A Democrat Who Understands the Assignment w/ Rep. Jake Auchincloss | The 1600

0:00Good morning once again from Newsweek headquarters at the top of the World Trade Center in hot and sunny New York City. I'm Carlo Versano, and this is your weekly edition of The 1600. This country was stone cold dead. So, you know, Congress doesn't get a lot of love these days, which makes sense, really, when you think about it. We've talked a lot in the newsletter and here on the show about how the legislative branch can sometimes seem like a cross between a nursing home and a social media hype house, maybe with a little bit of stock trading mixed in there, a place you go to either get rich, get famous, or die.

0:31But there are members of this Congress who break that molt, legislators who are actually, believe it or not, interested in legislating, in passing laws, and not just going on cable TV and TikTok all day to talk about it, actually thoughtful representatives, people who do deep thinking on the big issues facing this nation. And I am very lucky and honored to have one of those members joining me today. Representative Jake Aachencloss is a former Marine. He's a millennial Democrat running for his fourth term, excuse me, in Massachusetts' fourth district, the fighting fourth. Congressman, thank you so much for taking the time, sir.

1:06Carlo, thanks for having me on. I like that. Get rich, get famous, or die. That is unfortunately all too candid in its description. I hope you didn't think of that as a backhanded compliment. The point I'm trying to make is that you guys aren't all like that. And that's why I wanted to have you on. It's unfortunately, it's too fair of an indictment, regrettably. Fair enough. Okay, I want to start with, I have a million things I want to talk to you about. I'm cognizant that you have a day job here and don't have all day to talk to me. But I want to start with housing, which is probably the skeleton key, in my opinion, at least to sort of understanding all of the angst in our politics right now, at least the angst among the younger part of the electorate, including people like you.

1:49You and I are both elder millennials, right? I think we're sort of still considered young or youngish. And this is an issue I suspect is going to be front and center in the 2028 campaign. Simply put it, just somehow, some way got way too expensive to buy a home, especially if you're younger, a starter home, sometime in the last few years. And I want to hear about the measures you're taking to address the housing crisis in Congress, the so-called abundance agenda that I know you've endorsed. But I want to first hear about this ballot measure in Massachusetts that you're supporting, which has to do with making it easier to afford a starter home.

2:24Yes, I have endorsed question seven, which is the starter home ballot initiative in Massachusetts. Basically, it says for any lot greater than 5000 square feet that has connection to public sewer and water, that municipality has to allow by right the construction of these small starter homes, the kinds of homes that families can have their first kid in that you can afford when you're in your 20s as opposed to when you're in your 40s. And it is one element of the broader agenda to make homeownership a reality for somebody by the time they're 30 years old. I'm happy to talk about the problem and the solution of this broader issue if that's the direction you want to go.

3:03Please, please. Yeah, tell me. What do we do about this? I mean, I think this is a great idea, right? Five thousand feet. That's like the size of a basketball court. And I believe my understanding is that the rules in Massachusetts are the law has before this, at least the lot would have to be much larger. Right. Functionally in Massachusetts, I won't go into all the zoning and land use wonkiness, wonkiness. But functionally in Massachusetts, the land use laws have made it so that you've got to build McMansions. You've got to go to a big lot, 10 ,000, 15 ,000 square feet, and you've got to absolutely maximize the value, which means five, six bedrooms, five, six bathrooms.

3:37Beautiful homes, don't get me wrong. Sure. But you can't buy it when you're a young, middle class base stater. And this is symptomatic of what has become a broader problem. So let's just wind the clock back 50 years. Baby boom generation, 70s, 80s. and they were able to buy a home, including a home in high productivity cities, Boston, New York, et cetera, for something like three times of their yearly salary, right? So that was like a down payment that was maybe three months of salary and then three years of salary and you had it paid off. And it was very attainable. Then they got to sit on these lots for the next half century and watch them appreciate from like$40 ,000 to like$800 ,000.

4:22Pretty good deal. Yeah, I think a lot of our parents, right? Pretty good deal if you're a young baby boomer buying a home in the 80s or, you know, no shade on them. No, they got a great deal. Worked hard, fine. But how we paying it forward to the next generation, millennials, Gen Z, et cetera. Because now let's look at the situation for millennials and Gen Z. It's not three years to buy a home. It's 10 years worth of salary to buy a home in a lot of metro areas. that down payment is not three months. It's much, much longer of salary. And so they're just getting priced out. And what that means is they're living with their parents.

