McMahon Has A Plan, But UConn Economist Would Like More Details
by Hugh McQuaid | Aug 23, 2012 3:30pm
(14) Comments | Commenting has expired
Posted to: Election 2012, Taxes
(Updated 11:30 a.m. Friday) U.S. Senate candidate Linda McMahon’s jobs plan calls for a balanced budget amendment but the director of the Connecticut Center for Economic Analysis says that the details he’s seen of the plan seems to be a recipe to balloon the federal deficit at a “phenomenal rate.”
Although McMahon has said that economists at John Dunham and Associates say the numbers in her plan check out, Fred Carstensen, director of UConn’s economic analysis center, said the plan could spell trouble for the deficit.
Carstensen said McMahon’s plan contains some good ideas like proposals aimed at encouraging job training. One provision in McMahon’s plan encourages private-public partnerships to match employers with workers looking for immediate jobs training.
But Carstensen said the positive aspects of the plan were out of sync with each other and her proposal to drastically cut taxes.
McMahon, the Republican nominee for the Senate seat being vacated by Sen. Joseph Lieberman, calls for lowering middle class taxes and keeping the capital gains and dividend tax rate at 15 percent. Her plan also calls for reducing the federal corporate income tax rate from 35 percent to 25 percent.
Carstensen argued that cutting taxes, in and of itself, does not encourage economic growth, which is what he said Connecticut needs.
“You’re talking about just savaging federal revenue and I don’t know how the hell she would pay for it,” Carstensen said. “If tax cuts are your first priority than clearly there will be no money for your other proposals unless you plan massive deficit spending.”
On the contrary, McMahon’s plan calls for closing the federal deficit by reducing spending by one percent each year. As she was touring a Berlin business Thursday McMahon said those cuts would not be across the board cutbacks, rather priority-based, targeted cuts that amount to about $38 billion a year. But McMahon has said during the course of the campaign that she would not cut defense spending or Medicare.
McMahon said she plans to find and eliminate duplicative programs, as they’re laid out by the Government Accountability Office, and end loopholes and subsidies to some businesses.
“We can really find $38 billion in overlap,” she said. “... There are places to find this $38 billion, I think, without really impacting our services.”
Carstensen said that might be tough to do. There is likely fat to trim in the federal government, but it’s difficult to do without impacting someone, he said.
“There’s probably some reasonable ways you can get more efficiency out of government but that means there’s going to be less money in someone’s pocket,” he said.
Many of the programs frequently identified as overlapping may not be as duplicative as people think, Carstensen said.
“The may appear similar but they may serve different populations,” he said.
At the end of the day it’s tough to reduce spending without the absence of that money having a ripple effect on the economy, Carstensen said. For instance, if you reduce spending on food stamps it would likely create all sorts of health problems for the families that currently receive them, he said.
Carstensen said he would like to see McMahon clarify parts of her plan with more specifics like the models her economists used to asses the plan’s budgetary impact.
Todd Abrajano, McMahon’s spokesman, questioned how closely Carstensen had looked at the plan, given that he came to such a drastically different conclusion than the campaign’s economists. He said the plan will incentivize investment in the American economy while putting more money in the pockets of middle class families.
“Without any sort of detailed analysis I find it difficult to believe his conclusions are correct,” Abrajano said.
On Thursday McMahon defended the numbers in her plan as sound and ready to be implemented.
“I’ve had an economist model my plan to make sure the numbers work and they do. So I’m really going to try very hard to pass that plan,” she said.
The McMahon campaign has pointed to her jobs plan frequently as it has hammered her Democratic rival, U.S. Rep. Chris Murphy, for characterizing his own plan to create jobs as a “work in progress.”
Murphy says his plan is adaptable in that he is able to include ideas he hears from constituents.
“What I said when I unveiled my jobs plan was I’m going to listen to people. And if people come up with better ideas, I’m going to put them in my jobs plan,” Murphy said earlier this month.
“I’m going to never stop listening to people. You know what? That’s okay. There’s not enough listening that happens in government today,” he added.
However McMahon said Murphy’s had plenty of time to formulate his plan. Her campaign has been emailing reporters almost daily with updates on how many days it’s been since Murphy was elected to office and not formulated a jobs plan. On Wednesday they said it was 4,977 days.
“To say he’s got a work in progress, I think that’s what the people of Connecticut are tired of hearing. They want to see what a plan of action is and that’s what I’ve put out,” McMahon said.
