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INSIDER INFO -- FEBRUARY 2008
Loyalty Counts
Crowd Forming
Monkey Wrench
Spending Feud
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Loyalty Counts
Former Gov. Ridge stuck with McCain through thick and thin of presidential primary process
Former Pennsylvania Gov. Tom Ridge has a knack for making the early pick of who is going to emerge as the Republican candidate for President.
The Erie Republican became co-chairman of John McCain’s campaign last year and stuck to his guns in that regard even as McCain squandered his early front-runner status and campaign war chest advantage to the greater name recognition of upstart GOP candidate Rudy Giuliani, the former mayor of New York City and was left for political road kill as recently as last summer.
“What a difference a few weeks makes!” Ridge told friends a day after McCain swept to presumptive nominee status after several big wins in the Feb. 5 Super Tuesday primary contests.
With the departure Feb. 7 of chief rival, former Massachusetts Gov. Mitt Romney, McCain’s only challengers remain former Arkansas Gov. Mike Huckabee and Texas U.S. Rep. Ron Paul and both are way far back in the number of delegates won.
Now the question for Pennsylvania Republicans is whether McCain will do what Bob Dole and more seriously George W. Bush pondered but didn’t do -- select Ridge as the Republican nominee for vice president.
This year marks seven times Ridge has endorsed and worked for the eventual GOP nominee in the last eight cycles, and seven in a row. The only blip is 1980, when he and then-Republican National Committeewoman Elsie Hillman helped organize Pennsylvania for George H.W. Bush. Of course, even that endorsement didn’t hurt Ridge when first Bush, then his son, George W., later won the White House.
Still, many Pennsylvanians might have had pause to question Ridge sticking with McCain after this campaign imploded last summer. McCain, a U.S. senator from Arizona, ended up firing most of his staff and advisors. He jettisoned his “front-runner” campaign and returned to the mouthy, candid “Straight Talk Express” campaign bus style that worked well for him in his unsuccessful 2000 campaign.
By sticking with McCain even when his campaign appeared to be tanking and people were jumping off as if it was on fire, Ridge proved his loyalty as few did. And loyalty is a trait prized by both Ridge and McCain.
He also chaired McCain’s First Responders Coalition, which helped neutralize the perceived “911 Advantage” that former New York Mayor Rudy Giuliani was supposed to wield on that issue.
Now, as some networks estimate McCain has about half of the delegates he needs at the convention to win. As a result, many voices are counseling McCain to pick a conservative running mate to mend the rift some of his Senate positions have created with the party’s pivotal Right Wing.
Alfred R. Regnery, publisher of the American Spectator, wrote in a Wall Street Journal column Feb. 7 that McCain should “pick a conservative running mate early. Mr. McCain nees a young vice president with stellar conservative credentials so that conservatives can know that an acceptable successor is being trained and waiting in the wings.
“Nothing could endear conservatives more and nothing would make it clearer than Mc. McCain is serious about reaching out to him. . . One option would be 47-year-old Gov. Mark Sanford of South Carolina.”
As Ridge spends this weekend trying to help McCain sew up the Republican State Committee endorsement, Ridge is another obvious potential running mate, but not one who would meet the high bar of conservatives.
Ridge's vice presidential chances in 2000 were derailed when he publicly said he pulled out for family reasons. He also, sources said, deciphered that Bush’s vice presidential search committee chairman, Dick Cheney, would likely be the pick, not just the headhunter.
Eight years ago, conservatives started sniping at Ridge when he was in contention as Bush’s running mate and that likely would reoccur this year he were given serious consideration by McCain.
As Capitolwire, the Harrisburg-based Internet news service, wrote recently: “A group ranging from Roman Catholic bishops to conservative writer/activist Kate O’Beirne to former U.S. Sen. Trent Lott, R-Miss., objected to Ridge’s low-key support for abortion rights and congressional years skepticism about big weapons systems. But McCain doesn’t appear to have much of a litmus test, and generally resists efforts to impose one on him.”
McCain does care about winning, and that is where election math points to Ridge and the swing state of Pennsylvania in a general election. Given that Bush got 48.5 percent of the vote in Pennsylvania in 2004, and almost lost Ohio, and that both states are trending Democratic, McCain has to figure out how to win one of them.
