House candidates agree on goals, not methods, for economy

Each of the three candidates in Tuesday's 2nd Congressional District election has his own ideas about how to inject life into the nation's struggling economy. But they agree on this much: Taxes on business and a bloated federal government are stifling job creation.

Scott Rigell, a Republican, and Kenny Golden, an independent, are challenging the Democratic incumbent, U.S. Rep. Glenn Nye. All three say that to revive the economy, Congress has to cut federal spending and move toward a balanced federal budget. They all promise to support lower taxes.

In tacit acknowledgement that the military is the region's major employer, the three also separate defense spending when talking about any across-the-board cutbacks.

But the candidates differ sharply on the kinds of tax cuts they would support and how government should stimulate the economy.

Rigell and Golden have both criticized the $787 billion economic stimulus bill that was approved - with the help of Nye's vote - in early 2009.

Nye, like many supporters, has argued that the spending bill saved or created jobs. Pumping federal money directly into the economy "should only be reserved for dire emergencies," as was the case last year, Nye said.

Economists "were all saying our economy is in danger of going off a cliff," Nye said.

In hindsight, the Democrat said he would have done some things differently. "I would have put more money into infrastructure that actually resulted in projects moving quicker... rail to ports, light rail."

Rigell and Golden said the stimulus hurt the economy more than it helped by increasing the national debt. Rigell vowed to try to halt spending of any funds that haven't been allocated.

"The stimulus was not only not necessary but counterproductive to job creation," he said.

The three candidates' proposals for tax cuts range from wholesale changes to targeted reductions.

Golden, a former Republican who left to run as an independent, wants to abandon the entire federal tax system, replacing income taxes, Social Security taxes and other federal charges with a 23 percent national sales tax - known to supporters as the "fair tax." He said the new system would lower everyone's cumulative tax bill and would lure back to the United States those investors who moved trillions of dollars overseas to avoid taxes.

Rigell said he would consider a national sales tax so long as total revenues don't increase. He also has pledged not to vote for any increases in taxes or fees.

Nye said he would not want a national sales tax, given the recession.

Nye and Rigell agree, however, that the so-called Bush tax cuts on income and other taxes that are due to expire this year should be renewed. Rigell would make them permanent. Nye said they should be kept for at least a year or longer until the economy improves.

Nye said he wants to focus on tax cuts for small businesses to encourage them to hire more workers. During his two-year term, he has pushed for job- and business-development programs aimed at military veterans.

He also is proposing a "payroll tax holiday" that would exempt companies for a year from payroll taxes on new employees.

Rigell said he wants to lower corporate taxes and accelerate the depreciation that businesses can claim when they buy new equipment.

"This is probably the most powerful factor that government controls that affects an entrepreneur's decision about whether to purchase capital goods or not," Rigell said.

Rigell, who founded Freedom Automotive and made a personal fortune in car sales, often stresses that the key to reviving the economy is freeing business from government interference. He promises a careful review of all federal regulations governing businesses, arguing that they are a complex burden that is stifling growth.

Rigell said he'll work with business owners in the 2nd District - which includes Virginia Beach, the Eastern Shore and parts of Norfolk and Hampton - to identify what they consider the most oppressive regulations, arrange for meetings with leaders of the federal agencies involved and make their case for "smarter, lighter regulations."

"I know with certainty the best approach to moving things forward is to get people physically together in the same room on a regular basis," he said.

The candidates have different approaches to reining in the federal budget.

Golden wants a 2 percent across-the-board cut in federal spending, including Social Security and other entitlement programs. He would exempt the Defense Department, saying it could be cut in some areas such as senior staff and contractors.

Rigell wants a hiring freeze for all agencies - except defense and homeland security - noting that halting hiring is less disruptive for federal workers and their families.

Nye favors a 2 percent annual cut in federal spending over three years in all areas but defense.

Cutting defense is a tricky proposition for the three. All know it's one of the larger parts of the federal budget but also are aware it is a major source of jobs and economic growth in Hampton Roads.

The most recent challenge for regional leaders came in August when Defense Secretary Robert Gates announced plans to dismantle the Norfolk-based U.S. Joint Forces Command, which provides about 6,000 jobs.

Nye and the region's other federal lawmakers are trying to block Gates, arguing that JFCOM's shutdown isn't justified and would hurt the region.

Golden, a retired Navy captain, has said he expects the command will be closed but hopes that most of the jobs will be transferred to other military operations in Hampton Roads.

Rigell, whose first response to the JFCOM announcement was to criticize Nye for being caught by surprise, has since joined the chorus of opposing Gates.

"It is really un-American in my view, for a leader as distinguished as Defense Secretary Gates to come in and make such a massive radical decision," Rigell said.

Bill Bartel, (757) 446-2398, bill.bartel@pilotonline.com