Democrat John Wolfe and Republican Chuck Fleischmann were both present at a Cleveland Associated Industries luncheon held at the Chamber of Commerce.
Wolfe has made it an issue that Fleischmann refuses to debate. He said after the luncheon that Thursday was the first joint appearance the two candidates have made.
Independent candidate Savas Kyriakidis, of Chattanooga, was there as Wolfe’s guest, but was not invited to speak.
The Bradley County Republican Party and Pachyderm Club of Bradley County sponsored a “meet and greet” for Fleischmann at Mountain View Inn earlier in the morning. He arrived at the noon luncheon about 20 minutes into Wolfe’s presentation.
In response to a question about Social Security, Wolfe said the Social Security Trust Fund has a $2.5 trillion surplus and would be “good” until the year 2034. At that time, he said Social Security would begin paying 75 percent of benefits if nothing is done.
“All we have to do is basically raise the Social Security ceiling from $106,900 to $112,000 gradually and that will create more money,” Wolfe said. “Medicare, I think, is solvent until 2017 and there again, just do the same thing on that.”
He said Social Security and Medicare prevented more than 45 percent of the nation’s elderly population from living in poverty. Currently, he said 9 percent are poverty stricken.
Fleischmann was asked the same question after he finished his remarks. He said Social Security is a problem that has been made.
“It’s insurance we pay for. It’s not a gift, we all pay for it when we work. Those of us who are self-employed, like myself with a business, basically pay up to a certain level of income and as you know, over the years, the amount subject to being taxed has increased over the years. That’s a problem.
“Basically, what I think we need to do is sit down at the table and look and see about some of the options out there.
“One of the options out there that’s been talked about is partial privatization.”
He said it is wrong for the government to raid a fund and leave no money in that fund.
“I think we need to look at all the options. We don’t want to raise taxes — no question,” Fleischmann said. “Basically what we need to do is keep the promise to our seniors, but one of the better things would be, I think would be at least to look at the option of some funds being privately invested and I think that’s going to be a direction we should look in.”
When asked about Card Check legislation, Wolfe said the National Labor Relations Board should be enabled with enough legal staff to do its job to punish employers who penalize people for trying to start a union.
“What we need to do before we get to Card Check is put a higher penalty on employers that discriminate against people,” he said. “That right again (as Social Security), started in the New Deal and wasn’t really enforced much under (George W.) Bush and hasn’t been enforced much in a long time.”
He said if employees were allowed free and open elections, there would be no need to discuss Card Check legislation.
Fleischmann was not asked about Card Check.
Both were asked about the state of the economy.
Wolfe said, “When Mr. Obama and his administration said the recession is over, I don’t know what world they were living in. I think the person who said that for the Obama administration is wrong.”
He said the deficit is currently $13 trillion and the gross domestic product is slightly more than $15 trillion, which is about an 8-to-7 ratio between the GDP and the deficit.
“It’s a little bit dangerous. It’s not as bad as Greece, Portugal and Ireland, but it’s not good,” he said. “What I would do is this. I would look for ways to reduce spending where necessary. Right now, we are building submarines in Connecticut. I don’t know who those submarines are going to fight. Let’s concentrate on what is essential for defense and let’s not do pork barrel projects. I think we can cut a lot of money out of the budget by doing that.
“There is really no one for those subs to fight anymore. The Russian navy rotted away and the Chinese have one aircraft carrier which we target 24/7.”
Second, he suggested, is placing a tax on derivatives, which are not stocks and bonds, but bets on which direction stocks and bonds will go. The derivatives market, he said, is controlled by five companies and “a lot of those people are the ones who got us in trouble with speculation two or three years ago.
“As you remember, they were trying to spin manure into gold. They would have made Rumpelstiltskin jealous.
“If we tax 1/2 percent to the buyer and 1/2 percent to the seller, that would raise about $640 billion for the government, but right now, the derivatives market is a $64 trillion market.”
He said in the American economy, 40 percent of profits are made in the financial sector.
Wolfe promoted long-term capital gains tax breaks for small business as a way to grow the economy and get people to pay taxes.
Fleischmann said deficit spending is the biggest long-term threat to the economy. He said deficit spending was bad before, but it is worse now under the Obama presidency.
“It’s unbelievable that the federal government could have the liberal arrogance that it does. It continues to spend and spend and spend with no check in sight. It’s wrong. It’s morally wrong to do that to our country.”
He said the federal government should adopt Tennessee as a model of being constitutionally mandated to balance the budget.
“We need a constitutional amendment to federally balance the budget. Why? Because government is the problem, not the solution. Big government doesn’t know any better. That’s their nature. They get in there and what do they want to do — they want to spend, spend, spend, they want to tax, tax, tax — and it’s a problem.
“What we need to do as citizens is curtail the government.
“To address the issue of where we have to go with cuts,” he said, “I think what we have to do is as a nation, is sit down and audit different programs — just perform an audit — just like we do in business and say: Where is the money going? Where is there waste? Where is there fraud?”
Fleischmann was asked if he favored a fair tax or flat tax. Wolfe was not asked that question.
The Republican said the first thing he would throw out is the IRS tax code, saying it is not understood by accountants and is too costly.
“I think we need real tax reform. I do like certain aspects of the fair tax, but I do have some supporters who support the flat tax. The first thing we’ve got to do is get rid of the current IRS tax code and replace it with what we have in the great state of Tennessee. What do we have? We have sales tax.”
He said everyone pays sales tax regardless of income and legal status.