4:55That means that they're not taking jobs they might take because they can't afford the housing nearby. And it's just delayed establishment, basically, is that it just takes longer and longer to feel like you're really entering adulthood and have a rung on the middle class. How do we solve that problem? Well, Congress actually struck a blow in the right direction with the 21st Century Road to Housing Act. Yeah. Yeah. It's the most meaningful measure that Congress has passed in my lifetime to make housing more affordable. It's a lot of carrots and sticks to basically get states and cities to build more housing.

5:27And I really want to emphasize this point because it's an important, frankly, debate within the Democratic Party. And I want to be clear what side of it I'm on. If we want to make housing more affordable, we have to build more housing. I understand the impulse behind rent control for people who feel like their landlords are taking advantage of them. The best way to go after greedy landlords is to give them competition, is to have a lot more housing supply on the market. We've got to build seven million more units of housing in this country and create that social infrastructure for a middle class.

6:01No, that would be very, very well said. And I think that, you know, the Democrats should just be pounding, pounding the drum on this. And it as a housing is a supply problem. This is, you know, sort of this is the abundance agenda. people like Ezra Klein and Derek Thompson I know you've talked about it a lot on your Substack, which we'll put a link to in the description Congressman, again, I could ask you a lot of follow-ups here, I want to get to some other issues the easy stuff, Israel, how about that I actually, I don't want to spend a lot of time on Israel, I'm much more interested in what you're doing to help people like me, to help Americans live a better and more affordable life here However, the Israel issue has become sort of a litmus test among Democrats.

6:43You're in an interesting position here. You're Jewish. Your district includes, I understand, the largest population of Jews in New England. You have been endorsed by AIPAC in the past, and you've been very outspoken about the Jewish state and its right to exist, its right to self-defense. Then last month, you were one of, I believe, 103 Democrats and one lone Republican, Tom Massey, who voted to cut off military aid to Israel. You went in front of a group of constituents at a synagogue in Newton, great town, to defend that vote. And we're met with a largely skeptical response from what I understand.

7:15So can you just explain your reasoning for the vote and what you heard from those constituents that may have surprised you? It was a constructive conversation. I've since done five other visits to temples in my district. and I have had a really, I think, lively and intense and respectful back and forth with the pro-Israel community in my district broadly. And it starts with putting the values on the table. The constituents that I represent, the Jewish community I represent, have a visceral connection to Israel on a number of fronts. One is to them, who are many of them are children or grandchildren of Holocaust survivors, Israel is an incarnation of the pledge never again.

7:57that the ability for there to be a Jewish homeland that can defend itself is an important bulwark against persecution of the Jews. There's also, of course, cultural and personal connections. And I believe in the Jewish homeland's right to exist, and I believe in its right to defend itself against terrorists who do seek to exterminate it. What I don't agree with, what I will not support, what I will not appropriate for, is the decision making by Donald Trump and Benjamin Netanyahu that has led to a cataclysmic war in the Middle East, that nine out of 10 Israelis think Iran is winning and even fewer Americans support.

8:31I'm a veteran of these forever wars. I refuse to support with my voice and vote any measure that might advance yet another third failed forever war in the Middle East. And we have got to stop this quagmire before it before it goes even deeper. I want to ask you about the war in a second. What was the response from from from the pro-Israel lobby, AIPAC in particular, to that vote. I noticed that they took your fundraising link off their website, which is kind of a badge of honor in a Democratic primary right now, I think you could probably argue. Yeah, I don't vote. I don't take positions based on outside interests.

9:10It's just not the right way to do this job, right? People want to support me because of my positions, okay. And I fundraise, and then I help fellow Democrats win seats in battleground districts. If people don't want to support me because of my positions, okay. You know, I play in the NFL in Washington, D.C. It's a contact sport, and you can't be thin-skinned, and you can't be looking over your shoulder, and you can't be looking left or right on every issue. You got to vote the principle of it and be able to explain it in living rooms back home. Well, I actually, I mean, for what it's worth, which is nothing, I think it was a courageous vote, and I commend you for taking it, and I commend the rest of the Democrats for taking it.

