Bloomberg News

Bachmann Says Eliminating Minimum Wage May Spur Growth

June 26, 2011

(Updates with debt limit comment from 12th paragraph.)

June 26 (Bloomberg) -- Representative Michele Bachmann, a Minnesota Republican planning to seek the party’s presidential nomination, said she would stoke U.S. economic growth by cutting taxes on corporate income and capital gains and considering elimination of the minimum wage.

Corporate tax rates should be significantly reduced from a maximum 35 percent and capital gains taxes should be eliminated, Bachmann said in an interview on CBS’s “Face the Nation” today. Congress should also reevaluate the federal minimum wage of $7.25 per hour, she said.

“Whatever it takes, that’s what we need to do for job creation,” said Bachmann. She said President Barack Obama “doesn’t seem to have an understanding of how to do the job.”

Bachmann, who plans to formally announce her campaign tomorrow at an event in her birthplace of Waterloo, Iowa, is nearly tied with former Massachusetts governor Mitt Romney among prospective Republican challengers in a poll of likely Iowa caucus voters published today by the Des Moines Register.

Romney is the preference of 23 percent of Republican voters and Bachmann was second with 22 percent, according to the newspaper. Other candidates trailed by 12 points or more.

Bachmann said her experience founding and running a pair of mental health clinics qualifies her for the presidency.

She drew distinctions between herself and Romney over health care, citing her view that a legal requirement that Americans carry health insurance is “unconstitutional whether it’s put into place at the state level, by a state legislature, or whether it’s put into place at the federal level.”

Massachusetts Law

Romney, while serving as governor of Massachusetts in 2006, enacted a health-care overhaul that requires all state residents to carry insurance. Obama called that law the model for the federal health-care overhaul passed in 2010.

In an interview on “Fox News Sunday,” Bachmann said she would “fully repeal” Obama’s health-care law, which she called “one of the largest spending initiatives we will ever see in our country.”

The Congressional Budget Office said the overhaul will cost $1.4 trillion from 2012 through 2021. The law’s tax increases and spending cuts, primarily in Medicare, will more than pay for its cost, the CBO said.

“I want to bring free-market policies back to health care,” Bachmann said in the CBS interview.

Debt Limit

She said she also plans to vote against authorizing the government to issue more debt, a topic that is the subject of negotiations between Obama and congressional Republican leaders.

Obama seeks to raise the nation’s $14.3 trillion debt limit before Aug. 2. His administration has warned that failing to raise the ceiling might cause the U.S. to default on some obligations. Republicans have demanded trillions of dollars in long-term spending cuts in exchange for an increase.

“It isn’t true that the government would default on its debt,” Bachmann said on the CBS program. “The Treasury secretary can pay the interest on the debt first and from there we just need to prioritize our spending.”

The Congressional Research Service said in an April report that without an increase in the debt limit, “funding federal operations after the middle of 2011 may be complicated.” The government might avoid defaulting on its debt, the agency said, by delaying payments to vendors, contractors and federal employees.

--Editors: Gregory Mott, Ann Hughey

To contact the reporter on this story: Alex Wayne in Washington, DC on awayne3@bloomberg.net.

To contact the editor responsible for this story: Mark Silva in Washington, DC on msilva34@bloomberg.net.


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