Sunday, Oct. 23, 2011 | 2 a.m.
The wacky battle that Nevada Republicans are waging with other states over who will vote or caucus first, will likely determine how relevant the Silver State becomes in selecting the party’s presidential nominee.
If we’re relevant, Nevadans could see a lot of the candidates in the coming months. If we’re not, then last week’s national debate in Las Vegas might have been the one shot residents had to see the field on their home turf, addressing the state’s singular issues.
To that end, the Las Vegas Sun sat down with six of the seven candidates who traveled to Las Vegas for last week’s debate. We pressed them on issues that might not come up again as they battle their way through the early primary states — foreclosures, Yucca Mountain and online poker, to name a few. While the field mostly shares a minimalist approach to government intervention — in housing, nuclear waste and funding the green energy industry Nevada has worked hard to cultivate — they don’t always agree.
Photo by Christopher DeVargas
“Vegas gets helped the most, Nevada gets helped the most, when our national economy is booming. You start with the biggest problem.”
Herman Cain has a point. Though Las Vegas has discussed diversifying its economy since the markets crashed, tourism remains the dominant industry — and its success depends on people elsewhere being flush with cash to come and spend here.
Cain’s big-picture approach boils down to this: “The market will reset itself if you get government out of the way.”
That means no direct role for the federal government in mitigating foreclosures, except repealing certain bank regulations he blames for closing some banks that “might be willing to do some workouts with some of these homes.”
It also means “wean[ing] yourself off” federal education money, such as the $20 million in Department of Education money coming to Clark County’s Turnaround Schools program.
And while Cain insists that “there is a place” for Nevada’s fledgling renewables industry in his national energy strategy, it doesn’t involve the government helping to pay for it: Cain says it can thrive on private capital “if this economy’s growing the way it’s supposed to grow.”
But Cain’s prescription for growing that economy — his “9-9-9” tax plan — may squeeze Nevadans on the way to recovery. The nines in Cain’s plan stand for income, corporate, and sales tax rates. And while together they lower the net tax burden on the country, it’s not evenly distributed.
The 9 percent in federal sales tax would come on top of existing taxes on purchases, meaning Las Vegans, rich and poor, would see a whopping 17.1 percent sales tax on most items they buy.
And then there’s the 9 percent income tax. While a family earning about $1 million a year would likely receive at least a $25,000 tax break, middle class families earning about $50,000 a year would pay about $5,000 more per year. (On Friday, Cain said he would exempt individuals and families below the poverty level from paying income tax.)
Nevada’s median income is $51,001.
Photo by Leila Navidi
To hear Texas Gov. Rick Perry tell it, the key to solving all of Nevada’s woes is job creation. In pursuit of job creation, Perry would leave the foreclosure crisis alone, allow unemployment benefits to expire and see if other states, who may see an economic benefit, are interested in hosting the nation’s nuclear waste instead of burying it at Yucca Mountain.
“Getting back to work is the best tonic that can happen,” Perry said in an interview with the Las Vegas Sun last week. “It is the best tonic for this economy period. Whether your house is underwater or not, getting Americans back to work means more wealth being generated and new jobs are being created.”
Perry is in line with the rest of the GOP field when it comes to a hands-off foreclosure policy. He opposes government involvement in loan modifications, addressing principal imbalances or the glut of inventory.
Nevada suffers not only from the highest foreclosure rate, but the highest unemployment rate.
But don’t expect Perry to support any extension in emergency unemployment benefits — a move that could cost 44,000 Nevadans their weekly unemployment check. “I would stop extending (unemployment),” he said. “And I would get on to creating jobs. That’s what Americans are looking for.”
When it comes to renewable energy, Perry would end federal incentives.
“I don’t think the federal government needs to be involved in the subsidization of energy, period,” Perry said. “Not renewable, not traditional.”
Perry does favor tax credits for energy research and development.
As for Yucca Mountain, Perry called for “substantial conversation.”
“Is there a state out there that actually wants that facility, that wants to have the economic impact it can have?” Perry said. “I don’t know whether Yucca Mountain is the appropriate place or not. But we can’t kick this can down the road another 40 or 50 years.”
Photo by Steve Marcus
If any candidate in this race knows Nevada it’s Mitt Romney, who won the 2008 caucuses with 51 percent of the vote, was the first on the ground in the 2012 race, and has used a Nevada stage to unveil everything from his first commercial to his national jobs plan.
So when he prescribes economic remedies for state problems, he does it with local perspective.
“It’s impossible to get housing to recover as long as you have 13.4 percent of Nevadans out of work. You’ve got to get Nevadans back to work with good jobs,” Romney told the Sun. “Is there some way of helping people refinance their homes? With lower-priced debt? We’ll look at those things, but the key thing for me is let the market do its work. Get the foreclosures washed through the system ... let the market rebound from the bottom that it hits, and get people back into homes.”
Romney, a career businessman save for one term as Massachusetts’ governor, also turns to the free-market on green jobs investment and training — a “myth” and money-sucker, Romney said, that should be left to private enterprise — and high-speed rail.
Romney doesn’t swing quite so far right when it comes to education. While others have called for dismantling the Department of Education, Romney wants to allow states to be more inventive.
“Spending more money on education doesn’t make it better,” he said. “We’re going to get creative finding ways to help people get through school at a more reasonable cost.”
