Although they broadly agree on taxes, spending, and regulation, they differed on some key details
Tuesday night, eight Republicans vying for the 2012 presidential nomination spared over how to fix the U.S. economy. This debate should be the most important: with unemployment stuck above 9% and many fearing a double dip, economic policy will almost certainly play a major role in which candidate Americans pick as the next president. Although many people may think that the GOP platform on this topic is fairly straightforward -- cut spending, cut regulation, and cut taxes -- the candidates actually had very different views on some key issues.
A Quick Assessment
Before getting into those five areas of disagreement, I'll offer a quick assessment of the debate, in general:
- Mitt Romney was the clear winner. He was poised, at ease, and appeared to be the nominee that everybody else was trying to beat.
- Herman Cain got a huge amount of talk time, but in nearly every opportunity to speak, he relied on his "9-9-9" tax plan a a crutch (no it's not a pizza deal, as Jon Huntsman quipped). At this point, voters may worry that his platform is a little too one-dimensional and almost gimicky.
- Speaking of Huntsman, he performed pretty well. But he may just be too far to the left to energize the Republican base.
- Then, there was Rick Perry. His performance was shockingly weak. His way to save the economy has something to do with energy -- we know that -- but he provided no detail.
- The other candidates Rick Santorum, New Gingrich, Michele Bachman, and Ron Paul got less talk time than the others and are all looking more and more like long-shot candidates.
The most widely discussed tax policy during the debate was Cain's 9-9-9 plan, which would throw out the current tax code and impose a flat 9% income tax, 9% sales tax, and 9% corporate tax. Other candidates weren't on board with the plan. While most favored lowering and reforming the corporate and personal tax burdens, other candidates complained that imposing a sales tax would just provide the fedreal government another way to grow larger.
One particularly interesting exchange over taxes took place between Romney and Gingrich. In the section of debate where a candidate could pose a question to another, Gingrich asked Romney whether he is on board with Obama's class warfare. He pointed to Romney's economic plan, which would lower the capital gains tax only for Americans who earn less than $200,000 per year. Romney responded saying that the rich were doing just fine and that it's the middle class who need a break.
Another interesting topic was bailouts. Romney was asked what he would do if faced with a situation like 2008, where the financial system was near collapse. Romney said he understood the need to keep the market alive in times of peril, so he said that he believed that the government would have to act. But he would do things differently than what was done in 2008. He would force certain firms to fail and he would not have bailed out GM and Chrysler.
Meanwhile, however, some other candidates were staunchly opposed to bailouts. Santorum explained that he opposed the rescue because it was too big an intrusion in the private sector.
The Federal Reserve
The Fed also discussed in relation to bailouts and for its own sake. None of the candidates had anything nice to say about Chairman Ben Bernanke. They all said they would oust him. But how they wanted to reform the Fed took different forms. As you might guess, Ron Paul wants to get rid of it entirely. Others want the Fed to ditch its mandate that forces it to pursue maximum employment. All of the candidates basically agreed that greater transparency would be a good thing.
Herman Cain actually served as the deputy chairman of the Kansas City Federal Reserve in the early 1990s, and he asserted that the Alan Greenspan Fed actually did a pretty good job at that time. He doesn't support the Bernanke Fed's intervention over the past couple of years, however.
On health care, there was some agreement. Pretty much everyone criticized Obamacare. But they differed on some details. Romney was questioned by Perry on the health care law he created while governor of Massachusetts, which Perry said resembles Obamacare. Romney defended his actions, saying that his law made people's lives better. He tried to draw a distinction, saying that his law helped only those without insurance, while Obamacare goes fruther by extending federal control over the entire U.S. health care system.
Although Huntsman didn't really explain what he intended to do about the U.S. health care system, he said that it was "disingenuous" to say that you could simply repeal Obamacare. He asserted that the mandate would still remain in place. Santorum clarified that if you repeal the taxes and spending associated with the law, then the mandate could not be enforced and would have no teeth.
The candidates also addressed China's trade practices. Currently, Congress is considering legislation that would sanction the nation over its currency manipulation. Romney came out in strong support for getting tough with China. Most other candidates appeared to agree with him.
But Jon Huntsman called for restraint where China is concerned. His opinion is particularly noteworthy, considering that he just served as Ambassador to China under President Obama. He warned that such action would spark a trade war. He said this would ultimately disadvantage U.S. businesses. Since China is such an important trade partner, the U.S. needs to be very careful with the relationship, he said. Romney scoffed at this response, saying that the U.S. would be "played like a fiddle" by the Chinese if it goes too easy.
The differing views on the five issues above show that, even though all of these candidates are pursuing the same party nomination, they approach economic issues from varying angles. Of course, the spedific economic plans that candidates are calling for also differed. Romeny has a very robust 59-point plan. Cain has a simple tax reform approach through his 9-9-9 plan. Paul thinks that getting rid of the Fed and strengthening the dollar would help. Others rely more on simply cutting regulation, spending, and taxes to spur jobs. The debate should leave voters with a lot to consider.
Image Credit: REUTERS/Mario Anzuoni