Gio rips Caprio and his 'war' bond plan

With state and national fiscal crises, state Treasurer Frank Caprio -- who has been aggresively fundraising for an anticipated gubernatorial run in 2010 -- is shedding the normal lack of attention that comes with his job and moving directly into the limelight. Case in point is the lead story in today's ProJo.

Meanwhile, Gio Cicione, chairman of the RI Republican Party, who rose to the challenge of holding his own with his Democratic counterpart, Bill Lynch, during a taping this morning of WPRI-WNAC's Newsmakers, offered some very sharp criticism of Caprio. (The show airs at 1"30 pm Saturday on Channel 12, and at 5:30 am Sunday on 12 and Fox 64).

Tim White asked Cicione whether Caprio's prominent current role in responding to the fiscal crisis may disadvantage a Republican gubernatorial candidate in 2010. "He's already, in a way, campaigning, two years out," White observed.

Cicione responded:

He better be, because he's got a state pension fund that went from $8.5 billion down to, who knows, today, maybe $5 billion? He's lost a huge amount of money for the state because of the aggressive positions that Frank Caprio took to put the pension fund more in an equity investment, as opposed to the more stable muni bonds and things like that that would have weathered this type of crisis . . . You don't take pension money, you don't take your retirement money, and gamble it on the stock market. What you do is you put it in stable, long-term investments, like bonds, that will give steady returns, but he was trying to be a hero.

Lynch:

[You're part of] the same party that wanted to privatize Social Security and let everyone put their money in the stock market.

Cicione:

You know what? If we had, people would still be better off than the negative returns that they get from government right now, because the government is wasting their money with blank checks.

Arlene Violet asked about Caprio's "war" bond plan -- how citizens might have to pony up to bail out the state -- and whether it's a good idea.

Lynch:

I don't think they have to, but I think that they will, and I think it's been done before. In a perfect world we wouldn't be doing it, because in a perfect world we wouldn't be in the financial crunch that we're in right now, but it certainly seems to me that other states have done it. Rhode Island has done it before. It's a temporary stopgap by all accounts . . . This is a national problem that every single state is experiencing . . . .

Cicione:

 [To Arlene and her observation about this being one in an ongoing series of stopgaps in RI] You raise a very good point, and I think the viewers have to think about this when they decide whether Caprio's idea is a good one. You have a choice when you're short of money. You can either cut your expenses, or you can go out and raise more money. Well, when the state raises money, that means he [Caprio] is reaching into every viewers', every Rhode Islanders' pocket, taking $350 out of every man, woman and childs' pocket in the state, and using it to pay for the overspending that we've been doing for 70 years. That's what they're asking you to do.

Check out the whole show for a spirited debate.