There is no obvious vice presidential candidate in Ohio who can push McCain over 50 percent, for certain, in the fall. And as long as McCain is as pro-war as Bush, McCain has to hold the states Bush added to the GOP pile – Florida, Ohio, West Virginia – or replace any he might lose.
Another McCain option is Minnesota. Its popular governor, Tim Pawlenty, is another McCain fan, who could bring a blue state with 11 electoral votes to a potential GOP ticket.
Tim Russert of “Meet The Press” and NBC News thinks the close partnership of Huckabee and McCain that appears to have scuttled Romney’s campaign, could bloom into a ticket. And he says that “McCain needs a Baptist on the ticket to secure his base.”
But Huckabee raised taxes as governor, and as one eastern Pennsylvania GOP power broker said: “What does Huckabee get you in the fall? Also, now that Huckabee looms as his major rival, McCain may want him to stay in the race long enough to scuttle talk that he should be the veep pick.
As the GOP insider said: “Conservatives are vital to winning the nomination. Swing voters are what wins you the Presidency. And rallying the base? That’s what Hillary or Obama will do.”
Long-time Ridge ally and loyalist Republican National Committeeman Bob Asher, was backing Giuliani for president until Giuliani dropped out and endorsed McCain.
Asher said: “Tom Ridge is a great guy who is working very hard and traveling all over the country for John McCain. He should certainly be on the shortlist for VP if McCain wins.”
Insiders say Ridge wants it, but is not sure he wants to give up his lucrative private life and business to run for it, and the public scrutiny (and likely conservative scorn) it will revive. Ridge now runs Ridge Global, a Washington-based consulting firm that capitalizes on his expertise from his experience as the first secretary of Homeland Security.
Other McCain running mate picks also abound: U.S. Sen. Lindsey Graham, R-S.C., whose tough primary challenge from conservatives may take him out of this calculus, but who is the kind of maverick McCain likes, Sanford, Pawlenty, Huckabee, Georgia Gov. Sonny Perdue, Florida Gov. Charlie Crist, U.S. Sen. Mel Martinez, R-Fla., U.S. Sen. Richard Lugar, R-Ind., and others.
Crist and Martinez, who helped McCain win Florida, the turning point of the GOP nominating process, along with New Hampshire, have appeal, especially if Martinez can help McCain win back Latino votes the GOP hard line on immigration has cost them.
But as one analyst said, the only guys on that list who help McCain win a state he can't win on his own are Pawlenty, Ridge and Lugar.
No, the state constitution wasn’t changed while you were turned away to make state treasurers automatic candidates for higher office. It just seems that way.
How else to explain why three, four, maybe five, Democrats are poised to spend $15 million in the April 22 primary to win the Democratic nomination for state treasurer.
It’s happening because of a mix of ambitions, attitude and wealth that has never lined up in these proportions for this low-key state row office whose main duty is to oversee how the state’s money is spent and invested.
First, let’s look at the $12 million man. Fresh off his second-place finish in the 2007 primary for mayor of Philadelphia, Tom Knox, a multimillionaire business executive, said he is ready to invest millions more on top of the $10-12 million he spent in the Philadelphia race so that he has a statewide profile going into the 2010 race for governor.
The state treasurer contest has traditionally been a $2 million or so race for the winner, which historically has played out like a statewide judge race.
People tend to win based on their gender (women do better than men) geography (Western Pennsylvanians do better than easterners), and name recognition from previous statewide runs (Catherine Baker Knoll, Bob Casey Jr.).
One reason is that state auditors general have tended to run for treasurer after serving the maximum two terms as the state’s chief watchdog. Both then-Republican Barbara Hafer and Democrat Casey took that course.
Casey, of course, had tried unsuccessfully to run for governor in 2002 when he was auditor general. His 2004 race for treasurer set a state record for the most vote casts for one statewide candidate and propelled him into his successful 2006 U.S. Senate race in which he ousted Republican conservative Rick Santorum.
If Knox spends more than $5 million on this race as he has hinted he might, that would change the parameters of this race and he could just mop up the field on TV ads alone.
Then there is the guy who, before Knox got into the race, was poised to break all the records for fund-raising for a row office -- former Congressional aide and investment and venture capitalist Rob McCord. McCord’s plan to spend $3 million was wowing Democrats all over the state, along with his inspirational speaking style and charm.
