rick perry

You’re the Boss Blog: A Small-Business Owner Bird-Dogs the Republican Candidates

January 21, 2012 by NewsMaker Leave a Comment

The Agenda

How small-business issues are shaping politics and policy.

One undeniable benefit of holding an early primary (or caucus) in a small state like New Hampshire is that any citizen has a chance to meet the candidates for president individually and interrogate them on the issues — even if the citizen is not, technically, a resident of that early voting state. And so Mark Dunau, a New York farmer and gadfly for the self-employed (through his Web site, dontsubmit.org), headed up to the Granite State to “bird dog” the Republican candidates in the week before the New Hampshire primary.

Mr. Dunau’s issue is the tax burden on the self-employed — both that the payroll tax obligation for self-employed people is 15. 3 percent because they pay both the employer and employee share of the tax (for employees, the payroll tax is 7.65 percent of income) and that the self-employed are not able to deduct the cost of their health insurance the way employers can deduct their share of employee premiums. In exchanges now posted on YouTube with four of the six candidates then in the race — he did not see Texas Governor Rick Perry, and Newt Gingrich did not take his question — he discovered these concerns were not top of mind among those who would be president.

It was Mitt Romney, the eventual primary winner, whose answer most surprised Mr. Dunau. When Mr. Dunau asked Mr. Romney, “what else will you do for the self-employed,” the former Massachusetts governor responded first by promising to lower corporate taxes, to ease the regulatory burden, and to lower energy costs. Mr. Romney won the farmer’s approval when he then said he backed making health care expenses tax deductible for the self-employed. But the approval quickly faded when the candidate concluded his answer by conceding unfamiliarity with Mr. Dunau’s other concern. “And with regards to the payroll tax, I’ll take a look at that,” he said. “I didn’t realize you’re paying that additional — that double taxation — and that’s worth taking a look.”

Former Pennsylvania Senator Rick Santorum did appear familiar with the self-employment tax, but lost himself in a digression over its history, and never said whether he would support halving it. (Just because you can ask a candidate a question in New Hampshire does not guarantee you will get an answer.) He called it a “tougher issue” and than wondered what the alternative is to the current structure, in a way that suggested he did not see one.

Only Representative Ron Paul seemed to satisfy Mr. Dunau. To the question of halving self-employment taxes, Mr. Paul said, “my goal is always to get the taxes as close to zero as possible,” though he made no explicit promise. About health insurance, he said, “I would do anything I could to get the proper deduction.” He also stood firmly against extending the rights of “personhood” to corporations, another of Mr. Dunau’s concerns. (Earlier in the day, Mr. Dunau got into an argument with Mr. Santorum at a second campaign event, interrupting the candidate after Mr. Santorum argued that Supreme Court “activism” created new rights in cases involving abortion and contraception but seemed reluctant to acknowledge that a more recent court extended first amendment rights to corporations.)

Of course, Mr. Dunau was unlikely to be swayed by anyone in the Republican field — in 2000, he ran for the United States Senate as a Green Party candidate — and he acknowledged as much at the outset of his videotaping. But even so, he seemed to rally support among the independents and Republican faithful who attended the campaign events. At a town-hall meeting in Peterborough on January 3, Mr. Dunau made an impassioned plea on self-employment taxes to Jon Huntsman, the former governor of Utah. “Some politician has to say, ‘Well, there is no organization representing the self-employed, maybe it should be me,’” he said. “Because there’s 23 million of us in this country, and you never hear that word in any debate. But we know who we are, because we see the self-employment tax every April, and it’s a killer.”*

“You’ve done a very good job,” Mr. Huntsman responded, before the crowd broke in with 20 seconds of sustained applause. He shook Mr. Dunau’s hand. When the ovation ended, he continued: “So effective that I’m going to go home and look at it.”

