The Great Debate

This essay was submitted through the Romney campaign as a response to Lawrence Summers’ most recent column, “This election, Obama is the wiser economic choice.”

The large budget deficits and expansion of the national debt under President Barack Obama, unprecedented since World War II, have him set to bequeath an immensely costly legacy. Each of his deficits as a percentage of gross domestic product has been larger than the previous post-World War II record, for which Democrats excoriated President Ronald Reagan. Between the debt already racked up and what Obama’s FY13 budget projects, each income-tax-paying family will owe more in Obama debt than a new mortgage on a median-priced home and four years of college costs.

Yet more than three years into recovery from the recession, the president has not proposed a program to deal with the massive debt. Indeed, he abandoned even the long-run goal of a balanced budget, adopting the much weaker goal of stabilizing the debt-GDP ratio at the higher projected FY2016 level. But he did not budget for it, appointed the Simpson-Bowles Commission to propose how to do so, then ignored its recommendations. He has no serious proposals to deal with the even larger eventual long-run deficits in Social Security and Medicare, which total several times the current national debt. When Treasury Secretary Timothy Geithner was asked by Congress what the administration’s plan was, he said, “We don’t have one.” Vice President Joe Biden guaranteed, “No changes to Social Security.”

The government has been borrowing to cover 30 percent to 40 percent of its budget, hiding the true tax cost of government spending from voters. The $5.5 trillion in debt already accumulated in Obama’s first four years implies a future $5.5 trillion tax hike (in present discounted value). The projected future deficits and debt likewise add up to another immense tax hike, with marginal tax rates eventually reaching 70 percent for many middle-income families. That’s because every dollar borrowed requires future interest be paid; so unless future spending is cut, future taxes must go up to cover the interest.

The prospect and then reality of higher tax rates, plus increased uncertainty about fiscal policy, slow growth and raise the specters of higher inflation eroding the value of the government debt and even a financial crisis. Higher debt above a modest level slows growth because it eventually crowds out investment, and the lower capital formation reduces future incomes. How serious are these negative consequences of Obama’s debt buildup likely to be?

The neoconservatives who rebuffed the Republican establishment’s warnings about the perils of war in Iraq have now opened another front —against President Barack Obama.

The neocons, unlike the muscular Democrats who led the U.S. into the Vietnam War—including Defense Secretary Robert McNamara and Secretary of State Dean Rusk— are not reflecting about what went wrong in Iraq. Nor are they dodging the public spotlight.

They have instead signed on as foreign policy advisers for Republican presidential nominee Mitt Romney.  He is now strongly denouncing Obama as an abject failure, intent on appeasing the world’s dictators. Romney, who has scant foreign policy experience, is now championing a new “American Century,” featuring a pre-emptive foreign policy agenda, a $2-trillion increase in the Defense budget and, most likely, hostilities with Iran — not to mention skirmishes with China and Russia.

No matter how artificial and canned the candidates can seem at a presidential debate, no matter how competent or ineffectual the moderator — the nominee’s true self will peak out at some point.

Thus did GOP presidential nominee Mitt Romney tip his hand when it comes to the all-important female vote — which both he and President Barack Obama have been scrambling after. He didn’t make a huge gaffe or get ensnared in a tough debate about choice. Moving around the stage, he seemed a 1950s throwback who had wandered in from a different decade — one where men were men, women wore shirtwaist dresses (Ann Romney’s uniform) and marriage was between a man and a woman.

Of course what drove this home was Romney’s anecdote about trying to find talented women for his staff when he was governor of Massachusetts from 2003-2007. He said he actually went to a number of women’s groups “and they brought us whole binders full of women.” Though he apparently flipped this story: The groups came to him unsolicited.

Do you recall just seven months ago when Romney campaign aide Eric Fehrnstrom let slip that having won the Republican primaries, his candidate would “shake it up and restart it all over again” as if wiping clean an Etch-a-Sketch screen? Romney did just that last night. From a standing start Romney executed a perfect backward somersault, landing with both feet slap-bang in front of a bemused president, who appeared quite taken aback that his rival should plant his feet firmly in the middle ground where elections are won and lost.

Take Romney’s view of regulating the market. In his personal manifesto No Apology, Romney trod a careful path, suggesting that, like his primary opponents who unwaveringly support the untrammeled free market, he was wary of overregulating business. “Excessive regulation slows the creation of new businesses and the expansion of existing businesses,” he wrote. On his website, he promises to “act swiftly to tear down the vast edifice of regulations the Obama administration has imposed on the economy.”

But in Denver last night, Romney changed his tune, suggesting that he had always been in favor of regulation, whatever impression he may have given in the past. “Regulation is essential,” he declared. “You can’t have a free market work if you don’t have regulation … Every free economy has good regulation.”

One of the few thin­gs that President Obama and Mitt Romney are likely to agree on when they debate next week is the need for tax reform. Both candidates have backed streamlining America’s crazy-quilt tax code, and both have said that reforms could boost economic growth. Meanwhile, two key congressional committees held a rare bipartisan hearing last week – with lawmakers from both parties saying that tax reform is needed to rev up the economy.

Yet exactly how and why tax reform would spur growth is far from clear. Many proponents of reform, including Romney, want to lower tax rates while retaining the same level of revenue. But doing that means reducing major individual tax breaks that subsidize key sectors of the economy – including housing and healthcare. Long term, there are good arguments for whacking such subsidies, which tilt heavily in favor of affluent households and distort our economy. But curbing these freebies doesn’t offer a short-term economic fix and, in fact, could hurt growth.

