Ronald Reagan once quipped, “The government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
As a consequence, Americans mostly like politicians who promise to cut taxes, and almost as often as he invokes 9/11, Rudy Giuliani trumpets the claim. New York’s Daily News reported last July that as mayor, he says he cut taxes 23 times. “It is . . . Giuliani’s favorite boast on the presidential campaign trail . . . a claim inevitably met by applause.” But is it true? Not entirely.
Careful, Creative Counting
As critics point out, in order to arrive at the number 23, the former mayor has to take credit for cuts initiated by others (eight from state legislators in Albany, according to www.FactCheck.org), for some he actually opposed, “and, in one instance, he counts one tax cut twice,” FactCheck reported in “Giuliani’s Tax Puffery.” He even counts one of his own tax-increase proposals that was never actually implemented. As Charles Brescher of New York City’s Independent Budget Office has said, “We don’t consider not raising a tax a tax cut.”
Still, as Pat Toomey of the Club for Growth says: “In a city long accustomed to high taxes and ballooning budgets, Rudy Giuliani successfully cut taxes; kept spending below the growth of inflation and population; instituted sweeping welfare reform; privatized and deregulated many aspects of the city's bulky bureaucracy; and fought aggressively for school choice.”
Toomey is right about New York City’s traditional reluctance to consider budget and tax cuts.
When asked by Newsmax if other New York mayors had cut the city’s taxes, historian and Giuliani biographer Fred Siegel (“Prince of the City: Giuliani, New York and the Genius of American Life”) said emphatically: “No, Rudy is the only mayor in modern times who did.” But can he be expected to be a fiscal conservative as president?
“That’s harder to answer,” Siegel said. “It’s probably a case of six of one, and . . . four of the other.”
Indeed, Siegel has no quarrel with the description of Giuliani as someone for whom tax cuts are a management technique, not a political principle: “He’s not an ideological guy. He is a quick study: facing lots of new information he can process it, and solve problems quickly.”
This is also the view of one of Giuliani’s chief advisers, Charles Hill, who praises the former mayor’s “principled pragmatism.”
“Mr. Giuliani has a genius for non-ideological problem solving,” Hill wrote in The New York Sun. “He has achieved practical results time after time because he won't be categorized or captured by someone else's dogma.”
The New York Times has made the sweeping judgment that, in describing his own record on everything from crime to finance, Rudy’s “statements are incomplete, exaggerated or just plain wrong.” Perhaps the Times could say the same about the other presidential candidates; perhaps exaggeration is simply part and parcel of campaign politics. But one thing is certain: It’s no exaggeration to say that Giuliani has attracted a really first-rate group of advisers on questions of finance.
One aspect worth noting about any presidential campaign is the advisory group with whom the candidate consults. These are the men and women who write position papers and craft talking points and who may be expected to hold Cabinet positions (or recommend those who will) in the new administration if their man — or woman — wins the election.
In nearly every aspect of presidential policy, the Giuliani team is impressive. Heading Giuliani’s economics brain trust is Michael Boskin, former chairman of President George H.W. Bush’s Council of Economic Advisors. Steve Forbes, advocate of the flat tax, is also on board, as is the architect of “Reaganomics,” Martin Anderson.
Giuliani himself has been coy about the flat tax, although that hasn’t stopped Mr. Forbes from declaring in a Washington Post article, that a Giuliani administration would undertake “an assault” on the nation’s tax code.
That promise would be more encouraging to tax reformers if Giuliani did not remain unwilling to sign the Americans for Tax Reform’s “Taxpayer Protection Pledge” not to raise taxes. Nearly all the other Republican presidential candidates have signed the pledge (as did every GOP nominee since 1988), although Giuliani is not alone in refusing: Both John McCain and Fred Thompson have also declined.
In a November CNS News article, Giuliani argues that it makes no sense for a presidential candidate (and, more important, the president) to agree to such restrictions: “You take one pledge as president of the United States. It's to uphold the Constitution of the United States.”
He also argues that he cut taxes in New York City, “a place that was harder to do it than in Washington.” And if the failure to sign ATR’s pledge will hurt him, nobody has told the group’s president, Grover Norquist, who has praised Giuliani’s tax-cutting record.
