Tim Pawlenty: Keep the tax cuts (but pay for them) then cut more taxes

Gov. Pawlenty was interviewed last week on the Bloomberg network by Washington Journo Bigfoot Al Hunt. The interview aired Saturday. 

Pawlenty (along with pretty much all Republicans) wants to maintain the tax cuts for top earners that are set to expire, and he also wants to cut payroll taxes, capital gains taxes, inheritance taxes, and marginal income tax rates.

He also said, in essence, that the economy can’t really recover while the current occupant remains in the Oval Office and the current majority controls the Congress because the entrepreneurs who make everything happen don’t like or trust Pres. Obama or the Dems.

After telling an anecdote about a particular unnamed entrepreneur he had met — who would be hiring everyone in sight if he had a better feeling about those in charge of the government — TPaw said:

“That story repeats itself every time I travel around the country. It repeats itself with anybody I’m talking to in business. And the bottom line is the business community, the entrepreneurial community, doesn’t trust and doesn’t believe in this president, in this Congress, and they’re sitting on their hands.”

He also said they are “sitting on their wallets.”

Like most Republicans, TPaw advocates maintaining all of the Bush tax cuts, including those for Americans with incomes above $250,000 (that’s the level above which Pres. Obama and most Dems want to let the tax cuts expire).

But unlike most Republicans, who want to keep the tax cuts without “paying for them” (that’s Washington-speak for making offsetting spending cuts so the renewal of the tax cuts doesn’t add to the deficit) Pawlenty says he wants to pay for the renewal of the tax cuts for the wealthy. He’s not real specific about how, except to start with the remaining stimulus money that hasn’t been spent yet.

Over the course of this fairly brief interview, Pawlenty mentioned other taxes he would like to cut, and he certainly included most of the major taxes the federal government collects. TPaw wasn’t real clear about how deeply he wanted to cut all those other taxes, nor whether the cuts would be permanent or temporary, nor how he would make up for the impact on Social Security and Medicare’s long-term solvency problems if he cut the payroll tax. But he implied that it wouldn’t be hard to find spending cuts to offset the tax cuts. If he is serious about those tax cuts, and if he is taken seriously as a presidential candidate, he will have to specify hundreds of billions, if not trillions of dollars in cuts (depending on how long a time frame). He did mention that cuts in entitlements could be part of the picture.

In other contexts, such as this July 26 appearance at the famed Christian Science Monitor breakfast meeting with Washington, reporters, Pawlenty has said that among the steps necessary to get entitlement spending under control, he would favor means testing of Social Security benefits. (They are already means-tested in various small ways; Pawlenty presumably wants to do more along those lines so that, for example, wealthier seniors would get smaller annual cost of living hikes in their Social Security benefits than poorer seniors.)

This idea has long been part of the laundry list of “tough choices” that fiscal hawks say have to be made to address the long-term solvency of the entitlements. By itself, means testing of Social Security COLAs wouldn’t be enough. But Pawlenty’s Washington-based spokester Alex Conant did clarify for me that ideas like that one would be necssary just to fix the entitlement picture and couldn’t be counted toward the spending cuts necessary to balance the budget.

Pawlenty also told Hunt that he would favor a constitutional amendment so that children, born in the United States of parents who are illegal aliens, would not be entitled to U.S. citizenship. As things now stand, the 14th amendment says: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.” The “Radical Republican” authors of this post-Civil War amendment didn’t have the children of illegal immigrants in mind. They were trying to reverse the hideous Dred Scott decision in which the Supreme Court had ruled that blacks could never be U.S. citizens.

In the context of the current fight over illegal immigration, some people on the right, notably Sen. Lindsey Graham, have begun complaining that the application of that language to the children of illegal aliens makes no sense. But TPaw is the one of the first to begin advocating for a constitutional amendment. Here’s the quote on that one:

“I think we’re the only, or one of the few, developed nations in the world that allows somebody to come here illegally, give birth to a child, and then have the child be a legal citizen of our country. The procedure around amending the Constitution is very difficult, but I would be in favor of a rule that says you have to be here legally in order for your son or daughter to be deemed legal here if they’re born here.” 

In the Bloomberg interview, Pawlenty also urged the U.S. Senate to reject the treaty that Obama has negotiated with Russia requiring both countries to reduce their stockpiles of nuclear weapons.

Here’s the transcript of the interview.

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Comments (15)

  1. Submitted by Thomas Swift on 08/09/2010 - 08:40 am.

    Oops, you made a “typo”, Eric.

    The Democrat talking points memo clearly states that there is no Social Security or Medicare solvency problems.

  2. Submitted by Joe Williams on 08/09/2010 - 09:47 am.

    I think that is Thomas Swift speak for “good article, Eric.”

    Really, reject nuclear drawdown? Fear fear fear, power, respect, muscle, might. Bush-Pawlenty, same-same.

    I am really glad that the media is at least taking on SocSec more often. It certainly would be useful if our government would confront the problem instead of the endless kicking it down the road.

