For Pawlenty and another wannabe, Texas Gov. Rick Perry, there is another problem: Will their major narrative — we have served as governors and applied conservative policies and conservative visions, and shown how they can bring happiness, lower taxes and fiscal responsibility — hold up to scrutiny? Pawlenty, who has moved up to a very serious contender with the loss of Mississippi Gov. Haley Barbour, former Arkansas Gov. Mike Huckabee and Indiana Gov. Mitch Daniels from the race, is getting harsh criticism from some fellow Minnesota Republicans, most notably his predecessor as GOP governor, Arne Carlson. Carlson’s politics are much more moderate than Pawlenty’s. But his critique, focused on fiscal policy, is a serious one. Pawlenty, Carlson notes, used all kinds of budget tricks as he cut spending and cut state taxes, including “borrowing” more than $1 billion from the tobacco settlement that had been set aside for heath care, borrowing more than $1.4 billion from the K-12 education funding, borrowing more than $400 billion from the Health Care Access Fund for low-income families, accelerating tax payments and delaying bill payments. The result was not a balanced state budget but a huge $5 billion deficit, the seventh largest in the U.S. And to compensate for the state tax cuts, localities had to raise property taxes enormously.
For Perry, who won re-election by boasting about Texas’ surpluses and his sterling record of fiscal discipline, the post-election news was very different — a $4.3 billion deficit in the current fiscal year ending Aug. 31 and a projection from the state comptroller that the budget shortfall for the next two years will be $15 billion to $27 billion. At the same time, Texas has built in a major structural deficit of $10 billion annually, over education funding, primarily because Perry’s tax policies have left revenue woefully behind. Texas ranks 50th in the states in per capita spending, so this is not a problem caused by excessive spending but by harsh social policies combined with disastrous fiscal management. Quite a formula for a presidential campaign!
This makes for an interesting horse race. In Iowa, Pawlenty’s natural advantage, the proximity to Minnesota, could be undermined by the candidacy of Minnesota’s own Rep. Michele Bachmann, who was born in Iowa and is a heroine to Iowa’s conservative activists. In New Hampshire, Romney’s natural advantage could be undermined by Huntsman, whose fiscal conservatism and social centrism may find traction among the state’s primary voters. In South Carolina, who knows whether Newt Gingrich, Herman Cain, Bachmann or some other candidate might catch fire with a group of primary voters who consider ex-Rep. Bob Inglis (R-S.C.) and Sen. Lindsey Graham (R-S.C.) to be dangerous radicals? God knows who will emerge — or whether any candidate can develop a credible story line that can impress swing voters.
Norman Ornstein is a resident scholar at the American Enterprise Institute.