While Knox can outspend McCord, McCord and the other announced Democrats, state Rep. Jennifer Mann, D-Lehigh, and Bucks County Democratic Chairman John Cordisco, all three can out-campaign Knox who while deep-pocketed is challenge din the charisma department.
But for the office of treasurer, Knox’s fortune is a plus, since he certainly can claim a lot of experience handling, managing and growing his own giant pile of cash.
Being a successful businessman is a strong credential for that job, and it is one only Knox, and to a lesser extent, McCord, will likely extol as their virtues. McCord runs a consulting company that helps tech companies on the East Coast.
But remember, it is still a treasurer’s race, and Knox’s ads will both make him the front-runner and paint a target on his back, subjecting him to attacks of trying to buy the election.
And McCord could out-campaign him, while Mann might rely on her gender to help in a crowded field of men. In that sense, she would follow in the path of Lt. Gov. Catherine Baker Knoll. The former state treasurer in 2002 was the only woman in the field of eight candidates seeking the second spot on the Democratic ticket.
Knoll won getting just one quarter of the primary vote, beating Jack Wagner (now state auditor general) and then-state Sen. Allen Kukovich and several other men. Mann, who has a business-friendly voting record in the state House and who formally announced her candidacy this past week, could do the same.
The other announced candidate, Cordisco, a former state representative who is now Democratic chairman of Bucks County, seems to be outgunned in this contest but there is still one card left to be played – a Western Pennsylvania candidate.
Allegheny County Treasurer John Weinstein looked at the race and then declined to run, according to members of the Allegheny County state House delegation, but others close to Allegheny County politics say Weinstein may still get in.
One top confidant to Gov. Ed Rendell said: “If there are four easterners – Cordisco, Knox, Jen and Rob – there will be a western candidate and that western candidate could win.
“Basically, with a decent candidate from the west, someone like Weinstein, that person could win, Jen could win, but Knox is the front-runner. And Rob could simply out-work and out-charm the field.
“But that could be a lot harder than it looked a month ago.”
Monkey Wrench Ex-speaker Perzel throws out a seniors-only amendment that derails Democrats’ plan of property tax relief for all
Remember the second outing of the Star Wars trilogy, “The Empire Strikes Back.”
Well, Pennsylvania just witnessed a version of that with the legislative resurgence of former House Speaker John Perzel and his lightening strike against the House Democrats who dethroned him in January 2007.
The issue is cutting property taxes, and the problem for the Democratic leaders is that Perzel’s plan won by a more than 4-1 margin, including 63-34 among Democrats, when he proposed it in an amendment that would gut the caucus-sponsored general property tax cut bill.
Another big problem for House Majority Leader Bill DeWeese, D-Greene, and other leaders: Perzel’s plan is a hit with seniors, a key voting bloc in any pocket of Pennsylvania.
It would use all of the expected $1 billion-plus in 2009 slot-machine gaming revenue to eliminate the property taxes of about 630,000 elderly homeowners, 65 years and older, who earn less than $40,000 a year.
Perzel added it to legislation, sponsored by House Finance Committee Chairman David Levdansky, D-Allegheny, while gutting the core of that bill, which called for increasing the state sales and income tax rates to lower property taxes statewide and the city wage tax in Philadelphia.
Without the increased sales and income taxes, the gambling proceeds are expected to rebate about $75 to $200 to each and every state household late this year to offset property taxes.
Earlier this week, the Harrisburg-based Capitolwire Internet news service reported that Perzel is now unleashing robo-calls, funded by his massive campaign warchest, to target those Democrats who oppose his plan. He also has taken out full-page advertisements in the populist tabloid, the Philadelphia Daily News.
He and other House Republicans, including Minority Leader Sam Smith, R-Punxsutawney, have also spent the last week and a half excoriating Democrats for putting the Perzel-amended bill on the backburner.
On Monday, Smith traded harsh words with DeWeese on the House floor over the Democrats’ maneuver to send the bill back to the House Finance Committee, after DeWeese promised members a vote on the bill.
Smith accused the Democrats of deceiving him, saying DeWeese had reached out to him to work out a compromise while Speaker Denny O’Brien’s staff arranged for the bill to be sent to the Finance Committee through a speaker’s desk referral.
