitalization Act, they assumed the entire responsibility. So we now, as (unintelligible), I think, told me the other day, we're pretty current on our pension payments. So we're not facing...

SHERWOODThe city is kind of going forward from that period of time...

EVANSTo now.

SHERWOOD...but the $10 billion was taken by the...

EVANSWiped out. Gone. So we are not in the Wisconsin (word?)

SHERWOODDon't let the Republicans on the House know.

NNAMDILadies and gentlemen...

EVANSBut remember, we traded away the federal payment, which was $600 million a year. They took over the prisons and the court system. So there were a lot of moving parts to that. But again, they gave us unfunded pension liability, and then we gave them a worse one. So that's what happened.

NNAMDILadies and gentlemen, the winner of the competition for the longest and most detailed financial memory (laugh) in the District, institutional memory in the District of Columbia goes from Tom Sherwood to Jack Evans. (laugh)

MADDENAnd councilmember...

EVANSAs Peter said, it's fascinating stuff.

MADDENIf I could just tap into that institutional memory. Going back to 1995, '96...

EVANSRight.

MADDEN...there's talk right now obviously about a potential federal government shutdown.

EVANSYes.

MADDENWhat are the implications for here in the District?

EVANSAgain, it always depends on what happens. I know our congresswoman is trying to get a bill passed quickly that any shutdown of the federal government will not affect our finances directly. If she's able to do that, then the best of all circumstances is that the way we would be hurt is when the federal government closes down, assuming, like in '95, they closed all of the attractions -- the monuments, the Smithsonian, everything -- at a time going into the spring season when we get most of our visitors coming here, schools and things of that nature. It goes right to our sales tax, right to the bottom line. They won't stay in our hotels. They won't even eat in our restaurants, et cetera, et cetera.

EVANSNow in '95, Mayor Barry at that time, did something very clever. He tried to classify most District resident -- most District employees as essential. And frankly, they are. And by able in doing that, they stayed on the job and got paid. So we continue to pick up the trash, to have police officers on the streets, teachers in the schools, firefighters and things of that nature. So my advice to the current mayor would be to try and do the same thing. If Eleanor's bill is not successful, trying to keep as many people working as you can is essential, and then the effects on us would be actually much smaller than it would be on others.

SHERWOODHave you brought that up with Gray? It sounds...

EVANSNo, I have not talked and spoken to the mayor about that.

SHERWOODWell, maybe he's been busy with Suleiman Brown. (laugh)

NNAMDIWell, Republicans in the U.S. House went on a budget cutting bonanza last week. As Patrick was saying, that could ultimately result in -- or the disagreement could result in a shutdown of the federal government. But the District ended up on the business end of some of those cuts. What do you expect the District is going to be? What kind of situation is it going to be in once this federal budget fights are over?

EVANSWell, again, our finances remain quite strong. What -- how it's going to affect us is how much of the federal government commitment to money they were going to spend here is taken away. The best example starting out is Metro.

NNAMDIOne hundred and fifty million dollars?

EVANSWe -- yeah, 150 million. We went a long way, the city was the leader on this putting in $50 million a year. Maryland and Virginia, the same, matching the 150 million from the Feds for a total of $300 million commitment to Metro every year. If they...

SHERWOODFor 10 years.

EVANSYeah, for 10 years. If they pull their 150, we are not -- I can say this right out of the box -- we are not in a position to replace that $50 million. So Metro is gonna get shortchanged by $150 million right off the box, and that's gonna hurt them. There are other contributions...

NNAMDIHow about the $80 million from the District's budget for court, schools and other programs?

EVANSYeah, I was gonna say there are other situations where money that is almost critical to the District who are running at the city is gonna be taken away. And we are not in a position, again, to replace those dollars. So the only way that we can do them if they're essential is to make cuts elsewhere. And now, we're back to where do you make the cuts. Three areas -- human services, schools, public safety. That's 80 percent of our budget. And, you know, that's where we always get the arguments. And when you simplify it, human services, you know, homeless programs, schools or the kids, and police, and I can tell you, there's no community meeting I've gone to recently where people raise their hands saying, I see too many police on the streets, my God. (laugh) You know, you got to cut this back. So that's the problem.

NNAMDICutting public safety is always a no-no, but...

EVANSYeah.

NNAMDI...we've got a rack of callers who would like to address a variety of issues, starting with Oscar in Northeast Washington. Oscar, you're on the air. Go ahead, please.

OSCARYes. Good evening. Question right off the bat. I do have a long memory also, but I'll get to that in a few minutes. The thing with the credibility of the city council as we face these challenges, one, Kwame Brown, because of his lack of judgment ought to be recalled. No one can move forward dealing with the budget based upon understanding and looking back at the decisions that he made no sooner than he got to become city council chair. And then my second question is the gentleman in charge of Public Works, does he responds to requests from city council person? It seems to me that some of these people ought to say no to what Kwame Brown...