9:44I do not think, I'm not Jewish, but I do not think there's anything wrong. I do not think there's anything anti-Semitic about saying that we need to reevaluate the relationship we have with Israel, given its conduct under this current regime, this current prime minister. I don't think that's controversial. No, I'm criticizing Netanyahu, evaluating every foreign alliance that the United States has. None of that is outside the overt window of acceptable debate. I mean, George Washington said in his farewell address, avoid entangling alliances. Right. I don't have any issue with that. I will say, though, I want to be clear about this.

10:15Please. When there is sustained double standards, delegitimization and defamation directed at one country out of the hundreds that exist. And that has happened in our politics in the last several years. Of course, that does start to brush into, well, where is where is legitimate criticism starting to feel ugly? And that we do need to have that conversation as a Democratic Party. Yeah. On the topic of the war in Iran, which is, I think everybody would agree, a clusterfuck of epic proportions to put to use the technical term. I know you served in the Marines, as you noted. I know that this war with Iran is personal to you in a way that it might not be for some of us who haven't served.

10:53But I want to play this clip. You recently went on Fox News and addressed President Trump directly. Olivia, can we pull this clip up? Well, Peter, I know Donald Trump watches your show, and so I will say to him directly, Mr. Trump, you are the first president in American history to start and lose a war by yourself. You have made America more weak, more alone, and less respected. Congress, he has to take back the steering wheel from this impaired driver before we end up in a third quagmire in the Middle East of the 21st century. That starts with ending the escalation. He keeps on trying to escalate vertically, meaning more effects on target.

11:27Iran escalates horizontally, bringing in other regional players, other infrastructure assets into the fight. Iran is winning that escalation ratchet. We've got to stop it. We've got to negotiate transit through the Strait of Hormuz. Then we have to strengthen the Abraham Accords. But that is going to be a decadal process. It's not going to happen in this guy's term because he's too incompetent. What was it? Did you get any response to that? That was a great, great line. I know the president watches. And the reason I did that is because it is very evident that he is at a moment in this war where he is being introspective about his legacy.

12:05He's terrified of being compared to Jimmy Carter. He understands that the cataclysm of this war is going to stay with him in the history books. And because I feel so strongly about the imperative to stop this war, I think going directly at his sort of system one level reptile brain is an important way to do that. We've lost 18 Americans overseas. I don't want to lose a 19th. And if that means going on Fox News and telling him that he's an idiot directly to his face, I will continue to do that. Look, I think Democrats who can go on Fox and talk to that audience in a way that respects them but is also firm, there's two of them right now I can think of, you and Pete Buttigieg, and I think that's a smart strategy.

12:47If the president were to put out a memorandum, MOU, or a new deal that got us out of this mess without reopening the Strait of Hormuz and without dealing with the nuclear question, would you endorse it? Well, I'm not going to negotiate against the conjectural MOU. What I will look at is the MOU that he already did sign and has since been vacated. That MOU was the worst foreign policy document that ever a United States diplomat put their pen to. That had hundreds of billions of dollars for the Ayatollah, no strings attached, through sanctions relief, through frozen assets relief. That had de facto yielding of the Strait of Hormuz to Iran as an Iranian river.

13:28that had nothing on enrichment, on proxy terror funding, on ballistic missile development. It was a shameful document, which I actually think this president now understands. I agree. So I'm not going to support something like that. What I do support, and listen, this is a painful thing as an American policymaker who wants to see my country succeed. This is a painful thing for me to have to contemplate. We are going to have to accept a status quo after this war that is worse than before this war. That's the truth. and we have to avoid what's been our biggest Achilles heel as an establishment on national security in the 21st century, which is sunk cost bias, which is things are going badly, whether it's Afghanistan or Iraq, and they keep on plowing in more troops and treasure, hoping to change things and it doesn't get any better.

14:14Let's not do that here. No more troops, no more treasure. Recognize that the commander in chief made a totally boneheaded decision and then try to salvage the losses. Yeah. From your lips, Congressman, from your lips, Okay. I started to jump around here, but I want to go back to what we were talking about. Really, I mean, housing is part of an inequality issue. And that is really the – I said that housing is sort of the skeleton key to understand our politics. Inequality is probably the real problem, the real skeleton key. You came out – you had a great interview with Brett Stevens, the conservative columnist at the New York Times a couple months ago, in which you talked about being in favor of a wealth tax.

