June 22, 2011
Jon Huntsman’s fiscal management of Utah saw annual balanced budgets, a rainy day fund that grew by one-third and the largest tax cut package in state history. Yet anyone reading media reports about The Club for Growth’s white paper unveiled today might come away with a decidedly more negative impression.
This is to be expected. The Club (which is arguably the most effective conservative advocacy organization in the nation) issues white papers for each of the announced presidential candidates. Nobody gets a free pass. Everybody has a few blemishes. Still, it’s important to put things in context, and the central complaint — in terms of Huntsman’s actual record as governor — is Utah’s increase in spending. And here it is important to keep in mind that, unlike, say, Massachusetts or Minnesota, Utah’s population has seen an enormous surge — jumping 23.8 percent in the last decade — at a pace more than double the national population growth of 9.7 percent.
When population spikes, as it did during Huntsman’s time in office, one could assume expenses would also rise. This does not entirely excuse the increase in spending, but it should be taken into consideration.
Additionally, unlike other states, Utah spends about 50 percent of its revenue on education. This may not make a difference to fiscal hawks, but it is at least worth noting.
On the positive side, Gov. Huntsman’s fiscal management saw Utah’s rainy day fund grow from $146.1 million in 2006 to $418.5 million in 2010. Even as the national economic outlook soured, the fund remained untouched in large measure thanks to the $600 million dollars Huntsman slashed from the state’s 2009 budget.
What is more, Huntsman engineered the largest tax package cut in state history, for which the Utah Taxpayers Association awarded the governor the “Taxpayer Advocate” award. The Cato Institute likewise praised Huntsman and put Utah atop its ranking of best state tax regulatory structures in 2008.
The same year, the Pew Center pegged Utah one of the best-managed states in the union. “Utah has been a clear leader in sound government based on smart planning and effective performance management that emphasizes long-term results,” the 2008 report reads.
But the accolades for Huntsman and his steering of the Beehive State don’t end there. Utah captured Forbes coveted top ranking for business and careers when they found in 2010 the state had expanded its economy 3.5 percent annually in the last-half decade, a rate which outpaces all but one other state.
It is fair to say that some of Huntsman’s past rhetoric concerning controversial issues like cap and trade, climate change, TARP, etc., leaves room for skepticism. Huntsman strikes me as the kind of guy who is intellectually curious and open to considering a myriad of policy solutions — which means he doesn’t immediately dismiss even bad ideas. Dogmatic conservatives may lake little solace in this, but Huntsman’s actions probably serve as the best predictor of future behavior. And, in this regard, his pro-growth stance and record of tax cuts is encouraging.
A 'Conservative Problem-Solver'
The latest GOP presidential candidate talks about cutting defense to better compete with Asia
By DANIEL HENNINGER
No Republican presidential candidate stirs more curiosity than Jon Huntsman. "What about Huntsman?" You hear it all the time. Who is Jon Huntsman and where is he coming from? On the morning after he announced his presidential bid in front of the Statue of Liberty this week, we hitched a ride on his campaign plane to South Carolina, seeking answers.
Mr. Huntsman is addressed as "governor" because he was the two-term governor of Utah. Lots of governors run for president. What causes curiosity about Mr. Huntsman is that he has accumulated a remarkably full and intriguing biography in his 51 years. Mr. Huntsman became fluent in Mandarin Chinese during two years he spent in Taiwan as a young Mormon missionary. He worked in the Reagan White House. In the George H.W. Bush administration, he worked first on trade matters and then as Mr. Bush's ambassador to Singapore.
For the second Bush presidency, he was deputy trade representative. In 2004 he was elected governor of Utah, re-elected in 2008 and then most famously and curiously, accepted President Barack Obama's offer in 2009 to be the U.S. ambassador to China.
His father is Jon Huntsman Sr., the now-billionaire founder of Huntsman Corp., a chemical company. His father's first company, Huntsman Container, hit the jackpot by creating the "clamshell" burger box, which was adopted by McDonald's.
