Bloomberg News

Cain’s ‘9-9-9’ Tax Plan in Debate Spotlight as Perry Recedes

October 12, 2011

(Updates with Cain comments, tax plan revenue projection starting in 13th paragraph. For a special report, see ELECT.)

Oct. 12 (Bloomberg) -- Herman Cain defended his “9-9-9” tax plan against criticism from rivals seeking to halt his momentum at a Republican presidential debate last night that showcased Mitt Romney’s status as front-runner.

Texas Governor Rick Perry, in need of a strong performance to recharge his bid, rarely challenged Romney, using his time on the Dartmouth College stage to promote an energy-related job creation plan he said he would unveil later this week.

With fewer than 100 days until New Hampshire is expected to hold its primary, the eight presidential contenders focused on jobs and the economy at the event sponsored by Bloomberg News, The Washington Post and WBIN-TV, a Derry, New Hampshire, station.

The gathering unfolded as Romney, who is making his second presidential bid, seeks to bolster his status as front-runner and Cain and Perry, among others, vie to emerge as a fiscally and socially conservative alternative to the former Massachusetts governor’s candidacy.

“The Cain bubble is going to continue to grow for a while,” said Fergus Cullen, a former chairman of the New Hampshire Republican Party, who also credited Romney with a “strong performance” in the debate.

Perry, Cullen added, “didn’t implode, but did he do enough? I don’t think so. He no longer looks like Superman, like he did two months ago” when he entered the race and for a few weeks led in the polls.

Cain said his plan to scrap the tax code and replace it with 9 percent individual, corporate and sales taxes is superior to his rivals’ because it’s simple.

‘9-9-9’ Defense

“9-9-9 will pass,” the former Godfather’s Pizza chief executive said, “because it has been well-studied and well- developed. It starts with -- unlike your proposals -- throwing out the current tax code. Continuing to pivot off the current tax code is not going to boost this economy.”

Other Republican candidates criticized or ridiculed the idea. “I thought it was the price of a pizza when I first heard it,” former Utah Governor Jon Huntsman Jr. said.

Minnesota Representative Michele Bachmann hinted at something more sinister: “When you take the 9-9-9 plan and turn it upside down, I think the devil is in the details,” she said.

The number 666 is associated by some Christians with the devil.

Too Simple

Romney said the proposal was too simple to solve the nation’s economic problems. “To get this economy restructured fundamentally, to put America on a path to be the most competitive place in the world to create jobs, is going to take someone who knows how to do it,” said Romney, who has proposed a 59-point economic plan. “And it is not one or two things.”

Cain, addressing the New Hampshire House of Representatives in Concord today, said the harsh questioning on his tax plan was a sign his candidacy was surging.

“It attracted a lot of attention at the debate,” Cain said of the idea. “You know you must be doing something right when you get a lot of arrows in your back, but this is the first time that arrows have felt really, really good.”

Appeal for Supporters

Cain, who was announcing endorsements from a handful of New Hampshire legislators this afternoon, asked those not backing Romney to get behind him, “and for those of you who do support him, I’m asking you to reconsider.”

Appearing on ABC’s “Good Morning America” earlier today, he deflected criticism that the 9-9-9 plan would hurt poor people the most while slashing taxes for the wealthy.

“You have to take the three together,” he said. “Together, you broaden the tax base and together you lower the net-net taxes for everybody.” He said he wouldn’t revise the plan because of criticism from independent analysts, who he said used different assumptions about the economy than he does.

Today one of his advisers, Rich Lowrie, provided Bloomberg News with an analysis showing the 9-9-9 plan would have generated about $2.3 trillion in revenue in 2008, on par with the amount the federal government collected that year.

Last night’s debate -- conducted around a large table where candidates sat and fielded questions from journalists as well as each other -- unfolded as unemployment sits at 9.1 percent, standards of living are falling, and the Occupy Wall Street protests have spread from Lower Manhattan, giving voice to mounting public frustration with economic inequality.

‘Job Killer’

Asked about how he would address wealth disparities, Perry attacked Obama.

“The reason we have that many people living in poverty is because we have a president of the United States who’s a job killer,” Perry said. “You have a president that does not understand how to create wealth.”

Perry, who is scheduled to give a speech on the economy and energy in Pittsburgh on Oct. 14, said he wanted to open up the nation’s “treasure trove” of energy resources to invigorate the economy. “That’s the real key,” he said.

