♪ Welcome to This Week in South Carolina.

I'm Gavin Jackson.

Thanks to a greater than expected windfall of revenue coming into the state, the House passed major income tax reform this week.

House Majority Leader Gary Simrill joins us to discuss the bill and other pending legislation, and the University of South Carolina's Dean of the College of Arts and Sciences, Joel Samuels joins us to discuss the Russian invasion of Ukraine.

But first more from this week.

Fresh off his trips to the Middle East and Germany, and days before the Russian invasion of Ukraine, Senator Lindsey Graham called for tougher actions against Russia, additional money to support Ukraine, greater cybersecurity protections, and more.

<Graham> If you don't realize that the destruction of democracy in the Ukraine makes autocratic leaders more likely to attack other democracies, you're sort of living in a dreamland.

If you don't realize that an invasion of Ukraine by Russia will throw the oil and gas markets into disarray, you don't understand the oil and gas economy.

If you don't understand that the inflation problems here at home will get worse if Ukraine is destroyed as we know it, because they produce so many commodities in area of corn and wheat.

So this idea that Ukraine doesn't matter to our economy and law and order in the world makes no sense.

The same people are doubting whether we should do anything in Ukraine are the biggest talks when it comes to riots in the street.

To those who believe that if you allow a city to be taken over by thugs, businesses to be ransacked, and wholesale stealing, and nobody does anything about it, that that city is lost its way, you're right, the same is true in the world.

<Gavin> Russia launched an unprovoked multi front invasion against Ukraine while an emergency meeting of the United Nations Security Council was underway Wednesday evening.

>> There is no purgatory for war criminals.

They go straight to hell, Ambassador.

<Gavin> NATO Secretary General Jens Stoltenberg said Thursday that NATO has activated defense plans, which include 1000s of US troops stationed in allied countries bordering Ukraine.

The move to high alert is to ensure that conflict doesn't spill into NATO countries.

There are no plans to enter Ukraine by NATO or President Biden.

<Stoltenberg> This is a grave moment for the security of Europe.

Russia's unjustified and unprovoked attack on Ukraine's on Ukraine, is putting countless innocent lives at risk.

<Gavin> President Biden addressed the country Thursday afternoon, and laid out additional actions against Russia.

<Biden> Putin is the aggressor.

Putin chose this war, and now he and his country will bear the consequences.

Today, I'm authorizing additional strong sanctions and new limitations on what can be exported to Russia.

This is going to impose severe cost on the Russian economy, both immediately and over time.

<Gavin> House Majority Leader Gary Simrill joins me now to talk about the budget tax cuts and remaining legislative priorities.

Gary, welcome back.

<Gary> Thank you, Gavin.

Glad to be here.

<Gavin> So Gary, let's start off by talking about that $600 billion tax cut that House Republicans and Democrats passed this week.

What's in that and who benefits from this?

<Gary> Well, great question.

And I do want to thank Governor McMaster for pushing the tax cut for South Carolinians.

I think in the way this piece of legislation is sculpted, is a collaborative effort.

And what you see while the goal obviously is to lower taxes in South Carolina, the income tax from 7% to 6%, this first year, we were able to lower it to 6.5%.

But the effective rate in South Carolina is actually 3.1.

But I think the most important part of this piece of legislation, is the fact that we collapsed the brackets of 3, 4, 5 and 6% into 3%.

So, as I've told people, this is more of a 'Main Street' than a 'Wall Street' tax package, because it helps middle workers.

Those that are doing most of the heavy lifting in South Carolina, they benefit the most.

And so there's about a 25% reduction in your tax liability for most South Carolinians, which is, which is great for our state, great for our economy because you're keeping more of the money that you earn.

With that, you saw Democrats and Republicans come together in a bipartisan manner to support this measure.

Whereas before you had arguments over how to spend money, don't send it back to the taxpayer, invest in other programs in South Carolina.

And in this instance, you had everyone unanimously come together to say this is a good move for South Carolina.

And it was that all inclusiveness for us in this tax package that made that difference.

<Gavin> Very nice to see some bipartisanship, not that it's a foreign concept in the State House, but always good to see that.

But Gary, you talked about on the floor this week, when you were talking about this tax - income tax cut, that it's been years since the House has really passed one.

