Sun March 22, 2015 11:06 pm By Erica Grieder

ted cruz announces GOP presidential campaign

I love this detail from Teddy Schleifer’s Friday scoop about Ted Cruz’s imminent plans to announce his presidential campaign:

Cruz will launch a presidential bid outright rather than form an exploratory committee, said senior advisers with direct knowledge of his plans…They say he is done exploring and is now ready to become the first Republican presidential candidate.

“Done exploring.” Further confirmation that Cruz is a top-notch troll when he puts his mind to it. And further confirmation, of course, of something that’s been clear for a while, at least in Texas. In October 2013, for example, Cruz told me that conservatives have “a limited window” in which to turn the country around, and continued:

“I don’t think we’re there yet, but there is an urgency to these fiscal and economic issues unlike anything I’ve ever seen before.”

“That reminds me of what President Obama used to say during the primary in 2008, when people asked him why he was running for president after only a few years in the Senate,” I said. “He would say, ‘There’s a thing called “too late,” and that hour is almost here.’ ”

We stared at each other for a moment. 

“I didn’t know he said that,” Cruz said innocently.

“I thought it was remarkable,” I said. “Especially in a primary.”

For the first and last time since I began interviewing him, in July, Cruz said nothing at all in response.

Yup: running for president in 2016. How will he fare? That’s murkier. The fact that he’s expected to give his first official speech as a candidate at Jerry Falwell’s Liberty University is ominous. It suggests that Cruz, looking at a crowded field in an open primary, is moving to shore up support among social conservatives. The political reasoning is clear enough: he needs to corner the market on some measurable subset of Republican primary voters and build from there, and Rand Paul is already well ahead with the liberty-type Tea Partiers. If this is the strategy, however, Cruz risks squandering his most interesting asset—his apparent ability to unite the Tea Party, which is a nebulous aggregation of various interest groups–libertarians, social conservatives, fiscal hawks, gold bugs, homeschoolers, populists, nativists, elitists, anti-elitists, anti-authoritarians, etc—with surprisingly few common denominators beyond the fact that, like all Republicans, they’re against Obamacare, which is of course Cruz’s signature issue. He would also risk casting himself as a social conservative standard-bearer, which is fine in itself, but a recipe for coming in a distant second in a modern Republican primary.

With that said, Cruz is a shrewd tactician with a record of winning apparently impossible contests: Medellin v. Texas. The 2012 Republican Senate primary. And once in the Senate—well, he didn’t succeed in defunding Obamacare, but he definitely made an impression. Not an unmixed impression, perhaps, but I bet Marco Rubio would pay a lot of money for access to Cruz’s database of email addresses. So, you know, we’ll see what he says tomorrow. In the meantime, here’s some background reading on Texas’s junior senator–a riddle, wrapped in a mystery, inside a suit, wearing a FItBit—from our archives.

“The Man in the Arena”, February 2014. This is the aforementioned profile of Ted Cruz, which we planned as a short feature to mark his first year in the Senate—he ended up being busier than we expected. Of note, this profile includes a lot of Cruz comments that don’t appear in any other profiles.

“Ted Cruz’s Excellent Adventure,” October 2012. After winning the Republican Senate nomination, and in retrospect possibly ruining Texas politics by triggering a wave of increasingly absurd copycat primary challenges, Cruz sat for a chat with our then-editor Jake Silverstein. Highlights include another top-tier moment of trolling, when Cruz very precisely criticized Barack Obama: “I think he has pushed relentlessly for European-style socialism in this country, and I use that word in its literal sense. It describes a means of structuring an economy. Socialism is government ownership or control of the means of production or distribution. And, in my judgment, that has been the unified theme of this administration.”

“Texas Hold ‘Em,” July 2013. Even before Cruz somehow commandeered the House of Representatives and allegedly engineered a federal government shutdown, he was causing a ruckus in the capitol. Nate Blakeslee, for one, was unimpressed by his approach to immigration reform.