NNAMDIJack Evans, a lot of people say, we thought the director of Public Works work for the mayor. How does he have to respond to a request from the chairman of the city council for a vehicle?

EVANSThe head of Public Works is Bill Howland, who is an excellent head of the Public Works. And I'm not just saying that because I say that he's been there for a number of years. I've worked with Bill over the years on a number of projects. I suspect what he was doing, like he would do with any council person who...

NNAMDICourtesy.

EVANS...makes an inquiry, is a courtesy with responding to the concerns that were being raised by him. Clearly, the red flag should have gone up. And clearly -- even I had forgotten this. We passed the law -- Carol Schwartz sponsored it, we passed it -- that says you can't have SUVs. And you -- and it was essentially in response to what -- you see, when the control board came in in '95 and '96, they eliminated all of the cars. Cars are gone. And then when the control board leaves, the cars start coming back again. Now I'm going to introduce a bill -- so I could say it right here, make some news, along with Sekou Biddle -- on Tuesday that says when a lease expires on any of the rental cars in the District of Columbia right now, they cannot be renewed and -- with the exception of the mayor. The mayor can have, you know, a car for security reasons. Any lease that somebody wants to renew has to be approved by the mayor and come before the council so that we have complete openness, jurisdiction over any of these cars because there are too many of them out there.

SHERWOODThe city administrator has...

NNAMDIHow many are there?

SHERWOOD...has a car and a driver.

EVANSCity administrator, chancellor of the schools, I think the CFO. I mean, all of this card, and it wasn't like that 10 years ago. It's just one of those things that just got going again. And frankly, I -- just remember, when the control board came in and they said, what is this? and they had that ability to just eliminate it, you know, unilaterally. We don't have that. But as these leases expire, they should not be renewed.

NNAMDIOn to Steve in Washington, D.C. Steve, you're on the air. Go ahead, please.

STEVEHi. Good afternoon. Thank you. Quick suggestion on the tickets problem. Maybe just that you ought to just auction them off and raise some revenue.

EVANSWell, again, this goes back to what Tom was saying earlier. And I hate talking about this, but I'll do it because you raised it. Virtually every city in America that has a stadium in it, the government has a box. It's just one of those things that they have, and they're used as they're used. You know, they're given to elected officials who hand them out. You can auction them off. You could give the box back and not have a box at all. So these are all suggestions. The one I made is the historical way that these things were dealt it, and then puts this issue to rest once and for all.

NNAMDIThank you for your call, Steve. Now here is Aaron in Fairfax, Va. Hi, Aaron.

AARONHi, Kojo. Thanks for taking my call. I love the new guys. And I was wondering -- I read in the paper yesterday that Vincent Gray raised salaries not quite across the board but for a lot of his staff. And I was just wondering what percentage that was, like was it more than, you know, average inflation, was it less?

NNAMDIAccording to The Washington Post on Sunday, Gray's chief of staff, Gerri Mason Hall, received a 25 percent salary increase to $200,000 a year, putting her over a cap for her job category. What do you say to those percentages, Jack Evans?

EVANSWell, I am not here to either defend or attack the mayor on these things. So I don't have an answer as to why these things were done or not done. We do have a committee that Mary Cheh chairs, the Government Operations Committee. And my recommendation is that Mary convene a hearing on this and put it all out there as to what happened and what we're gonna do about it.

SHERWOODYeah, the mayor says that he's paying people more, but hiring fewer people.

EVANSRight. And if that's the case, he -- his staff can make that...

SHERWOODMake that argument.

EVANS...argument at the hearing and say, in actuality, the pool of money is less than in the Fenty administration, although I pay my people more. And frankly, that's a good argument. You know, in my council staff, we do that. I have eight people that are paid more.

NNAMDIExcept for people who are experiencing no salary increases and people who are having to go -- to be furloughed because the city is having...

EVANSRight.

NNAMDI...a bad time, to see people getting significant salary increases...

AARONCan you guys still hear me?

EVANSYeah.

NNAMDI...in that environment is gonna upset some people.

EVANSWell -- and now you're going to a perception issue. And again...

NNAMDIYes.

EVANS...I think -- you know, the mayor, I think, has gotten, you know, hit in the head with a baseball bat this week. You know, there's a perception problem here, and you're having a hard time explaining that.

NNAMDIAaron, you...

AARONCan you guys still hear me?

NNAMDIYes, Aaron. What were you going to say?

