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Financial Planning > Tax Planning

Christie’s Path

By Kenneth Silber

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New Jersey’s Gov. Chris Christie is a rising star in Republican national politics. He is a high-profile backer of Mitt Romney’s candidacy and a plausible choice to be Romney’s running mate. Even if not so chosen, Christie can be expected to remain an important campaigner for Romney, and in the event of victory, Christie might take a key position such as attorney general in the new administration.

Regardless of the various uncertainties in the above scenarios, a Christie run for president in the 2016 or 2020 cycle seems distinctly possible. Indeed, given his current high profile, and the various calls for him to run this time around, it would be something of a surprise if Christie does not show up as a presidential hopeful in four or eight years.

The New Jersey governor thus looks set to be a factor in national politics this year and beyond. An assertive personality, he is sure to draw attention and controversy in any role he plays. Among his key assets are seeming capacities to appeal across factional divisions within the Republican Party and to strengthen the party’s position within the Northeast, a region in which it has been in steady retreat.

As a policymaker, Christie has focused largely on fiscal and economic issues, and his views and record on such matters will get much attention in any future career move. His ability to appeal to the financial sector will be a significant factor in his political prospects, but also a target for opponents who will portray him as too close to Wall Street and the rich.

The 49-year-old Christie, elected governor in 2009, has built a reputation as a budget-cutter. Facing big deficits on taking office in 2010, he made sharp cuts in state aid to towns, cities and school districts. The following year, he vetoed legislative moves to restore various cuts. He has been in frequent conflict with unions for teachers and other public employees over his efforts to scale back pension and health benefits.

Recently, Christie has focused on tax cuts, proposing a 10% across-the-board reduction in state tax rates that currently range from 1.4% for income under $20,000 to 8.97% for income over $500,000. State Democrats have denounced the proposal as aiding the wealthy, and the governor has been unapologetic about that prospect. The top 1% currently pay 41% of the state’s income tax, he said in a Wall Street Journal interview headlined “Christie to the 1%: Please Occupy New Jersey.”

Christie’s combative style has garnered national attention. His caustic exchanges with critics have become a YouTube staple, often posted on his official channel by his social-media-savvy staff. He called an ex-Navy SEAL law student who interrupted him an “idiot,” for instance. Christie informed a questioner on a call-in TV show that where he sends his kids to school is “none of your business.” As Hurricane Irene approached, he told sunbathers, via a news conference and Twitter, to “get the hell off the beach.”

Financial Ties

In 2009, Christie received considerable support from the financial sector in his race against Democratic Gov. Jon Corzine, notwithstanding the latter’s history as an investment banker. According to data compiled by the National Institute on Money in State Politics, a watchdog group, Christie raised $856,030 from the finance, insurance and real estate sector, making for over 14% of his campaign’s contributions; this included $457,869 from the securities and investment industry.

Corzine, by contrast, received $418,166 from the finance, insurance and real estate sector, including just $181,015 from the securities and investment industry. Such figures were a small fraction of Corzine’s overall receipts, which were dominated by over $27 million donated by the candidate himself. Christie won the race with 48.5% of the vote, compared to Corzine’s 44.9%.

Before running for governor, Christie was a high-profile federal prosecutor. Prior to that, he was in private law practice, as well as holding the local office of freeholder in Morris County. From 1999 to 2001, Christie worked as a lobbyist, with clients including the Securities Industry Association (which after a later merger became SIFMA).

In late 2011, amid speculation about a Christie presidential run, an online publication called The Awl described that lobbying as a vulnerability for Christie, since one of his projects was “to win an exemption for securities fraud from New Jersey’s Consumer Fraud Act.” The Awl then stated that the industry association at the time “was led by one Bernard Madoff,” and enthused about a possible “attack ad” on the topic.

In reality, Madoff was a board member, not a sole leader, of the industry group, as part of his pretense of being a legitimate businessman, and of course no conceivable change in any law would have made his vast fraud legal. Still, if Christie does run for higher office, we might not have heard the last of his supposed connection to Madoff.

 Veep Prospects

In January, Christie downplayed the possibility of being a vice presidential candidate, stating that his style might be an obstacle. “I don’t know if I’m the guy to stand three feet behind somebody and nod my head,” Christie told Meet the Press. “That’s not necessarily in my character.” He did not, however, rule out anything.

The governor endorsed Romney last October after declining to make his own entry into the presidential race, and subsequently campaigned for Romney in Iowa and New Hampshire. Christie’s outspokenness has remained intact, throughout. Early this year, as Romney hesitated to release his tax returns, Christie publicly pressed the candidate to do so “sooner rather than later.”

As Romney’s evident grip on the nomination has tightened, speculation has persisted that Christie might be his running mate. In early April, the Intrade prediction market put Christie’s chance of getting the nod at over 10%, ranking him second after Florida Sen. Marco Rubio’s 25%. Virginia Gov. Bob McDonnell and Wisconsin Rep. Paul Ryan trailed Christie slightly, while New Mexico Gov. Susana Martinez and Ohio Sen. Rob Portman put in respectable showings in the upper single digits.

For Romney and his team, considering a choice of Christie means weighing some formidable upsides and downsides. Christie’s style could be seen as a liability, amid concerns about teamwork and tact. Then again, Christie’s tone has been vital in generating enthusiasm for him among conservatives, overshadowing some substantive disagreements with the right, including on gun control and climate change. Forcefulness can be a valuable asset in a vice presidential candidate — or a vice president.

At the same time, Christie has shown an ability to appeal beyond the conservative Republican base. He has been broadly popular, with approval ratings in the high 50s, in New Jersey, a state that has been firmly Democratic in recent presidential elections. Christie on the ticket would raise the possibility that New Jersey, with its 14 electoral votes, just might swing Republican this year. Then again, that is far from a sure thing.

Another consideration would be whether Romney should balance his own gubernatorial background with someone who has experience in Congress and/or foreign policy. However, choosing a Washington insider could also be a liability amid populist currents in public opinion, and foreign policy has relatively low visibility in current debate (though a crisis could change that). Christie, for his part, showed an expanding international interest with a recent trade mission to the Middle East.

All these considerations, of course, presume that Romney is going to be the nominee. In the unlikely event that this is not the case, there will be a brokered Republican convention with an unpredictable outcome. In such a scenario, Christie surely would be an important contender for either the top or the bottom of the GOP ticket.

Kenneth Silber, a resident of New Jersey, is senior editor of Research magazine.

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