What happens when you rocket up the polls? The debate sets it up so that everybody can take a shot at you right off the bat.
That’s what happened to Herman Cain, who was the implicit target of the debate’s first question about the candidates’ opinions on a national sales tax.
Rick Santorum went straight on the attack:
"Herman’s well-meaning and I love his boldness… but reports are now out that 84 percent of Americans will pay more taxes on his plan.
When you don’t provide a standard deduction, when you don’t provide anything for low-income individuals… we’re talking about major increases in taxes on people. He doesn’t do anything that takes care of families. A single person pays as much as a man and woman raising three children.
Mitt Romney, Rick Perry, Michele Bachmann all got on his case immediately over a bushel of issues - plenty of states abhor sales taxes (New Hampshire, for example), 999 would raise taxes on middle class Americans, and that it’s not a realistic approach.
Herman Cain responded thus:
"That simply is not true. I invite people to look at our analysis, which we put up on our website."
(We’d screenshot Cain’s analysis, but his site has crashed at this point.)
As we noted in our primer, Cain is going to get targeted. But, goodness, right off the bat that was intense.
The top image is the Tax Policy Center’s breakdown of Herman Cain’s “999 Plan” for Americans at all income levels. The second one shows those Americans who would see their tax bills decrease - those making over $200,000 per year.
They would have 5 percent more to spend under Cain’s plan. And the rest?
Those making $20,000 to $30,000, on the other hand, would have 16 percent less and those making $40,000 to $50,000 would have 11 percent less.
If Anderson Cooper’s debate prep team is working hard, let’s see if this makes it way into a question for The Hermantor tonight.
Watch the top Republican candidates face off in the CNN Western Republican Presidential debate LIVE from Vegas! Tuesday night at 8ET on CNN. (Sponsored message.)
When you’re at the top of the polls - and center stage at tonight’s GOP debate in Las Vegas - chances are you’re going to take some blows. While Herman Cain largely dodged them during last week’s debate, Decoder has an inkling he won’t be so lucky this week.
Here are five potential chinks in The Hermantor’s armor. Once you’ve checked them out, get ready to join us at our live chat during tonight’s debate (kicks off at 8 p.m. ET).
1. Was Cain against “999” before he was for it?
Herman Cain may turn out to be his own worst critic. As Business Insider points out, Cain once wrote an op-ed posted on several conservative sites (like The Daily Caller, here) entitled “Don’t Be VAT Stupid” in which he argues:
The worst idea is a proposed national sales tax, which is a disguised VAT (value added tax) on top of everything we already pay in federal taxes.
Cain’s campaign says this is taken out of context - but in the op-ed, Cain lays out explicitly why a national sales tax, the third “9” in his pantheon, is a terrible idea.
First, we have a spending problem in Washington, D.C., not a revenue problem….
Even worse is reason number two: In every country that has established a VAT with the promise of reducing its national debt, the VAT has eventually gone up or expanded on top of the existing tax structure….The third reason the national retail sales tax on top of all the taxes we already pay is a bad idea, is that there is already proposed legislation that replaces allof the federal taxes we pay. It replaces all current revenue. It supercharges our national economic growth, and puts the power of taxation back into the hands of the people who spend their money.
It’s called the Fair Tax.
As you learned from Decoder’s “999 plan” explainer, Cain’s ultimate goal remains the Fair Tax. Indeed, in this same op-ed he argues that “a national retail sales tax on top of all the confusing and unfair taxes we have today is insane!” Those three, bolded words (emphasis Decoder’s) may be his saving grace, as his 999 plan would abolish all other taxes.
2. Gay marriage
Former Pennsylvania Senator Rick Santorum has already signaled he’ll be going after Cain on 999 - but he’s also ready to hit Cain on gay marriage as well. After Cain told NBC’s Meet the Press on Sunday that gay marriage should be left to the states, Santorum offered this on a talk radio program in Iowa:
“The idea that this issue should be left to the states is the position Barack Obama takes and it’s not the right position.”
Cain’s position struck a (negative) chord among several other conservative leaders, as Jennifer Rubin writes in the Washington Post’s “Right Turn” blog.
