Republican presidential contender Mitt Romney’s selection ofPaul Ryan as his running mate offers a clear distinction between competing visions for the country, political and market observers told CNBC Monday, drawing attention to the growing fiscal challenges confronting the world’s largest economy.
With Europe’s debt crisis on full boil and the loomingU.S. “fiscal cliff” as a backdrop to the election, politicians and investors suggested the seven-term congressman from Wisconsin could help the former Massachusetts governor make a more forceful case for his economic proposals, while sharpening the distinctions between the GOP ticket and President Barack Obama.
“What’s really interesting about this choice is that globally it’s going to be seen as a question about austerity,” Chuck Gabriel, president of Capital Alpha Partners told CNBC’s “Squawk Box.”
Likening Ryan’s budget proposals to a “root canal,” Gabriel added that should the Republicans prevail in the November elections, “it’s pretty clear how we’ll go on these fiscal cliff issues if Republicans win the White House and the Senate.”
The Wisconsin congressman is known as an affable and intellectually sharp policy wonk on both sides of the aisle. Yet Ryan’s controversial proposals on cutting discretionary and entitlement spending have loomed large, drawing incoming fire from Democrats and even a few members of his own party.
Rep. Tom Price, a Republican congressman from Georgia who serves on the House Ways and Means Committee with Ryan, said that Romney’s selection of the 42-year-old Wisconsin native focuses “on the real challenges we face.”
As the GOP's vice presidential nominee, Ryan will be “someone who understands and appreciates the remarkable fiscal difficulties we’re in right now, and knows the way forward,” Price said.
Meanwhile, the clock ticks inexorably closer to a so-called fiscal cliff that could impose a combination of tax hikes and spending cuts at a time when the U.S. economy appears to be faltering. The developments are taking a psychological toll on corporate leaders, who have voiced a reluctance to make key hiring and investment decisions without more clarity on government policy.
”Obviously the election is very important and this choice does make it a little clearer in which direction the country wants to go,” said Ed Keon, managing director at Quantitative Management Associates. He added, however, that “both parties, despite their underlying differences, want to support that basic underlying strength of the economy.”