Of course, governors, our current one and previous ones have always been pushing for this.

What makes it all possible right now?

I'm guessing because we have massive surpluses, but talk about that.

What makes it possible right now?

<Gary> It's not just a surplus, Gavin, because a surplus can come or go much like a tide.

In this case, it's sustainability, and it's it's how you create a spending plan, prioritizing spending, and so because the economy in South Carolina has been doing so well.

Obviously, we're now home to 5.2 million people.

So those avenues make it very important for us.

We have tackled and continue to tackle infrastructure issues that make it easier to get around in South Carolina and more safely.

So all of that is a culmination of prioritization of spending, but to have the funding in place, because these are recurring dollars, you have to do this every year, if you go back to 2005, which I mentioned on the floor, where we passed an income tax cut, we soon realized that it jeopardized potentially the credit rating of South Carolina.

Certainly we don't want to do anything that hinders our economy, or hampers growth in the future.

And so we were able to take this tranche of funding through growth, again, recurring dollars this year, about $620 million, we took every bit of that and put it over into this into this tax cut.

But the sustainability becomes the real issue here.

That's the reason there are triggers within this.

So if we don't see a 5% growth by February 15 in the projections from the Board of Economic Advisers, the rest of the tax cut does not go through.

The remaining part, what we are passing today pending that the Senate agrees and the governor would sign it, which we know the governor will, of course, that part would stay.

But even with this first component of what you see in this tax cut that we passed yesterday in the House, that's the 25% reduction for those middle earners in South Carolina.

And so that part in and of itself, is is a is a great plan.

<Gavin> So just to clarify, you're saying it has to be triggered every year based on 5% growth, at least?

<Gary> To take it from 6.5 to 6, that 10th of a percent that would come down every year 'til you got from 6.5 to 6.0.

That is correct.

So the economic advisors, the Board of Economic Advisers, the BEA, by February 15, if they project 5% or greater growth in our state budget, it triggers that reduction.

So it would go from 6.5 to 6.4.

Let's say the growth comes in at 4.2.

That year, it would stick at the 6.5 top level.

It would not fall below that.

The great part of this, though, regardless of the trigger, is that middle bracket, that collapsing of 3, 4, 5 and 6 into 3, that part holds.

<Gavin> Gotcha.

Gary, you're saying the governor will sign this.

Obviously there was a press conference with you all about this same plan.

The Senate, however, has a different plan.

New Senate Finance Committee Chairman Harvey Peeler proposed one not only lowering tax rates, but also giving back a billion dollars in tax rebates.

Sounds good to hear both sides talking about income tax relief and giving money back to people, but I'm guessing you guys aren't keen on that plan.

Is there gonna be some sort of middle ground eventually decided going forward?

<Gary> There always is, Gavin.

Here's the good news.

The good news is the House, in working with the governor, has come up with an income tax plan.

We passed that out yesterday on second reading.

It will pass third reading today.

The Senate of course gets the budget after the House passes it, which we will do that beginning March 14.

And so the fact that you have both sides of the chamber, both the Senate and the House, talking about income tax cuts, that tells you this year in 2022, you will see taxes cut in South Carolina.

<Gavin> Gary, you're coming to us right after House Ways and Means Committee meeting in which the budget was passed out.

We're talking about a $14 billion budget here.

Talk to us about some big ticket items.

We have about three minutes left, I want to see: what are some big things that will likely make it to the governor's desk this year?

<Gary> Well, really, it's a theme of four R's, Gavin, and the first one we just talked about, and that's reduction in taxes.

The other deals with roads, to be able to put more money into roads.

As you know, we have a plan in place now for sustainability on how to pay for roads, but adding additional revenue to that pot accelerates the widening of interstates.

It accelerates the ability to patch more holes in South Carolina, the potholes that you see.

So that's the second 'R', the roads.

But the third 'R' deals with raises, raises for state employees.

I mean, I looked at the Post and Courier this morning, the headlines, you know, look at the $4,000 raise to teachers.

I mean, that that is very important for South Carolina for law enforcement, for first responders, the fact that we're able to pay them more and more of what they are worth.

If you take a first year teacher in South Carolina, just four years ago, that starting salary was under 30,000.

