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Will Americans Buy Romney’s Proposals to Turn Around the Economy?

August 28, 2012 at 12:00 AM EST
Judy Woodruff and Gwen Ifill talk to Romney economic advisers Glenn Hubbard, dean of Columbia University's School of Business, and John Taylor, senior fellow at the Hoover Institution, about debt, tax cuts and deregulation. Andy Kohut of Pew Research Group weighs in on how Americans perceive Republican economic policy.
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JUDY WOODRUFF: So how would a Romney administration change the jobs outlook?  We asked two of his advisers, Glenn Hubbard, who chaired the Council of Economic Advisers under President George W. Bush.  He’s now the dean of Columbia University’s School of Business.

And John Taylor, economics professor at Stanford University and a senior fellow at The Hoover Institution.  He was a Treasury official in the George W. Bush administration.

Joining them is Andy Kohut of the Pew Research Center. Welcome to you all three.

UNIDENTIFIED MALE:  Thanks.

JUDY WOODRUFF:  And, Andy, I just quickly want to start with you because there were new consumer confidence numbers out today, showing, what, a low, a new low in consumer confidence?  Talk about that –

(CROSSTALK)

ANDY KOHUT, Pew Research Group:  Yes, consumer confidence hit a 10-month low, according to the Conference Board survey.  And this has not been the first up-and-down over the course of the Great Recession.  We saw consumer confidence go up in early 2009, slowly remain modest throughout ’11 and then — throughout ’10 and then really take a nose dive.

They’ve come back in early 2012.  The bottom line is economic attitudes and the public’s perception of the economy is very unstable.  And it is increasingly difficult with all of those ups and downs for the American public to get any conviction about how things are going and where they’re going.

JUDY WOODRUFF:  And just very quickly, Andy, you were telling me earlier today that despite that that Mitt Romney’s lead, when it comes to people having confidence in his ability to turn the economy around, is not that much higher than it is for the president?  Is that right?

ANDY KOHUT:  He only leads the president by a few points on the economy, even though Obama gets a 35-42 percent approval rating, which is not very good.  Part of the reason is the image of the Republican Party, when we asked people who does the Republican Party favor, 62 percent say the rich.  The Democrats are seen as favoring the middle class and poor people.

So you have a — you have kind of a standoff where the public has — doesn’t have great confidence in Obama’s ability to perform, doesn’t trust the Republicans when it comes to economic issues.

JUDY WOODRUFF:  Glenn Hubbard, what about that?  I mean, so you have economic numbers.  If you look at just the data, you would think Mitt Romney would be doing a lot better than he is.

How do you — how do you address that perception now?

GLENN HUBBARD, dean of Columbia University’s School of Business:  Well, I think the key to what Andy was saying is that uncertainty about public policy and the economy is almost at an all-time high, and it really has consumers very worried.

I think what we hear from Governor Romney at the convention, what we hear from him on the campaign trail is how he plans to translate his economic agenda into growth.

We believe he can create 12 million new jobs in the first term.  That’s a very big number.

JUDY WOODRUFF:  Twelve million?

And John Taylor, how can he be so confident?  How can you be so confident that that number is real?

JOHN TAYLOR, senior fellow at The Hoover Institution:  Well, history tells us that and the fact that we know why this economy is so sluggish.  The policies have been erratic.  They’ve created uncertainty.  We’ve tried stimulus packages, which maybe gave a short-term but not a long-term boost.

And the Romney plan is to put in a whole new strategy of long-term focus to get this uncertainty out of the system, to deal with that debt, which is holding back investors worried about tax increases.  So it’s addressed, the problems that we have.  And we’ve seen in history, when we address the problems that way, we get much faster growth and many more jobs.

GWEN IFILL:  You don’t have a lot of time left between now and election day to prove to people that the Romney solutions are better than what the Obama — even if you don’t think they work — solutions are.  So what are they and how do you explain it in a really cogent and smart way to voters who are trying to make up their minds, quickly?

JOHN TAYLOR:  A lot of people understand that this debt is a problem holding the economy back.  They can sense that.  That’s what drove the election in November 2010.  And so his plan addresses that by gradually reducing spending to help people know there’s this big spending binge.  You get that down.  And that creates the deal with the debt.

Then on taxes, people are worried about tax increases.  We have this fiscal cliff.  Who knows what’s going to happen?  He puts in place a tax reform, lower tax rates, certainly not raising taxes.