Though she has continued to tour small businesses around the state, hearing from business owners about what impacts them, McMahon said what she hears does not influence her plan, which is completed.
“I have already spent almost 30 years in business myself, I’ve been touring the state talking to many small business, not just this time but before. So basically my jobs plan is a result of my experience and touring the state,” she said.
McMahon unsuccessfully ran for the U.S. Senate against Richard Blumenthal in 2010.
Editor’s note: Days after this article appeared John Dunham and Associates responded to the observations made by Mr. Carstensen in this letter.
Tags: Linda McMahon, jobs plan, economist, carstensen, U.S. Senate race, Murphy
(14) Comments
posted by: Jackawa | August 24, 2012 8:11am
We are so screwed! This is the same tired “reduce taxes and eliminate regulations” = new jobs. Mr. Carstensen is right to question how this is going to work. How about identifying, and agreeing on, the root causes of America’s economic problems and then developing and implementing solutions based on that. Hint; it’s not about high taxes and regulations.
posted by: AndersonScooper | August 24, 2012 10:19am
Deficit spending? When it comes to Linda that’s a laugher! For years WWE has paid out dividends that have been far greater than their profits. This money has allowed the McMahon’s to get rich and diversify out of their pro wrestling monopoly, but it sure hasn’t created any jobs. (Well maybe the McMahon’s hired another steward for their household staff.)
Should we be surprised that McMahon is pretending her record tax breaks could be balanced by “simple” but undelineated spending cuts? Probably not…. After all, politics to Linda is just a soap opera, and does the truth really matter as long as we are entertained?
$17.00/share—WWE stock when it IPO’ed in 1999
$7.99/share—today’s price.
posted by: ASTANVET | August 24, 2012 1:28pm
So, Jackawa - you don’t think high taxes make a difference? If you need gas, and you’re near the border of MA, do you wait to buy it because you know it will be 10 cents cheaper? Do you file a 1040 EZ or itemize your deductions to take advantage of all those ‘tax loopholes’? Taxes make a difference for individuals and for businesses. Maybe we should shrink government to the size of reasonable taxation to stay competitive rather than getting a bigger fire hose of cash to be taken from the citizens, be laundered by the feds to give back to the state, reduced again as the state takes their cut before they “redistribute” it back to the towns, giving pennies on the dollar to an ‘affected’ population. it is crazy to think that government will pull itself back. Regulations- what value added do regulations have on business? none - it costs billions of dollars to figure out the complex route between regulations to get anything accomplished. I’m not an anarchist, I believe in government - but we need to take a look at the size, scope and role of government in our state and nation.
posted by: redman | August 24, 2012 3:57pm
Carstensen said he would like to see McMahon clarify parts of her plan with more specifics. Would he like to see Murphy’s plan? Here it is: ...........
Please analyze that!
posted by: CB427 | August 24, 2012 4:17pm
To Hugh McQuaid: Do you have any background details on Mr Carstensen: represents UConn as an official spokesperson, Academic Position at UConn, himself personally, actively involved in Politics, etc., etc. Would help as to an understanding of his comments
posted by: Christine Stuart | August 24, 2012 4:38pm
CB427,
Carstensen’s wife gave money to Hilary Clinton, John Kerry, DNC, and Joe Courtney. Carstensen gave money to Denise Nappier and Republican state Sen. Tony Guglielmo. He also worked for two months for Tom Foley helping him develop and economic plan. He’s not a partisan. BTW In 2006 Linda McMahon gave 10s of thousands of dollars to the DNC. Does that make her any less of a Republican?
Christine
posted by: ALD | August 24, 2012 7:24pm
We are talking a US Senate seat here, not the President of the local High School Student Consul. The quality of either candidate’s jobs plan should be used as a key factor in helping to decide which of these two should be considered more qualified for the job. A High School level 300 word essay with no real deatils from either canidate should not be good enough.
I think Fred Carstensen is correct when suggesting that McMahon should provide more details to hers. At the same time Chris Murphy needs finish his 13 year work in process job plan and allow Mr Carstensen to review them both together. Assuming Murphy even has made a real start on any job plan beyond himself.
I would also suggest that both candidate’s more detailed jobs plan be submitted to a group of people ( business owners) who actually are currently in the business of creating private sector jobs for evaluation.
While I am sure some those people may never have earned a University degree they all have many real world concerns in common. A few are, meeting a pay role, profit and loss, and international competition.
