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Democrats Talk Taxes and Trade in Iowa Debate

December 13, 2007 at 6:45 PM EDT
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In their last debate before the key Iowa Caucus on Jan. 3, six of the the Democratic presidential candidates outlined their policies on tax reform and trade in hopes of swaying Iowa voters.

JIM LEHRER: Finally tonight, the Democrats debate one last time before the Iowa caucuses. NewsHour correspondent Kwame Holman reports.

JEFFREY BROWN: The most recent Iowa polls show Barack Obama surging, Hillary Clinton sliding, and the two now in a statistical dead heat. That was the backdrop to today’s debate in Des Moines, moderated by Carolyn Washburn, editor of the Des Moines Register. She began with questions on fiscal and trade issues.

CAROLYN WASHBURN, Editor, Des Moines Register: When are tax increases necessary and appropriate then? And given the current deficit, which of your priorities would be worth asking Americans to pay more for?

FORMER SEN. JOHN EDWARDS (D), Presidential Candidate: I think the truth of the matter is that the tax policy in America has been established by big corporations and the wealthiest Americans.

That’s why we have tax breaks for the top 1 percent and 2 percent. It’s why the profits of big corporations keep getting bigger and bigger, while most working middle-class families are struggling.

So what we ought to be doing instead is getting rid of these tax breaks for big — the wealthiest Americans, big tax breaks for companies that are actually taking American jobs overseas. This is insanity, when we’re losing American jobs at the rate we are today.

KWAME HOLMAN: Most of the candidates said higher taxes on the wealthy were justified to fund health care, education, and other programs, and that balancing the budget would take time. Senator Clinton.

SEN. HILLARY CLINTON (D), New York: Well, I think it’s important that we recognize how people feel in Iowa and across America. They feel as though they’re standing on a trapdoor.

They are one pink slip, one missed mortgage payment, one medical diagnosis away from falling through. I want to restore the tax rates that we had in the ’90s. That means raising taxes on corporations and wealthy individuals. I want to keep the middle class tax cuts.

KWAME HOLMAN: Senator Joe Biden.

SEN. JOE BIDEN (D), Delaware: As my dad used to say, “It’s all about priorities. What are your priorities?” I would fundamentally change the Republican priorities of rewarding only the wealthy, wasteful government programs in the Defense Department, as well as dealing with a more rational policy to promote jobs.

KWAME HOLMAN: Only six Democrats participated. Dennis Kucinich and Mike Gravel were disqualified because neither has established a campaign headquarters in the state.

Funding new federal programs

KWAME HOLMAN: The remaining candidates were asked how they would pay for new programs, given costs associated with the ongoing war in Iraq. Senator Obama.

SEN. BARACK OBAMA (D), Illinois: Every proposal I've put forward during this campaign we have paid for, and we have specified where that money is going to come from.

But let's just look at our tax code, because it's a great example of how we could provide some relief to ordinary citizens who are struggling to get by. Right now, we've got a whole host of corporate loopholes and tax savings.

There's a building in the Cayman Islands that houses, supposedly, 12,000 U.S.-based corporations. Now, that's either the biggest building in the world or the biggest tax scam in the world. And I think we know which one it is.

If we close some of those loopholes, that helps me to pay for an offset on the payroll tax that affects all Americans.

KWAME HOLMAN: Governor Bill Richardson said some spending is required now.

GOV. BILL RICHARDSON (D), New Mexico: Well, I detailed $57 billion in military reductions, which involve missile systems, procurement reform. But we've got to recognize that the Iraq war has drained our military. And what we need to do is we need a couple of more divisions in the Army, in the Marines.

We've got to take care of our veterans. The VA system needs guaranteed funding. Our veterans coming back with mental health problems, with trauma are not properly being taken care of. And we need to recruit and retain to keep the volunteer Army going. We need to improve our readiness.

Trade policy

KWAME HOLMAN: On the issue of trade, Senator Chris Dodd complained that the U.S. doesn't hold China to a high enough standard.

SEN. CHRIS DODD (D), Connecticut: I don't mind competing with someone, but as long as we're all operating by the same rules. We don't have the same access to their shelves, to our services that we'd like to sell in their country. They're very, very restrictive here.

We need to get a lot tougher on this -- fair, not loud, but fair -- if we're going to have a better relationship, or before long this will no longer be the most desirous market for them and we will have disadvantaged our country substantially.

This is a major, major issue that needs to be addressed with a lot more thoughtfulness than it's getting today.

KWAME HOLMAN: For her part, Hillary Clinton said she was in favor of revamping the North American Free Trade Agreement championed by her husband.

SEN. HILLARY CLINTON: I want to be a president who focuses on smart, pro-American trade. I will review every trade agreement. I'm going to ask for revisions that I think will actually benefit our country, particularly our workers, our exporters.

And I'm going to go to the international community and get the kind of enforceable agreements and standards on labor and environment that we have been seeking as Democrats, because we need to make it clear to the rest of the world that we are an open society, we believe in trade, but we don't want to be the trade patsies of the world. We want to have an equivocal, balanced relationship.

Final appeal to Iowans

KWAME HOLMAN: A light moment of the debate came when Washburn asked Obama why so many of former President Bill Clinton's foreign policy advisers were working for him.

CAROLYN WASHBURN: With relatively little foreign policy experience of your own, how will you rely on so many Clinton advisers and still deliver the kind of break from the past that you're promising voters?

SEN. BARACK OBAMA: Well, the -- you know, I am...

SEN. HILLARY CLINTON: I want to hear that.

SEN. BARACK OBAMA: Well, Hillary, I'm looking forward to you advising me, as well.

I want to gather up talent from everywhere.

KWAME HOLMAN: Each of the candidates was given 30 seconds of free time. And, like Senator Biden, they all made one last appeal to the statewide television audience.

SEN. JOE BIDEN: Well, you know, folks talk about this election being about experience or change. It's really about action and pragmatic solutions. And that's what I've done my whole career, with the Violence Against Women Act, the crime bill, the Balkans, helping stop the genocide there.

And, ladies and gentlemen, you know, leadership is also about knowing who you are, what you believe, and what your priorities are, and what you'll do. In my case, I'll start by ending that war in Iraq and also trust the American people. They're ready; they're ready to get up.

KWAME HOLMAN: This final debate signaled that Iowans who plan to participate in the caucuses now have three weeks for holiday shopping before coming together to vote on January 3rd.