  3. Submitted by Paul Udstrand on 08/09/2010 - 10:27 am.

    If only there really was such a thing as magic these magic plan republicans (cut taxes and wait for the magic to happen) would be onto something.

  4. Submitted by Paul Brandon on 08/09/2010 - 10:35 am.

    The real problem is not Social Security; it’s Medicare.
    Social Security can extend its solvency indefinitely by making minor adjustments such as raising the ages for eligibility and the income limits on Social Security taxes.
    Means testing is already built in — I pay income taxes on 85% of my Social Security payments.

    Medicare is the real problem — this is where we need major changes in the practice structure. Simply privatizing it only increases insurance company profits.

    And a story repeated many times is still just a story.

  5. Submitted by Richard Schulze on 08/09/2010 - 10:40 am.

    Pawlenty started his first term with a projected 3.5 billion dollar deficit. Nearly eight years later it is a 7 billion dollar projected deficit. Perhaps Pawlenty should return home and fix Minnesota’s deficit problems. Before the governor start preaching us on the fiscal fix for the nation.

  6. Submitted by Jim Roth on 08/09/2010 - 11:12 am.

    I second Mr.Schulze. Pawlenty obviously doesn’t have an economist with any integrity available to advise him. Pander, pander, pander. It reminds me of what Cheney said to justify the tax cuts in the first place: “President Reagan proved that deficits don’t matter.” It seems to me that this kind of thinking is what got us in trouble to begin with.

  7. Submitted by Ray Schoch on 08/09/2010 - 11:56 am.

    Thanks to Jim Roth for the Cheney line. If there’s any truth at all to “deficits don’t matter,” and in some circumstances, I think there IS truth to it, isn’t it odd that the same politicians who bought into that line for 8 years under The Shrub have suddenly found themselves converted to fiscal probity? Just sayin’…

    Mr. Swift makes a valid point about the Democratic talking points. Well, sort of.

    Social Security does need to be attended to, and could be fixed fairly easily if we adopted the sorts of measures mentioned by Paul Brandon. Those measures might well correct the program’s fiscal problems altogether if – and it’s an “if” of colossal proportions – we could get Congress, including our own state delegation, to stop “borrowing” from the Social Security “trust fund” for purposes that have nothing to do with Social Security (e.g., funding other programs, like the war in Afghanistan, deemed worthy of such aid by Congress). What’s “borrowed” in that context is never returned, so the “trust fund” idea, while nice in theory, doesn’t work so well in real life, since it’s largely an annual list of “I.O.U.s” from Congress to the public.

    Medicare is more difficult. Allowing medicine to transform from a public service into a corporate money machine, as we’ve done over the past generation, complicates the whole area immensely. Right now, we ration medical care by income and age, supplemented/subsidized by insurance premiums paid by several entities, including the government (read: your tax dollars and mine). It’s a system that’s patently unjust, and no thoughtful nation would adopt it if it were trying to provide health care to its public instead of profit to stockholders. With all the dollars now involved in the enterprise, fundamental change (as opposed to the tweaking that takes place under the Obama plan) would require substantial political courage at every level. I don’t see that courage on the horizon, nor do I see a dramatic shift in how the entire system operates.

    Thanks also to Richard Schulze for providing those deficit figures. As a newbie to Minnesota, those kinds of figures are not readily visible – or even available for examination.

    Also, and once again as a newbie to Minnesota, thanks to Eric for laying out some of the Governor’s policy positions in this piece. Basically, Mr. Pawlenty shows himself to be as unqualified for any national office as Mr. Emmer has shown himself to be for statewide office.

    As Joe Williams said, “Really, reject nuclear drawdown? Fear fear fear, power, respect, muscle, might. Bush-Pawlenty, same-same.” But that’s just for starters. For the most part, those Bush tax cuts reward people for good fortune, not work, nor thriftiness, just good luck. No one ever “earns” a capital gain – it’s the result of an economy that happens to reward whatever it is they invested in. There’s no reason not to tax such gains heavily. We’ve seen plenty of evidence in the past couple of years that the sort of massive cash flow to the already-wealthy provided by reducing capital gains, inheritance, and other taxes do NOT produce jobs and income for most Americans. They line the already-expensively-lined pockets of people who merit no further assistance from the general public.

    Even more troubling is Pawlenty’s embrace of the current radical right’s attack on the Constitution they pretend to revere. Someone who thinks so lightly of the 14th and 1st Amendments that he’s ready to condemn the children of immigrants, and all people of a religion he doesn’t share (see today’s “Glean”), isn’t someone I’d like to see with any sort of national political influence at all, much less the Oval Office

  8. Submitted by Brian Simon on 08/09/2010 - 01:09 pm.

    Using unspent stimulus money to ‘pay for’ extensions of the irresponsible Bush tax cuts is more of the same accounting shell-games that the governor used to destroy our state budget. What happened to the real fiscal conservatives?

  9. Submitted by Richard Schulze on 08/09/2010 - 04:19 pm.

    @ Ray,
    In a country ostensibly founded on religious tolerance, the anti-Islamic rhetoric is shameful demagoguery.