I value their opinion far greater then people who do not live with those concerns each day.
posted by: ... | August 24, 2012 7:27pm
I’m going to paraphrase what I heard from a fairly smart journalist recently: Why do you care about their ‘plans’? A single senator is only 1% of the Senate, and a single rep. is a fraction of 1%. Their plan isn’t going to be ‘the plan’. They’ll maybe get a few pages or footnotes of a plan that may or may not even come to a vote.
Political policy plans on a national level are more often than not a gimmick because their is no meat and a lack of understanding. Plus, no matter who wins this, they’re going to get the party platform orientation and follow accordingly.
P.S. Having heard Carstensen speak before, he’s not a man who makes a point of pressing a special interest or political leaning in any way. It’s why the economic plans he aided with Foley in held both conservative ideas of finding efficiencies in state government (whether staffing reductions or program reviews), or increases in infrastructural spending (for short/mid-term job growth and long-term business interest/investment in the region).
posted by: eastrivertype | August 24, 2012 7:54pm
Like anyone other than the most partisan Democrats believes anything Fred Carstenson has to say.
posted by: ALD | August 25, 2012 7:22am
” Why do you care about their plans? A single senator is only 1% of the Senate, and a single rep. is a fraction of 1%. Their plan isn’t going to be ‘the plan’. “
And this came from a “smart” journalist? So it must then be OK to send people with no, or poorly thought out ideas to the Senate because each senator is only 1% of the problem?? If all 50 states thought that way and decide it’s OK to send one empty suit to the Senate as long as their other Senator is firing on all cylinders then we only have 50% of the Senate incompetent?? Well, I guess as I do think of that, it probably that would be an improvement.
However, the U S Senate is not the local High School Student consul. If we are going to fix what is wrong in this country one of the places that clearly needs a lot of work is Washington…... And fixing Washington is going to take a lot of work….... 1% at a time.
posted by: GoatBoyPHD | August 25, 2012 9:16am
I’ve no doubt Mr. Carstensen is a neutral source.
I’ve found his recent job creation projections to be overly optimistic—we’ve seen the dead cat bounce in the recovery where some companies cut too deep and needed to rehire quickly by restoring 1/3 of the cut jobs.
Since January 2011 we’ve added about 5,100 jobs here in CT and there’s no reason to think that housing trends and the pressing need to act on the Federal Deficit will further encourage growth in CT in the next couple years. Population is older and stagnant. We’ll face a Romney Recession before we see those 78,000 jobs recovered
CT doesn’t have the natural resources to compete with the fracking and agricultural states moving into a global commodity demand cycle.
McMahon? I love the Murphy apologists defending their candidate’s ineffective leadership in the House as a normal part of the system where alla re faceless follwers. Except for guys like Paul Ryan who make a point that there is a brass ring of leadership and peer recognition in the House for those with leadership capability.
Peer recongition, rising above the norm, grabbing the brass ring—none of these desirables describe Murphy’s career so far.
Aspiring for office and Leadership in office are two different traits. Murphy has the former in spades and is seemingly deficient in the latter.
?
posted by: ALD | August 25, 2012 11:30am
...,
No misunderstanding that you were paraphrasing this “fairly smart” journalist. However I do take exception with his or her logic that since a single senator is only 1% of the Senate that we shouldn’t care about what plans a senator has in mind in regard to specific issues, like job creation.
That makes about as much sense to me as saying that as a cancer patient should not care about what a single Dr on that person’s medical team may think is the best course of treatment, because that one Dr is only part of the whole team.
If I were that patient I wouldn’t want any Dr anywhere on my team who was comfortable flying under the radar screen, just going along for the ride, because there are other’s doing the hard thinking. As a voter I don’t want my next Senator to think that since they are only 1% of any possible solutions they don’t need to present complete ideas and be willing push as hard as they can, in support of their ideas.
Let someone else’s senator be happy just being one of the 1%
OK??? 
!!!!!
posted by: CT Jim | August 25, 2012 2:54pm
Goatee so you put Ryan down as a leader??? Really??? A leader of what? Of right wing bills like the personhood bill him and Akin wrote that outlaws most forms of birthcontrol and takes a way a womans right to govern her own body? The same Ryan that penned a bill to redifine what the definition of rape will be? The same Ryan that in his budget his idea of closing loopholes while giving away the treasury is to eliminate the mortgage deduction from your taxes?? Do you want to explain to the homeowners in CT how much that will cost them to give Willard a tax cut?? Thats not leadership Goatee thats a right wing insane person thinking that every republican will just drink the juice. Oh yeah and his medicare voucher program along with destroying Social Security im sure you view as leadership.