The Ticker Quick Views on Politics, Economics and Finance
Romney and Christie’s Hard Truth Problem
The theme of Chris Christie’s Republican National Convention keynote address tonight was “hard truths.” The hard truths Chris Christie’s mother told, the ones he has told as governor of New Jersey, and the ones he says Mitt Romney will tell if elected president.
But sometimes, when telling the hard truth is especially hard, Chris Christie dissembles.
And Mitt Romney -- well, I will just note Christie’s use of the future tense. Christie promises Romney “will tell us the hard truths.” It would be hard to contend that he has done so in the past.
I have no reason to doubt that Christie’s mother was a straight shooter. So, at least he went one for three in tonight’s speech.
Christie’s record in New Jersey is mixed. He really has told some hard truths and defended some politically difficult positions, and the state is better off for it.
He has put a focus on pay and benefits structures that have made public employment in New Jersey unaffordable, and has gotten good though imperfect reforms passed through a Democratically controlled legislature.
Part of his 2010 budget plan was eliminating property tax credits -- effectively, raising New Jersey residents’ net property tax bills. This wasn’t popular in the state with the country’s highest property taxes, and it drew fire from the right and left, but it was a necessary part of addressing the state’s dire fiscal situation.
Unlike most Republicans, Christie has declined to take the Americans for Tax Reform pledge against tax increases. And he has loudly defended Muslims against baseless attacks from some conservatives, even though doing so might hurt him in a future presidential primary.
But a hard truth Christie absolutely will not tell is that every one of his budgets has been unbalanced by more than $2.5 billion. When Christie said tonight he has signed “three balanced budgets,” he wasn’t telling a hard truth -- he was using bad accounting to hide a hard truth.
Each year, Christie has achieved “on paper” budget balance by making inadequate payments into the state’s pension fund, effectively borrowing from the fund. Christie has touted this year’s $1.03 billion pension fund payment as the largest in the state’s history. Too bad the state’s pension actuaries told him to deposit $3.74 billion.
And Christie said tonight that his pension reforms will save the state $132 billion over 30 years. But those savings are backloaded. Pension costs will continue to rise over the coming years and squeeze out funding for public services. Even after reform, the hard truth is that New Jersey still has a defined-benefit pension system that is unaffordable and exposes taxpayers to excessive investment risk.
Christie isn’t the first governor to underfund New Jersey’s pensions or to sign a budget that was “balanced” with gimmicks. And he’s not the only governor to brag about an inadequate pension reform -- New Jersey’s reforms are actually better than what most states have done in the last few years.
But Christie claims to be a unique truth-teller, and in these key areas, he has not been one.
As for Romney, his political career has been built around avoiding hard truths. He was a moderate when that was convenient and a conservative when that was convenient, always modifying his message to meet the demands of the audience.
Mitt Romney needs hard truths like a fish needs a bicycle.
Romney’s platform contains no discernable hard truths. At a time of record budget deficits, Romney is running on a plan to cut income tax rates by 20 percent. He says he will broaden the tax base to offset the revenue loss, but he won’t say how -- that would be a hard truth.
Romney says Medicare is unsustainable, and yet he promises no changes to the program before 2022, even pledging to spend hundreds of billions of dollars more than President Obama would over the next decade. Saying that Medicare cuts have to start now, as they do in Obama's plan, would be a hard truth.
Romney has a 59-point economic plan with no content about monetary policy or housing policy. The vast majority of the plan could have just as easily have been proposed in 2007, before the housing and financial crises rocked the economy. Saying what he would do about the specific economic problems of our time would probably involve telling some hard truths.
Maybe Christie has reason to believe Romney will start telling hard truths if we first elect him president. I actually think that’s possible -- it’s closely related to my Secret Economic Plan hypothesis.
And that’s the hard truth about Mitt Romney’s candidacy -- the only way to support him is on a leap of faith.
Read more breaking commentary from Bloomberg View at the Ticker.
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.