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Obama and Romney on the issues: Economy

October 05, 2012

Listen to President Obama and Republican presidential candidate Mitt…

The Post is taking a comprehensive look at the positions of President Obama and Mitt Romney on several key issues. For an interactive experience including polling, quotes and the ability to choose which candidate better represents your views, visit the Post’s Issue Engine.

President Obama and Mitt Romney disagree on most issues, but their differences on the economy are particularly stark. Romney believes that the government is an impediment to economic growth and should mostly get out of the way. The president argues that the government plays a vital role in creating the foundation for a strong economy.

Jobs and the economy, by a huge margin, top the list of issues that will determine how people vote. It’s not much of an overstatement to say that this is a one-issue election. As the latest Economist magazine put it, “Barack Obama won in 2008 largely because of the economy. He may lose this year for the same reason.”

Friday’s employment report gave Obama a shot of good news, with the jobless rage dropping below 8 percent after 42 consecutive months above. But the overall economy remains the president’s biggest vulnerability. Obama’s challenge is to convince voters that he is making progress, and that what Romney offers is a return to the policies that created today’s problems. Romney’s challenge is to convince voters not just that the president’s policies have failed but also that he has the experience and the policies to do what Obama hasn’t.

Because the recovery has been sluggish, Obama has been running against stiff head winds all year. But there are signs that voters are beginning to feel better about the future. They remain split, however, on which candidate they would trust more to fix the problems.

— Dan Balz

Here are Obama and Romney’s positions on the economy, broken down by subject:

EMPLOYMENT

OBAMA

Obama has called for spending hundreds of billions of taxpayer dollars to try to reduce the unemployment rate, which stands at 7.8 percent. He wants to offer tax credits to companies that hire more workers and give money to states and localities to hire more teachers and first responders. He also wants Congress to agree to legislation that would overhaul job training and unemployment programs that would better ease the jobless back into work — by continuing to pay unemployment benefits, for example, if workers get part-time jobs or apprenticeships.

To revive U.S. manufacturing and prevent jobs from leaving the country, Obama advocates tax breaks for companies that keep positions in the United States and penalties for firms that move work abroad. To make U.S. employees more competitive, he wants to create government-backed hubs that connect community colleges and businesses, making sure people are trained for open positions. Cumulatively, he says, these programs would create 1 million new factory jobs by the end of a second term.

Obama also wants to spend $210 billion over six years to rebuild the nation’s roads, bridges and railroads. He says that money represents half of the money the government will save as a result of the wars in Iraq and Afghanistan winding down.

ROMNEY

Romney wants to lower taxes and reduce regulation in hopes of giving the private sector more flexibility to spend, invest and hire. He doesn’t like the idea of spending taxpayer money to stimulate hiring and has disparaged efforts to do so.

Romney would reduce individual tax rates by 20 percent and seek to offset the lost federal revenue by eliminating deductions, although he has not specified which ones. He also wants to end capital gains taxes (paid when stocks and bonds are sold) for people making less than $200,000 and eliminate the tax that heirs pay on estates valued at more than $5 million.

Romney has proposed reducing the corporate tax rate from 35 percent to 25 percent, a change that would bring corporate tax rates in the United States more in line with what they are abroad. As a result, he says, companies would be more likely to keep their operations here, saving U.S. jobs. He also would transition to a “territorial” tax system, so companies pay taxes where they operate rather than requiring that American firms operating abroad pay a tax on foreign profits in the United States.

Romney says his policies would create 12 million new jobs during his first term and lead to faster economic growth.

THE DEFICIT

OBAMA

Faced with a national debt that exceeds $16 trillion, Obama has proposed a plan that would cut $5.3 trillion from the budget over a decade, roughly in line with what economists say is necessary to keep the debt from getting out of hand.

The president proposes raising taxes on Americans who make more than $200,000 per year to the rates in effect during the Clinton era. That means 39.6 percent, compared with 35 percent now. He also wants to scale back deductions and loopholes that benefit the wealthy and specific industries, such as finance and energy.