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As accusations swirl, Cain strives to talk '9-9-9'

October 31, 2011|By James Oliphant
  • Herman Cain answers questions during an event at the National Press Club on Monday.
Herman Cain answers questions during an event at the National Press Club… (Pablo Martinez Monsivais…)

When Herman Cain wasn’t defending himself Monday over explosive allegations that he sexually harassed two employees more than a decade ago, he was defending his hotly debated ‘9-9-9’ plan.

That had originally been the point of a D.C. sojourn that had been envisioned as a sort of mash-up of classic movies, a “Citizen Cain Goes to Washington.” Still flush in the polls, the self-described outsider was coming to talk taxes, make contacts with the GOP establishment, and perhaps spark some contributions.

But much of that game plan went off the board after Politico reported that Cain, while the head of the National Restaurant Association in his last go-round in D.C., was accused of sexually harassing two employees. The two dropped their claims in exchange for confidential financial settlements, the story said.

That led to a bit of a surreal tableau early Monday at the American Enterprise Institute, a conservative think tank. Cain was there to talk ‘9-9-9’; the throng of reporters (many of whom normally would have skipped such a wonkfest altogether) were there for his reaction to the story.

But Cain wasn’t talking about the allegations. “I’ll take all the arrows later,” he said. (And he would in multiple media interviews.) He was at AEI to make a case for his plan, which would junk the current tax code and replace it with a 9% income tax, a 9% corporate tax and a new 9% federal sales tax.

That plan has come under attack from fellow candidates for the GOP nomination and other conservatives who say that a new federal sales tax would hand Congress another tool to exploit. “When you have the best plan on the table, prepare to be attacked,” Cain told the overflow crowd. The plan, he said, had his rivals “scrambling. How do you come back and counter 9-9-9?”

Texas Gov. Rick Perry tried last week, when unveiled a plan that would allow taxpayers to choose between the current federal system and a 20 % flat rate. Cain dismissed it Monday, calling it a “flat tax light.”

He also implicitly slammed Mitt Romney’s detailed economic outline, saying 9-9-9 “is not a 59-point plan with 160 pages.” It was simple and focused, Cain said, something “the American people can understand and get behind.”

Cain also rejected claims that his plan would help do away with Social Security, because it would end the payroll tax that helps fund the program, forcing it to be paid for out of the general revenue fund.

“We’re not eliminating it. Seniors are not going to be affected,” he said, adding that he was developing a plan to give younger workers “an option.”

At one point during the AEI forum, Cain was asked a question about the details of the 9-9-9 plan and deferred to his economic advisor, Rich Lowrie, who helped craft the plan. Cain would do the same later on a different question during an event at the National Press Club.

Cain, a former chief executive of Godfather's Pizza, said the plan was developed as an attempt to merge two competing conservative tax proposals, the flat tax and the so-called “fair” tax, a tax on consumption.

It was a way of getting “both of these groups to the table,” he said. “We expanded the [tax] base,” Cain said. “The only way we’re going to get the lowest possible rate is to expand the base.”

But Cain made it clear that he would favor eliminating all income taxes in favor of the fair tax, which some critics say would unfairly fall upon Americans who earn lower wages.

He also denied that his sales tax resembled a Value Added Tax, another form of consumption tax that taxes the entire supply chain. Prevalent in Europe, some conservatives fear a VAT will be brought to the U.S. by a Democratic administration.

“It doesn’t matter what you call it,” he said. “The reason why some of my opponents are calling it a VAT is they want to scare people.”

He elaborated later at the Press Club, where Cain held aloft a cupcake adorned with a "9-9-9."

"We are simply taking invisible taxes and replacing it with one visible tax," Cain said. "When you buy a loaf of bread, it is estimated that that loaf of bread contains at least 30 to 40% more cost because of all of the taxes that have to be paid along the way.  You just don't see them. The farmer pays taxes on his profits, if he makes a profit. The flour miller pays a tax. The baker pays a tax. The truck driver that delivers the bread to the store pays a tax.  And the grocery store, if it makes a profit, pays a tax.  Who do you think pays those taxes? We do, the consumer. We are simply taking out the embedded taxes which are invisible and replacing it with a 9% retail sales tax."

The Godfather’s experience taught Cain something else: that he could learn from experts on how to improve a company -- or, he told a lunchtime crowd later at the National Press Club, a country.

“When I went to Godfather's Pizza in 1986, the company was supposed to go bankrupt. I had never made a pizza but I learned,” he said. “And the way we renewed Godfather's Pizza as a company is the same approach I will use to renew America.”

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