Romney, Perry Find Cain’s 9-9-9 Plan Isn’t So Simple: Ron Klain

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Oct. 18 (Bloomberg) -- Watching the other Republican candidates struggle to combat the appeal of Herman Cain’s 9-9-9 tax plan, I am reminded of a Senate campaign that I worked on in the 1980s, when our candidate was outspoken on a single issue.

Our pollster came in to brief us and said, “Sixty percent of voters in this state identify our candidate with this one, single issue.”

Horrified, a colleague sputtered, “How can we win if the voters think of our candidate as a single-issue candidate?”

The pollster smiled: “You don’t understand. Yes, in the voters’ minds, our candidate is connected with only one issue, and isn’t yet at two -- but all the others in the field have zero issues, and are struggling to get to one.”

Likewise, in this year’s Republican contest, Cain’s momentum comes both from the 9-9-9 plan itself, and from his focus on at least one clear idea -- misguided as it may be -- in a field of candidates who have none.

This is a wake-up call to Cain’s rivals that they won’t be able to stumble through the primaries merely by bashing President Barack Obama and compiling longer and longer lists of administration initiatives to roll back: They are going to have to put forward affirmative proposals.

A more immediate challenge for Cain’s opponents, however, is deciding how they will deal with the 9-9-9 plan, now that his candidacy and his proposal have taken center stage.

Cain’s Surge

Their first approach -- just ignoring the plan -- was an utter failure; each poll over the past month has shown Cain rising in popularity while his opponents failed to take him or 9-9-9 seriously.

Their second approach -- slapping at the proposal with dismissive jabs (such as Michele Bachmann’s comment that voters should “turn 9-9-9 upside down” and appreciate that “the devil is in the details;” or Jon Huntsman’s jibe that he thought “9-9-9 was a pizza price”) -- likewise was unsuccessful. Cain had his very best debate night at Dartmouth College last week, and the half-hearted swipes only served to elevate the visibility of his proposal, not take it down.

The 9-9-9 plan can’t be ignored, nor brushed aside, because it taps into powerful sentiments among Republican voters. The Cain campaign video promoting it is chock-full of red-meat bashing of the Internal Revenue Service; in a year when anti-government feelings are running at an unprecedented intensity, there can be no underestimating the power of that message for the party’s primary voters.

Lower Incomes

Cain’s plan also responds to Republican calls to lower corporate taxes by proposing the steepest reduction of those rates in history. It taps into the Republican belief that too many lower-income workers “avoid” paying income taxes, and would increase the burden on tens of millions of low-wage families.

It scratches the Republican itch for lower taxes for the wealthiest by cutting the federal income-tax rate on the highest earners to a stunningly low level: A person earning $1 million a year who now pays, on average, about $260,000 in federal income tax (after deductions and exemptions), would pay just $90,000.

As a result, the Republican candidates -- especially the front-runner Mitt Romney and the conservative establishment candidate Rick Perry -- are at a decisive fork in the road: Embrace 9-9-9, or oppose it. Neither is a very good option.

To oppose the plan in the Republican primaries is to take a position that will be seen by the party’s voters as a defense of the status quo, in a year when the energy and enthusiasm are with the grass-roots, insurgent wing.

Emotional Appeal

Romney (to a great extent) and Perry (less so) are already vulnerable among Republican voters as “insider” candidates; standing against the most audacious “change” plan in the Republican universe will only reinforce that perception. Trying to pick it apart with facts and figures (a strategy foreshadowed by some campaigns’ comments) will be likewise unavailing, given the emotional and evocative appeal that 9-9-9 has for the party’s base.

But conversely, if Romney or Perry embraces the plan to gain favor with primary voters, he would court disaster in the general election. For tens of millions of Americans making between $40,000 and $100,000 a year, and who spend virtually every dollar they earn on basic goods that would be subject to a new 9 percent federal sales tax under Cain’s plan, 9-9-9 is a massive tax increase. A typical family of four making $70,000, paying about $7,000 today in payroll and income taxes, would owe more than $12,000 in federal income and sales taxes under Cain’s blueprint.

General Election

Right now, Republican primary voters who are moved by rabidly anti-IRS, anti-government zeal are prepared to embrace the 9-9-9 plan regardless of its effect on their personal pocket books; in the general election, where pragmatic, non-ideological voters are the swing bloc, the 9-9-9 proposal’s impact on middle-class voters would be fatal.

The lift that 9-9-9 would provide to a candidate in the Republican primaries would turn to lead in the general election.

This conundrum is why, thus far, Romney has damned 9-9-9 with very faint criticism, saying in the last debate only that “simple answers are always very helpful, but oftentimes inadequate.” What? Romney’s view is that 9-9-9 is “helpful” but “inadequate”? What would be “adequate,” then? 10-10-10? 11-11-11? This vague and confusing position can’t be sustained over the long run.

Primary Perils

Perhaps what gives Romney particular angst in dealing with the 9-9-9 plan is the history of rough waters that have buffeted Republican front-runners when trying to navigate the primary season’s recurring flat-tax tidal wave.

What Romney must particularly avoid is the mess that nominee Bob Dole got himself in during the 1996 campaign. Dole first spent the primary season battling Steve Forbes’s flat-tax plan, only to reverse himself and embrace the flat tax when he added Jack “15 percent” Kemp to the ticket. He then distanced himself from his running partner and relegated Kemp to obscurity in the final month of the campaign, when it became clear that the tax plan was a political liability.

If Romney or Perry takes a strong stand against the Cain plan, they will make the primary race more difficult for themselves, at a time when neither can afford to antagonize the activist voters who dominate the process. But if they try to make Cain’s plan their own, they are signing on to a program that will sink them in the general-election campaign.

(Ron Klain, a former chief of staff to Vice President Joe Biden and a senior adviser to President Barack Obama on the Recovery Act, is a Bloomberg View columnist. He is a senior executive with a private investment firm. The opinions expressed are his own.)

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