AARONOh, I was -- the other thing I was gonna say -- this is a comment and I'll let you guys go. I just find it very interesting that the city council squabbled over these contracts that Fenty pushed through. I'm a tennis coach in D.C. and I just -- I was so grateful for all the parks budget he pushed through because of the green space. And it's funny that there's not so much more fury over these increases in salary and this SUV thing, like everybody is kind of disconcerted. But I would just be absolutely furious that they're squabbling over $30,000 contracts and you have people making, you know, tens of thousands of dollars.

NNAMDIOh, they weren't squabbling over $30,000 contracts. They were squabbling over more like $80 million in there.

EVANS80 million contracts.

SHERWOODThere's a lot of -- there is a great deal of furious feeling about this. Gray -- I mean, again, Kwame Brown is in deep serious trouble over this. I don't know what he's gonna do to prove that this was an aberration. Gray has a little more time maybe.

NNAMDIHere is Sam in Washington, D.C. Sam, you're on the air. Go ahead, please.

SAMHi, Kojo. I'm a little concerned. You know, I heard Mr. Sherwood say a couple of times that the mayor was running from him. I'm not a Gray supporter. I didn't vote for him. I support D.C. I'm an advocate for the city I live in. And I think one of the problems, especially with, you know, the media, is that they, you know, they run after the sexy stories that, in the course of these folks' day, that might -- of those events that took place, they have taken, you know, 10 minutes out of your day. And it becomes so inflated that it literally distracts them from doing their job. And I think the media has some responsibility in that. They should be more -- as far as covering stories, I understand that sexy, it's scandalous and, you know, it makes for good air time, but, ultimately, it hurts the city. And I think the media and Mr. Sherwood should do their job as responsibly as they expect the politicians to do theirs.

NNAMDIWell, let me -- allow me to find a handgun so I can shoot the messenger. (laugh)

SHERWOODWell, here's -- he raises a good point. I mean, the media -- I mean, as I mentioned earlier, the mayor had a press conference on summer jobs, on HIV AIDS and all these things. And -- but he was ducking us. Yesterday, at 9:30, I sent an e-mail to him, saying I wanted to interview Suleiman Brown. I wanted to speak to the mayor. Then we heard that Suleiman was out. I spent all day trying to find the mayor. The mayor was perfectly aware that we were there. We spoke to his aides. We told them why we were there. And had the mayor stepped out and spoken to us for three minutes, that would have been the end of the deal. We wouldn't have had that soap opera, bizarre event yesterday where Suleiman showed up with the press corps. So it's up to the mayor's press people and to his staff to make him available to cut these things off. Fenty would stand there. He'd never give you a great answer, but he didn't let you chase him. And it makes sense. And so it's -- yes, the media is gonna go after the hot stories, but the mayor makes them hot by ducking.

NNAMDIAnd, Patrick Madden?

MADDENWell -- and just that the media isn't responsible for the leasing of two luxurious SUVs. It's not the media's fault that children of some close advisors were hired. I mean, there -- these are a lot -- these are self-inflicted wounds that both the Gray administration and Kwame Brown have happened, so.

NNAMDIAnd this is not exactly a rural jurisdiction here. Our elected officials know that this is a town that has a lot of media and that just about everything you do is going to be subjected to...

SHERWOODAnd we're not part of the government. We wanna do good -- go ahead.

NNAMDI...to media scrutiny is what I was gonna say.

SHERWOODYes. Yeah. Excuse me.

NNAMDIGo ahead.

SHERWOODI was just gonna say we're not part of the government. We are supposed to look at the government, how things go. I do a lot of positive things about what the city does. I know Jack Evans can say that, about the things that I do. But when you get this kind of embarrassment, when you get this kind of foolishness, when you get this kind of stupidity, it has to be addressed by the media because no one else will.

MADDENYes, sir.

EVANSAs an elected official, I have to say this is the profession we chose. I really believe that. If I didn't like this, I should go do something else. But if you walk into this fishbowl, you got to expect this is gonna happen.

NNAMDISam, thank you very much -- Sam?

SAMYeah. Can I just say one other thing?

NNAMDIYou got 10 seconds.

SAMOkay. I think it's unfair because they didn't get the attention immediately. The media didn't get the attention immediately, but they went on the attack. I think they should stand in line like everybody else who has a request from politicians...

SHERWOODI stood in line for all day.

NNAMDIThat would be Tom Sherwood. He is our resident analyst, an NBC 4 reporter and a columnist for the Current Newspapers. Patrick Madden is our guest analyst. He's a reporter for WAMU 88.5 News. Our guest, Jack Evans. He's a member of the D.C. Council, a Democrat representing Ward 2, chairman of the council's Committee on Finance and Revenue, who broke into our studios today, who never wants to leave.

EVANSI'm here.

NNAMDIJack, thank you so much for coming.

EVANSNext show. I'm here for the next show. (laugh)

NNAMDIAnd thank you all for listening. I'm Kojo Nnamdi.