AMES, Iowa – On Thursday, the third debate of candidates seeking the Republican nomination for presidential run took place at Iowa St. University. Participating in the debate were candidates Michele Bachmann, Herman Cain, Newt Gingrich, Jon Huntsman, Ron Paul, Tim Pawlenty, Mitt Romney and Rick Santorum.
To assist readers in differentiating the positions of the GOP candidates on various issues raised in the debate, this review of the debate will be published in two parts.
This, Part I, covers topics related to the economy. Because the economy is such a pressing issue right now in our country, the moderators chose to spend significantly more time asking questions about it than they did on any other topic. The candidates’ comments and opinions have been broken into three parts: (1) Their individual plan for improving the economy, (2) the subject of raising taxes, and (3) the debt ceiling/downgrade of our credit rating.
Individual Plan for Improving the Economy
All of the candidates were asked different questions that addressed their own plans for improving the economy.
Michelle Bachmann said, “We can start to see recovery within three months … if we put into place what we know to be true. Number one, we should not have increased the debt ceiling …We need to have a president of the United States who stands firm on [his or her] convictions … I have a consistent record of standing on my convictions.”
Herman Cain offered a four-step plan for improving the economy:
1. “We must have a maximum tax rate for corporations and individuals of 25 percent;”
2. “Take the capital gains tax rate to zero;”
3. “Take the tax on repatriated profits to zero;” and
4. “Make them permanent … here’s the big one, make them permanent. Uncertainty is what’s killing this company.”
The one specific thing most important to Cain was, “Make the tax rates permanent.”
Newt Gingrich offered a different approach, “Congress … should repeal the Dodd-Frank bill. They should repeal Sarbanes-Oxley. They should repeal Obamacare. They should institute Lean Six Sigma across the entire federal government.”
He also said, “The Fed should be totally audited, it should be out in public, … we should know who they bailed out and why they bailed them out and who they didn’t bail out. I think it is a scandal that the Federal Reserve is secret and … frankly, their monetary policy since the late 90s has been a major factor in the bubble that has been created and a major factor in the economic pain we’re now going through. … The Fed is the primary villain in failing to have a sound money policy.”
Jon Huntsman expressed that actions speak louder than words, he said, “I intend to do exactly what I did as governor in the state of Utah. We took a good state and made it number one in this country in terms of job creation, … we cut taxes historically, … we created the most business friendly environment in the entire country.”
When he was accused of supporting the stimulus he responded saying, “Let me tell you what I talked about with respect to the stimulus, I talked about the need for more tax cuts in the stimulus. We didn’t have enough of it. … In the state of Utah, we had done historic tax cuts. We created a flat tax … – exactly what needs to happen in this country. … We became the number one job creator in this nation and the best managed state. …I’m running on my record.”
Huntsman took part of his plan from his business experience. He said, “If you want to build a facility in the United States, you can’t – because of the [Environmental Protection Agency’s] regulatory reign of terror. …The percentage of our [gross domestic product] that is from manufacturing is down to 10 or 11 percent. When I was born, it was 25 percent and it used to mean something when you read ‘Made in America.’ We don’t make things anymore in this country.
“We need to start making things in this country and in order to do that we need serious regulatory reform, not just repealing Obamacare, but ending the EPA’s regulatory reign of terror.
“We need to create a more competitive environment that speaks to real tax reform that allows our entrepreneurs and businesses to step up and get it done and expand our economic base and create jobs.”
Ron Paul had a lot of solutions to the problem, and he tried to rattle them all off in his one minute allotted speech window. He said, “What you have to do is restore sound money. You have to understand why you have a business cycle, why you have booms and busts. If you don’t do that, there’s no way you can solve these problems and the boons and busts come from a failed monetary system. The interest rates, that are way lower than they should be, encourage mal-investment and debt. To get out of that, all this other tinkering, you cannot do that unless you liquidate debt. You don’t bail out the people that are bankrupt and dump the debt on the people. That is what’s happened. So, you have to allow liquidation of debt. Eliminate the mal-investment. Then you go back and you can get growth again by having a better tax structure. Lower taxes invite capital back into this country. We need to change the environment for our businesses. We need to lower the regulations and the taxes and have private property rights and contract rights. Under those conditions you can have growth again.”