*Mr. Dunau may be overstating things a bit. The National Association for the Self-Employed claims 200,000 members and lobbies for making health care expenses for the self-employed tax deductible. (It does not lobby for halving the self-employment tax.) In addition, Keith Hall, the association’s national tax adviser, said that 22 million people filed sole-proprietor tax documents with the I.R.S. and thus were subject to the self-employment tax on any profits. However, only 17 million had profits to tax. (Several million members of partnerships and limited liability corporations could also be subject to the tax, Mr. Hall said.) And there’s no way to know how many of those sole proprietors relied on those enterprises for the bulk of their income and how many were using them to supplement wages from a full-time job.

Article source: http://feeds.nytimes.com/click.phdo?i=471de000188f54a606f4f6f067e89943

Filed Under: Small Business Tagged With: employee premiums, republican candidates, rick perry

Economix Blog: Rich Get Biggest Break in Perry Tax Plan, Study Finds

November 1, 2011 by NewsMaker Leave a Comment

CATHERINE RAMPELL

Dollars to doughnuts.

Gov. Rick Perry’s proposal for an opt-in flat tax would primarily benefit the wealthiest Americans, according to a new analysis from the Tax Policy Center, a nonpartisan research organization. Compared with current tax policy, the plan would most likely reduce federal tax revenue by $570 billion, or about 15 percent.

The plan, released last week as part of Mr. Perry’s campaign for the Republican presidential nomination, allows taxpayers to calculate their personal income taxes under the existing tax code, which is progressive. But it also allows taxpayers to instead have their income taxed at a flat 20 percent rate. In this alternative system, long-term capital gains, qualified dividends and Social Security benefits would not be taxed, and only a handful of deductions would be allowed. Once a household chooses the new system, it cannot switch back.

Because no one would be forced to use the alternate system, Mr. Perry has said, no one would have to pay higher taxes (at least initially; presumably if a family’s income changes a few years after entering the plan, it may no longer be advantageous). Even so, the greatest beneficiaries of the flat-tax option — that is, the households that would be most likely to switch to this system — are far and away the highest earners:

Of all households in the bottom quintile of the tax distribution, only 18.9 percent would pay less in taxes under the Perry plan.

Meanwhile, 83.3 percent of households in the top quintile would get a tax cut. Closer inspection shows that almost every household in the top 1 percent would be offered a tax cut.

The size of the typical tax cut is also much larger for the richest households, both in raw numbers and as a share of that household’s income. For households in the top 0.1 percent, for example, after-tax income would rise by 27.4 percent. If every American household, however, chose the flat-tax system, after-tax incomes across the country would increase by an average of just 5.3 percent.

In addition to changes to individual income taxes, the Perry plan would also reduce the corporate income tax rate to 20 percent from 35 percent; allow companies to expense all investment purchases immediately; make any income that American companies earn abroad exempt from United States federal taxes; and repeal the federal estate taxes and various taxes contained in the Affordable Care Act.

The Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, has also created tables showing tax cuts by dollar income (as opposed to percentile) and how families with different marital structures and varying numbers of children would most likely be affected.

Article source: http://feeds.nytimes.com/click.phdo?i=bdda9859823523b55802b52a373c2d52

Filed Under: Economy News Tagged With: raw numbers, rick perry, tax distribution

Most Presidential Candidates Are Not the 99 Percent

October 29, 2011 by NewsMaker Leave a Comment

A look at the finances of those vying for the presidency shows that almost all of them rank at the very top of the country’s earners. In other words, they are the 1 percent.

The possible exceptions are Representative Michele Bachmann of Minnesota and Representative Ron Paul of Texas, whose annual household earnings may not exceed the estimated cutoff of $700,000 for the top 1 percent, and Gov. Rick Perry of Texas, who has yet to file a financial disclosure.

Buddy Roemer, the former governor of Louisiana, probably does not make the cut either, which may be one reason Mr. Roemer paid a visit to the protest encampment in Zuccotti Park in Manhattan to express his solidarity.

