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Economic issues Trump, Clinton should discuss at debate, but probably won't

Trump losing ground?

With two more presidential debates and one all-important month to go, Donald Trump and Hillary Clinton are likely to face a battery of questions during the debate on Sunday night about their policies and their fitness for leadership.

Yet some questions are more relevant than others. The president of the United States is given appellations like the leader of the free world, but his or her authority is hardly absolute. If Barack Obama's time in the White House has proven anything it's that a president's power to shape the world is stymied not just by Congress, but also by the realities of a complex and multi-polar international system.

One persistent question is just how much a president actually affects the U.S. economy. The adage is that "it's the economy" upon which voters base their decisions — and recent data still backs that up — but there's considerable evidence that a president is relatively powerless on that front.

Patrons fill the Capitol Lounge two blocks from the U.S. Captiol to watch the first presidential debate between Republican candidate Donald Trump and Democratic candidate Hillary Clinton September 26, 2016 in Washington, DC.
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President Barack Obama obviously disagrees with that contention, writing for The Economist this week about his economic accomplishments and advice for the next president.

"I enacted a larger and more front-loaded fiscal stimulus than even President Roosevelt's New Deal and oversaw the most comprehensive rewriting of the rules of the financial system since the 1930s, as well as reforming health care and introducing new rules cutting emissions from vehicles and power plants," Obama wrote.

"The results are clear: a more durable, growing economy; 15m new private-sector jobs since early 2010; rising wages, falling poverty, and the beginnings of a reversal in inequality; 20m more Americans with health insurance, while health-care costs grow at the slowest rate in 50 years; annual deficits cut by nearly three-quarters; and declining carbon emissions," he added.

Experts will dispute just how much credit the Obama White House deserves for those data points, but despite the many formulations of "The President of the United States Does Not Control the Economy," economists still say presidential candidates' economic stances matter for a handful of reasons.

Understanding the candidates' "general orientation toward general economic issues" is important to weighing how their White Houses would handle a crisis the likes of which Obama faced at the beginning of his tenure, according to American Enterprise Institute economist Michael Strain.

"I agree that presidents have less influence than is popularly perceived," Strain said. "But there are times when they do have a significant influence, and we should be evaluating that."

One of the most obvious ways the White House can affect the U.S. economy is in its selection of the Federal Reserve Board of Governors, but different presidents take different roles in this process, so economists will be carefully watching how this year's nominees posture about the Fed.

Since Bill Clinton, presidents have exercised relatively little overt influence over Fed policy, never openly second-guessing decisions. But that has not always been the case, so Brookings economist Gary Burtless said he would want candidates to answer whether they planned to direct economic spokespersons to take a more active role in publicly criticizing the central bank.

"Fed policy is the only part of the government economic policy making that seems to be working," Burtless said. "So that's a sensible question because not too many years ago we had presidents who were quarreling with the Fed."

But big nationwide initiatives will also impact the economy, and so economists will be listening closely for any hints on those moves.

"A president is going to be able to do some things that will have an impact on the economy," Strain said, pointing to the examples of Obama's Affordable Care Act, Medicare Part D under George W. Bush, and welfare reform signed by Bill Clinton. "The president is going to get a couple swings at the plate, and knowing what the president wants those swings to be is important when evaluating the candidates."

A president's commitment to infrastructure investment, in general, is a key point for economists. Both Trump and candidate Clinton have proposed new infrastructure programs, but Burtless said he will be keying into how they hope to politically accomplish those goals: will they be open to strategies for private financing and what will they do to make sure the public has confidence these projects will be useful and completed.

The candidates' plans for trade policy and social security can also directly impact the long-term economic trajectory of the country.

But beyond specific goals, a president's general economic worldview is also important because it can set the tenor of discussion for years to come, experts said.

Strain theorized what ideological ripples could be felt throughout the country if either major party candidate won: "If we had four years of a Trump administration, would that significantly affect public attitudes toward trade and immigration for a longer period of time? It's not obvious the answer to that question is no. And if we had four years of a Clinton administration, would that affect the way the public thinks about a federal role in issues about family life like paid leave and childcare? It's not obvious the answer to that is no."