And then these regulations that people keep talking about all the time, and it’s out there — you can see it in the data — addressing that.  And so there’s really substantive things in this plan.  And they will increase growth.  We know that from history, from –

GLENN HUBBARD:  The important thing on that is — John is absolutely right on the pieces Governor Romney’s suggesting.  But there’s a philosophical theme, too, that we need to focus on the long-term problems facing our country.  If we fix those, the short-term economy will also move.  That’s exactly the opposite of President Obama’s philosophy.

JUDY WOODRUFF:  One of the comments that I’ve seen from a number of analysts who’ve looked at what Governor Romney has put out there is he’s talked about pretty significant tax cuts for the corporate sector, for individuals.  And there’s some — I guess there’s some — it’s not clear yet what exactly would be the rate change.

But that it — if you — if you add all that up, it’s not clear how we pay for that.  If the debt is a real concern, at some point before the election, doesn’t Governor Romney have to spell out how you’re going to cover the cost of those taxes?

(CROSSTALK)

GLENN HUBBARD:  I mean, he’s already said the rates would go down by 20 percent for individuals.  And the corporate rate would go from 35 percent to 25 percent.  Part of that is paid for by faster economic growth, but much of it is from base broadening, the so-called tax expenditures.  The plan as a whole is revenue neutral.  So it’s not a net tax cut.

JUDY WOODRUFF:  And which base broadening?  I mean, this — that’s the question –

(CROSSTALK)

GLENN HUBBARD:  Everything’s on the table.

JOHN TAYLOR:  Base broadening, everything’s on the table, plus he wants to make sure it a progressive type of base broadening.

Also, don’t forget about spending.  We’ve had a big spending binge.  And part of the program is to get that spending down to what it was just before the crisis, actually.  It’s really something that’s quite doable.  And that’s part of it.  That’s why you can do this and have a pro-growth tax cut at the same time.

GWEN IFILL:  Andy Kohut, which part of this argument resonates with voters?  The fiscal cliff that John Taylor mentioned, which is a big fiscal disaster potentially that could happen by the end of the year, are voters paying attention to that?  Is this something they’re going to making their decisions based on?

ANDY KOHUT:  They — that hasn’t registered yet.  But you know, it has a — the news has a way of spreading.  It took a long time to the — to the last time we had that deficit plan in — reduction plan in 2011.

It — in a matter of months, that would — it became priority number one.  And the public is very concerned about the debt, and they’re — at record levels.  But the thing that comes through in survey after survey is jobs, jobs, jobs.  We see no change in public confidence about jobs — the job situation improving.

JUDY WOODRUFF:  And just quickly, to the extent there’s any lack of clarity about Governor Romney’s proposals for the economy and Paul Ryan’s proposals, which have been a lot of conversation out there about that — how do you clarify that for people who are looking at this and trying –

GLENN HUBBARD:  Well, first, there’s only Governor Romney’s proposals.  He’s running for president.  He and Congressman Ryan are on very much the same page about the need to right-size government, to reform the tax code, to have regulation that supports growth.

But it is the Romney economic plan.

JUDY WOODRUFF:  Does that mean the Romney plan goes away for the purposes of the election?

JOHN TAYLOR:  There’s — there are a lot of similarities, of course, and for example, one of the big debates that we’ve been having is how to control the rapid growth of entitlements.  So that’s part of the budget.  And they’ve laid out a plan that will slow that growth in a very responsible way to make the programs more effective for people.

When people look at that and they example and say, hey, that’s what we should be doing.  In fact, both sides of the aisle have proposed things like this in the past.  There’s a matter, I think, of explaining it, and we’ll get to it.

JUDY WOODRUFF:  Congressman Ryan’s proposals, though, clearly would slow that growth a lot faster.  I mean, there’s some more aggressive steps that he would take than Romney.

GLENN HUBBARD:  Well, what Governor Romney has said, yes, we need to slow the growth of entitlement spending, but principally for upper income families.  So he wants a very progressive entitlement reform.  The country can afford a very successful Social Security and Medicare system.  It can’t afford one on the kind of autopilot for everyone we presently have.

JUDY WOODRUFF:  And Andy Kohut, to get back to Gwen’s question, if that’s what these — this ticket has in mind, are voters going to get it?

ANDY KOHUT:  Voters are very wary of entitlement cuts for the sake of the deficit or for the sake of anything very much, because they don’t trust the politicians not to do more than they promise.  It’s that simple.  It’s about distrust of government, which Republican Party is well aware of.

GWEN IFILL:  OK.  Which is of course why we have this fight, no?  You’re ahead?  You’re behind (ph) on Medicare who’s going to cut you?  It’s going to just — it’s just starting.

Thank you all very much.