"Economic Choices 2008" - Presidential Hopeful Policies
Thursday, March 06, 2008SUSIE GHARIB: Voters may not know who the Democrats will nominate for president until the end of August, but investors won't have to wait that long to understand what the election could mean for their stock portfolios. When analysts pour over policy papers and positions of the three main presidential contenders, they find those positions may have similar impacts on some key economic sectors. Darren Gersh reports as we continue our series, "Economic Choices 08".
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Senators McCain, Obama and Clinton may disagree on issues like free trade and the war in Iraq, but on many other issues, Washington strategist Stuart Sweet says the three agree more often than you might think.
STUART SWEET, PRESIDENT, CAPITAL ANALYSTS NETWORK: In these cases, it really doesn't matter who the next occupant of the White House is. They are going to be more aggressive towards passing initiatives which are hostile to seven or eight industries.
GERSH: Industries like electric utilities. All three candidates are pushing for caps on the nation's greenhouse gas emissions, 40 percent of which, Sweet says, come from coal-fired electric plants. Sweet thinks oil companies may lose tax breaks, too. Pharmaceutical companies are headed for a tough time. McCain called them bad guys, while Clinton and Obama are pushing for big Medicare savings from drug companies. All three candidates want to see more competition for health insurance companies. Cable television prices are rising faster than inflation and Democrats are skeptical about industry pricing power. Sweet says McCain could be even tougher than Clinton and Obama.
SWEET: I would worry about the cable industry. Senator McCain wants to impose what he calls a la carte pricing on the industry. Also wants the telephone companies to become aggressive participants in delivering cable services.
GERSH: The impact on defense is a harder call. Democrats are likely to shift money from procurement to personnel, but defense analyst Brett Lambert says McCain might also cut some big weapons programs.
BRETT LAMBERT, DEFENSE ANALYST, DENSMORE GROUP: Well, Senator McCain knows the industry quite well and also knows its foibles and knows the waste that has occurred in the industry. So, if I were running a poor program, he's the one I'd be afraid of.
GERSH: The Bush tax cuts expire in 2010 and the next Congress is expected to have larger Democratic majorities. Political economist Tom Gallagher says that means the next president will likely raise taxes, though they may go up less under McCain.
TOM GALLAGHER, POLITICAL ECONOMIST, INTERNATIONAL STRATEGY & INVESTMENT: If it's President McCain and a Democratic Congress, if he just says I'm not going to sign any bill that raises taxes, then in 2011, you get a significant increase in taxes. So, as you play through that process, it would make sense for him to try to cut a deal to prevent tax increases of that magnitude.
GERSH: So while the politics of this presidential campaign may not be sorted out until after the Democratic convention, many of the most important investment impacts are already fairly clear. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.
