The Northern Virginia Technology Council held a Q&A today, June 28, at Microsoft’s Reston office. One candidate was present at a time, Kaine first, then Allen. Each gave a condensed stump speech and was then quizzed by the panelists followed by a few audience questions.
1. What is your position on sequestration? (Sequestration is the automatic $1.2 trillion cuts to the defense budget which is creating no small amount of anxiety – it’s the most important concern by NoVa businesses)
Kaine: I hope something will be done and the Senate needs to publish a plan. We also need to empower experts. Then he moved on to mention his “I cut $5 billion claim” and emphasized that he would be a good Gang of 6 member. He admitted that sequestration was purposely made ugly.
Allen: I opposed sequestration and the use of super commissions. Defense is the key Constitutional duty so it should not receive the majority of cuts. We also need the discipline imposed by a balanced budget and line item veto.
Winner: None. The group wanted to hear specific short term actions. Of course, like Taxmegedon, Sequestration will automatically kick in before the next Senate is seated.
2. Do you support Internet sales taxes? (The cost to comply with every state tax code is prohibitive especially for small businesses.)
Kaine: We need fundamental fairness and a more equitable policy. He used a Richmond bicycle shop anecdote to illustrate why the current system is inherently unfair to brick and mortar.
Allen: Opposes internet taxation and cited his legislation that opposed Internet access taxes. He also cited the 1992 U.S. Supreme Court ruling where retailers don’t have to collect sales taxes in states where they lack a physical presence.
Winner: Allen, Kaine’s use of words like equity and fairness implied that he endorses implementing an Internet sales tax.
3. Do you support repatriation of foreign profits? (This change would allow companies to bring profits earned oversees back to the US without having to pay the difference between lower foreign corporate rates and the higher US rate usually around 30%.)
Kaine: I support repatriation, but then he made two other points:
- He disagreed that US corporate tax rates are too high because other taxes like VAT are not considered.
- The difference in tax rates between salary and earnings is too much. In other words, he implied that capital gain tax rates should be increased.
Allen: I advocated for repatriation while in Senate and repatriation is addressed in my economic blueprint. Corporate tax rates must have certainty, simplicity and should target 20%. Companies should be allowed to choose either the current or a flat tax option.
Winner: Allen, in addition, Kaine further undercut himself after going beyond the question and volunteering his position that capital gains rates need to be increased.
4. What is your position on insourcing? (The Obama administration has been moving functions back into government, ostensibly because it is cheaper, but in reality to increase the number of public sector employees. Business is asking for a fair apples-apples procurement process, for example, the cost of government labor does not factor in long term costs like pension and other benefits.)
Kaine: I’m an agnostic. I increased minority and women owned contracting while in Richmond. The devil is in the details regarding how you do a fair comparison. I don’t beat up on business or unions. (He forgot to add except for oil companies)
Allen: There needs to be a moratorium on further insourcing until the process is better defined. Private companies are usually the best option, without the burden of long term costs plus they more effectively use technology.
Winner: Allen for a straightforward answer.
5. How do we increase STEM (Science Technology Engineering Mathematics) graduates? (Education funding is not really a federal concern; probably a planted question to fit in with Kaine’s Talent Economy stump speech)
Kaine: I want to work to the Education Committee. We need more pre-K investment. He said that his Honduras experience motivates him to support vocational education. He also criticized No Child Left Behind (which he originally supported until the education establishment turned on it) because it focuses on competency instead of excellence (that’s Kaine-speak). He made an awkward but unintentionally humorous statement in saying “I’m proof that colleges produce talent”.
Allen: He mirrored Kaine’s answer on vocational training and the need to sell STEM early in the school experience.
Winner: None – weak answers by both. The group wasn’t asking about vocational education. The candidates do not understand the IT industry. It was surprising that Kaine didn’t jump back into his Talent Economy and let’s just plow more dollars into education homily.
6. What is your view on immigration?
Kaine: I support the Dream Act. Undocumented individuals should only pay a fine and be granted citizenship. We will never deport anyone (repeated three times).