Paul also responded to what Gingrich said about the Fed, “I’m delighted that mainstream is catching up with this, these days, for auditing the Fed. This is great … the Fed creates the business cycle. If you don’t understand the business cycle, you don’t know why we have recessions. The sooner we learn that, the better.”
Tim Pawlenty didn’t believe he could outline his entire economic recovery plan in the one-minute window allotted to him so he took the opportunity to contrast himself with President Obama.
“I hope people will go to our website and read that whole [economic] plan because it’s the most specific, comprehensive plan of any candidate in this race,” he said. His plan is found here. http://www.timpawlenty.com/articles/a-better-deal-governor-tim-pawlenty-economic-policy-remarks .
“In fact, I’ll offer a prize tonight to anyone … if you can find Barack Obama’s specific plan on any of those items (Social Security reform, Medicare reform, Medicaid reform), I will come to your house and cook you dinner.”
When asked if the 5% growth outlined in his plan is unrealistic he responded, “The United States of America needs a growth target. I don’t want the United States growth target to be anemic or [a] lagger like Barack Obama’s.”
Mitt Romney outlined a seven-point plan:
1. “Make sure corporate tax rates are competitive with other nations.”
2. “Make sure that our regulations and bureaucracy works, not just for the bureaucrats in Washington, but for the businesses that are trying to grow.”
3. “Have trade policies that work for us, not just our opponents.”
4. “Have an energy policy that gets us energy secure.”
5. “Have the rule of law.”
6. “Great institutions that build human capital because capitalism is about people not just capital and physical goods.”
7. “Have a government that doesn’t spend more money than it takes in.”
“And I’ll go do it,” he said. “… Back in the days of John F. Kennedy the federal government took up, along with the state and local governments, 27 percent of the economy. Today government consumes 37 percent of the economy. We’re inches away from no longer having a free economy.”
Layoffs occurred under Romney at Bain Capital; he said, “Of those hundred businesses we invested in, tens of thousands of jobs, net-net, were created. I understand how the economy works. … If people want to send to Washington someone who spent their entire career in government, they can choose a lot of folks. But if they want to choose someone who understands how the private sector works, they’re going to have to choose one of us [pointing to himself and Herman Cain] because we’ve been in it.”
Rick Santorum focused on manufacturing, “If you want to know where the middle of America went, it went to China; it want to Malaysia; it went to Indonesia. … Take the corporate rate and cut it to zero for manufacturers, … our jobs will come back.”
Santorum was later the third candidate to mention the Fed. “We need to audit the Fed,” he said. “I disagree with most of what Ron Paul said. Just because he’s mostly wrong doesn’t mean he’s always wrong.”
This was one and probably the only stance that every candidate on the stage took alike. Each made it clear that he or she is completely against a raise in taxes in any way, shape or form. In fact, at one point the candidates were given the scenario of having an offer on the table including both spending cuts and tax hikes, with $10 in spending cuts for every $1 in tax hikes. Every single candidate raised their hand expressing that they would turn down the deal. Throughout the entire debate there wasn’t a single candidate that showed any interest in or inclination towards raising taxes.
Debt Ceiling and Downgrade of our Credit Rating
There was a lot of talk during the debate about the recent raising of the debt ceiling and the downgrade of the country’s credit rating.