But Mitt Romney, whose fortune, totaling as much as a quarter of a billion dollars, dwarfs those of his rivals; Jon M. Huntsman Jr., whose father owns a global chemical company; Newt Gingrich, a successful author; Herman Cain, a businessman who reports earnings of over $1.2 million; and Rick Santorum, the former senator, who took in over $700,000 last year, are all solidly in the 1 percent, as measured by assets, income or both.

The wealth is not limited to Republicans. Though President Obama was not in the 1 percent in 2006, before his entry to presidential politics, he earned between $1.8 million and $6.8 million last year, largely from book royalties.

The gap between the candidates and the electorate is especially striking in an election season in which the economy is foremost in people’s minds and politicians are trying to demonstrate that they can feel the pain. Many people believe that those responsible for the financial crisis escaped punishment with the help of political allies.

Democrats have more or less embraced the Wall Street protesters, while Republicans have wavered between dismissing them and trying to redirect their anger from Wall Street to the White House.

The protesters are far from the only potential voters disturbed by the growing wealth divide. In a recent New York Times/CBS News poll, 69 percent of respondents said that Republican policies favored the rich. Twenty-eight percent said the same of Mr. Obama’s policies, while only 23 percent thought his policies favored the middle class. Sixty-six percent said the country’s distribution of wealth should be more even.

The wealth of the candidates exacerbates the sense that politicians are far removed from middle-class American lives. “You want to know that elected leaders understand the consequences of their political decisions,” said Kathleen Hall Jamieson, the director of the Annenberg Public Policy Center at the University of Pennsylvania. “Does that candidate understand what I’m going through right now? What my family is going through? Do they know what it’s like to lose your home, to lose your job?”

Of course, presidential politics has long been a sport for the rich, and candidates need not be middle-class themselves to convince voters that they understand. Some, like Mr. Cain and Mr. Perry, may win people over with their stories of ascent from humble beginnings.

But even bootstraps are not strictly necessary. “A rich person can represent the 99 percent,” said Judy Goldstock, a retired social worker protesting in Zuccotti Park. “Look at Kennedy.”

Mr. Romney has scolded his audiences at times for “attacking people based on their success.” And Mr. Cain proclaimed, “If you don’t have a job and you’re not rich, blame yourself.” (Or, he later amended,
blame Mr. Obama.)

The 99 percent meme has shifted the debate from the days when President Obama spoke of raising taxes on families that made more than $250,000. “Many people could see a future in which they might make $250,000,” Ms. Jamieson said. “Very few can see a future in which they would be a member of the 1 percent.”

The alienation is evident in a study of mothers who shop at Wal-Mart, where pollsters found that the women did not believe their elected officials could understand what it was like to be consumed by the price of milk, gasoline and college tuition.

“We asked, ‘If your elected officials knew about your life what would they do?’ And somebody said, ‘Cry,’ ” said Margie Omera, the founder of Momentum Analysis, a Democratic polling firm that along with Public Opinion Strategies, a Republican firm, has been tracking the women since May 2010. “They always want to know, ‘When is my bailout going to come?’ ”

In focus groups, the women discussed the satisfaction they derived from watching “Undercover Boss,” a reality show in which top executives take a turn at the bottom of the ladder in their own companies.

Membership in the 1 percent can be measured by wealth or by income. By household wealth, the cutoff point would be a projected $9 million in 2010, according to an analysis of the Federal Reserve Board’s Survey of Consumer Finances by Edward Wolff, an economist at New York University. The cutoff for annual household income would be about $700,000, Mr. Wolff said. (Using Internal Revenue Service figures, which count earnings differently, the Congressional Budget Office puts the earnings cutoff at $350,000 for the 1 percent in 2007.

At Zuccotti Park, protesters described the 1 percent variously as people who “can just make money with money,” “the ones so interested in making profits that they’re willing to lay off hundreds of thousands of people a year,” and “anyone who doesn’t create a product.”

Even by the numbers, though, it is hard to tell precisely where the candidates stand. The majority have not released tax returns, and their financial disclosure forms give only a range of assets and income. Mrs. Bachmann’s income was listed at $280,000 to $840,000, and Mr. Paul’s was $360,000 to $1.1 million, which included their Congressional salaries of $174,000.