“Ted Cruz and the 47 Percent,” January 2013. At times, though, Cruz has shown far more nuance than his critics would consider him capable of, as in his analysis of the 2012 elections, which resulted in his call for Republicans to take the 47% to heart. It would be nice if he gave this speech tomorrow instead of the speech we should probably expect him to give. Yes, that would be nice. 

“The Overcomer,” October 2013. Brian Sweany’s profile of our new governor, Greg Abbott, otherwise known as Cruz’s former boss, and his closest political mentor.

“Master of the Senate,” December 2014. My profile of Dan Patrick, which may give some context on the Texas political landscape in the aftermath of Hurricane Ted.

“Face to Face With Rick Perry,” July 2014. Remember him? He’s also running for president and—although he has been widely discounted by political pundits, as a result of his previous campaign—I still think there’s a chance this all ends up like the climactic scene in Jurassic Park, when the velociraptors (Cruz et al) are about to eat the people (that’s us!) and then the T. Rex, Rick Perry, comes crashing through the door. 

(AP Photo/Joe Skipper)

Sun March 22, 2015 5:27 pm By R.G. Ratcliffe

Ted Cruz, the running man.

Ever since I first got to really know him in 2008, Ted Cruz has been a man more obsessed with running for office than actually serving. Now, with just two years and two months in his first elective office, the Houston Chronicle is reporting that Cruz is poised to announce as a candidate for president.

One of the first things Cruz may have to do on the campaign trail is explain to his social conservative base why in 2009, while preparing to run for state attorney general, he took more than $250,000 in campaign funds from out-of-state investment bankers who supported legalizing gay marriage. Cruz in February introduced legislation to leave same-sex marriage up to the states, a clear move to cut off the U.S. Supreme Court before it rules on the issue.

Read More
Fri March 20, 2015 3:46 pm By Erica Grieder

Since the beginning of session, the Senate’s leaders have been calling for billions of dollars in tax relief via a package deal focused on property taxes and the franchise tax. Considered together, the package has been met with opposition from Democrats and even from some Republicans, on the basis that the state revenue is already amply constrained and that for a number of reasons this isn’t the right time for Texans to be cavalier about the state’s economic outlook or ongoing spending commitments. Considered separately, the property tax relief proposal has been the most controversial. As I’ve written, it would effectively create a recurring obligation for the state to subsidize local school districts. As others have noted, it wouldn’t mean that much to the average homeowner; it would work out to about $200 a year, a figure that homeowners might not even notice, as property values, and therefore property taxes, continue to rise. Plus, the property tax proposal is what’s spurred the absurd claim, from the Senate Finance Chair, that state spending isn’t necessarily state spending.

But I wanted to take a moment to look at the franchise tax proposals, SB 7 and SB 8. Both are controversial because of the aforementioned context: if passed, they would cut biennial revenue collections by about $2.2 billion. That’s a significant figure in an austere state, especially at a time when revenue collections are already vulnerable to low oil prices and a slowing rate of economic growth. However, the bills are worth considering separately, and seriously. One strikes me as a reasonable idea that would have a lot of appeal if not for Texas’s overall tax structure. The other has a lot of appeal regardless. 

The former is SB 7, from Jane Nelson. It would ratchet down the franchise tax rate (which varies depending on the nature of the business), meaning a tax cut for all businesses currently paying the tax, big or small, rich or poor. Ultimately, business interests would like to see the franchise tax repealed, because they consider it burdensome, complex, and even punitive. And although Big Business isn’t necessarily a sympathetic character, their perspective has defenders; earlier this week the Houston Chronicle’s Chris Tomlinson summarized the case for reform, and endorsed it. I see the reasoning, but in light of Texas’s overall tax structure, I can’t endorse the idea of repealing the franchise tax. Texas is one of only a few states that taxes gross margins, but we’re also one of the only states that doesn’t have a personal income tax; the former is, in practice, a substitute for the latter. It may not be a good substitute, but as things stand, it’s the only one available. if we repealed the franchise tax we would be creating a gaping hole in the budget.

