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Press Release - Romney's S&P Upgrade Pitch Relied on Tax Hikes

August 11, 2011

Huntsman engineered the most business-friendly climate in the nation -- for which it registered first in Forbes' index of best states for business and was named the best-managed state by the Pew Center on the States.

When credit ratings agency Standard and Poor's indicated last week it would downgrade U.S. debt, Mitt Romney proudly boasted the same agency had years earlier boosted Massachusetts' bond rating. But new documents obtained Wednesday through a freedom of information request revealed the governor's pitch for the ratings increase was largely couched in a series of controversial tax hikes.

The Massachusetts Executive Office of Administration and Finance surrendered two separate documents -- 27 pages of confidential "discussion materials" and a 50-page presentation -- pursuant to the request. The presentation touted a 2002 tax increase, against which Romney campaigned in his 2002 gubernatorial bid, estimated by some to boost state revenues $1 billion each year and his 2004 closing of tax "loopholes" totaling an estimated $269 million.

Counter to Romney's new anti-tax intransigence, the presentation closed: "FY04 budget increased fees to raise $271 million yearly." (Romney also proposed the closing of tax loopholes in fiscal years 2005 and 2006 for $70 and $170 million, respectively, though the business backlash was so fierce the latter amount was reduced to $85 million.)

"The president really ought to personally sit down and meet with S&P," Romney said Tuesday, before the revelation of his tax-inclusive entreat. "I did that when I was governor."

All indications were that President Obama did, in fact, wish to pursue Romney's earlier tack, pressing for revenue hikes and the closing of tax loopholes throughout negotiations with Congressional Republicans. Romney aides responded -- because nothing would better convince primary voters theirs is a candidate of convictions and not convenience than an about-face -- that, despite the shared budgetary sentiments of the ex-guv in Massachusetts and the president's recent push for increased government revenues, he would entertain no legislative action that underwrote a debt ceiling increase with new taxes.

But if the president were keen to take counsel from any of his Republican rivals, perhaps he might be better served by heeding the advice a governor who preserved his state's AAA bond rating amid the worst economic conditions in a generation in lieu of the guy who earned a marginal bump to a credit rating worse even than the one into which the nation sunk Friday. Enter: Jon Huntsman.

Rather than baiting the ratings agency with the promise of higher taxes, Huntsman took an alternative approach, adopting instead the single largest tax reduction package in Utah history while still tripling the state's rainy day fund. Slashing tax rates and eliminating government waste, Huntsman engineered the most business-friendly climate in the nation -- for which it registered first in Forbes' index of best states for business and was named the best-managed state by the Pew Center on the States.

The months ahead will be a tough slog for President Obama, who earned the ignominy of steering the nation into its first credit downgrade. For Romney, though, it's not yet apparent which presentation will do greater harm to his candidacy: The one in which he boasted of revenue hikes to close a budget deficit, or the one in which he defended his unpopular health care mandate that eventually became the framework for the president's national model.

Jon Huntsman, Press Release - Romney's S&P Upgrade Pitch Relied on Tax Hikes Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/298882

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