Today, under this plan, it will be 40,000.

That's over a 30% increase in that short period of time.

The fourth 'R' that we talk about, our reserves.

We are changing the way we save money in South Carolina and people call it a rainy day fund.

But to take the dollar saved by us from a 5% savings to a 7%, so we will always bank 7% of that money this year, so about $209 million that goes into that account.

And that just protects core functions of government in case we would run into issues.

And I want to talk about just one more thing on that.

And that's that's growing South Carolina's land for use by the public.

The Conservation portion of this cannot be overlooked as we move forward to protect in the legacy, more and more land that is able to be used by the voting public of South Carolina.

<Gary> And Gary, we have less than 30 seconds, but I want to just ask about medical marijuana.

It's obviously passed the Senate.

It has an uncertain future in the House chamber.

With 30 seconds, kind of tell us where that's going, obviously after the budget gets through the chamber in March, but how do you see that progressing?

<Gary> So all bills that come from the Senate prior to crossover, which would be the end of March, we deal with House bills and legislation first, obviously the budget, which you and I have just talked about today.

Once we get through that, the end of March 1, first of April, you will start having hearings on Senate bills.

And so the issues that are coming across from the Senate now that are new 2022, not leftover 2021 bills, those will have hearings, and plenty of time for debate between April and the time we do sine die adjournment first part of May.

<Gavin> Will it pass the House?

<Gary> Not sure.

You know again, it took a long time in the Senate.

I think it was what, 25 to 13 or something in that range.

I don't know the votes in the House yet, but it depends on what the bill looks like.

<Gavin> Gotcha.

Well, we have a long march to sine sie and we'll definitely have you back on to talk about these issues.

That's Gary Simrill.

He's House Majority Leader in the South Carolina House of Representatives.

Thanks, Gary.

<Gary> Thank you, Gavin.

<Gavin> Joining me now to discuss the Russian invasion of Ukraine is Joel Samuels.

He is Dean of the College of Arts and Sciences at the University of South Carolina.

Dean Samuels, thanks for joining us.

<Dean> My pleasure.

Great to be with you.

So Dean, we're talking right now.

It's Thursday morning.

Some things will, of course, have changed by the time folks see this on air Friday night, but Russia has launched a large coordinated invasion of Ukraine, a sovereign country.

We have Russian President Vladimir Putin pledging to demilitarize Ukraine and replace its leaders.

This is something many of us have never seen before in our lifetimes.

Kind of give us your initial reaction to what's been happening the past 12 hours.

<Dean> Yeah, this has been a very quick escalation of a set of plans that were set in motion over the course of the last several months.

And, you know, yes, we're talking on Thursday morning.

Things will change by Friday.

But if we had talked on Monday, I mean, things have just been evolving, very, very quickly.

And what we're seeing now is that a range of different pretenses used by President Putin have set in motion what amounts to a full scale act of aggression by a sovereign nation against another sovereign nation without any provocation whatsoever.

This is something that is indeed unprecedented in most of our lifetimes.

And the precedence that we hear about dating back to World War Two are quite apt.

And again, we've seen internal conflict, even in Europe, breakup of Yugoslavia, the wars that follow there, but it's quite different when you see a sovereign nation under attack, again, with what amounts to a pretense basis for the invasion.

<Gavin> And Dean, you have a background in Russian and Eastern European Studies.

Can you kind of give us a brief history?

I know this has been building, like you said, for a few months now.

But kind of maybe zoom out a little bit more and tell us a little bit of a brief history for some context as to what kind of helped escalate to this point.

<Dean> Well, I'll actually give you a hundred year history, because in order to really understand what's happening, we have to go back to the Bolshevik Revolution in the early 20th century, which which was a change in government, but still a part of an imperialist Russia, which even predated that and created the Soviet Union.

And the Soviet Union was made up of 16 independent republics.

Think of them as states in the United States.

And in the early 1990s, the Soviet Union broke up led by Mikhail Gorbachev.

And that's relevant because you hear Putin talking about that period in the early 1990s right now, when he talks about the fact that Ukraine really is a part of Russia.

Ukrainians shouldn't view themselves as having an identity.

Nikita Khrushchev in the 1950s and 60s, mistakenly gave too much autonomy to Ukraine.