“You are the most successful tax cutter in modern New York history,” Mr. Norquist wrote in a letter to Rudy, “and, on balance, the most successful tax cutter in the Republican field today.”
That may not be saying much, but Giuliani seems a genuine convert to the supply-side, have-our-cake-and-eat-it-too argument that cutting taxes will almost certainly increase revenues. The New York Sun reports that he told Larry Kudlow last March: “I think Reagan got it right. . . . the tax code was this big, he got it down to a simple code, reduced the top rates. Kind of leveled out the rates a little so there weren't as many. The tax code needs a simplification in addition to lowering your sum taxes.”
The Giuliani campaign has pointed out that many of the tax cuts claimed by Mitt Romney, arguably Giuliani’s chief rival, as part of Romney’s record as governor of Massachusetts were actually overruled by the Bay State’s legislature. Yet it’s likely that this is exactly the situation either man would face as a Republican president in 2009.
Rudy’s record as a liberal Republican mayor of New York is unlikely to give him long coattails in the presidential race, and Democrats may very well increase their party’s majorities in both houses of Congress — even to the point of making them veto-proof.
Without a strong conservative standard-bearer atop the GOP ticket helping to clearly define an alternative to the tax-and-spend Democrats, Republican candidates for the Senate and the House will likely campaign under the same cloud that swept them out of power in 2006, and this will be true even if the GOP presidential candidate wins. As a result, the main power of the new president — if he’s a Republican — will be the veto power, and that may be meaningless in the wake of a Democrat landslide.
Giuliani likes to evoke Ronald Reagan, as he did in a November YouTube debate: “I think you have to do across-the-board spending cuts the way Ronald Reagan did.” And in December he wrote in an Op-Ed article in The Wall Street Journal that controlling spending “must be a chief executive's priority or it doesn't get done. That's a lesson I learned from Ronald Reagan, and put into action when I was mayor.”
To be sure, President Reagan failed to achieve his goal of significantly reducing the size of government, but (and it’s a big “but”) he always believed that was the goal, whereas for Giuliani it’s the cost-effectiveness of government, not its size that matters.
Speaking to a New Hampshire group in June, Giuliani said: “All spending is discretionary. Read the Constitution. Congress has to appropriate it; the president has to sign it. All spending is discretionary and it has to be looked at from the point of view of, Can we afford it now?”
All fine, until you realize that the operative word in the declaration is “now.” Might this not mean that if we can afford the spending later, President Giuliani would go ahead and ramp up the expenditures? No debt; no problem. If a spending proposal is affordable, considerations about its effect on future budgets and on American liberties become subsidiary. Heaven knows, there’ll be no scarcity of hands held out for federal largess if we find ourselves with a balanced budget, let alone a surplus, and no end to the temptations to make interest groups happy. “Government,” as Reagan once put it, “always finds a need for whatever money it gets.”
Passion for Power
Giuliani may try to wrap himself in the Reagan mantle, but he never says what President Reagan often said: “It is no coincidence that our present troubles parallel and are proportionate to the intervention and intrusion in our lives that result from unnecessary and excessive growth of government.” And when we remember that Barry Goldwater was Ronald Reagan’s political mentor, libertarian Reason magazine is probably right to suggest there is little philosophical union between Rudy and Ronnie.
A December article, “The Liberal Candidate,” stated, “Some of Giuliani’s positions are libertarian, but the man himself is not. He has never looked over his shoulder and declared that Goldwater was right. Goldwater thought he was elected to repeal laws, not pass them. Giuliani, generally, likes to expand the boundaries of the state. He has no interest in rolling back the government to where it was before the Great Society, let alone the New Deal.”
Many people who have worked with Rudy Giuliani have spoken about his almost Napoleonic passion for power. Writing in the Manchester, N.H. newspaper Union Leader in December, David Boaz sums up the dilemma for libertarians and conservatives concerning the then GOP front-runner: “Giuliani wants power concentrated in whatever position he holds at the time,” and this is not a happy prospect for Republicans, specifically, or Americans, generally. And it’s hardly Reagan-esque.
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