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THE MUSINGS OF A TRADITIONAL SOUTHERN DEMOCRAT

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Sid in his law office where he sits when meeting with clients. Observant eyes will notice the statuette of one of Sid's favorite Democrats.

Saturday, June 13, 2015

If he capitulates on this, he will really hurt himself. Reminescent of Romney flip flopping on issues: Jeb Bush Faulted Over Use of Florida Tax Money - Club for Growth criticizes plan to lure businesses

From The Wall Street Journal:

The Republican governors who are weighing presidential campaigns often talk about the jobs they have created in their states, drawing a contrast to potential rivals who serve in a gridlocked Congress.

But one facet of the economic plans adopted by many GOP governors is coming under criticism from conservatives within the party—their use of taxpayer money to encourage businesses to expand or relocate across state lines.

Tax incentives and financial awards to businesses are increasingly out of favor in a party that sees corporate subsidies and the Export-Import Bank, which helps support U.S. exports, as examples of "crony capitalism.’’

The latest example of the rising opposition comes from the Club for Growth, a free-market advocacy group, which is criticizing former Florida Gov. Jeb Bush for overseeing state spending increases that included $310 million to lure a biomedical research institute to Florida.

The Club’s appraisal of Mr. Bush’s economic record, reviewed by The Wall Street Journal ahead of its release, says the effort to spur the biotech industry didn’t generate as many jobs as promised.

“We want to frame what we think the right agenda should be for the Republican nominee, and when we see a candidate whose record shows they have used tax dollars to pick winner and losers, we are going to point it out as bad policy,” said David McIntosh, the Club for Growth president and a former Indiana congressman.

“What was a standard approach for Republican governors for a while, we’re now seeing a growing movement against,” he said.
A spokesman for Mr. Bush, Tim Miller, said the state’s investment in research institutes “diversified the economy, created high-wage jobs and contributed to significant scientific research advances.”

At least three other active or likely candidates—Wisconsin Gov. Scott Walker, New Jersey Gov. Chris Christie and former Texas Gov. Rick Perry—are expected to face similar criticism from the Club for using tax dollars to promote economic development.

In 2012, the libertarian Cato Institute criticized Mr. Walker for tax breaks intended to draw business to the state, which the group said "clutter the tax code.’’ In Texas, the Legislature has moved to curtail incentive programs touted by Mr. Perry.

The Club for Growth’s report on Mr. Bush praises the former two-term governor as an aggressive tax cutter who vetoed $2 billion in spending and pioneered a Medicaid privatization program.

But it criticizes Mr. Bush for a $310 million package to persuade California-based Scripps Research Institute to build a research center in Palm Beach County. One state economic analysis said the deal could lead to 50,000 new jobs, but the Club’s analysis says “the expansion of the biotech industry never materialized.”

Mr. Miller, the Bush spokesman, said the Scripps money came from a temporary increase in the federal matching funds for Medicaid.

“Rather than increasing entitlement spending, Gov. Bush made a strategic one-time investment in a sector that is integral to economic growth,” Mr. Miller said. He said 1.3 million jobs were created while Mr. Bush was governor.

Mr. Walker has defended state incentives to the Kohl’s KSS 0.42 % department store chain and is currently lobbying state and local lawmakers for a plan to spend $250 million in public money for an arena for Milwaukee’s pro basketball team.

Mr. Christie awarded more than $5 billion in tax incentives since he took office in 2010, at a rate outpacing his Democratic predecessors. Critics have said that too many of the awards have gone to existing New Jersey companies moving within the state, rather than attracting new businesses. Mr. Christie’s administration has said the incentives are essential to keeping companies in the high-cost state.

The Club, which is known for running attack ads against centrist Republicans, isn’t planning to endorse a candidate in the GOP presidential primary. However, Mr. McIntosh said the group may run negative ads against Republican candidates who have raised taxes, and it already aired one such spot about former Arkansas Gov. Mike Huckabee.

Along with corporate subsidies by state governments, the Export-Import Bank has become a top target of the Club for Growth. It is running ads against Ex-Im supporters in Congress noting that several GOP presidential candidates oppose the federal agency.

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