Romney easily rattles through local issues, advocating that Nevadans “have the final say about whether Yucca Mountain becomes a repository for nuclear waste,” pledging to keep investing in the drones flown from Creech Air Force Base, and promising an answer on online poker — he anticipated the question — “before the caucuses come along.”
So why hasn’t he yet locked down the race?
“You ask Nevadans today, tell me about each of the Republican candidates, there are not very many who could do that. So they’ll focus more and more, they’ll get to know us better,” he said. “Here in Nevada, I was pleased to have them give me a good boost. I’m hoping that’ll happen again.”
Photo by Leila Navidi
U.S. Rep. Ron Paul sounds more like a Nevadan than a Texan when it comes to his passionate opposition to sending the nation’s most radioactive waste to the Silver State.
“It just undermines the entire principle of states’ rights, by 49 states ganging up on one and saying, ‘Ha! It looks like you have a good place to put our garbage’ and use force to do it,” he told the Las Vegas Sun last week. “We have quite a few nuclear reactors in Texas. I just flew over West Texas. I bet they could find a place out there and dig a big hole.”
But when it comes to distressed homeowners in Nevada, Paul has a somewhat more painful message: Grin and bear it. Keep paying your mortgage and wait for the market to turn around.
“Yes, it’s a mess,” Paul said. “The mess demonstrates how badly things happen when you have this system of inflation and regulation.”
Paul believes the consequences of government intervention in the housing market are greater than the consequences of allowing the market to slowly recover — even if that means higher crime, more blight and loss of mobility for homeowners.
“We want people who made promises, who made contracts to fulfill their contracts. We want the people who committed fraud to go to prison and the people who made a lot of money and now are in trouble, shouldn’t get bailed out,” he said.
Paul also believes Nevada’s labor unions inflate wages.
“I understand wages out here are a little bit higher than they should be because they are union wages,” Paul said. “If you have wages artificially high it makes it harder to recover. You don’t want government interfering. Not only in interest rates and housing prices but wages, too.”
If those positions don’t sit well with some Nevadans, his hands-off philosophy might when it comes to online poker, which some see as a potential economic boon for the state.
“I think everything should be legalized that doesn’t do harm to people,” he said. “Let people make choices. So, yes, I think (online gaming) should be legal.”
When he was Speaker of the House, Newt Gingrich defined conservatism in the Republican Party. But when comes to Nevada’s problems, he appears willing to break from the party’s default talking points.
“What you want to do is renegotiate mortgages,” Gingrich told the Sun when asked about his position on foreclosures. “I’d write rules to make it profitable for banks to do it.”
It’s not that Gingrich doesn’t believe in the free market like his peers in the presidential field — though Gingrich, a professor by profession, says Adam Smith’s famous principles are something “conservatives never read but like to quote.”
But where others advocate letting the housing market “bottom out,” Gingrich says the most important thing is “to minimize forcing people out of their homes.”
He’s got a similarly nuanced position on clean energy: The government shouldn’t be throwing money at the problem, but it should be rewriting the rules so investors will.
For example, instead of the renewable energy loan guarantee program, “you could have a permanent solar power tax credit ... you’d have stability, so now you’d get capital investment.”
Gingrich complains that federal spending on education has “invested in nothing.” He advocates linking unemployment checks to mandatory skills training (underwritten by private industries). He also blasts “Republican incompetence” for the party losing the Latino vote.
(Gingrich is learning Spanish and pushing for a new visa system.)
While he didn’t vote for the infamous “screw Nevada” bill, he thinks there may be “a price, in fact, at which Nevadans would say ‘yeah’,” to Yucca Mountain. And he won’t give an opinion on legalizing online poker, even though one of his key Nevada supporters, Sheldon Adelson, wants it to happen.
But some solutions, he says, can be left to the country.
“A large part of presidential leadership is cultural,” he said. “It’s setting a standard.”
Photo by Charlie Neibergall/AP
Michele Bachmann offered the most sympathy for the plight of Nevadans of anyone in the GOP field.
“Las Vegas has the worst foreclosure crisis across the United States. This absolutely grieves my heart,” she told the Sun. “What a fantastic city and a place to live and do business, and yet the city is being devastated now by the economy.”
But she’s not offering much more than sympathy: The government, she believes, can help Nevada most by helping it far less.
“If there’s anything we’ve learned ... since 2008, the federal government interventions have been an abject failure at a very expensive cost,” she said. “That’s an even greater burden that people in houses underwater have to bear.”
Bachmann’s 11-point economic plan hasn’t received nearly as much attention as Cain’s 9-9-9 deal or Romney’s 160-page job creation proposal, but she enjoys some economic authority from her past as a tax attorney.
It’s through the lens of taxes that she explains other Nevada problems, such as its education system.
“When a state like Nevada is struggling economically, that means that the tax revenues are in all likelihood depressed, or lower than they would be,” she said. “That in all likelihood is why Nevadans aren’t able to pay for the cost (of education) on their own ... Keep that money in Nevada, don’t send it to Washington, D.C.”
Bachmann hadn’t campaigned in the Silver State before this week, and hadn’t thought through the local issues. Online poker? No opinion. Yucca Mountain? “It’s too detailed, I think, to just have to give it a short answer.” (She’s voted to refund the project.)
But she tailors her national economic message in local terms.
“People are just looking for a signal ... we have to send that signal, we’ve hit the bottom,” she said. “Then, because Las Vegas is such a fantastic city, you’ll see massive numbers of people come out here and buy their retirement home or their first home. And that demand builds up the economy. You’ll see housing swing back.”