Ted Simons: Good evening, and welcome to Horizon. I'm Ted Simons. Joining me tonight are Dan Nowicki of "The Arizona Republic," Howard Fischer of Capitol Media Services and Mike Sunnucks of "The Phoenix Business Journal." An amazing sight this week on the house floor--Capitol Hill. Again, was there any notice that Gabrielle Giffords might appear for the vote.
Dan Nowicki: It was probably the best-kept secret in Washington, the city known for not being able to keep secrets. I got a cryptic email from her communications director basically just saying make sure you watch C-Span, and the big vote was coming up so I was watching it anyway and I got a call from a source who said ,”Do you know what's going on with Giffords?” “No, what's going on?” “We just saw her getting wheeled into the house office building on Capitol Hill.” Apparently she’s going to vote, and by the time I could tell my editor, her office sent out a notice.
Howard Fischer: You’re right, and I’m going to with Dan: we count on leaks. The fact you've got 435 people there, all of their press aides, people who are with hear and people who are against her, and this was a wonderful opportunity. Now, I think part of the message here was to people like frank Antenori and all the Republicans in southern Arizona who are chopping this to bits, saying, “Oh, there's no folks for the congressional seat and all of the sudden probably Frank’s sitting there spilling milk out of his nose, saying, “Oh lord, now what?”
Dab Nowicki: Just moments before she showed up, the press gallery filled. It's usually empty. There’s a few stall wards up there, above the floor. And it filled up, and I turned to someone and said, “Is the president coming here or something? That's usually the only time it's filled up.” Turned out it was Giffords.
Mike Sunnucks: It did show some of the physical challenge challenges she still faces, and obviously these types of injuries are very wildcard things; people recover at different rates and different times, and one her sides of her body—one of her arms were down. She did look--she had some energy, but she looked very--kind of weak.
Howard Fischer: From what? I mean, this is a woman -- you guys covered it. The day of the shooting, we just assumed she had died. This remarkable recovery here, and it sends a signal that perhaps she's not just interested certainly in her own seat and as we'll talk about, we have the whole open U.S. Senate seat that sends a signal, maybe she's up for the race.
Ted Simons: What does it say about her political future? Not to get too far afield of the amazing event in and of itself to see her there. Is this the office basically-- the office said it was too important of a vote for her to miss.
Dan Nowicki: She actually did put out a statement a written statement attributed to her for the first time since the shooting, and I asked her office how much did she contribute, and it basically those are her words, she worked with staff like with all statements. But I think the talk has kind of died down; early on there was enthusiasm: “Maybe she would run for senate.” And recent weeks that enthusiasm has subsided a bit. And this has maybe reignited the faith among her supporters. I think she could at very least run for senate.
Mike Sunnucks: I think there was a lot of people, especially on the republican side, that didn't expect her to run, and it was encouraging some of the GOP folks to step forward. And when you go through something like this, being able to do something like that personally and for your rehabilitation to travel there and do her job, what she wants to do. I think it was maybe as much that as the political stuff we're talking about.
Ted Simons: When you think about it, when you saw the scene, I mean personally I would probably be tense at having a lot of electric energy having so many people crowding you and clapping for you. That takes a lot out of anyone.
Howard Fischer: It takes a lot out of anyone, but like I said, what's interesting in terms of the speculation, is how often do we see here between now and next March, April, when she actually needs to make a decision. I mean, the fact she was able to come not from Washington but from Houston to do suggests she has a certain amount of stamina. It will only get better. I think they will have to make in a decision in terms of her improvement. The last—one of the last things to come back according to the doctors was speech. And it's a complicated thing in terms of cognitive stuff in terms of all the muscles that need to move in the mouth. See obviously she was able to--Jeff Flake talked about the fact she said, "Flake, flake, flake" and mentioned him by name.
Dan Nowicki: Despite the chaos, she was able to pick out people and call them by name.
Mike Sunnucks: I mean if she runs—if she’s able to run, she doesn't have to really run. Because if she runs for her seat down there, she'll win. There will be so much sympathy vote for her, she has great name ID, everyone’s positive towards her, everyone’s rooting for her. Senate race, statewide, that's going to be a different animal; that has implications to national politics, but if she runs in a district, whatever it looks like, I don't think there's any chance of her losing.
Howard Fischer: And the Republicans might not even contest it if she runs for the house, but they’re not going to give her a senate seat, I don't think.
Ted Simons: As for the vote, she and Paul Gosar were the only members of the Arizona delegation that voted for this. Was that a surprise?