On the House floor Monday, Smith said: “There should have been some participation outside of your cabal, if I can use one of your words.
“That action is going to force me to put someone on the floor 24 hours a day to object to the moving of bills. … If that is the way things are going to be run around here, I find that offensive.”
DeWeese responded, also on the House floor: “I find that remark petulant,” and contended that Republicans manipulated the process when they held the majority.
On the bill itself, DeWeese said that the Finance Committee was a better place, than the “hurly-burly of the floor,” to work out a “genuine compromise” for “broad-based property tax relief.”
DeWeese also said: “When the Republicans are serious about a compromise that will sustain the promise that many of you made, when you came out and talked about broad-based property tax reform,” they should work with the Finance Committee members and chairmen of both parties. “If there is a compromise available, they’ll find it."
Smith said the Perzel amendment should have surprised no one: “That particular amendment was filed on the computer for something like three weeks. … It was there in full view.”
According to Capitolwire, Perzel is targeting the robo-calls into the districts of House Democrats who oppose his plan. He is also using campaign funds to buy two days of full-page ads in the Philadelphia Daily News calling on House Democrats to allow a vote on his plan.
House Democrats told Capitolwire that Perzel was waging a political response to an unusually strong Democratic challenger scheduled to run against him this fall, former Philadelphia Fraternal Order of Police leader Richard Costello.
Perzel responded: “This isn’t about politics. It is about getting the Democrats to let the House debate and vote on this issue: property taxes. I am trying to pressure the Democrats to let the House vote, not stall on this issue.”
Perzel stunned Democrats last week when his amendment came up and won passage by a vote of 159-36. It gutted Levdansky’s plan to cut property taxes by as much as $2.5 billion by using gaming money, and additional revenue from increased sales and income taxes. Levdansky’s bill proposed hiking the sales tax by one-half a percentage point, from 6 percent to 6.5 percent in most parts of the state, and the personal income tax rate from 3.07 percent to 3.29 percent.
After the vote on Perzel’s amendment, Levdansky said that plan “throws us off the track we were on to provide broad-based property tax relief to 3.3 million Pennsylvanians.”
That has been the general response from Democrats opposed to the plan. By their count, Perzel’s plan would benefit 630,000 seniors at the expense of another 2.7 million Pennsylvania homeowners and hundreds of thousands of Philadelphia area workers who pay the wage tax.
Some analysts and Democrats predicted that if the plan went forward, it could cost Perzel some political support in his home city, where the wage tax is widely unpopular. But that view is not universal.
The current wage tax rate is 4.219 percent for city residents, and 3.724 percent for suburban commuters. That’s well above the 0.5-percent and 1-percent earned income tax rates in other municipalities and school districts in the suburbs outside the city.
When gaming revenues reach $750 million, $108.4 million would be available for wage tax relief – nearly 10 percent of the $1.1 billion the wage tax generates
With Philadelphians generally frustrated by the slow-moving effort to reduce the wage tax rate, some analysts say Perzel’s plan could face opposition if it is perceived as a roadblock to wage tax relief.
But not all politicians and analysts thought Perzel’s plan would be an overall liability.
Rep. Mike McGeehan, D-Philadelphia, a frequent Perzel critic, nonetheless supported his amendment. He told Capitolwire that the benefit for seniors in Perzel’s plan would outweigh the loss of wage tax relief.
“Will this come back to bite John Perzel?” McGeehan asked. “In editorial columns, probably. At the polling place, absolutely not.”
One veteran Democratic strategist, Larry Ceisler, told Capitolwire: “John Perzel is a smart politician. If he thought this was going to be hugely unpopular in his district, I don’t think he would have attempted this. He either believes this is going to be positive for him in his district or neutral.”
Then there’s the pesky detail that 16 of 24 Philadelphia House lawmakers – all four of the city Republican delegation and 12 Democrats – voted for Perzel’s amendment. That reflects just how strong the senior vote is in the city, analysts said.
But DeWeese, Levdansky and other top Democrats are still hoping the plan will backfire on Perzel. They rightly note that there is no way Gov. Ed Rendell would sign this bill, even if it found majority support in the House and Senate.
They also argue that Pennsylvania homeowners will rebel against Perzel and the House Republicans pushing his proposal when they realize that it means they will not get the property tax relief lawmakers and the governor have been promising for so long.