Michelle Bachmann made it clear where she stood. She spelled it out, “People are looking for a champion … when others ran, I fought and I led against increasing the debt ceiling. … From the time I’ve been in congress we’ve gone from $8.67 trillion in debt to now almost double [with] $16.7 [trillion]. … [To] not raise the debt ceiling … [would have been] the right thing to do. The worst thing you can do is [to] continue to borrow money and spend money that we don’t have. …When [Standard and Poor’s] dropped our credit rating, what they said is we don’t have an ability to repay our debt. …I was proved right in my position; … we should have cut government spending, which was not done. And we needed to get our spending priorities in order.”
Herman Cain had a similar message: “I did not agree with raising the debt ceiling,” he said.
“…The way to deal with it is to pay those things that need to be paid and then make the tough choices of cutting the other things – agency by agency, program by program. Based upon performance metrics … the problem still has not been solved and Standard and Poor’s has sent a message.”
Newt Gingrich made sure to point out what he sees as a major flaw in how the debt ceiling was raised.
“I think this super-committee is about as dumb an idea as Washington has come up with in my lifetime,” he said. “…What they ought to do is scrap the committee right now, recognize it’s a dumb idea, go back to regular legislative business, assign every subcommittee the task of finding savings, do it in the open through regular legislative order, and get rid of this secret phony business.”
Jon Huntsman saw this issue in a different light than anyone else.
“On the default,” he said, “…I’m the only one on this stage who stood up for the Boehner deal against this nation defaulting. I know I’m a little different than everybody else in that regard. We are 25 percent of the world’s GDP. We are the largest financial services sector, by far, in this entire world and the thought that people would just let this nation default when we could have a deal that at least gets things going on cuts, raising the ceiling, gets us toward entitlement reform, and gets us toward a balanced budget amendment … I thought Speaker Boehner should be complimented for what he did. This nation should never default.”
“This nation is hurting, it is scared, and it is bankrupt. We have a cancer growing in this country called debt and we must deal realistically with it.”
Ron Paul initially brought up points similar to some of the other candidates.
“[Standard and Poor’s] didn’t downgrade [the US credit rating] mainly because [congress and the president] couldn’t come to a conclusion,” he asserted. “They downgraded it because congress and the president didn’t know what was going on.”
He also said, “The country’s bankrupt and nobody’s willing to admit it … All these proposed cuts weren’t cuts at all.”
Paul then brought out something very different from anything that any other candidates said, “We owe the Fed $1.6 trillion in treasury bills. Where’d they get the money to buy it? They create it out of thin air. So we pay them interest. Now that’s on our books. So we literally, with legislation, could wipe $1.6 trillion off. That’s not a solution to the monetary problem or our spending problems, but it would give you a year to work this out and we wouldn’t have had any of that debate going on. Those were all scare tactics to try to scare people.”
Tim Pawlenty decided to explain what he would do as president by showing what he did as Governor.
“If you go to my record in Minnesota, you’ll see government spending went from historic highs to historic lows … I balanced the budget every time, in Minnesota, that I was governor,” he said. “In fact, my last budget ended June 30th of this year with a surplus.”
Mitt Romney seized the opportunity to play on his gubernatorial record.
“I was fortunate enough to be a governor that got an increase in the credit rating of my state,” he said and contrasted, “…We got a president who got a decrease in the credit rating of our nation.”
Romney then explained what he did as governor, “I came in we had a huge deficit. I went to the legislature and I said I want expanded powers to unilaterally be able to cut spending, not just slow the rate of growth, but to cut spending. And they gave it to me and I did. We cut spending every single year I was governor, we balanced the budget and by the end of my term we had put in place over a $2 billion rainy-day-fund.”
Rick Santorum chimed in with most of the debating candidates’ opinion that “We should have balanced the budget.” But he then took a little bit different course: “To suggest that we never need to raise the debt ceiling, that is again showmanship, not leadership. Of course we have to raise the debt ceiling at some point. We’re borrowing 42 cents out of every dollar … are you going to cut 42 cents of every dollar? Just to remind you, Medicare, Medicaid, Social Security, defense and interest on the debt is 60 percent. That means cut everything else and something of those.”
Part II Coming Soon
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