Dan Nowicki: I think it was a little bit of a surprise. Gosar was actually said early on he was going to vote for it. He wasn’t one of the guys who took it to the limit so you had to guess how they would vote. Like David Schweickart, he didn’t say early on. Doesn't say Giffords’s vote wasn’t needed, but I was told like when she decided to get on the plane, it wasn’t clear.
Ted Simons: Interesting.
Howard Fischer: And that really shows something about the house leadership they didn't know, well how many votes they could deliver out of it. Same thing with the democrats.
Mike Sunnucks: It passed easily. Again, they had enough votes, and what I think they did was give some folks a hall pass politically to vote against it for the re-election. On both sides of the aisle. I mean, there were reasons for both democrats and republicans to have problems with it.
Ted Simons: Let’s talk about this as far as the fallout. Will opponents be labeled extremists whether it’s on the left or on the right, if you were against this and you were to put the whole full faith and credit of the United States up like a piñata, will that come back to haunt some of these guys?
>> Well it’s interesting because Arizona’s delegation has bipartisan extremism: two democrats in the house voted against it as well as some conservatives in the house.
Howard Fischer: And this is going to be interesting to real watch because on the democratic side, there's a lot of disappointment with the president, even among the people who voted for this: “Wait a minute, wasn't he the guy who told Eric Cantor ‘don't call my bluff?’ Wasn’t he the guy who said, ‘We’re going to hang in there this time.”I think the republicans have figured out, “Hey, we can roll this guy.” So the some of the dems lose nothing loses of their constituency. In terms of the Republican side, Gosar is an interesting case. Kirkpatrick is already raising a lot of money. But how does she go ahead and run to the left of that since he voted for the deal, what does she say? “I would have voted against it?” Not in that district.
Mike Sunnucks: I think what happens with the commission, whether the cuts go through and whether they raise taxes and how I think this vote will be long forgotten by the time election day comes around next year. In think in terms of how much defense cuts and what they do with taxes and social programs could impact things. But I think this vote and Howie is right, they were able to push the Pres around a bit, but the Republicans have tough choices to make coming up with the commission: are they going to be willing to raise taxes on folks or go along with the defense cuts.
Ted Simons: Some of the rhetoric: “All give and no take is no compromise.” That of course is coming from the left from the right. Jon Kyl had some pretty strong things to say.
Dan Nowicki: He voted for the bill.
Ted Simons: She voted for it, yet he says the knowing destruction of the U.S. military and the threat of Armageddon inserted into the bill. Was that among the strongest things said out there?
Dan Nowicki: That was pretty strong, but I know that I think over 10 years, there's substantial defense cuts and McCain expressed concern about that not using that language.
Howard Fischer: But, of course, let's be realistic about it. The pentagon itself has been trying to cut the some of the programs that the generals say are not necessary, and who is defending it: the senators and reps who got the defense in their --
Mike Sunnucks: Well the problem—the quandary is if you have all these defense cuts, $350 billion right now, and you’ll have another $800 billion, $600 billion if they don't do the cuts. They have a split, that's a lot of jobs that will be happening in Arizona, California and Virginia in these states where you have the contractors. That's a tough pill to swallow for a lot of folks, and we'll see if they have the guts. It’s going to be a hard one because those are high-paying jobs in a lot of states, and those are big employers.
Ted Simons: You mentioned Jon Kyl. A new name, face in the race to succeed senator Kyl. Who is Will Cardon?
Dan Nowicki: He’s a Mesa business leader and real estate investor; he's independently wealthy and I interviewed him today for the first time. You know, I heard his name, I heard he was rumored to be interested in running for the senate, and he, you know, assured me he is willing to spend as much money as he needs to win.
Howard Fischer: And this is where it is going to get interesting. We know that Jeff flake has already $2 million in the bank this far out of the election. This guy has money, not only his money—I mean the Cardon oil fortune: his grandfather was the founder of oil. He admitted he didn’t do all this on his own; it’s good to be born with a rich grandfather. The problem we're having -- struggling with is if you look at his positions on issues, and you look at Jeff's positions on most of the issues, there's not that much of a difference. You got two guys--two young east valley, LDS, attractive candidates who live within 10 miles of each other, and this is for the statewide race. This is it?
Ted Simons: But why not one of whom worked for the other to help him get elected.
Mike Sunnucks: I think the biggest difference is going to be immigration. You know, Jeff previously backed the McCain guest worker bill that gave a pass to undocumented folks that were here, and a lot of folks within the Republican Party don't like that; they think that’s amnesty. I think Cardon will hit him on the pork barrel stuff; Jeff brings nothing back to the state; he has that principled stance, and that’s appeals to some folks. That doesn’t appeal—but you can make the argument that we need a bridge or a road every once in a while. I think immigration will be the biggest issue.
