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Debate Recap: Economy Can Thrive With Less Government

ROCHESTER, Mich. — Herman Cain swatted away character issues, Rick Perry couldn't remember which federal agencies he wants to eliminate, and a still-crowded field of Republican candidates agreed that the way to save the government is by shrinking it.

Candidates on stage at the CNBC GOP Debate.
Photo: Rick Osentoski for CNBC.com
Candidates on stage at the CNBC GOP Debate.

A lively debate that CNBC moderated at Oakland University Wednesday night featured a range of differences and an abundance of similarities.

The candidates each said the days of government bailouts for companies should end, and they bemoaned government regulations that make it too difficult to do business in the U.S.

The eight hopefuls spent nearly two hours stating their case on why they should lead the country and its economy and replace the incumbent Democrat, President Barack Obama.

The debate began not on the U.S., though, but on Europe, where first Greek's debt and now Italy's debt have called into question not merely those economies but also the standing of the U.S.

Worries over Italy help throttle the U.S. financial markets Wednesday, but the candidates insisted that it wasn't the responsibility of the U.S. to bail out irresponsible European nations.

"My view is no, no, no. We do not need to step in and bail out banks in Europe, or here in the U.S. that may have Italian debt," former Massachusetts Gov. Mitt Romney said.

The debate was relatively gaffe-free, though Texas Gov. Perry provided a big oops moment: He said there were three Cabinet departments he wanted to get rid of, but could only name two.

Cain also provided some of the evening's drama as he addressed questions regarding several allegations of sexual misconduct while he was at the National Restaurant Association.

To hoots from the audience, Cain was asked to address the issue of whether he has a character problem that disqualifies him from being able to serve as president.

"The American people deserve better than someone being tried in the court of public opinion based on unfounded accusations," the former CEO of the Godfather's Pizza chain.

Romney was asked to address the issue but declined, drawing cheers.

The debate stuck mostly to economic issues.

The candidates universally deplored the bailouts that came about after the 2008 financial crisis and said they would not occur under their watches. They also bemoaned the state of the debt and deficits that have helped hamstring economic growth.

Perry also articulated the no-bailout movement among the party.

"We are not going to pick winners and losers...We're going to trust the capital markets and the private sector," he said. "If you are too big to fail, you are too big."

Gingrich, the former House speaker, took particular aim at the Federal Reserve .

Fed Chairman "Ben Bernanke is a large part of the problem and ought to be fired as rapidly as possible," he said.

Such stringent remedies were in abundance.

Minnesota Rep. Michele Bachmann said she would repeal the Dodd-Frank banking regulation bill, legislation that was a favorite target for the candidates. Former Pennsylvania Sen. Rick Santorum said he would repeal every regulatory measure the Obama administration has imposed over the past three years.

"Taxes lead to jobs leaving the country. All you need to know is we have the second-highest corporate tax rate in the world," Bachmann said. "Our biggest problem right now is our regulatory burden. The biggest regulatory problem we have is Obamacare and Dodd-Frank. I will repeal those bills."

GOP candidates debate
CNBC.com
GOP candidates debate

"We'll send a very clear message out to manufacturers in this country and all over the world that America will compete," Santorum added.

Addressing how the importance of developing energy independence, he said, "I'm going to cut all the subsidies out and let the market work, as opposed to creating different forms of energy that the government supports."

On health care, the candidates advocated a market-based approach, with some pushing for the government to allow tax-free medical savings accounts.

Asked to answer in 30 seconds how he would fix the health-care system, Gingrich berated the moderators as he has done at several other debates and said he wants no-moderator Lincoln-Douglas debates with Obama.

On housing, the answers stuck to a narrative of shrinking or eliminating Fannie Mae and Freddie Mac, the two government-sponsored entities that backstop a majority of mortgages.

"In the long run, you want to see housing come back, the economy has to come back," Gingrich said.

Paul advocated the same approach for housing as he did for education and health care — get government out of the way.

"When the government gets involved in the delivery of any service, whether it's education, medical care, or housing, they cause higher prices, lower quality, they create bubbles and give us this mess that we're in," he said.

Big Choice for Voters

Utah Gov. Jon Huntsman was perhaps the most populist in the crowd, saying he understands protests such as Occupy Wall Street, which have organized across the country to deplore corporate greed and bailouts.

"I don't like the anti-capitalism message but I do agree that this country is never again going to bail out corporations," he said. "So long as we have banks too big to fail we are setting ourselves up for long-term disaster and failure."

Herman Cain and Rick Perry at the CNBC GOP Debate
CNBC.com
Herman Cain and Rick Perry at the CNBC GOP Debate

Oakland University is nestled in a tony suburb that both supported President Obama in 2008 and, two years later, Republican Gov. Rick Snyder, who has waged war with the state's labor unions.

The GOP race thus far has amounted to a carousel of flavors-of-the-week, with voters unsure whether to pick quick-witted businessmen, dapper ex-governors or darlings of the Tea Party right.

Romney said picking the right candidate is important to defeat a president who cares more about his political aspirations than getting the country on the right track.

"What we have now is a president who unfortunately is driven by one thing — his re-election," Romney said. "It's unbelievable that we have a crisis going on in America like we have and we have a president who is only focused on getting re-elected."

Each candidate has asserted superiority on how to solve the debt and deficit problems in the U.S., but their plans have several common denominators.

Simplifying the tax code and broadening the tax base — getting more people to pay — has been the cornerstone, with many advocating a flat tax that eliminates the legion of loopholes that has made generating revenue an increasingly difficult proposition for the debt-laden federal government.

Cain, who joins Romney atop the field in most polls, has managed to capture the attention of many Republican voters in this regard.

Candidates on stage at the CNBC GOP candidates debate.
CNBC.com
Candidates on stage at the CNBC GOP candidates debate.

His 9-9-9 tax plan — which opponents deride as sounding like a special on the pizzas Cain's former company, Godfather's Pizza, makes — would implement an across-the-board levy on sales, income and business revenues.

He pledged that the numbers in his plan would not escalate should politicians decide they need more money to run government.

"Tax codes do not raise taxes, politicians do. The people will hold the politicians' feet to the fire," Cain said to applause. "Because the approach 9-9-9 will be very visible, the American people are going to hold the rates at 9."

One of the other main topics is how to cope with the nation's $15 trillion debt and $1.3 trillion budget deficit while trying to help an economy that grew at just 2 percent in the last quarter.

Raising taxes is anathema, though, to the Republican base, so the candidates have tried to sell their tax plans as both growth-friendly and less burdensome on those suffering most during the downturn.

The candidates also teed off on China, with Romney blasting "cheaters like China" and both he and Gingrich saying the U.S. needs to impose penalties even if it risks a trade way.

Huntsman — the former ambassador to China under Obama — said that would be a mistake.

"We've had a 40-year relationship with China. It is a troublesome and problematic relationship, very complicated," he said. "You can throw out applause lines and say that you're going to slap on tariffs. That doesn't work."