The disclosures exclude the candidates’ homes and other noninvestment property, as well as the salaries of their spouses. Most disclose income over a period longer than a year, from which The New York Times calculated annual earnings. The candidates were likelier to rank in the elite in income rather than in assets. Mr. Cain’s net worth topped out at $6.6 million, for example, and Mr. Santorum’s at $2.6 million.

Mr. Perry appears to be among the least affluent of the leading candidates. He earns $150,000 a year as governor, and his wife makes $60,000 a year at a nonprofit organization. But the couple have made money in real estate deals, including one that pushed their income above $1 million in 2007. Various news organizations have estimated the Perrys’ net worth at just over $1 million.

Article source: http://feeds.nytimes.com/click.phdo?i=b0249a6203a544ccfeef3078852558d3

Filed Under: Business News Tagged With: herman cain, newt gingrich, rick perry

Bucks Blog: Post Your Questions on the New Student Loan Developments

October 26, 2011 by NewsMaker Leave a Comment

October 26

Wednesday Reading: HPV Vaccine Endorsed for Boys

Panel endorses HPV vaccine for boys, low-income graduates get student loan relief, how Rick Perry’s tax plan would affect you and other consumer-focused news from The New York Times.

Article source: http://feeds.nytimes.com/click.phdo?i=7096c67c667a886574a9c57240c37189

Filed Under: Your Money Tagged With: graduates, rick perry, tax plan

Dynamics of G.O.P. Race Spur Romney to Hedge on Flat Tax

October 24, 2011 by NewsMaker Leave a Comment

Lately, though, his tone has been more positive. “I love a flat tax,” he said in August.

Flat-tax plans have come and gone before, and analysts note that they have tended to lose support once they come under scrutiny. But Mr. Romney’s support of the concept of a flat tax underscores the tightrope he is walking as taxes become a larger focus of the Republican presidential race and he faces rivals’ accusations of inconsistency on the issues.

That is because Mr. Romney also is always careful to emphasize — as he did in his comments two months ago — that he would never support any plan that hurts the middle class and helps the wealthy. But by replacing the graduated income tax with one single rate everyone pays, that is precisely what flat tax plans generally do, at least those that try to generate anywhere near the same tax revenue.

Politically, Mr. Romney’s favorable comments about flat taxes speak to the deep frustration many Republican voters share about the current system. While Herman Cain’s “9-9-9” tax overhaul proposal has been criticized by his rivals because it includes a new national sales tax in addition to a flat income tax, the catchy plan has nonetheless helped vault the relatively unknown businessman to the fore of the party’s field. Gov. Rick Perry of Texas is now trying to channel that same energy to rescue his campaign, and this week he is expected to unveil a flat-tax proposal resembling the one put forward 15 years ago by Mr. Forbes, who is advising him.

But flat taxes, despite Mr. Romney’s favorable comments, are not part of his campaign plan, which calls for extending Bush tax cuts and lowering corporate tax rates. Some conservative tax activists say his murky flat-tax stance highlights a broader complaint: his lack of consistency on conservatives’ core issues, like abortion.

“His problem is that people don’t have confidence that they know what he believes in, and I think there is a pretty good reason for that,” said Chris Chocola, a Republican former congressman from Indiana who is president of the Club for Growth.

Grover Norquist, head of Americans for Tax Reform, says he sees Mr. Romney’s shift as part of a broader consensus among the field to move toward a flatter tax structure. But with that movement gaining strength in the Republican Party, he said, Mr. Romney’s past critical comments about flat taxes are “awkward” and “a little tough to explain.”

