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John Kasich Outlines Broad Economic Agenda in New Hampshire

GOP presidential hopeful John Kasich pledges to balance the federal budget in 8 years and transfer many responsibilities to the states.

NASHUA, N.H. -- Presidential hopeful John Kasich outlined his economic agenda in front of a crowd of students at Nashua Community College, pledging to balance the federal budget in 8 years and transfer many responsibilities of the Department of Education and Department of Transportation to the states. The underlying message: Believe him because he has done it before.

Standing to the side of a giant ticking clock showing the pace of the rising national debt, the Republican governor of Ohio proposed that as president, he would “immediately” put the nation on a path to a balanced budget, and would accomplish it within eight years. And he promised to work with Congress and the states to pass a constitutional amendment requiring a balanced budget.

“To keep it balanced, I will start the process to amend our constitution, to require Washington to balance its budget every single year like states and like families in America,” he said.

Kasich cites his record on the campaign trail as evidence that he can get the job done, noting he “was the chief architect of first balanced budget in a generation,” while he served as chairman of the House Budget committee in the 1990's and wrote three balanced budgets as Governor of Ohio.

“It wasn’t easy, folks,” he said. “You step on a lot of toes when you shake things up from top to bottom.”

Balancing a budget in eight years is a shorter time frame than others have proposed. The No Labels organization, a bipartisan group, which Kasich spoke to on Monday, wants a balanced budget by 2030, but former Massachusetts Gov. Mitt Romney supported balancing the budget in 8-10 years when he ran for the White House in 2012.

Kasich also proposed reducing the number of tax brackets from seven to three. His plan includes cutting the top rate from 39.6 percent to 28 percent, increasing the Earned Income Tax Credit by 10 percent, eliminating the death tax, and reducing long-term capital gains rates to 15 percent. He proposes cutting the top business rate from 35 percent to 25 percent.

“Look, you know better how to spend the money you have in your pockets then sending to somebody in Washington so they can figure out what’s best for you,” Kasich said.

James Pethokoukis, an economic policy analyst at the conservative-center American Enterprise Institute, says Kasich’s tax proposals won’t necessarily set him apart from other Republican presidential candidates.

“That is sort of what you’ve seen from the other plans: Christie, Bush, several others. In a way it is a very cookie cutter tax plan,” he said, adding that losing revenue through the tax cuts could make it harder for Kasich to keep his first promise to keep the budget balanced.

“He’s going to do it through Medicare reform, through freezing non-defense discretionary spending, which is already done a lot because of the sequester deal … by freezing it, it will be even lower. It will be really at historically low levels.”

Kasich speaks frequently on the campaign trail about his fights over reforming the Pentagon in Congress, mentioning his battles to block the B-2 bomber, but maintained that although he wants non-defense discretionary spending frozen, he wants to increase defense spending $102 billion (17 percent) between 2017 and 2025.

“As president I will look across that river every day to make sure that money we spend will go to help our men and women in the military and not bureaucracies,” he said.

Kasich’s tax outline met swift denunciation from Democrats in New Hampshire, who claim the proposals will primarily benefit the wealthiest Americans.

“Kasich may try to paint himself as a different kind of Republican, but his plan to slash Social Security and programs that help the economy while giving tax cuts to the wealthiest proves he’s just another Republican who refuses to look out for the middle class,” Ray Buckley, Chair of the New Hampshire Democratic Party, said in a statement.

“Kasich is going to run into that criticism but I think you just say look, this is part of a comprehensive tax reform that will be pro growth. But when you increase the EITC, you are basically going to trade away rate reduction for progressivity,” said Gordon Gray, the Director of Fiscal Policy at the center-right American Action Forum. “The EITC is our largest anti-poverty measure. It’s pro work. It’s for people working.”

Kasich wants to put a 1-year freeze on major new regulations after he takes office. He also proposed reducing the Department of Education into four block grants, which he would then send back to the states.

“It’s time Washington stop micro-managing education,” he said. “Education is a local issue to be decided by parents, our communities, and our local educators.”

In his energy proposals, Kasich highlighted approval of the Keystone XL Pipeline and finding new ways to produce more energy from oil and gas, alternative energy, renewables, “and anything else that we can find.”

Kasich’s proposals on Thursday don’t go into detail about how he would reform social security, but he was asked in Nashua how the federal program would need to be restructured, and mentioned that he would be releasing more detail in the future, but that people’s benefits may need to be reduced.

“Social security is so sensitive. It has to be stabilized,” he said, also mentioning, “We are going to have to work with some Democrats who know this needs to be fixed.

Social security and other entitlements are necessary portions of proposals for a balanced budget, but Pethokoukis noted that there’s a reason why presidential candidates might not release those details at the same time. “When you roll it out at the same time as you roll out the tax plan, some might say ‘well gee you are cutting social security to pay for your tax cuts.’ Candidates certainly don’t like that association, and that might be one leap someone might make.”

Kasich’s agenda also includes transportation reform, including returning the federal gas tax to the states. “You keep your money and you fix your roads the way you want to,” he said. “Keep it right here in New Hampshire for what you need.”

Kasich made waves across the political world when he became one of only a few Republican governors to accept the Medicaid expansion under the Affordable Care Act. In his presidential agenda outline, he proposes giving per-member per-month Medicaid allocations back to individual states. “I’ll send Medicaid back to the states as well,” he said. “Right now Washington makes it so hard to try new ideas, that it seems as though nothing ever better gets done.”

In his remarks in Nashua, Kasich acknowledged that there would be skeptics of his plan, and he needs the support of those watching to help carry it out.

“All the politics, all the focus groups, all the polls, all TV ratings need to go out the window, and we need to come together,” he said. “We need to come together to do what’s in the best interest of our country.”