Let’s start with the best-known big tax break – the mortgage interest deduction, which will cost the U.S. Treasury about $100 billion next year, according to the Congressional Research Service. Shrinking this loophole is a good idea in principle, since it primarily benefits more affluent households who have big mortgages and itemize their taxes, but it would be a blow to a housing sector that is still struggling. Smaller subsidies for home buyers would mean weaker sales and less new construction and would keep home values depressed – not an outcome that anyone wants to see right now. Among other things, such reform could be another severe blow to construction workers, who now have the highest unemployment rate of any group.

In the late 1960s, a Stanford University psychologist began conducting his now famous “marshmallow test” to understand “delayed gratification” – the ability to wait.

He would place a 4-year-old alone in a room with a single delicious marshmallow, promising to give him two marshmallows after a short wait. Some children succumbed to temptation, while others held out for the bigger reward. The children who could control their impulses went on to become better, higher-achieving students.

Why do we bring up this iconic experiment now, in the midst of the 2012 election season?

By all accounts, the 2012 presidential election will be a squeaker – probably no more than a point or two in the popular vote will separate the candidates. Such close elections put a special premium on getting one’s base out to vote and targeting the small, yet important, group of “undecided voters”.

We already see both sides doing just this. On the one hand, the undecided voter – about 10 percent of the electorate – is most concerned about “jobs and the economy.” Both Romney and Obama have scrambled over the last month to try to establish credibility on this issue and, in turn, to undermine the credibility of their opponent.

Most analysts define undecideds as self-declared independents or those who have not expressed an opinion at the voting intention question (“unsure”, “refused” or “don’t know” responses). An often overlooked but much more precise way of thinking about this group is to understand them as alienated and disaffected voters – people who voted for one candidate in one election but do not plan to vote for that same candidate next time.

In finally evolving to support marriage equality, President Obama has not only placed himself firmly on the right side of history with respect to an issue of fundamental rights and justice but he has also thrown down the gauntlet for Republicans, especially his presumed challenger, Mitt Romney.

In his comments to ABC News, the president said his attitude toward gay marriage has been shaped over time by voters and members of his own staff “who are in incredibly committed monogamous relationships, same-sex relationships, who are raising kids together” – who are clearly in love. In other words, the president let the human reality around him shape his personal views and will now lead accordingly – a stark contrast, say, with Mitt Romney, who seems to have little grasp of the struggles and experiences of actual voters and instead rotates his political viewpoints as often as he rotates the cars on his vehicle elevator. In President Obama’s “evolution,” America saw a leader who is not afraid to be wrong and not afraid to change his mind. It’s refreshing.

And now it’s the Republicans’ turn. As Fox News anchor Shepard Smith suggested in reporting the president’s shift, Republicans are “on the wrong side of history.” Indeed. But they have plenty of time to make amends. Republicans should be ashamed enough that theirs is the party that stood in the way of interracial marriage and civil rights. Is that really a legacy the GOP wants to continue into the 21st century? It seems to me the GOP has a choice between courting the open-minded next generation of voters, or continuing to be marred by scandals in which anti-gay Republican after anti-gay Republican is embarrassingly outed and shamed. Apparently this is a tough choice for the GOP, which would rather keep implicitly firing up bigotry than stand firm for equality.

Back in February, things started to look dire for the Romney campaign’s ability to attract female voters. Every day brought another story about Republican attacks on reproductive rights: attacks on insurance coverage for contraception, transvaginal probes, all-male panels called in Congress to discuss contraception, attacks on Planned Parenthood’s funding, and the candidate himself increasingly afraid to say a positive word about contraception when asked directly in the debates. A gender gap opened up between the candidates in the polls, with Obama outpacing Romney with women by 19 points. The Romney campaign responded by trying to change the subject, to jobs and the economy. But if Romney wants to close the gender gap, he should rethink that strategy. After all, the polling data suggests that his stance on economic issues – specifically the size of the safety net and amount of economic support the government provides to citizens – is what’s really hurting him with female voters.

The real war between the sexes may not be over feminism or sex so much as whether or not our tax dollars should go to social spending. Research conducted by Pew in October 2011 showed women support a strong, activist government in much larger numbers than men. On the question of whether the government should offer more services, women said yes by 9 more percentage points than men. The gender gap on social spending remained when pollsters asked about specific interest groups. Women wanted more spending on the elderly than did men by 11 percentage points, more spending on children by 10 percentage points and more spending on the poor by 9 percentage points.

Female voters respond much more strongly than male voters to government providing pragmatic solutions and real-world support for ordinary citizens, which helps explain why women flock to Obama and to the Democrats in general. In fact, with college-educated white voters, the gender differences are nothing short of astounding. In this group, female voters prefer Obama 60 to 40, and male voters prefer Romney 57 to 39.

At this pivotal moment in the presidential race, President Barack Obama and his re-election team need to focus on a key question that could influence the outcome of this year’s election:

How do they get the “we” back?

Good question. We all remember how Obama broke new ground in the 2008 campaign by using social media as a powerful political tool. Obama’s campaign created an expansive Internet platform, MyBarackObama.com, that gave supporters tools to organize themselves, create communities, raise money and induce people not only to vote but to actively support the Obama campaign. What emerged was an unprecedented force, 13 million supporters connected to one another over the Internet, all driving toward one goal, the election of Obama.

When they chanted “Yes we can,” it wasn’t just a message of hope for the future – it was a confirmation statement of collective power. They weren’t waiting to be told what to do; they were actively engaged, calling friends to come to events, learn what was at stake, contribute ideas, and help out in some way. The power of “we” was awesome to behold. The “we” not only raised hope for people but also unprecedented sums of money for the old-fashioned campaign on the ground.