Corey Contends Trump Tax Reform Will Keep America Humming

By Scott Benjamin

SOUTHINGTON – U.S. Senate contender Matt Corey (R-Manchester) says Republican President Donald Trump’s election sent the stock market galloping and his recently-approved tax reform package will prompt small businesses to add “good-paying jobs.”

The GOP contender added that if Congress again invokes the long-ignored Pay-As-You-Go controls the current annual budget deficit of $660 billion will dwindle under Trump’s 10-year, $1.5 trillion fiscal plan.

However, he cautioned that Connecticut’s sluggish economy, which is the only one among the six New England states to not recapture all of the jobs lost during the 2008 recession, needs to attract more high technology companies and online retailers – a daunting challenge in a state with clogged highways where “we can’t move product and we can’t move people easily” and there is an ambivalence in some municipalities toward high-speed rail.

Wilshire Associates reports that stocks rose 26 percent between the 2006 presidential election and the end of 2017, largely propelled by advances in tech stocks, according to Washington Post economics columnist Robert Samuelson.

Stock prices compared to their profits are about 24 on the index of the Standard & Poor’s (S&P) 500 stocks compared to a historical average of 17 since 1936, reports Howard Silverblatt of S&P.

Corey, who is running for the seat held by first-term U.S. Sen. Chris Murphy (D-Cheshire), said he expects the market to continue to spiral upward, but acknowledged that with stock prices outracing income gains there could be a bubble that will lead to a recession.

However, Corey - the owner of a window-cleaning company that does business in cities throughout Connecticut and a pub in Hartford, said Trump’s tax package will take the tepid recovery under former President Barack Obama and push gross domestic product growth closer to three percent than the recent two percent average.

“Consumer confidence is up,” said the Republican contender regarding the president’s tax reform, which has been the signature accomplishment of his first year and could become the Republican placard for the midterm congressional elections.

“You only have to look at what Amazon is doing,” Corey, 54, added regarding the expansion of the huge Seattle-based online retailer. “If this is about job creation, we’re on the right track.”

He said, for example, by allowing small business owners – such as farmers and construction companies – to immediately deduct the cost of new machinery and pay-loaders, instead of having to do it over multiple years it “will create good-paying middle-class jobs.”

But what about the lower mortgage deductions, which reportedly could harm Connecticut’s real estate market?

“We have some of the highest real estate prices for homes,” Corey acknowledged. “However, I don’t think most middle class home-owners – with the houses in the $350,000 to $400,000 price range - are going to be impacted. It probably will occur more in lower Fairfield County or in West Hartford with the higher-priced homes.”

Former Greenwich resident David Stockman, who served as director of the Office of Management & Budget for former President Ronald Reagan, has stated that tax cuts don’t pay for themselves and Congress has seldom shown interest in curtailing spending. Critics have said the Kennedy/Johnson, Reagan and W. Bush tax cuts all created huge budget gaps.

Corey - who has made three unsuccessful bids, two as the Republican nominee and one as an independent between 2012 and 2016, against Democratic incumbent John Larson of East Hartford in the First Congressional District - said Congress could slice the current deficit by re-installing the Pay-As-You-Go controls in which spending increases and tax reductions must be offset by concurring adjustments in other parts of the federal budget.

Former Republican President George H.W. Bush insisted that Congress invoke Pay-Go when he raised taxes in 1990. Some observers believe that step help lead to an economic expansion through the final year of his administration and the succeeding administration of former Democratic President Bill Clinton – the longest in the country’s 242-year history. Pay-As-You-Go lapsed in 2001, while Bush’s son, Republican George W. Bush, was president.

On another topic, Corey also said the current Social Security system is not sustainable unless the income limit is increased on the taxes that help fund it.

Currently only the first $127,200 of income is subject to Social Security taxes, which means that someone making $1 million a year would have a little less than 13 percent of their earnings exposed to those taxes.

During his 2008 campaign, Obama called for raising the threshold to $250,000.

“I would look at the range,” Corey said in an interview. “I wouldn’t give you an exact number [now].”

On another fiscal issue, Corey, who faces Apple sales executive Dominic Rapini of Branford in the bid for the GOP nomination, said the 2010 Dodd-Frank financial reform legislation – co-authored by former U.S. Sen. Chris Dodd (D-East Haddam) – should be revised.

“It has hurt small businesses and it has hurt the community banks [through the increased compliance requirements],” the Republican contender explained. “I lost my (group) line of credit. Now I can just get a term loan. It [also] has made it more difficult to young entrepreneurs to bring new businesses to the stock market.”

