Governor's race: TARP's '$700 billion man' Neel Kashkari wants to lead California

Neel Kashkari, a former U.S. Treasury official, announced he would run for governor of California during an appearance at the Sacramento Business Review.
Neel Kashkari, a former U.S. Treasury official, announced he would run for governor of California during an appearance at the Sacramento Business Review.
Rich Pedroncelli/AP

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He’s never held elected office. He’s not a household name. To the extent he is known, it’s for running the politically unpopular federal bank bailout program. And he’s the man many California Republicans are counting on to rescue their party. He is Neel Kashkari, a former U.S. Treasury official under Presidents Bush and Obama. And as of Tuesday, he’s running for governor of California.

Neel Kashkari is challenging a popular Democratic governor with a $17 million campaign war chest – as a Republican in one of the bluest states in the nation. Why?

“If I saw a deep bench of talented Republicans who were going to do that, I’d go help them," Kashkari said. "But I don’t see it. And so if no one else is gonna do it, then I’m gonna go do it.  I’m gonna go charge up this hill and fight to turn the state around and give middle class families a fair chance – and we’re gonna break the cycle of poverty.”

Full Interview, Part One

Why he's running, why he's qualified, his top two priorities and why he wants to go back into politics five years after leaving Washington exhausted

The 40-year-old Kashkari is a practicing Hindu, the son of Indian immigrants. As one of Treasury Secretary Henry Paulson’s top advisors, Kashkari essentially wrote the Troubled Asset Relief Program (TARP) during the 2008 financial crisis. Then, Paulson assigned him to run TARP – prompting nicknames like the “Bailout Czar” and the “$700 Billion Man.”

Video: Clip from the 2011 HBO movie, Too Big Too Fail

Paulson and his team, including Kashkari, discuss how to explain the financial meltdown to the public. Warning Explicit Language.

“Boundless energy, I think, would be the first phrase that comes to mind,” said Michele Davis, who worked with Kashkari at Treasury as Secretary Paulson's lead spokesperson.

Davis also described him as “relentless,” and praises his analytical skills, his passion and his cool confidence under pressure.

“When the problems were coming at us fast and furious, it was really easy to be daunted," said Davis. "And he needed only that split-second to catch his breath and then was immediately on to, okay, we can take this on, we can figure it out, let’s just go get it done.” 

In an interview with Capital Public Radio, Kashkari talked of running a new kind of Republican campaign.

“My priorities are very simple: jobs and education," Kashkari said.

On jobs, Kashkari supports tax incentives and regulatory reform; for education: career technical programs and a longer school year. If you ask him, he’ll tell you he’s pro-immigration reform, pro-choice and pro-same-sex marriage. But he’d rather stick to his priorities.

Audio: Full Interview, Part Two

Kashkari's stances on California policy issues: taxes, regulations, prisons, immigration and more

“I believe my message of economic empowerment – a good job and a good education – will resonate with a very broad range of voters – Republicans, decline-to-states, moderate Democrats, high income and low income.” 

To Senate GOP Leader Bob Huff, that’s the kind of top-of-the-ticket candidate his party needs as it tries to dethrone Democrats’ legislative supermajorities.

“Neel brings a lot of things to the table that do capture the imagination probably of more of the mainstream of the – let’s call it the political center of California – which, if you’re at 29 percent registration as we are, that’s where you have to aspire to," Huff said. 

That’s an unspoken comparison to the other declared Republican candidate, tea party Assemblyman Tim Donnelly.

Republican political consultant Beth Miller agrees Kashkari has a chance to broaden the GOP’s appeal. But, she adds, Governor Jerry Brown starts the race in an “extraordinarily strong” position – and Kashkari faces plenty of challenges:

“He is not well known. He’s gonna have to communicate who he is. He’s running as a Republican, but he’s also publicly stated that he voted for Barack Obama. And he has a more moderate social agenda,” Miller said.

Most of all, there’s TARP. Kashkari took beatings at congressional hearings like this one in 2008:

Audio: Kashkari at congressional hearing

“And you can sit there and not come to a decision as to whether or not a $3 million bonus is too much?," said Rep. Donald Manzullo (R-Illinois), of TARP's executive compensation rules. "If you even have to ask that question whether it's too much, Mr. Kashkari, you're not the man for the job. I think you should step aside.” 

