Most presidential campaign sound bites are Hobbesian – nasty, brutish and short. The attacks and counterattacks by President Obama and Republican nominee Mitt Romney are no different as the November election approaches.
Both are engaged in a media blitz to persuade the American people who best understands the economic hardships across the country and who would adopt the policies needed to spur job growth. Romney promises smaller government and lower taxes, while Obama — leading in most polls — offers comfort to the middle class.
What you get here is the need to exaggerate the pluses of your own plan and the minuses of your opponent’s plan,” said Robert Bixby, executive director of the nonpartisan Concord Coalition dedicated to fiscal responsibility. “It gets us to the point where the budget is a funhouse mirror where things are distorted.”
From the stump and on the airwaves, each candidate has often glossed over exactly where the other stands on five major issues: the national debt, Medicare, taxes, China and the auto bailout.
Obama famously promised to halve the deficit by the end of his first term. Instead, it shot above $1 trillion for each of the past four years as the government muddled through the recession with new spending and tax breaks meant to stimulate the economy.
“It’s not just bad for our economy. It’s not just bad for our job creation,” Romney told a crowd in Westerville, Ohio on Wednesday. “In my opinion, it is immoral for us to pass on obligations like that.”
In a campaign video, the Republican accuses the president of a “spending inferno,” although the blaze will likely continue regardless of which man controls the White House, according to independent analyses of their plans.
Obama has said he wants to “stabilize” the debt. Translation: Under his proposal, the Congressional Budget Office estimates that share of the debt held by the public – excluding what the government owes itself – would climb from 67.7 percent of gross domestic product in 2011 to 76.3 percent in 2022.
Romney, whose advisers claim a surplus is possible within eight years, has provided scant details on how to ratchet down the debt. An Obama ad claims Romney’s mix of tax cuts and military spending would “add trillions to the deficit.”
The best publicly available predictions would have Romney adding trillions to the national debt, not the annual budget deficit. The Committee for a Responsible Federal Budget estimates the debt-to-GDP ratio would reach somewhere between 85 percent and 96 percent by 2021, slightly worse than Obama. However, Romney claims that under no circumstances would he add to the deficit. Translation: Taxes would likely go up for high earners.
Nothing riles seniors as much as the possible loss of Medicare, which is why the Obama campaign warns that Romney would end the health care program as it exists.
Not quite. Romney would offer senior citizens’ children and grandchildren the choice of a government-sponsored Medicare plan or a private insurance plan. Under his plan, Americans currently under the age of 54 would receive a voucher to either buy private or public insurance when they qualify for Medicare.
The notion is that private competition would slow the growth in health care costs that consume a greater share of the federal budget each year. Despite multiple assurances by Romney that nothing would change for existing seniors, the Obama team says the plan would shift expenses onto retirees.
The Obama campaign’s ads cite an analysis by the Congressional Budget Office of a plan put forth by Romney’s running mate, Wisconsin Rep. Paul Ryan, that predicts the elderly would each pay $6,400 more for health care by 2022.
Republicans prefer a different CBO report saying the president’s health care reform would cut $716 billion from Medicare – but that’s actually savings generated by cutting outlays to service providers.
However, Obama hasn’t spelled out exactly how he would pay to preserve the existing benefits without going deeper into debt or asking seniors to fork over more money.
“Obama is going to have to raise the price of benefits, whether by hundreds or thousands, I don’t know,” Bill Novelli, former CEO of AARP, told the Associated Press. “Where else is the money going to come from besides printing it?”
Taxes, Detroit--and China
Romney supporters have the impression that Obama raised taxes across the country, but that hasn’t happened … yet.
“Taxes are lower on families than they’ve been probably in the last fifty years,” Obama told CBS News’ “60 Minutes” in an interview that aired last Sunday.
