The Debtor President

By Barry Rascovar

July 20, 2015 – Should we elect as president a candidate who can’t seem to handle his own family’s finances?

Presidential Candidate Martin O'Malley

Presidential Candidate Martin O’Malley

Martin O’Malley, presidential contender and former Maryland governor, ran up $339,000 in college education debt for just two of his four children – a staggering amount – on an annual family income that easily topped $300,000.

The O’Malleys lived for eight years in a rent-free mansion where all meals and other household expenses were picked up by the state. They had no mortgage payments to make. They were driven everywhere in state-owned cars by State Troopers. They didn’t have to pay for gas, insurance or car repairs.

Given their minimal living expenses, why couldn’t the former governor and Judge Katie O’Malley contribute more of their hard-earned paychecks (and Martin’s pension as Baltimore mayor) to pay down their daughters’ college loans?

With two more children approaching college age, it’s possible the O’Malleys’ college debt soon could exceed $500,000 or $600,000.

Checkbook Juggling

That doesn’t say much about Martin O’Malley’s ability to balance his family’s checkbook without going heavily into debt – even on a two-income figure that most couples only dream about.

Would you trust a debtor presidential candidate to take on the far more arduous task of handling the federal government’s heavily out-of-balance budget?

What kind of message does this send to voters if Candidate O’Malley had to load himself down with IOUs to make ends meet despite a hefty family income?

To critics, it’s indicative of the kind of state government O’Malley ran, in which he repeatedly sought more and more social spending even though he was driving Maryland deeper and deeper into a sea of red ink.

By the time the Democratic governor left office, his replacement, Republican Larry Hogan Jr., said he was facing a $1.3 billion gap between spending and incoming revenue.

O’Malley was able to paper over the state’s structural deficit most years by raising taxes – dozens of fee and tax hikes. But with a family budget, you can’t turn to that kind of legerdemain.

A Catholic Education

It is entirely understandable that Mr. and Mrs. O’Malley, devout Catholics, want to give their children a solid parochial education. That costs a pretty penny in Baltimore’s private schools.

Plenty of parents make that same choice knowing it will place them behind the financial eight-ball for decades. It is a sacrifice they feel is worth the pain to ensure their kids receive quality schooling that includes religious instruction.

College is a totally different matter.

The O’Malleys let their daughters select high-cost, out-of-state campuses – Georgetown and the College of Charleston. Premier institutions, no doubt.

Georgetown University

Georgetown University

Yet with the O’Malleys still sending two sons to parochial schools and then onto college, didn’t it dawn on them that they were digging a hole of future debt that could prove embarrassing and keep them paying off loans for the rest of their lives?

It was not a smart move financially.

Homeland Heaven

The O’Malleys moved out of the Annapolis governor’s mansion in January and into a four-bedroom, 1928 lake-view house in Baltimore’s toney Homeland community they bought for $549,000. They put down $65,000 in cash and took out a whopping $494,000 mortgage, according to federal filing reports.

That brings the couple’s debt burden – education loans plus mortgage – to $833,000. If their two sons also get to select expensive out-of-state schools, the O’Malley debt load could top $1 million.

As has been pointed out by MarylandReporters’ Len Lazarick, the former governor and District Court judge could have invested a chunk of their salaries in Maryland’s college tuition savings plan to offset higher-education expenses. If the parents had put their foot down and insisted their children attend in-state public universities and colleges, the couple probably could have paid those tuition bill out of their bank accounts.

That’s not exactly a ringing endorsement of Maryland’s four-year public institutions by a Maryland governor – even though there are numerous gems to choose from, such as St. Mary’s College, UMBC, the flagship University of Maryland College Park campus, and well-regarded schools in Frostburg, Towson and Salisbury.

Voter Perception

If Martin O’Malley eventually becomes a legitimate contender for the Democratic presidential nomination (at this point he’s being heavily outspent and out-polled by Hillary Clinton and Sen. Bernie Sanders), his questionable handling of his family‘s education finances could become a legitimate bone of contention.

Sure, our children deserve a chance to gain a high-caliber education, even it is requires the parents to dig deep into their pockets. But like everything in life, there are limits to what that sacrifice should entail.

O’Malley hasn’t used good fiscal discipline in dealing with his family’s education expenses. Does this put a damper on voters’ perception of him as a viable presidential contender?

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4 thoughts on “The Debtor President

  1. Gene Oishi

    Barry,
    You sound like one of those fundamentalist conservatives who insist the national budget is like a family budget — you can’t spend more than you earn. As you know, the two are not the same. Managing the nation’s fiscal and monetary policies are considerably more complex than making a family budget. Not just the Executive is concerned, but also the Congress and the Federal Reserve, not to mention the often unpredictable swings in the world and national economy.
    And from my point of view at least, I think that the O’Malleys are willing to take on such a heavy financial burden to give their children a first-class education is commendable. I don’t know what kind of president O’Malley would make, but I wouldn’t judge him on basis of how much he spends on his children’s education.

  2. Oscar Nelson

    Barry, even though I really dislike O’Malley as an elected official, let me give you an alternative view.

    If I knew I was going to run for President in a few years time and that doing so would require me to take a leave from my job (or severely reduce my ability to earn an income) for at least a year, I would try to defer as many of my expenses as possible and save some cash (or prepare to live on my wife’s salary). One way to do this would be to take out or have my kids take out college loans so that all I’d need to do during that year is pay debt service. Once I’m done running I will be able to make more money as a former candidate and governor through speeches, job opportunities, TV commentary, books or whatever. If people lose all reason and elect me President, then I write a book and make major money. Either way, post campaign, if I want I can start paying down the debt in larger chunks. In the end, the college loans’ interest rates aren’t that high and wouldn’t have cost me that much money.

    I’d never say O’Malley was financially prudent as a governor, but he may be thinking at this another way as he runs for President. If this is what he is doing, it also shows how long he has planning to run for Prez.

  3. Myra

    I guess that after 8 years of letting other people (us, the Maryland taxpayers) pay for all of the O’Malleys’ living expenses, the Governor forgot how to manage REAL money. But then, he is in good company, if you consider the current occupant of the White House…but, at least the Obamas had someone else buy their home. Would it be too nosy to ask: If the O’Malley living expenses and auto expenses were tax payer financed, what did they spend their vast income for? Sorry, no sympathy from this career civil servant who went for years without a pay raise, but had to endure years of tax and fee increases from this budget deficient man. If, in the long run, he does manage to get to the White House, I know of one family (mine) that is going to leave the country.

  4. Maryland Guy

    Did you consider the children are responsible for the debt, but they put it in their parents names to protect them in case they can’t get a job after college or to secure them lower interest rates? As a recent graduate, I know this is not an uncommon practice.

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