Dick Armey, the Texas Republican and former House majority leader who was an early flat-tax proponent, said he believed Mr. Romney was doing “the conventional, orthodox, old traditional Republican thing: you’ve got to give it lip service but ‘I don’t want to do much heavy lifting.’ ”

Romney aides dispute the criticism and say his objection to the Forbes plan was specific: that it would raise taxes on the middle class. Gail Gitcho, a Romney spokeswoman, said there was “no inconsistency” in his position. She said he could support a flat tax that did not raise taxes.

But when asked about the many flat-tax plans that have been floated in the last two decades, Romney aides said they could not recall any that might pass muster with Mr. Romney’s requirements. Nor would they venture the outlines of a new plan that might meet his test. They also do not dispute the notion that a flat tax could never generate the same amount of tax revenue while also maintaining the same relative burdens on the wealthy and the middle class.

“You can have a flat-tax system that retains elements of progressivity, but I can’t say whether it would retain the same level of progressivity and same level of revenue,” one aide said.

Independent analysts say it is hard to imagine a flat-tax plan that would not be very regressive compared with the current system. Right now, the highest tax rate for many middle-income earners is 15 percent, while the richest Americans are subject to a 35 percent rate on much of their income.

“If you’re going to get the same amount of revenue, someone has to pay the price,” said Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution. “The rich pay less, the poor pay nothing, and the middle class bears the burden.”

Mr. Norquist and Mr. Armey see more support now for a flat tax than ever before. But Mr. Romney’s hesitation may ultimately prove more popular with many voters if the arc of this election cycle’s flat-tax proposals follows the pattern of some past years.

“The people with big incomes are going to see big tax cuts, the low-income people are going to see big tax increases, and suddenly that doesn’t seem fair,” Mr. Williams said. “You start to see that kind of thing, and suddenly the bloom is off the rose. When people start to look at what it’s going to mean for them particularly, they say, ‘Wait a minute.’ ”

Article source: http://feeds.nytimes.com/click.phdo?i=3bc0e6bb95ed86fb843d79f096b13783

Filed Under: Economy News Tagged With: bush tax cuts, presidential race, rick perry

Flouting the Law, Pastors Will Take On Politics

October 1, 2011 by NewsMaker Leave a Comment

The sermons, on what is called Pulpit Freedom Sunday, essentially represent a form of biblical bait, an effort by some churches to goad the Internal Revenue Service into court battles over the divide between religion and politics.

The Alliance Defense Fund, a nonprofit legal defense group whose founders include James Dobson, the founder of Focus on the Family, sponsors the annual event, which started with 33 pastors in 2008. This year, Glenn Beck has been promoting it, calling for 1,000 religious leaders to sign on and generating additional interest at the beginning of a presidential election cycle.

“There should be no government intrusion in the pulpit,” said the Rev. James Garlow, senior pastor at Skyline Church in La Mesa, Calif., who led preachers in the battle to pass California’s Proposition 8, which banned same-sex marriage. “The freedom of speech and the freedom of religion promised under the First Amendment means pastors have full authority to say what they want to say.”

Mr. Garlow said he planned to inveigh against same-sex marriage, abortion and other touchstone issues that social conservatives oppose, and some ministers may be ready to encourage parishioners to vote only for those candidates who adhere to the same views or values.

“I tell them that as followers of Christ, you wouldn’t vote for someone who was against what God said in his word,” Mr. Garlow said. “I will, in effect, oppose several candidates and — de facto — endorse others.”

Two Republican candidates in particular, Gov. Rick Perry of Texas and Representative Michele Bachmann of Minnesota, would presumably benefit from some pulpit politics on Sunday, since they have been courting Christian conservatives this year.

Participating ministers plan to send tapes of their sermons to the I.R.S., effectively providing the agency with evidence it could use to take them to court.

But if history is any indication, the I.R.S. may continue to steer clear of the taunts.

“It’s frustrating,” said Erik Stanley, senior legal counsel at Alliance Defense. “The law is on the books but they don’t enforce it, leaving churches in limbo.”

Supporters of the law are equally vexed by the tax agency’s perceived inaction. “We have grave concerns over the current inability of the I.R.S. to enforce the federal tax laws applicable to churches,” a group of 13 ministers in Ohio wrote in a letter to the Treasury secretary, Timothy F. Geithner, in July.