Howard Fischer: But let’s talk about that. The fact is that what Jeff did earlier this year, in terms of saying this is a dead end; we’re going to have spear the board is exactly what McCain did before the last election. The voters were willing to forgive him. He said, “I get it now. We've got to secure the border first.” Jeff said, “Look, the border is different than it was eight years ago.”
Mike Sunnucks: Now, if you have somebody up there that’s run a lot of campaigns, spent a lot of money on it and he’s an adequate candidate, does a good job, he’d run a lot of commercials with stuff that Jeff supported in the past, and that could resonate with folks in the Republican primary. But you could make that argument that if you run a good media campaign, you want to spend a lot of money; you could paint Jeff to the left on immigration.
Howard Fischer: And you could also paint Cardon as someone who doesn't care -- for all of his talk about the federal deficit—Jeff is very clear—he’s made a national name for himself on issue of earmarks: not only that they're bad but that he doesn’t vote for them. Cardon said to me, “Well you know, Howie, I’m against earmarks, if we do them through the frontier—the light of day and it benefits the state, well, I'll take them.” Well, you cannot say that earmarks are bad and then say, “But—eh--except for those I like.”
Dan Nowicki: I talked to Flake already and they assured me that they’re 100% behind him; they’re willing to do whatever it takes for their club members.
Ted Simons: Are we hearing -- gotcha. Are we hearing anything regarding Democrats, Independents, anyone else there besides what we've got so far?
Dan Nowicki: Yeah, Don Bivens, the former state Democratic Party chairman, is probably the most prominent name that’s actually out there exploring; there's a Tucson businessman who’s also exploring.
Howard Fischer: In other words, nobody. I’m sorry, but I hate to say it--
Ted Simons: Well, let's throw out the name that you referred to earlier. Not necessarily Gabrielle Giffords but Mark Kelly.
Howard Fischer: Oh, come on now, look. This is--
Ted Simons: Oh, come on now?
Howard Fischer: I’m sorry
Ted Simons: Well you may not be buying it but a lot of other people are talking about it.
Howard Fischer: No, no what happens was he gave an interview and someone said, “Would you consider politics,” and he said, “I would never—“
Ted Simons: No, we’re not talking about last week; we’re talking about this week. This week people are saying regarding a pop--
Howard Fischer: I'm sorry, I'd be willing to bet you whatever dinner whatever place you want Mark Kelly is not a candidate.
Ted Simons: Does that mean I have to go to dinner with you? Okay, bet’s off.
Dan Nowicki: He does seem to be generally uninterested in politics, but maybe somebody can talk to him.
Mike Sunnucks: The challenge is he's a good candidate on paper: he’s an astronaut; he has a lot of good will build up for what they’ve gone through. The problem is he's a democrat, and that's a bad brand right now, especially in a state like Arizona. So maybe what's gone on with him and Gabby can overcome that, maybe he’s one of those things where you look at it and he's an astronaut, not partisan. “I’m going to go in there and do what's best for the state. You can see a good campaign there, but on the surface, running as a democrat, I don't think the Republicans are going to hand it over to him, and there will be a lot of questions about where he stands on stuff, and he hasn't run for anything.
Dan Nowicki: Interestingly if he does become the next senator, Arizona will be represented by two former navy pilots.
Ted Simons: Speaking of that other former navy pilot, what's going on with him and the hobbits?
Dan Nowicki: Well, he read a "Wall Street Journal" editorial on the floor, and it didn't go over well with some of the bigger names in the Tea Party. He criticized Christine O’Donnell, Sharron Angle, and the gist was that he was criticizing the strategy. This kind of diehard tea party strategy: we're going to hold out for what we want: a balanced budget amendment. Never mind the default. And McCain was sort of saying, who do you think is going to get blamed get blamed? Obama, don't count on it. It’s probably going to be Republicans. I think that was the larger point he was trying to make, but he referenced J.R.R. Tolkien characters and it was actually the “Wall Street Journal" that did it. And a big backlash. I talked with him last week, and he wasn't surprised by the reaction at this point, but he did stress he wasn’t trying to pick a fight with the rank and file tea partiers; he was just talking about some people in the senate.
Mike Sunnucks: Well, he’s always had run-ins with those folks whether it’s the folks that support Arpaio or J.D. Hayworth or other folks kind of--the pitchfork folks that don't get into the officers' club at the Republican Party. He’s always had kind of a clash with them here in Arizona and kind of nationally even though he agrees with them on a lot of stuff; they’re kind of on the same the same side in terms of fiscal conservatism and getting spending under control, but it’s kind of this--I don't know if it's a cultural or a personality thing--he's never meshed with those folks.