Romney kept his focus on Obama, shrugging off criticism from his competitors while portraying the president as incompetent.

“What’s happened in this country under the Obama administration is that you have a president who I think is well- meaning, but just over his head when it comes to the economy,” Romney said.

Christie Endorsement

Romney entered the debate with a new advantage. Earlier in the day, New Jersey Governor Chris Christie, whom some Republicans had urged to enter the presidential race, endorsed his candidacy.

Christie, who last week announced to reporters in New Jersey that he wouldn’t run, joined Romney in Lebanon, New Hampshire, for a joint news conference. “I have no question in my mind that Governor Romney is our party’s and our country’s best opportunity to defeat President Obama,” Christie said.

Bachmann, a favorite of the anti-tax Tea Party who has seen her support drop following Perry’s entrance into the race, during the debate placed responsibility for the financial meltdown on the government, rather than on the private sector.

“If you look at the problem with the economic meltdown, you can trace it right back to the federal government,” she said, arguing that low interest rates and laws encouraging weaker lending standards to allow more middle-class people to purchase homes were to blame. “There’s a real problem, and it began with the federal government.”

Bank Bailout

Romney offered tepid support for the financial rescue package passed in 2008 with backing from both parties. He criticized its implementation, and left open the possibility he might support another one.

“My experience tells me that we were on the precipice, and we could have had a complete meltdown of our entire financial system, wiping out all the savings of the American people. So action had to be taken,” Romney said. “Was it perfect? No. Was it well implemented? No, not particularly.”

Cain, whose standing jumped in public opinion polls after his victory in a non-binding straw poll in Florida on Sept. 24, drew criticism from U.S. Representative Ron Paul of Texas, who long has advocated abolishing the Federal Reserve. Paul said Cain, a former board member of the Federal Reserve Bank in Kansas City, Missouri, had resisted efforts to audit the central bank.

Greenspan Criticized

When Cain named former Federal Reserve Chairman Alan Greenspan as a model for the type of chairman he would appoint, Paul retorted that Greenspan was a “disaster” who set the country on course for recession. “Alan Greenspan has ushered in the biggest bubble,” he said. “And what did we do? We’ve continued the same thing.”

Fed Chairman Ben S. Bernanke was also under attack in the debate. Former House Speaker Newt Gingrich of Georgia won applause when he called for Bernanke’s removal.

“Bernanke has in secret spent hundreds of billions of dollars bailing out one group and not bailing out another group,” Gingrich said. “It is wrong and it is corrupt for one man to have that kind of power.”

Romney said that as president he would pick a new Fed chairman, though he declined to indicate whom he might choose.

Huntsman, Obama’s former envoy to China, challenged Romney over how to handle the Asian economic giant, saying Romney’s plan to sanction China for currency manipulation would prompt retaliation that would harm the U.S. economy.

Trade War

“I don’t want to find ourselves in a trade war,” Huntsman said. “We have to find common ground.”

Romney responded: “If you are not willing to stand up to China, you will get run over by China.”

Rick Santorum, a former senator from Pennsylvania, said he wanted to increase American economic competitiveness by challenging China. “I want to go to war with China and make America the most attractive place in the world to do business,” he said.

Perry was asked whether he would follow the model of President Ronald Reagan and agree to tax increases as part of spending cuts. “I don’t think he ever saw those reductions,” Perry said, calling for a balanced budget amendment.

“One of the reasons that I think Americans are so untrustworthy of what’s going on is because they never see a cut in spending,” Perry said.

A pre-debate national poll of Republicans and Republican- leaning independents by Bloomberg News and The Washington Post showed Romney leading with 24 percent, followed by Cain at 16 percent and Perry at 13 percent.

Rounding out the field, 6 percent backed Paul, 4 percent were for Bachmann, 3 percent supported Gingrich, 1 percent picked Santorum and fewer than 1 percent preferred Huntsman.

--With assistance from Lisa Lerer, Roger Runningen, Steven Sloan, Richard Rubin and Robin Meszoly in Washington. Editors: Don Frederick, Laurie Asseo

To contact the reporters on this story: Julie Hirschfeld Davis in Washington at jdavis159@bloomberg.net; John McCormick in Chicago at jmccormick16@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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