14:56Yes. I understand. So here's where I am. And again, you tell me where I'm wrong. Maybe we can work this out together. But I understand that is a position that an elected Democrat would take. I have no issue with taxing the wealthy more. But is the answer to our deeply unfair tax code adding a new tax, understanding that we have these issues of capital flight, which people are very good at figuring out how to not pay taxes and do it in legal ways or semi-legal ways? You've got all these enforcement problems. To me, it seems to me, and again, I'm a layman here. I'm not a tax expert by any means.

15:29It seems to me that the original sin of our tax code is that we tax labor at a lower rate than we tax capital. How do we solve that problem? Yeah. Carla, you should your next guest should be Ray Madoff, who's written a terrific book, The Second Estate, that talks about exactly these tax issues. I will give you the the, you know, the high level version, but she's the one who can talk in great detail about it. She's awesome. So a few things. One, we need a wealth tax. Now, at a state level, you're right that it's very challenging because capital is mobile and capital will move across different states.

16:04At a federal level, much harder to do that. You can create a broad-based wealth tax that is hard to circumvent. How do you do that? You close the buy, borrow, die loophole. What's buy, borrow, die? Buy, borrow, die is when you are extremely wealthy, hundreds of millions, billions of dollars. You don't take salary. Instead, you hold assets. You borrow against your assets to support your lifestyle. When you die, those assets then get transferred to either a foundation or to your heirs. And here's the critical point. They get transferred fundamentally tax-free because of what's called a step-up in basis.

16:38They mark to mark it up on your death, and your heirs don't have to pay the appreciated tax delta there. That's unfair because here's what that means in reality. It means that if you work really, really hard and you earn$500 ,000, you are paying a higher tax on that income than an heir would pay when they inherit$500 ,000. Un-American. Un-American to pay a higher tax on work that you have done than on something that you got passively. So I want to close that buy, borrow, die loophole. That is fundamentally a wealth tax because it's about wealth transferred across generations. To your second point about labor and capital, agreed.

17:15Agreed. Got to raise the cap gains tax. Totally. Because for the last 50 years, capital has done very well. Labor has not gotten the same returns. We've got to equilibrate that. You talked about taxing death as this realization event. That's part of what you were talking about with the buy-borrow-die. Just explain that a little bit to me, please. Yeah. Bear with me on a little bit of wonkiness, but that is closing the buy-borrow-die loophole. So what happens now, rich person dies, their assets, and rich people fundamentally have more assets than they have income. Their assets, it's called mark-to-market.

17:51So if I bought it 50 years ago and it was worth$20 and now it's worth$80, in normal times, you would pay a tax on that appreciation from$20 to$80. That does not happen at death. This is critical to understand why an aristocracy is ossifying in America. That does not happen at death. Instead, your assets get up to$80 transferred to your heir, and then your heir has to pay a tax only on if it goes from$80 to$81, right? Right. It's a massive tax loophole for rich heirs. unfair. We should not do that in this country. If you have a lot of success in this country, great, good for you. But you can't give it all to your kids tax-free.

18:29You got to pay it forward to the next generation of kids. Give them a chance to. This idea of paying it forward, it strikes a chord with me because, you know, you're just, you're seeing so much again among young people just feeling like they got the short end of the stick. And I think that, I mean, one thing I've sort of thought about, I've tossed out in the newsletter, again, as a layman, but is this idea of like a tax holiday for people who work who are under 40? Like, why is anyone under 40 being taxed on their labor at all, or at least more than the absolute minimum? The idea of an age-based tax preference, I'm a little skeptical of because there's a lot of people under 40 who are doing extremely well on their income, and they should be paying some income tax.

19:10But let me give you an example of a way that we can think about age in the tax code, And that's back to homeownership. I put forward a proposal that would say, listen, if you're working, if you are giving back to your community, if you're obeying the law, you should be able to own your own home by the time you're 30. And that would be made real through a state federal program where states would do supply side reforms to unlock more housing production. And states would also offer down payment assistance to those young homeowners. The federal government would match that funding stream and it would pay for that by taking away mortgage interest tax deductions for second homes and for very wealthy homeowners.