It's no surprise that a man with this résumé, notably similar to that of George H.W. Bush, would—what else?—run for president.
"I'm a conservative problem-solver," Gov. Huntsman said over the engine roar of his campaign charter, on which the reporters in back were outnumbered by family members filling the aisles—his wife, four of their own children (most of them grown) and two younger adopted daughters.
If there's a short version of Mr. Huntsman's core message, it is that America needs to start competing again, and aggressively, in the global marketplace. "We need to get back in the game," he says, citing the lapse of free-trade momentum as a primary failing of the Obama years. "If we don't do it, China will move ahead with free-trade agreements as they are in Latin America, built around procurement practices that benefit Chinese companies."
In step with the other candidates, Mr. Huntsman wants to downgrade our military commitment in Afghanistan, but here, too, the argument is linked to regaining the U.S.'s competitive edge:
"Now we have one out of every six defense department dollars going to Afghanistan. We've achieved much of what we set out to do. We've been able to rout the Taliban from power. We've been able to disrupt to a large extent al Qaeda. We've had free elections going back to 2004. And we still have 100,000 troops on the ground. The future well-being of the United States is likely not going to be fought on the prairies of Afghanistan. It's likely to be the result of our ability or inability to compete competitively across the Pacific against the rising giants."
Terry Shoffner
He adds he is "not suggesting pulling out completely" but would "leave behind a very capable fighting force that is appropriately positioned given the asymmetric threat that we face—the intelligence-gathering capability, the special forces capability, the training of Afghan forces capability, and the ability to work with friends in the region who believe as we do that those who are coming after us, we should go after very aggressively."
He is preoccupied with Asia: "I've seen the rise of Asia as a business guy, I've seen it as a diplomat. I think every day how we're going to better position ourselves to compete in the next century with the likes of China and India."
Mr. Huntsman believes the answer to this grand challenge lies in Utah. Not Utah alone, of course, but in the 50 individual states. Nothing he said in our conversation, at least, suggests he has grand plans for Washington: "I think the appropriate role of the federal government is to carefully measure out the nation's competitiveness. When are taxes too high and making us less competitive than our major trading partners? When do we reach the point of onerous regulation and have to throttle back so we can maintain a competitive posture?"
The states, he says, know how to compete and like to compete: "As a country we should maintain a level playing field for the states. Equip them with what they need to survive and be competitive and then be attentive enough to learn from them when it comes to possible national models," for example, health care. Mr. Huntsman says he favors repeal of the Obama health-care law—"this behemoth."
One model he has in mind is Utah under Gov. Huntsman. "I'm not running from my record," he says, letting his interlocutor figure out who in the race he thinks is. The record he cites is a new, 5% flat income tax ("We took 30% out of the income tax"), a lowered sales tax and a robust, high-growth state economy. Anticipating the inevitable observation that governing Utah isn't the same as running, say, Texas, the governor offers an analogy: "Sure it's a state with only three million people, but Singapore is a country of only five million people and it tops the world's best over and over again in terms of how to compete."
Over the next few months, Mr. Huntsman is going to try a national version of the problem-solving approach he used in Utah: "Gather together stakeholders who have something invested in our economic well-being, whether small business people, bankers, traditional investors. I want to gather them together as I did in the election of 2004 when I ran for governor. Our economy was OK, but it was tired, and our entrepreneurs weren't deploying their capital in our market. We went through a very rigorous exercise in 2004 before the election and did a very specific 10-point plan, and after the campaign I said, 'This is our bible. Don't try to sidetrack me; it's the most important thing for the state.' We went through all 10 points."
He wants to move that approach "to the national stage, with businesses West Coast to East Coast. I want to know in specific terms what needs to be done on day one, so there is no misgiving about how we revive this economy and get it moving forward in a sustainable direction."
