COLUMBIA, S.C. – Texas Gov. Rick Perry proposed an economic plan Tuesday that would dramatically lower taxes on the wealthy, sanction private Social Security accounts and deeply slash federal spending on domestic programs.
The proposal from the Republican presidential candidate would give Americans the option of paying a 20 percent tax or keeping their current rate, which now rises to 35 percent for the most wealthy. Perry also would eliminate a variety of taxes that mainly affect the rich, as well as the income tax on Social Security payments, which would benefit millions of retirees.
Perry told reporters he didn’t “have a problem in the world” if his plan delivers millions of dollars to the richest taxpayers, and that he assumes they will use the windfall to create jobs. He also dismissed criticisms that the plan would widen the federal deficit.
For Perry, the presentation of his economic proposal was an effort to change the subject after weeks in which his faltering debate performances have derailed his campaign.
Perry’s economic announcement came as he sought to bolster his campaign by hiring a raft of new campaign consultants. One of the additions is Austin, Texas, lobbyist Joe Allbaugh, a tight-fisted manager who helped run George W. Bush’s 2000 presidential campaign.
The plan announced Tuesday threaded between those already released by other GOP candidates – including the simple “9-9-9” plan by businessman Herman Cain that would shrink income and corporate taxes to single digits while enacting a national sales tax, and the 59-point economic plan set out by former Massachusetts Gov. Mitt Romney.
Before an invited audience of 150 South Carolina supporters, Perry called his tax proposal “the kind of bold reform that is needed to jolt this economy out of the doldrums.”
Perry said he would balance the federal budget by 2020 by spurring economic growth, cutting discretionary federal spending by at least $100 billion a year, and overhauling Social Security, Medicare and Medicaid, the main drivers of future deficits. As an example of where he would cut, Perry said federal spending for elementary and secondary education could immediately be halved, saving $25 billion.
Peter Morici, a conservative economist at the University of Maryland, said the plan “falls short in two important respects: It won’t encourage many better investment decisions and foster growth, and it will spin the federal deficit permanently into the stratosphere.”
He estimated that Perry’s plan would cost the federal government $900 billion a year in lost revenues. A Perry economic policy adviser, Sean Davis, said the campaign could not provide a projection of the potential revenue loss and would leave those estimates to others.
The announcement, at a plastics factory on the outskirts of Greenville, S.C., was part of a brief swing through the first Southern primary state, which is essential to Perry’s hopes of going head to head with Romney in later contests.