19:47OK. Right now in this country, we get a bigger tax preference for a wealthy older person to buy a second home than we do for a young working class person to buy their first home. Yeah. Unfair. Yeah. No, I mean, that makes more sense than my idea. I agree with you. I mean, once you start doing these, you know, the more I think about it, it's like once you start doing these tax, you know, these cutoffs on or just like tax holidays for certain groups, it just seems like a slippery slope. OK, Congressman, let's talk a little politics. Let's talk a little midterms. You won a crowded primary in 2020.

20:22You ran unopposed in your two reelection bids since. Now we've got the Massachusetts primary coming up on, I believe, September 1st. You're facing a progressive challenge from the left and a Brookline Republican running from your right. I think you're in pretty good shape here. I saw a poll that has you up 47 percent. Your progressive challenger, this guy Jason Poulos, has referred to you as a multimillionaire too close to donor interests. How do you respond to this idea that you're a, you know, a quote unquote corporate Democrat? I would look at how I've used my voice and vote over the last five years, and it's to do two things fundamentally.

20:56One is to fight and one is to fix. We need to do both right now. One, we have to fight the depredations and the cruelty and the corruption of this Trump administration. I've done so. Whether it's ICE, whether it's trying to cut science funding, whether it is the meme coin corruption. And then second, you've got to fix things. That means, and if you're going to fix things in Washington, D.C., no feather can be unruffled. And I'll give an example here with health care. I've demonstrated my ability to do that. taking on pharma when necessary by expediting biosimilar development, taking on the insurance companies when necessary through prior Roth reform, taking on the hospitals if necessary through amending their outpatient pharmacy pricing program.

21:34I'll do it all because right now health care costs$5 trillion, going up 10 % a year here in Massachusetts, unsustainable for the middle class. And you've got to be willing to take on all comers. I'll do that. So, you know, I've talked to, we have a lot of subscribers and a lot of listeners here and who, you know, mostly Democrats, not all, but a lot of liberals. And it's interesting hearing from them because a lot of people will tell me something that they worry about, which is that Democrats are going to win in November. They'll win in the House, maybe even the Senate. And they're going to impeach Trump again.

22:08And, I mean, there's a million reasons. I mean, he's totally impeachable, right? You can pick like one thing out of a hat every day that you can impeach him over. But what I'm saying is the concern is it's going to look like the Democrats aren't there to actually solve any of those problems. They're just there to go after Trump. How do you sort of split the baby there? Because, again, the point of the Democrats coming back into the House is to check this unlawful and totally out of control corrupt administration. But how do you do that without coming across as just like going on these various witch hunts?

22:39Does that make sense? Totally makes sense. I totally hear the concern. The caucus is having these conversations right now. We have 18 or so committees in Congress, right? There's 435 members of Congress. We all have 15 to 20 staffers, right? We should be able to do two things at once. We should be able to go out there and demonstrate to Americans that we take seriously their number one issue, which is cost of living. More first dollar coverage for medicines. Improving prior authorization for people trying to access care that they need in health care, right? Making home ownership more attainable.

23:12We can do that and we can peel the bark off the most corrupt administration in history. Now, we want to do that in a way that does not allow Trump to make this about himself, because that is, of course, been as always like his his marketing formula has been. I bear a cross for everybody else. Yeah, he needs a foil. Right. He needs the foil. We don't want to play into his terrains. How do we do that? I think first up should be his most egregious cabinet members. I would put Pete Hegseth, number one. I would put RFK Jr., number two. And then there's a lot of competition for that third slot. But Pete Hegseth in particular, this is a man who has lied to the American public.

23:53This is a man who is firing senior officers by virtue of being women. And this is a man who has misled his own president about the status of U.S. munitions in wartime. We got a lot of of grill for the, what's the expression? Grist for the mill. There we go. Yeah, grist for the mill. There you go. Yeah, grist for the mill here. And you know who's someone I'm excited about to do this would be Nancy LaCour in South Carolina. Vice Admiral fired by Pete Hegseth without cause. She's running for Congress in the South Carolina first. I'm supporting her because when she comes to Congress on the 120th term, she's going to make his life miserable.