Institutional investors overwhelmingly approve of Jack Kemp as the Republican vice presidential candidate, a Pensions & Investments fax poll shows, but doubt the Republican ticket can win the election.
In fact, the 122 pension executives, money managers and investment consultants responding gave the Republicans only a 40.5% chance of defeating the Democratic incumbents. And, only 37% gave Dole/Kemp an even or better chance of defeating Clinton/Gore.
Mr. Kemp is a popular choice among institutional investors - 114 thought he was the best available candidate and 110 said he enhances the Republican ticket.
But they might not like his attitude toward retirement savings.
Mr. Kemp seems to favor saving through individual retirement accounts, not employer-sponsored defined benefit and defined contribution plans.
A report from the National Commission on Economic Growth and Tax Reform, which Mr. Kemp chaired, said any new tax system should encourage people to save for retirement. It recommended Congress begin making policy changes that will allow people to take more responsibility for their own retirement saving.
Odds of a Dole victory ranged from 100% cited by three respondents to "zero-to-minus-one" cited by one obviously doubtful consultant. Another consultant was able to hone the GOP's odds of winning to 48.7%, while another narrowed it down to 48% to 52%.
Oft-cited reasons for Mr. Kemp's wide popularity with respondents included his perceived charisma and enthusiasm; his perceived talent for articulating issues; sensitivity to some social issues; and, as one money manager put it, his "supply-side economics (which are) very popular with the investment community."
Nonetheless, not all respondents preferred Mr. Kemp. Others suggested Massachusetts Gov. William Weld; former Tennessee Gov. Lamar Alexander; former Education Secretary William Bennett; and New Jersey Gov. Christine Todd Whitman as better choices.
Said one respondent who preferred Ms. Whitman: "Dole has selected a candidate (who is) even more to the right than himself, which will only serve to further alienate those who had hoped to be able to support a more balanced, inclusive ticket."
Of those surveyed, 42% were plan sponsors, 19% money managers, 28% consultants and 11% other financial professionals.
Strong support from managers
Money managers showed the strongest support for the Dole/Kemp ticket. They gave the Republicans an average 50.6% chance of beating Clinton/Gore vs. an average 40.4% by consultants and 38.4% by plan sponsors.
Money managers also showed the most enthusiasm for Mr. Dole's plan for a 15% income tax cut, with an 82% approval rate, vs. 61% from plan sponsors and 67% from consultants.
When asked "the most important thing the Dole/Kemp campaign can do to have a chance of winning," respondents offered a range of ideas - with recurring themes centering on Republicans' need to attract more women voters, to de-emphasize controversial social issues (including abortion) and to stress ways of stimulating economic growth.
Abortion an issue with some
Robert F. Lanz, vice president and chief investment officer of PacifiCorp, Portland, Ore., suggested the Dole/Kemp campaign should "soften its opposition to abortion and otherwise attempt to become more moderate, which (is the) political ground Clinton has seized." He gave the Republicans only a 20% chance of winning.
Karen Polenz, director of benefits, Carson Pirie Scott & Co., Milwaukee, suggested the Republicans "allow different views within the party on such things as a woman's right to choose." She gave the ticket only a 10% chance of winning.
Not all respondents who mentioned the abortion issue were in the pro-choice camp. Consultant Vernon C. Sumnicht, president of Sumnicht & Associates, Appleton, Wis., recommended the Dole/Kemp campaign offer a "solid supply-side (economic focus)" and a "pro-life stand." "Regardless of what the media suggests, I think people on the grass-roots level are pro-life," he said in a follow-up interview.
Mr. Sumnicht gave Messrs. Dole and Kemp 60% to 70% odds on beating Messrs. Clinton and Gore.
Some respondents also demonstrated their sense of humor.
"The Republican Party should nominate Clinton and Gore, call it a victory and go home," quipped Jay Dirnberger, managing director, Julius Baer Investment Management, New York.
In a follow-up interview, Mr. Dirnberger cited President Clinton's moves toward more conservatism, such as "giving up on health care reform" and promising to sign the welfare reform bill.
