Supply-side economics at core of Gingrich plan

With the economy at the core of the presidential campaign, Newt Gingrich has received help from a group of relatively unknown economic thinkers — including two former advisers to Herman Cain — who share an unwavering faith in the school of thought known as “supply-side economics” that rose to prominence more than three decades ago.

Unlike Mitt Romney, who long ago surrounded himself with mainstream Republican economists, Gingrich has turned to more zealous advisers who believe the only true solution to healing the nation’s deficit is to spur economic growth through sharp tax cuts, reduced regulation and a tight rein on monetary policy, rather than focusing too keenly on spending cuts.

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Peter Ferrara describes himself as Gingrich’s chief economic policy adviser and has won praise from Gingrich on the campaign trail. A lawyer and libertarian scholar who had long advocated privatizing Social Security — and once acknowledged taking payments from Jack Abramoff to write favorable op-ed pieces about the lobbyist’s clients — Ferrara said he talks to Gingrich almost daily.

“His thinking is extremely in tune with mine,” Ferrara said in an interview.

Other Gingrich advisers include a software entrepreneur in Texas and a Chicago-based economist for a research firm, both of whom advised the Cain campaign — famous for its “9-9-9” economic plan — before it collapsed late last year.

Gingrich surged to the front of the Republican pack, following his triumph in the South Carolina primary last week, in part on the strength of his appeal on economic issues. Voters who cited the economy as their top concern chose Gingrich over Romney, a shift from earlier contests.

The Gingrich campaign declined to discuss its economic team. But in separate interviews, the advisers said their arrangement is ad hoc, adding that Gingrich seeks advice but ultimately calls his own shots. “Speaker Gingrich does not need to be tutored on these issues,” said Paul Hoffmeister, the Chicago-based economist.

While Romney has cast himself as a problem-solving executive who created jobs in the private sector, Gingrich has heralded the country’s job growth during his time as House speaker and repeatedly portrayed himself as a Ronald Reagan-like figure whose aggressive policies would trigger a new era of growth in America.

“The Gingrich campaign is the strongest supply-side economic team in the Republican race right now, without question . . . We are real, pure blood supply-siders. I mean, hard-core supply-siders,” Hoffmeister said.

Romney and Gingrich share some core beliefs. Both candidates believe in lowering taxes. Both want to make permanent the George W. Bush tax cuts of 2001 and 2003. Both want to roll back regulations on businesses and financial firms.

But Gingrich has gone much further, proposing to eliminate taxes on capital gains and other investment income altogether. He also would lower the corporate tax rate to 12.5 percent — barely a third of the current level — and give individuals the choice to pay a flat tax rate of 15 percent, and create a “gold commission” aimed at keeping the dollar stable.

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