3. Is Cain too “shocking” on immigration - or not shocking enough?
As Decoder wrote previously, Cain has waffled on whether a fence along the US border with Mexico rimmed with electrified barbed wire is a good idea or not. Whatever this discussion does to the GOP’s chances with Hispanic voters, Michele Bachmann has already hit Cain from the right for suggesting such a fence would be a joke.
"This is no laughing matter, the border fence," Bachmann said. "We’ve seen jokes made by presidential candidates about the fence. It is not a joke. This is a real issue, and this is a serious issue."
4. Does he know anything about foreign policy?
Cain also discussed foreign policy during his chat with Meet the Press host David Gregory. To put it bluntly, Cain has not impressed many experts with his command of foreign affairs. He typically falls back on “I will ask the ____” where the blank can be generals, intelligence analysts, or other experts. Perhaps an honest position, but as the Washington Post’s Rubin writes, when you mix that in with his inability to formulate his own coherent views about foreign policy, the resulting goo is … well, goo.
Right now Cain is telling us he likes the neoconservative Charles Krauthammer and the conservative critic of the Iraq and Afghanistan wars, George Will. He told David Gregory he likes both John Bolton and Henry Kissinger as foreign policy thinkers. (What — he curries favor with the despots only on odd-numbered days?) These pairs of conservatives are polar opposites, of course. It is sort of like picking Justice Antonin Scalia and Ruth Bader Ginsburg as your favorite Supreme Court justices — it suggests a lack of understanding of the diametrically opposed views they present. More to the point, it raises doubt as to how Cain could make national security decisions with no vision of his own or familiarity with the issues.
5. Is Cain a serious contender?
Rick Santorum and Michele Bachmann have practically become Iowa residents. Jon Huntsman is boycotting the Nevada debate in an attempt to score points with New Hampshire. Rick Perry’s political DNA is about retail politics. Any of them could go after Cain for eschewing the early primary states as he continues on his book tour (he hasn’t been to Iowa since August) in hopes that voters in those states will remember how much time they’ve lavished on early primary contests.
Watch the top Republican candidates face off in the CNN Western Republican Presidential debate LIVE from Vegas! Tuesday night at 8ET on CNN. (Sponsored message.)
Photo: Eric Thayer/Reuters
At the front of the GOP presidential pack, former Godfather’s Pizza CEO Herman Cain is having his moment in the political sun. Which also means he’s going under the journalistic microscope. This morning’s papers are packed with pieces on Cain.
To help you keep up with the media’s continued vetting of Cain, here’s a review of the top pieces from this weekend and this morning:
1. Herman Cain’s appearance on NBC’s “Meet The Press” Sunday
Two bits of news emerged from this interview. First, as Decoder wrote this weekend, Cain said his applause line at a recent rally - about installing a fence along the Mexican border with electric barbed wire capable of killing those trying to enter the US illegally - was a “joke” and that America “needs to get a sense of humor.”
Second, Cain acknowledged that some Americans would pay more in taxes under his “999 plan.” Which Americans, specifically? According to Cain: “The people who spend more money on new goods.”
2. Herman Cain and the Koch Brothers
The Washington Post inspected Cain’s ties to the left’s favorite monied GOP bogeymen, Charles and David Koch, finding:
Cain’s campaign manager and a number of aides have worked for Americans for Prosperity, or AFP, the advocacy group founded with support from [the Kochs], which lobbies for lower taxes and less government regulation and spending. Cain credits a businessman who served on an AFP advisory board with helping devise his “9-9-9” plan to rewrite the nation’s tax code. And his years of speaking at AFP events have given the businessman and radio host a network of loyal grassroots fans.
3. The history of “999”
The Wall Street Journal’s Neil King, Jr. digs into the formation of the “999 Plan,” finding Cain and economic advisor Rich Lowrie sought - and received - a blessing from conservative tax guru Arthur Laffer. Laffer, “often viewed as the father of supply-side economics,” reportedly signed 999 with a red A+.
In practice, Mr. Lowrie’s design combines two ideas that have figured prominently in conservative tax debates in recent years. One idea is a flat tax (Mr. Laffer for years has championed this idea). The other is a national sales tax.
Admirers see it as a breath of fresh air in what is often a stultifying debate over how to rewrite the mammoth U.S. tax code. Many conservative economists have praised the Cain approach’s shift to taxing consumption while encouraging savings and investment. But some business people—particularly retailers but also home builders—cringe at the prospect of a national sales tax. And liberals worry it would raise taxes on lower-income people, or deepen the current deficits, or maybe both.