    The reason that Mr. Pawlenty does not distinguish between Islam and a murderous terrorist organization is actually quite simple. Mr. Pawlenty is a simple populist demagogue. One can only hope that, in the long run, Mr. Pawlenty is no more successful that that other populist demagogue: William Jennings Bryan.

  10. Submitted by John E Iacono on 08/10/2010 - 09:56 am.

    Mr. Pawlenty is certainly a shrewd politician — or “demagogue” if you don’t like him.

    But if the above comments are to be believed, he has much GREATER powers:

    >He apparently single handedly brought on a nationwide collapse of housing values, the major financial markets, and a consequent recession, thus deliberately creating a huge Minnesota deficit during his two terms. Quite a feat.

    >With a dem controlled legislature, he browbeat them into passing budgets during his terms that would do little or nothing to deal with the economic storm while funding the political supporters of his enemies. A brilliant move that was intended to force them to confront a huge deficit during the last year of his term and again after he leaves office.

    >He said “no new taxes” and — so wickely — kept his word. He wants tax cuts. He — most nefariously — also wants spending cuts, even willing to BREAK THE LAW to impose them unilaterally when he told the legislature he would do that if they did not present a balanced budget bill without added taxes and they failed to do it. He had to be shown that he could not do that. Until, that is, at the last moment a year later they did just about what he had done. But the BIG thing is that he wants SPENDING cuts, and has shown he might actually impose them if given the chance. How terrible can one man be?

    >Being a HUGE war monger, he has taken positions regarding the nuclear arms treaty sure to foment nuclear war by raising questions about things in the treaty that seem not to be in the interests of the nation. After all, Putin likes it, so it must be good. And of course, as he has done with the economy, TP will nefariously lead us down this dire path, though he has no office from which to do it, and has not announced for one. But of course we all KNOW he is really gunning for the presidential race. Don’t we?

    >We KNOW he hates everybody not of his religious convictions. Just look at his attacks on those folks who declare daily that they intend us dire harm. Shameful! It’s all part of his wicked plot to remove religious freedom from out country.

    >We also KNOW he hates all hispanics — why else would he object to folks sneaking across the border just to get free birthing, free medical services, free aid to families with dependent chilren, and a foothold in the country they have entered illegally? It’s part of his secret plan to provide jobs by kicking those “illegal” folks out of the jobs they have here so “our” unemployed can have them.

    Faced with such an unprincipled, ignorant, crafty, dishonest politician, we can go to sleep confident that NO sane person (except those idiots who voted him into the governor’s office here two times) could ever support such a man.

  11. Submitted by Richard Schulze on 08/10/2010 - 05:48 pm.

    John, I wouldn’t want you to think that I’m alone when using the term demagogue.

    //Mark McKinnon, who served as media adviser in Bush’s two presidential campaigns, said Republicans risk losing their “rightful claim” to the 14th Amendment if they continue to “demagogue” the issue.//

    //Vice President Dick Cheney and President George W. Bush, who pushed for comprehensive immigration reform, have condemned the calls by top Republicans to end birthright citizenship.//
    http://www.politico.com/news/stories/0810/40855.html#ixzz0wFHZxXxH

    To be fair, William Jennings Bryan was a Democrat. Demagoguery is used by politicians of all stripes. But that still does that make it any more acceptable.

  12. Submitted by John E Iacono on 08/11/2010 - 10:26 am.

    I doubt they were called demagogues by their friends.

  13. Submitted by Richard Schulze on 08/12/2010 - 06:47 am.

    The governor is one of the most successful Mn politicians in recent memory. He has been able to make a career out of good political timing and policy that sounds good. Politically astute is probably as good a description as any.

    The reality is that his budgets have been nothing short of an exercise in arithmetic. The term “cash management” come to mind. The expectation that we will grow our way out of the problem. The reality is quite the opposite. We have grown into the problem and the problem has become larger.
    Because we have been rolling over deficits for the past eight years. If you take a look and start to relate his political statements to reality, you’ll find out there is a wide gap. Now the next governor will deal with that wide gap.

    There is no such thing as a half truth. it’s all the truth and nothing but the truth. A wise sage wrote this recently. I agree with him. When a friend tells me an uncomfortable truth, It means more because I know it came from the heart and I know that they care enough to want risk sharing it with me.

    If Governor Pawlenty wants to be known as a straight shooter, he’ll have to start shooting straight.

  14. Submitted by John E Iacono on 08/12/2010 - 01:34 pm.

    Richard,

    Because TP wants to resolve fiscal problems by cutting spending programs, but knows he cannot get it through a dem legislature, and so settles for the usual “pay it forward” games does not make him a “half truther.”

    “No new taxes,” with the threat of veto to back him up was as far as he could go. And he stuck with it.

    In my opinion what you see with TP is what you get, the very essence of a “straight shooter.”

    Whether a dem audience is capable of hearing it is another matter.

  15. Submitted by Richard Schulze on 08/12/2010 - 05:19 pm.

    That’s what make’s it more disappointing, I supported him twice. He campaigned on cutting the billions and billions in wasted state spending. I just don’t see it…

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