Libertarian Cato Institute grades 2012 contenders

Governors' grades released by the libertarian Cato Institute are likely to impact the early horse race between potential 2012 GOP presidential contenders. 

Gov. Bobby Jindal of Louisiana and Minnesota Gov. Tim Pawlenty both received a top grade of "A" from the think tank and received praise for promoting pro-growth policies and tamping down spending.

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"Tim Pawlenty of Minnesota has proposed pro-growth reforms, opposed tax increases, and been a relatively frugal budgeter," Cato wrote. "He has proposed cutting the state's high and uncompetitive corporate franchise tax, and he has repeatedly vetoed giant tax-hike packages passed by the legislature, including increases to gasoline taxes, beer taxes, wine taxes, and income taxes."

Cato called Jindal a "a top-performing governor with regard to both his tax and his spending policies."

Pawlenty has not said if he will enter the 2012 race, but most political observers expect the outgoing governor to join the field. Whether or not Jindal is interested in the race is less clear, but the grades could give both candidates a boost among Republican voters. 

Because the grades were only issued to sitting governors, other potential 2012 candidates such as former Massachusetts Gov. Mitt Romney (R) and Sen. John Thune (R-S.D.) were not included.

Tax and spending issues have come to the forefront during the 2010 midterm campaign season due to the struggling economic recovery. Most Republicans have argued scaling back spending and the size of government is necessary for the economy to thrive.

Democrats have argued the opposite, that government stimulus is needed to spark the economy and urge employers to hire. 

Indiana Gov. Mitch Daniels also earned a high grade of "B." Cato called Daniels "a fiscal conservative, but he seems to focus more on balancing the state budget than shrinking the size of government."

They criticized his decision to raise taxes on cigarettes to fund healthcare spending and said he has not done enough to lower the state's high corporate tax rate.

Republican Governors Association Chairman Haley Barbour (Miss.), another potential 2012 candidate, received a "C" grade.

"Governor Barbour has a conservative reputation, but his tax and spending record over seven years as governor has not been very conservative," Cato said. "Barbour has proposed some small tax breaks and blocked some tax increases proposed by the legislature, but he has not pushed for pro-growth reforms such as marginal tax rate cuts. Barbour signed into law a tax increase on hospitals in 2008 and a tax increase on cigarettes of 50 cents per pack in 2009."

Cato also hit Barbour for overseeing large increases in the state budget before the recession, but praised him for lowering spending 14 percent this fiscal year.