“Although noble, it does not provide tax relief, as we promised to all the taxpayers of this commonwealth,” Majority Whip Keith McCall, D-Carbon, said during floor debate on the amendment.
Levdansky has called the move by Perzel: “the ex-speaker’s revenge.”
But Republicans say that gaming-funded property tax relief will be so small – $75 to $200 for most homeowners – that Pennsylvanians would gladly give it up to really help seniors stay in their homes.
Perzel said during floor debate that his amendment wasn’t about politics, but rather about poor seniors struggling to stay in their homes.
“This is trying to help every senior citizen stay in their home and not be forced out or forced to make bad choices,” Perzel said. “That’s really what it’s all about.
“This is the difference between voting $1.3 billion in taxes … or allowing seniors, without one dime in additional tax revenue, to keep their homes and get a full rebate if they make under $40,000 for their school property taxes.”
Unless House Democratic leaders come around to that view, Perzel may be making this pitch in robo-calls, campaign literature and other venues, before he sees a bill to accomplish this heading to the governor’s desk.
Spending Feud Parameters are set for the state’s annual budget battle between the governor and legislators in the PA Assembly
It’s just a few days old but Gov. Ed Rendell’s proposed $28.3 billion budget has already touched off sharp debate around the state.
Rendell says it increases state spending by 4.2 percent, but by cutting $400 million in legislative priorities that will very likely be restored (Every governor cuts those spending items and every year, the Legislature restores them.) When those items are added to Rendell’s proposed budget, the actual increase is closer to 5.5 percent or more.
Most controversial of the governor’s proposals is Rendell’s idea to give poor families who qualify to pay no state income taxes up to $400 for a family of four (the maximum income for such a family is $32,000). Rendell says that will stimulate economic growth and help them weather a potential slower growth period in the economy.
Republicans call it a giveaway, not a “rebate” since it gives people money they did not pay in state income taxes. The GOP wants to plow that $130 million and a lot more, into business tax cuts.
Meanwhile, Rendell proposes to slow the pace of the biggest tax cut he is proposing the Capital Stock and Franchise tax. That tax cut is set by law, and Rendell wants to emulate Gov. Mark Schweiker in slowing the pace in the CS&FT in slowing down its multi-year elimination. Republicans and business groups, such as the Pennsylvania Manufacturers’ Association, called that a “hidden” tax increase.
The governor is also still proposing an energy usage tax that, he says, will be $5.40 a year for most homeowners, but it could go as high as $10,000 for medical centers, universities and many large businesses that use a lot of electricity. And he wants a tax on employers who don’t provide health insurance. Oh yes, and another 10 cents a pack tax on cigarettes
And Rendell is sensitive about how those are characterized.
When KDKA-TV political and business editor Jon Delano asked Rendell about a list of proposed taxes published by the Associated Press, he reacted with anger, according to the KDKA-TV website.
"Are you nuts, Jon? Are you nuts?” Rendell said. "As a media person you should say, ‘This is ridiculous, it's 42 cents a year, folks. This isn't a tax. It’s 42 cents a year!'"
According to KDKA, Rendell later said: “Any fair reporter should take that (the Republican opposition’s) press release and mock it. They should report to their citizens that this is a joke.”
The website said: “Rendell told Jon that his budget really did not include tax increases because the fees it contains on cigarettes, electricity and property insurance are just pennies.”
Rendell is also threatening to veto a bill the Senate Republicans just passed which would take away his annual threat of state employee layoffs if a budget isn’t passed by the tenth of July or so, if that bill passes the House.
Another financial arm-wrestling is the issue of borrowing – a perennial issue between Rendell and the GOP Legislature.
Rendell says correctly all his proposed borrowing for medical research, roads, bridges, economic development, infrastructure improvements, energy reform and investment will cost only $5 million to $10 million this year in debt service to the general fund.
But if you add that to the other funds taxpayers will have to pay, and go just a few years into the future, say when the next governor takes office, debt service from all the funds involved will be $172 million.
Rendell says if the GOP really believes that, they would all give up their home mortgages, because a mortgage is nothing more than borrowing against future earnings.
“There are things you borrow for, long-term things, and things you don’t borrow for,” said House Minority Leader Sam Smith, R-Punxsutawney. “And that is the discussion we will be having with the governor.”
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