Notes From New Hampshire, #1: Kasich — Reagan Redux?

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by Jack Beatty

Saturday afternoon, in Keene, a college town in the southwest corner of the state, Ohio Gov. John Kasich held his 83rd Town Hall meeting in New Hampshire. He spoke to a standing-room only crowd at the Ball Mansion, the handsome brick headquarters of the Historical Society of Cheshire County.

The first thing you notice at a Kasich Town Hall is the large electronic Debt Clock. In his low-key remarks Kasich took partial credit not only for stopping it but for making it run it backwards, into the fiscal Eden of surplus. This was in the late 1990s when Kasich was chairman of the House Budget Committee. In Keene, the only policy promise he made was to balance the budget as president.

A father of two daughters, Kasich spoke feelingly of a single mother telling her kids, “Girls, I lost my job today.” Then, his voice rising, he imagined her exulting, “I got a job today!” Government’s role is to “create an environment where people” like that mom can find and hold onto to a job. He got his only applause when he said that his main goal as president would be to “get everybody to rise” and “leave nobody behind ... We can do it again,” he said, “Absolutely, we can do it again.” (“It” meaning recreate the low-unemployment, wages-rising, inequality-narrowing economy of the late '90s.)

Balancing the budget, he avowed, is the path to broad prosperity. This was pre-Reagan Republican doctrine, and for a minute there the audience might have taken Kasich for a political throwback. But then, answering a question, he said he wanted to restore the Reagan-era tax brackets. He would cut the top rate from 39.6 percent to 28 percent, the capital gains rate from 25 to 15 percent, the estate tax from 40 percent to 0, and lower the corporate income tax. When Reagan pushed through a similar menu of tax cuts it led not to a balanced budget but to years of runaway deficits and rising debt.

As Jonathan Chait points out in an impressively documented article in New York, two laws passed in the '90s “eliminated the structural deficits of the Reagan era” and culminated in the balanced budget Kasich is so proud of. One was the 1990 budget deal between President George H. W. Bush and the Democrats to cut spending and raise taxes. The other was President Bill Clinton’s 1993 tax increase on the wealthy. Kasich voted against both bills (while taking a bow for their result). “This plan will not work,” he predicted then. "If it was to work, then I’d have to become a Democrat.” It worked. Kasich remained a Republican.

Kasich’s “plan” to balance the budget in eight years while cutting taxes on a Reaganesque scale and “restoring” the military calls for a freeze on all discretionary domestic spending (basically on everything except the National Institutes of Health, whose budget Kasich would double), a 13 percent cut in Medicaid and a 10 percent cut in Medicare. When Reagan forced Republican senators to vote for a milder array of spending cuts, the Republicans lost the Senate. But even if Kasich got all his cuts enacted, he still would fall far short of a balanced budget, so big is his tax cut.

In one of the GOP debates Kasich attacked the tax cut plans of Donald Trump and Ben Carson as “fantasies.”  “We’ve got to be responsible about what we propose on the tax side,” he sternly said. Kasich talks like a lunch pail Republican, and to his credit would increase the Earned Income Tax Credit for low-wage workers. But his own tax plan not only fails his “responsible” budgetary standard but would, in Chait’s words, amount to “a tax cut for the rich of a scale never before seen in American history.”

On Point news analyst Jack Beatty is sending us dispatches from his home state of New Hampshire, as the 2016 candidates for President make their final pitch to voters in the Granite State. Sign up for Jack's Notes from New Hampshire Newsletter here!