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Pawlenty Tries Tax Cuts

3:39 PM, Jan 19, 2009 • By BRIAN FAUGHNAN
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Faced with a slow economy and a large deficit, Democrats in Washington are going to try to solve the problem by adding more than $1 trillion to the national debt. Many governors face similar challenges, and some at least, are trying a different approach. One noteworthy example is Minnesota's Tim Pawlenty:

In his State of the State Address to a joint body of the House and Senate in the House chamber, Pawlenty urged lawmakers wrestling with a $4.85 billion budget deficit in the upcoming biennium not to raise taxes for strapped workers.

Rather, calling the challenges facing the state "the worst we've seen in a long time,'' Pawlenty said the state should cut the business tax rate in half, from 9.8 percent to 4.8 percent over a six-year period, and give businesses a series of tax credits and exemptions that would allow them to expand and create jobs...

In his budget proposal later this month, Pawlenty said he will rely on spending cuts to balance the state's budget. But he promised to protect military members and their families and public safety programs, and he urged legislators dealing with the deficit to do the same.

Incoming North Carolina governor Beverly Perdue -- who was elected on Barack Obama's coattails -- has also chosen budget cuts over tax increases:

Gov. Beverly Perdue tried to get ahead of a deepening budget crisis Thursday by ordering larger cuts in state agencies, freezing vacant jobs and halting millions of dollars in construction, purchases and travel.

She said agencies are close to laying off employees.

It was the second time Perdue, governor for less than a week, has dispatched an emergency order to help stabilize the state's finances.

She issued an executive order Thursday afternoon telling agencies to increase cuts in the current year's spending -- 7 percent for most of them. Smaller cuts were ordered for schools, mental health services, prisons and courts.

These approaches will earn both Pawlenty and Perdue fans among fiscal conservatives. In the case of Pawlenty in particular, it may help burnish his national image in the event that he seeks the presidency in 2012.

Hat tip: Ambinder