Standard & Poor’s downgraded New Jersey’s credit outlook to negative this week, citing concerns with projected growth. Former Gov. Thomas Kean told NJ Today Managing Editor Mike Schneider that while the outlook doesn’t mean much, a downgrade would cost the state money. Kean said the state needs to control its spending to get back on track. He also discussed Gov. Chris Christie’s performance as the Republican National Convention’s keynote speaker and civility in politics.
A downgrade from the S&P would cost New Jersey money because the state would have to pay more for debt, Kean explained. He said the negative outlook indicates that officials need to be careful because a good credit rating helps the state’s reputation and helps in the borrowing process.
Kean said it will be difficult to repair the damage. “We’ve been getting into a hole and digging that hole deeper every single year,” he said. “Now we’re starting to dig that hole out but it’s going to take some time. You can’t do it all at once without hurting the economy.”
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The former governor said both political parties are trying to address the issue, but neither are willing to take the lead to cut items from the budget to truly solve the borrowing problem because they don’t want negative reaction from voters.
“The governor has taken the lead on pensions with alliances in both parties. That’s a start,” Kean said. “They gotta continue to do that kind of thing until we get back to the point of responsibility.”
Some have criticized New Jersey for utilizing one-shot funds. Kean said officials have done that for 20 years. “Irresponsible borrowing without necessary money year after year after year, eventually creditors catch up with you and creditors come after you,” he said. “We should revise the whole way we borrow, the whole way we tax. We rely much too much on income tax now.”
Kean was at the Republican National Convention in Tampa last month to watch Christie’s keynote address. Although some criticized Chrisite’s performance, Kean — who gave the keynote address at the 1988 RNC — said he did a good job.
“The expectations were over the moon with people saying it was going to be the greatest speech he’s ever made. Nobody was going to meet those expectations,” Kean said. “But it was a good speech and it did the job. And he talked responsibly about bipartisanship and what you have to do to get the nation governed as well as the state, used his own example. I thought it was a good speech.”
One of Christie’s talking points was bipartisanship and some have said he made it sound more prevalent in New Jersey than it is. But Kean said a lot of compromise does happen in New Jersey, though he wishes there were more of it. He said Christie gets credit for bipartisanship because he’s the leader, but Senate President Stephen Sweeney and others should also be recognized for compromise.
Kean did criticize some Democrats before Christie gave his speech. He said Democrats should have been proud that the state’s governor was delivering the keynote instead of criticizing him. Bill Bradley congratulated him when he gave the address in 1988.
“There was much more civility. The two parties worked together and if somebody in either party was doing something to give the state more prominence, everybody got behind that,” Kean said. “It just doesn’t seem to happen any more and it should.”
Kean also discussed the presidential race. While one poll has Mitt Romney trailing President Barack Obama by eight points in his home state, Kean said he doesn’t get concerned over any individual poll. He has heard that the race will be incredibly close and numbers will rise and fall in the coming weeks.
Romney has been criticized for comments that 47 percent of Americans are taking government assistance. Kean said Romney’s words were somewhat misinterpreted and he was actually talking about how the U.S. is struggling to pay for social programs. “We’ve got to find sources to pay for them. And we haven’t done that in the past,” Kean said. “It’s one of the reasons we’re in deep debt and one of the reasons as a country we’re in trouble.”
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Kean co-chaired the 9/11 Commission. He said while the country has made progress, much of that has been around an old threat and the U.S. needs to improve and adjust. He said the terrorists aren’t just in Afghanistan any more but are more spread out and are focusing on smaller rather than larger attacks. Cyber security is another area of concern, according to Kean. “They can disrupt our whole grid in this country with a cyber attack,” he said. “We’re not ready for it. We’re not prepared for it.”
Blame doesn’t matter now, Kean said. “So it doesn’t matter whose fault it is. We’ve got to do it. We’re behind on that,” he said. “Often the people who attack are better prepared than the people who defend. We’re not yet ready to defend ourselves from a serious cyber attack either in the private sector or in the public sector and that’s gotta change.”
Kean also said he believes the U.S. is too active militarily throughout the world. “I don’t think we can afford to do what we’re doing any more and I think aid is misdirected,” he said. “I would like to see a lot more humanitarian aid rather than military aid around the world.”
He explained that humanitarian aid can help the U.S. gain a more favorable reputation. As an example, Kean said before sending aid to Indonesia — a Muslim country — after the tsunami, 20 percent of citizens had a favorable view of the United States. After the aid, 80 percent felt favorably about the U.S.
When asked if there’s an effective way to win hearts and minds, Kean said, “Absolutely. And it’s a lot cheaper than a war.”