What this really amounts to is the buildup of a history in which, for Russia, Ukraine represents an important patriotic, symbolic part of Russia, in which there are certainly in the eastern part of Ukraine, many native Russian speakers who identify more closely with Russia or over the years have identified more closely with Russia.

There is that important piece.

There are these enclaves that we read about in the Donbass region of Luhansk, and Donetsk, which have declared where there's some separatist movements and there declared it's independence, and putatively Russia was going in to protect those areas, although we now see that the intentions are much deeper than that.

And so it's that history dating back, again, a century or more.

It's the period in the 1990s, where when the Soviet Union broke up, Ukraine split away as an independent nation.

And although I should say that during a brief period in the aftermath of the breakup of the Soviet Union, Ukraine was part of a small group of post Soviet states, including Russia, who remained together in a loose affiliation known as the Commonwealth of Independent States.

And so for a number of years, they were in a shared space.

But as Ukraine has asserted its independence, as it has become more Westward leaning, as it has moved towards democracy on Russia's borders, with a Russian population in certain areas, as viewed by Russia.

That has all been part of the lead up to what we're seeing now.

<Gavin> And just this past week, we've seen some retaliation on the west, you know, leading up to this escalation.

On Tuesday, we saw the United States and European and Asian countries launch their first round of sanctions against Russia.

We expect more today from the President.

We saw Germany walk away from the Nord Stream 2 gas pipeline.

Wednesday, Ukraine declared a state of emergency.

And that night, the UN Security Council had an emergency meeting, during which time Russia did invade Ukraine.

President Biden will speak today.

He's actually in a meeting right now with G7 leaders.

How would you rate this unified response so far against Russia?

<Dean> Well, I'm an academic, so I like to give grades to things.

<Gavin> Of course.

[chuckles] <Dean> And I don't believe in grade inflation, so I would say it's a B-, C+.

So I think it's been important that there have been certain measures taken immediately.

It's important there's been some coordination between the United States and Western European partners.

But at the same time, I think that the scale of the response has been not sufficient.

Clearly, let's be clear, sanctions and certain actions, whether by banks or related to pipelines, are not a deterrent to President Putin.

He does not -- these are not measures that are of concern to him.

And so I think that it was somewhat predictable that that would be the case.

I should add, there have over the past decade been sanctions against Russia and some of the most powerful Russians in England, in the United States and elsewhere.

And so it was predictable that some of these measures would not have a strong impact on President Putin.

Actually, domestically, it gives him the ability to say to the Russian people, look at what the West is doing, look at how they're harming us or attempting to harm us economically.

So it actually provides some credibility.

That said, the United States and our partners are in a difficult position.

We're in a bit of a 'no-win' position, right, because we're not ready to act militarily.

We're not ready to go in, and certainly our European partners aren't, and so given that, we've sort of disarmed ourselves, no pun intended, of certain, you know, arrows in our quiver, and that limits the options in response.

<Gavin> I was gonna say, so then what, then?

I mean, should we...

I know you're saying sanctions are already kind of expected, he knows what's coming.

They have plenty of reserve surplus cash over there in Russia at the same time.

What more should be done, though?

I mean, it sounds like even trying to remove him from the worldwide financial system, Swift would still not be enough in some cases, and it doesn't sound like we're gonna even get to that point at this stage.

<Dean> Yeah, I think that is one of the steps that I would like to see, and I think taking decisive action that has consequences beyond an immediate consequence, and then actually standing by those.

On the one hand, the United Nations is set up in a way that limits the ability to do much through that body because Russia has a veto seat on the Security Council, and the Security Council is the part of the United Nations, is the body within the United Nations that is charged with protecting peace and security.

So I mean, I think one of the things we're seeing is one of the severe limitations of the United Nations system itself, which was set up in the wake of World War Two precisely to avoid wars of aggression, precisely to avoid what we find ourselves in now, but by providing five veto seats on the Security Council, by the way, China, Russia, the United States, the United Kingdom, and France, which also recognized a world power structure in 1945 that may not -- if you were to pick five countries to give veto power to today, I'm not sure those would be the five countries you would select, UK and France in particular.