4. Is Herman Cain a serious contender?
Two pieces dig into whether Cain, who has only recently rocketed up to top-tier status, has the desire and/or ability to start building the kind of team necessary to compete with the serious organizations of Mitt Romney and Rick Perry.
Neil King, Jr. of the Wall Street Journal writes:
Now, under increasing scrutiny, [Cain] needs to hone his message, rapidly build a campaign organization to capture the swell and, perhaps most importantly in the eyes of national GOP operatives, give himself over to the discipline of a national campaign….
Cain aides say they are hiring campaign staff at a breakneck pace, looking to nearly double the payroll to about 60 by the end of the month. They opened a South Carolina headquarters 10 days ago and are bulking up operations in Iowa and New Hampshire, where Mr. Cain has shot up in the polls.
The Washington Post’s Amy Gardner begins her piece by looking at Cain’s current lack of such an organization:
As presidential contender Herman Cain launched a bus tour across Tennessee this weekend, his advisers couldn’t explain why he would spend precious time in a state that is far down the list of crucial primaries.
Moments away from an appearance at a diner in Concord, N.H., Cain’s people didn’t know the name or address of the place.
And Cain’s organization is so thin in key early states that one New Hampshire strategist said that when activists have asked where to learn more about the candidate, there was no one in the state to refer them to.
Still, Cain is drawing massive crowds and - so far, at least - the more traditional trappings haven’t paid off much for Perry or Romney.
“If Facebook could be used to topple the Egyptian government, then perhaps Herman Cain can use it to win Iowa,” said Phil Musser, a Republican strategist who most recently worked for the short-lived presidential bid of former Minnesota governor Tim Pawlenty. “Thus far, the traditional approach to running for president in 2012 has paid few dividends, and the old must-dos have proven to be less important milestones than expected.”
5. Lobbying against stricter drunk driving regulations?
As head of the National Restaurant Association, Cain lobbied against a national law imposing a .08 percent blood alcohol content (BAC) limit for a driving under the influence charge, Benjy Sarlin of Talking Points Memo writes:
“The problem is not the responsible drinker,” Cain wrote in one letter to the editor.” It is the alcohol-abuser who gets behind the wheel of a car. In fact, according to the National Highway Traffic Safety Administration, two-thirds of all alcohol-related fatalities are caused by drivers with a BAC of 0.15 or higher.”
Photo: Republican businessman Herman Cain speaks during a dinner sponsored by Americans for Prosperity, in this April 29, 2011 file photo taken in Manchester , N.H. Cain casts himself as the outsider, the pizza magnate with real-world experience who’ll bring fresh ideas to the nation’s capital. But Cain’s economic ideas, support and organization have close ties to two billionaire brothers who bankroll right-leaning causes through their group Americans for Prosperity. (AP Photo/Jim Cole, File)
Herman Cain, it may be your moment - as Decoder wrote yesterday, Cain is leading the entire GOP field in the latest Wall Street Journal/NBC poll.
Want to understand what all the fuss is about when it comes to Cain’s “999” tax plan? Here you go.
1. The Plan itself. What may surprise many is that the “999 plan” - a 9 percent personal income tax, 9 percent national sales tax and a 9 percent business tax - is actually only phase two of Cain’s overall tax vision. In phase one, Cain would cut individual and corporate tax rates to a maximum of 25 percent. Then, in phase two, he would implement the “999” rates. Phase three is the implementation of a “fair tax.” That tax would amount to a single national sales tax (typically formulated at 30 percent) in lieu of all other taxes. Why not just go straight to the fair tax? Cain writes, somewhat nebulously:
Amidst a backdrop of the economic boom created by the Phase 1 Enhanced Plan, I will begin the process of educating the American people on the benefits of continuing the next step to the Fair Tax.
2. What do economists think about this plan? There are plenty of economists with plenty of opinions, but The Christian Science Monitor’s Ron Scherer caught up with a boatload of them. In general, they aren’t very bullish:
“Every CEO says the reason they’re not hiring is because they’re not seeing demand,” says Rachelle Bernstein, a vice president and tax counsel at the National Retail Federation, a lobbying group, in Washington. “An additional tax on consumer spending will negatively impact that already weak demand.”
