The Prosecutor and the Salesman
Rudy and Romney rumble over tax-cutting credentials.
BY COLLIN LEVY
Friday, October 12, 2007 12:01 a.m. EDT
If you'd told voters that 2008 would see two supposedly liberal Northeast Republicans duking it out for the title of most conservative, someone probably would have come to take your temperature. And yet it's a good year for supply-siders when a former New York mayor and a former Massachusetts governor are going mano a mano over who is the baddest tax cutter east of the Mississippi.
Mr. Giuliani calls Mr. Romney the governor from "Taxachusetts." Mr. Romney, who has bragged that he's the only candidate to sign the Anti-Tax Pledge, says he thinks the former mayor's claims to be the better fiscal conservative are "baloney." You know that hurts.
The fiscal issue has come front and center because the immediate prize is New Hampshire, where Mr. Giuliani has shaved Mr. Romney's summertime lead to a dead heat. Granite State voters have always been a tracking stock for economic conservatives. And with a good group of conservative economic advisers, Mr. Romney is on the offensive, running a series of radio ads and statements intended to build his brand as the natural heir to Reaganesque economic policies.
Whether the former Massachusetts governor has the chops to win this particular fight is another question. Anti-tax groups like the Club for Growth have been lukewarm on his record. The Cato Institute gave him a "C" on its governors' report card in 2006, a grade that report author Steve Slivinski says indicates a "placeholder governor"--not doing any major harm, but not doing much good either.
On the campaign trail, he's talked a good game. He's pledged a continuation of the Bush tax-cut policies--making the tax cuts permanent, eliminating the death tax and so on. The Bad: He refused to endorse the same Bush tax cuts in 2003 as governor, and loudly opposed the flat tax. The Ugly: He raised fees and closed "loopholes" in the business tax code, effectively increasing the tax burden in Massachusetts. And his biggest accomplishment was a dubious one--passing a state health-care plan that strikes a lot of Democrats as a good national model.
Some of that may be a product of his environment--hopefully a lot of it. His campaign has made much of the fact that his accomplishments in the Bay State came despite having to wrangle with an opposition legislature. He held the line on new broad-based taxes during the state's budget crisis in 2003, not an easy feat. And he gets credit for fighting to a standstill a bill that would have retroactively hiked capital gains taxes.
Battling the Massachusetts Democratic legislature was undoubtedly tough--but Mr. Romney wasn't the first, or the most successful, in taking it on over fiscal issues. That honor goes to his predecessor, former Gov. Paul Cellucci. Mr. Cellucci couldn't get a tax cut through the legislature either. So he found another way to do it. He went to the voters, putting a referendum on the ballot in 2000 and winning.
The income-tax reductions that occurred during Mr. Romney's own governorship began with the Cellucci ballot measure. Did we mention that Mr. Cellucci has endorsed Rudy Giuliani?
Yeah, that's a little awkward, though Mr. Cellucci has been at pains to say he's not trying to stick it to Mitt. He just thinks Rudy did a better job than Mitt did, and is better qualified than Mitt is. No offense or anything.
What is Mr. Giuliani's claim to fame for pro-growth fiscal conservatives? He has made hay of the alleged fact that he cut taxes 23 times while mayor of New York. Longtime City Hall watchers say touting the number needlessly exaggerates a pretty classy record. Before his time in office no mayor of New York City had ever made tax cutting a priority, yet he did it every year--with pretty decent results. Having taken office with a $2.3 billion deficit, he executed a total turnaround of the city's economy, leaving residents with the lowest tax burden they had seen in three decades. New York City's growth rate well outpaced the national average, even in a strong economy.
But the former mayor is not without his own dancing fiscal skeletons. In 1994, Hizzoner criticized then Gov. George Pataki's big income-tax cut as potentially ruinous to the city, echoing the contentions of his chief Democratic rival, Mario Cuomo, whom he had endorsed against Mr. Pataki. Jack Kemp, campaigning for Gov. Pataki at the time, was flummoxed. Rudy may share our conservative economic principles, the supply-side saint told a Buffalo newspaper, but then he turns around and supports "Mr. Tax and Spend Liberal. . . . it hurts the party and confuses people."
Far from backing down, the mayor shot back that he was a much better judge of the interests of the city he was elected to serve. An equally unsightly scenario played out when he opposed getting rid of the city's 12.5% income tax surcharge in the late '90s--putting him to the left of Democratic City Council Member Peter Vallone.
But Mr. Giuliani did plenty of good too. He fought for hundreds of millions of dollars in tax cuts for the city and didn't mince words doing it. In October of 2001, facing the economic devastation of September 11, reporters asked the departing mayor why he didn't go ahead and raise taxes to fill the budget shortfall? Because, he answered, that would be a "dumb, stupid, idiotic and moronic" idea.
The bottom line: Both men are pretty B+ (we grade on a curve around here). Both have good but imperfect tax records, and both have a serious albatross: Mr. Giuliani ended up on the wrong side of the line-item veto fight by suing to prevent its use by President Clinton; the Massachusetts governor gave national Democrats a free preview of Hillarycare. But it's also fair to note that Mr. Giuliani, while citing the Constitution, was protecting New York City's interest in federal pork. Mr. Romney's health-care plan, on the other hand, seemed more like a ploy to raise his presidential profile in the national media.
If elected, either man would find himself in familiar territory, with both houses of Congress likely controlled by Democrats and possibly even by a wider margin than they currently are. Mr. Giuliani is a prosecutor. Mr. Romney is a salesman. Which would Nancy Pelosi prefer?
Supply-siders might answer that question for themselves and then choose the other one.
Ms. Levy is a senior editorial writer at The Wall Street Journal, based in Washington.
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