Tue September 25, 2012
Two Plans For Fixing The Economy, But Few Details
Originally published on Tue September 25, 2012 1:48 pm
As this presidential election year was kicking off, strategists were saying the focus would be on the economy. But now — even as absentee ballots are being filled in — the candidates are still dodging details about how to improve growth.
"President Obama doesn't have a plan," says Kevin Hassett, an economic adviser to Republican candidate Mitt Romney.
Jeffrey Liebman, an economic adviser to President Obama, says Romney has revealed no plan other than "going back to the failed policies of the past decade."
One independent economist, David Pritchett, who used to work for the International Monetary Fund, listened Monday as the two advisers debated economic policy at the National Press Club in Washington. His verdict: "There should be more specifics."
This would seem to be a good time for the candidates to reveal more of their plans. Most voters remain deeply worried about the economy, and many have not yet decided who would do a better job of fixing it.
A national CNBC poll released Tuesday shows 55 percent of the 800 Americans surveyed say the economy is worse now than when Obama's term began. But there is no clear majority for which candidate would do a better job of fixing the economy in the future.
The poll showed 43 percent say Obama would do a better job, compared with 34 percent for Romney. But a huge chunk of voters — 22 percent — say they simply don't know who would do a better job with the economy in the future.
Other polls show voters want the candidates to provide more details on how they would reduce unemployment, change tax policy and alter government spending. But they aren't getting much.
During an interview aired Sunday by CBS's 60 Minutes, Romney declined to specify which tax deductions and exemptions he would eliminate to make it possible to lower tax rates. When asked for clarity, he said: "Well, that's something Congress and I will have to work out together."
On the same news show, Obama was pushed to explain why the unemployment rate remains above 8 percent. His response was that "the hole was so deep when we got in [office] that we lost 9 million jobs. We've created 4.6 [million]."
On Monday, a debate on the candidates' economic plans was sponsored by the National Association for Business Economics. The event, held at the National Press Club, featured Hassett and Liebman. Both agreed the No. 1 problem for businesses is the lack of customers. "Insufficient demand, for sure," Hassett said.
But they disagreed over how to stimulate demand for goods and services. Liebman talked up Obama's support for a jobs bill to create more work for teachers, firefighters and construction workers. By spending more on infrastructure, schools and public safety, the government could spur consumer demand, Liebman said.
If tax rates for the wealthy "go back to the same rate as [under] President Clinton, you can create enough revenue to bring the deficit down and you don't have to whack the middle class," Liebman said.
Hassett said Obama's deficit-reduction plan is built on "phantom savings."
Romney would cut taxes for everyone, including the wealthiest, and pay for the cuts by controlling spending, Hassett said. But he would not specify which one — cutting spending or lowering tax rates — would be the higher priority for Romney. He said he had not directly discussed that topic with the candidate.
The lack of specifics may be a good indicator of just how tough the problems are. Congress already has spent vast amounts on economic stimulus programs to create jobs. It has bailed out banks and shored up automakers and reduced taxes.
Now, going forward, the White House and Congress must move toward making much more painful choices involving spending and taxes to reduce deficits.
"I don't see any basis for optimism," Pritchett said after listening to the debate. The choices will be so difficult, no elected leader will want to make them. "There already are so many lines drawn in the sand that I don't see how you get to compromises," he said.
Though lots of details must still be filled in, here are the key points each candidate has made:
-- Boost domestic fossil fuel production.
-- Improve education by increasing school choice and changing teacher evaluations.
-- Expand international trade while curtailing "unfair" trade policies, particularly those involving China.
-- Cut federal spending.
-- Repeal the Affordable Health Care Act, supported by Democrats, who are likely to retain control of the Senate. Romney says he would allow each state to craft its own specific plan for expanding health care coverage.
-- Repeal the Dodd-Frank financial regulation law and replace it with more streamlined rules for Wall Street.
-- Create 1 million manufacturing jobs and expand exports.
-- Push Congress to invest more in infrastructure projects to create jobs.
-- Make "education a national mission" and increase job training.
-- Create "a tax code that makes sure everybody pays their fair share," including tax increases for those earning over $250,000 a year.
-- Reduce federal debt by $4 trillion over one decade.
-- Eliminate tax breaks for companies that send jobs overseas.