Allen: We should attach a green card to college diplomas.
Winner: Kaine for being willing to drop all restrictions as soon as possible. This week’s Arizona ruling has given him renewed confidence to support amnesty. Allen “went Romney” and skirted around the larger immigration issue.
For all the money poured into this system, it was a pathetic sight to see a group like this effectively say that American education has failed to deliver enough qualified technology graduates and that they must have more foreign educated green cards now. But I need to add that NoVa IT businesses are as hypocritical as the construction trade because they also want lower cost labor, less attitude, and lower expectations. Still, no politician is willing to propose radical change in education.
7. Regarding cyber security, should the federal government use regulations or incentives to facilitate information sharing?
Kaine: He struggled with the question and rerouted the response to how he supported DARPA.
Allen: The bias should be to incentivizing because government regulations introduce too much legal liability. He also discussed intrusions into privacy.
Winner: Allen, he is more conversant about business and technology than Kaine.
8. How do we control spending, especially Social Security?
Kaine: We need to increase social security taxable income (he’s talking about the $105K cutoff threshold) by taxing all regular income with Social Security tax rates (which would also increase the employers matching amount). Social Security is not the cause of the deficit. (That’s pretending that the trust fund still exists; but we know that social security taxes effectively go into the general fund along with inter-department IOUs).
Allen: Favors raising the retirement age and eliminating benefits for people making a million dollars.
Winner: None. Both men were just tinkering around the margins.
9. What do think of the UVa decision?
Kaine: he repeated his absolute support for Teresa Williams and again denounced the BOV. No mention of McDonnell’s role.
Allen: Recognizing the question as a set up, Allen said that he had to agree that Coach London was a good hire. The audience appreciated the humor. Then he went on to agree with the reinstatement decision.
Winner: Kaine. The question was off topic and designed to help Kaine; however, it was a missed opportunity. The group wanted to talk about intensifying STEM, which was a key point in Helen Dragas’s summary of issues at UVa, so this was a perfect opportunity to discuss curriculum reform.
The audience questions were mainly variations on the panel’s questions. But one question for Kaine came from a person who sounds like disciple of Richard Dawkins who is a rabid atheist and Christian hater. The question was “how do you see these religious conservatives standing in the way of science and more funding for STEM?”
Kaine: I’m troubled by the anti-science that’s out there like those who deny that humans are not the cause of global warming. (It would have been nice if Kaine had put on his “I’m a Catholic with deep faith” robe and denounced the man’s ignorance).
Interestingly, there was no panel question on Obamacare. Then again, this group was more concerned about immediate revenue impacts caused by sequestration and insourcing. Allen did get an Obamacare-friendly question/statement from the audience on why Health Savings Accounts don’t work, which Allen swatted down. It sounded like another question planted for Kaine.
Kaine: I’m the healer, can’t we all get along.
Allen: I have record of addressing these concerns.
Overall winner: None because neither candidate specifically addressed the group’s key concerns in sufficient detail.
Kaine came across as a big government guy who is ready and willing to raise taxes. His Progressive/Leftist beliefs now leak through much more than when he was governor. But Kaine is good on his feet and he blends Bill Clinton-like policy wonkiness with Democrat social justice moralizing.
Allen came across as more business friendly, personable, and knowledgeable about federal policies. He connected with the group, but he needs to challenge Kaine’s premises and present a crisper alternative with a more urgent call to action.
I thought the panel’s primary questions were too parochial and tactical for high tech business leaders – a bit too much of a whiny “hey who took my place at the federal teat” complaint session. They ignored the larger federal policy issues such as the macro economic trends, energy, access to capital, and regulatory over-control. After all, Fairfax-Arlington-Alexandria did vote overwhelmingly for Obama, so maybe this group needs to be engaging the electorate about their concerns.
This Q&A and the December debate may show why the polls are tied. Although there are core differences in governance philosophy, they are currently muted in pastels.