Jerry Brown’s team is signaling that it will make TARP a campaign issue too.

“He was a banker at Goldman Sachs, and then his one public policy act was to hand $700 billion to Wall Street banks," said Dan Newman, one of the governor's political advisors. "So it’s hard to imagine how that makes one qualified to be governor of California.”

Kashkari defends TARP, saying it stabilized an economy on the verge of collapse – and made taxpayers a profit, too.

Audio: Full Interview, Part Three

Defending TARP, why he voted for Pres. Obama in 2008, why he's a better candidate than Gov. Brown and Asm. Donnelly, and why the Calif. GOP needs a makeover 

Bio Bits


Jobs: Supports tax incentives and easing of regulations to attract and retain businesses and factories in California.  Supports hydraulic fracturing ("fracking") - while protecting the environment - to "literally" create hundreds of thousands of "good jobs."

Education: Wants to reduce federal and state "rules and regulations" that have Calif. teachers "budgeting their time almost down to the minute" and allow teachers to "redesign the education environment so they're really meeting the needs of our kids."  Supporter of vocational education (also known as career-technical education). Wants to explore extending school year into the summer to reduce achievement gap.

Taxes: Will not sign "No Tax" pledge but believes California's taxes are "too high" and "poorly designed."  Supports "comprehensive review" of tax code to make it more efficient and growth-oriented.  Voted no on Prop 30 ("I don’t think pouring more money into a broken system fixes anything"), and called the idea suggested by some Republicans of refunding extra Prop 30 revenues to taxpayers "very reasonable."

Pensions: Criticizes Gov. Brown for accepting CalPERS and CalSTRS "unrealistic" rate-of-return projections.  Says state is "ignoring the giant mortgage" of unfunded pension liabilities "and just patting ourselves on the back for balancing our checkbook [the state budget] this month."

High-Speed Rail: Calls the "crazy train" the biggest example of "wasted government spending" and opposes investing any more money in it - including the sale of any remaining voter-approved state bonds.

Water: Calls it a "clear no-brainer" that the state needs more water storage.  Criticizes Gov. Brown for focusing on his twin tunnel proposal at the expense of all else, but declines to give a position on the proposal itself until he can review it further.

Prisons: Criticizes Gov. Brown's criminal justice realignment program (the shift of responsibility for low-level offenders from the state to counties) as "shuffling the deck chairs of the Titanic," rather than addressing the main problem.  Supports rehabilitation efforts and sentencing reform to make state's prison system "smarter and more efficient."

Health Care: Says it's "appropriate" for California to follow Obamacare, as it's "the law of the land."  Says U.S. can't go back to its old health care system.  But Obamacare's "fundamental flaws" need "big changes" - or, if it's "beyond fixing," then Congress should "replace it with something better."

Immigration: Supports immigration reform at federal level, rather than patchwork of state laws.  Supports "some form of legal status" for undocumented immigrants so they pay taxes, but declined to say if he supports a path to citizenship.  Wants to prioritize immigration system to meet economic needs (i.e. engineers in Silicon Valley, farm workers in Central Valley).  Calls for enforcing immigration laws at the border and at companies.

Minimum Wage: Calls new law raising California's minimum wage "very well-intentioned" but says it'll lead to increased unemployment.

Guns: He is a gun owner who "deeply believe(s) in the Second Amendment" but wasn't inconvenienced "in the slightest" by going through background checks and waiting periods. Doesn't support additional gun laws for "responsible gun owners like me" that won't "actually make our kids any safer." Wants to focus on "root cause" of recent school shootings by reforming state's mental health system.

Abortion and Same-sex Marriage: Pro-choice and supports same-sex marriage.  Voted against Prop 8. As a "social libertarian," wants the government "out of our lives."

Global Warming: Believes it's real, but calls "knee-jerk reactions" to it "misguided."  Describes state's landmark greenhouse gas reduction bill (AB 32) as "well-intentioned" but worried about job losses and electricity cost increases hurting poor Californians.  Supports technologies that are both clean and cheap enough.