Marcus Owens, the lawyer representing the Ohio ministers, warned that the I.R.S.’s failure to pursue churches for politicking violations would encourage more donations to support their efforts, taking further advantage of the new leeway given to advocacy groups under the Supreme Court’s decision last year in the Citizens United case.

Lois G. Lerner, director of the agency’s Exempt Organizations Division, said in an e-mail that “education has been and remains the first goal of the I.R.S.’s program on political activity by tax-exempt organizations.” The agency has posted “guidance” on what churches can and cannot do on its Web site.

The agency says it has continued to do audits of some churches, but those are not disclosed. Mr. Stanley, Mr. Owens and other lawyers say they are virtually certain it has no continuing audits of church political activity, an issue that has been a source of contention in recent elections.

The alliance and many other advocates regard a 1954 law prohibiting churches and their leaders from engaging in political campaigning as a violation of the First Amendment and wish to see the issue played out in court. The organization points to the rich tradition of political activism by churches in some of the nation’s most controversial battles, including the pre-Revolutionary war opposition to taxation by the British, slavery and child labor.

The legislation, sponsored by Lyndon Baines Johnson, then a senator, muzzled all charities in regards to partisan politics, and its impact on churches may have been an unintended consequence. At the time, he was locked in a battle with two nonprofit groups that were loudly calling him a closet communist.

Thirty years later, a group of senators led by Charles E. Grassley, Republican of Iowa, passed legislation to try to rein in the agency a bit in doing some audits. While audits of churches continued over the years, they appeared to have slowed down considerably after a judge rebuffed the agency’s actions in a case involving the Living Word Christian Center and a supposed endorsement of Ms. Bachmann in 2007. The I.R.S. had eliminated positions through a reorganization, and therefore, according to the judge, had not followed the law when determining who could authorize such audits.

Article source: http://feeds.nytimes.com/click.phdo?i=df531bd7db92401ceb8c60d6b7538e1f

Filed Under: Business News Tagged With: court battles, republican candidates, rick perry

In Texas Jobs Boom, Crediting a Leader, or Luck

August 16, 2011 by NewsMaker Leave a Comment

Is Texas lucky, or has the state benefited from exceptional leadership? As Gov. Rick Perry campaigned Monday in Iowa for the Republican presidential nomination — with the economy dominating the national political landscape — the answer to that question is central to his candidacy.

Even before he formally entered the race over the weekend, Mr. Perry and his allies set out to dictate an economic narrative on his terms. A radio spot last week in Iowa told voters that the governor “has a proven record of controlling spending and creating jobs” and suggested that he could replicate the success of Texas on a national scale. In a budget speech a few months ago, Mr. Perry, who declined through a spokesman to be interviewed for this article, boasted that Texas stood “in stark contrast to states that choose to burden their residents with higher taxes and onerous regulatory mandates.”

But some economists as well as Perry skeptics suggest that Mr. Perry stumbled into the Texas miracle. They say that the governor has essentially put Texas on autopilot for 11 years, and it was the state’s oil and gas boom — not his political leadership — that kept the state afloat. They also doubt that the Texas model, regardless of Mr. Perry’s role in shaping it, could be effectively applied to the nation’s far more complex economic problems.

“Because the Texas economy has been prosperous during his tenure as governor, he has not had to make the draconian choices that one would have to make in the White House,” said Bryan W. Brown, chairman of the Rice University economics department and a critic of Mr. Perry’s economic record.

And if Mr. Perry were to win the nomination, he would face critics, among them Democrats, who have long complained that the state’s economic health came at a steep price: a long-term hollowing out of its prospects because of deep cuts to education spending, low rates of investment in research and development, and a disparity in the job market that confines many blacks and Hispanics to minimum-wage jobs without health insurance.