Corey said he supports legislation by U.S. Sen. John Kennedy (R-La.) to exempt community banks with assets of less than $10 billion from Dodd-Frank. Kennedy wrote in The Wall Street Journal last year that 1,700 community banks have “disappeared” since the legislation was signed by Obama in 2010.

Samuelson, the Washington Post economics columnist, has indicated that departing Federal Reserve Board Chairman Janet Yellen might be primarily responsible for the surging economy since 10 million new jobs have been added bringing the unemployment rate down from 6.7 percent to 4.1 percent since she was appointed in 2014.

He has noted that Yellen kept interest rates low as the economy improved but was stymied by middle-class wage stagnation, and then rightly chose to gradually increase rates as unemployment dwindled toward 4 percent and there were possible signs of higher inflation or reckless speculation.

However, Trump didn’t nominate her for a second term.

“Was she qualified to stay? Absolutely,” said Corey. “But sometimes a change at the top is good.”

Trump instead nominated Federal Reserve Board Vice Chairman Jerome Powell.

Powell is the first nominee in 40 years who is not a trained economist - but he does have extensive experience in fiscal and monetary policy. He was easily confirmed last month by the Senate Banking Committee and will be up soon for a vote in the full Senate before the next term begins in February. Reports indicate that he has mostly supported Yellen’s policies over the last four years.

Corey said he would have to study Powell’s record before deciding whether he would support his nomination.

Regarding Connecticut, which has experienced job losses in four of the last five months, the Republican contender said the state needs “to look outside of defense, insurance and the financial sectors” and attract more of the high technology-related companies that dot the major innovation hubs, such as the Route 128 Corridor in Massachusetts.

But, he said Connecticut’s efforts are stymied by traffic congestion that turns a 20-minute trip from Norwalk to Bridgeport to more than an hour after 6:45 a.m.

Murphy and U.S. Sen. Bob Corker (R-Tenn.) have proposed a 12-cent increase in the federal gasoline tax – which hasn’t been raised in 25 years - to fund infrastructure improvements. The tax would be raised from 18.4 cents to 30.4 cents a gallon.

“I support an increase in the gasoline tax,” said Corey. “However, I don’t know how much.”

He said the Nutmeg State is also beset with a rail system where passengers wait a year and a half to get parking permits for stations in lower Fairfield County and some municipalities shout “Not in My Back Yard” whenever there’s discussion of building high-speed rail lines.

“It’s unfortunate,” he lamented, noting that Massachusetts state legislators are lobbying for high-speed rail from Boston to Springfield to service prospective customers at the incoming casino in Springfield.

“Again, Connecticut is looking in from the outside,” added Corey.

He believes the lack of an efficient transportation network could deter Amazon from expanding further in Connecticut, where is has two centers with a third under construction.

“I would like to see more,” Corey said. “It’s the future of the country. Amazon is just massive. Brick and mortar – I’m not going to say that it is a thing of the past. But they’re going to have to re-evaluate how they do business.”

Regarding immigration reform, the Republican contender supports increased border protection as well as a “pathway to citizenship for people who came here [illegally] as children.”

Corey said that although Murphy pledged in a debate six years ago with Republican nominee Linda McMahon of Greenwich, who is now the director of the federal Small Business Administration to “not be the senator of obstruction” he “votes against every Republican bill put forward.”

However, Murphy has been praised for his co-sponsorship with a Republican senator on raising the gasoline tax, engaging in foreign policy initiatives with U.S. Sen. John McCain (R-Ariz.) and for his Buy America legislation, which has Trump’s support. Murphy initially introduced that legislation in 2010 while he was still in the U.S. House.

Corey said he would make his state and federal income tax returns public and called on Murphy, who did make his returns public in 2012, to do so again.

He said he had raised almost $10,000 through the end of 2017, well below the unprecedented $10.4 million that CT Mirror has reported Murphy has collected. The senator is considered a possible candidate for the Democratic presidential or vice presidential nomination in 2020.

Corey said he has been taking his platform to the people.

“I walk through some streets in the inner-cities and they say they haven’t had a Republican visit them in 30 years,” Corey said. “That’s an embarrassment.”

No Republican has won a U.S. Senate election in Connecticut since Lowell Weicker of Essex annexed a third term in 1982.

The Republican state convention is slated for May and the nomination might ultimately be determined in an August primary.