If we lowered the tax, as Nelson’s proposal suggests, it would be a smaller hole, and in some years it might seem like a manageable one. But 2015 isn’t one of those years. Paul Bettencourt, one of the freshmen Republicans in the Senate, said as much in January: in light of the economic outlook, it would be an unrealistic moment for major tax cuts. And intervening events have only strengthened the case for caution. I’m still not panicking about oil prices. But I am thinking that if whatever Barack Obama’s doing with Iran results in sanctions being lifted, that’s an extra 500,000 barrels of oil hitting an already oversupplied global market every day. And I’m noticing that as a result of America’s crude oil export ban, storage capacity is quickly being exhausted; that’s putting US producers in a tough position, and creating pressure for them to produce less oil—and Texas’s overall economy is a lot more vulnerable to production levels than prices. 

SB 8, however, from Charles Schwertner, is worth considering even in the current context. This would exempt businesses with less than $4m a year in gross receipts from paying the francise tax at all. Currently, the exemption applies to businesses with receipts less than $1m. It would help thousands of businesses across the state, and unlike blanket changes to the franchise tax rate, it differentiates between small businesses, which could probably use the help, and big ones, which don’t like the franchise tax but manage to survive it. And because these businesses are small, the aggregate cost to the state—the taxes that the businesses would no longer be paying—would be modest; the fiscal note puts it at about $380m a year. Put differently, of the $2.2bn biennial price tag for the franchise tax proposals, only about a third of that would come from this bill. And since small businesses usually aren’t wildly profitable, the tax cut would probably spur some extra activity on their end—the money would reappear on the payroll, as business spending, or even just as consumer spending from the business owners themselves. Some of the foregone revenue would thus be recaptured via the sales tax and so on. I doubt it would add up to $380m a year, but the damage to overall state receipts, under this proposal, would be more of a ding than a disaster.

On balance, SB 8 is easily the best of the tax proposals on offer this session. If it was the only one, it would still face reasonable resistance because of the context, but Senate Republicans could make a great case for it. Since it’s been dragooned into this tax relief reform package, though, the case for the bill has been subsumed by the case for the package—and that’s a weaker case, on the merits and in context.

Fri March 20, 2015 9:43 am By R.G. Ratcliffe

There’s a new definition of gun nuts

During the Texas Senate debate over the open carrying of handguns by license holders, Senator Craig Estes of Wichita Falls suggested that anyone who is afraid of guns needs to get psychiatric help.

Senator Sylvia Garcia of Houston told bill sponsor Estes that “I can tell you nothing is putting more fear in some of my seniors than some of that crazy gun stuff, and that’s what they call it.” She said there are a lot of people afraid of having pistols openly carried in an urban setting. Estes replied that fear is unfounded.

“Human beings have a lot of fears. I don’t know what it is called, a phobia of just seeing a gun on a person,” Estes said.

“It’s called human nature, I think,” Garcia replied.

“I don’t have that phobia myself,” Estes said. “If someone has that phobia, sincerely, clinically, I would think they would need to get help.”

Read More
Fri March 20, 2015 7:54 am By R.G. Ratcliffe

Barack Obama this week proved presidents are unwise to muse in public. At an event in Cleveland on Wednesday, he thought out loud about how the neighborhood would be more beautiful if everyone voted. Perhaps we should make voting mandatory like Australia, said the Muser in Chief.

Fired upon by the right and the left, it was White House down. The Boss was disavowed faster than Secret Service agents ramming the gates. “The president was not making a specific policy prescription for the United States,” said press secretary Josh Earnest.

But the whole tempest – which teapots are wont to have – got me wondering what effect mandatory voting might have in Texas, a state with a woeful history of voter turnout.

 

Read More