Some economists worry the plan would result in national tax cheating since retailers might offer items for sale at two different prices: one with tax and one without tax for people paying with cash. “The incentive to cheat is huge,” says Nigel Gault, chief US economist for IHS Global Insight in Lexington, Mass.
Mr. Gault says this is the reason why most countries have enacted a Value Added Tax (VAT) that gets tacked on during the different phases of producing a product. As each tax gets added on, there is an incentive to pass it on.
Since Cain would eliminate the business deduction for labor but not investment, the plan would most likely cause distortions that might add to the unemployment rate, says [John] Silvia [chief economist at Wells Fargo Securities in Charlotte, NC]. “This would favor heavy industries that use lots of capital and penalize companies where labor is significant and capital is small,” says Silvia. The entire service sector would be disadvantaged, he adds….
But probably the largest economic impact would be shifting the tax burden. “It’s a huge tax reduction on the very top and a huge tax increase for moderate and low income people,” says Michael Graetz, a professor at Columbia University who has testified before Congress on taxes.
The Washington Post’s Fact Checker Glenn Kessler looked into “999” as well, eventually giving Cain “Three Pinocchios” for saying most Americans would see their taxes decline under his plan.
Just like it would be wrong to claim pizza is a low-calorie meal, Cain’s description of the plan’s impact on working Americans is highly misleading.
3. Who helped him gin this thing up, anyway?
A good question. The only economic policy adviser Cain has named is a guy named Rich Lowrie (here’s his LinkedIn profile) whose economic credentials are, shall we say, limited. For one, he doesn’t have an economics degree, although Cain called him an economist during the debate Tuesday night. Second, his professional experience extends to helping run a Wells Fargo wealth management division outside of Cleveland, Ohio, and sitting on the boards of various conservative economic groups. Cain has refused to offer up the names of any other advisers.
4. What are Republicans saying about the plan?
Reaction on the right could be described as generally positive but with a host of caveats. As one might imagine, the best part of the plan, in the eyes of conservatives, is lower tax rates. The main objections include the fact that by adding a new 9 percent national sales tax, Cain’s plan gives the federal government a new revenue stream which, some argue, would inevitably lead to more government and/or more taxes.
An analysis by Tea Party group FreedomWorks put it thus:
Mr. Cain’s 999 plan is on the right track with its goal of a lower, flatter, simpler, fairer, more transparent tax system. Nine percent would be a wonderful top rate for the income tax, compared to today’s 35% top rate. And let’s face it, abolishing the payroll tax and the death tax would simply be awesome.
But adding a national retail sales tax on top of the federal income tax (even a flat tax) is a bad idea, because it creates the infrastructure for a federal-level, European-style [value-added tax, or VAT].
And if Cain’s 9% personal flat tax failed to remain flat (as happened with Ronald Reagan’s promising but ultimately failed 1986 tax reform), we would end up with the worst of both worlds: a confiscatory income tax and a job-crushing VAT.
But while there may be some qualms over the plan, there’s much greater enthusiasm for the plan’s messenger. One blogger at conservative web forum RedState notes that Cain’s ability to sell his plan to the American public, whatever its flaws, is a positive thing in and of itself.
Yes, that it is appealing doesn’t make it workable or a good idea. But it does make it an appealing idea. Which is a helluva lot better than the alternatives we have so far. You’re not going to find crowds at Romney rallies chanting “59 Points!” or even understanding what the hell is in his 160-page economic plan. (Although, a Romney rally where the crowd did chant his entire economic plan would be akin to a Buddhist funeral ceremony… hours and hours of chanting….) Perry’s economic plan is easy to understand, and has a built-in slogan… oh wait… he hasn’t released one yet. Nevermind then…
There’s a deeper point to be made here. Cain often says on the stump that his job as President will be to educate and inform the American people, because “If people understand it, they will demand it.”
Photo: Republican presidential candidate, businessman Herman Cain is greeted by lawmakers at the statehouse in Concord, N.H., Wednesday, Oct. 12, 2011. (AP Photo/Jim Cole)
Good morning, America! If you missed the GOP presidential debate last night about the economy (well put on by the Washington Post and Bloomberg), here are five pieces from our liveblog coverage with Shortformblog that will tell you all you need to know.