Dan Nowicki: And I think they definitely don't trust him. Any little thing he says is going to be a blow-up.
Ted Simons: Alright, closer to home here, we had a hearing regarding Medicaid cuts and Tim Hogan back in court. This time though with folks who have been affected by the freeze—the eligibility freeze.
Howard Fischer: Even the state has conceded at least one of his new plaintiffs. It’s affected by the fact that last month, they stopped enrolling childless adults into the plan. Which is the plan that the governor came up with. Over the course of the year, it’s going to cut enrollment by over 100,000 people. The idea is we’re going to save a bunch of money. The question becomes what did voters mean in 2000 when they said the state shall provide coverage for everyone below the federal poverty level. With or without children. He said you cannot simply defund it and say you haven't violated the voter protection act. Now, what the judge said is you've got a little problem here problem. The measure said it's funded by tobacco taxes and supplemented by other available sources. Well, what's available? The legislature said,” Look, we're in a budget crunch; there’s no available money.” And he said, “Wait a second, you did fund the department of commerce.” Well, that's not a decision you can get into, judge. Well, the department of commerce is not statutorily required; it’s not constitutionally, and the question becomes will a judge second guess that. Bottom line is this judge will issue a ruling probably next month. Whoever loses will go to the Supreme Court and find out what did voters intend.
Mike Sunnucks: I think from a big-picture legal perspective, the plaintiffs—Hogan has the argument: it’s mandated: you are supposed to spend it. You take a move nuanced if you want to move everything around—if you want to move the language around, you might be able to rule in favor of Brewer and the legislature, but kind of from a big picture, if you looked at it from 30,000 feet, that's a good argument they have there on the mandate and spending.
Howard Fischer: Well, and the other tricky part of all this is that now lawmakers are saying, “Well, it doesn’t mean we have to spend it. These are the same lawmakers who voted to put a measure on the ballot saying, several years ago—saying, “Look what access did to us, so for all future measures, you have to have a dedicated revenue source so we don’t get into this situation.” Well now they’re saying, “Remember when we told you a few years ago – “
Mike Sunnucks: Well they're chomping at the bit down there. Some of the republican lawmakers. Some of the business folks to get rid of the mandated things because they think it hamstrings them when they really need to make decisions; they want to give tax cuts and fund the commerce authority instead of doing what the voters wanted, so I think there’s folks down there if they win this case, we'll see all these types of the challenges.
Ted Simons: We’ve only got a couple of minutes left. Howie, there’s quite a bit of debate going on about online sales and collecting state sales taxes from folks who are based here or in a state but who aren’t collecting those taxes.
Howard Fischer: Technically speaking, if I buy a piece of software from Amazon, and they're seem the prime player here. They're not charging the state’s 6.6% sales tax, the city tax and county tax and everything. If I go to Best Buy and buy the same thing, they’re collecting the tax. Obviously the retailers say it’s unfair. Now, theoretically speaking, I'm supposed to pay that 6% tax as a use tax.
Mike Sunnucks: And I know you pay that every year too.
Howard Fischer: I’ll bet that thousands of our viewers each year fill out a use tax form for everything they buy from catalog and phone sales.
Ted Simons: And you don’t even have to fill that out anymore; they made it even easier: all you have to do is put it on a line. They made it easier.
Howard Fischer: I know: they made it much easier. Let’s just say I'll be doing a public records request to find out how many people declared how much. Look, the fact is the use tax collection doesn't work. Should -- the tricky part is the U.S. Supreme Court ruled in the 1990s that states can't routinely tell out of state retailers to collect their taxes unless the company has a “nexus to the state.” Amazon has what they call affiliates, people who get business through them in each of the states; therefore, they say, “You have a nexus here.” Jim Wires tried to push a vote through. It was killed—curiously, by his brother Jerry Wires in the rules committee. You got Todd Fereci who’s saying we ought to market the fact that we don’t charge the tax to convince California business to come here. This is going to be a issue for years to come. Which we're losing millions and millions of dollars, and a state that needs money, this is critical.
Mike Sunnucks: Well, Amazon will tell the states that go after them, “Alright, we’re not going to locate any not locate warehouses there.” And we have some here in this state.
Ted Simons: They're going after California now.
Mike Sunnucks: Oh, absolutely.
Ted Simons: They’re basically saying if you're in California right now, we're disassociating ourselves from you.
Howard Fischer: You see? That's the craziest part. Amazon says, “We don’t have a nexus”; they just opened another warehouse here. What the hell does it take to create a nexus?
Ted Simons: Watch your language, Howie, this is a family program. And with that we will close the curtain on this.
Howard Fischer: I'm so embarrassed.
Ted Simons: Thank you, by the way; we appreciate it.