Allen, Kaine detail plans to improve Va.'s economy

U.S. Senate candidates and former Virginia Govs. Timothy M. Kaine and George Allen laid out starkly different visions to get the state's economy back on track at a Virginia Chamber of Commerce event here Thursday.

Allen led off the second annual economic summit by calling for the federal government to butt out of the state's business, saying the best thing for business in the state would be significantly less influence from across the Potomac River.

"The government doesn't create jobs, you do," the Republican told the nearly 500 businesspeople gathered at the daylong event at The Ritz-Carlton, Tysons Corner, adding, "we really don't need Washington telling us what kinds of lightbulbs we can buy."

The event's focus was the U.S. government's role in Virginia's economic prosperity, but Allen suggested amending it to "how the federal government can actually have a 'positive' role in Virginia's economic prosperity."

Allen touted the three prongs of his campaign — reining in regulations, reforming tax policies and increasing the nation's energy production — as a recipe for the state's success. He also called for a reduction of the nation's corporate tax rate from 35 to 20 percent and suggested Congress should vote on any government-proposed regulations with a substantial economic impact.

Kaine, who spoke later in the day, took a different tack in presenting a very different set of solutions.

"There's one attitude that says that the right strategy to take is to fight Washington. I've got a different attitude. I think we need to fix Washington," said Kaine, a Democrat.

He stressed the close relationship between the federal government and Virginia, which serves as home to many of its workers. He said the key to improving the state's economy was to focus on education, which breeds talent and, in turn, business.

Acknowledging dysfunction in Washington, Kaine said the problem had less to do with policy and more to do with the state of politics, decrying partisan brinkmanship, and "obstructionism" that has caused gridlock this year, particularly on deficit-reduction efforts.

"When you look at Washington, you see a prevalence of … gimmicks," he said, pointing to no-tax pledges and filibusters while endorsing bipartisanship and a "balanced approach" to the issues, especially the nation's $15 trillion in debt.

"Cuts are really important, but nobody has ever cut their way to prosperity," he said, noting that he has embraced the idea of allowing the Bush-era tax cuts to expire on the wealthiest Americans as a way of reducing the nation's debt in concert with spending reductions.

Much of the discussion at the summit centered on the impact of $1.2 trillion in looming federal spending cuts — focused heavily on defense — on the state's economy. Virginia relies heavily on defense spending, which represents nearly 14 percent of the state's total gross domestic product.

The automatic cuts, to take effect in 2013, were brought on by the bipartisan congressional supercommittee's recent failure to agree on alternative deficit reductions.

On that, Kaine and Allen found common ground. Kaine called the inability to reach a deal "an embarrassment," and Allen said he was "not surprised but disappointed by the failure."

Following their respective speeches, all agreements went out the window.

Caught for questions after his speech, Allen, who will debate Kaine next week for the first time, drew a sharp contrast with Kaine.

"My opponent has a different vision," he said. "He's been for this Obama stimulus that has not created the jobs that it promised, he has confirmed he's for tax increases now in the midst of this weak economy — as he did as governor — (and) he's for this 'Obamacare,' which is such an impediment to hiring," he said.

Kaine swung back at the criticism later in the day, noting that while Allen might call allowing the Bush-era tax cuts to expire a tax increase, he voted for them to be temporary while serving in the U.S. Senate.

"The reason that they were temporary was because if they were made permanent, they were going to explode the deficit. George Allen was part of a deficit-exploding wrecking crew when he was in the Senate," Kaine said.

He also addressed Allen's criticism of the stimulus plan, which Kaine touted as Democratic National Committee chairman.

"Go ask Gov. (Bob) McDonnell what he did with the stimulus dollars. He used them to balance Virginia's budget. Everybody sort of gets this but George," Kaine said. "I think he's playing out of a dated playbook."