1. By and large, the tone of this debate was far different than the others (JVBrewer, too!). The candidates were seated around a large wooden table, giving the entire thing a more intimate feel.
The moderators did a great job of speeding the questions along, and while Ron Paul and Rick Santorum were hardly well served, the entire evening did feel serious and engaged where some of the other debates felt shlocky and crusted over with social media doodads.
2. Most memorable line of the evening: Herman Cain responding to criticism of his “999 plan.” Or was it Jon Huntsman saying the “999 plan” made him think of a pizza deal? Or was it Jon Huntsman’s daughters laying a Twitter smackdown on Mitt Romney over China?
3. There was a ton of talk about the Federal Reserve. Newt Gingrich kicked it all off with a long diatribe about how Ben Bernanke, former Democratic Senator Chris Dodd and Democratic Congressman Barney Frank (Mass.) are all criminals.
Herman Cain also ripped Bernanke then later said he admired Alan Greenspan, which drew immediate rebuke from Ron Paul ("Alan Greenspan was a disaster") and likely cost Cain with some of the professional, Wall St. Republican set.
4. Everybody is going bananas over “999.” Herman Cain’s tax plan calling for a 9% federal income tax, a 9% sales tax and a 9% corporate income tax was at the center of the debate. There are a number of moving parts here, but if you only take away one thing about it from last night let it be that everybody is going to be taking shots at 999 in the weeks ahead.
The power of Cain’s plan is its simplicity, as the Washington Post writes this morning. But if the devil is in the details, to paraphrase Michele Bachmann’s strange criticism, the next few weeks will be about the details. (The CS Monitor already looked into the details, by the way.)
5. Who won and who lost? In Decoder’s view, Romney, Cain, and to a lesser extent Santorum all comported themselves well and gained from the debate while Perry, who many thought needed to distinguish himself, looked divinely uncomfortable. Shortformblog noted the primary process has gotten to the point “where the winners and losers are the ones who aren’t necessarily flashy, but well-polished and well-studied. Romney made it look easy; he’s well-polished and well-studied.”
The best from around the web:
"I just try to get up every day and do my job, and debates are not my strong suit,” the Texas governor told reporters following a post-debate party at a Dartmouth fraternity house."
Mitt Romney prospers in Republican debate, by Dan Balz, a highly-respected political writer for the Washington Post.
Republicans stretch truth in debate salvos, by Bloomberg.
Rick Perry loses Dartmouth debate, wins Beta house by The Weekly Standard. Apparently, Perry’s best performance of the night was well off camera.
You can find the liveblog of the debate from Andrew Sullivan, he of Newsweek/Daily Beast (and formerly of the Atlantic), here.
Is the man who brought you such hits as trademarking “The Hermanator Experience" and the "999 Plan" hitting his political stride? Is this Herman Cain’s moment?
Exhibit A: Today’s FOX News poll showing Herman Cain with the support of 17 percent of GOP primary voters, a hair behind Texas Gov. Rick Perry at 19 percent and within reach of Mitt Romney at 23 percent. Cain was at 6 percent a month ago, before the GOP’s marathon debate schedule put all the candidates in front of voters over and over again.
Exhibit B: Cain crushed everybody at the most recent straw poll (in Florida), taking home 37 percent of the vote to Perry’s 15.4 percent and Romney’s 14 percent. While some saw it as a protest vote against Rick Perry, the fact remains: Cain cleaned house.
Exhibit C: Coming to
bookstores Amazon shopping carts near you, “This is Herman Cain: My Journey to the White House.” A book is a great reason to get a candidate on Sunday talk shows, cable news programs, hits with print reporters, and the beat goes on.
Exhibit D: Herman Cain is killing it on Facebook. This first chart shows Facebook fans gained, by day.
Now, check out the version below - Herman Cain’s September bump was so massive that when you take him out of the equation, it changes the scale entirely.
Cain’s 203,000-strong fanbase is still well behind Mitt Romney’s more than 1.1 million Facebook devotees - but of course, Romney has been running for president for five years.
The question for Herman Cain? He’s also behind Michele Bachmann, who has north of 450,000 Facebook fans. Will he wind up like Bachmann, generating a ton of short-term heat but without much long-term light?