His controversial $787 billion stimulus passed in 2009? Tax breaks made up about 35 percent of it. And when the economy needed more gas, Obama temporarily reduced Social Security payroll taxes for 2011 and 2012. Obama also extended in 2010 all of the reduced tax rates first passed under George W. Bush, even as he pledged to let them expire in 2013 for families earning more than $250,000 – families who would also face new taxes for his health care law.
So while Obama might knock Republicans for assuming that tax cuts cure every economic problem, he has relied on the same medicine.
Romney plans to trim income tax rates for everyone by 20 percent, paying for the decrease by limiting deductions that his campaign has yet to specify. The former private equity executive would also encourage investment “by eliminating the tax for middle-income families on interest, dividends and capital gains,” he told “60 Minutes” in a separate interview.
The Auto Bailout
Romney has a conflicted relationship with the government rescue of General Motors and Chrysler: He was for it, before he was against it. And President Obama is taking credit for an intervention that began under George W. Bush in 2008.
The debate gets at a larger philosophical question about the government’s relationship with the private sector. The bailout potentially saved millions of jobs from the scrap heap and bolstered the health of two iconic companies, but layoffs still occurred and dealerships still closed under the government commitment totaling $80 billion.
“There’s always a lot of conflation on the rescue of the auto industry,” said Scott Paul, executive director of the Alliance for American Manufacturing. “It’s easy to nitpick at the details. It puts a hole in Romney’s narrative about Obama if he concedes the rescue was successful in any form.”
Obama constantly dings his Republican rival for opposing the intervention, quoting the headline of a New York Times editorial written by Romney in November 2008: “Let Detroit Go Bankrupt.” But the article argued for a government backstop that would “provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.”
During a May radio interview, Romney claimed that was Obama’s eventual strategy – though he would have implemented it better. In the end, both General Motors and Chrysler did file for bankruptcy. But the bailout saved jobs and investors’ stock holdings, and accelerated the companies’ return to full operation.
“The Obama administration stalled for about six months and finally came to that conclusion,” Romney said. “That was the right course – it was the course I fought for.”
But the Republican now distances himself from the bailout. His campaign released a commercial in August entitled “Dream” that interviews the owner of a closed GM dealership in Ohio, who laments, “It was like the dream that we worked for, that we worked so hard for was gone.”
Romney often blasts Obama for being soft on China. The president allowed the 1.3-billion person country to get away with pirating American-made goods and pegging its currency at an unnaturally low level to the dollar, two affronts that Romney says he would stop.
But market forces on labor, energy and other costs are already making the United States more competitive. The Boston Consulting Group estimated last week that manufacturing costs in China will be 93 cents for every U.S. dollar by 2015, a gap that narrowed from 87 cents in 2010.
The Obama administration filed nine complaints against China with the World Trade Organization, including one on auto parts this month and, notably, a decision in 2009 to put a tariff on Chinese-made tires – a protectionist move that Romney criticized three years ago as worthless.
“So putting barriers up, trying to put walls up, in my opinion is a defeating strategy and will yield ultimate decline and collapse,” said Romney, a former private equity executive who invested in China, according to a 2009 video found by The New Republic.
Per Romney’s critique, Obama’s Treasury Department decided not to name China as a currency manipulator in seven semi-annual reports to Congress – providing China with a cost advantage on labor. What does appear unrealistic is Romney’s argument that China’s theft of intellectual property – a decades-long problem and the subject of ongoing negotiations – can instantly be fixed by a change at the White House.
The Republican is running ads saying that China’s patent infringements have separately cost the country 2 million jobs under Obama. It’s a hypothetical stat based on an “alternative” analysis of recessionary conditions by the U.S. International Trade Commission last year.
The report actually notes that few U.S. jobs have been lost by the patent violations, but another 932,000 would have been added under normal conditions if China enforced intellectual property laws.
Of course, once the campaign ends – and the voters speak – the truth will be in the winner’s actions, not his rhetoric and sloganeering. Getting elected to the Oval Office is in many ways a small part of actually being president.