“The Texas model can’t be the blueprint for the United States to successfully compete in the 21st-century economy, where you need a well-educated work force,” said Dick Lavine, senior fiscal analyst at the Center for Public Policy Priorities, an Austin-based liberal research group.

Since Mr. Perry succeeded George W. Bush as governor in 2000, he has viewed his role as mostly staying out of the way of the private sector. When he has stepped in, he has tweaked the system, not remade it. For example, he pushed through tort reform to limit lawsuits against doctors, which encouraged the continued expansion of major medical centers. He also set up an enterprise fund that gave businesses nearly a half a billion dollars in grants and financial incentives over the last eight years to encourage their expansion.

For homeowners, he cut real estate taxes to make the state’s already cheap housing a bit more affordable. And a few months ago, with the state facing a $27 billion deficit in its two-year budget, Mr. Perry called lawmakers into a special session and insisted they not raise taxes. The Republican-dominated Legislature complied, slashing billions of dollars in aid to public schools.

“He’s been a promoter of stability in regulatory policy and stability in spending,” said Talmadge Heflin, director of the Texas Public Policy Foundation’s Center for Fiscal Policy and a former Republican state representative. “That gives him something to show for whatever he runs for.”

As the Republican race pits the Texas governor against a former Massachusetts governor, Mitt Romney, the economies of the two states are bound to be contrasted. Texas has far outstripped Massachusetts in the number of jobs created over the last two years. But by other measures, the Massachusetts economy has been stronger, with a lower unemployment rate in June and economic growth of 4.2 percent last year, compared with 2.8 percent in Texas.

This article has been revised to reflect the following correction:

Correction: August 15, 2011

An earlier version of this article rendered incorrectly part of the name of the Maguire Energy Institute at Southern Methodist University.

Article source: http://feeds.nytimes.com/click.phdo?i=0c9ac11b2149cd97656e1b83fb88642c

Filed Under: Business News Tagged With: regulatory mandates, rick perry, steep price

In Texas, Perry Has Ridden an Energy Boom

August 15, 2011 by NewsMaker Leave a Comment

Is Texas just lucky, or has the state benefited from exceptional leadership? As Gov. Rick Perry campaigned Monday in Iowa for the Republican presidential nomination — with the economy dominating the national political landscape — the answer to that question is central to his candidacy.

Even before he formally entered the race over the weekend, Mr. Perry and his allies set out to dictate an economic narrative on his terms. A radio spot last week in Iowa told voters that the governor “has a proven record of controlling spending and creating jobs” and suggested that he could replicate the success of Texas on a national scale. In a budget speech a few months ago, Mr. Perry boasted that Texas stood “in stark contrast to states that choose to burden their residents with higher taxes and onerous regulatory mandates.”

And if Mr. Perry were to win the Republican nomination, he would face critics, among them Democrats, who have long complained that the state’s economic health has come at a steep a price: a long-term hollowing out of the state’s prospects because of deep cuts to education spending, low rates of investment in research and development, and a disparity in the job market that confines many blacks and Hispanics to minimum-wage jobs without health insurance.

On the campaign trail, Mr. Perry is hearing none of it. In announcing his candidacy in South Carolina on Saturday, he pointed to his policies of low taxes, reduced government spending and regulatory easing as “a recipe to produce the strongest economy in the nation” and one that Washington would do well to duplicate. The next day, he told Iowa Republicans that the party needs to nominate “somebody who understands, knows how and has had job-creation experience.”

For example, he pushed through tort reform to limit lawsuits against doctors, which encouraged the continued expansion of major medical centers around the state. He also set up an enterprise fund that gave businesses nearly a half a billion dollars in grants and financial incentives over the last eight years to encourage their expansion.

For homeowners, he cut real estate taxes to make the state’s already cheap housing a bit more affordable. And a few months ago, with the state facing a $27 billion deficit in its two-year budget, Mr. Perry called state lawmakers into a special session and insisted lawmakers not raise taxes. The Republican-dominated Legislature complied, slashing billions of dollars in aid to public schools.