Because President Clinton appears to have become more conservative anyway - "and if Dole is going to have difficulty winning," the Republicans might as well "nominate the guy who will win," he said jokingly.
But Mr. Dirnberger, a native of Buffalo, N.Y., is a big fan of Mr. Kemp. "I went to almost all his home (football) games" when Mr. Kemp played quarterback for the Buffalo Bills. "He was excellent."
Mr. Dirnberger gave the Republicans a 50% chance of winning.
Only two respondents said there was nothing the Republicans could do to win in November.
Kemp's empowerment message
But if the respondents are wrong and Messrs. Dole and Kemp are elected, the vice president might move his empowerment message to the retirement savings arena, encouraging people to take more control, Washington observers say.
"Without sufficient retirement saving, many people will become dependent upon the government in their old age, necessitating either sharp increases in taxes on future generations or a significantly diminished standard of living," the report of Mr. Kemp's commission said. "Providing strong encouragement for individuals and families to take responsibility for their own retirement will go a long way toward preventing uncontrolled growth of government while ensuring a more comfortable, more secure and more independent retirement."
Libby Kern, a research consultant with Hewitt Associates L.L.C., Washington, and one of three staffers on the now-disbanded commission, said she thought Mr. Kemp would be eager to jump into retirement savings issues. Because of his penchant to spout off even the most detailed proposals, he wouldn't be shy about getting into technical aspects either, she said.
"You'll see him trying to tackle (retirement savings issues) and being involved in it .*.*. because it is such a legitimate issue," Ms. Kern said. "He supports encouraging savings by taxing only once."
Fallback to IRAs?
Mr. Dole and Mr. Kemp might fall back to a largely popular and fairly standard Republican idea of expanding IRAs, some said.
"In looking at the practical aspects, most savings has been done in employer-based plans," said Sylvester J. Schieber, director of research at Watson Wyatt Worldwide, Washington. "If they're concerned about retirement savings, (placing more emphasis on IRAs) would be a mistake."
Mr. Kemp, a nine-term U.S. representative from Buffalo, former secretary of Housing and Urban Development and longtime supporter of hefty tax cuts, was the co-sponsor of the largest tax cut ever: in 1981, taxes were cut 25% over three years.
Several say Mr. Kemp's somewhat undying enthusiasm for his economic issues will be a major force in pushing Mr. Dole's economic proposal, which calls for a 15% cut in tax rates.
Jude Wanniski, president of Polyconomics Inc., Morristown, N.J., and former editorial writer for the Wall Street Journal, was one of Mr. Kemp's early teachers of supply-side economics. He said the proposal will jump-start the economy and allow everyone to benefit from a lower tax, higher growth system.
"Jack's strategy is not to aim narrowly at the tax system," Mr. Wanniski said. "What Jack essentially is saying is increase the size of the economy as rapidly as possible, and that will cause assets to increase as fast as possible. .*.*. People will produce more, and in turn will save more."
Mr. Kemp's "wholesale endorsement of supply-side economics" worries Watson Wyatt's Mr. Schieber. With a whopping tax cut, federal officials will be looking for ways to pay for it, he said. Earlier this month, Mr. Dole said he would end tax loopholes and wasteful programs.
While most agreed the tax-favored status of pension plans is almost untouchable, Mr. Schieber said: "Bob Dole certainly showed in the 1980s that he was willing to curtail retirement savings' tax preferential treatment."
(In 1983, P&I reported Mr. Dole called for a study on whether the tax expenditure for pension plans was performing as expected. Many feared Mr. Dole would be lowering the expenditure to help reduce the federal deficit. In a letter to P&I, Mr. Dole said: "We cannot ignore certain tax expenditures as 'sacred cows' and refuse to assess whether the expenditures serve the purpose intended by Congress. However it would not be fair for any organization to take these comments and interpret them as a cutback on any particular tax expenditure item.")
But Frank McArdle, a consultant with Hewitt in Washington, said pension plans' tax-preferred status will remain the same simply because retirement savings has become a "bread-and-butter" issue for politicians.
"Any political candidate who would attack pensions ... would be looking for a death wish," Mr. McArdle said.