Mr. Huntsman says, "Our priorities need to revolve around ensuring that we have a competitive environment that speaks to the attraction and aggregation of capital, the deployment of capital." To that end, he cites three policy goals: tax reform, regulatory reform, "and I want to mention a third I think is going to be extremely important for our economy long-term, and that's energy independence. It's a low hanging fruit." What comes next isn't quite what one expects. He's talking about natural gas.
"Everybody wants more sun, everybody wants to use more wind," for which they had special zones in sunny, windy Utah. "But it's going to take years and years to perfect those technologies and distribution systems. We're going to need a transitional product to get us from here to the decades of the future when these things will be more viable. I can't think of a better product than natural gas."
He thinks the recent natural gas finds in the U.S. "completely change how we operate and how we view our economy. I believe this is just revolutionary." He favors drilling to get it. "Why not take advantage of something we control, when it's derived from our reserves, it employs our people and enhances our economic base?"
He qualifies the "energy independence" goal: "Look, we're never going to be totally energy independent. You can talk in those terms but we're always going to be accessing raw materials from elsewhere in the world. But we can do better than 60% of imported oil."
Subsidies for energy? "I don't like subsidies. I'd like to see us phase out all subsidies. Maybe a nudge in terms of a tax incentive like we did in Utah to convert cars to natural gas." A great enthusiast of natural-gas-powered vehicles, Mr. Huntsman argues that his tax credit for them was a huge success in Utah: "They were in demand in such numbers that car dealers couldn't find any more natural-gas cars for sale in the U.S."
He'd block-grant Medicaid back to the states. "Let states determine what the percentage of poverty levels are, and let public officials rise or fall on how local citizens feel about those decisions. They're in a much better position to understand their vulnerable populations than at the federal level."
Our conversation keeps coming back to Asia. When I sat down, I brought the former ambassador to China news that the Chinese said they were releasing dissident artist Ai Weiwei. "That's good," he says. "Now at least 500 more to go." Mr. Huntsman talks animatedly about how we "need to redefine what it means to be a friend and ally of the United States." Looking beyond the traditional allies of Japan and South Korea, he thinks there are "other countries in Southeast Asia, in South Asia and perhaps in the Indian Ocean who would want to shore up a relationship that would constitute a new model going forward." I suggest, India? He answers, "Vietnam?"
What would China think? "They are not going to like that at all. Any move we make on their periphery, they are going to take as a step toward encircling them. . . . But our longstanding commitment in the Pacific region is to keeping the sea lanes open first and foremost, from which the Chinese have benefited enormously." He thinks "we have an opening there because of the concerns people have about China's military."
I ask what this means for his thinking on the role of the defense budget in the spending debates. "I'm consulting with some of the experts on exactly what a reconfigured asymmetric posture would mean to overall defense spending," he replies. That said, it sounds like defense cuts would be in the mix: "If you're willing to look with a critical eye at every aspect of government, whether we're talking about entitlements or were talking about the defense department, we can't take one off the table and say you can't touch this. It's intellectually indefensible."
Jon Huntsman, a discursive talker, brings a lot to the table. What remains to be seen is how he presents it all in a way Republican voters will want to buy. He's been pegged as the man running toward the middle—with past positions in favor of cap-and-trade regimes (now repudiated) and gay civil unions. But to win, he still has to pull votes from the conservative base. How?
"When people look at what we've done," he says, "they're going to say, 'He's a conservative problem solver.' I'm going to point people in the direction of what we've done as governor. I'm pro-life, strongly pro-Second Amendment. I think there are enough voters who will say, 'I may not like everything, but there's enough here to like.'"
It's time to let the governor finish a sandwich before he visits a TEC outdoor-grills factory in Columbia, S.C. He adds a final point on his own behalf: "I'm not trying to make things up as we go. I'm drawing from my own experiences, where I've seen it work. I want to make sure that what we advocate and say we believe in can be tied back to real-world experience. So when people say, 'What do you stand for, what do you want to do?' I can say, 'Here, 1,2,3, here's what I did as governor of a state.' I think that's going to help people to connect the dots."
Mr. Henninger is the deputy editorial page editor of The Journal.
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