But the point is, what we're seeing now is some of the limitations of the current international system, which is in place precisely to protect against acts of aggression, against war and to protect peace and security around the world.

<Dean> And Dean, I want to stick with peace and security around the world, especially because of European stability at this point.

I spoke with Senator Lindsey Graham this week, he had just returned from the Munich Security Conference, as well as some stops in the UAE and Israel.

And he said, "Do I think there will be a third world war over Russia seizure of Ukraine?

No, but I do believe there's going to be conflict at every turn.

And the stability we've enjoyed in Europe that's benefitted the United States is going to be lost."

Senate Intelligence Chairman Mark Warner said similar things.

He said, "For more than 70 years, we have avoided large scale war in Europe.

With this illegal invasion of Ukraine, Vladimir Putin has tragically brought decades of general peace to an end."

So pick up on that.

What does this mean for the future of European stability and maybe the world?

<Dean> Well, I want to say that both Senator Warner and Senator Graham are spot on with their remarks.

And they're two of our more astute senators when it comes to foreign affairs.

And I think what we're seeing now is not just, and I think this is the key to your question, it's not just about Ukraine, it's not just about a single event.

It's about an entire shift to what we can expect globally, in terms of responses to acts of aggression and war.

I've spoken repeatedly about this.

One of the biggest concerns I have is what this portends for China's ambitions, with regard to Taiwan, with regard to the South China Sea, which is an important both mineral source of natural resources and route for commerce.

And this is a small microcosm of some actually much broader, larger trends that we could see that are not isolated to Russia, not isolated to Europe.

Certainly, I don't want to minimize what's happening in and of itself, but I do think we're seeing a much more concerning opening to other actions, and again, I think what we're really seeing, and it goes back to what I said a few minutes ago, we are seeing the limitations of the international peace and security system in terms of what the meaningful responses are, if the collective body of nations led by, in this case, the United States, are not willing to enter into military conflict, which we are not with good reason, then we have severely limited the mechanisms available to meaningfully stop acts of aggression and war.

<Gavin> And Dean, we have less than two minutes left, and I want to ask you a question.

Piggybacking on this, when we're talking about stability and how it resonates with Americans, obviously oil is now over $100 a barrel, wheat prices are going up, inflation is already present.

Things are only gonna get worse because of this.

Do you think this will maybe make Americans tune in?

Because right now I think 26% say that they don't want us to play a major role in this situation.

What message do you have for folks when you try to explain this situstion about how we are so interconnected?

I think the pandemic did a pretty good job at highlighting how globalization works in our world.

So what do you have to say to people about the situation right now?

<Dean> Yeah, I think you just hit on on the theme: we are all interconnected.

That is the reality of the world we live in today.

And our economy does not operate in isolation from the rest of the world.

And so there will be real effects felt by all of us here in the United States as a result of this conflict and the sanctions and the actions taken in response.

We will feel them in our pocketbooks.

We will feel them through our stock market.

And I would say that it's actually more than that, though, because that is at the personal level.

I am a strong proponent that it is not our job to be the policeman of the world, and I think most Americans feel that way.

On the other hand, we do have a responsibility as global leaders to this day, the leading or one of the leading strongest military powers to ensure the protection of sovereign nations around the world.

That is a responsibility that we bear.

I think it's an important responsibility, and the lessons of World War Two, I think, highlight that, where we really lead, belatedly, but eventually lead the efforts to curb the Nazi invasion of Europe.

And I'm not comparing what's happening now to that, but what I am saying, going back to your very first question, is that what we're seeing is a significant shift in the dynamics of world power.

And the response is going to not only tell the tale in Ukraine and Europe in the years to come, in the immediate years to come, but it's going to tell us in very real and important ways about what the dynamics and the expectations can be around the world for other acts of aggression and invasion in the decades to come.

<Gavin> A lot to think about right there, a New World Order power structure, for sure.

And of course, many dark days ahead, unfortunately.

And our prayers are with the people of Ukraine right now.

But Dean, thank you for joining us.

That's Dean Joel Samuels.

He's Dean of the College of Arts and Sciences at the University of South Carolina.

<Dean> Thank you.

Great to see you.

<Gavin> Thanks.

For South Carolina ETV, I'm Gavin Jackson.

Be well, South Carolina.

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